$96.6M | +9% | YoY | $(13.0)M | $(18.4)M |
REVENUE | REVENUE GROWTH |
ADJUSTED EBITDA(1)(2)
| GAAP NET LOSS |
+30 | % | YoY | +80 | % | YoY | +78 | % | YoY |
MEDICARE ADVANTAGE APPROVED MEMBERS | MAJOR MEDICAL MEDICARE APPLICATIONS SUBMITTED FULLY ONLINE | INDIVIDUAL AND FAMILY PLAN APPROVED MEMBERS |
Second Quarter 2021 Overview
|
•Revenue for the second quarter of 2021 was $96.6 million, a 9% increase compared to $88.8 million for the second quarter of 2020.
•GAAP net loss for the second quarter of 2021 was $18.4 million compared to $3.4 million for the second quarter of 2020.
•Adjusted EBITDA(1)(2) was $(13.0) million for the second quarter of 2021 compared to $3.4 million for the second quarter of 2020 reflecting significant investment in scaling our internal Medicare agent force.
•Second quarter 2021 approved members for Medicare Advantage products was 78,569, a 30% increase compared to 60,477 for the second quarter of 2020.
•Online business continued to scale with 38% of major medical Medicare applications submitted online in the second quarter of 2021 compared to 30% in the second quarter of 2020.(3)
•Customer Center accounts topped 143,000 since its launch in October of 2020.
|
CEO Comments |
Second quarter results were strong, with revenue, profitability and Medicare Advantage enrollments exceeding our expectations. During the quarter, we made significant progress toward expanding and enhancing our telesales organization, continued to scale our digital business and saw positive trends in our under-65 business.
|
(In thousands, except for per share amounts) | Q2 2021 | Q2 2020 | ||
Total Revenue | $ | 96,557 | $ | 88,766 |
Total Commission Revenue | 89,823 | 80,773 | ||
Segment Revenue | ||||
Medicare | 73,231 | 80,379 | ||
Individual, Family and Small Business | 23,326 | 8,387 | ||
Segment Profit (1)
| ||||
Medicare | (17,804) | 14,996 | ||
Individual, Family and Small Business | 17,925 | 2,738 | ||
Loss from operations | (25,333) | (6,254) | ||
Net loss | (18,409) | (3,370) | ||
Net loss attributable to common stockholders | (22,889) | (3,370) | ||
Diluted net loss attributable to common stockholders per share | (0.86) | (0.13) | ||
Net cash used in operating activities | (32,083) | (21,305) |
(In thousands, except for per share amounts) | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | ||
Total Revenue | $ | 230,771 | $ | 195,174 |
Total Commission Revenue | 216,875 | 180,442 | ||
Segment Revenue | ||||
Medicare | 194,252 | 176,530 | ||
Individual, Family and Small Business | 36,519 | 18,644 | ||
Segment Profit (1)
| ||||
Medicare | 6,741 | 38,132 | ||
Individual, Family and Small Business | 25,977 | 5,666 | ||
Loss from operations | (25,975) | (5,223) | ||
Net income (loss) | (19,209) | 82 | ||
Net income (loss) attributable to common stockholders | (23,689) | 82 | ||
Diluted net income (loss) attributable to common stockholder per share | (0.89) | - | ||
Net cash provided by (used in) operating activities | 10,726 | (12,398) |
(In thousands, except for per share amounts) | Q2 2021 | Q2 2020 | ||
Non-GAAP net income (loss) | $ | (12,137) | $ | 1,736 |
Non-GAAP diluted net income (loss) per share | (0.45) | 0.07 | ||
Adjusted EBITDA(2)
| (12,972) | 3,387 |
(In thousands, except for per share amounts) | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | ||
Non-GAAP net income (loss) | $ | (2,754) | $ | 12,054 |
Non-GAAP diluted net income (loss) per share | (0.10) | 0.45 | ||
Adjusted EBITDA(2)
| 4,339 | 16,003 |
Q2 2021 | Q2 2020 | |||
Approved Members | ||||
Medicare | 91,675 | 76,874 | ||
Individual and Family | 9,473 | 5,310 | ||
New Paying Members | ||||
Medicare | 89,907 | 72,651 | ||
Individual and Family | 9,211 | 6,912 | ||
Online Submission % - Medicare(1)
| 37.8 | % | 29.8 | % |
Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | |
Approved Members | ||
Medicare | 214,352 | 161,576 |
Individual and Family | 20,787 | 14,675 |
New Paying Members | ||
Medicare | 270,039 | 234,215 |
Individual and Family | 26,818 | 22,422 |
Estimated Membership | 1,266,970 | 1,117,423 |
(1)
|
See Non-GAAP Financial Information for definitions of our non-GAAP financial measures.
|
(2)
| During the first quarter of 2021, we revised the calculation of segment profit and adjusted EBITDA by excluding amortization of capitalized software development costs to enhance comparability of our financial metrics with peer companies. See the Revised Segment Profit Summary and Revised Adjusted EBITDA Reconciliation for additional information. Amortization of capitalized software development costs excluded from adjusted EBITDA is $10.0 million, which is comprised of $9.0 million and $1.0 million for the Medicare segment and the Individual, Family and Small Business segment, respectively. |
(3)
|
Segment profit is calculated as revenue for the applicable segment less marketing and advertising, customer care and enrollment, technology and content and general and administrative operating expenses, excluding stock-based compensation expense, depreciation and amortization, restructuring charges, and amortization of intangible assets, that are directly attributable to the applicable segment and other indirect marketing and advertising, customer care and enrollment and technology and content operating expenses, excluding stock-based compensation expense, depreciation and amortization, restructuring charges, and amortization of intangible assets, allocated to the applicable segment based on usage.
