eHealth, Inc. Q1 FY2025 earnings call

• eHealth delivered strong execution with first quarter revenue of $113.1 million growing 22%, GAAP net income of $2 million, and adjusted EBITDA of $12.5 million.
• Increased Medicare submissions 22% year-over-year, expanded enrollment margins, and strengthened retention initiatives by nearly doubling the retention and customer service team.
• Omnichannel marketplace empowered Medicare beneficiaries, with hybrid enrollments growing 38% year-over-year. Implemented AI pilot program in telephonic enrollment funnel with positive feedback.
• Employer and Individual segment saw concurrent trends with encouraging signs in ancillary and ICRA opportunities but legacy products in decline.

Medicare segment: First quarter revenue was $103.7 million, an increase of 26%. Medicare submissions across agency and amplified fulfillment models grew 22%, with the agency model delivering 25% submission growth. Medicare segment gross profit was $35.7 million, an exceptional increase of 62%. Employer and Individual segment: Produced revenue of $9.4 million in Q1 with a segment gross profit of $6 million, both down year-over-year.

• Reiterating 2025 guidance ranges. Q1 enrollments within expectations, revenue and earnings benefited from tail revenue timing and favorable operating expenses.
• Anticipate Q2 revenue in mid-40s million and adjusted EBITDA loss in mid-30s million due to seasonality, D-SNP enrollment restrictions, and advisor ramp costs. Tail revenue recognized in Q1 shifted from Q2.
• Updated 2025 tail revenue range to $11 million to $20 million.

• DOJ complaint announced, with eHealth believing key claims are without merit and intending to challenge them. No litigation loss reserve taken as of yet.
• Uncertainties in Medicare macro environment, including carrier benefit designs, AEP strategies, and broker commission rates.

Q: About MA landscape, impact of Elevance removing plans from online marketing platforms?

A: eHealth has nearly 50 Medicare Advantage carrier relationships, not totally dependent on one or two carriers. Unusual at this season, but they'll revisit in preparation for 2026 AEP.

Q: Thoughts on evolving regulatory environment and its impact?

A: Cautiously optimistic, encouraging to see less regulatory requirements. Rate environment improved but still may have volatility. Commission rates typically in June, could be encouraging but not built into budget.

Q: Litigation impact on carrier discussions and ancillary services?

A: Too soon to report on carrier discussions. Ancillary services like Amplify are in infancy, limited to a few carriers, not a significant revenue component yet.