Q2 2024 GoHealth Inc Earnings Call

John Shave, Vijay Kotte, Benjamin Hendrix, Jason Schulz

Music

Marvin: Good morning, and welcome to GoHealth's second quarter 2024 earnings conference call. My name is Marvin, and I'll be your operator for today's call.

Marvin: Currently, all participants are in listen-only mode. Following the prepared remarks, we will conduct a question-and-answer session. As a reminder, this conference is being recorded. I'll now turn the call over to John Shave, Vice President of Investment Relations. John , you may begin.

Speaker Change: Thank you and good morning. Welcome to GoHealth's second quarter 2024 earnings call. Joining me today are Vijay Kotte, Chief Executive Officer, and Katie O'Halloran, Interim Chief Financial Officer.

Speaker Change: Today's conference call contains forward-looking statements based on our current expectations. Numerous known and unknown risks and uncertainties may cause actual results to differ materially from those anticipated or projected in these statements.

Speaker Change: Many of the factors that will determine future results are beyond the company's ability to control or predict. You should not place undue reliance on any forward-looking statements, and the company undertakes no obligation to update or revise any of these statements, whether due to new information, future events, or otherwise.

Speaker Change: Earlier today we issued a press release containing our results for the second quarter of 2024. We have posted the release on the GoHealth website under the Investor Relations tab.

Speaker Change: In conjunction with our forward-looking statements, we encourage you to consider the other risk factors described in our 2023 Annual Report on Form 10-K and our other filings with the SEC for additional information.

Speaker Change: During this call, we will be discussing certain non-GAAP financial measures. These measures are reconciled to the most directly comparable GAAP financial measure, and the reconciliations are set forth in the press release. I will now turn the call over to GoHealth CEO , Vijay Kotte.

Vijay Kotte: Thank you, John , and good morning, everyone. I'd like to begin by sharing commentary on our quarterly performance, along with updates on our general business activities and initiatives.

Speaker Change: In the second quarter of 2024, our internal CAPTIV team empowered nearly 525,000 consumers to navigate their Medicare options, utilizing the Plan Fit Checkup via our Proprietary Encompass workflow.

Operator: Good morning, and welcome to Gohealth's second quarter, 2024 earnings conference call. My name is Marvin, and I'll be your operator for today's call. Currently, all participants are listening only mode following the prepared marks will conduct the question and your session. As a reminder, this conference is being recorded.

Speaker Change: Along with supporting over 155,000 new enrollments in Q2, we also provide a peace of mind to over 125,000 consumers confirming their current plan is best for their needs.

John Shave: I'll now turn the call over to John Shave, Vice President of Special Relations. John, you may begin. Thank you and good morning. Welcome to Gohealth's second quarter. Today's conference call contains forward-looking statements based on our current expectations. Numerous known and unknown risks and uncertainties may cause actual results that differ materially from those anticipated or projected in these statements. Many of the factors that will determine future results are beyond the company's ability to control or predict.

Speaker Change: Our performance during Q2's Special Enrollment Period, or SEP, exceeded our expectations for submissions, revenue, and adjusted EBITDA.

Speaker Change: While our total submissions were down 6%, submissions generated by our internal captive agents increased 14% year-over-year, versus a 33% decline in submissions from our external GoPartner Solutions or GPS agents.

Speaker Change: We are particularly pleased with our internal captive results, especially considering the shopping and switching dynamics have remained unchanged since the last annual enrollment period, or AEP, and are not expected to change significantly until Q4 of this year when health plans release new benefits.

John Shave: You should not place them in the future. There is undue reliance on any forward-looking statements, and the company undertakes no obligation to update or revise any of these statements, whether due to new information, future events or otherwise.

Speaker Change: Due to market dynamics, we anticipated year-over-year declines from Q1 through Q3. Our team has managed these expected factors by driving efficiencies and reducing costs. We believe these results show the benefit of our proprietary Encompass workflow and plan-fit checkout process.

John Shave: Earlier today, we issued a press release containing our results for the second quarter of 2024. We have posted the release on the Gohealth website under the Investor Relations tab. In conjunction with our forward-looking statements, we encourage you to consider the other risk factors described in our 2023 annual report on form 10K and our other filings with the SEC for additional information. During this call, we will be discussing certain non-GAP financial measures. These measures are reconciled to the most directly comparable GAP financial measure and the reconciliations are set forth in the press release.

Speaker Change: At Gohealth, our mission is to provide support and clarity to Medicare consumers in a landscape often marked by confusion and uncertainty. There are over 65 million Medicare-eligible individuals in the United States, and approximately half of them are enrolled in Medicare Advantage plans.

Speaker Change: One-third of Medicare consumers live in counties with more than 50 plans available. The abundance of options can be overwhelming.

Speaker Change: This complexity often deters consumers from shopping for better options because they are unsure who to trust or where to begin.

Vijay Kotte: I will now turn the call over to Gohealth CEO, Jay Kote. Thank you, John, and good morning, everyone. I'd like to begin by sharing commentary on our quarterly performance along with updates on our general business activities and initiatives. In the second quarter of 2024, our internal captive team empowered nearly 525,000 consumers to navigate their Medicare option, utilizing the plan-fit check-up via our proprietary encompass workflow. Along with supporting over 155,000 new enrollments in Q2, we also provide a peace of mind to over 125,000 consumers confirming their current plan is best for their needs.

Speaker Change: We believe GoHealth is the premier resource to empower these individuals to make informed and personal decisions because of our proprietary and objective tools, as well as our well-trained, tenured agent workforce.

Speaker Change: We are continuing our evolution from a traditional Medicare enrollment company to a Medicare engagement company, focusing on building high-quality, long-term relationships with our consumers.

Speaker Change: We believe this shift emphasizes a more integrated and interactive approach to consumer care, cementing our unique and vital role in the Medicare landscape.

Speaker Change: On our last two quarterly calls, we highlighted several market factors that could influence our performance this year.

Vijay Kotte: Our performance during Q2's special enrollment period, or SEP, exceeded our expectations for submissions, revenue, and adjusted EBITDA. While our total submissions were down 6%, submissions generated by our internal captive agents increased 14% year over year, versus a 33% decline in submissions from our external GO partner solutions or GPS agents. We are particularly pleased with our internal captive results, especially considering that shopping and switching dynamics have remained unchanged since the last annual enrollment period or AEP, and are not expected to change significantly until Q4 this year, when health plans release new benefits.

Speaker Change: Due to the dynamics of the industry, we expect clarity on the impact of these factors in Q4 once AEP starts.

Speaker Change: As typical, the market dynamics we observed in the fourth quarter of 2024 for AEP will continue for a full four quarters running through the third quarter of 2025.

Speaker Change: As a reminder, there are five key market factors.

Speaker Change: 1. The final rate notice on commissions for the 2025 plan year.

Speaker Change: Two, the final 2025 marketing rule from the Centers for Medicare and Medicaid Services, or CMS.

Speaker Change: 3. Plan product and benefit differentiation between 2024 and 2025.

Vijay Kotte: Due to market dynamics, we anticipated year over year declines from Q1 through Q3. Our team has managed these expected factors by driving efficiencies and reducing costs. We believe these results show the benefit of our proprietary encompass workflow and plan-fit check-up process. At Gohealth, our mission is to provide support and clarity to Medicare consumers in a landscape often marked by confusion and uncertainty. There are over 65 million Medicare eligible individuals in the United States, and approximately half of them are enrolled in Medicare Advantage points.

