GoHealth Q1 2025 Earnings Call Transcript

Quartr
Provided by Quartr
May 13, 2025

There are 8 speakers on the call.

Operator

Good morning, and welcome to GoHealth's first quarter two thousand twenty five earnings conference call. My name is Tanya, and I'll be your operator for today's call. Currently, all participants are in a listen only mode. Following the prepared remarks, we will conduct a question and answer session. As a reminder, this conference is being recorded.

Operator

I would now like to turn the call over to John Shave, Vice President of Investor Relations. John, you may begin.

Speaker 1

Thank you, and good morning. Welcome to GoHealth's first quarter twenty twenty five results call. Joining me today are Vijay Kote, Chief Executive Officer and Brendan Shanahan, Chief Financial Officer. Today's conference call contains forward looking statements based on our current expectations. Numerous known and unknown risks and uncertainties may cause actual results to differ materially from those anticipated or projected in these statements.

Speaker 1

Many of the factors that will determine future results are beyond the company's ability to control or predict. You should not place undue reliance on any forward looking statements, and the company undertakes no obligation to update or revise any of these statements, whether due to new information, future events, otherwise. Earlier today, we issued a press release containing our results for the first quarter twenty twenty five. We have posted the release on the GoHealth website under the Investor Relations tab. In the press release, we have listed certain risk factors that you should consider in conjunction with our forward looking statements.

Speaker 1

We encourage you to consider the other risk factors described in our 10 ks and 10 Q reports filed with the SEC for additional information. During this call, we will be discussing certain non GAAP financial measures. These measures are reconciled to the most directly comparable GAAP financial measure in our press release. You may also refer to the Investor Relations presentation posted to the Investor Relations section of our website for reconciliations of non GAAP measures to the most comparable GAAP measures discussed during this earnings call. I will now turn the call over to GoHealth CEO, Vijay Kotay.

Speaker 2

Thank you, John, and thank you all for joining us today. Our performance during Q1's open enrollment period exceeded our expectations for submissions, revenue, and adjusted EBITDA. For those new to the GoHealth story, our mission is to provide support, clarity, and peace of mind to Medicare consumers in a landscape often marked by confusion and uncertainty. The US has over 67,000,000 Medicare eligible consumers, with over half enrolled in Medicare Advantage, or MA. In many geographic regions, consumers face over 40 different plan options, creating confusion and deterring them from exploring better options.

Speaker 2

GoHealth seeks to simplify these decisions by empowering consumers with unbiased tools and guidance. At GoHealth, we strive to empower Medicare eligible consumers with proprietary and unbiased tools used by our highly trained and experienced licensed agents. We have evolved from a traditional Medicare enrollment company to a Medicare engagement company, focusing on building long term, quality relationships with our consumers. We believe this shift allows us to deliver a more integrated and personalized approach to care, reinforcing our unique role in the Medicare landscape. With that said, let me now turn to our first quarter results, which highlight strong operational execution and meaningful progress across our financial and strategic priorities.

Speaker 2

Our performance in the quarter exceeded our expectations. Notably, submission volume in Q1 increased from the previous year, driven by our captive Medicare team's impressive 64% year over year growth, while agent headcount only grew by 24% year over year. Our Q1 twenty twenty five revenue increased to $221,000,000 compared to $186,000,000 in Q1 twenty twenty four, representing a 19% improvement. Q1 twenty twenty five adjusted EBITDA grew to $42,000,000 a 56% year over year improvement. Our Q1 results were driven by another quarter of improvements within our productivity.

Speaker 2

Thanks to the combination of stronger training programs and broader adoption of our AI driven tools, including Plan GPT and the Plan Fit tool, we cut enrollment average handle times by 12% compared to the same period last year. More importantly, our captive agents served more consumers per day, while still improving conversion rates. This balance between speed and quality shows the strength of our model and the discipline we've built into our operations. Similar to what we communicated after AEP, we attempt to deploy our capital to drive the most appropriate balance of risk and return. We have invested in valuable year over year growth, driven by our strong direct cost of submission, or CAC, conversion rates, and capacity expansion.

Speaker 2

Due to a higher mix of agency versus non agency submissions, we reported a year over year decrease in cash flow from operations of $25,000,000 and in line with our product mix expectations, a 15% year over year decrease in sales per submission. Reflecting on our first quarter performance, I want to take a few minutes to highlight three exciting developments that enable us to expand our ability to serve consumers. First is the launch of a new suite of products in the life insurance space we have called GoHealthProtect. Second is the continued evolution of our PlanFit platform. And third, there are several new technology enhancements that are already making a meaningful impact.

