GoHealth Reports Second Quarter 2021 Results

Rhea-AI Summary

GoHealth, Inc. (NASDAQ: GOCO) reported strong financial results for Q2 and YTD 2021, with net revenue reaching $196.9 million, a 55% increase year-over-year. Year-to-date net revenue totaled $401.1 million, up 50%. Medicare—Internal revenue surged 84% to $160.4 million in Q2. Despite these gains, the company posted a net loss of $39.2 million compared to $22.9 million last year. Adjusted EBITDA fell 47% to $14.3 million. The outlook for 2021 has been tightened with projected net revenue of $1.2 billion to $1.3 billion.

Positive

• Q2 2021 net revenue increased 55% to $196.9 million.
• YTD 2021 net revenue rose 50% to $401.1 million.
• Medicare—Internal revenue surged 84% to $160.4 million in Q2.
• Medicare Advantage Approved Submissions climbed 58% in Q2.
• LTV Per Approved Submission improved by 5% to $953.

Negative

• Net loss for Q2 2021 was $39.2 million, worsening from $22.9 million year-over-year.
• Adjusted EBITDA decreased by 47% to $14.3 million.
• Higher agent costs led to reduced Adjusted EBITDA outlook for 2021.

CHICAGO, Aug. 11, 2021 /PRNewswire/ -- GoHealth, Inc. (NASDAQ: GOCO), a leading health insurance marketplace and Medicare-focused digital health company, announced financial results for the three and six months ended June 30, 2021.

• Second quarter 2021 net revenue of $196.9 million increased 55% compared to the prior year period. YTD 2021 net revenue of $401.1 million increased 50% compared to the prior year period.
• Second quarter 2021 Medicare—Internal revenue of $160.4 million increased 84% compared to the prior year period. YTD 2021 Medicare—Internal revenue of $317.8 million increased 74% compared to the prior year period.
• Second quarter 2021 Medicare Advantage ("MA") Approved Submissions of 152,749 increased 58% compared to the prior year period. YTD 2021 MA Approved Submissions of 323,876 increased 52% compared to the prior year period.
• Second quarter 2021 MA LTV Per Approved Submission of $953 increased 5% compared to the prior year period. YTD 2021 MA LTV Per Approved Submission of $975 increased 11% compared to the prior year period.
• Second quarter 2021 net loss of $39.2 million compared to a net loss of $22.9 million in the prior year period; Adjusted EBITDA¹ of $14.3 million decreased 47% compared to the prior year period due to the 2021 strategic investments in agent capacity, marketplace technology, branding and the Encompass Platform. YTD 2021 net loss was $46.4 million compared to a net loss of $23.8 million in the prior year period; Adjusted EBITDA¹ of $46.4 million decreased 25% compared to the prior year period.
• The Company tightened its full year 2021 revenue outlook to $1,200 - $1,300 million (+37% to +48%) powered by commission net revenue of $1,000 - $1,100 million (+49% to +64%) as agent growth is tracking at the high end of expectations. The Company lowered its Adjusted EBITDA¹ outlook to $300 - $330 million (+11% to +22%), primarily due to higher agent costs expected in 2021.

Clint Jones, co-founder and CEO said, "GoHealth's second quarter revenue growth of 55% was driven by an 84% gain in our Medicare—Internal segment with LTVs expanding 5%. Our ramped up investments in our Encompass Platform led to $17 million in revenue contribution from the platform's additional services beyond enrollment for carriers. Given the 50% top-line growth over the first six months and continued strength in the market, we have raised and tightened our revenue expectations for full year fiscal 2021."

Jones continued, "These excellent top-line results are enabled by our success at increasing our agent counts ahead of the 50% growth target, ensuring that we have ample agent capacity to address the anticipated demand during this year's Annual Enrollment Period. While we are encouraged by the growth in our agent force, enhanced training and tight labor markets have created cost pressures that we expect to continue over the balance of the year. Given these higher agent costs, we are reducing our outlook for 2021 Adjusted EBITDA. We anticipate that these 2021 investments in agents, training, technology and Encompass will position us well for continued strong efficient growth in 2022."