Speaker Change: for marketing efficiency within this election season.

Speaker Change: And finally, relative health plan competitiveness and its effect on plan mix. As we become more selective in the health plans we include in our marketplace, this factor impacts sales per submission or revenue per sale and agency versus non-agency revenue distribution.

Vijay Kotte: One third of Medicare consumers live in counting with more than 50 plans available. The abundance of options can be overwhelmed. This complexity often deters consumers from shopping for better options because they are unsure who to trust or where to begin. We believe Gohealth is the premier resource to empower these individuals to make informed and personal decisions because of our proprietary and objective tools as well as our well-trained tenured agent workforce. We are continuing our evolution from a traditional Medicare enrollment company to a Medicare engagement company focusing on building high quality long-term relationships with our consumers.

Speaker Change: As we report our second quarter results, we have updates regarding these factors.

Speaker Change: On market factor one, as we previously discussed, CMS issued the final rate notice, which aligns with our expectations for the base commission schedule.

Speaker Change: The 2025 Final Rate Notice introduced margin pressure for health plans, which we believe will likely lead to benefit disruptions and market exits, particularly for non-special needs plans.

Speaker Change: Major health plans confirmed significant upcoming benefit disruptions in their Q1 earnings calls.

Speaker Change: Similarly, we expect on average 20% plus increases in premiums for beneficiaries currently on Medicare supplements.

Speaker Change: We believe these rate increases and disruptions could lead to a significant increase in consumer shopping and switching during the upcoming AEP, presenting a positive opportunity for GoHealth's business model.

Vijay Kotte: We believe this shift emphasizes a more integrated and interactive approach to consumer care, cementing our unique and vital role in the Medicare landscape. On our last two quarterly calls, we highlighted several market factors that could influence our performance this year. Due to the dynamics of the industry, we expect clarity on the impact of these factors in Q4 once AEP starts. As typical, the market dynamics we observe in the fourth quarter of 2024 for AEP will continue for a full four quarters running through the third quarter of 2025.

Speaker Change: More recently, many health plans had the opportunity to resubmit their bids due to a series of successful lawsuits on STARS scores.

Speaker Change: While this may change AP's competitive dynamics, we know that many health plans are targeting growth in specific markets and products.

Speaker Change: Notably, some are focusing on the special needs population, a segment that GoHealth is uniquely equipped to attract and serve. These strategies and priorities will vary by health plan and geography, but we believe we are ideally positioned to help health plans achieve targeted and measured growth.

Vijay Kotte: As a reminder, there are five key market factors. One, the final rate notice on commissions for the 2025 plan year. Two, the final 2025 marketing rule from the Centers for Medicare and Medicaid Services or CMS. Three, plan product and benefit differentiation between 2024 and 2025. Four, marketing efficiency within this election season. And finally, relative health plan competitiveness and its effect on plan mix. As we become more selective in the health plans we include in our marketplace, this factor impacts sales for submission or revenue for sale and agency versus non-agency revenue distribution.

Speaker Change: on Market Factor II.

Speaker Change: In April , CMS published the final 2025 marketing rules addressing independent agent and broker compensation and introducing new guidelines.

Speaker Change: However, the U.S. District Court in Texas stayed the effective date of the compensation provisions of the rule, and later CMS acknowledged that because of the court's order, the status quo would be maintained through AEP.

Speaker Change: As we have already commented, we believe the final rule, as published, had minimal impact to our business model, but the court order and subsequent CMS guidance confirms that it is business as usual.

Speaker Change: The one part of the rule that we expect to be implemented as planned pertains to the restrictions in the new rules surrounding conduct commonly attributed to lead generators.

Vijay Kotte: As we report our second quarter results, we have updates regarding these factors. On market factor one, as we previously discussed, CMS issued the final rate notice, which aligns with our expectations for the base commission schedule. The 2025 final rate notice introduced margin pressure for health plans, which we believe will likely lead to benefit disruption and market exits, particularly for non-special needs plans. Major health plans confirm significant upcoming benefit disruption in their Q1 earnings calls.

Speaker Change: Those restrictions should not affect GoHealth because we held ourselves to the standards of the new rule years before the rule was even proposed. And accordingly, we think these restrictions are good for the industry at large to protect consumers from confusing and unintended sales calls.

Speaker Change: As we contemplate the remaining factors, we are cautiously optimistic about shopping and appropriate switching during AEP. As part of our strategic shift from enrollment to engagement, we believe in building trusted relationships with consumers and putting them in the right plan for their needs.

Vijay Kotte: Similarly, we expect on average 20% plus increases in premiums for benefit shares currently on Medicare supplements. We believe these rate increases and disruption could lead to a significant increase in consumer shopping and switching during the upcoming AEP, presenting a positive opportunity for Go Health business models. More recently, many health plans have the opportunity to resubmit their bids due to a series of successful lawsuits on start scores. While this may change AEP's competitive dynamics, we know that many health plans are targeting growth in specific markets and products.

Speaker Change: As a reminder, we have always indicated that we plan to have a portfolio of agency and non-agency contracts, varying by health plan and product, but mix would be dependent on the plans most suitable for the consumers we serve.

Speaker Change: Based on our early reads, though still to be refined based on actual benefit releases later this year, we see a mix shifting towards contracts with agency arrangements versus non-agency arrangements.

Speaker Change: The evolving market dynamics are expected to result in tailwinds for submissions, revenue, and adjusted EBITDA. However, we expect a year-over-year decline in cash flow from operations due to the shift from non-agency revenue.

Vijay Kotte: Notably, some are focusing on a special needs population, a segment that Gohealth is uniquely equipped to attract and serve. These strategies and priorities will vary by health plan and geography, but we believe we are ideally positioned to help the health plans achieve targeted and measured growth.

Speaker Change: We are committed to supporting the consumer throughout their Medicare journey and believe doing the right things will ultimately increase engagement and retention.

Speaker Change: We look forward to providing an update during our November quarterly results call once AP dynamics start to play out.

Vijay Kotte: On market factor two, in April, CMS published the final 2025 marking rules addressing independent agent and broker compensation and introducing new guidelines. However, the U.S. District Court in Texas stayed the effective date of the compensation provisions of the rule, and later, CMS acknowledged that because of the court's orders, the status quo would be maintained through AEP. As we have already commented, we believe the final rule as published had minimal impact to our business model, but the court order and subsequent CMS guidance confirms that it is business as usual.

Speaker Change: Additionally, there are two emerging market factors that I'd like to discuss.

Speaker Change: First, several mid-sized brokers have ceased operations due to evolving market dynamics and poor management of customer acquisition costs.

Speaker Change: We believe this will lead to less competition for leads and generally for the attention.

Speaker Change: of Medicare consumers during AEP, a potential tailwind for Gohealth. In addition, the seasoned agents entering the market offer us the opportunity to pick up tenured new hires as we ramp for AEP.

Speaker Change: Second, Gohealth external GPS agents have seen fewer submissions year-over-year through Q2.

Vijay Kotte: The one part of the rule that we expect to be implemented as planned pretends to the restrictions in the new rule surrounding conduct commonly attributed to lead generators. Those restrictions should not affect Gohealth because we held ourselves to the standards of the new rule years before the rule was even proposed. And accordingly, we think these restrictions are good for the industry at large to protect consumers from confusing and unintended sales calls.

