GoHealth, Inc.

Good day and welcome to the GoHealth Third Quarter 2025 Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to John Shave, Vice President of Investor Relations. Please go ahead.

Thank you and good morning. Welcome to Go Health's third quarter 2025 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 announcing our results for the third quarter 2025. We have posted the release on the GoHealth website under the Investor Relations tab. In the press release, we have listed certain risk factors that you should consider in conjunction with our forward-looking statements. We encourage you to consider the risk factors described on our Form 10-Q and our Form 10-K 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 measures in our press release. You may also refer to the investor relations presentation posted on 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 Go Health CEO, Vijay Kodai. Thank you, John, and good morning, everyone.

Today, more than 65 million individuals are enrolled in Medicare, and nearly half participate in Medicare Advantage. Each year, Beneficiaries are challenged to decide how to access their coverage. They face an overwhelming number of plan options and annually need to sift through changes to benefits, networks, and formularies. Our role is to simplify that decision. GoHealth's platform is built from more than 30 million shopping experiences, giving our agents a data-driven view of which plans best align with each beneficiary's eligibility, doctors, prescriptions, and personalized needs. The foundation of our model remains the same. Match beneficiaries to the coverage that serves them best, whether that means enrolling in a new plan or confirming their current one continues to be the right fit. Turning to the current Medicare Advantage landscape, demand for Medicare Advantage remains strong, and we believe the role of a trusted broker is more important than ever. However, the shape of growth this year has been different. Based on our analysis, health plans are prioritizing retention, stable member profiles, and unit economics rather than broad expansion. Health plans tighten plan economics, reduce pre-funded marketing, and adjusted broker compensation. In some cases, the most consumer-preferred plans were made non-commissionable or were suppressed, and some health plans eliminated or consolidated low-margin plans entirely. The decision to scale back our MA volume earlier this year began when we saw health plans tightening commissions, eligibility, and benefit structures. So we pulled back intentionally. As we disclosed with our Q2 results, we made a deliberate decision in the second quarter to scale back our Medicare Advantage activity in response to tightening health plan economics. We shifted our capacity into Go Health Protect. during SEP and prioritized retention and stable member profiles rather than pursuing volume where unit economics did not justify incremental volume. What I can tell you based on my personal experience building and running Medicare Advantage health plans is that none of the actions that health plans are taking now are irrational. Frankly, I believe they are very justified and prudent. We believe that health plans are making good decisions and have been clear about what they want and what they do not want. We have been here before. The industry experienced similar pressures previously. We learned from those cycles, and we used those lessons this year to move early. Rather than chasing volume and declining economics, we focused on three key priorities. One, quality over quantity. Two, retention over short-term submission. And three, cash preservation and strategic flexibility. We retained our highest quality agents, shifted marketing toward retention, and adjusted compensation to reinforce objective guidance, including confirming the consumer's existing plan when appropriate. We have significantly reduced overhead while continuing to invest in AI and automation that improve agent effectiveness, consumer experience, and member retention. We are confident that this will keep our platform efficient today and maintain our strategic optionality moving forward. These decisions preserve the capabilities that matter to us, our member book, our retention and engagement model, our leadership and special needs plans, and our efficient platform. We have continued support from our lenders and have enhanced our governance structure to support this strategy. Last quarter, we obtained a new senior secured super priority term loan facility, including new capital and covenant relief, and we refreshed our board with new directors aligned with long-term value creation. We believe these actions provide the capacity to operate, invest, and evaluate strategic opportunities, including consolidation in a fragmented broker landscape. Health plans have been very clear about what they want today. Retention over new growth, quality over quantity, and focused growth on special needs plans. We are aligning our strategy accordingly. we are protecting the parts of the business that matter to us the most. First, our leadership position in special needs plans, where health plans are increasingly reallocating resources. Total available non-special needs plan products declined for 2026, while special needs plan options increased. This reflects a clear industry priority, targeted growth, where value and continuity of care are highest. Second, our high-quality member book that supports payment quality, and third, our retention and engagement model. The broker landscape remains fragmented, and we believe the current environment supports consolidation. With a stronger balance sheet, lender support, and a refreshed board, we believe that we are positioned to lead integration where it creates value, reducing duplicative costs, improving back-book cash flow, stabilizing membership retention, and enhancing the consumer experience. We look forward to continuing to provide you with updates as we progress down this path. Here are the messages I want to make sure are clear. First, our pullback is intentional. We prioritize long-term value creation rather than near-term enrollment volume. Medicare is complex and choice can be overwhelming. Our role is not simply to move members into new plans, to help them understand whether their current plan is still the right fit. That balance between guidance and stability has always been core to how GoHealth serves consumers. Second, we preserve the capabilities that matter to us the most, including our technology platform, our retention and engagement model, our high-quality member base, and our leadership and special needs plan. Third, we believe the industry should consolidate. As others face capital constraints, we are confident that Go Health is positioned to lead, to integrate, and to expand when the environment stabilizes. Let me leave you with one thought. If our interpretation of the market proves early or overly cautious, we believe we have preserved flexibility through the protection of the member base, the platform, and the balance sheet. Alternatively, if we had chased projected volume in deteriorating economics and that assessment was wrong, the downside would have been significant and lasting. We chose the disciplined path. We also remain optimistic. Medicare Advantage is a durable and important part of the U.S. healthcare system, and we expect the market to rationalize as benefit designs, STARS performance, and cost structures stabilize. Because we read the market and reacted early, maintained our core capabilities, strengthened our balance sheet, and aligned with health plan priorities, We believe GoHealth is positioned to return to revenue growth consistent with prior years when the market rationalizes, but with a meaningfully stronger margin and cash profile. With that, we will open the line for questions.