Second Quarter 2021 Highlights²

• Total company revenue grew 55% to $196.9 million
• Total Medicare Commissionable Submitted Policies grew 52% to 156,559
• Medicare—Internal net revenue increased 84% to $160.4 million
• LTV Per carrier Approved MA Submission increased 5% to $953
• Adjusted EBITDA¹ decreased 47% to $14.3 million
• Aggregate investment in customer care and enrollment and technology grew $39.8 million to $73.9 million, an increase of 117%, including enhanced tools and training to continue powering conversion gains and improved effectuation, as well as investments in the Encompass platform
• Agent counts grew well ahead of the 50% target as the Company prepares for the Annual Enrollment Period and fiscal 2022
• Total cost of revenue, marketing and advertising expense grew 60%, roughly in line with sales growth
• The Company refinanced a portion of its term loans, upsized its revolver to $200 million, and lowered its annual borrowing costs by over $7 million

YTD 2021 Highlights²

• Total company revenue grew 50% to $401.1 million
• Total Medicare Commissionable Submitted Policies grew 48% to 333,130
• Medicare—Internal net revenue increased 74% to $317.8 million
• Medicare—Internal segment profit increased 4% to $77.7 million
• LTV Per carrier Approved MA Submission increased 11% to $975
• Adjusted EBITDA¹ decreased 25% to $46.4 million
• Aggregate investment in customer care and enrollment and technology grew 108% to $68.0 million
• Total cost of revenue, marketing and advertising expense grew 55%, roughly in line with sales growth

2021 Financial Outlook

The trajectory of the U.S. economy remains challenging to predict, particularly given the continued uncertainty associated with the pace of recovery from the COVID-19 pandemic. The Company is revising its financial outlook for the fiscal year ending December 31, 2021 based on current market conditions and expectations:

• Full-year 2021 net revenue of $1,200 - $1,300 million, representing year-over-year growth of 37% - 48%
• Full-year 2021 commission revenue of $1,000 - $1,100 million, representing year-over-year growth of 49% - 64%, fueled by the Company's continued investment in its Medicare business, including GoHealth's Encompass Platform
• Full-year 2021 Adjusted EBITDA¹ of $300 - $330 million, representing year-over-year growth of 11% - 22%

Jones added, "Seniors continue to demonstrate a high degree of interest in our model, and increasingly want to explore their Medicare plan choices from the safety and comfort of their own home through our Choice platform. GoHealth's telesales agents are equipped with the decision support tools and experience to help consumers select the right plan for their unique needs and achieve a superior health outcome with lower costs. We are in the early days of realizing this enormous market opportunity by building GoHealth's position as the trusted advisor for consumers, helping these consumers navigate their healthcare journey through our Encompass offerings, and in the process, creating value for our carrier partners through driving high-quality enrollments."

Conference Call Details

The Company will host a conference call today, Wednesday, August 11, 2021 at 5:00 p.m. (ET) to discuss its financial results.  A live audio webcast and a supplemental presentation will be available online at https://investors.gohealth.com. The conference call can also be accessed by dialing 1-833-519-1310 for U.S. participants, or 1-914-800-3876 for international participants, and referencing participant code 5464567. A replay of the call will be available for 30 days via webcast for on-demand listening shortly after the completion of the call, at the same web link.

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 customers, 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 carrier that is right for them. Since its inception, GoHealth has enrolled millions of people in Medicare and individual and family plans. For more information, visit https://www.gohealth.com.

Investor Relations:
Jay Koval, VP of Investor Relations
IR@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)	Second quarter and YTD 2021 results compared to the comparable prior year period.