Speaker Change: Gohealth partners with several smaller brokers as downlines who leverage our technology platform, health plan relationships, and support teams to operate effectively. These brokers are also experiencing market pressures resulting in lower production.

Speaker Change: To offset their lower production, we are in the midst of onboarding several new agencies who we expect to meaningfully contribute to GPS submission to this AEP.

Vijay Kotte: As we contemplate the remaining factors, we are cautiously optimistic about shopping and appropriate switching during AEP. As part of our strategic shift from enrollment to engagement, we believe in building trusted relationships with consumers and putting them in the right plan for their needs. As a reminder, we have always indicated that we plan to have a portfolio of agency and non-agency contracts varying by health plan and products, but mix would be dependent on the plan's most suitable for the consumers we serve.

Speaker Change: Now let me move from market factors to some exciting developments regarding our strategic investments.

Speaker Change: In the fourth quarter of 2023, we announced the launch of PlanFit Checkup. This innovative service, powered by our proprietary AI-driven PlanFit tool, is designed to alleviate stress and enhances the experience for consumers shopping for a Medicare Advantage plan.

Speaker Change: As we have previously shared, Planned Fit Checkup delivers three key consumer outcomes.

Speaker Change: One, enrolling a consumer in a new plan that better suits their needs.

Vijay Kotte: Based on our early reads, though still to be refined based on actual benefit releases later this year, we see a mixed shifting towards contracts with agency arrangements versus non-agency arrangements. The evolving market dynamics are expected result in tailwinds for submissions, revenue, and adjusted EBITDA. However, we expect a year-over-year decline in cash flow from operations due to the shift from non-agency revenue. We are committed to supporting the consumers throughout their Medicare journey, and believe doing the right thing will ultimately increase engagement and retention.

Speaker Change: 2. Informing the consumer about a superior plan, even if they choose not to switch. 3. Reassuring the consumer that their current plan remains the best option for their needs, resulting in no enrollment change.

Speaker Change: Importantly, GoHealth agents are compensated for completing a plan-fit checkup regardless of whether the assessment leads to a new enrollment. This ensures that our agents remain focused on providing the best advice and service to our consumers.

Vijay Kotte: We look forward to providing an update during our November quarterly results call once AEP dynamics start to play out.

Speaker Change: Based on our launch results, we are well on our way to operationalizing reimbursement for a subset of these plan-fit checkups in what we call a plan-fit save with a select few strategic health plan partners.

Vijay Kotte: Additionally, there are two emerging market factors that I'd like to discuss. First, several mid-sized brokers have ceased operations due to evolving market dynamics and poor management of customer acquisition costs. We believe this will lead to less competition for leads and generally for the attention of Medicare consumers during AEP, a potential tailwind for GoHealth. In addition, the season agents entering the market offer us the opportunity to pick up tenured new hires as we ramp for AEP.

Speaker Change: A plan-fit save is a plan-fit checkup where our agents reassure the consumer that their current plan remains the best option for their needs, resulting in no enrollment change and we help the consumer understand and navigate the benefits of their current plan that are most valuable to them.

Speaker Change: In this process, we earn compensation for doing the right thing for consumers, as well as protecting the existing membership of our health plan partners.

Vijay Kotte: Second, GoHealth's external GPS agents have seen fewer submissions year-over-year through Q2. GoHealth partners with several smaller brokers as downline to leverage our technology platform, health plan relationships, and support teams to operate effectively. These brokers are also experiencing market pressures resulting in lower production. The offset their lower production, we're in the midst of onboarding several new agencies who we expect to meaningfully contribute to GPS submission to this AEP.

Speaker Change: This year we are focusing on streamlining processes and improving call handle times.

Speaker Change: As part of this effort, we launched Encompass Express, an enhanced consumer-centric model built on the foundation of our original Encompass workflow.

Speaker Change: Encompass Express includes streamlined scripting and handoffs, utilizing tech-driven standardization and automation to deliver efficiency and enhance the consumer experience while maintaining quality.

Speaker Change: Notably, we have reduced consumer on-phone time by approximately 25% from 90 minutes to 67 minutes. We anticipate these changes will positively impact our financial results more substantively this fall during AAP.

Vijay Kotte: Now let me move from market factors to some exciting developments regarding our strategic investments.

Vijay Kotte: In the fourth quarter of 2023, we announced the launch of Planfit Checkup. This innovative service powered by our proprietary AI-driven planfit tool is designed to alleviate stress and enhance the experience for consumers shopping for a Medicare-vanished plan. As we have previously shared, Planfit Checkup delivers three key consumer outcomes.

Speaker Change: We are dedicated to advancing our technology to elevate the consumer experience, boost agent efficiency, and enhance overall quality. Our strategic investments focus on several key areas.

Vijay Kotte: One, and rolling a consumer in a new plan that better suits their needs. Two, informing the consumer about a superior plan, even if they choose not to switch. And three, reassuring the consumer that their current plan remains the best option for their needs, resulting in no enrollment change. Importantly, Gohealth agents are compensated for completing a Planfit Checkup regardless of whether the assessment leads to an enrollment. This ensures that our agents remain focused on providing the best advice and service to our consumers.

Speaker Change: First, we are running programs integrating AI and automation into our operations. This initiative aims to streamline processes including agent onboarding, enhance agent efficiency, and deliver more precise data-driven insights to improve the overall consumer experience.

Speaker Change: One great example of this is how we have deployed AI to support AgentRAMP. History has shown us that training and onboarding of new sales agents is a cash drain, given their low initial productivity and long RAMP time.

Speaker Change: We've used conversational AI role play simulations in our agent training program, reducing onboarding time for new agents by 40%.

Vijay Kotte: Based on our launch results, we are well on our way to operationalizing reimbursement for a subset of these Planfit Checkups, in what we call a Planfit save with a select few strategic health plan purpose. A Planfit save is a Planfit Checkup where our agents reassure the consumer that their current plan remains the best option for their needs, resulting in no enrollment change, and we help the consumer understand and navigate the benefits of their current plan that are most valuable to them. In this process, we earn compensation for doing the right thing for consumers, as well as protecting the existing membership of our health plan partners.

Speaker Change: In addition, new agents are now providing double the productivity in their first three months compared to new agents last year. You will see this efficiency reflected in our AAP results this year.

Speaker Change: Next, our Customer 360 capabilities empower us to drive essential business insights. For example, we can now track a single consumer across multiple shopping seasons and monitor her progression across all touch points.

Speaker Change: When a returned consumer calls us, we're able to recognize that consumer and auto-populate where we left off the last time we spoke to them, be it five minutes, five months, or five years ago.

Speaker Change: This memory of the consumer both reinforces the trust built with them that motivated their proactive outreach to us, as well as provides valuable information to the agent to support added effectiveness and efficiency during the call.

Vijay Kotte: This year, we are focusing on streamlining processes in improving call handle time. As part of this effort, we launched In Compass Express, an enhanced consumer-centric model built on the foundation of our original In Compass Workforce. In Compass Express includes streamline scripting and handoffs utilizing tech-driven standardization and automation to deliver efficiency and enhance the consumer experience while maintaining quality. Notably, we have reduced consumer on phone time by approximately 25% from 90 minutes to 67 minutes. We anticipate these changes will positively impact our financial results more substantively this fall during AEP.

Speaker Change: Keep in mind, on average, 30% of the calls we get each AEP are from consumers we have served before.

