GoHealth, Inc. (NASDAQ: GOCO) (“GoHealth” or the “Company”), a
leading health insurance marketplace and Medicare-focused digital
health company, today announced financial results for the three and
nine months ended September 30, 2024.
Third Quarter Highlights
- Third quarter 2024 net revenues of $118.3 million, a $13.7
million decrease compared to $132.0 million in the prior year
period.
- Third quarter 2024 Submissions were 166,195, a 2.9% increase
compared to 161,550 Submissions in the prior year period, with
strong contributions from GoHealth’s internal captive agents,
partially offset by a decline in Submissions from the external
GoPartner Solutions (“GPS”) agents.
- Third quarter 2024 net income of $15.4 million, an improvement
of $71.6 million compared to a net loss of $56.2 million in the
prior year period.
- Third quarter 2024 Adjusted EBITDA(1) of negative $12.1
million, a decrease of $0.6 million compared to negative $11.5
million in the prior year period.
- Third quarter 2024 trailing twelve months (“TTM”) positive cash
flow from operations of $35.1 million, an increase of $38.3 million
compared to TTM negative cash flow from operations of $3.2 million
in the prior year period.
- Refinanced Credit Facility, establishing new five-year term
with new lender group.
- Completed the strategic acquisition of e-TeleQuote Insurance,
Inc. (“e-TeleQuote”), adding approximately $90.5 million in
contract assets and $22.5 million in cash (inclusive of the
Company’s initial $5.0 million investment), and recording a $77.4
million gain on bargain purchase, reinforcing GoHealth’s
aspirations to expand its market leadership and operational
capacity.
- Achieved an 11.0% improvement in Direct Operating Cost per
Submission(2) in the third quarter of 2024 compared to the prior
year period, through advancements in artificial intelligence
(“AI”), automation, and marketing efficiencies, along with targeted
operational improvements.
- Appointed Brendan Shanahan as Chief Financial Officer, who
brings over 30 years of healthcare and financial strategy expertise
to GoHealth.
“Our third-quarter results underscore the strength of our
ongoing transformation into a Medicare engagement company. We’ve
helped over 650,000 consumers navigate Medicare options through
tools like PlanFit CheckUp, and with the addition of e-TeleQuote’s
400 agents, we’re prepared to efficiently serve the demand surge we
are seeing in this year’s Medicare Annual Enrollment Period
(“AEP”). We believe these developments reinforce GoHealth’s
leadership in the eBroker space, positioning us for sustained
growth and profitability,” said Vijay Kotte, CEO of GoHealth.
“The acquisition of e-TeleQuote not only added $90.5 million in
contract assets and $22.5 million in cash (inclusive of our initial
$5.0 million investment), but also provided a substantial gain on
bargain purchase of $77.4 million, boosting our financial
position,” Kotte continued. “This strategic move expanded our agent
capacity ahead of a pivotal AEP, which we believe will enable us to
capitalize on market demand. As the competitive landscape shifts,
GoHealth aims to stand out, ready to support the millions of
consumers facing benefit reductions or coverage losses.”
“GoHealth’s third-quarter results reflect disciplined cost
management, as we reduced our Direct Operating Cost per
Submission(2) by 11.0%, despite broader market challenges. These
efficiency gains and a focus on high-quality lead generation
underscore our commitment to driving profitable growth, especially
as we progress through AEP,” said Brendan Shanahan, CFO of
GoHealth. “With over $77 million gained through the e-TeleQuote
acquisition, we believe we’re positioned with the liquidity and
flexibility needed to drive long-term value, even as we expand our
agent base during this critical AEP.”
“This AEP, we’re seeing unprecedented disruption, with over two
million consumers losing coverage and more than six million
experiencing reduced benefits. We believe GoHealth’s investments in
AI-driven technology, an expanded agent network, and our focus on
consumer engagement uniquely position us to lead through these
market changes, delivering both growth and improved customer
experience,” said Kotte.
(1) |
Adjusted
EBITDA is a non-GAAP measure. For a definition of Adjusted EBITDA
and a reconciliation to the most comparable GAAP measure, please
see below. |
(2) |
Direct Operating Cost per Submission is an operating metric.
For a definition of Direct Operating Cost per Submission and an
explanation of its calculation, please see below. |
|
|
Conference Call Details
The Company will host a conference call today, Thursday,
November 7, 2024 at 8:00 a.m. (ET) to discuss its financial
results. A live audio webcast of the conference call will be
available via GoHealth's Investor Relations website,
https://investors.gohealth.com/. A replay of the call will be
available via webcast for on-demand listening shortly after the
completion of the call.
About GoHealth, Inc.
