GoHealth, Inc.

Good morning, and welcome to the Go Health Board Quarter and Full Year 2024 Earnings Conference Call. My name is Livia, and I'll be your operator for today's call. Currently, all participants are in 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 conference over to John Shafe, Vice President of Investillations. John, you may begin.

Thank you and good morning. Welcome to Go Health's fourth quarter and full year 2024 results 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 known 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 fourth quarter and full year 2024. 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 in our press release. You may also refer to the investor 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 good morning, everyone. Our 2024 results reflect robust financial growth and operational excellence. The success of 2024 is a testament to our continued, unwavering dedication to empowering and engaging Medicare consumers. By simplifying the complexities of Medicare with personalized guidance from a licensed agent using leading technology, we're enabling millions of consumers to make more informed and transparent healthcare decisions. For those new to the Bill 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. The U.S. has over 67 million Medicare-eligible consumers, with over half enrolled in Medicare Advantage, or MA. In many geographic regions, consumers face 40-plus plan options in Medicare Advantage, creating confusion and deterring them from exploring better options. GoHealth seeks to simplify these decisions by empowering consumers with unbiased tools and guidance. For example, this past December, Susan, a retiree and Medicare Advantage enrollee, reached out to Go Health and afterwards left us an unpaid online review. Susan was frustrated by the lack of understanding of her current coverage, steadily increasing out-of-pocket costs, and a suspicion that she may be in the wrong plan. Susan felt uneasy and confused, overwhelmed by a flurry of calls from various marketers, Susan reached out to Go Health for a marketplace view of the Medicare Advantage options available to her and her husband. A licensed agent at Go Health listened to Susan's concerns, gathered her profile and goals, and educated her on the plan options with a thorough comparison of coverage and benefits. Susan selected and enrolled in a new plan with Go Health for her and her husband and reports that they are now saving more than $500 per month. According to Susan, she left the call with the confidence that she understood her options better than she ever had before, and with a sense of relief, saying that a weight has been lifted from my shoulders. Susan goes on to say she plans to come back next year to revisit her situation, review options, and confirm she's in the right plan. At Go Health, we empower Medicare-eligible consumers with proprietary and unbiased tools used by our highly trained and experienced licensed agents. 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. The 2024 Annual Enrollment Period, or AEP, drove exceptional results for GoHealth compared to the prior year. We surpassed expectations across key metrics, which we believe solidifies our market leadership and demonstrate the strength of our strategy and team. We are proud to have supported nearly 3 million consumers in assessing their benefit options in 2024. During Q4, this resulted in over 481,000 submissions, a 67% improvement year-over-year. This achievement reflects the powerful combination of our people, processes, and technology platform, which together drove these improved results. In Q4 2024, we achieved significant year-over-year improvements in both operational efficiency and financial performance. Our submission volume increased in Q4 from the previous year, driven in part by the following factors. First, our captive Medicare team, inclusive of eTeleQuote, saw submissions increase by approximately 82%, driven by improved conversion rates and improved call efficiency times. And second, GoPartner Solutions, our external agents, also demonstrated a 25% year-over-year increase in submissions attributed to effective onboarding of eight new agency partners. Our marketing and agent efficiencies have also translated into meaningful cost reductions. Direct operating cost per submission or customer acquisition costs, CAC, decreased by 27% year-over-year in Q4 to $501. Our Q4 2024 revenue increased to $389 million compared to $277 million in Q4 2023, representing a 41% improvement. Q4 2024 adjusted EBITDA grew to $118 million, a 107% year-over-year improvement. Looking ahead, the positive market dynamics we observed in Q4 2024 are expected to remain favorable through at least the first three quarters of 2025, with cautious optimism for similar favorable dynamics for the fourth quarter, which we anticipate could drive continued opportunity. We are immensely proud of the team's achievements this quarter, which we believe showcase not only outstanding performance, but also our ability to lead with agility and innovation in the dynamic and ever-evolving Medicare landscape. As we reflect on our performance in Q4, it's essential to unpack the operational milestones that contributed to these results. In addition to the financial metrics shared earlier, we achieved several operational milestones that provide further context for our success. Let's explore how our strategies translated into meaningful outcomes. There were three primary contributors to our operational success in Q4. Agent productivity, our plan fit technology platform, and our integration of the eTeleQuote business. A brief word on all these contributors. First, agent productivity. Through enhanced training programs and the adoption of advanced tools, we reduced average handle time by 8.6% in Q4 2024 compared to Q4 2023. The captive team was significantly more efficient year over year when measured by our average handle time alongside the number of consumers we serve and the actual conversion rate. Our team consulted with more consumers per agent per day while decreasing average handle time even amidst a conversion rate improvement, which usually increases the average handle time and decreases capacity to serve more consumers. Second, our Encompass and PlanFit platforms continued to set us apart from our competitors. 