CHICAGO, Nov. 9, 2023
/PRNewswire/ -- 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, 2023.
- Third quarter 2023 net revenues of $132.0 million, compared to $133.1 million in the prior year period; YTD 2023
net revenues of $458.0 million, a
decrease of $104.3 million compared
to $562.3 million in the prior year
period.
- Third quarter 2023 Submissions of 161,550, a 31% improvement
compared to 122,964 Submissions in the prior year period.
- Third quarter 2023 net loss of $56.2
million, an improvement of $18.5
million compared to $74.7
million in the prior year period; YTD 2023 net loss of
$149.0 million, an improvement of
$76.7 million compared to
$225.6 million in the prior year
period.
- Third quarter 2023 Adjusted EBITDA1 of negative
$11.5 million, an improvement of
$2.9 million compared to negative
$14.3 million in the prior year
period; YTD 2023 Adjusted EBITDA1 of $18.1 million, an improvement of $53.1 million compared to negative $35.0 million in the prior year period.
- Third quarter 2023 trailing twelve months negative cash flow
from operations was $3.2 million, an
improvement of $121.5 million
compared to negative cash flow from operations of $124.7 million in the prior year period. Cash
flow from operations was lower than expected because approximately
$72.0 million of payments from health
plan partners, expected in the third quarter, were received shortly
after quarter end.
- Third quarter 2023 performance reflects investments made in
advance of the 2023 Annual Enrollment Period, which began on
October 15. These investments include
the testing of marketing strategies, the introduction of
technological enhancements and the ongoing development of
agents.
"At GoHealth, our relentless commitment to enhancing the
consumer experience has been a driving force behind our transition
to Encompass, our new enrollment and engagement solution, which
should position us for success during the 2023 Annual Enrollment
Period," emphasized Vijay Kotte, CEO
of GoHealth. "Encompass offers a standardized workflow, ensuring a
consistent consumer experience that not only elevates quality but
also bolsters cost efficiency. Our quarterly results showcase
year-over-year growth, while we believe our full-year guidance
points towards a substantial improvement in cash flow from
operations and a rapid increase towards profitability."
"As we embark on the next phase of our growth journey, I take
great pride in sharing that GoHealth has consistently made strides,
harnessing the potential of our advanced technology tools. These
advancements have not only yielded early efficiency gains but have
also paved the way for access to new segments of the Medicare
marketplace via our unparalleled personalized consumer experience,"
continued Kotte.
"As we report our latest financial results, I am pleased to
confirm our guidance as a testament to our strong performance and
confidence in our future. Our expectations for full year 2023 total
net revenue and Adjusted EBITDA, both excluding Non-Encompass BPO
Services, reflect our dedication to sustained growth and the
delivery of value to our shareholders. Our focus on the shift to
our Encompass model and operational excellence fuels our enthusiasm
for the quarters ahead, and we eagerly anticipate building on this
momentum," stated Jason Schulz, CFO
of GoHealth.
Conference Call Details
The Company will host a conference call today, Thursday,
November 9, 2023 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.
As a leading health insurance marketplace and Medicare-focused
digital health company, GoHealth's mission is to improve access to
healthcare in America. Enrolling in a health insurance plan can be
confusing for consumers, and the seemingly small differences
between plans can lead to significant out-of-pocket costs or lack
of access to critical medicines and even providers. GoHealth
combines cutting-edge technology, data science and deep industry
expertise to match customers with the healthcare policy and health
plan partner that is right for them. GoHealth has enrolled millions
of people in Medicare plans and individual and family plans. For
more information, visit https://www.gohealth.com.
Investor Relations:
John
Shave
JShave@gohealth.com
Media Relations:
Pressinquiries@gohealth.com
(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)
|
Non-Encompass BPO
Services are those services in which we dedicate certain agents to
specific health plan partners and agencies, outside of the
Encompass Solution.
|
(3)
|
Net revenue
excluding Non-Encompass BPO Services revenue and Adjusted EBITDA
excluding Non-Encompass BPO Services gross margin are non-GAAP
measures. For definitions and further explanation, please see
below.
|
Forward-Looking Statements
This press release contains forward-looking statements. We
intend such forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements contained in
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"). 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,
level of cash flow, technological capabilities and operational
efficiency are forward-looking statements.
