eHealth, Inc. Updates Guidance for Fiscal Year 2024 Following Strong AEP Performance
PR Newswire
AUSTIN, Texas, Dec. 17, 2024
AUSTIN, Texas, Dec. 17, 2024 /PRNewswire/ -- eHealth, Inc. (Nasdaq: EHTH), a leading private online health insurance marketplace, today provided commentary on its Annual Enrollment Period $(AEP)$ performance and updated guidance ranges for the fiscal year ending December 31, 2024.
"This dynamic enrollment period was marked by significant changes to Medicare Advantage and Part D plan offerings, creating an increased demand for the trusted, carrier-agnostic solutions that eHealth provides to help beneficiaries navigate their coverage options. eHealth's outperformance during this critical time is a testament to the success of our extensive transformation initiatives and the organization's tremendous AEP preparedness effort," said Fran Soistman, Chief Executive Officer of eHealth.
Continued Fran Soistman, "During the AEP, we drove strong consumer demand to our omnichannel platform coupled with conversion rates that exceeded our expectations, allowing us to deliver substantial enrollment growth at enhanced margins. Most importantly, we continued to execute on our mission, assisting hundreds of thousands of Medicare beneficiaries in evaluating their health coverage and either enrolling in a new plan or determining that their existing coverage remains the best option for their needs. I am proud of the eHealth team and believe we are in the early stages of capturing the exciting opportunities for scale, margin expansion and brand advancement in our Medicare business."
AEP Operational Highlights
-- Strong year-over-year growth in submitted Medicare applications including
significant outperformance within direct marketing channels.
-- All-time high AEP submitted application volume in the online unassisted
category.
-- Telephonic and online conversion rates above expectations and
representing meaningful year-over-year improvement.
-- Expansion in LTV-to-CAC ratio(1) in the Medicare business.
-- Successful implementation of eHealth's new comprehensive member retention
program driving consumers to return to the eHealth platform to review
their coverage and shop for healthcare plans.
Updated 2024 Guidance
Based on information available as of December 17, 2024, eHealth is revising its guidance ranges for the full year ending December 31, 2024.
-- Total revenue is expected to be in the range of $500.0 million to $520.0
million compared to the prior range of $470.0 million to $495.0 million.
-- GAAP net income (loss) is expected to be in the range of $(12.0) million
to $3.0 million compared to the prior range of $(36.5) million to $(22.0)
million.
-- Adjusted EBITDA(2) is expected to be in the range of $40.0 million to
$55.0 million compared to the prior range of $7.5 million to $25.0
million.
The above guidance includes the expected impact of positive net adjustment revenue in the range of $14.0 million to $20.0 million.
-- Operating cash flow is expected to be in the range of $(15.0) million to
$(5.0) million compared to the prior range of $(10.0) million to $0.0
million. The change in operating cash flow outlook reflects eHealth's
investment in profitable Medicare enrollment growth during the fourth
quarter.
Said John Dolan, Chief Financial Officer of eHealth, "The mid-point of our updated guidance ranges implies a substantial expansion of our margins -- an important accomplishment for the company. We also believe the AEP cohort we enrolled this year will drive attractive cash ROI. Our revised operating cash flow guidance reflects greater than expected AEP enrollment volume and associated acquisition spend. As a reminder, we recognize revenue upon plan approval, and member acquisition costs are expensed and paid upfront, while we do not receive initial commission payments for most new policies until the first quarter. Our guidance is reflective of this timing dynamic within our Medicare agency fulfillment model."
These expectations are forward-looking statements, and eHealth assumes no obligation to update these statements. Actual results may be materially different and are affected by the risks and uncertainties identified in this press release and in eHealth's annual and quarterly reports filed with the Securities and Exchange Commission.
About eHealth, Inc.
