GoHealth, Inc. Q3 FY2024 earnings call

• Welcomed Brendan Shanahan as the new Chief Financial Officer, leveraging his experience in the Medicare advantage space. - Reported solid operational progress in Q3, driven by strong performance from the internal captive team and efficiency improvements. - Completed the acquisition of e-TeleQuote, adding $90.5 million in contract assets and $22.5 million in cash, with a $77.4 million gain on bargain purchase. - Utilized PlanFit CheckUp to guide consumers through Medicare options, resulting in over 166,000 submissions and over 40,000 consumers having their plans verified. - Rolled out PlanFit Save to retain existing memberships with health plan partners. - Focused on reducing direct operating cost per submission using AI, automation, and proprietary tools, achieving a 25% reduction in average call times and 40% reduction in agent onboarding time. - Deployed technology innovations like plan GPT, chronic condition special needs plan optimization, and an automatic prescription drug lookup tool to enhance productivity and consumer experience.

In the third quarter of 2024, GoHealth reported net revenues of $118.3 million, down from $132 million in the same period the previous year. Internal captive agent submissions saw a 46% year-over-year increase, while submissions from the GPS (gold partner solutions) channel declined by 46% due to broader market pressures affecting external broker partners. Revenue contribution percentages weren't explicitly provided, but internal captive was a key driver of growth amidst GPS challenges.

• Anticipates improvements in Q4 due to new benefits and market dynamics, expecting sustained growth through the first three quarters of 2025. - Refinanced the term loan credit facility to $475 million with a five-year term, allowing management to focus on investment and growth. - Confident in leveraging the e-TeleQuote integration and PlanFit initiatives to drive continued growth and profitability.

• Market dynamics and pressures impacting external broker partners, leading to GPS submission declines. - Uncertainties associated with forward-looking statements, as numerous risks and uncertainties may cause actual results to differ from projections. - Risks outlined in the 2023 Annual Report on Form 10-K and other SEC filings that could affect future financial outcomes.

Q: Regarding the acquisition of e-TeleQuote, how was the training process for new agents and their readiness for AEP?

A: Vijay Kotte stated that the e-TeleQuote team was seasoned and aligned with GoHealth's values. They spent time in September-October onboarding into GoHealth's technology, ensuring agents were trained on PlanFit tools and optimized for performance.

Q: About balance sheet and debt plans, what are the plans for additional debt paydown and target debt to EBITDA ratio?

A: Brendan Shanahan mentioned they evaluate the best use of capital, currently deploying cash into growth opportunities, and will assess debt paydown over time with flexibility from the new five-year term loan.

Q: Discussing internal captive agent submissions growth and GPS channel recovery, what were the details?

A: Vijay Kotte explained internal growth was due to technology efficiency and targeted marketing, while the GPS channel is being reset with new agency onboarding for Q4 to contribute meaningfully to submissions.

Q: Efforts to reduce CAC and outlook for CAC with e-TeleQuote acquisition, what was detailed?

A: Vijay Kotte detailed focus on marketing targeting, AI/automation to decrease average handle time, and supply/demand matching for step-function improvement in reducing cost per submission.

Q: Impact of election and cash deployment, what was the response?

A: Vijay Kotte stated they'll adapt to the new administration, focusing on deploying cash into marketing and growth opportunities to access consumer demand during AEP and beyond.