Speaker 2

As we continue to focus on innovation and diversification, we are excited to share that GoHealth has launched GoHealthProtect, a suite of products to cover unexpected life events with the expansion into Guaranteed Acceptance Life Insurance, often referred to as final expense insurance as the inaugural product. Guaranteed Acceptance Life Insurance is a simple, affordable product designed to help families cover the cost of funeral and burial expenses. This move is a natural extension of our core business and GoHealth's mission to ensure consumers' peace of mind when making healthcare decisions, enabling them to focus on living life. Our Medicare Advantage platform has been the foundation of GoHealth's success, but it's also inherently seasonal, with most of our activity concentrated around the Annual Enrollment Period, or AEP. That seasonality limits our ability to drive consistent revenue and cash flow throughout the year.

Speaker 2

GoHealth Protect, led by our initial Guaranteed Acceptance Life Insurance offering, begins to help us solve that problem. This product offering aligns perfectly with our commitment to bringing peace of mind to the consumers we serve. We expect that it will also allow us to better support our existing customer base. We see a real opportunity here. Roughly half of the population 65 does not have any life insurance coverage today.

Speaker 2

We also generate millions of leads annually across the same population. By leveraging our pre existing relationship with this consumer base and our existing sales infrastructure, we believe we will be able to drive growth in a cost effective way without significant new investment. I'm encouraged by the early progress. During the first quarter, we launched a partnership with a leader in the guaranteed acceptance life insurance space. Their strong brand, simplified product offering have made them a great fit for our go to market approach.

Speaker 2

Together, we aim to deliver a high quality, consumer friendly product that our agents are genuinely excited to sell. With a significant percentage of our agents already holding life insurance licenses, the response has been overwhelmingly positive, and we expect this strong momentum to continue in the second quarter. From a financial standpoint, the economics are consistent with the structure and return profile of our non agency contracts. The economic value per policy is attractive when factoring in average duration, expected persistency, and a materially lower acquisition cost compared to our core Medicare business. This creates strong unit economics and accelerated cash realization.

Speaker 2

In short, our move into GoHealthProtect is a highly strategic step for GoHealth. It diversifies our product portfolio, minimizes revenue seasonality, and we anticipate it will put us on a clear path toward long term profitable growth. We believe it aligns with our mission, empowers our agents, and most importantly, allows us to better serve the consumers who count on us. As GoHealthProtect was in its early testing phases during Q1, there was minimal contribution to revenue and adjusted EBITDA. However, we expect it to continue to ramp in Q2 and Q3, and thus be a meaningful contributor to the full year 2025 results and beyond.

Speaker 2

Second, we believe our Encompass and Plan Fit platforms continue to set us apart and gain traction. These tools give consumers tailored guidance, whether that's enrolling in a new plan, finding a better fit, or simply validating that their current plan is still the best choice. In Q1, Plan Fit Checkups grew 27% year over year, a strong sign that consumers are engaging more actively with us. Given the disruptions caused by plan exits and benefit changes, we saw a higher rate of plan switches than usual. At the same time, we helped roughly 15,000 consumers stay in their existing plans, reinforcing our focus on long term value, not just short term sales.

Speaker 2

Early results are encouraging, and we expect the program to keep growing. Third, we delivered several important technology launches, with a concentration on automation and artificial intelligence. That are enhancing both the consumer experience and agent efficiency. In early April, we launched MyGoHealth, giving consumers the ability to create a profile, save their personal information, and manage their Medicare journey more easily. We also piloted a unified enrollment experience that consolidates carrier applications into a single, streamlined process.

Speaker 2

Agents have already reported seeing faster enrollment and a simpler workflow. For our GPS downline agencies, we completed the move to GPS Express, an innovation to our enrollment system that has improved the efficiency of the post sale consumer experience. On the Go Help Protect expansion, we rolled out inbound marketing leads to our agents, and as expected, conversion rates are higher than with manual outbound dialing. And finally, our marketing and operations teams have deployed a differentiated approach towards identifying, tailoring messaging, and conducting a deep needs assessment with consumers who may qualify for chronic condition special needs Medicare plans, or CSNPs. Taken together, we believe these operational and technological investments are already driving better engagement, greater efficiency, and a stronger platform for sustainable growth.