|
(4)
|
Corporate consists of other indirect general and administrative operating expenses, excluding stock-based compensation and depreciation and amortization expense, which are managed in a corporate shared services environment and, since they are not the responsibility of segment operating management, are not allocated to the reportable segments.
|
June 30, 2021 | December 31, 2020 | |||
Assets | (Unaudited) | |||
Current assets: | ||||
Cash and cash equivalents | $ | 229,260 | $ | 43,759 |
Short-term marketable securities | 75,830 | 49,620 | ||
Accounts receivable | 3,534 | 1,799 | ||
Contract assets - commissions receivable - current | 181,673 | 219,153 | ||
Prepaid expenses and other current assets | 11,594 | 16,661 | ||
Total current assets | 501,891 | 330,992 | ||
Contract assets - commissions receivable - non-current | 573,949 | 573,252 | ||
Property and equipment, net | 14,296 | 14,609 | ||
Operating lease right-of-use assets | 39,996 | 42,558 | ||
Restricted cash | 3,354 | 3,354 | ||
Intangible assets, net | 8,273 | 8,569 | ||
Goodwill | 40,233 | 40,233 | ||
Other assets | 29,746 | 26,455 | ||
Total assets | $ | 1,211,738 | $ | 1,040,022 |
Liabilities, temporary equity, and stockholders' equity | ||||
Current liabilities: | ||||
Accounts payable | $ | 15,423 | $ | 36,921 |
Accrued compensation and benefits | 16,833 | 20,542 | ||
Accrued marketing expenses | 10,141 | 17,788 | ||
Lease liabilities - current | 5,443 | 5,192 | ||
Deferred revenue | 1,363 | 308 | ||
Other current liabilities | 3,806 | 3,657 | ||
Total current liabilities | 53,009 | 84,408 | ||
Deferred income taxes - non-current | 64,925 | 72,317 | ||
Lease liabilities - non-current | 38,577 | 41,369 | ||
Other non-current liabilities | 4,969 | 4,370 | ||
Temporary equity: | ||||
Series A convertible preferred stock | 218,504 | - | ||
Stockholders' equity: | ||||
Common stock | 38 | 38 | ||
Additional paid-in capital | 738,906 | 721,013 | ||
Treasury stock, at cost | (199,998) | (199,998) | ||
Retained earnings | 292,467 | 316,155 | ||
Accumulated other comprehensive income | 341 | 350 | ||
Total stockholders' equity | $ | 831,754 | $ | 837,558 |
Total liabilities, temporary equity, and stockholders' equity | $ | 1,211,738 | $ | 1,040,022 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2021 | 2020 | 2021 | 2020 | |||||
Revenue: | ||||||||
Commission | $ | 89,823 | $ | 80,773 | $ | 216,875 | $ | 180,442 |
Other | 6,734 | 7,993 | 13,896 | 14,732 | ||||
Total revenue | 96,557 | 88,766 | 230,771 | 195,174 | ||||
Operating costs and expenses: | ||||||||
Cost of revenue | 246 | 540 | 1,242 | 1,678 | ||||
Marketing and advertising | 44,581 | 32,873 | 95,455 | 70,637 | ||||
Customer care and enrollment | 38,362 | 27,148 | 72,524 | 57,683 | ||||
Technology and content | 20,464 | 13,373 | 43,627 | 29,113 | ||||
General and administrative | 18,118 | 20,713 | 41,172 | 40,366 | ||||
Amortization of intangible assets | 119 | 373 | 295 | 920 | ||||
Restructuring charges | - | - | 2,431 | - | ||||
Total operating costs and expenses | 121,890 | 95,020 | 256,746 | 200,397 | ||||
Loss from operations | (25,333) | (6,254) | (25,975) | (5,223) | ||||
Other income, net | 172 | 452 | 322 | 825 | ||||
Loss before benefits from income taxes | (25,161) | (5,802) | (25,653) | (4,398) | ||||
Benefit from income taxes | (6,752) | (2,432) | (6,444) | (4,480) | ||||
Net income (loss) | (18,409) | (3,370) | (19,209) | 82 | ||||
Paid-in-kind dividends for preferred stock | (3,083) | - | (3,083) | - | ||||
Change in preferred stock redemption value | (1,397) | - | (1,397) | - | ||||
Net income (loss) attributable to common stockholders | $ | (22,889) | $ | (3,370) | $ | (23,689) | $ | 82 |
Net income (loss) per share attributable to common stockholders: | ||||||||
Basic | $ | (0.86) | $ | (0.13) | $ | (0.89) | $ | - |
Diluted | $ | (0.86) | $ | (0.13) | $ | (0.89) | $ | - |
Weighted-average number of shares used in per share: | ||||||||
Basic | 26,677 | 26,358 | 26,639 | 25,539 | ||||
Diluted | 26,677 | 26,358 | 26,639 | 26,758 | ||||
_____________
(1) Includes stock-based compensation as follows:
| ||||||||
Marketing and advertising | $ | 2,140 | $ | 1,539 | $ | 4,625 | $ | 3,269 |
Customer care and enrollment | 692 | 573 | 1,161 | 1,235 | ||||
Technology and content | 2,360 | (82) | 5,103 | 1,535 | ||||
General and administrative | 3,053 | 4,646 | 8,758 | 9,351 | ||||
Total stock-based compensation expense | $ | 8,245 | $ | 6,676 | $ | 19,647 | $ | 15,390 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2021 | 2020 | 2021 | 2020 | |||||
Operating activities: | ||||||||
Net income (loss) | $ | (18,409) | $ | (3,370) | $ | (19,209) | $ | 82 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 1,064 | 858 | 2,202 | 1,681 | ||||