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 the outcome, we ensure a strong focus on delivering the best possible guidance to our consumers. Plan fit checkups grew 72% in Q4 2024 compared to the same period in 2023, reflecting strong consumer engagement. Due to significant disruption caused by health plans, plan exits, or benefit degradation, More PlanFit checkups resulted in recommendations of new plan enrollment via our PlanFit tool than in previous years. Additionally, we recommended approximately 29,000 consumers remain in their current Medicare Advantage plan during Q4, ensuring they stayed in a plan best suited to their personal needs and long-term value. In 2024, we launched the PlanFit Save Initiative, a program where we partnered with select health plans to ensure agents were properly incentivized to prioritize the best interests of the consumer, and we began receiving compensation from those initial participating health plans for driving member retention. Since its initial launch, implementation has been smooth, and we are seeing continued interest from health plans looking to integrate this program. As we expand PlansetSafe, we remain focused on growing our partnerships and enhancing the value we deliver to both consumers and health plans. Third, our transformation and acceleration of the e-telequote or e-GQ business. We believe this acquisition demonstrates how strategic integration through the deployment of our proprietary AI-driven tools, automation, training, and sales management can drive positive results, despite the transaction closing just two weeks prior to the start of AEP. ETQ delivered 54,000 submissions during AEP, an impressive 170% improvement year over year, and materially higher than ETQ's expectations prior to the close of our transaction. We believe these results reflect the combined impact of our platform's efficiency, enhanced training program, and a relentless focus on execution and partnership with the ETQ team. We focused on three important attributes of success for ETQ prior to AEP. First, operational improvements. We replaced the Marketplace technology platform ETQ operated on with Go Health's proprietary Planted tool and Marketplace. The deployment of the Go Health Marketplace significantly improved call efficiency and improved agent optimization, enabling ETQ to process more consumers skillfully and compliantly. Second, enhanced training programs. Our operations leaders designed and executed comprehensive training programs, including customized onboarding tracks for new agents and targeted coaching for leaders at all levels. This focus on upskilling contributed to readiness and excellence throughout the AEP period. Finally, inbound lead optimization. Shifting to primarily inbound leads sourced through digital and mail campaigns, scored and matched to the appropriate agents using Go Health proprietary AI tools resulted in higher conversion rates and a more efficient sales funnel. Building on the solid foundation of 2024, we intend to capitalize on favorable market conditions that lie ahead. Our outlook for 2025 reflects confidence in our strategies and we are optimistic that the positive market dynamics we witnessed in Q4 2024 will remain favorable throughout the first three quarters of 2025. Rather than issuing specific guidance, we will outline our general expectations across several key financial indicators. For 2025, we anticipate meaningful revenue growth and profit expansion in the first three quarters versus 2024, driven by ongoing refinements to our operating model, enhanced efficiencies, and favorable market dynamics. Reflecting on the unique dynamics of the 2024 annual enrollment period, we identified and capitalized on opportunities that yielded substantial returns. Though 2024 AEP had very unique market dynamics led by very high consumer disruption, we believe the fourth quarter, or AEP of 2025, will still have positive market dynamics but less disruption than this past year. As a result, we believe the market conditions will be slightly less favorable, though still positive, and thus our AEP efficiency will be contingent upon both our process and automation progress, as well as the degree to which these market conditions change. As the year progresses, we expect to gain clear insights into emerging opportunities, enabling us to make informed decisions that align with our strategic and financial objectives. As we stated last year and always expect to be true, Regulatory and market factors could influence our performance in the year ahead. First, the CMS final rate notice remains a key determinant of health plan funding and revenue assumptions. This year, CMS is projecting a 4.3% average revenue increase for Medicare Advantage health plans in 2026, inclusive of a 7.7% increase to broker commission, the highest effective growth rate in nearly a decade. This increase may signal a more consumer-friendly and growth-oriented MA market, and we are well-positioned to capture additional market share while deepening our relationships with both consumers and health plan partners. Next, we believe the CMS final marketing rules will play a critical role in shaping our marketing effectiveness and outreach strategies. For example, we continue to monitor the implementation of the guidelines in the SEP of 2025 around the Medicare dual eligible special enrollment period eligibility, and access to integrated dual eligible plans. As regulations evolve, we have a proven ability to use our integrated technology and guided sales processes to adapt swiftly and are prepared to maintain engagement efficiency and compliance while continuing to connect consumers with the most suitable plans. Finally, health plan relative competitiveness and thus mix is driven by the dynamic interplay between health plan profitability, consumer switching behavior, and plan affordability on a county by county basis. As always, the impact of these factors, whether individually or in combination, will shape our performance throughout 2025. Some of these key variables will become clearer as the year progresses, while others may remain uncertain until the early part of the fourth quarter, leading into and during AEP. As we continue to navigate these industry shifts, our agile approach and strategic investments should ensure that we are well prepared to adapt capitalize on opportunities, and drive sustained growth. Brendan Shanahan, our CFO, will provide a detailed review of our financial performance for Q4 and the full year.