In some cases, you can identify forward-looking statements by
terms, such as "may," "will," "should," "aim," "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. 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, but not limited to, the
following: the marketing and sale of Medicare plans are subject to
numerous, complex and frequently changing laws, regulations and
guidelines; our operating results have been, and may continue to
be, adversely impacted by factors that impact our estimate of LTV
(as defined below); our gradual expansion of the Encompass Solution
may not be as successful as we expect; our business may be harmed
if we lose our relationships with health plan partners or if our
relationships with health plan partners change; health plan
partners may reduce the commissions paid to us and change their
underwriting practices in ways that reduce the number of, or impact
the renewal or approval rates of, insurance policies sold through
our platform; our management identified a material weakness in our
internal controls over financial reporting, and we may be unable to
develop, implement and maintain appropriate controls in future
periods, which may lead to errors or omissions in our financial
statements; we currently depend on a small group of health plan
partners for a substantial portion of our revenue and losing our
relationships with any of these health plan partners may
disproportionately impact our financial position and performance;
changes and developments in the health insurance system and laws
and regulations governing the health insurance markets in
the United States could materially
adversely affect our business, operating results, financial
condition and qualified prospects; we rely on certain services from
the Centers for Medicare & Medicaid Services, and a federal
government shutdown that impedes our ability to use these services
may materially impact our business; information technology system
failures could interrupt our operations; volatility in general
economic conditions, including inflation, interest rates, and other
commodity prices and exchange rates may impact our financial
position and performance; we may lose key employees or fail to
attract qualified employees; our failure to grow our customer base
or retain our existing customers; we may not realize the benefits
we expect from our strategic cash flow optimization and other cash
management initiatives; our ability to sell Medicare-related health
insurance plans is largely dependent on our licensed health
insurance agents; operating and growing our business may require
additional capital; and the Founders and Centerbridge have
significant influence over us, including control over decisions
that require the approval of stockholders.
The foregoing factors 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 our 2022 Annual
Report on Form 10-K, our Quarterly Report on Form 10-Q for the
first fiscal quarter ended March 31,
2023, our Quarterly Report on Form 10-Q for the second
fiscal quarter ended June 30, 2023,
our forthcoming Quarterly Report on Form 10-Q for the third quarter
ended September 30, 2023, and our
other filings with the Securities and Exchange Commission. If one
or more events related to these or other risks or uncertainties
materialize, or our underlying assumptions prove to be incorrect,
actual results may differ materially from what we anticipate. Many
of the important factors that will determine these results are
beyond our ability to control or predict. Accordingly, you should
not place undue reliance on any such forward-looking statements.
Any forward-looking statement speaks only as of the date on which
it is made, and, except as otherwise required by law, we do not
undertake any obligation to publicly update or review any
forward-looking statement, whether as a result of new information,
future developments or otherwise. New factors emerge from time to
time, and it is not possible for us to predict which will arise. In
addition, we cannot assess the impact of each factor on our
business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those
contained in any forward-looking statements.
Use of Non-GAAP Financial Measures and Key Performance
Indicators
In this press release, we use supplemental measures of our
performance that are derived from our consolidated financial
information, but which are not presented in our Consolidated
Financial Statements prepared in accordance with Generally Accepted
Accounting Principles ("GAAP"). These non-GAAP financial measures
include net income (loss) before interest expense, income tax
(benefit) expense and depreciation and amortization expense, or
EBITDA; Adjusted EBITDA; Adjusted EBITDA margin; Sales per
Submission; Cost per Submission and Adjusted Gross Margin per
Submission. Adjusted EBITDA is the primary financial performance
measure used by management to evaluate the business and monitor its
results of operations. Sales per Submission, Cost per Submission
and Adjusted Gross Margin per Submission are key operating metrics
used by management to understand the Company's underlying financial
performance and trends.
Additional non-GAAP financial measures, including net revenue
excluding the Lookback Adjustments, Adjusted EBITDA excluding the
Lookback Adjustments, net revenue excluding both the Non-Encompass
BPO Services revenue and the Lookback Adjustments and Adjusted
EBITDA excluding both the Non-Encompass BPO Services gross margin
and the Lookback Adjustments, are also discussed in this press
release. The Lookback Adjustments are revenue adjustments that
represent changes in estimates relating to performance obligations
satisfied in prior periods and relate to the fiscal years 2021 and
prior.
Adjusted EBITDA represents, as applicable for the period, EBITDA
as further adjusted for certain items summarized below in this
press release. Adjusted EBITDA margin represents Adjusted EBITDA
divided by net revenues. Sales per Submission represents Medicare
Revenue per Submission as further adjusted for certain items
summarized below in this press release. Cost per Submission
represents Operating Expense per Submission as further adjusted for
certain items summarized below in this press release. Adjusted
Gross Margin represents Sales per Submission less Cost per
Submission.