Forward-Looking Statements

This release contains forward-looking statements within the meaning 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 the Company's future results of operations and financial position, business strategy and plans and objectives of management for future operations, including, among others, statements regarding expected financial performance and operational performance for the fiscal year 2021, including with respect to revenue and Adjusted EBITDA are forward-looking statements. In some cases, you can identify forward-looking statements by terms, such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "targets," "projects," "contemplates," "believes," "estimates," "predicts," "potential" 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 the Company believes 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. There are or will be important factors that could cause the Company's actual results to differ materially from those indicated in these forward-looking statements, including, but are not limited to, the following: the Company's ability to comply with the numerous, complex and frequently changing laws regulating the marketing and sale of Medicare plans; the potential for an adverse change in the Company's relationships with carriers, including a loss of a carrier relationship; failure to grow the Company's customer base or retain its existing customers; the time and cost of training agents are significant and can increase during a period of high attrition; carriers' ability to reduce commissions paid to the Company and adversely change their underwriting practices; significant consolidation in the healthcare industry which could adversely alter the Company's relationships with carriers; information technology systems failures or capacity constraints interrupting the Company's operations; factors that adversely impact the Company's estimate of LTV; the Company's dependence on agents to sell insurance plans; changes in the health insurance system and laws and regulation governing health insurance markets; the inability to effectively advertise the Company's products; and our ability to successfully implement our business plan during a global economic downturn caused by the COVID-19 pandemic.

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 the Company's Annual Report on Form 10-K for the year ended December 31, 2020 and other SEC filings. If one or more events related to these or other risks or uncertainties materialize, or if the Company's underlying assumptions prove to be incorrect, actual results may differ materially from what the Company anticipates. Many of the important factors that will determine these results are beyond the Company's 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, the Company does 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, the Company cannot assess the impact of each factor on its 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 expense (benefit) and depreciation and amortization expense ("EBITDA"); Adjusted EBITDA and Adjusted EBITDA margin. Adjusted EBITDA is the primary financial performance measure used by management to evaluate its business and monitor its results of operations.

Adjusted EBITDA represents EBITDA as further adjusted for share-based compensation, loss on debt extinguishment, non-recurring legal fees, change in fair value of contingent consideration liability, IPO transaction costs, and severance costs. Adjusted EBITDA margin represents Adjusted EBITDA divided by net revenues.

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. 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 net income (loss) 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 and Adjusted EBITDA to its most directly comparable GAAP financial measure, net income (loss), 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.

Management has provided its outlook regarding Adjusted EBITDA, which is a non-GAAP financial measure and excludes certain charges. Reconciliations of Adjusted EBITDA to its most directly comparable GAAP financial measure, net income (loss), is presented in the table below in this press release.

Glossary

"Adjusted EBITDA" represents, as applicable for the period, EBITDA as further adjusted for share-based compensation expense, loss on extinguishment of debt, non-recurring legal fees, change in fair value of contingent consideration liability, IPO transaction costs, and severance costs.

"Adjusted EBITDA Margin" refers to Adjusted EBITDA divided by net revenues.

"Approved Submissions" refer to Submitted Policies approved by carriers for the identified product during the indicated period.

"LTV Per Approved Submission" refers to the Lifetime Value of Commissions per Approved Submission, which we define as (i) aggregate commissions estimated to be collected over the estimated life of all commissionable Approved Submissions for the relevant period based on multiple factors, including but not limited to, contracted commission rates, carrier mix and expected policy persistency with applied constraints, excluding revenue adjustments recorded in the period, but relating to performance obligations satisfied in prior periods, divided by (ii) the number of commissionable Approved Submissions for such period.

"Revenue Per Submission" refers to the total net revenues per Submitted Policy, which we define as (i) total net revenue, excluding revenue adjustments recorded in the period, but relating to performance obligations satisfied in prior periods, divided by (ii) the number of Submitted Policies for such period.

"Submitted Policies" refer to completed applications that, with respect to each such application, the consumer has authorized us to submit to the carrier.

The following tables set forth the components of our results of operations for the periods indicated (unaudited):

