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EI

eHealth, Inc. (EHTH)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue of $60.8M fell 8% YoY but exceeded internal expectations; GAAP net loss improved to $17.4M, and adjusted EBITDA was $(14.1)M, supported by higher tail revenue and disciplined variable marketing spend .
  • eHealth raised FY25 guidance: revenue to $525–$565M, GAAP net income to $5–$26M, and adjusted EBITDA to $55–$75M; positive net adjustment revenue outlook increased to $29–$32M from $11–$20M .
  • Consensus vs actual: Q2 revenue beat by ~$15M and EPS beat by ~$0.65; EBITDA also better than consensus, reflecting stronger retention and LTVs for MA and Medigap products. Estimates marked with an asterisk are from S&P Global* (see Estimates Context) *.
  • Strategic setup for AEP: enhanced telesales mix, expanding distinct consumer brand, and scaling AI voice agents to materially improve answer rates amid anticipated high beneficiary shopping activity .
  • Potential stock reaction catalysts: raised FY25 guidance, improved Medicare segment gross profit (+26% YoY), CEO succession with a seasoned operator, and AI-enabled efficiency gains ahead of AEP .

What Went Well and What Went Wrong

What Went Well

  • Medicare segment gross profit rose 26% YoY to $19.1M as tail revenue and cost discipline offset lower enrollments; variable marketing per MA-equivalent fell 7% and total acquisition cost rose only 3% despite seasonality .
  • LTV refresh showed stable-to-improving economics: MA LTV up 1% YoY to $934 and Medigap LTV up 29%, aided by retention, lower constraints, and favorable carrier mix .
  • Management raised FY25 revenue, GAAP net income, and adjusted EBITDA guidance, citing strong YTD performance and higher expected tail revenue; CEO emphasized opportunity to differentiate during a “dynamic AEP” with omni-channel strengths .

What Went Wrong

  • Q2 revenue down 8% YoY driven by regulatory changes restricting dual-eligible switching outside main enrollment periods; Medicare submissions declined 18% YoY to 41,138 .
  • E&I segment weakened: revenue fell to $2.7M and segment gross loss was $(0.3)M, with negative adjustment revenue in individual & family plans and increased constraints .
  • Operating cash flow was $(41.2)M in Q2 (seasonal ramp into AEP), and CC&E cost per MA-equivalent rose 11% due to lower enrollments per advisor and year-round tenured staffing .

Financial Results

Quarterly Trends (oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$315.2 $113.1 $60.8
GAAP Net Income (Loss) ($USD Millions)$97.5 $2.0 $(17.4)
Diluted EPS ($USD)$2.51 $(0.33) $(0.98)
Adjusted EBITDA ($USD Millions)$121.3 $12.5 $(14.1)
Net Income (Loss) Margin (%)31% 2% (29)%
Adjusted EBITDA Margin (%)38% 11% (23)%

Q2 2025 vs Prior Year and vs Estimates

MetricQ2 2024Q2 2025 ActualQ2 2025 Consensus
Revenue ($USD Millions)$65.9 $60.8 $46.0*
EPS (Primary/GAAP) ($USD)$(1.33) (GAAP diluted) $(0.98) (GAAP diluted) $(1.45)*
EBITDA ($USD Millions)n/a$(21.0)*$(34.9)*
  • Revenue: $60.8M vs $46.0M consensus — bold beat.
  • EPS: $(0.98) GAAP vs $(1.45) consensus Primary EPS — bold beat.
  • EBITDA: better than consensus.
    Values marked with an asterisk (*) retrieved from S&P Global.

Segment Breakdown (oldest → newest)

Metric ($USD Millions)Q4 2024Q1 2025Q2 2025
Medicare Segment Revenue$305.8 $103.7 $58.1
Medicare Segment Gross Profit$159.9 $35.7 $19.1
E&I Segment Revenue$9.4 $9.5 $2.7
E&I Segment Gross Profit (Loss)$4.0 $6.0 $(0.3)

KPIs and Unit Economics (oldest → newest)

KPIQ4 2024Q1 2025Q2 2025
Medicare Submissions (count)250,609 104,181 41,138
Total Approved Members (count)272,363 111,810 48,936
MA LTV ($)$1,174 $907 $934
Variable Marketing per MA-Equiv ($)$371 $393 $423
CC&E per MA-Equiv ($)$220 $361 $664
Total Acquisition Cost per MA-Equiv ($)$591 $754 $1,087

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($M)FY 2025$510–$550 $525–$565 Raised
GAAP Net Income (Loss) ($M)FY 2025$(10)–$15 $5–$26 Raised
Adjusted EBITDA ($M)FY 2025$35–$60 $55–$75 Raised
Operating Cash Flow ($M)FY 2025$(25)–$10 $(25)–$10 Maintained
Positive Net Adjustment Revenue ($M)FY 2025$11–$20 $29–$32 Raised