We use non-GAAP financial measures to supplement financial
information presented on a GAAP basis. 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 used 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 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, net revenue excluding the Lookback
Adjustments, Adjusted EBITDA excluding the Lookback Adjustments,
net revenue excluding both the Non-Encompass BPO Services revenue
and the Lookback Adjustments, Adjusted EBITDA excluding both the
Non-Encompass BPO Services gross margin and the Lookback
Adjustments, Sales per Submission, Cost per Submission and Adjusted
Gross Margin per Submission to its most directly comparable GAAP
financial measure, are presented in the tables 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 include other expenses, costs and
non-recurring items.
The Company is unable to provide a full reconciliation of
guidance for Adjusted EBITDA without unreasonable effort because it
is not possible to predict certain adjustment items with a
reasonable degree of certainty since they are not yet known or
quantifiable, and do not relate to the Company's routine
activities. This information is dependent upon future events, which
may be outside of the Company's control and could have a
significant impact on its GAAP financial results for fiscal
2023.
Glossary
- "Adjusted EBITDA" represents, as applicable for the
period, EBITDA as further adjusted for certain items summarized
below in this press release.
- "Adjusted EBITDA Margin" refers to Adjusted EBITDA
divided by net revenues.
- "Adjusted Gross Margin per Submission" refers to Sales
per Submission less Cost per Submission.
- "Cost of Submission" refers to the aggregate cost to
convert prospects into Submissions during a particular period. Cost
of Submission is comprised of revenue share, marketing and
advertising expenses, and customer care and enrollment expenses,
excluding share-based compensation expense, the impact of revenue
adjustments recorded in the period, but relating to performance
obligations satisfied in prior periods and such expenses related to
Non-Encompass BPO Services.
- "Cost per Submission" refers to (x) the aggregate cost
to convert prospects into Submissions for a particular period
(comprised of revenue share, marketing and advertising expenses,
and customer care and enrollment expenses, excluding share-based
compensation expense and such expenses related to Non-Encompass BPO
Services) divided by (y) either (i) a completed application with
our licensed agent that is submitted to the insurance 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 marketplace during the
indicated period.
- "EBITDA" represents net income (loss) before interest
expense, income tax expense (benefit) and depreciation and
amortization expense.
- "Gross margin" refers to net revenue divided by revenue
share, marketing and advertising expenses and customer care and
enrollment expenses.
- "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 plan
partners and agencies we partner with outside of the Encompass
model.
- "Sales per Submission" refers to (x) the sum of (i)
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, excluding revenue adjustments
recorded in the period, but relating to performance obligations
satisfied in prior periods, (ii) Encompass revenue, and (iii)
partner marketing and enrollment services, divided by (y) the
number of Submissions for such period.
- "Sales/Cost of Submission" refers to (x) the sum of (i)
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, excluding revenue adjustments
recorded in the period, but relating to performance obligations
satisfied in prior periods, (ii) Encompass revenue, and (iii)
partner marketing and enrollment services, divided by (y) the
aggregate cost to convert prospects into Submissions (comprised of
revenue share, marketing and advertising expenses, and customer
care and enrollment expenses, excluding share-based compensation
expense) for such period. Sales and Cost of Submission exclude
amounts related to Non-Encompass BPO Services.
- "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 marketplace during the
indicated period.