Amortization of internally developed software | 2,933 | 1,734 | 5,739 | 3,235 | ||||
Amortization of intangible assets | 119 | 373 | 295 | 920 | ||||
Stock-based compensation expense | 8,245 | 6,676 | 19,647 | 15,390 | ||||
Deferred income taxes | (6,822) | (2,379) | (7,392) | (4,520) | ||||
Other non-cash items | 359 | 23 | 779 | 246 | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (1,688) | (2,056) | (1,736) | (392) | ||||
Contract assets - commissions receivable | (13,628) | (22,031) | 37,007 | 4,842 | ||||
Prepaid expenses and other assets | 92 | (872) | 4,317 | (1,031) | ||||
Accounts payable | 4,410 | (1,203) | (21,416) | (17,482) | ||||
Accrued compensation and benefits | (7,797) | 3,322 | (3,709) | (7,782) | ||||
Accrued marketing expenses | (935) | 1 | (7,647) | (7,328) | ||||
Deferred revenue | 486 | (2,586) | 1,056 | (2,473) | ||||
Accrued expenses and other liabilities | (512) | 205 | 793 | 2,214 | ||||
Net cash provided by (used in) operating activities | (32,083) | (21,305) | 10,726 | (12,398) | ||||
Investing activities: | ||||||||
Capitalized internal-use software and website development costs | (4,100) | (4,045) | (7,342) | (7,609) | ||||
Purchases of property and equipment and other assets | (806) | (2,156) | (2,705) | (4,664) | ||||
Purchases of marketable securities | (60,040) | (89,482) | (67,811) | (147,546) | ||||
Proceeds from redemption and maturities of marketable securities | 18,105 | 13,250 | 41,514 | 13,250 | ||||
Net cash used in investing activities | (46,841) | (82,433) | (36,344) | (146,569) | ||||
Financing activities: | ||||||||
Proceeds from issuance of preferred stock, net of issuance costs | 214,025 | - | 214,025 | - | ||||
Proceeds from issuance of common stock, net of issuance costs | - | - | - | 228,024 | ||||
Net proceeds from exercise of common stock options and employee stock purchases | 2,766 | 223 | 3,051 | 1,314 | ||||
Repurchase of shares to satisfy employee tax withholding obligations | (870) | (3,785) | (5,907) | (8,160) | ||||
Acquisition-related contingent payments | - | - | - | (8,751) | ||||
Principal payments in connection with leases | (38) | (25) | (76) | (83) | ||||
Net cash provided by (used in) financing activities | 215,883 | (3,587) | 211,093 | 212,344 | ||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 51 | 1 | 26 | (1) | ||||
Net increase in cash, cash equivalents and restricted cash
| 137,010 | (107,324) | 185,501 | 53,376 | ||||
Cash, cash equivalents and restricted cash at beginning of period | 95,604 | 187,520 | 47,113 | 26,820 | ||||
Cash, cash equivalents and restricted cash at end of period | $ | 232,614 | $ | 80,196 | $ | 232,614 | $ | 80,196 |
Three Months Ended June 30, | % Change | Six Months Ended June 30, | % Change | |||||||||
2021 | 2020 | 2021 | 2020 | |||||||||
Revenue | ||||||||||||
Medicare (1)
| $ | 73,231 | $ | 80,379 | (9) | % | $ | 194,252 | $ | 176,530 | 10 | % |
Individual, Family and Small Business (2)
| 23,326 | 8,387 | 178 | % | 36,519 | 18,644 | 96 | % | ||||
Total revenue | $ | 96,557 | $ | 88,766 | 9 | % | $ | 230,771 | $ | 195,174 | 18 | % |
Segment profit | ||||||||||||
Medicare segment profit (loss) (3)(4)
| $ | (17,804) | $ | 14,996 | (219) | % | $ | 6,741 | $ | 38,132 | (82) | % |
Individual, Family and Small Business segment profit (3)(4)
| 17,925 | 2,738 | 555 | % | 25,977 | 5,666 | 358 | % | ||||
Total segment profit | 121 | 17,734 | (99) | % | 32,718 | 43,798 | (25) | % | ||||
Corporate (5)
| (13,093) | (14,347) | (9) | % | (28,379) | (27,795) | 2 | % | ||||
Stock-based compensation expense | (8,245) | (6,676) | 24 | % | (19,647) | (15,390) | 28 | % | ||||
Depreciation and amortization (4)
| (3,997) | (2,592) | 54 | % | (7,941) | (4,916) | 62 | % | ||||
Amortization of intangible assets | (119) | (373) | (68) | % | (295) | (920) | (68) | % | ||||
Restructuring charges | - | - | * | (2,431) | - | * | ||||||
Other income, net | 172 | 452 | (62) | % | 322 | 825 | (61) | % | ||||
Loss before benefits from income taxes | $ | (25,161) | $ | (5,802) | 334 | % | $ | (25,653) | $ | (4,398) | 483 | % |
(1) |
The Medicare segment consists primarily of amounts earned from our sale of Medicare-related health insurance plans, including Medicare Advantage, Medicare Supplement and Medicare Part D prescription drug plans, and to a lesser extent, ancillary products sold to our Medicare-eligible customers, including but not limited to, dental and vision plans, as well as our advertising program that allows Medicare-related carriers to purchase advertising on a separate website developed, hosted and maintained by us and our delivery and sale to third parties of Medicare-related health insurance leads generated by our ecommerce platforms and our marketing activities.
