- Fourth quarter 2018 submitted Medicare
applications grew 64% compared to the fourth quarter of 2017
- Fourth quarter 2018 revenue is expected
to be in the range of $133.5 million to $135.5 million compared to
revenue of $83.1 million for the fourth quarter 2017
eHealth, Inc. (Nasdaq: EHTH), a leading private online
health insurance exchange in the United States, today announced
preliminary financial results and select operating metrics for the
fourth quarter and fiscal year ended December 31, 2018 and provided
2019 annual guidance.
“We are very pleased with our operational achievements and
financial results for the fourth quarter and the full year 2018,”
commented Scott Flanders, chief executive officer of eHealth. “Our
strong execution during the critical Medicare Annual Enrollment
Period validated eHealth’s value proposition for this important
market and has allowed us to exceed our revenue and EBITDA
expectations for 2018. We expect to maintain this momentum as
reflected in our 2019 annual guidance.”
Fourth Quarter and Fiscal Year 2018 Preliminary
Results
Revenue for the fourth quarter of 2018 is expected to be in the
range of $133.5 million to $135.5 million with expected fourth
quarter revenue from the Medicare segment in the range of $121.0
million to $122.0 million. GAAP net income for the fourth quarter
of 2018 is expected to be in the range of $24.3 million to $27.3
million. Adjusted EBITDA(a) for the fourth quarter of 2018 is
expected to be in the range of $51.7 million to $52.7 million.
For the year ended December 31, 2018, eHealth anticipates
revenue to be in the range of $250 million to $252 million as
compared to the company’s guidance of $217.5 million to $227.5
million. Revenue from the Medicare segment for the full year 2018
is expected to be in the range of $210 million to $211 million.
eHealth anticipates GAAP net income (loss) for the year ended
December 31, 2018 to be in the range of $(1.5) million to $1.5
million as compared to the company’s guidance of $1.6 million to
$6.6 million. eHealth anticipates Adjusted EBITDA(a) for the year
ended December 31, 2018 to be in the range of $33.5 million to
$34.5 million as compared to the company’s guidance of $21.9
million to $26.9 million.
2018 GAAP Net Income includes a non-cash charge of approximately
$12 million related to an increase in fair value of the earnout
liability assumed in connection with eHealth’s acquisition of
GoMedigap. The increase is driven primarily by eHealth’s share
price appreciation since the transaction closed in January of 2018.
The share price appreciation has increased the value of the
equity-based portion of the earnout consideration owed to the
former holders of GoMedigap equity interests.
Submitted applications for all Medicare products grew 64% during
the fourth quarter of 2018 compared to the fourth quarter a year
ago. For the full year 2018, submitted Medicare applications grew
39% compared to the full year 2017. Approximately 22% and 16% of
Medicare major medical applications (b) submitted during the fourth
quarter and the full year 2018 respectively were submitted
online.
Submitted applications for individual and family plan (IFP)
products declined 45% during the fourth quarter of 2018 compared to
the fourth quarter a year ago. For the full year 2018, submitted
IFP applications declined 56% compared to 2017. The decline in IFP
applications reflects continuing volatility in the Individual
market as well as our decision to shift our marketing spend towards
Medicare.
These preliminary, unaudited results are based on information
available as of January 22, 2019 and management's initial review of
operations for the quarter ended December 31, 2018. They remain
subject to change based on management's ongoing review of the
company's fourth-quarter results and are forward-looking
statements. eHealth assumes no obligation to update these
statements. The actual results may be materially different and are
affected by the risk factors and uncertainties identified in this
release and in eHealth’s annual and quarterly filings with the
Securities and Exchange Commission. eHealth anticipates providing
its full financial and operating results for 2018 on or about
February 24, 2019.
2019 Guidance
The company is providing the following guidance for the full
year ending December 31, 2019 based on information available as of
January 22, 2019. 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 risk factors and uncertainties identified in this
release and in eHealth’s annual and quarterly filings with the
Securities and Exchange Commission:
- Total revenue is expected to be in the
range of $290 million to $310 million. Revenue from the Medicare
segment is expected to be in the range of $256 million to $272
million.
- GAAP net income is expected to be in
the range of $16.3 million to $21.3 million.
- Adjusted EBITDA(a) is expected to be in
the range of $45 million to $50 million.
(a) Adjusted EBITDA is calculated by adding stock-based
compensation expense, depreciation and amortization expense,
acquisition costs, amortization/impairment of intangible assets,
other income (expense), net and provision (benefit) for income
taxes to GAAP net income (loss). See “Non-GAAP Financial
Information and Reconciliations.” (b) Major Medicare plans
include Medicare Advantage and Medicare Supplement plans.