Speaker 2

Additionally, we'd like to highlight a key regulatory development. CMS announced a 5.06% average increase in Medicare Advantage revenue for health plans, along with a 10.72% increase to the Broker Commission Schedule in its final rate notice. This represents the most significant adjustment in over a decade, and underscores the continued strength of the Medicare Advantage Program. It also affirms the important role brokers play in helping beneficiaries navigate their options. Looking ahead to the 2025 AEP, while we continue to anticipate positive market dynamics, our outlook has evolved.

Speaker 2

We anticipate another disruptive AEP. Some early indications of the upcoming disruption are the decisions made by health plans, both during the fourth quarter of twenty twenty four and more recently in Q2 to suppress Plan Commission eligibility, to be even more targeted on where they want to grow, hold, or pull back for the remainder of plan year 2025. We believe these moves indicate a likely repricing of plan benefits to right size margin profiles that will likely result in more consumers needing to assess their options. Due to our expectation to see health plans deemphasize growth in Q2 and Q3, also referred to as the Special Election Period or SEP, as well as the continued evolution of the Medicaid dual eligible changes, we plan to continue to ship more capacity into GoHealthProtect for the remainder of SEP as we prepare for another dynamic shopping season in the fourth quarter. We will continue to monitor the market behavior, and ultimately wait to see what happens with final health plan bids and product benefit changes, to get a better view on the shopping and appropriate switching behaviors we can expect to see with consumers going into the 2026 plan year.

Speaker 2

We believe the market condition will be favorable ahead, though our ability to capitalize on those conditions will be dependent on the health plan benefit decisions, appetite for growth, and willingness to invest in the high value service GoHealth provides alongside our operational and capital efficiency. Before I turn the call over to Brendan for a more detailed review of our financial results, I want to briefly address a matter that, while not new, has recently taken a procedural step forward. GoHealth is aware that the United States Attorney's Office has decided to intervene in a key TAM lawsuit that names multiple defendants, including GoHealth. The claims in both the action by the government as well as the original complaint are based on alleged violations of the False Claims Act and the Anti Kickback Statute. This case has been undersealed and inactive for several years since it was originally filed.

Speaker 2

GoHealth firmly denies the allegations made by the government in this lawsuit related to events that allegedly occurred between 2016 and 2021. We are disappointed that the government is pursuing claims against the company that strives to advance the interests of the Medicare Advantage Program and the Medicare beneficiaries it serves. We intend to vigorously defend against these claims and will not allow this litigation to distract us from our mission, to provide peace of mind to the Medicare beneficiaries we serve. While we take this matter seriously, it did not change our focus or our momentum. We do not intend to further comment on ongoing litigation.

Speaker 2

Now I will turn the call over to Brendan Shanahan, our CFO, who will provide a more detailed review of our financial performance for Q1.

Speaker 3

Thank you, Vijay. I will continue with a review of our financial performance for the first quarter of twenty twenty five. First quarter revenue totaled $221,000,000 representing a 19% increase compared to Q1 twenty twenty four. Higher captive agency submission volumes drove growth, helped by improved operational efficiency. While we reported a GAAP net loss of $9,800,000 this quarter, this reflects a significant improvement year over year and is progress toward our goal to drive long term profitability.

Speaker 3

Importantly, our adjusted EBITDA for Q1 twenty twenty five totaled $42,100,000 a 56% increase from $26,900,000 in Q1 twenty twenty four, which we believe demonstrates the underlying strength and scalability of our model. Cost optimization efforts across marketing, agent training and operational infrastructure significantly improved our margins. A key driver of these results was the Q1 reduction in our direct operating cost per submission or customer acquisition costs by 18% from $640 to $522 which we believe is a testament to our targeted marketing strategies and efficient agent performance. On the cash flow front, we reported negative cash flow from operations of $12,400,000 compared to a positive $12,500,000 in the prior year period, primarily driven by the mix shift from non agency to agency. Likewise, our commissions receivable grew to over $1,000,000,000 at quarter end, growing nearly 19% year over year due to the same mix shift from non agency to agency, reinforcing the durability and scale of our business.

