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GI

GoHealth, Inc. (GOCO)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered solid execution: net revenues rose 19.1% year over year to $221.0M, Adjusted EBITDA increased 56.4% to $42.1M, and Submissions grew 40.2% to 303,026, while Direct Operating Cost per Submission fell 18.4% to $522 .
  • EPS modestly beat S&P Global consensus: diluted EPS of -$0.52 vs -$0.55 consensus; revenue was ~inline/slight miss at $220.97M vs $221.61M consensus (S&P Global) *.
  • Management launched GoHealth Protect (guaranteed acceptance life insurance) to reduce Medicare revenue seasonality and improve unit economics; early ramp expected in Q2–Q3 .
  • Cash from operations was -$12.4M in Q1 (mix shift back to agency), and commissions receivable topped $1.0B; management flagged DOJ intervention in a TAM lawsuit as a legal overhang .
  • Subsequent event: on June 30, GoHealth amended its credit agreement, extended the revolver to Sep 30, 2025, and received consent to pursue receivables financing/securitization to address a going concern position .

What Went Well and What Went Wrong

What Went Well

  • Strong top-line and profitability momentum: net revenues +19.1% YoY to $221.0M; Adjusted EBITDA +56.4% YoY to $42.1M; Adjusted EBITDA margin expanded to 19.0% .
  • Efficiency improved: Submissions +40.2% YoY to 303,026; Direct Operating Cost per Submission improved 18.4% YoY to $522; management cited 12% lower enrollment average handle times driven by AI tools (PlanGPT, PlanFit) .
  • Diversification initiative: launched GoHealth Protect (final expense life insurance) to enhance cash realization and lower acquisition costs; “a highly strategic step…to minimize revenue seasonality” . Quote: “We expect it will…drive a more predictable revenue and margin profile” — CFO Brendan Shanahan .

What Went Wrong

  • Sales per Submission declined 15.4% YoY to $724, reflecting mix shift back to agency; management reiterated this was expected and mix-driven .
  • Cash generation dipped: cash from operations -$12.4M vs +$12.5M prior year due to agency mix; commissions receivable expanded, increasing working capital needs .
  • Legal overhang and potential headline risk: DOJ intervened in a TAM lawsuit (FCA/anti-kickback claims) covering 2016–2021; company denies allegations and will defend vigorously .

Financial Results

Headline P&L Comparison (chronological: Q3 2024 → Q4 2024 → Q1 2025)

MetricQ3 2024Q4 2024Q1 2025
Net Revenues ($USD Millions)$118.3 $389.1 $221.0
Net Income (Loss) ($USD Millions)$15.4 $58.0 $(9.8)
Diluted EPS ($)$0.46 $1.56 $(0.52)
Adjusted EBITDA ($USD Millions)$(12.1) $117.8 $42.1
Net Income Margin (%)13.0% 14.9% (4.4)%
Adjusted EBITDA Margin (%)(10.2)% 30.3% 19.0%

Consensus vs Actual (S&P Global)

MetricQ3 2024 Estimate*Q3 2024 ActualBeat/MissQ4 2024 Estimate*Q4 2024 ActualBeat/MissQ1 2025 Estimate*Q1 2025 ActualBeat/Miss
Revenue ($USD Millions)106.9*118.3 Beat326.6*389.1 Beat221.6*221.0 Slight miss
Primary EPS ($)-3.05*0.46 Beat0.97*1.56 Beat-0.55*-0.52 Beat

Values retrieved from S&P Global.*

Disaggregation of Revenue (Q1)

Revenue Component ($USD Thousands)Q1 2024Q1 2025
Commission Revenue (Agency)$79,733 $167,109
Partner Marketing & Other (Agency)$19,391 $20,524
Total Agency Revenue$99,124 $187,633
Non-Agency Revenue$85,902 $31,771
Other Revenue$574 $1,568
Total Net Revenues$185,600 $220,972

KPIs and Operating Metrics (Q1)

KPIQ1 2024Q1 2025
Submissions (units)216,148 303,026
Sales per Submission ($)$856 $724
Direct Operating Cost per Submission ($)$640 $522
Direct Operating Cost of Submission ($USD Thousands)$138,250 $158,042
Sales/Direct Operating Cost of Submission (x)1.3 1.4