Speaker Change: Additionally, we can analyze the behaviors of repeat consumers versus first-time consumers at Gohealth, delivering customized messaging and services to best serve their needs.

Speaker Change: We continue to be the industry leader in implementing technology and automation, and we believe we are extending that lead.

Speaker Change: These initiatives are integral to our long-term transformation from a company focused on Medicare enrollment to one that prioritizes continuous engagement with Medicare consumers.

Vijay Kotte: We are dedicated to advancing our technology to elevate the consumer experience, boost agent efficiency, and enhance overall quality. Our strategic investments focus on several key areas. First, we are running programs integrating AI and automation into our operations. This initiative aims to streamline processes, including agent onboarding, enhance agent efficiency, and deliver more precise data-driven insights to improve the overall consumer experience. One great example of this is how we have deployed AI to support agent ramps.

Speaker Change: This shift aims to build lasting relationships and improve the overall consumer journey in the Medicare landscape.

Speaker Change: As we prepare for this year's AEP, which begins in 67 days, we are intensifying our targeted marketing efforts to better identify and reach consumers in need of new options.

Speaker Change: I am proud of our team's innovation and adaptability, which have led to just over 11% improvement in consumer acquisition cost or direct cost per submission, while upholding the integrity of our Encompass workflow and delivering exceptional service.

Vijay Kotte: History has shown us that training and onboarding in new sales agents is a cash train given their low initial productivity and long ramp time. We have used conversational AI role-play simulations in our agent training program, reducing onboarding time for new agents by 40%. In addition, new agents are now providing double the productivity in the first three months compared to new agents last year. You will see this efficiency reflected in our AEP results this year.

Speaker Change: Market dynamics have remained consistent since the last AP, which are expected to yield lower volume at higher costs, so those dynamics change in Q4.

Speaker Change: Due to the resiliency of the team, we have been able to offset some of these headwinds via operating efficiencies.

Speaker Change: You can expect us to continue delivering a superior direct cost per submission compared to the industry.

Vijay Kotte: Next, our customer 360 capabilities empower us to drive essential business in- For example, we can now track a single consumer across multiple shopping seasons and monitor her progression across all touch points. When a return consumer calls us, we're able to recognize that consumer and auto-populate where we left off the last time we spoke to them, the five minutes, five months or five years ago. This memory of the consumer both reinforces the trust built with them that motivated their proactive outreach to us, as well as provides valuable information to the agent to support added effectiveness and efficiency during the call.

Speaker Change: We believe a focus on direct cost-per-submission enables us to effectively manage expenses and investment in a highly regulated industry where benefits change annually, contracting dynamics change annually, and consumer behavior can vary.

Speaker Change: We remain confident in our performance expectations for 2024 and beyond, and continue to be driven by our commitment to transforming the consumer healthcare journey through continuous innovation and strategic foresight.

Speaker Change: I want to thank our team for their dedication to our values and our stakeholders for their ongoing support and commitment to delivering long-term value.

Speaker Change: With that, I will turn it to Katie to detail our financial results.

Vijay Kotte: Keep in mind, on average, 30% of the calls we get each AEP are from consumers we have served before. Additionally, we can analyze the behaviors of repeat consumers versus first-time consumers at Gohealth delivering customized messaging and services to best serve their needs.

Katie: Thank you, Vijay, and good morning. Our 2024 second quarter performance continues to demonstrate the overall stability and resilience in our business model.

Katie: Second quarter net revenues were $106 million, down from $143 million in the second quarter of 2023, primarily due to a decrease in total submissions compared to the prior year.

Vijay Kotte: We continue to be the industry leader in implementing technology and automation, and we believe we are extending that lead. These initiatives are integral to our long-term transformation from a company focused on Medicare enrollment to one that prioritizes continuous engagement with Medicare consumers. This ship aims to build lasting relationships and improve the overall consumer journey in the Medicare landscape.

Speaker Change: While our total submissions were down, submissions generated by our internal captive agents increased 14% year-over-year versus a 33% decline in submissions from our external GPS agents.

Speaker Change: A combination of enhanced training and technology for our agents, along with more effective marketing efforts, helped drive the submission improvement by our internal CAPTIV team.

Vijay Kotte: As we prepare for this year's AEP, which begins in 67 days, we are intensifying our targeted marketing efforts to better identify and reach consumers in need of new options. I am proud of our team's innovation and adaptability, which have led to just over 11% improvement in consumer acquisition costs or direct cost for submission, while upholding the integrity of our encompassed workflow and delivering exceptional service. Market dynamics have remained consistent since the last AEP, which are expected to yield lower volume at higher cost to those dynamics changed in Q4.

Speaker Change: I'd like to touch on the Change Healthcare and CrowdStrike technology incidents and how they've impacted GoHealth.

Speaker Change: We use Change Healthcare to assess Medicaid eligibility for consumers during our enrollment process.

Speaker Change: The changed healthcare cyber attack and their subsequent outage affected our ability to enroll some consumers.

Speaker Change: This incident negatively impacted second quarter revenue by over $7 million and earnings in the quarter by over $6 million.

Speaker Change: Our teams worked diligently to work around this issue, and the primary result was an increase in submissions under our traditional agency contracts versus our non-agency contracts.

Vijay Kotte: Due to the resiliency of the team, we have been able to offset some of these headwinds via operating efficiencies. You can expect us to continue delivering a superior direct cost per submission compared to the industry. We believe a focus on direct cost per submission enables us to effectively manage expenses and investment in a highly regulated industry where benefits change annually, contracting dynamics change annually, and consumer behavior can vary.

Speaker Change: We expect to have this issue fully resolved before AAP.

Speaker Change: The more recent CrowdStrike outage had a minimal impact on Gohealth, and we do not expect it to impact our third quarter results.

Speaker Change: Adjusted EBITDA was negative $12 million for the quarter, a decrease of $13 million from the same period of the prior year.

Vijay Kotte: We remain confident in our performance expectations for 2024 and beyond and continue to be driven by our commitment to transforming the consumer health care journey through continuous innovation and strategic foresight.

Speaker Change: The reduction in revenue and impact from changed healthcare I noted were partially offset by improvements in our cost structure represented by a 12% reduction in direct cost per submission.

Vijay Kotte: I want to thank our team for their dedication to our values and our stakeholders for their ongoing support and commitment to delivering long-term value.

Speaker Change: These cost savings were primarily attributable to our targeted marketing efforts and we continue to gain more efficiencies through our investments in our proprietary technology and our operating models.

Katie: With that, I will turn it to Katie to detail our financial results.

Katie: Thank you, Budget, and good morning. Our 2024 second-core performance continues to demonstrate the overall stability and resilience in our business model. Second quarter net revenues for $106 million down from $143 million in the second quarter of 2023. Primarily due to a decrease in total submissions compared to the prior year. While our total submissions were down, submissions generated by our internal captive agents increased 14% year over year. Versus a 33% decline in submissions from our external GPS agents. A combination of enhanced training and technology for our agents, along with more effective marketing efforts, help drive the submission improvement by our internal cap.

Speaker Change: Cash flow used in operations was negative 24 million dollars year-to-date versus cash flow generated from operations of 31 million dollars in the first half of the prior year.

Speaker Change: The decrease of $55 million year-over-year was primarily driven by $14 million of fewer agency and non-agency receipts.

Speaker Change: An $11 million payment made in March to settle the Securities Class Action Litigation

Speaker Change: and $11.2 million of interest paid in 2024 that related to the last two months of 2023.

