GoHealth, Inc.

Good morning, and welcome to GoHealth's third quarter 2024 earnings conference call. My name is Hope, and I will be your operator for today's call. Currently, 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 will now turn the call over to John Shave, Vice President of Investor Relations. John, you may begin.

Thank you and good morning. Welcome to Go Health's third quarter 2024 earnings call. Joining me today are Vijay Kote, Chief Executive Officer, and Brendan Shanahan, Chief Financial Officer. Today'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. Earlier today, we issued a press release containing our results for the third quarter of 2024. We have posted the release on the GoHealth website under the Investor Relations tab. In the press release, we have listed several risk factors that you should consider in conjunction with our forward-looking statements. We encourage you to consider the risk factors described in our 2023 Annual Report on Form 10-K in our other filings 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 quarterly results call. I will now turn the call over to GoHealth CEO Vijay Kote.

Thank you, John, and good morning, everyone. First, I'm pleased to welcome Brendan Shanahan as our new Chief Financial Officer. Brendan joins us with over 30 years of financial leadership experience, including more than 20 years in the Medicare Advantage space. His expertise in financial strategy, mergers and acquisitions, and operational leadership will be invaluable as we continue to execute our strategy and pursue profitable growth. With his extensive background and passion for helping consumers navigate their healthcare options, I am confident that Brendan will be a tremendous asset to our team as we capitalize on the opportunities ahead. I would also like to thank Katie O'Halloran for her dedication during her time as interim CFO. Her leadership has been crucial throughout this transition. Katie will remain a key leader in the finance organization, continuing to serve as chief accounting officer. For those new to the Go Health story, our mission is to provide support clarity, and ultimately peace of mind to Medicare consumers in a landscape often marked by confusion and uncertainty. There are over 65 million Medicare eligibles in the U.S., about half of whom are enrolled in Medicare Advantage plans. Many consumers face an overwhelming number of options, as one-third of Medicare eligibles live in counties with 30 or more plans available. This complexity often deters consumers from exploring better options, as they may not know who to trust where to begin. At Go Health, we aim to empower these individuals with proprietary, objective technological tools and a highly trained and experienced agent team. We have evolved from a traditional Medicare enrollment company to a Medicare engagement company, focusing on building long-term, high-quality relationships with our consumers. We believe this shift allows us to deliver a more integrated and personalized approach to care, reinforcing our unique role in the Medicare landscape. Turning to our third quarter results, I'm pleased to report solid operational progress driven by strong performance from our internal captive team and continued improvements in efficiency and cost effectiveness. Our efforts this quarter were focused on guiding consumers through their Medicare options and delivering value to our stakeholders while ensuring we are adequately prepared for the expected dynamic and disruptive annual enrollment period. Notably, we completed the eTeleQuote insurance acquisition further strengthening our platform. Following the quarter's end, we also refinanced our term loan credit facility with new lenders and a five-year term, reinforcing confidence in GoHealth's financial stability and positioning us for sustained growth. More importantly, the five-year new term allows management the ability to fully focus on the investment and optimization of the business going forward. Brendan will provide further details on this shortly. In Q3, we continue to support consumers in navigating their Medicare choices through the plan fit checkup, leveraging our Encompass workflow with our internal captive team, supporting nearly 650,000 consumer experiences through this process. Overall, this resulted in over 166,000 submissions and added to just under 40,000 consumers' peace of mind by ensuring that their current plans met their needs. Our performance during the Q3 special enrollment period exceeded our expectations, particularly in terms of submissions, revenue, and adjusted EBITDA. Overall submissions were up 3% year-over-year, with our internal captive agent submissions increasing by 46%, highlighting the effectiveness of our training and tools. In contrast, submissions from our GoPartner Solutions channel, or GPS, declined by 46%, reflecting the previously discussed broader market pressures impacting our external broker partners. Despite these challenges, we have been actively onboarding several new agencies that we expect will meaningfully contribute to GPS submission during AEP. The strength of our internal team has been especially evident given the stable shopping and switching dynamics since last AEP. As anticipated, the market dynamics have been stagnant through Q3, but we are optimistic about improvements in Q4 as new benefits have become available alongside significant benefit disruption. We believe the differentiation and efficiency of our proprietary model continues to show via our Encompass workflow and PlanFit checkout process. These improvements have significantly lowered our direct operating cost per submission or customer acquisition costs, driving greater cost effectiveness and enhancing both our operational performance and customer experience. I will address this further later in my prepared remarks. The most significant development this quarter was Go