|
(2) |
The Individual, Family and Small Business segment consists primarily of amounts earned from our sale of individual, family and small business health insurance plans and ancillary products sold to our non-Medicare-eligible customers, including but not limited to, dental, vision, and short-term insurance. To a lesser extent, the Individual, Family and Small Business segment consists of amounts earned from our online sponsorship program that allows carriers to purchase advertising space in specific markets in a sponsorship area on our website, our licensing to third parties the use of our health insurance ecommerce technology, and our delivery and sale to third parties of individual and family health insurance plans leads generated by our ecommerce platforms and our marketing activities.
|
(3) | Segment profit is calculated as revenue for the applicable segment less marketing and advertising, customer care and enrollment, technology and content and general and administrative operating expenses, excluding stock-based compensation expense, depreciation and amortization, restructuring charges, and amortization of intangible assets, that are directly attributable to the applicable segment and other indirect marketing and advertising, customer care and enrollment and technology and content operating expenses, excluding stock-based compensation expense, depreciation and amortization, restructuring charges, and amortization of intangible assets, allocated to the applicable segment based on usage. |
(4) |
During the first quarter of 2021, we revised the calculation of segment profit by excluding amortization of capitalized software development costs to enhance comparability of our financial metrics with peer companies. The amortization of capitalized software development costs were $2.9 million and $1.7 million for the second quarter 2021 and 2020, respectively, and $5.7 million and $3.2 million for the six months ended June 30, 2021 and 2020, respectively. See Revised Segment Profit Summary for additional information.
|
(5) |
Corporate consists of other indirect general and administrative operating expenses, excluding stock-based compensation expense, depreciation and amortization, which are managed in a corporate shared services environment and, because they are not the responsibility of segment operating management, are not allocated to the reportable segments.
|
Three Months Ended June 30, | % Change | Six Months Ended June 30, | % Change | |||||||||
2021 | 2020 | 2021 | 2020 | |||||||||
Medicare: | ||||||||||||
Medicare Advantage | $ | 69,142 | $ | 58,586 | 18 | % | $ | 172,667 | $ | 126,933 | 36 | % |
Medicare Supplement | 3,921 | 9,893 | (60) | % | 12,143 | 25,063 | (52) | % | ||||
Medicare Part D | (6,027) | 1,158 | (620) | % | (4,291) | 6,819 | (163) | % | ||||
Total Medicare | 67,036 | 69,637 | (4) | % | 180,519 | 158,815 | 14 | % | ||||
Individual and Family: (1)
| ||||||||||||
Non-Qualified Health Plans | 11,076 | 1,224 | 805 | % | 14,443 | 2,670 | 441 | % | ||||
Qualified Health Plans | 2,838 | 883 | 221 | % | 4,938 | 2,093 | 136 | % | ||||
Total Individual and Family | 13,914 | 2,107 | 560 | % | 19,381 | 4,763 | 307 | % | ||||
Ancillaries: | ||||||||||||
Short-term | 1,513 | 2,070 | (27) | % | 3,269 | 4,286 | (24) | % | ||||
Dental | 3,660 | 596 | 514 | % | 5,388 | 1,339 | 302 | % | ||||
Vision | 934 | 187 | 399 | % | 1,139 | 430 | 165 | % | ||||
Other | 1,021 | 797 | 28 | % | 1,056 | 1,846 | (43) | % | ||||
Total Ancillaries | 7,128 | 3,650 | 95 | % | 10,852 | 7,901 | 37 | % | ||||
Small Business | 2,290 | 2,281 | - | % | 5,513 | 5,252 | 5 | % | ||||
Commission Bonus and Other | (545) | 3,098 | (118) | % | 610 | 3,711 | (84) | % | ||||
Total Commission Revenue | $ | 89,823 | $ | 80,773 | 11 | % | $ | 216,875 | $ | 180,442 | 20 | % |
(1)
|
We define our Individual and Family plan offerings as major medical individual and family health insurance plans, which does not include Medicare-related, small business or ancillary plans. Individual and family health insurance plans include both qualified and non-qualified plans. Qualified health plans are individual and family health insurance plans that meet the requirements of the Affordable Care Act and are offered through the government-run health insurance exchange in the relevant jurisdiction. Non-qualified health plans are Individual and Family plans that meet the requirements of the Affordable Care Act and are not offered through the exchange in the relevant jurisdiction. Individuals that purchase non-qualified health plans cannot receive a subsidy in connection with the purchase of those plans.
|
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2021 | 2020 | 2021 | 2020 | |||||
Medicare: | ||||||||
Commission Revenue from Members Approved During the Period (1)
| $ | 78,598 | $ | 72,165 | $ | 193,276 | $ | 153,290 |
Net Commission Revenue from Members Approved in Prior Periods* (2)
| (11,543) | 685 | (11,529) | 9,664 | ||||
Total Medicare Segment Commission Revenue | 67,055 | 72,850 | 181,747 | 162,954 | ||||
Individual, Family and Small Business: | ||||||||
Commission Revenue from Members Approved During the Period (1)
| 5,208 | 4,362 | 11,603 | 10,158 | ||||
Commission Revenue from Renewals of Small Business Members During the Period (3)
| 1,723 | 1,487 | 4,410 | 3,883 | ||||
Net Commission Revenue from Members Approved in Prior Periods (2)(3)
| 15,837 | 2,074 | 19,115 | 3,447 | ||||
Total Individual, Family and Small Business Segment Commission Revenue | $ | 22,768 | $ | 7,923 | 35,128 | 17,488 | ||
Total Commission Revenue | $ | 89,823 | $ | 80,773 | $ | 216,875 | $ | 180,442 |
* | The net commission revenue from members approved in prior period primarily consisted of $7.5 million related to Medicare Part D Prescription Drug plans, $2.2 million related to Medicare Advantage, and $1.8 million related to Medicare Supplement for the three and six months ended June 30, 2021. |
(1)
|
These amounts include commission bonus revenue.