(in thousands, except percentages and per share amounts)		Three months ended Jun. 30, 2021							Three months ended Jun. 30, 2020
		Dollars				% of Net Revenues			Dollars				% of Net Revenues			$ Change				% Change
Net revenues:
Commission		$	147,508			74.9	%		$	96,606			76.0	%		$	50,902			52.7	%
Enterprise		49,394				25.1	%		30,451				24.0	%		18,943				62.2	%
Net revenues		196,902				100.0	%		127,057				100.0	%		69,845				55.0	%
Operating expenses:
Cost of revenue		37,442				19.0	%		36,559				28.8	%		883				2.4	%
Marketing and advertising		55,735				28.3	%		21,634				17.0	%		34,101				157.6	%
Customer care and enrollment		61,927				31.5	%		28,394				22.3	%		33,533				118.1	%
Technology		11,983				6.1	%		5,705				4.5	%		6,278				110.0	%
General and administrative		25,251				12.8	%		10,359				8.2	%		14,892				143.8	%
Change in fair value of contingent consideration liability		—				—	%		15,300				12.0	%		(15,300)				N/M
Amortization of intangible assets		23,515				11.9	%		23,514				18.5	%		1				—	%
Total operating expenses		215,853				109.6	%		141,465				111.3	%		74,388				52.6	%
Income (loss) from operations		(18,951)				(9.6)	%		(14,408)				(11.3)	%		(4,543)				31.5	%
Interest expense		8,277				4.2	%		8,986				7.1	%		(709)				(7.9)	%
Loss on extinguishment of debt		11,935				6.1	%		—				—	%		11,935				N/M
Other (income) expense		44				—	%		(505)				(0.4)	%		549				N/M
Income (loss) before income taxes		(39,207)				(19.9)	%		(22,889)				(18.0)	%		(16,318)				71.3	%
Income tax expense (benefit)		(32)				—	%		(22)				—	%		(10)				N/M
Net income (loss)		$	(39,175)			(19.9)	%		$	(22,867)			(18.0)	%		$	(16,308)			71.3	%
Net income (loss) attributable to noncontrolling interests		(27,186)				(13.8)	%
Net income (loss) attributable to GoHealth, Inc.		$	(11,989)			(6.1)	%
Net income (loss) per share:
Net income (loss) per share of common stock — basic and diluted		$	(0.12)
Weighted-average shares of common stock outstanding — basic and diluted		102,300
Non-GAAP financial measures:
EBITDA		$	(5,192)						$	10,615
Adjusted EBITDA		$	14,342						$	26,936
Adjusted EBITDA margin		7.3		%					21.2		%

_________________________

NM = Not meaningful

 

(in thousands, except percentages and per share amounts)		Six months ended Jun. 30, 2021							Six months ended Jun. 30, 2020
		Dollars				% of Net Revenues			Dollars				% of Net Revenues			$ Change				% Change
Net revenues:
Commission		$	321,489			80.2	%		$	209,116			78.0	%		$	112,373			53.7	%
Enterprise		79,592				19.8	%		58,951				22.0	%		20,641				35.0	%
Net revenues		401,081				100.0	%		268,067				100.0	%		133,014				49.6	%
Operating expenses:
Cost of revenue		85,817				21.4	%		78,693				29.4	%		7,124				9.1	%
Marketing and advertising		110,219				27.5	%		47,708				17.8	%		62,511				131.0	%
Customer care and enrollment		109,021				27.2	%		52,371				19.5	%		56,650				108.2	%
Technology		21,600				5.4	%		10,298				3.8	%		11,302				109.7	%
General and administrative		44,944				11.2	%		20,849				7.8	%		24,095				115.6	%
Change in fair value of contingent consideration liability		—				—	%		19,700				7.3	%		(19,700)				N/M
Amortization of intangible assets		47,029				11.7	%		47,029				17.5	%		—				—	%
Total operating expenses		418,630				104.4	%		276,648				103.2	%		141,982				51.3	%
Income (loss) from operations		(17,549)				(4.4)	%		(8,581)				(3.2)	%		(8,968)				104.5	%
Interest expense		16,965				4.2	%		15,742				5.9	%		1,223				7.8	%
Loss on extinguishment of debt		11,935				3.0	%		—				—	%		11,935				N/M
Other (income) expense		57				—	%		(495)				(0.2)	%		552				(111.5)	%
Income (loss) before income taxes		(46,506)				(11.6)	%		(23,828)				(8.9)	%		(22,678)				95.2	%
Income tax expense (benefit)		(63)				—	%		(24)				—	%		(39)				N/M
Net income (loss)		$	(46,443)			(11.6)	%		$	(23,804)			(8.9)	%		$	(22,639)			95.1	%
Net loss attributable to noncontrolling interests		(32,364)				(8.1)	%
Net loss attributable to GoHealth, Inc.		$	(14,079)			(3.5)	%
Net income (loss) per share:
Net income (loss) per share of common stock — basic and diluted		$	(0.14)
Weighted-average shares of common stock outstanding — basic and diluted		97,349
Non-GAAP financial measures:
EBITDA		$	21,564						$	40,579
Adjusted EBITDA		$	46,390						$	61,857
Adjusted EBITDA margin		11.6		%					23.1		%