Earnings Call Themes & Trends

TopicQ4 2024 (Two Quarters Ago)Q1 2025 (Prior Quarter)Q2 2025 (Current)Trend
AI/TechnologyHighlighted omni-channel platform and conversion gains in AEP Piloted AI voice agents; digital conversion uplift Scaling AI voice agents to materially improve answer rates; strong customer feedback Scaling adoption; efficiency tailwind
Macro/Regulatory (Medicare)Disruption: benefit changes, plan exits driving shopping Positive signals on 2026 MA reimbursement; sector dynamics Anticipates disruptive AEP; carriers may reduce service areas/benefits; possible non-commissionable plans Continued volatility; shopping likely elevated
Telesales OrganizationScaled and optimized advisor mix in AEP Optimization efforts continued New flexible structure blending full-time & seasonal; better profitability despite lower volumes More agile capacity management
Retention/LTVAEP retention initiatives effective Retention-driven LTV gains, Medigap constraints lowered LTV refresh; MA LTV +1% YoY; Medigap LTV +29% YoY Improving economics
Capital StructureNo major update disclosedNoted strategic priorities; improving fixed cost leverage Working to address term loan (Feb maturity) and access liquidity; receivables validation; preferred to be addressed later Active restructuring pathway
CEO Successionn/an/aDerrick Duke appointed CEO effective Sept 18, 2025; Soistman advisory through year-end Leadership transition

Management Commentary

  • “eHealth delivered a strong second quarter, once again exceeding our revenue and profitability expectations… we anticipate a dynamic AEP marked by elevated consumer shopping activity… well-positioned for another successful AEP.” — Fran Soistman, CEO .
  • “We are increasing our full year 2025 revenue and earnings guidance… carriers are communicating persistent margin pressure… This anticipated volatility is a key reason why we are maintaining our underlying AEP expectations as part of our guidance.” — Francis Soistman .
  • “Second quarter revenue was $60.8M… including $17.8M in positive net adjustment revenue… MA LTV came in at $934 up 1%… MedSup LTV was $1,435 up 29%… variable marketing cost per MA-equivalent decreased 7%… CC&E increased 11% due to seasonality.” — John Dolan, CFO .
  • “We successfully piloted AI voice agents… deploying at scale… expect AI screening to materially improve answer rates given peak-period wait times.” — Francis Soistman .

Q&A Highlights

  • Guidance vs broker rate increases: Management is “cautiously optimistic” on 2026 commission rates but not “baking the entire 10.9% in” until carrier visibility improves; expects hybrids with quality metrics and varying structures by carrier .
  • AI voice agents: Clarified AI is a screening tool gathering demographics and routing immediately to licensed advisors, enabling more calls answered and reduced hold times; customer feedback has been “highly positive” .
  • Capital structure: Plan to address term loan maturity and improve access to liquidity; approach will validate commissions receivable assets; preferred equity solution likely multi-step and later .
  • 2026 MA benefits/macro: Expects environment similar to last year (service area reductions, benefit changes, plan withdrawals); carriers still need balanced growth; volatility plays to eHealth’s strengths as shoppers need guidance .
  • ACA subsidies: Does not expect ACA market to “go away”; subsidies likely addressed via bipartisan actions; expects a dynamic OEP but eHealth prepared; volatility increases shopping and guidance needs .

Estimates Context

  • Q2 2025 vs consensus (S&P Global):
    • Revenue: $60.8M vs $46.0M consensus — bold beat *.
    • EPS: $(0.98) GAAP vs $(1.45) consensus Primary EPS — bold beat *.
    • EBITDA: Actual better than consensus (company-adjusted EBITDA $(14.1)M vs S&P EBITDA consensus $(34.9)M)* *.
  • Near-term estimates likely to adjust upward on FY25 guidance raise and demonstrated tail revenue strength (positive net adjustment revenue updated to $29–$32M) .
    Values marked with an asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

  • FY25 guidance raised across revenue, GAAP earnings, and adjusted EBITDA; tail revenue outlook materially increased — a clear positive for near-term estimate revisions and sentiment .
  • Regulatory-driven seasonality shift (dual-eligible restrictions) depresses Q2/Q3 but should push volume into Q4 AEP; unit economics holding up with MA LTV stable and marketing efficiency improving .
  • AI voice agent deployment at scale offers tangible operational leverage (answer rates, call routing, customer experience) into peak AEP, supporting conversion and capacity efficiency .
  • Medicare segment profitability improved YoY despite lower volumes, underpinned by tail revenue and cost discipline; E&I remains a drag and will need tighter constraints and product/channel optimization .
  • Capital structure work (term loan and liquidity access) and validation of commissions receivable are potential medium-term de-risking catalysts; preferred equity resolution likely later .
  • Leadership transition to Derrick Duke (ex-Magellan/HealthMarkets) aligns with a scale, diversification, and cash flow mandate; continuity preserved via Soistman advisory through AEP .
  • Trading lens: Favor catalyst stack into Q4 (AEP, AI scaling, guidance path) vs seasonal headwinds in Q3; monitor carrier plan strategies, commissionability, and conversion metrics in November update .