eHealth (EHTH) Q3 2024 earnings summary

Executive summary

• Q3 2024 saw strong Medicare enrollment growth, with Medicare submissions up 22% and Medicare Advantage submissions up 26% year-over-year, driven by enhanced agent force, marketing, and digital experience.

• Total approved members were flat for the quarter and down 2% for the nine months, as declines in other segments offset Medicare gains.

• Early AEP performance exceeded expectations, with increased call volume, online visits, and conversion rates, supported by robust outreach and plan changes.

• Completed AEP preparations, including achieving licensed agent headcount targets, robust training, and platform enhancements.

• Extended term loan maturity to February 2026 with improved interest rate terms, enhancing financial flexibility.

Financial highlights

• Q3 2024 total revenue was $58.4M, down 10% year-over-year, mainly due to lower positive net adjustment (tail) revenue; non-GAAP total revenue excluding tail revenue increased 9% year-over-year.

• Q3 2024 GAAP net loss was $42.5M, a 15% increase year-over-year; non-GAAP net loss improved 6% year-over-year.

• Adjusted EBITDA was $(34.8)M, compared to $(28.1)M in Q3 2023; adjusted EBITDA excluding net adjustment revenue improved by $4.3M year-over-year.

• Operating cash flow for the trailing twelve months ended 9/30/2024 was $(24.1)M; cash, cash equivalents, and marketable securities totaled $117.8M as of September 30, 2024.

• Recognized $7.4M in non-cash asset impairment charges and $2.0M in restructuring charges in the nine months ended September 30, 2024.

Outlook and guidance

• Full-year 2024 revenue expected between $470M and $495M, with GAAP net loss projected between $(36.5)M and $(22.0)M, and adjusted EBITDA expected between $7.5M and $25.0M.

• Guidance includes estimated positive net adjustment revenue of $14–$20M and operating cash flow guidance of $(10.0)M to $0.0M.

• Operational priorities include growing revenue, achieving positive adjusted EBITDA, advancing omni-channel enrollment, and expanding the product portfolio.

• Confident in sufficient liquidity to execute strategy through 2025 and 2026.

• Anticipates significant consumer demand in the upcoming AEP, driven by plan changes and competitor exits.