Health's acquisition of eTeleQuote, which closed on September 30th. This strategic move adds approximately $90.5 million in contract assets and $22.5 million in cash to our balance sheet, which is inclusive of our initial $5 million investment. Through this investment, we acquired an 18.9% stake in eTeleQuote, with the previous owner relinquishing their 81.1% ownership. making Go Health the sole owner of eTelequote and allowing us to secure all assets, inclusive of the $5 million paid to eTelequote at transaction closing. The acquisition also led to a substantial improvement in net income, largely due to the significant gain on bargain purchase of $77.4 million, as the fair market value of the eTelequote assets acquired exceeded the fair market value of the liabilities assumed. The addition of eTeleQuotes also brought nearly 400 licensed agents into the GoHealth fold, significantly expanding our agent capacity and strengthening both our financial and operational capabilities. This cash-efficient increase in capacity comes at a critical time, and we believe it will allow us to meet the high demand for Medicare Advantage shopping without the need for further hiring, thus optimizing our customer acquisition efforts. eTelequote will operate within our GPS program, continuing its operations while maintaining independence and benefiting from our plan-fit tools and marketing channels. Integrating eTelequote agents into GPS enhances our reach during AEP, and with reduced broker marketing capacity across the industry, we are confident that GoHealth is well-positioned to leverage this expanded agent base without any perceived risk to the typical disk economies of scale. The transaction is delivering immediate accretive benefits, reinforcing our market leadership and positioning us to seize growth opportunities in the coming quarters. Health plan disruption and consumer shopping behavior during the 2024 AEP is unfolding as we anticipated, with over 2 million individuals having lost coverage and more than 6 million consumers seeing reduced plan benefits. These shifts are driving increased shopping for new plan options, creating a unique opportunity for us to capture demand more effectively, drive continued momentum, and help consumers find better coverage. With favorable market dynamics, reduced competition, and our strategic emphasis on quality, we believe GoHealth is well positioned for success this AEP and beyond. We anticipate these positive trends to continue through the first three quarters of 2025, driving sustained growth and new opportunities. A cornerstone of our transformation into a Medicare engagement company has been the successful rollout of our PlanFit Checkup introduced in Q4 2023. Powered by our AI-driven PlanFit tool, this initiative has significantly enhanced the Medicare Advantage shopping experience for consumers. PlanFit Checkup offers three key outcomes. One, enrolling in a new plan. Two, informing consumers about a better option. or three, reassuring them that their current plan is the right choice. By compensating our agents for each completed checkup, regardless of outcome, we ensure a strong focus on delivering the best possible guidance to our consumers. Building on the success of PlanFit Checkup, we continue to roll out PlanFit Safe, a targeted initiative aimed at retaining existing memberships with our health plan partners. Since its initial launch, implementation has been smooth, and we're seeing continued interest from health plans looking to integrate this program. Given the expected market dynamics for the 2025 plan benefit year, with more justified scenarios for appropriate plan switching, we expect a smaller target population for plan fit saves versus the 2024 benefit year. As we expand plan fit saves, we remain focused on growing our partnerships and enhancing the value we deliver to both consumers and health plans regardless of what the future dynamics will be for the benefit plan year 2026 and beyond. We remain committed to reducing our direct operating cost per submission through AI, automation, and our plan fit tools. We have already achieved material improvements, some of which I will describe to you in further detail, and expect this multi-year effort to drive continued substantial reductions while enhancing marketing efficiency. As we scale our agency business, These strategies will support a strong profit profile by combining ongoing cost savings with higher lifetime value from deeper consumer relationships. Advancing our technology is also central to improving consumer experiences, agent efficiency, and service quality. We have streamlined processes, cutting average call times from 90 to 67 minutes, a 25% reduction. Additionally, we have deployed AI to reduce agent onboarding time by 40%, With the introduction of PlanGPT, an AI-driven tool for quicker access to extensive plan details, we are boosting productivity and allowing for more accurate comparisons and personalized support. Further enhancements include chronic condition special needs plan optimization, making it easier for agents to verify eligibility, driving efficiency and retention while increasing sales. Additionally, Our automatic prescription drug lookup tool has shown a reduction in drug lookup time by approximately 40%, providing convenience and simplicity for both agents and consumers. These innovations, via our proprietary, built-for-purpose technology and platform, are anticipated to deliver strong financial outcomes during AEP by improving speed, precision, and service quality, positioning GoHealth for sustained growth. And with significant runway ahead, we believe we are well positioned to continue making improvements and enhancements, further extending our multi-year lead in developing and implementing proprietary solutions against competitors in our space. With that, I'll turn it over to Brendan to detail our financial results.