GoHealth, Inc.

Good morning and welcome to the Go Health Third Quarter 2023 Earnings Conference Call. My name is Michelle and I'll be your operator for today's call. At this time, 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. I'll now turn the call over to John Shea, Vice President of Investor Relations. John, you may begin.

Thank you and good morning, everyone. Welcome to Go Health's third quarter 2023 quarterly results call. Joining me today are Vijay Kote, Chief Executive Officer, and Jason Shulls, Chief Financial Officer. Today's conference call contains forward-looking statements based on our current expectations. Numerous none and unknown 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. Earlier today, we issued a press release containing our results for the third quarter of 2023. We have posted the release on the Go Health 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 Securities 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 measure, and the reconciliations are set forth in the 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 Kote.

Thank you, John, and thank you all for joining us today. I'm pleased to report another strong quarter for GoHealth, with revenue and adjusted EBITDA in line with guidance. Our quarterly results showcase a 12% year-over-year revenue growth, excluding look-back adjustments and non-encompassed BPO services, while our full-year guidance points at a substantial improvement in cash flow from operations and a rapid increase towards profitability as compared to last year. During the third quarter, together with our external agency partners, we helped over 161,000 Medicare consumers assess their current coverage, review potential Medicare options, and enroll in a plan. Go Health's core value proposition to consumers is providing a trustworthy shopping experience that allows them to select the Medicare Advantage plan that meets their unique needs. Our marketplace model is 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. We accomplish this with our Encompass platform, offering a personalized, no-pressure shopping experience where consumers can feel comfortable and confident throughout the entire process. The eBroker 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 them with the right plan for their needs. Encompass, our proprietary operating technology and data science platform, allows us to streamline shopping, 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 Medicare consumers. By leveraging our machine learning platform, we can better serve these consumers and deliver better outcomes for our business. Even with personalization, Encompass provides a standardized workflow that facilitates a uniform consumer experience while enhancing quality and improving cost efficiency. Business flowing through the Encompass workflow, most significantly reflected in the non-agency revenue line, is generally pre-funded and de-risked from policy lifetime values, and therefore should be considered as cash revenue. Non-agency revenue is increased by over 161% year-over-year from $12.9 million in Q3 2022 to $33.5 million in Q3 2023. The Encompass model generates more predictable in-period cash revenue and cash EBITDA. Consistent with our expectations, we have seen increased consumer shopping behavior amongst the Medicare consumers seeking our services. Benefit and health plan changes, such as increasing or decreasing co-pays, moving drugs on and off formularies, regional shifts in provider networks, and expansion or contraction of service areas result in shopping. In addition, material shifts in the Centers for Medicare and Medicaid Services' Medicare Advantage Star Rating, good or bad, generate more shopping. CMS recently announced 2024 Medicare Advantage Star Ratings, and amongst the top 15 health plans by enrollment, about half improved or had stable ratings year over year, while the other half saw their ratings decline. When environmental factors align with the ever-changing personal circumstances of the Medicare consumer, it's no surprise that there is increased shopping. We believe Go Health has been ahead of the curve in terms of identifying shopping behavior and building tools to support it. Our investment in technology is an important differentiation for GoHealth and our consumers. Our proprietary PlanFit tool utilizes a machine learning algorithm built on data from approximately 28 million consumer interactions over multiple years, plus star ratings, and GoHealth independently observed retention characteristics. Our PlanFit tool helps our agents quickly select a recommended plan based on the consumer's individual needs to drive a more likely match for both immediate and short-term consumer priorities. Last quarter, we spoke about our new PlanFit Checkup offering, designed to create a personalized, pressure-free, high-quality shopping experience. We assess consumer needs via the PlanFit Checkup, regardless of whether they have been a Go Health caller for years or a first-time caller. We've seen three consumer outcomes for PlanFit Checkup. In the first outcome, we recommend a new plan to help them save money, increase benefits, or better cover their new needs, and re-enroll them. In the second outcome, we make a recommendation, but the consumer chooses to stay in their current plan. In the third outcome, we find that the consumer is in the best plan for their current needs and reassure them no new enrollment takes place. GoHealth agents who complete the PlanFit checkup are compensated regardless of whether the assessment results in an enrollment. If after a plan fit checkup, our agent informs the consumer they are already on the right plan to suit their personalized needs and no new enrollment takes place, we compensate our agent for investing their time to build trust with the Medicare consumer. In Q3, during our controlled launch, we completed almost 5,000 plan fit checkups and are proud to be doing what is needed in the industry, building trusted, long-term relationships with consumers. We expect the number of completed PlanFit checkups to increase over time as the program is now deployed across our entire Go Health agent base. Our agents are responding positively to PlanFit checkups as we further align agent interests with consumers and continue to build long-term trusted relationships with consumers by putting them at the center of all we do. Our standardized and compass model directs our focus to the lifetime value of a consumer and their relationship with GoHealth, as opposed to the lifetime value of a transactional policy at a given point in time. In addition, we are excited to share that we have made significant progress in both our unified agent experience and Customer 360 technology initiatives, and we'll share more over the coming quarter. Both are aimed at driving improved efficiency for our agents while also preparing us to succeed in a future where consumers are empowered to enroll in and manage their Medicare on their own terms, whether telephonically, digitally, or some combination of the two. Building off the foundation of our robust data set within Customer 360, we have invested a significant amount of time into understanding and testing our learnings of the Medicare consumers. Based on the work we have been doing in earnest over the last year, we have found there are very specific segments of the population that find value in the way we have historically gone to market and the value proposition we have provided. We have also learned there are larger segments of the market that are looking for personalization, not only in the benefit and plan matching process, but also in how they interact with us and our proprietary technology. Based on this insight, We've begun efforts to adapt our engagement model to meet more consumers wherever they're most comfortable, to ultimately deliver them peace of mind in their Medicare coverage decisions. Our unique end-to-end solution is strategically designed to prioritize plan satisfaction and long-term retention, ensuring the most favorable outcomes for Medicare consumers, while aligning with the objectives of our health plan partners who share our vision and values. To that end, the U.S. Senate Finance Committee, along with other consortiums of legislators, have met and commented on Medicare Advantage marketing practices and enrollment tactics. And we are pleased that they are focused on the same core topic we are, protecting Medicare consumers and ensuring an unbiased, personalized shopping experience. In addition, earlier this week, CMS issued the calendar year 2025 proposed rule for Medicare Advantage and Part D. Those early and additional clarifications and definitions will be necessary to draw any conclusions on the implications. It is important to highlight key facts on GO Health's operating model. First, in our model centered on the Encompass workflow, our licensed agents are compensated for a quality plan fit checkup regardless of whether a new enrollment takes place. Second, information on our commercial arrangements with health plans are not shared with our licensed frontline agents. Third, our license agents do not get compensated differently based on which health plan or product they recommend for the consumer. Finally, as part of the Encompass workflow, after our unbiased Tier 2 shopping agent recommends a plan, our Tier 3 agent reviews the recommendation again with the consumer, discusses the trade-off, and reconfirms it is the right choice for them before they ultimately complete the application. We are confident with this process we can ensure through our technology, training, compensation model, and real-time quality assurance that our focus is doing what's right for the consumer. As we embark on the next phase of our growth journey, I take great pride in the fact that GoHealth is serving a large and important group of consumers by helping them navigate a challenging healthcare decision, harnessing the potential of our advanced technology tools for a better experience and delivering strong financial I'll now turn it over to Jason to discuss our financials in more detail. Thanks, Vijay.