The following tables set forth the components of our results of
operations for the periods indicated (unaudited):
|
|
Three months
ended
Sep. 30, 2023
|
|
Three months
ended
Sep. 30, 2022
|
|
|
|
|
(in thousands, except
percentages and per share amounts)
|
|
Dollars
|
|
% of Net
Revenues
|
|
Dollars
|
|
% of Net
Revenues
|
|
$
Change
|
|
%
Change
|
Net revenues
|
|
$
132,037
|
|
100.0 %
|
|
$
133,052
|
|
100.0 %
|
|
$ (1,015)
|
|
(0.8) %
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
share
|
|
35,992
|
|
27.3 %
|
|
48,044
|
|
36.1 %
|
|
(12,052)
|
|
(25.1) %
|
Marketing and
advertising
|
|
39,416
|
|
29.9 %
|
|
22,661
|
|
17.0 %
|
|
16,755
|
|
73.9 %
|
Customer care and
enrollment
|
|
46,472
|
|
35.2 %
|
|
51,153
|
|
38.4 %
|
|
(4,681)
|
|
(9.2) %
|
Technology
|
|
11,652
|
|
8.8 %
|
|
11,061
|
|
8.3 %
|
|
591
|
|
5.3 %
|
General and
administrative
|
|
12,967
|
|
9.8 %
|
|
25,611
|
|
19.2 %
|
|
(12,644)
|
|
(49.4) %
|
Amortization of
intangible assets
|
|
23,514
|
|
17.8 %
|
|
23,514
|
|
17.7 %
|
|
—
|
|
— %
|
Operating lease
impairment charges
|
|
—
|
|
— %
|
|
350
|
|
0.3 %
|
|
(350)
|
|
(100.0) %
|
Restructuring and
other related charges
|
|
—
|
|
— %
|
|
9,797
|
|
7.4 %
|
|
(9,797)
|
|
NM
|
Total operating
expenses
|
|
170,013
|
|
128.8 %
|
|
192,191
|
|
144.4 %
|
|
(22,178)
|
|
(11.5) %
|
Income (loss) from
operations
|
|
(37,976)
|
|
(28.8) %
|
|
(59,139)
|
|
(44.4) %
|
|
21,163
|
|
(35.8) %
|
Interest
expense
|
|
17,565
|
|
13.3 %
|
|
15,630
|
|
11.7 %
|
|
1,935
|
|
12.4 %
|
Other (income) expense,
net
|
|
771
|
|
0.6 %
|
|
(115)
|
|
(0.1) %
|
|
886
|
|
(770.4) %
|
Income (loss) before
income taxes
|
|
(56,312)
|
|
(42.6) %
|
|
(74,654)
|
|
(56.1) %
|
|
18,342
|
|
(24.6) %
|
Income tax (benefit)
expense
|
|
(108)
|
|
(0.1) %
|
|
—
|
|
— %
|
|
(108)
|
|
NM
|
Net income
(loss)
|
|
$
(56,204)
|
|
(42.6) %
|
|
$
(74,654)
|
|
(56.1) %
|
|
$
18,450
|
|
(24.7) %
|
Net income (loss)
attributable to non-controlling interests
|
|
(32,294)
|
|
(24.5) %
|
|
(44,649)
|
|
(33.6) %
|
|
12,355
|
|
(27.7) %
|
Net income (loss)
attributable to GoHealth, Inc.
|
|
$
(23,910)
|
|
(18.1) %
|
|
$
(30,005)
|
|
(22.6) %
|
|
$
6,095
|
|
(20.3) %
|
Net income (loss)
per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share of Class A common stock — basic and diluted
|
|
$
(2.61)
|
|
|
|
$
(3.41)
|
|
|
|
|
|
|
Weighted-average shares
of Class A common stock outstanding — basic and diluted
|
|
9,489
|
|
|
|
8,825
|
|
|
|
|
|
|
Non-GAAP financial
measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
(12,482)
|
|
|
|
$
(30,959)
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
(11,475)
|
|
|
|
$
(14,327)
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
|
(8.7) %
|
|
|
|
(10.8) %
|
|
|
|
|
|
|
_________________________
|
NM = Not
meaningful
|
|
|
Nine months
ended
Sep. 30, 2023
|
|
Nine months
ended
Sep. 30, 2022
|
|
|
|
|
(in thousands, except
percentages and per share amounts)
|
|
Dollars
|
|
% of Net
Revenues
|
|
Dollars
|
|
% of Net
Revenues
|
|
$
Change
|
|
%
Change
|
Net revenues
|
|
$
457,974
|
|
100.0 %
|
|
$
562,299
|
|
100.0 %
|
|
$ (104,325)
|
|
(18.6) %
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
share
|
|
117,876
|
|
25.7 %
|
|
167,041
|
|
29.7 %
|
|
(49,165)
|
|
(29.4) %
|
Marketing and
advertising
|
|
124,428
|
|
27.2 %
|
|
151,408
|
|
26.9 %
|
|
(26,980)
|
|
(17.8) %
|
Customer care and
enrollment
|
|
134,035
|
|
29.3 %
|
|
