eHealth, Inc. Q3 FY2024 earnings call

• Achieved revenue and profitability targets in the third quarter and saw significant growth in Medicare application volume.
• Completed final preparations for the annual enrollment period, scaled and trained the agent force, finalized brand-driven marketing materials, and enhanced the online consumer experience.
• Entered the critical selling season with a larger pipeline of appointments than the previous year, and saw call volume and online visits to the platform up meaningfully year-over-year.
• Have a differentiated value proposition for carrier partners and beneficiaries, including delivering quality enrollment volume, local market focus, broad plan selection, and exceptional customer experience.
• Built on rebranding and marketing success from 2023, with integrated marketing campaign and focus on lead nurturing, local market approach, and improving conversion rates across the omnichannel enrollment platform.
• Retention initiatives include engaging customers, reaching out to those with changing coverage, and using tools like Match Monitor to summarize plan changes.
• Amplify fulfillment model is expected to play an important role during AEP, and the company attained HITRUST Certification and Great Place to Work certification.
• In the third quarter, Medicare Advantage submissions grew 26%, total Medicare submissions grew 22%, and third quarter revenue excluding tail grew 9% with improved adjusted EBITDA and GAAP earnings.

In the third quarter, Medicare Advantage submitted applications across both fulfillment models grew 26% year-over-year. Total Medicare submitted applications, including Med Supp and prescription drug plans, grew 22%. Excluding tail revenue, third quarter revenue grew 9% year-over-year. Medicare segment revenue excluding tail revenue grew 13% year-over-year. Including tail revenue, the Medicare segment generated $53.2 million in revenue compared to $55.5 million in Q3 of 2023. The employer and individual segment had revenue of $5.2 million with a segment loss of $800,000, compared to segment revenue of $9.2 million and a segment profit of $4.8 million in Q3 of 2023.

• Reiterated the 2024 guidance ranges provided as part of the second quarter earnings, which can be referenced in the third quarter earnings release and slides on the Investor Relations section of the website.

Q: Please quantify the larger pipeline early in the AEP and ability to convert demand at a greater rate than a year ago.

A: The pipeline was built robustly with greater visibility due to plan changes affecting beneficiaries, leading to a strong start to the AEP. While specific metrics aren't provided, there has been significant growth in the first three weeks surpassing internal forecasts with higher conversion rates.

Q: Concerns about national election affecting advertising and whether AEP could get extended.

A: DRTV and other channels performed above expectations despite political advertising, with messages getting through. As for AEP extension, no inside information, but prediction is CMS would likely communicate any special enrollment period closer to the end of AEP on December 7.

Q: Regarding reduced constraint and tail revenues being more limited, if we feel good about the constraint change and small tail revenues ahead.

A: The company continues to analyze performance volatility and LTV trends, remains confident the constraint change was right, and has seen positive tail adjustments in most quarters since 606 adoption, feeling confident in staying compliant with 606 guidance.