GoHealth is a leading health insurance marketplace and
Medicare-focused digital health company whose purpose is to
compassionately ensure consumers’ peace of mind when making
healthcare decisions so they can focus on living life. For many of
these consumers, enrolling in a health insurance plan is confusing
and difficult, and seemingly small differences between health plans
may lead to significant out-of-pocket costs or lack of access to
critical providers and medicines. GoHealth’s proprietary technology
platform leverages modern machine-learning algorithms, powered by
over two decades of insurance purchasing behavior, to reimagine the
process of matching a health plan to a consumer’s specific needs.
Its unbiased, technology-driven marketplace coupled with highly
skilled licensed agents has facilitated the enrollment of millions
of consumers in Medicare plans since GoHealth’s inception. For more
information, visit https://www.gohealth.com.
Investor
Relations: |
John Shave |
JShave@gohealth.com |
|
Media
Relations: |
Pressinquiries@gohealth.com |
|
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, (the “Securities Act”), and Section 21E of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”). These
forward-looking statements are made in reliance upon the safe
harbor provision of the Private Securities Litigation Reform Act of
1995. All statements other than statements of historical facts
contained in this press release may be forward-looking statements.
Statements regarding our future results of operations and financial
position, business strategy and plans and objectives of management
for future operations, including, among others, statements
regarding our expected growth, future capital expenditures, debt
service obligations, adoption and use of artificial intelligence
technologies, the impact on our business from the acquisition of
e-TeleQuote Insurance, Inc. (“e-TeleQuote”) and our ability to
successfully integrate e-TeleQuote’s operations, technologies and
employees into our business, are forward-looking statements.
In some cases, you can identify forward-looking statements by
terms such as “may,” “will,” “should,” “aims,” “expects,” “plans,”
“anticipates,” “could,” “intends,” “targets,” “projects,”
“contemplates,” “believes,” “estimates,” “predicts,” “potential,”
“likely,” “future” or “continue” or the negative of these terms or
other similar expressions. The forward-looking statements in this
press release are only predictions, projections and other
statements about future events that are based on current
expectations and assumptions. Accordingly, we caution you that any
such forward-looking statements are not guarantees of future
performance and are subject to risks, assumptions and uncertainties
that are difficult to predict. Although we believe that the
expectations reflected in these forward-looking statements are
reasonable as of the date made, actual results may prove to be
materially different from the results expressed or implied by the
forward-looking statements.
These forward-looking statements speak only as of the date of
this press release and are subject to a number of important factors
that could cause actual results to differ materially from those in
the forward-looking statements, including the factors described in
the sections titled “Summary Risk Factors,” “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations” in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2023 (“2023 Annual Report on Form
10-K”) and in our other filings with the Securities and Exchange
Commission. The factors described in our 2023 Annual Report on Form
10-K should not be construed as exhaustive and should be read
together with the other cautionary statements included in this
press release, as well as the cautionary statements and other risk
factors set forth in the Quarterly Report on Form 10-Q for the
first fiscal quarter ended March 31, 2024, the Quarterly Report on
Form 10-Q for the second fiscal quarter ended June 30, 2024, the
forthcoming Quarterly Report on Form 10-Q for the third quarter
ended September 30, 2024 and in our other filings with the
Securities and Exchange Commission.
You should read this press release and the documents that we
reference in this press release completely and with the
understanding that our actual future results may be materially
different from what we expect. We qualify all of our
forward-looking statements by these cautionary statements. Except
as required by applicable law, we do not plan to publicly update or
revise any forward-looking statements contained herein, whether as
a result of any new information, future events, changed
circumstances or otherwise.
Non-GAAP Financial Measures
Throughout this press release, we use a number of non-GAAP
financial measures. Non-GAAP financial measures are supplemental
measures of our performance that are derived from our consolidated
financial information, but which are not presented in our Condensed
Consolidated Financial Statements prepared in accordance with U.S.
generally accepted accounting principles (“GAAP”). We define these
non-GAAP financial measures as follows:
- “Adjusted EBITDA” represents, as applicable for the period,
EBITDA as further adjusted for certain items summarized in the
table furnished below in this press release.
- “Adjusted EBITDA Margin” refers to Adjusted EBITDA divided by
net revenues.
- “EBITDA” represents net income (loss) before interest expense,
income tax expense (benefit) and depreciation and amortization
expense.
We believe that excluding certain items from our GAAP results
allows management to better understand our consolidated financial
performance from period to period and better project our future
consolidated financial performance as forecasts are developed at a
level of detail different from that used to prepare GAAP-based
financial measures. Moreover, we believe these non-GAAP financial
measures provide our stakeholders with useful information to help
them evaluate our operating results by facilitating an enhanced
understanding of our operating performance and enabling them to
make more meaningful period to period comparisons. Adjusted EBITDA
is the primary financial performance measure used by management to
evaluate the business and monitor the results of operations, as
well as a basis for certain compensation programs sponsored by the
Company. There are limitations to the use of the non-GAAP financial
measures presented in this press release. For example, our non-GAAP
financial measures may not be comparable to similarly titled
measures of other companies. Other companies, including companies
in our industry, may calculate non-GAAP financial measures
differently than we do, limiting the usefulness of those measures
for comparative purposes.