_________________________

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):

(in thousands)		Three months ended Jun. 30, 2021				Three months ended Jun. 30, 2020
Net revenues		$	196,902			$	127,057
Net income (loss)		(39,175)				(22,867)
Interest expense		8,277				8,986
Income tax expense (benefit)		(32)				(22)
Depreciation and amortization expense		25,738				24,518
EBITDA		(5,192)				10,615
Loss on extinguishment of debt (1)		11,935				—
Share-based compensation expense (2)		7,599				597
Change in fair value of contingent consideration liability (3)		—				15,300
IPO transaction costs (4)		—				424
Adjusted EBITDA		$	14,342			$	26,936
Adjusted EBITDA margin		7.3		%		21.2		%

_________________________
(1)	Represents the loss on debt extinguishment related to the Initial Term Loan Facility.
(2)	Represents non-cash share-based compensation expense relating to equity awards.
(3)	Represents the change in fair value of the contingent consideration liability due to the predecessor owners of the Company arising from the Centerbridge Acquisition.
(4)	Represents legal, accounting, consulting, and other indirect costs associated with the Company's IPO.

 

(in thousands)		Six months ended Jun. 30, 2021				Six months ended Jun. 30, 2020
Net revenues		$	401,081			$	268,067
Net income (loss)		(46,443)				(23,804)
Interest expense		16,965				15,742
Income tax expense (benefit)		(63)				(24)
Depreciation and amortization expense		51,105				48,665
EBITDA		21,564				40,579
Loss on extinguishment of debt (1)		11,935				—
Share-based compensation expense (2)		12,711				1,077
Legal fees (3)		180				—
Change in fair value of contingent consideration liability (4)		—				19,700
IPO transaction costs (5)		—				424
Severance costs (6)		—				77
Adjusted EBITDA		$	46,390			$	61,857
Adjusted EBITDA margin		11.6		%		23.1		%

_________________________
(1)	Represents the loss on debt extinguishment related to the Initial Term Loan Facility.
(2)	Represents non-cash share-based compensation expense relating to equity awards.
(3)	Represents non-recurring legal fees unrelated to our core operations.
(4)	Represents the change in fair value of the contingent consideration liability due to the predecessor owners of the Company arising from the Centerbridge Acquisition.
(5)	Represents legal, accounting, consulting, and other indirect costs associated with the Company's IPO.
(6)	Represents costs associated with the termination of employment.

 

The following table summarizes share-based compensation expense by operating function for the periods indicated (unaudited):

(in thousands)		Three months ended Jun. 30, 2021				Three months ended Jun. 30, 2020				Six months ended Jun. 30, 2021				Six months ended Jun. 30, 2020
Marketing and advertising		$	426			$	61			$	764			$	119
Customer care and enrollment		1,043				32				1,839				58
Technology		1,133				83				1,880				159
General and administrative		4,997				421				8,228				741
Total share-based compensation expense		$	7,599			$	597			$	12,711			$	1,077

 

The following table sets forth our balance sheets for the periods indicated (unaudited):