Speaker 3

Discipline guides our decision making as we constantly evaluate how much rep growth to pursue, recognizing that these are conscientious choices. Every quarter, we weigh how much we want to invest to pursue additional growth versus how much we're willing to leave on the table to preserve cash to preserve margin or cash flow. And we do so with flexibility and financial discipline to adapt to evolving market dynamics. A great example of this is our GoHealthProtect initiative, which was deployed and launched during the first quarter. It's still early, but we are excited about the potential.

Speaker 3

This business shares similar cash dynamics with our non agency model, where fees are paid more quickly, which will help reduce seasonality in our cash flow and drive a more predictable revenue and margin profile. As GoHealthProtect scales, we expect it will contribute to lowering our customer acquisition costs, especially as agents are able to serve more consumers with multiple product options. That's a powerful economic advantage and one we believe we are well positioned to capture in part because we've secured proprietary contracts that are differentiated across the industry. These agreements give us unique access and flexibility to serve consumers in ways that few others can replicate. Looking more broadly, we remain highly focused on capital discipline and maximizing return on investment.

Speaker 3

We continue to actively evaluate how to best deploy our resources, whether through growth investments, technology acceleration or further capital structure optimization. Our goal is to reduce our cost of capital and reinvest in the business in ways that drive long term value. We will be thoughtful and selective. We will continue to monitor the market and pursue only those alternatives that offer attractive economics and strategic alignment. With continued favorable market dynamics and a potentially disruptive AEP, we expect further progress in margin expansion, operating efficiency and returns on our technology investments.

Speaker 3

We believe the market will continue to reward models that combine personalized service with operational excellence and the ability to adapt in real time. I will now hand it back to Vijay for his closing remarks.

Speaker 2

Thank you, Brendan. Our first quarter results underscore the strength of our model and disciplined execution, along with continued momentum in helping seniors navigate Medicare with greater clarity. We believe our innovation and deployment of AI tools are empowering our agents and leading to better consumer experiences, improving plan fit, building trust, and strengthening long term relationships. Early traction from Go Help Protect is equally encouraging, extending our value to existing consumers, opening the door to new consumers, reducing seasonality, and enhancing unit economics through multi product engagement. As we move forward, we remain focused on leveraging our platform, agent network, and consumer trust to thoughtfully expand into adjacent verticals aligned with our mission.

Speaker 2

Thank you for your time and interest. Operator, we're now ready for questions.

Operator

Thank you. And one moment for our first question, which will come from Rob McGuire of Granite Research. Your line is open.

Speaker 4

Good morning, and thank you for taking my call.

Speaker 2

Good morning, Rob.

Speaker 4

Yeah, good morning. Terrific. So 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?

Speaker 2

Look, I think we have always commented on there are to be multiple scenarios and multiple alternatives in how we think about our capital structure. We have a term loan, we have revolvers, we have a lot of different alternatives as to how we can think about running and investing in the business. We are always assessing becoming more efficient to open up more doors to do more things. And I think some of the innovation around new products, like GoHealthProtect to help support the way we want to invest in the business and finding different ways to do that internally, are going to be ones that we're going to continue to consider. As Brendan said in his prepared comments, we are going to make sure that whatever we do consider is the right time, the right terms, that will improve our position, not make it weaker.

Speaker 2

So we're going to continue to assess it under that kind of key considerations. But more importantly, what I would tell you is that the DOJ piece by itself obviously is something that we're going to be working on separately, as we just described. But it doesn't change our plans to go ahead and assess multiple alternatives and all the different options out there to enhance our capital structure so that we can invest in the business appropriately.

Speaker 4

Thanks, Vijay. And then this morning, I don't know if you caught the news on United. Was just curious, you made comments regarding the fourth quarter AEP. Is there do you have any thoughts on United and the changes that they're experiencing? And then can you kind of give us a little more detail on your expectations for this year's coming AEP versus last year on a relative basis?

Speaker 2

Yeah, no, I did see the news. It's a little early to digest all of that. But what I would say is that across the industry, there has been no deficit of health plans describing some of their margin challenges, either last year coming into this year, and or in their attempts to try to manage their margins and or their growth profile as they move into the new plan year of 2026, so this transitionary period. As I indicated earlier, we're reading those tea leaves as best as we can. And what that tells us is that the health plans are uncertain about the margin profiles or having challenges with those margins even into '25 as they either have announced that in their earnings or they have pulled back on what they're making commission eligible in their sales for new commissionable sales.

