GoHealth, Inc.

Good morning and welcome to the Go Health first quarter 2023 earnings conference call. My name is Michelle and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Followed by the prepared remarks, we will conduct a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. As a reminder, this conference is being recorded. I'll now turn the call over to John Shave, Vice President of Investor Relations. John, you may begin.

Thank you and good morning, everyone. Thanks for joining Go Health's first quarter 2023 quarterly results call. Joining me today are Vijay Kote, Chief Executive Officer, and Jason Scholz, Chief Financial Officer. This morning'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 or revise any of these statements, whether due to new information, future events, or otherwise. Before the market opened today, we issued a press release containing our results for the first quarter of 2023. We have posted the release on the GoHealth 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. We encourage you to consider the other risk factors described in our Form 10-K and Form 10-Q reports filed with the Security and Exchange Commission 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 measures, and the reconciliations are set forth in the press release. please refer to today's press release for reconciliations of non-GAAP measures to the most comparable GAAP measures discussed during this earnings call. For reference, in the investor relations section of the GoHealth website, we have provided a supporting slide presentation and exhibits that I encourage you to review. And with that, I'd like to turn the call over to Vijay.

Good morning, and thank you all for joining us today. I'm pleased to report a strong quarter and start to the year. we achieved about $183 million in revenue, $29 million in adjusted EBITDA, and $20 million in positive cash flow. Together with our external partners, we helped over 214,000 Medicare beneficiaries assess their current coverage and potential Medicare options and enroll in a plan. Jason will provide more insight into the financial results in his section. At a high level, our first quarter performance highlights our operational efficiencies and the progress we are making within Compass and supports our confidence in our full-year 2023 guidance. The e-broker industry has long believed that growth is directly tied to the acquisition of more agents and thus more leads. However, this traditional approach often leads to dis-economies of scale, where the cost of adding more agents and leads drives up customer acquisition costs due to lower-quality agents and lower-quality leads. We believe technology can drive economies of scale and meaningfully elevate the consumer experience by matching consumers with the right plan for them. Encompass, our proprietary operational technology and data science platform, allows us to streamline the purchase process for consumers, simplifying the cumbersome and confusing experience of healthcare purchasing while allowing our agents to focus on what's most important, showing empathy and care for our consumers. By leveraging our machine learning platform, we're able to better serve these consumers and deliver better outcomes for our business. I am incredibly proud of our team and their tireless efforts towards achieving our goals, and I'm excited to share our progress with you. As we have discussed previously, the increasing propensity for consumers to shop, coupled with the seemingly ever-increasing number of Medicare Advantage choices for consumers can prove overwhelming. This makes the Go Health value proposition to both consumers and health plans so timely and relevant. Go Health's core value proposition to consumers is providing a trustworthy shopping experience that allows consumers to select the Medicare Advantage plan that meets their unique needs. With the Encompass platform, we offer a personalized, unbiased, and no-pressure shopping experience where consumers can feel comfortable and confident throughout the entire process. Our marketplace model distinct from traditional brokers in several ways. At Go Health, we put the consumer at the center of all we do. This has resulted in a passionate belief that we must remain unbiased in the servicing of our consumers. I'd like to take this opportunity to go a bit more in depth to discuss exactly how our people and technology create a differentiated experience and introduce some common language when speaking about our technology. First, I'll start with our associates. Our tenured agents and staffing model support the consumer through the end-to-end shopping process and ensure compliance. We have multiple teams of agents. Tier 1 ensures Medicare eligibility and confirms shopping interest. Tier 2 supports the needs assessment and planned shopping process. And Tier 3 completes enrollment, ensuring the consumers are satisfied with their planned choices, understands their benefits, and know what will happen next. Our quality assurance teams audit the entire process, provide feedback to improve processes along the way, and ensure compliant behavior from our team. Our agents are not incentivized to promote specific health plans, and their compensation is not based on the insurance product that consumers ultimately select. This approach ensures that each consumer receives an impartial evaluation and recommendation that is tailored to their specific needs and preferences. Now moving to technology. Our proprietary consumer matching technology drives value at the start of the consumer shopping process. We've identified many consumer and market level dynamics that correlate to a particular agent being more effective than another in serving a consumer's unique needs. Using machine learning, we identify these matches in real time and route to the best fit agent. We