The non-GAAP financial measures are not meant to be considered
as indicators of performance in isolation from or as a substitute
for the most directly comparable financial measures prepared in
accordance with GAAP and should be read only in conjunction with
financial information presented on a GAAP basis. Reconciliations of
each of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin to its
most directly comparable GAAP financial measure are presented in
the tables furnished below in this press release. We encourage you
to review the reconciliations in conjunction with the presentation
of the non-GAAP financial measures for each of the periods
presented. In future periods, we may exclude similar items, may
incur income and expenses similar to these excluded items and may
include other expenses, costs and non-routine items.
Key Performance Indicators
In addition to traditional financial metrics, we rely upon
certain business and operating metrics to evaluate our business
performance and facilitate our operations. The most relevant
business and operating metrics are as follows:
- “Direct Operating Cost of Submission” is an operating metric
that represents costs directly attributable to Submissions
generated during a particular period and excludes costs that are
indirect or fixed. Direct Operating Cost of Submission is comprised
of the portion of the respective operating expenses for revenue
share, marketing and advertising and consumer care and enrollment
that are directly related to the Submissions generated in the
particular period. Direct Operating Cost of Submission, most
recently referred to as “Direct Cost of Submission,” reflects a
name change only.
- “Direct Operating Cost per Submission” is an operating metric
that represents the average performance of Submissions generated
during a particular period. Direct Operating Cost per Submission
refers to (x) Direct Operating Cost of Submission for a particular
period divided by (y) the number of Submissions generated for such
period. Direct Operating Cost per Submission, most recently
referred to as “Direct Cost per Submission” reflects a name change
only.
- “Sales/Direct Operating Cost of Submission” represents (x) the
numerator of Sales per Submission, as defined below, divided by (y)
Direct Operating Cost of Submission. Sales/Direct Operating Cost of
Submission, most recently referred to as “Sales/Direct Cost of
Submission” reflects a name change only.
- “Sales per Submission” is an operating metric that represents
the average performance of Submissions generated during a
particular period. Sales per Submission measures revenues only from
the Submissions generated in the period and excludes items that are
unrelated to such Submissions, including any impact of revenue
adjustments recorded in the period, but relating to performance
obligations satisfied in prior periods. Sales per Submission equals
(x) the sum of (i) agency revenues, comprised of the expected
amount of initial commission revenue and any renewal commissions to
be paid from the health plan partners on such placement as long as
the policyholder remains with the same insurance product, as well
as partner marketing and other revenue and (ii) non-agency
revenues, comprised of the enrollment and engagement services for
which cash is collected in advance or in close proximity to the
point in time revenue is recognized, divided by (y) the number of
Submissions generated for such period.
- “Submission” refers to either (i) a completed application with
our licensed agent that is submitted to the health plan partner and
subsequently approved by the health plan partner during the
indicated period, excluding applications through our Non-Encompass
BPO Services or (ii) a transfer by our agent to the health plan
partner through the Encompass operating model during the indicated
period.
Direct Operating Cost of Submission, Direct Operating Cost per
Submission, Sales/Direct Operating Cost of Submission, Sales per
Submission and Submissions are key operating metrics we use to
understand our underlying financial performance and trends.
Certain Definitions and Key Terms
As used in this press release, unless the context otherwise
requires:
- “LTV” refers to the Lifetime Value of Commissions, which we
define as aggregate commissions estimated to be collected over the
estimated life of all commissionable Submissions for the relevant
period based on multiple factors, including but not limited to,
contracted commission rates, health plan partner mix and expected
policy persistency with applied constraints.
- “Non-Encompass BPO Services” refer to programs in which
GoHealth-employed agents are dedicated to certain health plans and
agencies we partner with outside of the Encompass operating
model.