Speaker 2

And that is a strong indication that those are products that need to be reset because it doesn't meet the margin threshold or they're seeing unexpected medical expense trends or otherwise. What we see that to mean is that there's a higher likelihood that there's going to be more benefit resets and disruptions coming in the upcoming AEP, especially in those products that didn't get reset last year, right? So if you wrote on products that were redesigned already for last year, those are probably good products. For the products that didn't get reset or maybe the market competitiveness wasn't able to be assessed at the time when health plans introduced '20 '20 '5 benefit plans back last October. Well then those are the ones who are most likely to be reset.

Speaker 2

So we don't know for sure. We're going have to monitor for the rest of the year. But early indications, as we said, lead us to believe that there are going to be more benefit adjustments going into the next AEP. And that's going to cause for a new shopping experience or demand for shopping and comparison of options for consumers.

Operator

Thank you. And our next question will be coming from Pat McCann of Noble Capital Markets. Pat, your line is open.

Speaker 5

Hey, thanks. Good morning. Thanks for taking my questions. First of all, I wanted to ask about GoHealthProtect. And I guess the first question there is, 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?

Speaker 5

Is this something where you are marketing specifically for that offering? Or is it more of something that is you kind of added on as an additional sales point after a consumer comes through the top of the funnel that you already have implemented for the Medicare Advantage business?

Speaker 2

Morning, Pat. Thanks for the question. What I would say is this, is first and foremost, this guaranteed acceptance life insurance, or also known as final expense insurance within the industry, is not a novel concept. People do it. What GoHealth is doing here is similar to the way we think about how we deliver on Medicare Advantage.

Speaker 2

Is that we don't have to be the first mover, but we will do it with a consumer oriented lens. And we'll do it more efficiently through our standardization, through our technology, and through our innovative approach to marketing to match consumers with the products that they need. And in this vein, as we've been testing it in Q1 going into Q2, you want to be thoughtful about how many partners you bring into that. So we've been selective in that process. We've been testing all the different approaches, as we indicated in my earlier remarks, between doing outbound and serving consumers who are already with us and who have demonstrated some interest with it.

Speaker 2

Versus also doing some inbound marketing to find out which consumers would react to the marketing on a more direct response basis for this type of product. So we've been testing all of it as we do with Medicare Advantage and we have a balanced approach to how we do that. And as time goes on, we'll see the different products and different alternatives that are available for consumers and make sure within a portfolio of what we expect to be expanding with GoHealth Protect, more products to be offered to match those needs. Those may be with the same health or carrier or they could be multiple carriers. It really depends on what we start to assess is the demand function from the consumer side that they're interested in.

Speaker 2

So I'm pretty excited about it because we have proven that once we find that there's an economic structure and a value proposition that matches with the consumers we serve and the operating model we deliver, we can do it at scale and really lead within the industry. And we expect to be scaling up to be just that within this portfolio of products. So more to come, it is still early. You don't want to go too broad, too fast in what you're going to offer because otherwise it's hard to be great at it. So we're going to do it slow and steady and calculated.

Speaker 2

But as we indicated, continue to ramp through Q2 and Q3, and we expect it to be meaningful as we move forward.

Speaker 5

Thanks. That's helpful. And then my last question was just I wanted to touch on something in presentation, sales per submission being down 15%. And I think you mentioned that that was within expectations, but I was just wondering if you could quickly touch on that and what's kind of going on behind the scenes there.

Speaker 2

Yeah, so it's a great question, Pat. And I think there's a reason why I wanted to explicitly call it out in our prepared remarks, which is because we saw the same dynamic. We saw it actually 16% drop in the fourth quarter year over year. And now it's 15.4 this quarter year over year. And that is the exact same dynamic that is happening, which is agency versus non It's a mix shift between the non agency contracts and agency contracts.

Speaker 2

As you may recall, back when we originally went into the non agency business back in late twenty twenty two, we were actively choosing which products, which health plans we wanted to make that shift over. And when we made the shift, we got a pickup in sales per submission for those non agency contracts. As the mix dynamic shifts back to agency because that's the best product that matches the consumer's needs, again, we don't put our thumb on the scale there. Then you're gonna see the opposite effect where the blended average is coming down. The isolated rates for agency and non agency aren't necessarily changing.

Speaker 2

It's the mix shift that's driving that change in the perception of sales per submission. And so that's why in line with the mix shift in non HCT and H that we saw in Q4 that you should see run through Q1, that's why it's the same dynamic and nothing more to talk about on that issue. It's the same story and the same underlying costs.