|
(2)
|
These amounts reflect our revised estimates of cash collections for certain members approved prior to the relevant reporting period that are recognized as net adjustment revenue within the relevant reporting period. The net adjustment revenue includes both increases in revenue for certain prior period cohorts as well as reductions in revenue for certain prior period cohorts.
|
(4)
| Commission revenue from renewals of small business members during the period was previously included in net commission revenue from members approved in prior periods. However, starting in the first quarter of 2021, we enhanced our reporting by separately disclosing commission revenue from renewals of small business members during the period in a separate line item. During 2020, the commission revenue from renewals of small business members were $1.1 million and $1.7 million for the third and fourth quarter, respectively. |
Three Months Ended June 30, | % Change | Six Months Ended June 30, | % Change | |||||
2021 | 2020 | 2021 | 2020 | |||||
Medicare: | ||||||||
Medicare Advantage | 78,569 | 60,477 | 30 | % | 185,453 | 125,375 | 48 | % |
Medicare Supplement | 6,130 | 8,794 | (30) | % | 13,912 | 19,632 | (29) | % |
Medicare Part D | 6,976 | 7,603 | (8) | % | 14,987 | 16,569 | (10) | % |
Total Medicare | 91,675 | 76,874 | 19 | % | 214,352 | 161,576 | 33 | % |
Individual and Family: | ||||||||
Non-Qualified Health Plans | 4,120 | 2,798 | 47 | % | 9,729 | 7,618 | 28 | % |
Qualified Health Plans | 5,353 | 2,512 | 113 | % | 11,058 | 7,057 | 57 | % |
Total Individual and Family | 9,473 | 5,310 | 78 | % | 20,787 | 14,675 | 42 | % |
Ancillaries: | ||||||||
Short-term | 6,462 | 9,446 | (32) | % | 14,338 | 21,584 | (34) | % |
Dental | 10,406 | 7,722 | 35 | % | 21,576 | 17,432 | 24 | % |
Vision | 4,566 | 3,764 | 21 | % | 9,628 | 8,265 | 16 | % |
Other | 2,614 | 3,946 | (34) | % | 5,017 | 8,271 | (39) | % |
Total Ancillaries | 24,048 | 24,878 | (3) | % | 50,559 | 55,552 | (9) | % |
Small Business | 2,588 | 3,118 | (17) | % | 5,536 | 6,721 | (18) | % |
Total Approved Members | 127,784 | 110,180 | 16 | % | 291,234 | 238,524 | 22 | % |
Three Months Ended June 30, | % Change | Six Months Ended June 30, | % Change | |||||
2021 | 2020 | 2021 | 2020 | |||||
Medicare: | ||||||||
Medicare Advantage | 77,710 | 57,232 | 36 | % | 218,707 | 143,531 | 52 | % |
Medicare Supplement | 5,317 | 7,914 | (33) | % | 15,313 | 19,474 | (21) | % |
Medicare Part D | 6,880 | 7,505 | (8) | % | 36,019 | 71,210 | (49) | % |
Total Medicare | 89,907 | 72,651 | 24 | % | 270,039 | 234,215 | 15 | % |
Individual and Family: | ||||||||
Non-Qualified Health Plans | 4,607 | 3,817 | 21 | % | 15,575 | 13,370 | 16 | % |
Qualified Health Plans | 4,604 | 3,095 | 49 | % | 11,243 | 9,052 | 24 | % |
Total Individual and Family | 9,211 | 6,912 | 33 | % | 26,818 | 22,422 | 20 | % |
Ancillaries: | ||||||||
Short-term | 6,963 | 9,572 | (27) | % | 18,206 | 21,832 | (17) | % |
Dental | 9,430 | 6,935 | 36 | % | 20,903 | 17,348 | 20 | % |
Vision | 4,283 | 3,646 | 17 | % | 10,409 | 9,217 | 13 | % |
Other | 2,427 | 3,474 | (30) | % | 5,176 | 7,787 | (34) | % |
Total Ancillaries | 23,103 | 23,627 | (2) | % | 54,694 | 56,184 | (3) | % |
Small Business | 2,391 | 3,138 | (24) | % | 6,516 | 8,294 | (21) | % |
Total New Paying Members | 124,612 | 106,328 | 17 | % | 358,067 | 321,115 | 12 | % |
As of June 30, | % Change | |||
2021 | 2020 | |||
Medicare: (1)
| ||||
Medicare Advantage | 562,905 | 407,243 | 38 | % |
Medicare Supplement | 99,306 | 94,838 | 5 | % |
Medicare Part D | 214,744 | 213,949 | - | % |
Total Medicare | 876,955 | 716,030 | 22 | % |
Individual and Family (2)
| 107,466 | 115,832 | (7) | % |
Ancillaries: (3)
| ||||
Short-term | 18,032 | 23,203 | (22) | % |
Dental | 115,990 | 118,198 | (2) | % |
Vision | 69,062 | 68,666 | 1 | % |
Other | 33,015 | 35,404 | (7) | % |
Total Ancillaries | 236,099 | 245,471 | (4) | % |
Small Business (4)
| 46,450 | 40,090 | 16 | % |
Total Estimated Membership | 1,266,970 | 1,117,423 | 13 | % |
(1)
|
To estimate the number of members on Medicare-related health insurance plans, we take the sum of (i) the number of members for whom we have received or applied a commission payment for a month that may be up to three months prior to the date of estimation (after reducing that number using historical experience for assumed member cancellations over the period being estimated); and (ii) the number of approved members over that period (after reducing that number using historical experience for an assumed number of members who do not accept their approved policy and for estimated member cancellations through the date of the estimate). To the extent we determine we have received substantially all of the commission payments related to a given month during the period being estimated, we will take the number of members for whom we have received or applied a commission payment during the month of estimation.
