GoHealth (GOCO) Q3 2024 earnings summary

Executive summary

• Q3 2024 net revenues were $118.3M, down 10.4% year-over-year, with submissions rising 2.9% due to strong internal agent performance and the e-TeleQuote acquisition.

• Net income for Q3 2024 was $15.4M, a $71.6M improvement from a $56.2M net loss in Q3 2023, primarily due to a $77.4M gain on bargain purchase from the e-TeleQuote acquisition.

• Adjusted EBITDA for Q3 2024 was negative $12.1M, slightly lower than negative $11.5M in Q3 2023.

• Trailing twelve months cash flow from operations improved to $35.1M, up from negative $3.2M a year ago.

• Completed the acquisition of e-TeleQuote, adding $90.5M in contract assets, $22.5M in cash, and nearly 400 licensed agents.

Financial highlights

• Q3 2024 net income margin was 13.0%, up from -42.6% in Q3 2023.

• Q3 2024 Adjusted EBITDA margin was -10.2%, compared to -9.2% in Q3 2023.

• Sales per submission fell to $702 in Q3 2024 from $813 in Q3 2023; direct operating cost per submission decreased 11% to $663.

• Cash and cash equivalents at September 30, 2024 were $35.5M, down from $90.8M at year-end 2023.

• Interest expense rose to $19.1M in Q3 2024, up 8.7% year-over-year.

Outlook and guidance

• Management expects to capitalize on market disruption during the Medicare Annual Enrollment Period, leveraging expanded agent network and AI-driven technology.

• Expect strong demand and positive trends to continue through Q4 2024 and into 2025.

• Anticipate a year-over-year decline in cash flow from operations due to a shift in revenue mix and increased marketing investment.

• Management expects current liquidity, including cash and credit facilities, to be sufficient for at least the next twelve months.

• Ongoing focus on technology investments, operational efficiency, and integration of e-TeleQuote to drive future growth.