We're Matchmakers. For over 25 years, eHealth has helped millions of Americans find the healthcare coverage that fits their needs at a price they can afford. As a leading independent licensed insurance agency and advisor, eHealth offers access to over 180 health insurers, including national and regional companies.
For more information, visit eHealth.com or follow us on LinkedIn, Facebook, Instagram, and X. Open positions can be found on our career page.
Forward-Looking Statements
This press release contains statements that are forward-looking statements as defined within the Private Securities Litigation Reform Act of 1995. These include: statements regarding factors that impacted our Annual Enrollment Period $(AEP.UK)$ performance; our expected operating and financial performance for the 2024 fiscal year; our 2024 annual guidance for total revenue, GAAP net income (loss), Adjusted EBITDA and operating cash flow; our estimates for positive net adjustment revenue and its expected impacts on our 2024 annual guidance; our expectation for the AEP enrollment cohort and its expected impact on our financial condition; our estimates regarding Medicare Advantage approved members and Medicare approved members for the fourth quarter of 2024; our expectation for improvement in our LTV-to-CAC ratio; our expectation for improvement in margin for the fourth quarter of 2024; our expectation regarding timing of receipt of commission and payment practices of health insurance carriers; our expectations regarding AEP enrollment volume and associated acquisition spend; our expectations regarding our financial and operating condition and performance; our expectations regarding our business, operations, initiatives and strategies; and other statements regarding our future operations, financial condition, prospects and business strategies.
These forward-looking statements are inherently subject to various risks and uncertainties that could cause actual results to differ materially from the statements made. In particular, we are required by Accounting Standards Codification 606 -- Revenue from Contracts with Customers to make numerous assumptions that are based on historical trends and our management's judgment. These assumptions may change over time and have a material impact on our revenue recognition, guidance and results of operations. Please review the assumptions stated in this press release carefully.
The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, our ability to retain existing members and enroll new members during the annual healthcare open enrollment period, the Medicare annual enrollment period, the Medicare Advantage annual open enrollment period and other special enrollment periods; changes in laws, regulations and guidelines, including in connection with healthcare reform or with respect to the marketing and sale of Medicare plans, such as the Policy and Technical Changes to Medicare Advantage for Contract Year 2025 released by CMS on April 4, 2024 and subsequent rules released by CMS relating thereto; competition, including competition from government-run health insurance exchanges and other sources; the seasonality of our business and the fluctuation of our operating results; our ability to accurately estimate membership, lifetime value of commissions and commissions receivable; changes in product offerings among carriers on our ecommerce platform and changes in our estimated conversion rate of an approved member to a paying member and the resulting impact of each on our commission revenue; the concentration of our revenue with a small number of health insurance carriers; our ability to execute on our growth strategy and other business initiatives; changes in our management or other key employees; our ability to hire, train, retain and ensure the productivity of licensed insurance agents, or benefit advisors, and other personnel; exposure to security risks and our ability to safeguard the security and privacy of confidential data; our relationships with health insurance carriers; the success of our carrier advertising and sponsorship program; our success in marketing and selling health insurance plans and our unit cost of acquisition; our ability to effectively manage our operations as our business evolves and execute on our business plan and other strategic initiatives; the need for health insurance carrier and regulatory approvals in connection with the marketing of Medicare-related insurance products; changes in the market for private health insurance; consumer satisfaction of our service and actions we take to improve the quality of enrollments; changes in member conversion rates; changes in commission rates; our ability to sell qualified health insurance plans to subsidy-eligible individuals and to enroll subsidy-eligible individuals through government-run health insurance exchanges; our ability to derive desired benefits from investments in our business, including membership growth and retention initiatives; our reliance on marketing partners; the success and cost of our marketing efforts, including branding, online advertising, direct-to-consumer mail, email, social media, telephone, television, radio and other marketing efforts; timing of receipt and accuracy of commission reports; payment practices of health insurance carriers; dependence on our operations in China; the restrictions in our debt obligations; the restrictions in our investment agreement with our
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