The following tables set forth the components of our results of
operations for the periods indicated (unaudited):
|
|
|
Three months ended Sep. 30, |
|
|
|
|
|
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
(in
thousands, except percentages and per share amounts) |
|
|
Dollars |
|
% of Net Revenues |
|
Dollars |
|
% of Net Revenues |
|
$ Change |
|
% Change |
Net revenues |
|
|
$ |
118,292 |
|
|
100.0 |
% |
|
$ |
132,037 |
|
|
100.0 |
% |
|
$ |
(13,745 |
) |
|
(10.4) % |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue share |
|
|
|
19,683 |
|
|
16.6 |
% |
|
|
35,992 |
|
|
27.3 |
% |
|
|
(16,309 |
) |
|
(45.3) % |
Marketing and advertising |
|
|
|
45,270 |
|
|
38.3 |
% |
|
|
39,416 |
|
|
29.9 |
% |
|
|
5,854 |
|
|
14.9 |
% |
Consumer care and enrollment |
|
|
|
45,556 |
|
|
38.5 |
% |
|
|
46,472 |
|
|
35.2 |
% |
|
|
(916 |
) |
|
(2.0) % |
Technology |
|
|
|
9,801 |
|
|
8.3 |
% |
|
|
11,652 |
|
|
8.8 |
% |
|
|
(1,851 |
) |
|
(15.9) % |
General and administrative |
|
|
|
17,140 |
|
|
14.5 |
% |
|
|
12,967 |
|
|
9.8 |
% |
|
|
4,173 |
|
|
32.2 |
% |
Amortization of intangible assets |
|
|
|
23,514 |
|
|
19.9 |
% |
|
|
23,514 |
|
|
17.8 |
% |
|
|
— |
|
|
— |
% |
Total operating expenses |
|
|
|
160,964 |
|
|
136.1 |
% |
|
|
170,013 |
|
|
128.8 |
% |
|
|
(9,049 |
) |
|
(5.3) % |
Income (loss) from
operations |
|
|
|
(42,672 |
) |
|
(36.1) % |
|
|
(37,976 |
) |
|
(28.8) % |
|
|
(4,696 |
) |
|
12.4 |
% |
Interest expense |
|
|
|
19,086 |
|
|
16.1 |
% |
|
|
17,565 |
|
|
13.3 |
% |
|
|
1,521 |
|
|
8.7 |
% |
Gain on bargain purchase |
|
|
|
(77,363 |
) |
|
(65.4) % |
|
|
— |
|
|
— |
% |
|
|
(77,363 |
) |
|
NM |
Other (income) expense,
net |
|
|
|
250 |
|
|
0.2 |
% |
|
|
771 |
|
|
0.6 |
% |
|
|
(521 |
) |
|
(67.6) % |
Income (loss) before income
taxes |
|
|
|
15,355 |
|
|
13.0 |
% |
|
|
(56,312 |
) |
|
(42.6) % |
|
|
71,667 |
|
|
(127.3) % |
Income tax (benefit)
expense |
|
|
|
(11 |
) |
|
— |
% |
|
|
(108 |
) |
|
(0.1) % |
|
|
97 |
|
|
(89.8) % |
Net income (loss) |
|
|
$ |
15,366 |
|
|
13.0 |
% |
|
$ |
(56,204 |
) |
|
(42.6) % |
|
$ |
71,570 |
|
|
(127.3) % |
Net income (loss) attributable
to non-controlling interests |
|
|
|
8,591 |
|
|
7.3 |
% |
|
|
(32,294 |
) |
|
(24.5) % |
|
|
40,885 |
|
|
(126.6) % |
Net income (loss)
attributable to GoHealth, Inc. |
|
|
$ |
6,775 |
|
|
5.7 |
% |
|
$ |
(23,910 |
) |
|
(18.1) % |
|
$ |
30,685 |
|
|
(128.3) % |
Net Income (Loss) Margin |
|
|
|
13.0 |
% |
|
|
|
(42.6) % |
|
|
|
|
|
|
Net income (loss) per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share of
Class A common stock — basic |
|
|
$ |
0.58 |
|
|
|
|
$ |
(2.61 |
) |
|
|
|
|
|
|
Net income (loss) per share of
Class A common stock — diluted |
|
|
$ |
0.46 |
|
|
|
|
$ |
(2.61 |
) |
|
|
|
|
|
|
Weighted-average shares of
Class A common stock outstanding — basic |
|
|
|
10,077 |
|
|
|
|
|
9,489 |
|
|
|
|
|
|
|
Weighted-average shares of
Class A common stock outstanding — diluted |
|
|
|
14,580 |
|
|
|
|
|
9,489 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP financial
measures: |
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
|
$ |
60,860 |
|
|
|
|
$ |
(12,482 |
) |
|
|
|
|
|
|
Adjusted EBITDA |
|
|
$ |
(12,106 |
) |
|
|
|
$ |
(11,475 |
) |
|
|
|
|
|
|
Adjusted EBITDA Margin |
|
|
(10.2) % |
|
|
|
(8.7) % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM = Not meaningful
|
|
|
Nine months ended Sep. 30, |
|
|
|
|
|
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
(in
thousands, except percentages and per share amounts) |
|
|
Dollars |
|
% of Net Revenues |
|
Dollars |
|
% of Net Revenues |
|
$ Change |
|
% Change |
Net revenues |
|
|
$ |
409,762 |
|
|
100.0 |
% |
|
$ |
457,974 |
|
|