(in thousands, except per share amounts)		Jun. 30, 2021				Dec. 31, 2020
Assets
Current assets:
Cash and cash equivalents		$	112,863			$	144,234
Accounts receivable, net of allowance for doubtful accounts of $686 in 2021 and $787 in 2020		17,335				14,211
Receivable from NVX Holdings, Inc.		—				3,395
Commissions receivable - current		113,062				188,128
Prepaid expense and other current assets		52,992				41,854
Total current assets		296,252				391,822
Commissions receivable - non-current		761,011				622,270
Other long-term assets		2,594				2,072
Property, equipment, and capitalized software, net		23,527				17,353
Intangible assets, net		641,697				688,726
Goodwill		386,553				386,553
Total assets		$	2,111,634			$	2,108,796
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable		$	17,080			$	8,733
Accrued liabilities		31,036				26,926
Commissions payable - current		51,579				78,478
Deferred revenue		700				736
Current portion of long-term debt		4,270				4,170
Other current liabilities		9,207				8,328
Total current liabilities		113,872				127,371
Non-current liabilities:
Commissions payable - non-current		214,237				182,596
Long-term debt, net of current portion		414,908				396,400
Other non-current liabilities		2,817				3,274
Total non-current liabilities		631,962				582,270
Stockholders' equity:
Class A common stock – $0.0001 par value; 1,100,000 shares authorized; 105,318 and 84,196 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively.		10				8
Class B common stock – $0.0001 par value; 597,502 and 619,004 shares authorized; 215,495 and 236,997 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively.		22				24
Preferred stock – $0.0001 par value; 20,000 shares authorized; no shares issued and outstanding at June 30, 2021 and December 31, 2020.		—				—
Additional paid-in capital		503,689				399,169
Accumulated other comprehensive income (loss)		(13)				17
Accumulated deficit		(32,881)				(18,802)
Total stockholders' equity attributable to GoHealth, Inc.		470,827				380,416
Non-controlling interests		894,973				1,018,739
Total stockholders' equity		1,365,800				1,399,155
Total liabilities and stockholders' equity		$	2,111,634			$	2,108,796

 

The following table sets forth our statements of cash flows for the periods indicated (unaudited):

(in thousands)		Six months ended Jun. 30, 2021				Six months ended Jun. 30, 2020
Operating Activities
Net income (loss)		$	(46,443)			$	(23,804)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Share-based compensation		12,711				1,077
Depreciation and amortization		4,076				1,636
Amortization of intangible assets		47,029				47,029
Amortization of debt discount and issuance costs		1,262				1,058
Change in fair value of contingent consideration		—				19,700
Loss on extinguishment of debt		11,935				—
Other non-cash items		(884)				(458)
Changes in assets and liabilities, net of acquisition:
Accounts receivable		(2,702)				12,383
Commissions receivable		(63,675)				(58,709)
Prepaid expenses and other assets		(11,778)				1,794
Accounts payable		6,114				(3,467)
Accrued liabilities		3,993				(7,641)
Deferred revenue		(36)				(14,171)
Commissions payable		4,742				18,135
Other liabilities		1,406				1,269
Net cash provided by (used in) operating activities		(32,250)				(4,169)
Investing Activities
Purchases of property, equipment and software		(7,909)				(7,764)
Net cash provided by (used in) investing activities		(7,909)				(7,764)
Financing Activities
Proceeds received upon issuance of common units		—				10,000
Borrowings under term loans		310,000				117,000
Payments of term loans		(296,835)				(1,793)
Call premium paid for debt extinguishment		(5,910)				—
Payment of deferred offering costs		—				(874)
Debt issuance cost payments		(1,608)				(6,289)
Principal payments under capital lease obligations		(154)				(144)
Cash received on advancement to NVX Holdings, Inc.		3,395				—
Net cash provided by (used in) financing activities		8,888				117,900
Effect of exchange rate changes on cash and cash equivalents		(100)				98
Increase in cash and cash equivalents		(31,371)				106,065
Cash and cash equivalents at beginning of period		144,234				12,276
Cash and cash equivalents at end of period		$	112,863			$	118,341
Supplemental Disclosure of Cash Flow Information
Non-cash investing and financing activities:
Purchases of property, equipment and software included in accounts payable		$	2,233			$	798
Issuance of senior preferred earnout units to settle contingent consideration liability		$	—			$	100,000
Issuance of common A and B units to settle contingent consideration liability		$	—			$	100,000

 

The following tables set forth operating segment results for the periods indicated (unaudited):