About eHealth, Inc.
eHealth, Inc. (NASDAQ: EHTH) operates eHealth.com, a leading
private online health insurance exchange where individuals,
families and small businesses can compare health insurance products
from leading insurers side by side and purchase and enroll in
coverage online and over the phone. eHealth offers thousands of
individual, family and small business health plans underwritten by
many of the nation's leading health insurance companies. eHealth
(through its subsidiaries) is licensed to sell health insurance in
all 50 states and the District of Columbia. eHealth also offers
educational resources, exceptional telephonic support, and powerful
online and pharmacy-based tools to help Medicare beneficiaries
navigate Medicare health insurance options, choose the right plan
and enroll in select plans online through PlanPrescriber.com
(www.PlanPrescriber.com), eHealthMedicare.com
(www.eHealthMedicare.com) and Medicare.com (www.Medicare.com).
Q4 2018 Fiscal year 2018
In
millions
Low High Low High GAAP income (loss) $ 24.3 $ 27.3 $
(1.5 ) $ 1.5 Stock-based compensation 3.1 3.1 12.4 12.4
Depreciation and amortization expense 0.6 0.6 2.5 2.5 Acquisition
and restructuring costs — — 1.9 1.9 Amortization/Impairment of
intangibles 3.2 0.2 4.7 1.7 Change in fair value of earnout
liability 6.0 6.0 12.3 12.3 Other income (expense), net — — (0.8 )
(0.8 ) Provision (benefit) for income taxes 14.5 15.5 2.0
3.0 Adjusted EBITDA $ 51.7 $ 52.7 $
33.5 $ 34.5
Fiscal year
2019
In
millions
Low High GAAP income (loss) $ 16.3 $ 21.3 Stock-based
compensation 14.9 13.4 Depreciation and amortization expense 3.5
3.0 Acquisition and restructuring costs — — Amortization/Impairment
of intangibles 3.1 2.1 Change in fair value of earnout liability —
— Other income (expense), net 1.2 1.2 Provision (benefit) for
income taxes 6.0 9.0 Adjusted EBITDA $ 45.0 $ 50.0
This press release includes financial measures that are not in
accordance with generally accepted accounting principles in the
United States (GAAP), including Adjusted EBITDA. Adjusted EBITDA is
calculated by adding stock-based compensation expense, depreciation
and amortization expense, acquisition costs,
amortization/impairment of intangible assets, other income
(expense), net and provision (benefit) for income taxes to GAAP net
income (loss).
eHealth believes that the presentation of these non-GAAP
financial measures provide important supplemental information to
management and investors regarding financial and business trends
relating to eHealth’s financial condition and results of
operations. Management believes that the use of these non-GAAP
financial measures provides consistency and comparability with
eHealth’s past financial reports. Management also believes that the
items described above provides an additional measure of eHealth’s
operating results and facilitates comparisons of eHealth’s core
operating performance against prior periods and business model
objectives. This information is provided to investors in order to
facilitate additional analyses of past, present and future
operating performance and as a supplemental means to evaluate
eHealth’s ongoing operations. eHealth believes that these non-GAAP
financial measures are useful to investors in their assessment of
eHealth’s operating performance.
Adjusted EBITDA is not calculated in accordance with GAAP, and
should be considered supplemental to, and not as a substitute for,
or superior to, financial measures calculated in accordance with
GAAP. Non-GAAP financial measures used in this press release have
limitations in that they do not reflect all of the revenue and
costs associated with the operations of eHealth’s business and do
not reflect income tax as determined in accordance with GAAP. As a
result, you should not consider these measures in isolation or as a
substitute for analysis of eHealth’s results as reported under
GAAP. eHealth expects to continue to incur the stock-based
compensation costs and purchased intangible asset amortization
costs described above, and exclusion of these costs, and their
related income tax benefits, from non-GAAP financial measures
should not be construed as an inference that these costs are
unusual or infrequent. Finance to confirm this sentence. eHealth
compensates for these limitations by prominently disclosing GAAP
net income (loss) and providing investors with reconciliations from
eHealth’s GAAP operating results to the related non-GAAP financial
measures for the relevant periods.