|
(2)
| To estimate the number of members on Individual and Family plans, we take the sum of (i) the number of Individual and Family plan members for whom we have received or applied a commission payment for a month that may be up to three months prior to the date of estimation (after reducing that number using historical experience for assumed member cancellations over the period being estimated); and (ii) the number of approved members over that period (after reducing that number using historical experience for an assumed number of members who do not accept their approved policy and for estimated member cancellations through the date of the estimate). To the extent we determine we have received substantially all of the commission payments related to a given month during the period being estimated, we will take the number of members for whom we have received or applied a commission payment during the month of estimation. |
(3)
| To estimate the number of members on ancillary health insurance plans (such as short-term, dental and vision insurance), we take the sum of (i) the number of members for whom we have received or applied a commission payment for a month that may be up to three months prior to the date of estimation (after reducing that number using historical experience for assumed member cancellations over the period being estimated); and (ii) the number of approved members over that period (after reducing that number using historical experience for an assumed number of members who do not accept their approved policy and for estimated member cancellations through the date of the estimate). To the extent we determine we have received substantially all of the commission payments related to a given month during the period being estimated, we will take the number of members for whom we have received or applied a commission payment during the month of estimation. The one to three-month period varies by insurance product and is largely dependent upon the timeliness of commission payment and related reporting from the related carriers. |
(4)
| To estimate the number of members on small business health insurance plans, we use the number of initial members at the time the group was approved, and we update this number for changes in membership if such changes are reported to us by the group or carrier. However, groups generally notify the carrier directly of policy cancellations and increases or decreases in group size without informing us. Health insurance carriers often do not communicate policy cancellation information or group size changes to us. We often are made aware of policy cancellations and group size changes at the time of annual renewal and update our membership statistics accordingly in the period they are reported. |
Three Months Ended June 30, | % Change | |||||
2021 | 2020 | |||||
Medicare | ||||||
Medicare Advantage (1)
| $ | 908 | $ | 945 | (4) | % |
Medicare Supplement (1)
| 938 | 1,134 | (17) | % | ||
Medicare Part D (1)
| 216 | 244 | (11) | % | ||
Individual and Family | ||||||
Non-Qualified Health Plans (1)
| 243 | 184 | 32 | % | ||
Qualified Health Plans (1)
| 286 | 258 | 11 | % | ||
Ancillaries | ||||||
Short-term (1)
| 165 | 163 | 1 | % | ||
Dental (1)
| 88 | 60 | 47 | % | ||
Vision (1)
| 56 | 44 | 27 | % | ||
Small Business (2)
| 184 | 149 | 23 | % |
(1) |
Constrained lifetime value ('LTV') of commissions per approved member represents commissions estimated to be collected over the estimated life of an approved member's policy after applying constraints in accordance with our revenue recognition policy. The estimate is driven by multiple factors, including but not limited to, contracted commission rates, carrier mix, estimated average plan duration, the regulatory environment, and cancellations of insurance plans offered by health insurance carriers with which we have a relationship. These factors may result in varying values from period to period.
|
(2) | For small business, the amount represents the estimated commissions we expect to collect from the plan over the following twelve months. The estimate is driven by multiple factors, including but not limited to, contracted commission rates, carrier mix, estimated average plan duration, the regulatory environment, and cancellations of insurance plans offered by health insurance carriers with which we have a relationship and applied constraints. These factors may result in varying values from period to period. |
Three Months Ended June 30, | ||||
2021 | 2020 | |||
Medicare: | ||||
Medicare Advantage | 7 | % | 7 | % |
Medicare Supplement | 9 | % | 5 | % |
Medicare Part D | 7 | % | 5 | % |
Individual and Family: | ||||
Non-Qualified Health Plans | 7 | % | 15 | % |
Qualified Health Plans | 4 | % | 4 | % |
Ancillaries: | ||||
Short-term | 20 | % | 20 | % |
Dental | 5 | % | 10 | % |
Vision | 5 | % | 10 | % |
Other | 10 | % | - | % |
Small Business | 5 | % | - | % |
Three Months Ended June 30, | % Change | |||||
2021 | 2020 | |||||
Medicare: | ||||||
Estimated customer care and enrollment ('CC&E') cost per approved Medicare Advantage ('MA')-equivalent approved member (1)
| $ | 418 | $ | 354 | 18 | % |
Estimated variable marketing cost per MA-equivalent approved member (1)
| 412 | 334 | 23 | % | ||
Total Medicare estimated cost per approved member | $ | 830 | $ | 688 | 21 | % |
Individual and Family Plan ('IFP'): | ||||||
Estimated CC&E cost per IFP-equivalent approved member (2)
| $ | 103 | $ | 105 | (2) | % |
Estimated variable marketing cost per IFP-equivalent approved member (2)
| 65 | 60 | 8 | % | ||
Total IFP estimated cost per approved member | $ | 168 | $ | 165 | 2 | % |
(1)
|
MA-equivalent approved members is a derived metric with a Medicare Part D approved member being weighted at 25% of a Medicare Advantage member and a Medicare Supplement member based on their relative LTVs at the time of our adoption of Accounting Standards Codification 606 - Revenue from Contracts with Customers ('ASC 606'). We calculate the number of approved MA-equivalent members by adding the total number of approved Medicare Advantage and Medicare Supplement members and 25% of the total number of approved Medicare Part D members during the period presented.
