eHealth (EHTH) Q1 2025 Earnings Call May 07, 2025 08:30 AM ET Speaker0 Good morning, everyone, and welcome to eHealth, Inc. Conference Call to discuss the company's First Quarter twenty twenty five Financial Results. At this time, all participants have been placed in listen only mode. The floor will open for your questions following the prepared remarks. I will now turn the floor over to Eli Newbrand Mintz, Senior Investor Relations Manager. Please go ahead. Speaker1 Good morning, and thank you all for join ...

Q1 2025 Financial Results ©2025 eHealthInsurance Services, Inc. 1 Safe Harbor Statement Forward-Looking Statements This presentation includes forward-looking statements within the meaning of the federal securities laws. Forward-looking statements generally relate to future events or our future financial or operating performance. Forward-looking statements in this presentation include, but are not limited to, the following: our estimates regarding online and hybrid-assisted enrollment growth; our estimates r ...

AUSTIN, Texas, May 7, 2025 /PRNewswire/ -- eHealth, Inc. (Nasdaq: EHTH), a leading private online health insurance marketplace, today announced its financial results for the first quarter ended March 31, 2025. Please click the included PDF link to access the full earnings press release.The earnings press release and earnings presentation can also be accessed on the eHealth Investor Relations website at https://ir.ehealthinsurance.com. View PDF eHealth, Inc. Announces First Quarter 2025 Results Webcast ...

New capability uses artificial intelligence (AI) to help streamline and improve how consumers comparison shop for health plansNew research finds 74% of people are willing to interact with an AI assistant when calling customer serviceAUSTIN, Texas, April 30, 2025 /PRNewswire/ -- eHealth, Inc. (Nasdaq: EHTH), a leading private online health insurance marketplace, today unveiled a new AI-based voice, non-licensed agent designed to streamline the health insurance plan selection process. This launch marks a sign ...

Final rules set by CMS will ensure Medicare Advantage beneficiaries have continued access to quality coverage, additional benefits such as hearing, dental and vision, and effective help from licensed insurance agents AUSTIN, Texas, April 9, 2025 /PRNewswire/ -- eHealth, Inc. (Nasdaq: EHTH), a leading online private health insurance marketplace, today confirmed support for the final rules and rates for the Fall 2025 Annual Enrollment Period for Medicare Advantage beneficiaries. The rules, announced April 7, ...

eHealth (EHTH) has been on a downward spiral lately with significant selling pressure. After declining 26.4% over the past four weeks, the stock looks well positioned for a trend reversal as it is now in oversold territory and there is strong agreement among Wall Street analysts that the company will report better earnings than they predicted earlier.Guide to Identifying Oversold StocksWe use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whether a stock is o ...

72% give the US healthcare system a C grade or lower; 57% say there's too much government regulation of healthcareMost are willing to reconsider key provisions of the Affordable Care Act and 66% want to see a ban on drug company advertisementsAUSTIN, Texas, March 11, 2025 /PRNewswire/ -- As the Trump administration reconsiders the role and scope of the federal government, many Americans are ready to rethink the way healthcare works in the United States, according to new research from eHealth, Inc. (Nasdaq: ...

eHealth, Inc.’s (EHTH) shares lost 3% since it reported fourth-quarter 2024 results on Feb. 26, 2025, before the opening bell. Despite an earnings beat, the quarterly results were dampened by rising operating costs, and a significant revenue decline in the Employer and Individual segment. Nevertheless, the downside was fully offset by strong Medicare segment growth, driven by a 42% surge in Medicare Advantage submissions and a 33% rise in approved members. Higher commissions and other revenues also supporte ...