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 our
execution during the Medicare annual enrollment period, our
momentum in 2019, our anticipated revenue, revenue from the
Medicare segment, GAAP net income and Adjusted EBITDA for the
fourth quarter of 2018 and the year ended December 31, 2018,
submitted applications for Medicare products and IFP products for
the fourth quarter and year ended December 31, 2018, our
stock-based compensation costs and purchased intangible asset
amortization costs, the timing of our full financial and operating
results for 2018, and our guidance for the full year ending
December 31, 2019, including our guidance for total revenue,
revenue from the Medicare segment, GAAP net income and Adjusted
EBITDA.
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 the new revenue recognition standard to make numerous
assumptions that are based upon historical trends and management
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 section
carefully as well as the disclosures about our implementation of
the new revenue recognition standard in our Form 10-Q for the
fiscal quarters ended March 31, 2018, June 30, 2018 and September
30, 2018, as well as the recast consolidated financial statements
for each of the three years in the period ended December 31, 2017
reflecting the adoption of the new revenue recognition standard in
our Form 8-K filed on December 17, 2018.
The risks and uncertainties that could cause our results to
differ materially from those expressed or implied by such
forward-looking statements include risks associated with the impact
of healthcare reform; our ability to retain existing members and
enroll a large number of new members during the annual healthcare
reform open enrollment period and Medicare annual enrollment
period; the impact of annual enrollment period for the purchase of
individual and family health insurance and its timing on our
recognition of revenue; our ability to sell qualified health
insurance plans to subsidy-eligible individuals and to enroll
subsidy eligible individuals through government-run health
insurance exchanges; changes in laws and regulations, including in
connection with healthcare reform; our ability to successfully make
and integrate acquisitions; our health insurance benefit packages'
ability to meet individual customer's specific health insurance and
price needs; our ability to comply with CMS guidance and impact on
conversion rates as a result of the federal exchange changes to
enrollment; competition, including competition from government-run
health insurance exchanges; seasonality of our business and the
fluctuation of our operating results; our ability to retain
existing members and limit member turnover; changes in consumer
behaviors and their selection of individual and family health
insurance products, including the selection of products for which
we receive lower commissions; a reduction of product offerings
among carriers and the resulting impact on our commission
revenue; carriers exiting the market of selling individual and
family health insurance and the resulting impact on our supply and
commission revenue; our ability to execute on our growth strategy
in the Medicare and small business health insurance markets; the
impact of increased health insurance costs on demand; our ability
to timely receive and accurately predict the amount of commission
payments from health insurance carriers; timing of commission
payments from health insurance carriers; medical loss ratio
requirements; delays in our receipt of items required to recognize
Medicare revenue; changes in member conversion rates; our ability
to accurately estimate membership; our relationships with health
insurance carriers; customer concentration and consolidation of the
health insurance industry; our success in marketing and selling
health insurance plans and our unit cost of acquisition; our
ability to hire, train and retain licensed health insurance agents
and other employees; the need for health insurance carrier and
regulatory approvals in connection with the marketing of
Medicare-related insurance products; costs of acquiring new
members; scalability of the Medicare business; lack of membership
growth and retention rates; consumers satisfaction of our service;
changes in competitive landscape; our ability to attract and to
convert online visitors into paying members; changes in products
offered on our ecommerce platform; changes and reductions in
commission rates; maintaining and enhancing our brand identity; our
ability to derive desired benefits from investments in our
business, including membership growth initiatives; dependence on
acceptance of the Internet as a marketplace for the purchase and
sale of health insurance; reliance on marketing partners; the
impact of our digital 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; compliance with insurance and
other laws and regulations; exposure to security risks; and the
performance, reliability and availability of our ecommerce platform
and underlying network infrastructure. Other factors that could
cause operating, financial and other results to differ are
described in eHealth’s most recent Quarterly Report on Form 10-Q or
Annual Report on Form 10-K filed with the Securities and Exchange
Commission and available on the investor relations page of
eHealth’s website at http://www.ehealthinsurance.com and on the
Securities and Exchange Commission’s website at www.sec.gov.
All forward-looking statements in this press release are based
on information available to eHealth as of the date hereof, and
eHealth does not assume any obligation to update the
forward-looking statements provided to reflect events that occur or
circumstances that exist after the date on which they were made,
except as required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190122005918/en/
Investor Relations Contact:Kate Sidorovich, CFAVice
President Investor Relations(650)
210-3111kate.sidorovich@ehealth.comhttp://ir.ehealthinsurance.com
eHealth (NASDAQ:EHTH)
Historical Stock Chart
From Mar 2024 to Apr 2024
eHealth (NASDAQ:EHTH)
Historical Stock Chart
From Apr 2023 to Apr 2024