eHealth, Inc. Q3 FY2025 earnings call

• Derrick Duke discussed joining eHealth and focusing on AEP execution, thanking Fran Soistman for prior leadership. • AEP is critical, with eHealth well-positioned, leveraging strong carrier relationships and omnichannel platform. • Q3 results: total revenue in line with expectations, Medicare volume below expectations but tail revenue positive, GAAP net loss and adjusted EBITDA improved. • Investment in adviser force, consumer brand strength, technology initiatives like AI screener, and retention efforts. • Diversification efforts with solid performance in HIP and MedSupp, with HIP enrollments more than doubling and MedSupp agency enrollments up 10% YoY.

In the third quarter, total revenue was $53.9 million, down 8%. Third quarter Medicare segment revenue was $49.9 million compared to $53.2 million the prior year, reflecting lower enrollment volume but partially offset by $12.1 million in positive net adjustment revenue (tail revenue). The Medicare segment had a segment loss of $1.2 million in Q3, narrowing from $5.6 million the prior year. Total Medicare applications across fulfillment models declined 26%. Third quarter Employer and Individual segment revenue was $3.9 million, with segment gross profit of $1 million.

• Total revenue for 2025 expected to be in the range of $525 million to $565 million. • GAAP net income for 2025 now expected to be in the range of $9 million to $30 million, up from prior range of $5 million to $26 million. • Adjusted EBITDA for 2025 now expected to be in the range of $60 million to $80 million, up from prior range of $55 million to $75 million. • Operating cash flow expected to be in the range of negative $25 million to positive $10 million. • Estimated positive net adjustment revenue for 2025 in the range of $40 million to $43 million, up from prior range of $29 million to $32 million.

Q: George Sutton asked about disruption relative to AEP and if it's favorable.

A: Derrick Duke said similar demand levels to prior year due to carrier disruption, with last few weeks of AEP important, and results in line with expectations.

Q: George Sutton asked about being opportunistic during AEP.

A: Derrick Duke mentioned investing more in branded channels with better economics, and Michelle Barbeau added about optimizing channels holistically with branded channels driving lift in search traffic.

Q: George Sutton asked about stronger retention.

A: Derrick Duke said eHealth aims to be best broker, not just telebroker, with increased outbound calls and brand investment leading to improved retention.

Q: Jonathan Yong asked about demand levels, share gains, and commission rates.

A: Kate Sidorovich said eHealth took market share last AEP, CMS expects Medicare Advantage membership to decline temporarily but grow long-term; Derrick Duke said commission rates are mid-single-digit increases and enrollments are in commissionable plans; John Dolan added LTV includes commission rates and administrative fees.

Q: Michael Murray asked about LTV growth for 2026 and tail revenue delta.

A: John Dolan said LTV expected to be low-to-middle single-digits increase; tail revenue guidance increased with potential upside in Q4.