196,150
|
|
34.9 %
|
|
(62,115)
|
|
(31.7) %
|
Technology
|
|
31,706
|
|
6.9 %
|
|
34,569
|
|
6.1 %
|
|
(2,863)
|
|
(8.3) %
|
General and
administrative
|
|
73,440
|
|
16.0 %
|
|
90,859
|
|
16.2 %
|
|
(17,419)
|
|
(19.2) %
|
Amortization of
intangible assets
|
|
70,543
|
|
15.4 %
|
|
70,543
|
|
12.5 %
|
|
—
|
|
— %
|
Operating lease
impairment charges
|
|
2,687
|
|
0.6 %
|
|
25,345
|
|
4.5 %
|
|
(22,658)
|
|
(89.4) %
|
Restructuring and
other related charges
|
|
—
|
|
— %
|
|
11,872
|
|
2.1 %
|
|
(11,872)
|
|
NM
|
Total operating
expenses
|
|
554,715
|
|
121.1 %
|
|
747,787
|
|
133.0 %
|
|
(193,072)
|
|
(25.8) %
|
Income (loss) from
operations
|
|
(96,741)
|
|
(21.1) %
|
|
(185,488)
|
|
(33.0) %
|
|
88,747
|
|
(47.8) %
|
Interest
expense
|
|
51,721
|
|
11.3 %
|
|
39,752
|
|
7.1 %
|
|
11,969
|
|
30.1 %
|
Other (income) expense,
net
|
|
739
|
|
0.2 %
|
|
(65)
|
|
— %
|
|
804
|
|
NM
|
Income (loss) before
income taxes
|
|
(149,201)
|
|
(32.6) %
|
|
(225,175)
|
|
(40.0) %
|
|
75,974
|
|
(33.7) %
|
Income tax (benefit)
expense
|
|
(225)
|
|
— %
|
|
472
|
|
0.1 %
|
|
(697)
|
|
(147.7) %
|
Net income
(loss)
|
|
$
(148,976)
|
|
(32.5) %
|
|
$
(225,647)
|
|
(40.1) %
|
|
$
76,671
|
|
(34.0) %
|
Net income (loss)
attributable to non-controlling interests
|
|
(86,945)
|
|
(19.0) %
|
|
(138,340)
|
|
(24.6) %
|
|
51,395
|
|
(37.2) %
|
Net income (loss)
attributable to GoHealth, Inc.
|
|
$
(62,031)
|
|
(13.5) %
|
|
$
(87,307)
|
|
(15.5) %
|
|
$
25,276
|
|
(29.0) %
|
Net income (loss)
per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share of Class A common stock —
basic and diluted
|
|
$
(7.04)
|
|
|
|
$
(10.54)
|
|
|
|
|
|
|
Weighted-average shares
of Class A common stock
outstanding — basic and diluted
|
|
9,194
|
|
|
|
8,293
|
|
|
|
|
|
|
Non-GAAP financial
measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
(18,580)
|
|
|
|
$
(104,999)
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
18,091
|
|
|
|
$
(34,995)
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
|
4.0 %
|
|
|
|
(6.2) %
|
|
|
|
|
|
|
_________________________
|
NM = Not
meaningful
|
The following tables set forth the reconciliations of GAAP net
income (loss) to EBITDA and Adjusted EBITDA for the periods
indicated (unaudited):
|
|
Three months ended
Sep. 30,
|
|
Nine months ended
Sep. 30,
|
(in
thousands)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
revenues
|
|
$
132,037
|
|
$
133,052
|
|
$
457,974
|
|
$
562,299
|
Net income
(loss)
|
|
(56,204)
|
|
(74,654)
|
|
(148,976)
|
|
(225,647)
|
Interest
expense
|
|
17,565
|
|
15,630
|
|
51,721
|
|
39,752
|
Income tax expense
(benefit)
|
|
(108)
|
|
—
|
|
(225)
|
|
472
|
Depreciation and
amortization expense
|
|
26,265
|
|
28,065
|
|
78,900
|
|
80,424
|
EBITDA
|
|
(12,482)
|
|
(30,959)
|
|
(18,580)
|
|
(104,999)
|
Share-based
compensation expense (benefit)1
|
|
(545)
|
|
6,456
|
|
16,159
|
|
25,868
|
Professional
services2
|
|
1,213
|
|
29
|
|
1,213
|
|
3,979
|
Legal
fees3
|
|
339
|
|
—
|
|
14,692
|
|
—
|
Operating lease
impairment charges4
|
|
—
|
|
350
|
|
2,687
|
|
25,345
|
Severance
costs5
|
|
—
|
|
—
|
|
1,920
|
|
2,940
|
Restructuring and
other related charges 6
|
|
—
|
|
9,797
|
|
—
|
|
11,872
|
Adjusted
EBITDA
|
|
$
(11,475)
|
|
$
(14,327)
|
|
$
18,091
|
|
$
(34,995)
|
Adjusted EBITDA
margin
|
|
(8.7) %
|
|
(10.8) %
|
|
4.0 %
|
|
(6.2) %
|
_________________________
|
(1)
|
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.