|
(2)
|
IFP-equivalent approved members is a derived metric with a short-term approved member being weighted at 33% of a major medical individual and family health insurance plan member based on their relative LTVs at the time of our adoption of ASC 606. We calculate the number of approved IFP-equivalent members by adding the total number of approved qualified and non-qualified health plan members and 33% of the total number of short-term approved members during the period presented.
|
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2021 | 2020 | 2021 | 2020 | |||||
GAAP marketing and advertising expense | $ | 44,581 | $ | 32,873 | $ | 95,455 | $ | 70,637 |
Stock-based compensation expense (1)
| (2,140) | (1,539) | (4,625) | (3,269) | ||||
Non-GAAP marketing and advertising expense | $ | 42,441 | $ | 31,334 | $ | 90,830 | $ | 67,368 |
GAAP customer care and enrollment expense | $ | 38,362 | $ | 27,148 | $ | 72,524 | $ | 57,683 |
Stock-based compensation expense (1)
| (692) | (573) | (1,161) | (1,235) | ||||
Non-GAAP customer care and enrollment expense | $ | 37,670 | $ | 26,575 | $ | 71,363 | $ | 56,448 |
GAAP technology and content expense | $ | 20,464 | $ | 13,373 | $ | 43,627 | $ | 29,113 |
Stock-based compensation expense (1)
| (2,360) | 82 | (5,103) | (1,535) | ||||
Non-GAAP technology and content expense | $ | 18,104 | $ | 13,455 | $ | 38,524 | $ | 27,578 |
GAAP general and administrative expense | $ | 18,118 | $ | 20,713 | $ | 41,172 | $ | 40,366 |
Stock-based compensation expense (1)
| (3,053) | (4,646) | (8,758) | (9,351) | ||||
Non-GAAP general and administrative expense | $ | 15,065 | $ | 16,067 | $ | 32,414 | $ | 31,015 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2021 | 2020 | 2021 | 2020 | |||||
Net income (loss) attributable to common stockholders | $ | (22,889) | $ | (3,370) | $ | (23,689) | $ | 82 |
Paid-in-kind dividends for preferred stock | 3,083 | - | 3,083 | - | ||||
Change in preferred stock redemption value | 1,397 | - | 1,397 | - | ||||
GAAP net income (loss) | (18,409) | (3,370) | (19,209) | 82 | ||||
Stock-based compensation expense | 8,245 | 6,676 | 19,647 | 15,390 | ||||
Amortization of intangible assets | 119 | 373 | 295 | 920 | ||||
Restructuring charges | - | - | 2,431 | - | ||||
Tax effect of non-GAAP adjustments | (2,092) | (1,943) | (5,918) | (4,338) | ||||
Non-GAAP net income (loss) | $ | (12,137) | $ | 1,736 | $ | (2,754) | $ | 12,054 |
GAAP net income (loss) attributable to common stockholders per diluted share | $ | (0.86) | $ | (0.13) | $ | (0.89) | $ | - |
Impact from preferred stock | 0.17 | - | 0.17 | - | ||||
Stock-based compensation expense | 0.31 | 0.25 | 0.74 | 0.58 | ||||
Change in fair value of earnout liability | - | - | - | - | ||||
Amortization of intangible assets | - | 0.01 | 0.01 | 0.03 | ||||
Restructuring charges | - | - | 0.09 | - | ||||
Acquisition costs | - | - | - | - | ||||
Tax effect of non-GAAP adjustments | (0.07) | (0.06) | (0.22) | (0.16) | ||||
Non-GAAP net income (loss) per diluted share | $ | (0.45) | $ | 0.07 | $ | (0.10) | $ | 0.45 |
Net income (loss) attributable to common stockholders | $ | (22,889) | $ | (3,370) | $ | (23,689) | $ | 82 |
Paid-in-kind dividends for preferred stock | 3,083 | - | 3,083 | - | ||||
Change in preferred stock redemption value | 1,397 | - | 1,397 | - | ||||
GAAP net income (loss) | (18,409) | (3,370) | (19,209) | 82 | ||||
Stock-based compensation expense | 8,245 | 6,676 | 19,647 | 15,390 | ||||
Change in fair value of earnout liability | - | - | - | - | ||||
Depreciation and amortization (2)
| 3,997 | 2,592 | 7,941 | 4,916 | ||||
Amortization of intangible assets | 119 | 373 | 295 | 920 | ||||
Restructuring charges | - | - | 2,431 | - | ||||
Acquisition costs | - | - | - | - | ||||
Other income, net | (172) | (452) | (322) | (825) | ||||
Provision (benefit) for income taxes | (6,752) | (2,432) | (6,444) | (4,480) | ||||
Adjusted EBITDA (2)
| $ | (12,972) | $ | 3,387 | $ | 4,339 | $ | 16,003 |
Full Year 2021 Guidance | ||||
Low | High | |||
GAAP net income attributable to common stockholders | $ | 23.0 | $ | 38.0 |
Impact from preferred stock | 19.0 | 19.0 | ||
GAAP net income | 42.0 | 57.0 | ||
Stock-based compensation expense | 39.0 | 37.0 | ||
Restructuring charges | 2.1 | 2.1 | ||
Amortization of intangible assets | 1.5 | 1.5 | ||
Tax effect of non-GAAP adjustments | (8.5) | (8.1) | ||
Non-GAAP net income | $ | 76.1 | $ | 89.5 |
GAAP net income attributable to common stockholders per diluted share | $ | 0.84 | $ | 1.39 |
Impact from preferred stock | 0.69 | 0.69 | ||
Stock-based compensation expense | 1.42 | 1.35 | ||
Restructuring charges | 0.08 | 0.08 | ||
Amortization of intangible assets | 0.05 | 0.05 | ||
Tax effect of non-GAAP adjustments | (0.31) | (0.30) | ||
Non-GAAP net income per diluted share | $ | 2.77 | $ | 3.26 |
GAAP net income attributable to common stockholders | 23.0 | 38.0 | ||
Impact from preferred stock | 19.0 | 19.0 | ||
GAAP net income | 42.0 | 57.0 | ||
Stock-based compensation expense | 39.0 | 37.0 | ||
Depreciation and amortization (2)
| 15.5 | 14.5 | ||
Restructuring charges | 2.1 | 2.1 | ||
Amortization of intangible assets | 1.5 | 1.5 | ||
Other income, net | (1.5) | (2.5) | ||
Provision for income taxes | 11.4 | 15.4 | ||
Adjusted EBITDA (2)
| $ | 110.00 | $ | 125.00 |
(1)
|
See Non-GAAP Financial Information section for definitions of our non-GAAP financial measures.