Speaker Change: As a result of the nearly $60 million paid to our term loan lenders during the quarter, we drew $15 million from our revolving credit facility to fund operations during SEP.

Katie: I'd like to touch on the change healthcare and crowd strike technology incidents and how they've impacted Gohealth. We use change healthcare to assess Medicaid eligibility for consumers during our enrollment process. The change healthcare cyber attack and their subsequent outage affected our ability to enroll some consumers. This incident negatively impacted second quarter revenue by over $7 million and earnings in the quarter by over $6 million. Our teams worked diligently to work around this issue and the primary result was an increase in submission under our traditional agency contract versus our non-agency contract.

Speaker Change: As is typical this time of year, we made investments to increase marketing efforts, enhance consumer engagement, and maintain the level of service quality that our Medicare consumers expect.

Speaker Change: As part of our ongoing efforts to strengthen our financial position and support our growth initiatives, we are actively working to refinance our term loan and revolving credit facility.

Speaker Change: We have been pleased by the receptiveness and interest thus far.

Speaker Change: Our goal is to find the right structure and partner to ensure we can execute our long-term strategy.

Speaker Change: We are assessing numerous options to address the upcoming maturities and look forward to updating you in the coming months.

Katie: We expect to have this issue fully resolved for AAP. The more recent crowd strike outage had a minimal impact on Gohealth and we do not expect it to impact our third quarter results. Adjusted EBITDAB was negative $12 million for the quarter a decrease of $13 million from the same period of the prior year. The reduction in revenue and impact from change healthcare I noted were partially offset by improvements in our cost structure represented by a 12% reduction in direct cost per submission.

Speaker Change: As Jay mentioned, several factors will influence our full year performance, many of which will become clearer during AEP.

Jay: The evolving market dynamics are expected to result in tailwinds for submissions, revenue, and adjusted EBITDA.

Jay: However, we expect a year-over-year decline in cash flow from operations due to the shift from non-agency revenue.

Speaker Change: Looking forward, we remain confident in our performance expectations for 2024.

Speaker Change: And we'll now turn the call back over to Vijay for closing remarks.

Katie: These cost savings were primarily attributable to our targeted marketing efforts and we continue to gain more efficiencies through our investments in our proprietary technology and our operating model. Cashable use operations was negative $24 million a year date versus cash flow generated from operations of $31 million in the first half of the prior year. The decrease of $55 million a year was primarily driven by $14 million of fewer agency and non-agency receipts and $11 million payment made in March to settle the securities class action litigation and $11.2 million of interest paid in 2024 that related to the last two months of 2023.

Vijay Kotte: Thank you, Katie.

Vijay Kotte: We believe our strategic initiatives, particularly in Compass Express, compensation for plan-fit saves, and investments in cutting-edge technology such as AI and automation,

Vijay Kotte: have not only boosted our operational efficiency, but also enhanced the service quality provided to Medicare consumers and our health plan partners.

Speaker Change: As I mentioned previously.

Speaker Change: We operate in a dynamically changing market landscape.

Speaker Change: However, we believe our nimbleness and resilience as an organization position us well to seize the many opportunities that will arise during this annual enrollment period and beyond.

Speaker Change: We expect GoHealth to continue as a national leader in enrolling consumers in appropriate Medicare Advantage plans for their needs.

Katie: As a result of the nearly $60 million paid to our term loan lenders during the quarter we drew $15 million from our revolving credit facility to fund operations during SEP. As this typical this time of year we made investments to increase marketing efforts and hands consumer engagement and maintain the level of service quality that our Medicare consumers expect.

Speaker Change: We're now ready to take your questions.

Speaker Change: Thank you. At this time, we'll conduct a question and answer session. To ask a question, you'll need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster.

Katie: As part of our ongoing efforts to strengthen our financial position and support our growth initiatives we are actively working to refinance our term loan and revolving credit facility. We have been pleased by the receptiveness and interest thus far. Our goal is to find the right structure and partner to ensure we can execute our long term strategy. We are assessing numerous options to address the upcoming maturities and look forward to updating you in the coming months.

Speaker Change: Our first question comes from the line of Ben Hendrix of RBC Capital Markets. Your line is now open.

Ben Hendrix: Hey, good morning, guys. Thank you very much.

Ben Hendrix: Quick question on going back to the market dynamics. I was wondering if you could provide some more color on your thoughts on what is driving some of the competitor exits.

Speaker Change: and if there are parallels there to kind of the lower submission volume among your external GPS agents. Is that all regulatory or are there other factors?

Katie: As Jay mentioned several factors will influence our full year performance many of which will become clearer during AEP. The evolving market dynamics are expected to result in tailwind for submissions revenue and adjusted EBITDA. However we expect a year over year decline in cash flow from operations due to the shift from non-agency revenue.

Speaker Change: and maybe a little more detail on how you're positioned to address some of the challenges there and an opportunity that might present ahead of AAP. Thank you.

Speaker Change: Thank you, Ben, for the question. When you're speaking about market dynamics, I'm assuming you're talking about other brokerages and agencies and other entities who are in that shopping experience who have exited that space. That's correct, right, Ben?

Vijay Kotte: Looking forward we remain confident in our performance expectations for 2024 and will now turn the call back over to Jay for closing remarks. Thank you Katie. We believe our strategic initiatives particularly encompass express compensation for plants it saves and investments in cutting edge technology such as AI and automation have not only boosted our operational efficiency but also enhanced the service quality provided to Medicare consumers and our health plan partners.

Ben: Yes, that's right. Thank you. As it relates to that, again, I can't go too far into the details, I don't know all of the reasons behind it, but what I'll highlight for you is that I think those of us who have been around this industry for a long time understand that it is constantly changing.

Mark Bello: and Mark Bello.

Vijay Kotte: As I mentioned previously, we operate in a dynamically changing market landscape. However, we believe our nimblements and resilience as an organization positioned us well to seize the many opportunities that will arise during this annual enrollment period and beyond. We expect Gohealth to continue as a national leader in enrolling consumers in appropriate Medicare Advantage plans for their needs.

Mark Bello: year

Speaker Change: You have to have conviction in that model, you have to have the ability to deploy the cash to make those investments, and you need to be prepared to work and be nimble within any given enrollment season to do just that.

Speaker Change: And from our observations, there have been other parties who have been challenged by those changing dynamics. Maybe they weren't as focused on just the Medicare population and understanding how that works.

Vijay Kotte: We are now ready to take your question. Thank you.

Operator: At this time, we will conduct a question and a session. To ask a question, you need to press start 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press start 1-1 again. Please stand by while we compile the Q&A roster.

Speaker Change: There may be parts of portfolios within larger organizations where there wasn't patience for what is a very nuanced business that you need to be focused on.

Speaker Change: So some of the information is around those CACs.

Benjamin Hendrix: Our first question comes from a line of Ben Hendrix from RBC Capital Markets. Your line is now open. Hey, good morning, guys. Thank you very much. Quick question on going back to the market dynamics. I'm wondering if you could provide some more color on your thoughts on what is driving some of the competitor exits. And if there are parallels there to the lower submission volume among your external GPS agents, is that all regulatory or their other factors?

Speaker Change: Cost per acquisition going up.

Speaker Change: for those entities where we've seen nice efficiencies, improvements year over year.

Speaker Change: because we've thought through those dynamics. But really, I think it's a question about how you deploy your cash, invest, and how you can meet your expectations on a multi-year basis, as opposed to trying to maximize what you saw last year, the next year, because the dynamics are always changing.

