AUSTIN,
Texas, Jan. 26, 2024 /PRNewswire/ -- eHealth,
Inc. (Nasdaq: EHTH), a leading private online health insurance
marketplace, today announced preliminary, unaudited financial
results and select operating metrics for the fourth quarter and
fiscal year ended December 31,
2023.
"Our Annual Enrollment Period performance is a testament to the
success of the business transformation plan that we initiated two
years ago as well as our organization-wide AEP preparedness
efforts. Ahead of the fourth quarter, we scaled our telesales
organization, launched a successful brand campaign, and further
enhanced customer experience on our omni-channel platform," said
Fran Soistman, Chief Executive
Officer of eHealth.
Continued Mr. Soistman, "During the fourth quarter,
eHealth delivered strong year-over-year revenue and Medicare
enrollment growth, while driving further expansion of our Medicare
unit gross margin. Importantly, our full year 2023 operating cash
flow represents a substantial improvement compared to a year ago,
driven by favorable commission collections from our existing member
cohorts as well as our disciplined approach to operating costs. We
entered 2024 on a strong financial and operating foundation and
will continue our efforts to build a leadership position in the
important Medicare Advantage market as well as to pursue our
business diversification strategy across adjacent areas."
Select AEP and Fourth Quarter 2023 Operating Metrics
- Medicare Advantage approved members for the fourth quarter of
2023 were 159,595, an increase of 22% year-over-year.
- Total Medicare approved members for the fourth quarter of 2023
were 186,567, an increase of 16% year-over-year.
- Fourth quarter 2023 Medicare Advantage lifetime values (LTV)
grew year-over-year, driven by favorable member retention and
carrier mix, among other factors.
Fourth Quarter and Fiscal Year 2023 Preliminary
Results
- Total revenue for the fourth quarter of 2023 is expected to be
in the range of $241 to $249 million. Total revenue for the year ended
December 31, 2023 is expected to be
in the range of $446 to $454 million as compared to the company's
guidance of $439 to $459 million.
- Fourth quarter 2023 total revenue includes positive net
adjustment revenue of approximately $12 to $17 million,
reflective of continued positive trends in beneficiary persistency
and commissions payments.
- GAAP net income for the fourth quarter of 2023 is expected to
be in the range of $47 to
$52 million. GAAP net loss for the
year ended December 31, 2023 is
expected to be in the range of $32 to
$27 million as compared to the
company's guidance of GAAP net loss of $46 to $26
million.
- Adjusted EBITDA for the fourth quarter of 2023 is expected to
be in the range of $65 to
$70 million. Adjusted EBITDA for the
year ended December 31, 2023 is
expected to be in the range of $10 to
$15 million as compared to the
company's guidance of $(3) to
$17 million.
- Operating cash flow for the year ended December 31, 2023 is expected to be approximately
$(7) million as compared to the
company's guidance of $(30) to
$(15) million.
The preliminary, unaudited financial results and select
operating metrics included in this press release are based on
information available as of January 26,
2024 and management's initial review of operations for the
fourth quarter and year ended December 31,
2023. They remain subject to change based on management's
ongoing review of the Company's fourth quarter and full year
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 press release and in eHealth's
annual and quarterly filings with the Securities and Exchange
Commission.
About eHealth
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.
Consumers can visit our health insurance marketplace at
eHealth.com or call us to speak with a licensed insurance
agent at 1-833-964-1202, TTY 711. 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 fourth quarter
performance; our expected operating and financial performance in
2024; our expected total revenue, GAAP net income (loss), Adjusted
EBITDA and operating cash flow for the fourth quarter of 2023 and
the year ended December 31, 2023, as
applicable; our Medicare Advantage approved members for the fourth
quarter of 2023; our Medicare approved members for the fourth
quarter of 2023; our Medicare unit gross margin for the fourth
quarter of 2023; our estimates regarding constrained lifetime
values of commissions per approved member by product category; our
expectations regarding our financial and operating condition and
performance; our expectations regarding our business, operations,
initiatives and strategies, including the Medicare Advantage market
and our business diversification strategy; 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;
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 and key
employees; our ability to hire, train, retain and ensure the
productivity of licensed insurance agents, or benefit advisors, and
other employees; 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 transformation 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 maintain
and enhance our brand identity; our ability to derive desired
benefits from investments in our business, including membership
growth and retention initiatives; reliance on marketing partners;
the impact of our direct-to-consumer mail, email, social media,
telephone and television 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
convertible preferred stock investors and our ability to comply
with such restrictions and conditions; our ability to raise
additional capital; compliance with insurance, privacy,
cybersecurity, and other laws and regulations; the outcome of
litigation in which we may from time to time be involved; the
performance, reliability and availability of our information
technology systems, ecommerce platform and underlying network
infrastructure; including any new systems we may implement; public
health crises, pandemics, natural disasters, changing climate
conditions and other extreme events; general economic conditions,
including inflation, recession, financial, banking and credit
market disruptions; and our ability to affectively administer our
self-insurance program. Other factors that could cause operating,
financial and other results to differ are described in our 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 our 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 us as of the date hereof, and we do 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.