Operator

Okay. And our next question will be coming from James Sidoti of Sidoti and Company. James, your line is open.

Speaker 6

Hi, good morning. Thanks for taking the questions. So you had some pretty impressive growth with regard to the number of submissions. Can you break it out? Can you tell us how many of those submissions came from the recently acquired eTeleQuote agents?

Speaker 2

Yes. As we think about our operating model coming out of the fourth quarter and the first quarter this year, we've been actively starting to work on integrating as much as possible. We've shifted some of the agents to get better distribution, better oversight, more consistency with our historically what you would call the GoHealth captive team integrated now with DTQ. We're getting much more integrated in that. So we're not going to split out the agent counts because now it's more mixed within all of our teams as opposed to a separate distinct team.

Speaker 2

There is a smaller agent base that is still managed by predominantly ETQ leadership. But I'd say in general, it's been mixed between. But I would say, as you think year over year, we got a 25% year over year increase in agent headcount available on the floor in Q1. And a good portion of that came from ETQ as part of that transaction late last year.

Speaker 6

Okay. All right. And then we look at the last two quarters, despite the lower revenue per submission, you were able to grow total revenue 40% in fourth quarter, '20 percent this quarter. I know you don't give specific guidance, but I mean, you think those trends continue in June and September? Do you think you'll have a higher revenue relative to a year ago?

Speaker 2

You know, that's again, as I've indicated, we're thinking about how we're going to look at the full year. We're reading and reacting to how the health plans are behaving in the Q2 and Q3. And you want to be nimble there. And you want to be able to assess what's the most efficient use of capital and what is going to be the greatest, I guess, avenue for investment to allow you to have the capacity you want to react to whatever the fourth quarter is going look like. So I know not a lot of conclusive items there.

Speaker 2

We are optimistic about what the shopping dynamic will look like in the fourth quarter. In Q2 and Q3, we're seeing that if not the greatest environment as you see health plans pulling back and you have to be thoughtful about where you want to grow relative to that and their interest in growing. And then that's why we're introducing GoHealthProtect to hedge against that so that we have more stability and predictability in Q2 and Q3 despite or regardless of what health plans in the MA space are trying to do. So long story, a long way to answer your question, no, I'm not prepared to give you any clear indications of what we think about revenue year over year. What I can tell you though is that we are reading the situations.

Speaker 2

We are making sure we have a portfolio of options to work within to be able to optimize our performance and leverage the assets we've got to do so. So we are indicating clearly that in Q2, Q3 we're going lean more into GoHealthProtect because of the dynamics we're observing. And then if we get better line of sight to what the actual behavior will be in the fourth quarter beyond what we're starting to see as being disruptive. Once we can see more of where it will be disruptive, it's going to be more SNIP, more non SNIP. Is it going be which geographies within the country?

Speaker 2

We can read and react there to be able to determine how much of the opportunity in the fourth quarter we'll be able to reap. But that's what we're focused on right now is reading and reacting as we continuously go. And that's why we hold off on giving full year guidance because there are too many unknowns till we get to the later parts of the year.

Speaker 6

Okay. And then can you give us some balance sheet information, cash at the end of the quarter and total debt?

Speaker 2

Sure. Let me give that to Brendan. Yes. Thank

Speaker 3

you. Yes. So cash at the end of the quarter was 23,000,000 and that's down from year end.

Operator

And our next question will be coming from Dave Storms of Stonegate. Your line is open.

Speaker 7

Good morning and thank you for taking my questions. Just wanted to ask my first one around GoHealthProtect. You mentioned a lot of the synergies that you're expecting the momentum that you're expecting into the second half of the year. What are some of the logistical hurdles that you'll need to clear to get there?

Speaker 2

Sorry. Can you repeat that question? I didn't catch all.

Speaker 7

Sorry, just around GoHealthProtect, some of the logistical hurdles that you'll need to clear to see that growth through the second half of the year.

Speaker 2

Yeah, no, I mean, we're making sure that we have our agents all licensed. As I said, we have a significant portion of our floor who already have life insurance licenses. As we started this, we were always thoughtful. Our operating team is very impressive in being able to take a small test group, really kicking the tires, figuring out what works, what doesn't work. And then when they feel like there's a scalable model, being able to really ramp up with our agents and ensure that they're trained.