Speaker Change: So I know that's not a fulsome answer because I just don't know all the details for everybody else And I don't want to try to presume too much

Benjamin Hendrix: And then maybe a little more detail on how your position to address some of the challenges there and an opportunity that might present ahead of AP. Thank you. Thank you, Ben, for the question. When you're speaking about market dynamics and assuming you're talking about other brokerages and agencies and other entities who are in that shopping experience, who have exited that space. That's correct, right, Ben? Yes, that's right. Thank you. As it relates to that, again, I can't go too far into the details.

Speaker Change: But as it relates to some of our own downlines, yes, they've had some of those same challenges. Access to their own capital structure, how they market, where they get, you know, how they can support their own agents throughout the course of the year. All of those things are relevant factors as to how they can produce more or less in any given time frame.

Speaker Change: Hopefully that's helpful. Does that work for you Ben?

Ben Hendrix: Yes, absolutely. Maybe you can go into a little more detail on how you're approaching this, kind of the changes in the regulations for 2025, any specific strategies to mitigate negative impacts from regulations and what you're doing there.

Benjamin Hendrix: I don't know all of their, the reasons behind it, but while I'll highlight for you is that, I think those of us who've been around this industry for a long time understand that it is constantly changing. You've got to have an appetite for understanding what the business is going to be, be able to predict, you know, things will continue to change and be prepared for those. And that includes investing in efficiency and not always just trying to maximize growth in the current creator, but you need to make investments for the future.

Speaker Change: Yeah, and actually I think I forgot one portion of your question earlier and it'll relate to this as well It's just as we think about AEP and these competitive dynamics of another a lot of the different brokers agencies That aren't going to be there anymore that have either shut their doors or or significantly decreased in size We believe that's a positive for us because there's less mouth-to-feet. There's less lead demand. There's less confusing advertising

Benjamin Hendrix: You have to have conviction in that model. You have to have the ability to deploy the cash to make those investments and you need to be prepared to work and be nimble within any given enrollment season to do just that. And from our observations, there have been, you know, other parties who've been challenged by those changing dynamics. Maybe they weren't as focused on just the Medicare population understanding how that works. They may be parts of portfolios within larger organizations where there were sensations for what is a very nuanced business that you need to be focused on.

Benjamin Hendrix: So some of the information is around those CACs, cost per acquisition going up for those entities where we've seen nice efficiencies improvements year over year because we've thought through those dynamics. But really, I think it's a question about how you deploy your cash, invest, and how you can meet your expectations on a multi-year basis as opposed to trying to maximize what you saw last year, the next year, because the dynamics are always changing.

Speaker Change: And this is why it's related to the regulatory component of what you described. If you look at the 2025 rule, that's the main thing that's going to stick now.

Ben Hendrix: which is the ability to enforce what has been really a lot of bad actors within the lead generation state.

Ben Hendrix: to stop reselling consumer leads to multiple parties and leading to that confusion.

Speaker Change: And the reason why those lead generators were able to get away with that, or at least continue to do that as a business, was because there was so much demand for leads.

Speaker Change: And so, when we think about the compounding effect of these other brokerages and agencies within the landscape shutting down or no longer operating in the space, that will also help us so that we can have more efficiencies in our own lead generation.

Speaker Change: and avoid confusion, and I'm hopeful that will lead to better compliance with what CMS has put out in the regulations that we've been compliant with for years.

Benjamin Hendrix: So I know that's not a full amount because I just don't know all the details for everybody else and I don't want to try to presume too much. But as it relates to some of our own online, yes, they've had some of those same challenges, access to their own capital structure, how they market, where they get, you know, how they can support their own agents throughout the course of the year. All of those things are relevant factors as to how they can produce more or less in any given time.

Speaker Change: As we think about the overall implications, as we said earlier, all reads are that it's more business-as-usual for a company like ourselves. The final rule on the marketing rules really had very little implication on us at all anyway. But this just reinforces that there's less...

Speaker Change: confusion and uncertainty amongst health plans as well on their interpretation of the rules that could have been there. Now we're able to really focus on how we can serve as many consumers as possible if we go into AEP.

Benjamin Hendrix: Hopefully that's helpful. Is that work for you, Ben? Yes, absolutely. Maybe go into a little more detail on how you're approaching this kind of changes in the regulations for 2025, any specific strategies to mitigate, you know, negative impacts from regulations and what you're doing there. Yeah, and actually, I think I forgot one portion of your question earlier and it will relate to this as well. It's just as we think about AEP and these competitive dynamics of another lot of the different brokers agencies that aren't going to be there anymore, that have either shut their doors or significantly decrease in size.

Speaker Change: Thank you very much. If we could shift over to cap structure and, you know, you're refinancing negotiations. You know, you mentioned you're kind of assessing multiple structures. I wonder if you could give us some more detail on kind of receptivity to those structures. Are you looking at any type of unique securitizations?

Speaker Change: of receivables within those negotiations and kind of what are the big sticking points in financing negotiations.

Benjamin Hendrix: We believe that's a positive for us because there's less mouths to feed. There's less lead demand. There's less confusing advertising and this is why it's related to the regulatory component of what you describe. If you look at the 2025 rule, that's the main thing that's going to stick now, which is the ability to enforce what has been really a lot of bad actors within the lead generation space to stop reselling consumer leads to multiple parties and leading to that confusion.

Speaker Change: Ben, let me just start with the fact that we've been working really hard as a company for multiple years to make sure that we're solid and operating well, and that's coming through in the conversation we're having about looking at the capital structure of the company and looking at different refinancing options. We're looking at all the different options that are on the table, and we've made good progress on all fronts.

Speaker Change: and we're pretty excited about where we stand with it. So I won't go too far into that, but I'll say that we wanted to make sure we exhausted all the different potential options for an organization like us and where we are relative to the industry. And so we're pretty excited about how that's progressing thus far.

Benjamin Hendrix: And the reason why those lead generation were able to get away with that or at least to continue to do that as a business was because there were so much demand for leads. And so when we think about the compounding effect of these other brokerages and agencies within the landscape shutting down or no longer operating in the space, that will also help us so that we can have more efficiencies in our own lead generation and avoid confusion.

Speaker Change: Thank you. One moment for our next question.

Speaker Change: James Sidoti, John Shave, Vijay Kotte,

Speaker Change: Our next question comes from the line of Pat McCann of Noble Capital Markets. Your line is now open.

Pat McCann: Hey, good morning, and thanks for taking my questions. Yeah, my first question is I wanted to talk a little bit about the agency versus non-agency, just particularly because of the whole lifetime value issue that comes up with with agency business.

Benjamin Hendrix: And I'm hopeful that will lead to better compliance with what CMS has put out in the regulations that we've been compliant with for years. As we think about the overall implications as we said earlier, all reads are that it's more business as usual for a company like ourselves. The final rule on the marketing rules really had very little implication on that at all anyway, but this just reinforces that there's less confusion and uncertainty among health plans as well on their interpretation of the rules that could have been there. Now we're able to really focus on how we can serve as many consumers as possible to go into AP.

Speaker Change: So, I was wondering if you could maybe give a little more details as to how you consider customer retention when it comes to negotiating agency versus non-agency agreements with health carriers.

Speaker Change: So Pat, good to hear from you. Thanks for the question. This is a really important component to our strategy.