100.0 |
% |
|
$ |
(48,212 |
) |
|
(10.5) % |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue share |
|
|
|
78,376 |
|
|
19.1 |
% |
|
|
117,876 |
|
|
25.7 |
% |
|
|
(39,500 |
) |
|
(33.5) % |
Marketing and advertising |
|
|
|
136,049 |
|
|
33.2 |
% |
|
|
124,428 |
|
|
27.2 |
% |
|
|
11,621 |
|
|
9.3 |
% |
Consumer care and enrollment |
|
|
|
132,731 |
|
|
32.4 |
% |
|
|
134,035 |
|
|
29.3 |
% |
|
|
(1,304 |
) |
|
(1.0) % |
Technology |
|
|
|
28,921 |
|
|
7.1 |
% |
|
|
31,706 |
|
|
6.9 |
% |
|
|
(2,785 |
) |
|
(8.8) % |
General and administrative |
|
|
|
50,457 |
|
|
12.3 |
% |
|
|
73,440 |
|
|
16.0 |
% |
|
|
(22,983 |
) |
|
(31.3) % |
Amortization of intangible assets |
|
|
|
70,542 |
|
|
17.2 |
% |
|
|
70,543 |
|
|
15.4 |
% |
|
|
(1 |
) |
|
— |
% |
Operating lease impairment charges |
|
|
|
— |
|
|
— |
% |
|
|
2,687 |
|
|
0.6 |
% |
|
|
(2,687 |
) |
|
(100.0) % |
Total operating expenses |
|
|
|
497,076 |
|
|
121.3 |
% |
|
|
554,715 |
|
|
121.1 |
% |
|
|
(57,639 |
) |
|
(10.4) % |
Income (loss) from
operations |
|
|
|
(87,314 |
) |
|
(21.3) % |
|
|
(96,741 |
) |
|
(21.1) % |
|
|
9,427 |
|
|
(9.7) % |
Interest expense |
|
|
|
55,133 |
|
|
13.5 |
% |
|
|
51,721 |
|
|
11.3 |
% |
|
|
3,412 |
|
|
6.6 |
% |
Gain on bargain purchase |
|
|
|
(77,363 |
) |
|
(18.9) % |
|
|
— |
|
|
— |
% |
|
|
(77,363 |
) |
|
NM |
Other (income) expense,
net |
|
|
|
332 |
|
|
0.1 |
% |
|
|
739 |
|
|
0.2 |
% |
|
|
(407 |
) |
|
(55.1) % |
Income (loss) before income
taxes |
|
|
|
(65,416 |
) |
|
(16.0) % |
|
|
(149,201 |
) |
|
(32.6) % |
|
|
83,785 |
|
|
(56.2) % |
Income tax (benefit)
expense |
|
|
|
(122 |
) |
|
— |
% |
|
|
(225 |
) |
|
— |
% |
|
|
103 |
|
|
(45.8) % |
Net income (loss) |
|
|
$ |
(65,294 |
) |
|
(15.9) % |
|
$ |
(148,976 |
) |
|
(32.5) % |
|
$ |
83,682 |
|
|
(56.2) % |
Net income (loss) attributable
to non-controlling interests |
|
|
|
(36,857 |
) |
|
(9.0) % |
|
|
(86,945 |
) |
|
(19.0) % |
|
|
50,088 |
|
|
(57.6) % |
Net income (loss)
attributable to GoHealth, Inc. |
|
|
$ |
(28,437 |
) |
|
(6.9) % |
|
$ |
(62,031 |
) |
|
(13.5) % |
|
$ |
33,594 |
|
|
(54.2) % |
Net Income (Loss) Margin |
|
|
(15.9) % |
|
|
|
(32.5) % |
|
|
|
|
|
|
Net income (loss) per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share of
Class A common stock — basic |
|
|
$ |
(3.14 |
) |
|
|
|
$ |
(7.04 |
) |
|
|
|
|
|
|
Net income (loss) per share of
Class A common stock — diluted |
|
|
$ |
(3.14 |
) |
|
|
|
$ |
(7.04 |
) |
|
|
|
|
|
|
Weighted-average shares of
Class A common stock outstanding — basic |
|
|
|
9,922 |
|
|
|
|
|
9,194 |
|
|
|
|
|
|
|
Weighted-average shares of
Class A common stock outstanding — diluted |
|
|
|
9,922 |
|
|
|
|
|
9,194 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP financial measures: |
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
|
$ |
68,679 |
|
|
|
|
$ |
(18,580 |
) |
|
|
|
|
|
|
Adjusted EBITDA |
|
|
$ |
2,479 |
|
|
|
|
$ |
18,091 |
|
|
|
|
|
|
|
Adjusted EBITDA Margin |
|
|
|
0.6 |
% |
|
|
|
|
4.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM = Not meaningful
The following tables set forth the reconciliations of GAAP net
income (loss) to EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin
for the periods indicated (unaudited):
|
|
|
Three months ended Sep. 30, |
|
Nine months ended Sep. 30, |
(in thousands) |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net
revenues |
|
|
$ |
118,292 |
|
|
$ |
132,037 |
|
|
$ |
409,762 |
|
|
$ |
457,974 |
|
Net income (loss) |
|
|
|
15,366 |
|
|
|
(56,204 |
) |
|
|
(65,294 |
) |
|
|
(148,976 |
) |
Interest expense |
|
|
|
19,086 |
|
|
|
17,565 |
|
|
|
55,133 |
|
|
|
51,721 |
|
Income tax expense (benefit) |
|
|
|
(11 |
) |
|
|
(108 |
