GoHealth, Inc.

Thank you for standing by and welcome to Go Health's fourth quarter 2021 earnings. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question at that time, please press star then one on your touchtone telephone. As a reminder, today's conference call is being recorded. I will now turn the conference over to your host, Mr. Brian Farley, Chief Legal Officer. Sir, you may begin.

Thank you and good afternoon, everyone. I want to thank each of you for joining Go Health's 2021 fourth quarter and year-end earnings call. Joining me today are Clint Jones, co-founder and chief executive officer, and Travis Matison, our interim chief financial officer. This afternoon's conference call contains forward-looking statements based on our current expectations. Numerous risks and uncertainties may cause actual results to differ materially from those anticipated or projected in these statements. 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 any of these statements or any guidance provided, whether due to new information, future events, or otherwise. After the market closed today, we issued a press release containing our results for the fourth quarter and year end of fiscal 2021. In addition, Presentation materials that Clint and Travis will walk through momentarily, both the release and the slides can be found on GO Health's website under the Investor Relations tab. In the press release, we have listed a number of risk factors that you should consider in conjunction with our forward-looking statements. Other significant risk factors are described in our Form 10-K and 10-Q reports filed with the Securities and Exchange Commission. We filed the form 12B25 earlier this month in order to obtain a 15-day extension on our 10-K filing due date. We intend to file our 10-K for fiscal year 2021 tomorrow, March 16th, in line with the 12B25 extension. During this call, we will be discussing certain non-GAAP financial measures. These measures are reconciled to the most directly comparable GAAP financial measures, and the reason management believes they provide useful information to investors regarding the company's financial conditions and results of operations. These are contained in the press release and investor presentation. And with that, I'd like to turn the call over to Clint.

