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EI

eHealth, Inc. (EHTH)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $113.1M (+22% YoY), GAAP net income was $2.0M, and adjusted EBITDA was $12.5M; results were driven by strong Medicare submissions and margin expansion .
  • Versus S&P Global consensus, revenue beat ($113.1M vs $99.5M*), EPS beat (Primary EPS -$0.27* vs -$0.76*), and EBITDA beat ($5.3M* vs -$8.0M*) with improved unit economics; management reiterated FY25 guidance . Values retrieved from S&P Global.*
  • Catalysts included raising the low-end of FY25 positive net adjustment (“tail”) revenue to $11–$20M, supportive final CMS rules and 2026 MA rate notice, and an AI-based voice agent pilot that enhances intake and efficiency .
  • Near-term caution: Q2 outlook calls for revenue in the mid-$40M and an adjusted EBITDA loss in the mid-$30M due to D-SNP enrollment restrictions and investment ramp ahead of AEP, plus DOJ litigation headlines (allegations only; no reserve) .

What Went Well and What Went Wrong

What Went Well

  • Medicare submissions +22% YoY (MA +25%) with a 10% decline in total acquisition cost per MA-equiv approved member, reflecting optimized sales and marketing and stronger conversion rates; CEO: “another quarter of strong execution, resulting in significant revenue and profitability improvements” .
  • Medicare segment revenue +26% YoY to $103.7M and segment gross profit +62% YoY to $35.7M, supported by improved per-unit acquisition costs and greater fee-based revenue from Amplify .
  • Operating cash flow rose 9% YoY to $77.1M; tail revenue was $10.5M vs $2.5M in the prior year, and commissions receivable ended at $923.3M, underpinning liquidity and asset quality .

What Went Wrong

  • Employer & Individual segment remained soft: revenue down 11% YoY to $9.5M and segment gross profit down 19% YoY to $6.0M, with legacy products in decline outweighing growth in ancillary and ICHRA .
  • MA constrained LTV fell 5% YoY; Part D LTV fell 30%, reflecting retention dynamics and broader PDP trends, partially offset by a 31% increase in Med Supp LTV (carrier mix) .
  • Q2 guide implies seasonal/regulatory headwinds (D-SNP restrictions) and expense ramp ahead of AEP; DOJ complaint adds headline risk (company asserts claims are without merit; no litigation reserve recorded) .

Financial Results

Consolidated P&L and Margins (chronological: oldest → newest)

MetricQ1 2024Q3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$93.0 $58.4 $315.2 $113.1
GAAP Net Income (Loss) ($USD Millions)$(17.0) $(42.5) $97.5 $2.0
Net Income (Loss) Margin (%)(18)% (73)% 31% 2%
Net Loss to Common ($USD Millions)$(27.7) $(53.9) $85.7 $(10.0)
EPS to Common (Basic/Diluted, $)$(0.96) $(1.83) $2.51 $(0.33)
Adjusted EBITDA ($USD Millions)$(1.7) $(34.8) $121.3 $12.5
Adjusted EBITDA Margin (%)(2)% (60)% 38% 11%
Operating Cash Flow ($USD Millions)$70.8 (not disclosed)$(27.7) $77.1

Actual vs S&P Global Consensus – Q1 2025

MetricActualConsensusSurprise
Revenue ($USD)$113,119,000 $99,457,820*+$13,661,180
Primary EPS ($)-$0.266*-$0.760*+$0.494
EBITDA ($USD)$5,269,000*-$7,992,350*+$13,261,350

Values retrieved from S&P Global.*

Segment Revenue and Profit

MetricQ3 2024Q4 2024Q1 2025
Medicare Revenue ($USD Millions)$53.2 $305.8 $103.7
E&I Revenue ($USD Millions)$5.2 $9.4 $9.5
Medicare Segment Gross Profit ($USD Millions)n/a (segment loss used) $159.9 $35.7
E&I Segment Gross Profit ($USD Millions)n/a (segment loss used) $4.0 $6.0

Note: Q3 2024 presented “segment profit (loss)” rather than segment gross profit; methodology updated in Q4 2024 .

Key Operating KPIs

KPIQ3 2024Q4 2024Q1 2025
Total Medicare Submissions (count)55,518 288,648 104,181
Total Approved Members (count)58,266 272,363 111,810
Total Acquisition Cost per MA-Equiv Approved Member ($)$1,256 $591 $754
MA Constrained LTV ($)$990 $1,174 $907
Net Adjustment (Tail) Revenue ($USD Millions)$1.2 $7.6 $10.5
Non-GAAP Total Revenue ex Tail ($USD Millions)$57.2 $307.6 $102.6

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($M)FY 2025$510–$550 $510–$550 Maintained
GAAP Net Income (Loss) ($M)FY 2025$(10)–$15 $(10)–$15 Maintained
Adjusted EBITDA ($M)FY 2025$35–$60 $35–$60 Maintained
Operating Cash Flow ($M)FY 2025$(25)–$10 $(25)–$10 Maintained
Positive Net Adjustment (Tail) Revenue ($M)FY 2025$0–$20 $11–$20 Raised low-end to $11
Revenue ($M)Q2 2025 Outlookn/aMid-$40s New quarterly outlook
Adjusted EBITDA ($M)Q2 2025 Outlookn/aLoss in mid-$30s New quarterly outlook