Vijay Kotte: Thank you very much. If we shift over to cap structure and you know you're refinancing negotiations, you know you mentioned you're kind of assessing multiple structures. I wonder if you could give us some more detail on kind of receptivity to those structures. Are you looking at any type of unique securitization of receivables within those negotiations and kind of what are the one of the big sticking points in financing negotiations. Yeah, I think Ben, let me just start with the fact that we're we've been working really hard as a company for multiple years to make sure that we're solid operating well.

Speaker Change: It has been for a number of years now, which is this dynamic of agency versus non-agency contract structures. As we've said from the beginning, we never expect nor would want to have 100% one way or the other. It's a year-by-year decision as to how we think about the market landscape, how we think about the... Thank you.

Speaker Change: track record of the health plans and their benefit structures by product and population type. And so even given with any one carrier you may have or health plan, you might have one agency versus and one non-agency contract.

Speaker Change: Some health plans, we might do a more exhaustive pre- and post-enrollment relationship on an agency or non-agency basis. So there are a lot of different structures that you might put in place. But as we think about the market dynamics on a year-over-year basis,

Vijay Kotte: And that's coming through in the conversation we're having about looking at capital structure of the company and looking at different refinancing options. We're looking at all the different options that are on the table and we've made the progress in all fronts. And we're pretty excited about where we stand with it. So I won't go too far into that, but I'll say that we wanted to make sure we've got to all the different potential options for an organization like us. And where we are relative the industry and so we're pretty excited about how that's progressing, this far. Thank you.

Operator: We'll move it for next question.

Speaker Change: If you think the pressures that are put in place, when you see market dynamics that health plans are trying to do land grabs and really grow fast and aggressively, you kind of start to think about what does that do on an LTV basis of the tenure of the consumer?

Speaker Change: A consumer coming in with a very high benefit plan will have a higher probability of benefits coming down versus going up over time.

Speaker Change: When you reset benefits and you bring the benefits down to a more, you know, stable, systematic basis,

Patrick McCann: Our next question comes from a line of Pat McCann of Noble Capital Markets. Your line is now open. Hey, good morning and thanks for taking my questions. You know, my first question is I wanted to talk a little bit about the agency versus non-agency, just particularly because of the whole lifetime value issue that comes up with agency business. So I was wondering if you could maybe give a little more detail as to how you consider customer retention when it comes to negotiating agency versus non-agency agreements with health carriers.

Speaker Change: You're going to have more upward opportunity or stability in those benefit plans. So as we think about trajectories, track records of product.

Speaker Change: We think about it in that way.

Speaker Change: You may actually be better off staying on an agency contract versus a non-agency contract with certain carriers based upon those dynamics and where we feel those benefits stack up for consumers.

Speaker Change: And so as you think about where we were last year, there were some major players.

Speaker Change: For example, Aetna grabbed a lot of share last year, as you know they were a big leader in the space.

Speaker Change: And based upon that structure, we had them on a non-agency contract.

Speaker Change: Right, and you can see that play through as being a very good astute view on where the market was given that Aetna is making a big

Patrick McCann: Now Pat, good to hear from you. Thanks for the question. This is a really important component to our strategy and has been for a number of years now, which is this dynamic of agency versus non-agency contract structures. And as we've said from the beginning, we never expect nor would want to have 100% one way or the other. And it's a year by year decision as to how we think about the market landscape, how we think about the track record of the health plans and their benefit structures by product and population type.

Speaker Change: Clawback on their benefits this year, as they've said publicly. So we didn't have that tail risk on that business. And so we're able to continue to serve that population as appropriate. As we look into the coming year, we make decisions as to which plans will be in our marketplace and offer to our consumers based upon what we think is going to be best for them and their rankings.

Patrick McCann: And so even given with any one carrier you may have or health plan, you might have one agency versus and one non-agency contract. Some health plans we might do a more exhaustive pre and post enrollment relationship on an agency or non-agency basis. So a lot of different structures that you might put in place. But as we think about the market dynamics on a year-over-year basis, as you think the pressures that are put in place, when you see market dynamics that health plans are trying to do land grabs and really grow fast and aggressively, you kind of start to think about what does that do on an LTV basis of the tenure of the consumer.

Speaker Change: et cetera. So I guess what I'm coming down to is if I believe this AEP, right, as we think about different carriers and what they're doing and saying about bringing the benefits down to a more stable level to drive their margins, when you write business in that environment,

Speaker Change: different from even today. When you write in the new AEP with the new benefits that we expect to come out, you should have higher confidence in those cohorts retaining potentially better than historically have.

Speaker Change: So that's that's how we're starting to think about it but again it's plan by plan and it's product by product and population by population the way we've discussed those.

Speaker Change: with an emphasis on those health plans to allow us to really serve the consumer in a greater way post-enrollment, because that's where the real service comes on retention and long-term satisfaction.

Speaker Change: got it that makes sense and you know it sounds like

Patrick McCann: A consumer coming in with a very high benefit plan will have a higher probability of benefits coming down versus going off over time. When you reset benefits and you bring the benefits down to a more stable, systematic basis, you're going to have more upward opportunity or stability in those benefit plans. So as we think about trajectories, track records, the products, we think about in that vein. You may actually be better off staying on an agency contract versus a non-agency contract with certain carriers based upon those dynamics and where we feel those benefits stack up for consumers.

Speaker Change: The strategy has a lot to do with, of course, your expectations for the upcoming enrollment period, which sort of leads me to my next question, which was just around the financial projections and

Speaker Change: with the idea that you would have revenue that is relatively flat with some modest margin expansion. I was wondering to what extent

Speaker Change: To what extent does that...

Patrick McCann: And so as you think about where we were last year, there were some major players. You know, for example, I had no grab with a lot of share last year, as you know, there were big leaders in the space. And based upon that structure, we had them on a non-agency contract, right? And you can see that playthrough as being a very good astute view on where the market was, given that that was making a big clawback on their benefits this year as they've set publicly.

Speaker Change: bake in some of the the possible upswings from the upcoming period given you know the market dynamics.

Speaker Change: or to what extent does it sort of conservatively not include considerations for, you know, a strong enrollment period upcoming.

Speaker Change: So let me just kind of take you to a couple of things we said in our prepared remarks. One is that when we gave you those qualitative statements for the full year, what was contemplated at that time was the fact that market dynamics we saw last ADP.

Patrick McCann: So we didn't have that tail risk on that business. And so we were able to continue to serve that population as appropriate. As we look into the coming year, we make decisions as to which plans will be in our marketplace, in offer to our consumers based on what we think is when we best for them and their rankings, et cetera. So I guess what I'm coming down to is if I believe this AEP, right, as we think about different carriers and what they're doing thing about bringing the benefits down to a more stable level to drive their margins, when you write business in that environment, different from even today, when you write in the new AEP with the new benefits that we expect to come out, you should have higher confidence in those cohorts retaining potentially better We have.

Speaker Change: of lots of shopping with no reason for appropriate switching would continue till new benefits were released. So that would mean that Q1 through Q3 should have been lower than last year because of the market dynamics that would continue.

Speaker Change: endoing

Speaker Change: And if you kind of do the math on that with us saying generally flat year-over-year, you would have seen an upward expectation on the back part of the new benefit plan market dynamics in Q4. Based upon our early reads right now, we're seeing that there are some tailwinds.