(in thousands, except percentages)		Three months ended Jun. 30, 2021							Three months ended Jun. 30, 2020
		Dollars				% of Net Revenues			Dollars				% of Net Revenues			$ Change				% Change
Net revenues:
Medicare - Internal		$	160,433			81.5	%		$	87,201			68.7	%		$	73,232			84.0	%
Medicare - External		31,379				15.9	%		28,108				22.1	%		3,271				11.6	%
IFP and Other - Internal		3,788				1.9	%		7,019				5.5	%		(3,231)				(46.0)	%
IFP and Other - External		1,302				0.7	%		4,729				3.7	%		(3,427)				(72.5)	%
Net revenues		196,902				100.0	%		127,057				100.0	%		69,845				55.0	%
Segment profit (loss):
Medicare - Internal		31,257				15.9	%		32,746				25.8	%		(1,489)				(4.5)	%
Medicare - External		(1,688)				(0.9)	%		495				0.4	%		(2,183)				N/M
IFP and Other - Internal		(800)				(0.4)	%		(54)				—	%		(746)				N/M
IFP and Other - External		(57)				—	%		130				0.1	%		(187)				(143.8)	%
Segment profit		28,712				14.6	%		33,317				26.2	%		(4,605)				(13.8)	%
Corporate expense		24,148				12.3	%		8,911				7.0	%		15,237				171.0	%
Change in fair value of contingent consideration liability		—				—	%		15,300				12.0	%		(15,300)				N/M
Amortization of intangible assets		23,515				11.9	%		23,514				18.5	%		1				—	%
Loss on extinguishment of debt		11,935				6.1	%		—				—	%		11,935				N/M
Interest expense		8,277				4.2	%		8,986				7.1	%		(709)				(7.9)	%
Other (income) expense		44				—	%		(505)				(0.4)	%		549				N/M
Income (loss) before income taxes		$	(39,207)			(19.9)	%		$	(22,889)			(18.0)	%		$	(16,318)			71.3	%

_________________________

NM = Not meaningful

 

		Six months ended Jun. 30, 2021							Six months ended Jun. 30, 2020
(in thousands, except percentages)		Dollars				% of Net Revenues			Dollars				% of Net Revenues			$ Change				% Change
Net revenues:
Medicare - Internal		$	317,786			79.2	%		$	182,488			68.1	%		$	135,298			74.1	%
Medicare - External		70,879				17.7	%		57,053				21.3	%		13,826				24.2	%
IFP and Other - Internal		7,763				1.9	%		15,651				5.8	%		(7,888)				(50.4)	%
IFP and Other - External		4,653				1.2	%		12,875				4.8	%		(8,222)				(63.9)	%
Net revenues		401,081				100.0	%		268,067				100.0	%		133,014				49.6	%
Segment profit:
Medicare - Internal		77,700				19.4	%		74,482				27.8	%		3,218				4.3	%
Medicare - External		(2,319)				(0.6)	%		173				0.1	%		(2,492)				N/M
IFP and Other - Internal		(1,529)				(0.4)	%		427				0.2	%		(1,956)				N/M
IFP and Other - External		103				—	%		642				0.2	%		(539)				(84.0)	%
Segment profit		73,955				18.4	%		75,724				28.2	%		(1,769)				(2.3)	%
Corporate expense		44,475				11.1	%		17,576				6.6	%		26,899				153.0	%
Change in fair value of contingent consideration liability		—				—	%		19,700				7.3	%		(19,700)				N/M
Amortization of intangible assets		47,029				11.7	%		47,029				17.5	%		—				—	%
Loss on extinguishment of debt		11,935				3.0	%		—				—	%		11,935				N/M
Interest expense		16,965				4.2	%		15,742				5.9	%		1,223				7.8	%
Other (income) expense		57				—	%		(495)				(0.2)	%		552				N/M
Income (loss) before income taxes		$	(46,506)			(11.6)	%		$	(23,828)			(8.9)	%		$	(22,678)			95.2	%

_________________________

NM = Not meaningful

 

The following table presents the number of Submitted Policies by product for the Medicare segments for the three and six months ended June 30, 2021 and 2020, for those submissions that are commissionable (compensated through commissions received from carriers):

Medicare - Total Commissionable Submitted Policies		Three months ended Jun. 30, 2021		Three months ended Jun. 30, 2020		Six months ended Jun. 30, 2021		Six months ended Jun. 30, 2020
Medicare Advantage		153,163		99,078		326,037		216,413
Medicare Supplement		1,022		2,248		2,126		4,919
Prescription Drug Plans		2,374		1,969		4,967		4,431
Total Medicare		156,559		103,295		333,130		225,763

 

The following tables present the number of Approved Submissions by product relating to commissionable policies for the Medicare segments for three and six months ended June 30, 2021 and 2020. Only commissionable policies are used to calculate LTV.