Speaker 2

If you look back at, for example, what we did with even ETQ last year, within weeks of closing that transaction, we were able to ramp them up onto our tools and getting them to be very efficient with it. So once we proved that model in the late part of Q1, rolling into Q2, we started to scale up those agents, those who are qualified and getting them appointed appropriately and then feeding them with the appropriate leads to be able to deliver. So it really is just making sure that everybody's licensed, appointed and then that we've got them set up to operate within our technology to write that business. There's not a lot there. That's what we said.

Speaker 2

There's a minimal investment necessary from us on a fixed basis to get there. It's more about investing in the marketing or leveraging the marketing we already do to be able to sell these products to those who need it. And the question for us is just making sure that we have a thoughtful ramp as opposed to room moving too quickly. Because you want to make sure that you keep learning and getting your best practices deployed before you go to the full floor.

Speaker 7

Understood. Thank you. And then maybe just a macro question. 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 plant based checkups, more inbound calls or anything like that?

Speaker 2

If we go back to history last year, you can see we had a lot more opportunities that came through the door. But more importantly, the opportunities that came in were more disproportionately those who needed to make changes because disruption happened. There were a lot of plan exits last year. So first and foremost, the question is how many plan exits will there be? Because those are shoppers who need to make a plan change under all circumstances.

Speaker 2

They have to choose something new. When there's just benefit degradation, it's more of a, are my options better or worse than the other ones available? Or the plan I'm on, did it change in a way that's gonna be exorbitantly expensive to me? And are there alternatives that can actually help support my daily cost of living, etcetera, etcetera. So what we end up seeing is more people shop because they hear about the disruptions, they hear everything going on in the industry, you have more shoppers come through the door.

Speaker 2

And generally, we found that those shoppers who come through and coming on inbound have a higher probability of needing a switch. And that's what we've observed last year. And that's what we're expecting that we'll have more coming in this year. We'll wait to see what benefits ultimately do. But our expectation is there's going to be a lot demand for shopping to compare their options as there will be continued benefit repricing is our current expectation.

Operator

Thank you. And I'm showing no further questions at this time. I would now like to turn the call back to Vijay Cote, CEO, for closing remarks.

Speaker 2

Well, you all for your time here. I know we've had a lot of really good questions. There's a lot that's exciting going on with GoHealth. There's a lot of things going on within the industry that we need to monitor. The health plans are continuing to reassess how they want to show up for Medicare Advantage.

Speaker 2

There's no doubt it's a valuable product and serves a lot of consumers. And those consumers need help figuring out what matches for their needs. The health plans need help to balance their needs as well. And the one common denominator there is players like GoHealth can enable that ability to balance needs against the market dynamics. We're excited about how that plays forward.

Speaker 2

There's a lot that we're working on to read and react as we see the market coming. As we think about our flexibility, our capital structure, as we talked about earlier, making sure that we have the ability to invest appropriately, to seize the opportunities that are there that are thoughtful, and positive contributors to revenue, EBITDA, and our cash position. All of those are really important balancing acts for us. And we wanna make sure that we are prepared for the market to come. So with that, we appreciate your time.

Speaker 2

We're excited about the opportunity, and we look forward to speaking to you all again very soon.

Operator

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

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Key Takeaways

  • GoHealth delivered a 19% revenue increase to $221 million and a 56% adjusted EBITDA growth to $42 million in Q1, driven by higher submission volume and a 12% reduction in average handle times via AI-driven tools.
  • The company launched GoHealthProtect, a suite of guaranteed-acceptance life insurance products, to diversify its offerings, reduce seasonality, and leverage existing agent licenses—and expects meaningful revenue ramp in Q2 and Q3.
  • Tech innovations like PlanFit saw a 27% year-over-year increase in checkups, while tools such as Plan GPT, MyGoHealth, and a unified enrollment system are enhancing consumer engagement and agent efficiency.
  • CMS’s final rate notice includes a 5.06% boost in Medicare Advantage revenue and a 10.72% rise in broker commissions, marking the most significant adjustment in over a decade and reinforcing the value of broker-led guidance.
  • Looking ahead, GoHealth anticipates a disruptive AEP amid health-plan benefit repricing and commission eligibility shifts, and plans to flex capacity into GoHealthProtect during Q2/Q3 while maintaining capital discipline.
AI Generated. May Contain Errors.
Earnings Conference Call
GoHealth Q1 2025
00:00 / 00:00