|
(2)
|
Represents costs
primarily associated with non-recurring consulting fees and other
professional services.
|
(3)
|
Represents
non-routine legal fees and accruals unrelated to our core
operations.
|
(4)
|
Represents operating
lease impairment charges, reducing the carrying value of the
associated ROU assets and leasehold improvements to the estimated
fair values.
|
(5)
|
Represents costs
associated with the termination of executive employment and
associated fees unrelated to restructuring
activities.
|
(6)
|
Represents employee
termination benefits and other associated costs related to
restructuring activities.
|
The following table summarizes net revenues and Adjusted EBITDA
excluding the Lookback Adjustments and Non-Encompass BPO Services
for the periods indicated (unaudited):
|
|
Three months ended
Sep. 30,
|
|
Nine months ended
Sep. 30,
|
(in
thousands)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Net
revenues
|
|
$
132,037
|
|
$
133,052
|
|
$
457,974
|
|
$
562,299
|
Lookback Adjustments
reported during the indicated periods1
|
|
—
|
|
2,788
|
|
—
|
|
8,269
|
Net revenue excluding
Lookback Adjustments
|
|
132,037
|
|
135,840
|
|
457,974
|
|
570,568
|
Exit of Non-Encompass
BPO Services
|
|
—
|
|
(17,554)
|
|
(9,322)
|
|
(75,610)
|
Net revenues
excluding Lookback Adjustments and Non-Encompass BPO
Services
|
|
132,037
|
|
118,286
|
|
448,652
|
|
494,958
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
(11,475)
|
|
$
(14,327)
|
|
$
18,091
|
|
$
(34,995)
|
Lookback Adjustments
reported during the indicated periods1
|
|
—
|
|
1,938
|
|
—
|
|
5,899
|
Adjusted EBITDA
excluding Lookback Adjustments
|
|
(11,475)
|
|
(12,389)
|
|
18,091
|
|
(29,096)
|
Exit of Non-Encompass
BPO Services
|
|
(851)
|
|
(2,511)
|
|
(2,518)
|
|
(13,319)
|
Adjusted EBITDA
excluding Lookback Adjustments and Non-Encompass BPO
Services
|
|
$
(12,326)
|
|
$
(14,900)
|
|
$
15,573
|
|
$
(42,415)
|
Adjusted EBITDA
margin excluding Lookback Adjustments and Non-Encompass BPO
Services
|
|
(9.3) %
|
|
(12.6) %
|
|
3.5 %
|
|
(8.6) %
|
_________________________
|
(1) Excludes the
impact of Lookback Adjustments on Non-Encompass BPO
Services.
|
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)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Medicare
Revenue
|
|
|
|
|
|
|
|
|
Agency
Revenue
|
|
|
|
|
|
|
|
|
Commission
Revenue1
|
|
$
76,579
|
|
$
82,308
|
|
$
261,513
|
|
$
383,028
|
Partner Marketing and
Other Revenue
|
|
21,300
|
|
19,725
|
|
71,619
|
|
75,131
|
Total Agency
Revenue
|
|
97,879
|
|
102,033
|
|
333,132
|
|
458,159
|
Non-Agency
Revenue
|
|
33,510
|
|
12,851
|
|
106,586
|
|
22,151
|
Total Medicare
Revenue
|
|
131,389
|
|
114,884
|
|
439,718
|
|
480,310
|
Other
Revenue
|
|
|
|
|
|
|
|
|
Non-Encompass BPO
Services Revenue
|
|
—
|
|
17,554
|
|
9,322
|
|
75,610
|
Other
Revenue
|
|
648
|
|
614
|
|
8,934
|
|
6,379
|
Total Other
Revenue
|
|
648
|
|
18,168
|
|
18,256
|
|
81,989
|
Total Net
Revenue
|
|
$
132,037
|
|
$
133,052
|
|
$
457,974
|
|
$
562,299
|
|
|
(1)
|
Commissions 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)
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Marketing and
advertising
|
|
$
149
|
|
$
556
|
|
$
378
|
|
$
1,212
|
Customer care and
enrollment
|
|
519
|
|
738
|
|
1,847
|
|
1,993
|
Technology
|
|
676
|
|
884
|
|
2,365
|
|
2,493
|
General and
administrative
|
|
(1,889)
|
|
4,277
|
|
11,569
|
|
20,170
|
Total share-based
compensation expense (benefit)
|
|
$
(545)
|
|
$
6,456
|
|
$
16,159
|
|
$
25,868
|
The following table sets forth our balance sheets for the
periods indicated (unaudited):