are continuing to test different populations for this matching, and our first tests have shown a 30% increase in conversion rate when applying this routing. Our PlanFit tool has been built on millions of consumer interactions and leverages that data to create a customized, guided, multi-step purchasing experience that results in a thorough and comprehensive understanding of our consumers' Medicare insurance needs. Each time we talk to a consumer, PlanFit analyzes over 180 factors, including plan characteristics, consumer inputs, and historical data to sort through thousands of Medicare Advantage plans and help us provide the best recommendations to consumers. This allows us to help consumers make informed decisions about their healthcare and select the right plan for their unique needs. The tool continues to evolve as we write more policies, gather more data, and add more features. Our proprietary unified agent experience creates a simpler, more efficient process for agents to assist consumers, enables faster onboarding, and drives compliance. These benefits tie directly to revenue, cash flow, and adjusted EBITDA outcomes. The unified agent experience increases automation, creating a simpler, more efficient process. Our sales agents interact with many different applications for everything from determining Medicare eligibility to identifying medications. By integrating these applications directly into our agent platform, we're able to shorten call time for both the agent and consumer. Shorter handle times increase agent and consumer satisfaction and lead to increased throughput in our model. Today, new agents receive rigorous training to complete a high-quality, compliant enrollment. But even with that, it takes repetition for new agents to hone their craft. Our standardized technology accelerates this learning curve and will enable faster onboarding for our new agents, improving overall conversion rates and throughput. Standardization of shopping experience also enables us to drive compliance and adapt to regulatory changes as needed, a critical capability given the current climate. Finally, we create a data profile on each individual, including their health preferences, financial situation, and other relevant factors. Our evolving Customer 360 platform organizes this information and will enable our agents to provide more efficient, personalized service to each consumer that takes their historical relationship with GoHealth into account. This laser focus on the consumer is a win-win and strengthens the value proposition we continue to bring to health plans. We serve the largest health plans in the country, while selectively adding new options in our marketplace to ensure we are offering consumers the highest quality options available. We believe our unbiased marketplace model and superior consumer experience attracts a broader set of consumers than health plans can reach and ultimately expands the number of consumers we can match to health plans. This expands the pie for health plans that participate in our marketplace and enables them to drive their own member growth so long as they have competitive consumer-focused benefits. Additionally, health plans can rely on our standardized and effective sales process to ensure that the consumers enrolled in their plan are informed and satisfied with their plan selection, which minimizes churn, improves retention, and reduces complaints. Finally, our Encompass Model's specialized agent roles and uniform agent experience technology allows us to drive compliance while also being nimble and responsive to the ever-changing regulatory landscape. Our belief in the Encompass Model's value for health plans is backed by our ability to redefine and reset the foundation of our business through our new contracts. We have secured Encompass contracts with nearly all our health plan partners, assuring them access to our high-powered marketplace and guided shopping process that culminates with an in-house dedicated health plan enrollment team for each health plan to support final enrollment confirmation and initiate onboarding. As you can see, Encompass is much more than just a new way to contract. It is also a technology-forward operating model designed with purpose making the consumer's needs paramount. The efficiency of the model has already begun to flow through our financials with lower cash burn and lower costs. This lower cost for submission, driven by significant marketing improvements, lower agent carrying costs during low season, and expansion of technology and tools, offers variable capacity and access to economies of scale. With every shift of volume to the Encompass model, we deliver greater revenue reliability, supported by a greater percentage of cash collected within the first 12 months. Our new model has transformed our cash flow profile as a business, and we are now in the unique position in the industry of generating positive, dependable cash flow. This fundamental economic change in our business model recognizes the value of our differentiated approach to delivering elevated consumer experiences and allows us to build an enduring company. As the Encompass model approaches its first full year of launch at scale, we expect that the model will evolve and continue to improve outcomes for consumers, health plans, and GoHealth stakeholders. Jason will speak about how Encompass allows us to reach profitability with the new business we generate on a go-forward basis and decouples a company's future from the macro headwinds seen throughout the industry from increasing shopping behavior. I want to take a moment to thank our associates, agents, and partners. We have been diligently working to improve operational efficiency, which will take time to show fully in results, but we are very encouraged by our progress, which Jason will now discuss.