Non-GAAP Financial Information
This press release
includes Adjusted EBITDA, a financial measure that is not
calculated in accordance with generally accepted accounting
principles in the United States
(GAAP). Adjusted EBITDA is calculated by excluding provision for
(benefit from) income taxes, depreciation and amortization,
stock-based compensation expense, other income (expense), net, and
other non-recurring charges from GAAP net income (loss). Other
non-recurring charges to GAAP net income (loss) may include
transaction expenses in connection with capital raising
transactions (whether debt, equity or equity-linked) and
acquisitions, whether or not consummated, purchase price
adjustments and the cumulative effect of a change in accounting
principles.
eHealth believes that the presentation of Adjusted EBITDA
provides 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 Adjusted EBITDA provides consistency and
comparability with eHealth's past financial reports. Management
also believes that Adjusted EBITDA 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 Adjusted EBITDA is 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. Adjusted EBITDA has limitations in that it does not reflect
all of the revenue and costs associated with the operations of
eHealth's business and does not reflect income tax as determined in
accordance with GAAP. As a result, you should not consider this
measure 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 depreciation and
amortization described above, and exclusion of these costs, and
their related income tax benefits, from Adjusted EBITDA should not
be construed as an inference that these costs are unusual or
infrequent. eHealth compensates for these limitations by
prominently disclosing GAAP net income (loss) and providing
investors with a reconciliation from eHealth's GAAP net income
(loss) to Adjusted EBITDA for the relevant periods.
The accompanying table provides more details on GAAP net income
(loss), which is the most directly comparable GAAP financial
measure to Adjusted EBITDA, a non-GAAP financial measure, and the
related reconciliation between these financial measures.
Non-GAAP Financial Information Reconciliation – Preliminary
Results
|
Three Months
Ended
December 31,
2023
|
|
Year
Ended
December 31,
2023
|
(in millions,
unaudited)
|
Low
|
|
High
|
|
Low
|
|
High
|
GAAP net income
(loss)
|
$
47
|
|
$
52
|
|
$
(32)
|
|
$
(27)
|
Stock-based
compensation expense
|
6
|
|
5
|
|
24
|
|
23
|
Depreciation and
amortization
|
5
|
|
5
|
|
20
|
|
20
|
Other expense,
net
|
1
|
|
1
|
|
1
|
|
1
|
Provision for
(benefit from) income taxes
|
6
|
|
7
|
|
(3)
|
|
(2)
|
Adjusted
EBITDA
|
$
65
|
|
$
70
|
|
$
10
|
|
$
15
|
Non-GAAP Financial Information Reconciliation – Fiscal Year
2023 Guidance
|
Year
Ended
December 31,
2023
|
(in millions,
unaudited)
|
Low
|
|
High
|
GAAP net
loss
|
$
(46)
|
|
$
(26)
|
Stock-based
compensation expense
|
22
|
|
20
|
Depreciation and
amortization
|
22
|
|
21
|
Other expense,
net
|
7
|
|
6
|
Benefit from
income taxes
|
(8)
|
|
(4)
|
Adjusted
EBITDA
|
$
(3)
|
|
$
17
|
Investor Relations Contact:
Kate Sidorovich, CFA
Senior Vice President, Investor Relations & Strategy
investors@ehealth.com
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SOURCE eHealth, Inc.