Cash Flow & Receivables

MetricQ1 2024Q1 2025
Net Cash from Operations ($USD Thousands)$12,512 $(12,405)
Commissions Receivable – Current ($USD Thousands)$320,399 (Dec 31, 2024) $207,443 (Mar 31, 2025)
Commissions Receivable – Non-Current ($USD Thousands)$733,161 (Dec 31, 2024) $793,174 (Mar 31, 2025)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025No formal guidanceNo formal guidance; management will “lean more into GoHealth Protect” in Q2–Q3; expects another disruptive AEP Maintained “no guidance”
Adjusted EBITDAFY 2025No formal guidanceNo formal guidance; expects margin gains from efficiency and AI/tooling Maintained
Operating focusQ2–Q3 2025N/AShift more capacity to GoHealth Protect during SEP as plans suppress commission eligibility New operating posture
Regulatory backdrop2025/2026N/ACMS finalized ~5.06% MA revenue increase and 10.72% broker commission increase, supportive for brokers Positive macro tailwind
Liquidity/Capital2025Prior refinancing of term loan to 2029 Amended credit agreement; revolver extended to Sep 30, 2025; consent to pursue receivables financing/securitization Strengthened flexibility (post-Q1 event)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
AI/Technology & Agent ProductivityQ3: Reduced avg handle time, PlanFit CheckUp/Save; Change Healthcare impact mitigated; tool automation; e-TeleQuote onboarding . Q4: Avg handle time -8.6%; PlanFit Checkups +72%; savings from automation; platform differentiation .Avg handle time -12%; PlanFit and PlanGPT boosted conversion; My GoHealth launched; unified enrollment pilot; GPS Express rollout .Continued efficiency gains; expanding consumer-facing tools.
Product DiversificationQ3/Q4: Focus on Medicare engagement; PlanFit Save retention economics .Launched GoHealth Protect (final expense life insurance); expect ramp Q2–Q3; aims to reduce seasonality, improve cash realization .New revenue/cash vector; early stage but scaling.
Macro/MA Market DynamicsQ3: Anticipated AEP disruption; large benefit changes; targeted marketing . Q4: Positive dynamics through first three quarters of 2025; cautious AEP outlook .Expects another disruptive AEP; health plans suppress commission eligibility during SEP; mix management .Disruption persists; requires nimble capacity allocation.
Regulatory/LegalQ4: CMS 4.3% avg revenue increase and 7.7% broker commission increase projected .CMS finalized ~5.06% avg MA revenue; 10.72% broker commission increase; DOJ intervened in TAM FCA case (2016–2021) .Regulatory tailwinds for broker economics; legal overhang elevated.
Capital Structure/LiquidityQ4: Term loan refinancing to 2029 (SOFR +7.5%); $1.1B commissions receivable .Active evaluation of alternatives; flexibility intact despite DOJ matter; subsequent credit amendment consent to receivables financing .Pursuing receivables financing; increased flexibility.

Management Commentary

  • CEO framing on Q1: “Our achievements…demonstrate substantial progress in key financial metrics, including revenue, Adjusted EBITDA, margin enhancement, and capital efficiency” .
  • On AI-driven operations: “We cut enrollment average handle times by 12%…our captive agents serve more consumers per day while still improving conversion rates” .
  • Strategy on GoHealth Protect: “It diversifies our product portfolio, minimizes revenue seasonality, and…puts us on a clear path toward long-term profitable growth” .
  • CFO on economics and cash: “As GoHealth Protect scales, we expect it will contribute to lowering our customer acquisition costs…with fees paid more quickly…reduce seasonality in our cash flow” .

Q&A Highlights

  • Capital structure flexibility: DOJ intervention does not change plans to pursue alternatives; focus on timing and terms that improve position .
  • AEP dynamics and carrier behavior: Expect more benefit resets; targeted disruption across geographies; heightened shopping demand .
  • GoHealth Protect mechanics: Selective carrier partnerships; testing inbound/outbound strategies; staged ramp to ensure quality/scalability .
  • Sales per Submission decline: Mix shift toward agency explains -15.4% YoY; agency/non-agency rates stable, blended average down .
  • Liquidity snapshot: Quarter-end cash ~$22M; down from year-end, consistent with mix/cash flow dynamics .

Estimates Context

  • Q1 2025 EPS beat and revenue near inline: EPS -$0.52 vs -$0.55 consensus; revenue $220.97M vs $221.61M consensus (S&P Global)* .
  • Prior quarters (Q3/Q4 2024) showed revenue and EPS beats vs consensus, evidencing consistent execution through disruption (S&P Global)* .
  • FY 2025 consensus revenue is $551.8M*, far below FY 2024 actual $798.9M, reflecting expected seasonality, agency mix, and conservative assumptions; potential upward revision hinges on GoHealth Protect scale and MA disruption trajectory (S&P Global)* .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Unit economics and operating leverage improving: robust Adjusted EBITDA growth and margin expansion, with CAC down double digits; supports medium-term margin thesis .
  • Mix-managed model: higher agency mix compresses Sales per Submission but drives durable LTV and growing commissions receivable; requires working-capital solutions (receivables financing underway) .
  • EPS beat and revenue inline show disciplined execution in shoulder season; watch Q2–Q3 for GoHealth Protect ramp as near-term catalyst .
  • AEP setup remains dynamic; targeted marketing plus AI/PlanFit should capture disruption; sensitivity to carrier commission eligibility and benefit resets persists .
  • Legal headline risk exists (DOJ intervention) but management reaffirmed focus and denies allegations; monitor litigation developments for sentiment impact .
  • Liquidity optionality improved post-quarter with credit amendment and securitization consent; a potential stock catalyst if receivables financing closes on attractive terms .
  • Near-term trading: bias to react to GoHealth Protect KPIs and any receivables financing announcement; medium-term thesis centers on sustained CAC reductions, diversified product cash cycles, and monetization of growing commission asset base .