(in thousands, except
per share amounts)
|
|
Sep. 30,
2023
|
|
Dec. 31,
2022
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
26,387
|
|
$
16,464
|
Accounts receivable,
net of allowance for doubtful accounts of $139 in 2023 and $89 in
2022
|
|
12,412
|
|
4,703
|
Commissions receivable
- current
|
|
285,922
|
|
335,796
|
Prepaid expense and
other current assets
|
|
21,599
|
|
57,593
|
Total current
assets
|
|
346,320
|
|
414,556
|
Commissions receivable
- non-current
|
|
609,831
|
|
695,637
|
Operating lease ROU
asset
|
|
22,932
|
|
21,483
|
Other long-term
assets
|
|
2,907
|
|
1,721
|
Property, equipment,
and capitalized software, net
|
|
25,350
|
|
25,282
|
Intangible assets,
net
|
|
430,069
|
|
500,611
|
Total
assets
|
|
$
1,437,409
|
|
$
1,659,290
|
Liabilities,
Redeemable Convertible Preferred Stock and Stockholders'
Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
6,213
|
|
$
15,148
|
Accrued
liabilities
|
|
46,657
|
|
53,334
|
Commissions payable -
current
|
|
103,640
|
|
122,023
|
Short-term operating
lease liability
|
|
5,785
|
|
8,974
|
Deferred
revenue
|
|
42,819
|
|
50,594
|
Current portion of
long-term debt
|
|
—
|
|
5,270
|
Other current
liabilities
|
|
12,661
|
|
10,112
|
Total current
liabilities
|
|
217,775
|
|
265,455
|
Non-current
liabilities:
|
|
|
|
|
Commissions payable -
non-current
|
|
221,051
|
|
253,118
|
Long-term operating
lease liability
|
|
40,819
|
|
38,367
|
Long-term debt, net of
current portion
|
|
496,965
|
|
504,810
|
Other non-current
liabilities
|
|
6,884
|
|
5,839
|
Total non-current
liabilities
|
|
765,719
|
|
802,134
|
Commitments and
Contingencies
|
|
|
|
|
Series A redeemable
convertible preferred stock — $0.0001 par value; 50 shares
authorized; 50 shares
issued and outstanding at both September 30, 2023 and December 31,
2022. Liquidation preference of
$50.9 million at September 30, 2023 and December 31,
2022.
|
|
49,302
|
|
49,302
|
Stockholders'
equity:
|
|
|
|
|
Class A common stock –
$0.0001 par value; 1,100,000 shares authorized; 9,707 and 8,963
shares
issued; 9,550 and 8,950 shares outstanding at September 30, 2023
and December 31, 2022,
respectively.
|
|
1
|
|
1
|
Class B common stock –
$0.0001 par value; 616,021 and 616,259 shares authorized; 12,817
and
13,054 shares issued and outstanding at September 30, 2023 and
December 31, 2022, 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 at both
September 30, 2023 and December 31,
2022.
|
|
—
|
|
—
|
Series A-1 convertible
preferred stock— $0.0001 par value; 200 shares authorized; no
shares issued
and outstanding at both September 30, 2023 and December 31,
2022.
|
|
—
|
|
—
|
Treasury stock – at
cost; 157 and 13 shares of Class A common stock at September 30,
2023 and
December 31, 2022, respectively.
|
|
(2,423)
|
|
(345)
|
Additional paid-in
capital
|
|
649,470
|
|
626,269
|
Accumulated other
comprehensive income (loss)
|
|
(64)
|
|
(144)
|
Accumulated
deficit
|
|
(419,054)
|
|
(357,023)
|
Total stockholders'
equity attributable to GoHealth, Inc.
|
|
227,931
|
|
268,759
|
Non-controlling
interests
|
|
176,682
|
|
273,640
|
Total stockholders'
equity
|
|
404,613
|
|
542,399
|
Total liabilities,
redeemable convertible preferred stock and stockholders'
equity
|
|
$
1,437,409
|
|
$
1,659,290
|
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,
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
$
37,840
|
|
$
101,903
|
|
$
(3,159)
|
|
$
(124,684)
|
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, besides EBITDA and
Adjusted EBITDA, for our single operating and reportable
segment.
