GoHealth, Inc. Q1 FY2025 earnings call

• Mission: To provide support, clarity, and peace of mind to Medicare consumers.
• Q1 performance: Exceeded expectations for submissions, revenue, and adjusted EBITDA; captive agency submission volume grew 64% year-over-year while agent headcount grew 24% year-over-year.
• Evolution: Shift from traditional Medicare enrollment company to Medicare engagement company, focusing on long-term relationships.
• Product launches: Launched GoHealth Protect suite in life insurance space; Encompass and PlanFit platforms continue to gain traction with PlanFit checkups growing 27% year-over-year; technology launches like MyGoHealth, unified enrollment experience, etc.
• Regulatory development: CMS announced Medicare Advantage revenue and broker commission schedule adjustments.
• Litigation: GoHealth firmly denies allegations in DOJ's qui tam lawsuit related to events from 2016-2021 and intends to vigorously defend.

In Q1 2025, GoHealth's revenue increased to $221 million compared to $186 million in Q1 2024, representing a 19% improvement. Adjusted EBITDA grew to $42 million, a 56% year-over-year improvement. Submission volume in Q1 increased, with captive Medicare team's submission volume growing 64% year-over-year while agent headcount grew by 24% year-over-year. Cash flow from operations was negative $12.4 million in Q1 2025 compared to positive $12.5 million in the prior year period, primarily driven by the mixed shift from non-agency to agency. Sales per submission decreased by 15% year-over-year due to a higher mix of agency versus non-agency submissions. Revenue contribution from GoHealth Protect was minimal in Q1 but expected to ramp in Q2 and Q3.

• Anticipate disruptive 2025 AEP with health plans likely repricing benefits, leading to more consumers assessing options.
• GoHealth Protect expected to ramp in Q2 and Q3, contributing meaningfully to full-year 2025 results and beyond.
• Continue to assess multiple alternatives for capital structure optimization, considering opportunities from new products like GoHealth Protect.

• Numerous known and unknown risks may cause actual results to differ from forward-looking statements.
• Need to consider risk factors in Form 10-K and 10-Q reports.
• Risk from DOJ's qui tam lawsuit alleging violations of False Claims Act and Anti-Kickback Statute.

Q: With regards to your capital structure, can you just kind of give us an idea, are there opportunities to improve your capital structure at this point, or do you think that DOJ's actions might defer that for the time being?

A: We have always considered multiple scenarios and alternatives for our capital structure. We are always assessing ways to become more efficient. The DOJ matter is separate, but it doesn't change our plans to assess multiple alternatives to enhance our capital structure.

Q: With regards to GoHealth Protect, are you partnering with a specific carrier or carriers or what are the mechanics of that offering? And as well as how does that impact the marketing strategy?

A: We've been testing different approaches, including outbound and inbound marketing, and are selective in partners. We have a balanced approach, testing various ways to serve consumers interested in the product, and expect to expand with more products in the GoHealth Protect portfolio over time.

Q: You mentioned sales per submission being down 15%. Can you quickly touch on that and what was kind of going on behind the scenes there?

A: It's due to the mixed shift between agency and non-agency submissions. The shift from non-agency to agency has led to this 15% decrease, which is in line with our expectations.

Q: Can you give us some balance sheet information, cash at the end of the quarter and total debt?

A: Cash at the end of the quarter was $22 million, down from year end.

Q: What kind of customer behavior do you see when the markets get volatile the way they are? Do you see more customers coming out to do plan fit checkups more inbound calls, or anything like that?

A: Historically, during volatile markets, more shoppers come through the door as they need to assess their options, with more inbound calls and plan fit checkups as people are more motivated to evaluate their plans.