) |
|
|
(122 |
) |
|
|
(225 |
) |
Depreciation and amortization expense |
|
|
|
26,419 |
|
|
|
26,265 |
|
|
|
78,962 |
|
|
|
78,900 |
|
EBITDA |
|
|
|
60,860 |
|
|
|
(12,482 |
) |
|
|
68,679 |
|
|
|
(18,580 |
) |
Gain on bargain purchase(1) |
|
|
|
(77,363 |
) |
|
|
— |
|
|
|
(77,363 |
) |
|
|
— |
|
Share-based compensation expense (benefit)(2) |
|
|
|
2,859 |
|
|
|
(545 |
) |
|
|
6,534 |
|
|
|
16,159 |
|
Professional services(3) |
|
|
|
818 |
|
|
|
1,213 |
|
|
|
818 |
|
|
|
1,213 |
|
Legal fees(4) |
|
|
|
654 |
|
|
|
339 |
|
|
|
1,331 |
|
|
|
14,692 |
|
Severance costs(5) |
|
|
|
66 |
|
|
|
— |
|
|
|
2,480 |
|
|
|
1,920 |
|
Operating lease impairment charges(6) |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,687 |
|
Adjusted EBITDA |
|
|
$ |
(12,106 |
) |
|
$ |
(11,475 |
) |
|
$ |
2,479 |
|
|
$ |
18,091 |
|
Net Income (Loss) Margin |
|
|
|
13.0 |
% |
|
(42.6) % |
|
(15.9) % |
|
(32.5) % |
Adjusted EBITDA Margin |
|
|
(10.2) % |
|
(8.7) % |
|
|
0.6 |
% |
|
|
4.0 |
% |
(1) |
Represents the excess of the acquisition-date fair value of the net
assets acquired over the acquisition-date fair value of the
consideration transferred related to the acquisition of
e-TeleQuote. |
(2) |
Represents non-cash share-based
compensation expense (benefit) relating to equity awards as well as
share-based compensation expense (benefit) relating to liability
classified awards that will be settled in cash. |
(3) |
Represents costs primarily
associated with non-recurring consulting fees and other
professional services. |
(4) |
Represents legal fees, settlement
accruals and other expenses related to certain acquisitions,
litigation, Credit Agreement amendments and other non-routine legal
or regulatory matters. |
(5) |
Represents severance costs and
other fees associated with a reduction in workforce unrelated to
restructuring activities. |
(6) |
Represents operating lease
impairment charges, reducing the carrying value of the associated
right-of-use (“ROU”) assets and leasehold improvements to the
estimated fair values. |
|
|
The table below depicts the disaggregation of revenue and is
consistent with how the Company evaluates its financial performance
(unaudited):
|
|
|
Three months ended Sep. 30, |
|
Nine months ended Sep. 30, |
(in thousands) |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
Medicare Revenue |
|
|
|
|
|
|
|
|
|
Agency Revenue |
|
|
|
|
|
|
|
|
|
Commission Revenue(1) |
|
|
$ |
77,868 |
|
$ |
76,579 |
|
$ |
228,154 |
|
$ |
261,513 |
Partner Marketing and Other Revenue |
|
|
|
14,408 |
|
|
21,300 |
|
|
47,926 |
|
|
71,619 |
Total Agency Revenue |
|
|
|
92,276 |
|
|
97,879 |
|
|
276,080 |
|
|
333,132 |
Non-Agency Revenue |
|
|
|
24,377 |
|
|
33,510 |
|
|
130,723 |
|
|
106,586 |
Total Medicare Revenue |
|
|
|
116,653 |
|
|
131,389 |
|
|
406,803 |
|
|
439,718 |
Other Revenue |
|
|
|
|
|
|
|
|
|
Non-Encompass BPO Services Revenue |
|
|
|
— |
|
|
— |
|
|
— |
|
|
9,322 |
Other Revenue |
|
|
|
1,639 |
|
|
648 |
|
|
2,959 |
|
|
8,934 |
Total Other Revenue |
|
|
|
1,639 |
|
|
648 |
|
|
2,959 |
|
|
18,256 |
Total Net
Revenues |
|
|
$ |
118,292 |
|
$ |
132,037 |
|
$ |
409,762 |
|
$ |
457,974 |
(1) |
Commission revenue excludes commissions generated through the
Company’s Non-Encompass BPO Services as well as from the sale of
individual and family plan insurance products. |
|
|
The following table summarizes share-based compensation expense
(benefit) by operating function for the periods indicated
(unaudited):
|
|
|
Three months ended Sep. 30, |
|
Nine months ended Sep. 30, |
(in thousands) |
|
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
Marketing and advertising |
|
|
$ |
75 |
|
$ |
149 |
|
|
$ |
203 |
|
$ |