Medicare - Internal Commissionable Approved Submissions		Three months ended Jun. 30, 2021		Three months ended Jun. 30, 2020		Six months ended Jun. 30, 2021		Six months ended Jun. 30, 2020
Medicare Advantage		121,299		67,818		250,185		151,426
Medicare Supplement		268		465		519		1,287
Prescription Drug Plans		2,033		1,571		4,317		3,745
Total Medicare		123,600		69,854		255,021		156,458

 

Medicare - External Commissionable Approved Submissions		Three months ended Jun. 30, 2021		Three months ended Jun. 30, 2020		Six months ended Jun. 30, 2021		Six months ended Jun. 30, 2020
Medicare Advantage		31,450		28,979		73,691		61,266
Medicare Supplement		665		1,633		1,396		3,191
Prescription Drug Plans		236		405		525		854
Total Medicare		32,351		31,017		75,612		65,311

 

The following table presents the LTV per Approved Submission by product for the Medicare segments for the three and six months ended June 30, 2021 and 2020:

LTV per Approved Submission		Three months ended Jun. 30, 2021			Three months ended Jun. 30, 2020			Six months ended Jun. 30, 2021			Six months ended Jun. 30, 2020
Medicare Advantage		$	953		$	905		$	975		$	877
Medicare Supplement		$	846		$	937		$	821		$	928
Prescription Drug Plans		$	215		$	215		$	215		$	216

 

The following table presents the number of Submitted Policies by product for the Medicare segments for the three and six months ended June 30, 2021 and 2020, for those submissions that are non-commissionable (compensated via hourly fees and enrollment fees) and do not result in commission revenue:

Medicare - Total Non-Commissionable Submitted Policies		Three months ended Jun. 30, 2021		Three months ended Jun. 30, 2020		Six months ended Jun. 30, 2021		Six months ended Jun. 30, 2020
Medicare Advantage		3,232		7,407		9,171		14,334
Medicare Supplement		2,042		1,734		3,692		3,546
Prescription Drug Plans		791		955		1,676		1,753
Total Medicare		6,065		10,096		14,539		19,633

 

The following table presents a reconciliation from net income to non-GAAP Adjusted EBITDA guidance for the twelve months ended December 31, 2021:

		Twelve months ended Dec. 31, 2021
		Guidance Range
(in thousands)		Low				High
Net revenues		$	1,200,000			$	1,300,000
Net income		127,665				157,665
Interest expense		30,000				30,000
Income tax expense		220				220
Depreciation and amortization expense		102,000				102,000
EBITDA		259,885				289,885
Loss on extinguishment of debt (1)		11,935				11,935
Share-based compensation expense (2)		28,000				28,000
Legal fees (3)		180				180
Adjusted EBITDA		$	300,000			$	330,000
Adjusted EBITDA margin		25		%		25		%

_________________________
(1)	Represents the loss on debt extinguishment related to the Initial Term Loan Facility.
(2)	Represents non-cash share-based compensation expense relating to equity awards.
(3)	Represents non-recurring legal fees unrelated to our core operations.

 

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SOURCE GoHealth, Inc.

FAQ

What are GoHealth's Q2 2021 financial results?

GoHealth reported Q2 2021 net revenue of $196.9 million, a 55% increase year-over-year.

How did GoHealth's Medicare revenue perform in 2021?

Medicare—Internal revenue grew 84% year-over-year to $160.4 million in Q2 2021.

What is GoHealth's outlook for 2021?

GoHealth has tightened its 2021 revenue outlook to between $1.2 billion and $1.3 billion.

What was GoHealth's net loss in Q2 2021?

The net loss for Q2 2021 was $39.2 million, compared to a loss of $22.9 million in the previous year.

What factors led to a decrease in GoHealth's Adjusted EBITDA?

Higher agent costs and strategic investments in technology led to a decrease in Adjusted EBITDA by 47% in Q2 2021.