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
AI/Technology initiativesAEP readiness: omnichannel tools (MatchMonitor, LiveAdvise), platform enhancements Record conversions; continued optimization and digital tools AI voice agent pilot for intake, after-hours coverage, improved efficiency Improving deployment/impact
Regulatory/Macro (CMS rules, rates)Noted 2025 CMS Policy and Technical Changes FY25 guide framed amid dynamic sector Final CMS rules positive; 2026 MA rate notice exceeded expectations; broker commissions TBD More supportive environment
Medicare product performanceMA submissions +26% YoY; lower tail drove headline declines MA strength; unit margin expansion; record quarter MA approved members +26%; submissions +25% (agency); hybrid +38%; Med Supp LTV +31% Strong, broad-based
Retention initiativesLoyalty program launched Retention initiatives supporting AEP Dedicated retention/customer service team nearly doubled; better recapture of switching Scaling efforts
Amplify (BPO) / DiversificationCarrier-dedicated model referenced Fee-based BPO contribution grew Amplify fee-based revenue +; BPO expected to evolve irrespective of rate environment Expanding
Legal/Regulatory riskGeneral litigation risk disclosures Standard risk disclosure DOJ complaint (allegations only); no reserve; company will vigorously contest Headline risk elevated

Management Commentary

  • CEO: “As Medicare beneficiaries are navigating an increasingly complex and evolving plan landscape, eHealth’s transparent, consumer-centric choice model has become more relevant than ever… These first quarter results… position us exceptionally well to achieve our 2025 objectives” – Fran Soistman .
  • CFO: “Adjusted EBITDA exceeded our expectations… driven partially by favorable enrollment margins as well as timing benefits related to operating expense recognition… we are raising the low end of our 2025 range for tail revenue to reflect our first quarter performance ($11–$20M)” – John Dolan .
  • CEO on CMS: “The final Medicare Advantage carrier reimbursement rates exceeded market expectations… we firmly believe the CMS announcements constitute an important positive development for the entire MA ecosystem” – Fran Soistman .

Q&A Highlights

  • Carrier dynamics: Question on Elevance MA plans removing from online marketing; company emphasized broad carrier diversification (~50 MA relationships) and seasonality; expects potential revisit ahead of 2026 AEP .
  • Regulatory/commission rates: Management is cautiously optimistic; expects less volatility in 2026 AEP; broker commission rate changes typically announced in June and historically correlate with plan rates (not embedded in guidance) .
  • Amplify strategy: Outsourced solutions attractive given seasonality and D-SNP changes; expect continued evolution and opportunities regardless of rate environment .
  • Litigation: DOJ complaint is allegations only; no liability determinations; company intends to challenge vigorously; sponsorship programs limited to a subset of carriers .
  • Near-term guide clarity: Q2 revenue mid-$40M and adjusted EBITDA loss mid-$30M due to D-SNP restrictions and adviser ramp; some Q1 tail revenue pulled forward from Q2 forecast .

Estimates Context

  • Q1 2025: Revenue beat ($113.1M vs $99.5M*), Primary EPS beat (-$0.27* vs -$0.76*), and EBITDA beat ($5.3M* vs -$8.0M*). Values retrieved from S&P Global.*
  • FY 2025 consensus revenue $547.0M* and EBITDA $69.9M* sit above the midpoints of company guidance; estimate revisions may edge higher on stronger Q1 execution but are tempered by Q2 seasonal/regulatory headwinds and management’s desire to retain reinvestment flexibility . Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Strong Q1 execution with broad Medicare momentum and improved unit economics, delivering revenue and profitability outperformance versus consensus; tail revenue strength and OCF support the balance sheet .
  • FY25 guidance reaffirmed with a higher low-end tail range ($11–$20M), signaling confidence in receivable collection quality and cohort dynamics despite near-term seasonality .
  • The regulatory backdrop has turned more supportive (final CMS rules, 2026 MA rates), potentially stabilizing broker economics and carrier investment appetite into the next AEP .
  • Watch Q2: management telegraphed a seasonal/regulatory air-pocket (D-SNP), step-up in ramp expenses, and timing effects; Q2 softness is in the plan and not thesis-breaking .
  • Strategic levers—brand, omnichannel funnel, AI voice agents, and Amplify fee-based BPO—are compounding drivers of conversion, margin, and diversification through cycles .
  • Litigation headline risk exists (DOJ complaint), but company asserts claims lack merit and recorded no reserve; monitor carrier sponsorship discussions and any regulatory commentary .
  • Into AEP, focus on commission rate announcements (June), carrier benefit designs, and retention metrics—key inputs that could tilt FY25 earnings trajectory and estimate revisions .