Thank you, Brian, and thank you all for joining us to review our fourth quarter and full year 2021 results. As Brian mentioned, we have posted a slide deck to our investor relations website that we will walk through before opening the Q&A. Before I jump into our results for the year, Let me thank all of our GoHealth employees for their hard work and long hours spent educating and enrolling customers during AEP. Their dedication to our mission has been inspiring and something we look to build on in 2022. 2021 was a challenging year on multiple fronts for us, and we are disappointed with our operating results. Entering AEP, we achieved our hiring goals, observed strong consumer demand, and we're optimistic with our agent conversion rates leveraging our technology platform. The primary driver of our miss to plan was the lower effectuation and retention characteristics as a result of consumers shopping much more often than we expected. This affected both new members that were sold a plan in Q4, as well as members from older cohorts that we expected to stay on their plans. These drop-offs ultimately resulting in a look-back adjustment we took on previous vintages. as well as the constraint we have added to our Q4 2021 enrollments to mitigate future look-backs, which dampened our reported results. Travis will unpack these more when we discuss our full-year financials. In addition to these LTV insurance challenges, which were observed by us and our peers, we also observed increased competition for MA advertising. We saw cost pressures and underperformance in certain marketing channels, which also negatively impacted retention. We don't think that last year's environment is sustainable for many players, and we believe there will be a pullback in marketing spend and overall competition, which we've already begun to see. Finally, we were not immune to the challenging labor market, and we observed higher than expected agent attrition, which meant operating with less experienced agents. But because we intentionally prioritized growth and scale in 2021, we are in a strong position for 2022 with a larger and more experienced agent base than we've had in the past. This positioning means we can reduce investments in hiring in 2022 and focus on building the tenure of our agents through career development programs and be much more selective with any new agents we look to onboard. As we look to 2022, we believe we are well positioned for success. We have the most efficient platform in the Medicare Advantage eBroker space. Through the challenges of last year, we have emerged as a leader in Medicare Advantage enrollments. Encompass continues to gain traction as evidenced by its $72 million of revenue in 2021, above expectations, which also improves our cash flow profile. Demand for eBroker enrollment continues to be very robust as consumers seek comparison shopping services. Our platform provides an easy way for consumers to quickly find the right plan that meets their needs. Our key focus on 2022 will be on cash flow and better operational leverage. We are taking big steps to drive profitability by operating in a constrained LTV environment. Our formula for success in 2022 starts with optimizing the marketing engine and being highly selective with the leads we generate, then leveraging our guided selling platform to continue to improve agent performance and increase LTVs, and finally, allowing our large book of commission receivables to catch up and boost cash flow. One additional note before we move on. In our press release we shared on March 1st, we noted that we were working with our lenders to secure a waiver on certain covenants. We have secured the waiver and have outlined a plan in 2022 that we believe will not require any additional capital to get to our goal of positive operating cash flow by the first half of next year. With the challenges we observed in 2021, We learned several lessons that will help us optimize the business and drive profitable growth. I'll touch on a few key lessons here on slide five. One, increased consumer shopping put pressure on our LTVs. And we are addressing this in three ways. We are taking a look back adjustment on prior vintages. We are applying an additional constraint on Q4 LTVs to mitigate future look backs. We are assuming lower LTVs in 2022. Travis will discuss these in future slides. Two, we are aligning our marketing spend with our updated LTBs in 2022. We are optimizing our channels to focus on the highest quality leads that have proven to increase member retention. Three, we have clear data from a challenging 2021 that shows the impact of our guided selling platform on key sales performance metrics like conversion, quality, and retention. We are decreasing the number of new agent hires now that we have a large agent workforce. and leveraging this workforce's experience on our guided selling platform while continuing to invest in their development and success. Moving on to slide six, we continue to have strong conviction in the Medicare Advantage market and see strong tailwinds for years to come. There will be over 4 million seniors aging into Medicare in 2022 at a pace of 11,000 per day. Most of these seniors are technically savvy and are used to comparison shopping and buying online and over the phone. Medicare Advantage is growing at 7% to 8% per year for the next several years and provides an attractive alternative to original Medicare. The abundance of plans in the market means that there is more value for consumers to come to comparison shopping services like ours, and the data shows that eBroker channels continue to gain an outsized share of new enrollments. As we have previously stated, our channel is important to providing education, choice, and transparency for the consumer and a source of quality membership growth for our carrier partners. On slide seven, we show our highly differentiated model that leverages machine learning, omnichannel marketing, and highly skilled and trained agents to help every consumer navigate a very complex process. We use data and technology at every step of the way to customize the customer journey. This data and technology platform has continuously evolved over the last 20 years. Our marketing engine engages with customers in both online and offline methods with customized messages and content. Our machine learning tools score and route customers in real time to our licensed agents, creating a journey centered around the customer and the best plan that fits their needs. Our telecare agents perform services that drive quality and engagement under our Encompass platform, aligning the interests of the customers and the carrier. While others in our space experienced sales conversion issues in 2021, our platform enabled us to increase sales conversion throughout the year, despite a significantly less tenured workforce. With more tenure in 2022 and additional enhancements to our guided selling platform, we believe we will have a significant advantage in the market to help consumers find the right plans. Slide eight shows the benefit of our investment in scale. While these investments we made in 2021 proved more expensive than planned, we achieved tremendous enrollment growth relative to our peers. Despite the challenges we described, we were able to enroll 1.2 million consumers in new plans in 2021, a record number and more than two times our nearest peer. This volume growth is a product of our 2021 strategy to invest in our agents, technology, and Encompass platform. We believe we will continue to expand our leadership position in 2022 and plan to differentiate ourselves further by becoming the first of our public peers to reach positive operating cash flow. Moving now to slide nine. In terms of our financial results, we achieved full-year revenues of nearly $1.1 billion, powered by a record 1.2 million submissions, and had a full-year EBITDA of $34 million. As I mentioned before, our low than expected LTVs had severe impacts on both top and bottom lines. However, we were able to emerge from 2021 as the largest enrollment engine and the leading partner with our top carriers. We continue to gain momentum with our Encompass platform as evidenced by our 72 million in Encompass revenue for 2021. We believe we are at an inflection point where we can leverage our scale to focus on optimizing our business and producing healthy, durable cash flows. Looking ahead to our key priorities in 2022 on slide 10, we have a lot to work on, much of which is already underway. We will reduce our marketing spend in certain channels in 2022, allowing us to be more selective and disciplined with our LTV to CAC ratios and profitability. We are focusing on building our agents' experience on our guided selling platform and investing in their career development. We will be much more selective with new agent hires as well. We will continue to make investments in technology solutions that drive efficiency and effectuation, yielding higher quality enrollments. We are continuing to scale our Encompass platform and retention activities for our major partners, which will improve cash flow characteristics. Finally, after years of aggressive growth, we will be shifting our focus to operational efficiencies. We have set a goal of cash flow positivity in the first half of 2023. Some of these efforts and cost reductions have already taken place, and we will see much more favorable cash flow profile in 2022 and beyond with these strategic shifts. Before I turn over the presentation to Travis to provide more color around Q4 and full-year 2021 results, I want to again reiterate to our shareholders and stakeholders that we are disappointed in our 2020 results and believe we have a big opportunity to optimize our business in 2022 and operate against a new set of unit economics. We have established a strong leadership position in a healthy, high-demand market and look forward to continuing to deliver on our mission of improving access to health care in America. Travis?