378 |
Customer care and
enrollment |
|
|
|
189 |
|
|
519 |
|
|
|
841 |
|
|
1,847 |
Technology |
|
|
|
293 |
|
|
676 |
|
|
|
780 |
|
|
2,365 |
General and
administrative(1) |
|
|
|
2,302 |
|
|
(1,889 |
) |
|
|
4,710 |
|
|
11,569 |
Total share-based
compensation expense (benefit) |
|
|
$ |
2,859 |
|
$ |
(545 |
) |
|
$ |
6,534 |
|
$ |
16,159 |
(1) |
For the three and nine months ended September 30, 2024 and 2023,
share-based compensation expense (benefit) includes expense
(benefit) related to the stock appreciation rights (“SARs”), which
are liability classified awards. |
|
|
The following table sets forth our balance sheets for the
periods indicated (unaudited):
(in thousands, except per share amounts) |
|
|
Sep. 30, 2024 |
|
Dec. 31, 2023 |
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
|
$ |
35,527 |
|
|
$ |
90,809 |
|
Accounts receivable, net of allowance for doubtful accounts of $2
in 2024 and $27 in 2023 |
|
|
|
6,862 |
|
|
|
250 |
|
Commissions receivable - current |
|
|
|
270,383 |
|
|
|
336,215 |
|
Prepaid expense and other current assets |
|
|
|
21,271 |
|
|
|
49,166 |
|
Total current assets |
|
|
|
334,043 |
|
|
|
476,440 |
|
Commissions receivable -
non-current |
|
|
|
627,341 |
|
|
|
575,482 |
|
Operating lease ROU asset |
|
|
|
20,449 |
|
|
|
21,995 |
|
Property, equipment, and
capitalized software, net |
|
|
|
30,418 |
|
|
|
26,843 |
|
Intangible assets, net |
|
|
|
326,011 |
|
|
|
396,554 |
|
Other long-term assets |
|
|
|
2,891 |
|
|
|
2,256 |
|
Total
assets |
|
|
$ |
1,341,153 |
|
|
$ |
1,499,570 |
|
Liabilities, Redeemable
Convertible Preferred Stock and Stockholders’ Equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
|
|
$ |
15,285 |
|
|
$ |
17,705 |
|
Accrued liabilities |
|
|
|
49,475 |
|
|
|
86,254 |
|
Commissions payable - current |
|
|
|
80,899 |
|
|
|
118,732 |
|
Short-term operating lease liability |
|
|
|
5,541 |
|
|
|
5,797 |
|
Deferred revenue |
|
|
|
42,696 |
|
|
|
52,403 |
|
Current portion of long-term debt |
|
|
|
65,000 |
|
|
|
75,000 |
|
Other current liabilities |
|
|
|
23,075 |
|
|
|
14,122 |
|
Total current liabilities |
|
|
|
281,971 |
|
|
|
370,013 |
|
Non-current liabilities: |
|
|
|
|
|
Commissions payable - non-current |
|
|
|
177,023 |
|
|
|
203,255 |
|
Long-term operating lease liability |
|
|
|
36,187 |
|
|
|
39,547 |
|
Deferred tax liabilities |
|
|
|
24,995 |
|
|
|
— |
|
Long-term debt, net of current portion |
|
|
|
416,332 |
|
|
|
422,705 |
|
Other non-current liabilities |
|
|
|
7,363 |
|
|
|
9,095 |
|
Total non-current
liabilities |
|
|
|
661,900 |
|
|
|
674,602 |
|
Commitments and
Contingencies |
|
|
|
|
|
Series A redeemable convertible
preferred stock — $0.0001 par value; 50 shares authorized; 50
shares issued and outstanding as of both September 30, 2024 and
December 31, 2023. Liquidation preference of $53.7 million and
$50.9 million as of September 30, 2024 and December 31, 2023,
respectively. |
|
|
|
52,023 |
|
|
|
49,302 |
|
Stockholders’ equity: |
|
|
|
|
|
Class A common stock – $0.0001 par value; 1,100,000 shares
authorized; 10,440 and 9,823 shares issued; 10,121 and 9,651 shares
outstanding as of September 30, 2024 and December 31, 2023,
respectively. |
|
|
|
1 |
|
|
|
1 |
|
Class B common stock – $0.0001 par value; 615,980 and 616,018
shares authorized; 12,775 and 12,814 shares issued and outstanding
as of September 30, 2024 and December 31, 2023, respectively. |
|
|
|
1 |
|
|
|
1 |
|
Preferred stock – $0.0001 par value; 20,000 shares authorized
(including 50 shares of Series A redeemable convertible preferred
stock authorized and 200 shares of Series A-1 convertible preferred
stock authorized); 50 shares issued and outstanding as of both