Business Strategy and Growth - The company plans to grow its investment in Medicare Supplement products, which can be sold year-round, and has introduced a dedicated sales team for this segment [61]. - The company intends to leverage its technology leadership and distribution capabilities to scale its core business and diversify revenue streams [60]. - The company plans to expand its telesales capacity and maintain internal benefit advisors year-round to support enrollment growth goals [81]. - The company has made significant investments in marketing, technology, and customer care to diversify revenue and scale the business, with ongoing efforts to improve brand awareness and member retention [140]. - Transformation initiatives implemented in 2022 and 2023 aim to enhance sales and marketing effectiveness while rationalizing costs, though expected benefits may not be realized due to various risks [144]. Market Trends and Demographics - The Medicare segment benefits from demographic trends, with approximately 10,000 people projected to turn 65 every day for the next several years [56]. - ICHRA adoption has grown by 29% from 2023 to 2024, indicating a shift towards alternative health insurance products for employers [57]. - In 2024, 60% of Medicare plan-related applications were submitted in the fourth quarter, compared to 56% in 2023, indicating a strong seasonal trend in revenue generation [77]. Technology and Innovation - The company achieved HITRUST i1 certification for its carrier integration platform in 2024, enhancing its cybersecurity posture [50]. - The introduction of MatchMonitor™, a self-service tool, allows members to understand annual notice changes and compare their current plans [65]. - The company aims to advance its digital technology leadership by utilizing its AI Center of Excellence to guide technology initiatives for 2025 [69]. - The company plans to utilize its AI Center of Excellence to guide technology initiatives for 2025, but faces potential liability and reputational risks associated with AI implementation [199]. Marketing and Consumer Engagement - Marketing initiatives are tailored to consumer segments, focusing on direct marketing channels to drive traffic to the company's platforms [51]. - The company emphasizes the importance of consumer satisfaction and retention metrics in establishing a leadership position in the health insurance industry [63]. - Direct channel marketing is critical for reaching target consumers, but increasing competition may raise costs associated with these channels [121]. - The company depends on marketing partners for consumer referrals, and any deterioration in these relationships could harm business operations and financial results [124]. Financial Performance and Risks - The company generated a significant portion of its commission revenue in the fourth quarter, driven by the enrollment of new Medicare plans [77]. - The company expects to incur significant marketing and advertising expenses in the fourth quarter due to the Medicare Annual Enrollment Period (AEP) and the Individual and Family Plan (IFP) open enrollment [80]. - The company has not met the Minimum Asset Coverage Ratio since September 30, 2023, and as of November 30, 2024, it was no longer in compliance with the Minimum Liquidity Amount [186]. - The company generated negative cash from operating activities and may continue to do so, indicating a need for additional capital to support business growth [188]. - The company faces significant capital markets risk related to changes in interest rates and credit spreads, which could adversely affect its financial condition and operating results [209]. Regulatory and Compliance Challenges - The company is subject to various federal and state privacy and security laws, including HIPAA, which govern the protection of consumer information [93]. - Compliance with CMS marketing guidelines is essential, as non-compliance could result in losing referrals and significantly impact Medicare plan demand [125]. - The company faces ongoing legal and regulatory scrutiny, which could adversely affect its business operations and financial results [156]. - Compliance with complex and frequently changing laws and regulations in the healthcare industry may involve significant costs and could harm the company’s business if not adhered to [151]. Competition and Market Position - The company faces intense competition from government-run health insurance exchanges and other competitors, which may increase marketing costs during the Medicare annual enrollment period [101]. - Humana, UnitedHealthcare, and Aetna accounted for 24%, 22%, and 18% of total revenue for the year ended December 31, 2024, respectively [107]. - The company derives a significant portion of its revenue from a small number of health insurance carriers, which poses a risk if relationships with these carriers are impaired [107]. Workforce and Employee Relations - As of December 31, 2024, the company had 1,773 regular full-time employees, with 1,213 in customer care and enrollment, reflecting a strong workforce dedicated to service [82]. - The company earned the Great Place to Work Certified recognition in 2024, highlighting employee satisfaction with its culture and leadership [84]. - The company relies on timely recruitment, training, and retention of qualified licensed insurance agents to provide superior customer service and support strategic initiatives while controlling labor costs [137]. Economic and External Factors - The company’s business could be adversely affected by changes in consumer behavior due to economic conditions, such as inflation or unemployment [109]. - Adverse economic conditions such as recession and high unemployment may negatively affect customer demand for the company's health insurance offerings [227]. - Large-scale health issues, including pandemics, have previously disrupted operations and could continue to have a material adverse effect on the company's financial condition [230].

Financial Data and Key Metrics Changes - eHealth reported a fourth quarter revenue increase of 27% year-over-year, reaching a record high of $315.2 million [43] - GAAP net income for the fourth quarter increased by 87% to $97.5 million, up from $52.2 million [43] - Adjusted EBITDA grew 74% to $121.3 million, with an adjusted EBITDA margin of 38% for the quarter [44] Business Line Data and Key Metrics Changes - Medicare segment revenue increased by 31% to $305.8 million, with total Medicare submissions rising 38% across Agency and Amplify enrollments [44][45] - The Agency fulfillment model saw submissions grow by 49%, reflecting consumer preference for platforms with broad plan offerings [45] - The E&I segment revenue decreased by 33% to $9.4 million, with a gross profit of $4 million [47] Market Data and Key Metrics Changes - The Medicare Advantage lifetime value (LTV) increased by 2% to $1,174, with an LTV to customer acquisition cost (CAC) ratio of 2x, exceeding the target of 1.7x [46] - The company observed unprecedented disruption in MA plan offerings, leading to elevated consumer demand as beneficiaries reassessed their coverage [11] Company Strategy and Development Direction - eHealth aims to expand brand recognition across all direct marketing channels and enhance retention and customer loyalty strategies [36] - The company plans to advance its AI and digital technology leadership to better serve stakeholders, including consumers and carriers [37] - eHealth is focusing on diversifying its revenue base through targeted investments in Medicare Supplement and ancillary products [37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's competitive and financial position, anticipating a fluid Medicare market with ongoing changes [29] - The regulatory environment in the Medicare Advantage sector is expected to improve over the next four years, with early indicators being the final MA rates and marketing rules [30] - The company is taking a balanced approach to its outlook, guiding for relatively flat revenues compared to the previous year [33] Other Important Information - eHealth successfully navigated the Medicare sector disruption, taking market share and scaling its business at attractive economics [28] - The company ended 2024 with $82.2 million in cash, cash equivalents, and marketable securities, with expectations for a meaningful increase in cash balance by the end of Q1 2025 [53][55] Q&A Session Summary Question: Expectations for 2025 and competitive environment - Management characterized the outlook as pragmatic due to changes in administration and regulatory priorities, with a focus on tracking the Medicare Advantage environment closely [70][72] Question: Impact of D-SNP rules on Q4 expectations - Management anticipated more D-SNP opportunities in Q4 due to changes in regulations affecting Q2 and Q3 volumes [84] Question: Future of the Amplify platform - Management expressed confidence in the Amplify platform's growth potential, emphasizing the importance of building the carrier pipeline and improving margins as the business matures [88][92] Question: Changes in consumer behavior and retention strategies - Management noted an increase in activity during the OEP, with diversified retention initiatives targeting beneficiaries impacted by plan changes [102] Question: Resource allocation towards E&I - Management remains bullish on the E&I segment, planning to continue investments while recognizing the need for a healthy capability in this area [105][109] Question: Carrier commission suppression and rate environment - Management indicated that while commission suppression was more pronounced, eHealth's broad carrier portfolio allowed it to navigate these challenges effectively [117][120]