The following tables set forth the reconciliations of Medicare
Revenue per Submission, Operating Expense per Submission, and Gross
Margin per Submission to Sales per Submission, Cost Per Submission,
and Adjusted Gross Margin per Submission for the periods indicated
(unaudited):
|
|
Three months ended
Sep. 30,
|
|
Nine months ended
Sep. 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Sales per
Submission
|
|
|
|
|
|
|
|
|
Medicare Revenue per
Submission
|
|
$
813
|
|
$
934
|
|
$
817
|
|
$
892
|
Lookback Adjustments
reported during the indicated periods1
|
|
—
|
|
23
|
|
—
|
|
15
|
Sales per
Submission
|
|
$
813
|
|
$
957
|
|
$
817
|
|
$
907
|
|
|
|
|
|
|
|
|
|
Cost per
Submission
|
|
|
|
|
|
|
|
|
Operating Expense per
Submission
|
|
$
1,052
|
|
$
1,563
|
|
$
1,031
|
|
$
1,389
|
Indirect operating
expenses2
|
|
(298)
|
|
(572)
|
|
(332)
|
|
(434)
|
Lookback Adjustments
reported during the indicated periods1
|
|
—
|
|
7
|
|
—
|
|
4
|
Exit of Non-Encompass
BPO Services
|
|
(5)
|
|
(122)
|
|
(16)
|
|
(115)
|
Share-based
compensation expense3
|
|
(4)
|
|
(10)
|
|
(4)
|
|
(6)
|
Cost per
Submission
|
|
$
745
|
|
$
866
|
|
$
679
|
|
$
838
|
|
|
|
|
|
|
|
|
|
Gross Margin per
Submission4
|
|
$
(239)
|
|
$
(629)
|
|
$
(214)
|
|
$
(497)
|
Adjusted Gross Margin
per Submission5
|
|
$
68
|
|
$
91
|
|
$
138
|
|
$
69
|
|
|
(1)
|
Excludes the impact
of Lookback Adjustments on Non-Encompass BPO
Services.
|
(2)
|
Indirect operating
expenses include technology, general and administrative,
amortization of intangible assets, operating lease impairment
charges and restructuring and other related charges.
|
(3)
|
Shared-based
compensation expense included within marketing and advertising
expenses and customer care and enrollment expenses.
|
(4)
|
Medicare Revenue per
Submission less Operating Expense per Submission.
|
(5)
|
Sales per Submission
less Cost per Submission.
|
The following table presents the number of Submissions for the
periods presented (unaudited):
Submissions
|
|
Three months ended Sep.
30,
|
|
|
|
|
|
2023
|
|
2022
|
|
Change
|
|
% Change
|
|
161,550
|
|
122,964
|
|
38,586
|
|
31.4 %
|
|
|
|
|
|
|
|
|
|
Nine months ended Sep.
30,
|
|
|
|
|
|
2023
|
|
2022
|
|
Change
|
|
% Change
|
|
538,032
|
|
538,523
|
|
(461)
|
|
(0.1) %
|
The following table presents the Sales per Submission for the
period presented (unaudited):
Sales Per
Submission
|
|
Three months ended Sep.
30,
|
|
|
|
|
|
2023
|
|
2022
|
|
$ Change
|
|
% Change
|
|
$
813
|
|
$
957
|
|
$
(144)
|
|
(15.0) %
|
|
|
|
|
|
|
|
|
|
Nine months ended Sep.
30,
|
|
|
|
|
|
2023
|
|
2022
|
|
$ Change
|
|
% Change
|
|
$
817
|
|
$
907
|
|
$
(90)
|
|
(9.9) %
|
The following are our Sales/Cost of Submission, Cost of
Submission (in thousands) and Cost Per Submission for the three and
nine months ended September 30, 2023
and 2022 (unaudited):
|
|
Three months ended Sep.
30,
|
|
Nine months ended Sep.
30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Sales/Cost of
Submission
|
|
1.1
|
|
1.1
|
|
1.2
|
|
1.1
|
Cost of
Submission
|
|
$
120,362
|
|
$
106,432
|
|
$
365,612
|
|
$
451,535
|
Cost per
Submission
|
|
$
745
|
|
$
866
|
|
$
679
|
|
$
838
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/gohealth-reports-third-quarter-2023-results-301982536.html
SOURCE GoHealth, LLC