September 30, 2024 and December 31, 2023. |
|
|
|
— |
|
|
|
— |
|
Series A-1 convertible preferred stock— $0.0001 par value; 200
shares authorized; no shares issued and outstanding as of both
September 30, 2024 and December 31, 2023. |
|
|
|
— |
|
|
|
— |
|
Treasury stock – at cost; 319 and 173 shares of Class A common
stock as of September 30, 2024 and December 31, 2023,
respectively. |
|
|
|
(4,124 |
) |
|
|
(2,640 |
) |
Additional paid-in capital |
|
|
|
665,020 |
|
|
|
654,059 |
|
Accumulated other comprehensive income (loss) |
|
|
|
(141 |
) |
|
|
(127 |
) |
Accumulated deficit |
|
|
|
(448,717 |
) |
|
|
(420,280 |
) |
Total stockholders’ equity
attributable to GoHealth, Inc. |
|
|
|
212,040 |
|
|
|
231,014 |
|
Non-controlling interests |
|
|
|
133,219 |
|
|
|
174,639 |
|
Total stockholders’ equity |
|
|
|
345,259 |
|
|
|
405,653 |
|
Total liabilities,
redeemable convertible preferred stock and stockholders’
equity |
|
|
$ |
1,341,153 |
|
|
$ |
1,499,570 |
|
|
|
|
|
|
|
|
|
|
|
The following table sets forth the net cash provided by (used
in) operating activities for the periods presented (unaudited):
Net cash provided by (used in) operating
activities |
|
Nine months ended
Sep. 30, |
|
Trailing Twelve
Months ended Sep. 30, |
|
|
2024 |
|
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
|
|
$ |
(36,211 |
) |
|
$ |
37,840 |
|
$ |
35,091 |
|
$ |
(3,159 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
In addition to traditional financial metrics, we rely upon
certain business and operating metrics to evaluate our business
performance and facilitate our operations. Below are the most
relevant business and operating metrics for our single operating
and reportable segment.
The following table presents the number of Submissions for the
periods presented:
Submissions |
|
Three months ended Sep. 30, |
|
|
|
|
|
2024 |
|
2023 |
|
Change |
|
% Change |
|
166,195 |
|
161,550 |
|
4,645 |
|
|
2.9% |
|
|
|
|
|
|
|
|
|
Nine months ended Sep. 30, |
|
|
|
|
|
2024 |
|
2023 |
|
Change |
|
% Change |
|
534,737 |
|
538,032 |
|
(3,295 |
) |
|
(0.6)% |
|
|
|
|
|
|
|
|
|
|
The following table presents the Sales per Submission for the
periods presented:
Sales Per Submission |
|
Three months ended Sep. 30, |
|
|
|
|
|
|
2024 |
|
|
2023 |
|
$ Change |
|
% Change |
|
$ |
702 |
|
$ |
813 |
|
$ |
(111 |
) |
|
(13.7)% |
|
|
|
|
|
|
|
|
|
Nine months ended Sep. 30, |
|
|
|
|
|
|
2024 |
|
|
2023 |
|
$ Change |
|
% Change |
|
$ |
761 |
|
$ |
817 |
|
$ |
(56 |
) |
|
(6.9)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table presents the Direct Operating Cost per
Submission for the periods presented:
Direct Operating Cost Per Submission |
|
Three months ended Sep. 30, |
|
|
|
|
|
|
2024 |
|
|
2023 |
|
$ Change |
|
% Change |
|
$ |
663 |
|
$ |
745 |
|
$ |
(82 |
) |
|
(11.0)% |
|
|
|
|
|
|
|
|
|
Nine months ended Sep. 30, |
|
|
|
|
|
|
2024 |
|
|
2023 |
|
$ Change |
|
% Change |
|
$ |
647 |
|
$ |
679 |
|
$ |
(32 |
) |
|
(4.7)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
The following are our Direct Operating Cost of Submission (in
thousands) and Sales/Direct Operating Cost of Submission for the
periods presented:
|
|
|
Three months ended Sep. 30, |
|
Nine months ended Sep. 30, |
|
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
Direct Operating Cost of
Submission |
|
|
$ |
110,245 |
|
$ |
120,362 |
|
$ |
346,112 |
|
$ |
365,612 |
Sales/Direct Operating Cost of
Submission |
|
|
|
1.1 |
|
|
1.1 |
|
|
1.2 |
|
|
1.2 |
GoHealth (NASDAQ:GOCO)
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From Nov 2024 to Dec 2024
GoHealth (NASDAQ:GOCO)
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From Dec 2023 to Dec 2024