|
(2)
| In the first quarter of 2021, we revised our calculation of adjusted EBITDA to exclude the amortization of capitalized software development costs. Amortization of capitalized software development costs is included in depreciation and amortization. Refer to Revised Adjusted EBITDA Reconciliation for additional information. |
Fiscal Year 2020 | Q1 | Q2 | Q3 | Q4 | ||||||||||||||||||||
As Reported | Adj. | As Adjusted | As Reported | Adj. | As Adjusted | As Reported | Adj. | As Adjusted | As Reported | Adj. | As Adjusted | |||||||||||||
Medicare segment profit (loss) (1)
| $ | 21,960 | $ | 1,176 | $ | 23,136 | $ | 13,430 | $ | 1,566 | $ | 14,996 | $ | (16,010) | $ | 1,871 | $ | (14,139) | $ | 82,583 | $ | 2,211 | $ | 84,794 |
Individual, Family and Small Business segment profit (1)
| 2,603 | 325 | 2,928 | 2,570 | 168 | 2,738 | 18,286 | 201 | 18,487 | 15,924 | 238 | 16,162 | ||||||||||||
Total segment profit | 24,563 | 1,501 | 26,064 | 16,000 | 1,734 | 17,734 | 2,276 | 2,072 | 4,348 | 98,507 | 2,449 | 100,956 | ||||||||||||
Corporate | (13,448) | (13,448) | (14,347) | (14,347) | (15,581) | (15,581) | (14,288) | (14,288) | ||||||||||||||||
Stock-based compensation expense | (8,714) | (8,714) | (6,676) | (6,676) | (6,332) | (6,332) | (3,450) | (3,450) | ||||||||||||||||
Depreciation and amortization (2)
| (823) | (1,501) | (2,324) | (858) | (1,734) | (2,592) | (923) | (2,072) | (2,995) | (1,090) | (2,449) | (3,539) | ||||||||||||
Amortization of intangible assets | (547) | (547) | (373) | (373) | (287) | (287) | (286) | (286) | ||||||||||||||||
Other income (expense), net | 373 | 373 | 452 | 452 | (101) | (101) | (58) | (58) | ||||||||||||||||
Income (loss) before income taxes | $ | 1,404 | $ | - | $ | 1,404 | $ | (5,802) | $ | - | $ | (5,802) | $ | (20,948) | $ | - | $ | (20,948) | $ | 79,335 | $ | - | $ | 79,335 |
Fiscal Year 2020 | Q1 | Q2 | Q3 | Q4 | ||||||||||||||||||||
As Reported | Adj. | As Adjusted | As Reported | Adj. | As Adjusted | As Reported | Adj. | As Adjusted | As Reported | Adj. | As Adjusted | |||||||||||||
GAAP income (net loss) | $ | 3,452 | $ | 3,452 | $ | (3,370) | $ | (3,370) | $ | (14,505) | $ | (14,505) | $ | 59,873 | $ | 59,873 | ||||||||
Stock-based compensation expense | 8,714 | 8,714 | 6,676 | 6,676 | 6,332 | 6,332 | 3,450 | 3,450 | ||||||||||||||||
Depreciation and amortization (2)
| 823 | 1,501 | 2,324 | 858 | 1,734 | 2,592 | 923 | 2,072 | 2,995 | 1,090 | 2,449 | 3,539 | ||||||||||||
Amortization of intangible assets | 547 | 547 | 373 | 373 | 287 | 287 | 286 | 286 | ||||||||||||||||
Other expenses (income), net | (373) | (373) | (452) | (452) | 101 | 101 | 58 | 58 | ||||||||||||||||
Provision for (benefit from) income taxes | (2,048) | (2,048) | (2,432) | (2,432) | (6,443) | (6,443) | 19,462 | 19,462 | ||||||||||||||||
Adjusted EBITDA (1)
| $ | 11,115 | $ | 1,501 | $ | 12,616 | $ | 1,653 | $ | 1,734 | $ | 3,387 | $ | (13,305) | $ | 2,072 | $ | (11,233) | $ | 84,219 | $ | 2,449 | $ | 86,668 |
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eHealth Inc. published this content on 29 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 July 2021 21:41:22 UTC.