Patrick McCann: So that's how we're starting to think about it, but again, it's planned by plan and it's product by product and population by population the way we've discussed those. With an emphasis on those health plans to allow us to really serve the consumer in a greater way post enrollment because that's where the real service comes on retention and long-term satisfaction. Got it, that makes sense and it sounds like the strategy has a lot to do with of course your expectations for the upcoming enrollment period, which sort of leads me to my next question, which was just around the financial projections and with the idea that you would have revenue that is relatively flat with some modest margin expansion.

Speaker Change: We believe, based upon what we've observed so far, we don't know to the extent that that will be there, but we do believe there are tailwinds on revenue, adjusted EBITDA, and total submission counts.

Speaker Change: Especially given the advancements we've also been making and the early results, we feel pretty good about on efficiencies on that direct cost per submission.

Speaker Change: VR technology, etc. So the only switch, as we've said, is that we're starting to see that potential decline on agency versus non-agency mix that could impact the cash flow from operations estimates.

Speaker Change: versus last year, but that that's really the way we think about it right now is that we do see that on those Qualitative top line bottom line items. We see some positive tailwinds from the market dynamics We were observing right now and expecting to come this AEP

Speaker Change: Thank you, one moment, for our next question.

Patrick McCann: I was wondering to what extent does that bake in some of the possible upswings from the upcoming period given the market dynamics or to what extent does it sort of conservatively not include considerations for a strong enrollment period upcoming? So let me just kind of take you to a couple of things we said in our prepared remarks. One is that when we gave you those qualitative things for the full year, what was contemplated at time was the fact that market dynamics we saw last day of lots of shopping with no reason for appropriate switching.

Speaker Change: Our next question comes from line of Jim Sidoti of Sidoti & Co. Your line is now open.

Jim Sidoti: Hi, thanks for taking the questions. So if you do have that shift towards agency revenue, do you still expect to be cash flow positive this year, and how do you do that?

Speaker Change: I think it's too early for us to get too far into exactly the extent to which shifts will happen. These are the right ways that we think about setting up our contracts. Again, we design the contracts with our assessment of the product qualities, and we think our extent to which we can serve the consumer is the best.

Jim Sidoti: And then whatever those contracts are, year over year, we have a distribution of agency versus non-agency.

Jim Sidoti: and depending on which product matches best will determine the extent to which that shift may happen between agency and non-agency. So it's just it's too early to tell. I don't want to get you there. All I know is that it's likely not going to be the same distribution of non-agencies we saw last year.

Patrick McCann: It would continue until new benefits were released, so that would be that Q1 through Q3 should have been lower than last year because of the market dynamics that were continuing going forward. And if you kind of do the math on that with us saying generally flat year or year you would have seen an upward expectation on the back part of the new benefit plan market dynamics in Q4. Based upon our early reads right now, we're seeing that there are some tailwinds.

Jim Sidoti: And therefore, that would lead to a lower than what we experienced last year in cash flow from operations. But again, they're all for the right reasons.

Jim Sidoti: It's the right plan for the consumer, and the way we've appropriately decided which contract and or product that we prefer to be on, agency versus non-agency, to deliver the greatest value for us as well, right? Meaning on a revenue and adjusted EBITDA basis.

Patrick McCann: We believe based upon what we've observed so far, we don't know to the extent that that will be there, but we do believe there are tailwinds on revenue, adjusted EBITDA and total submission counts, especially given the advancements we've also been making and the early results. We feel pretty good about on efficiencies on that direct cost per submission, the art technology, etc. So the only switch, as we said, is that we're starting to see that potential decline on agency versus non-EDC mix that could impact the cash flow from operations estimates versus last year.

Speaker Change: risk-adjusted from the way we think about it. So I know you're looking for more of a specific answer, but I just think it's a little too early for us to get too far into that till we know more about the details of the benefit distribution in a more precise way, which won't be evident until closer to October .

Speaker Change: All right, Irmin, how are you doing with the use of AI to improve efficiency, you know, are there any...

Patrick McCann: But that's really the way we think about it right now is that we do see that on those qualitative top line bottom line items, we see some positive tailwinds from the market dynamics we're observing right now and expecting to come to say you see.

Speaker Change: You know, how's that going so far and do you expect that to continue to improve throughout the year?

Speaker Change: Oh, no, I love the question. It's one of the things that has been at the core of what we've been doing for the last couple of years when we talked about Plan Fit, and we really haven't described it in a way that I think the market really has had a chance to understand how unique it really is.

Vijay Kotte: Thank you, one more for our next question.

Sandeep Soorya: Our next question, because on line of genocidote, if the odine call, your line is now open. All right, thanks for taking the questions. So if you do have that shift towards agency revenue, do you still expect expect to be cash flow positive this year?

Speaker Change: When you take the 30 million interactions that we've had and the live interactions we're having every day with consumers and feathering that into how to make the best recommendations for plans. We know, for instance, that when a plan fit checkup is done and our proprietary plan fit tool uses its logic and AI thinking to really estimate a rank of appropriate, most suitable plans for the consumer.

Vijay Kotte: And how do you do that? I think it's too early for us to get too far into exactly the extent to which shifts will happen. These are the right ways that we think about setting up our contracts. Again, we design the contracts with our assessment of the product qualities and we think our extent to which we can serve the consumers the best. And then whatever those contracts are, year-to-year, we have a distribution of agency versus non-agency.

Vijay Kotte: And depending on which product matches best will determine the extent to which that shift may happen between agency and non-agency. So it's just, it's too early to tell. I don't want to get you there. All I know is that it's likely not going to be the same distribution of non-agency as we saw last year. And therefore that would lead to a lower than what we experienced last year and cash flow from operations.

Speaker Change: That when we write one of the top plans, it has the highest retention, highest satisfaction for the consumer.

Speaker Change: So when we start to think again about around the agency versus non-agency model.

Speaker Change: It went, regardless of what type of contract it is, we know that our tools have been designed now to be able to enable the agent to recommend a plan that has the highest probability of the highest tenure and retention value for that consumer because it's the most, drives the most customer satisfaction.

Speaker Change: That's one big place that we've been doing it and continue to develop to do it.

Speaker Change: We highlighted on the prepared remarks around what we've been doing in our training, which is going to come through in significant efficiencies, this AEP, as we think about the onboarding speed, 40% improvements in that, getting to double the productivity that we saw last year in early phases of the gestation of these patients.

Vijay Kotte: But again, they're all for the right reasons. It's the right plan for the consumer and the way we've, you know, appropriately decided which contracts and real product that we prefer to be on agency versus non-agency to deliver the greatest value for us as well. Right, meaning on a revenue and adjusted EBITDA basis risk adjusted from the way we think about it. So I know you're looking for more of a specific answer, but I just think it's a little too early for us to get too far into that till we know more about the details of the benefit distribution and more precise way.

Speaker Change: It's a really important component of how you can give live advance for agents to learn on the fly. And so they can do it on their schedule and we can do it on our appropriate timeline in different scenarios. So they're most prepared to serve this population.

Vijay Kotte: Which won't be evident until close to talk. Soorya. How are you doing with the use of AI to improve efficiency? You know, are there any, you know, how's that going so far and you expect that to continue to improve throughout the year? Oh, no, I love the question. It's one of the things that has been at the core of what we've been doing for the last couple of years. We talked about plan fit and we really haven't described it in a way that I think the market really has had a chance to understand how unique it really is.

Speaker Change: and given the amount of focus that health plans have been putting specifically on wanting to grow within special needs populations.

Speaker Change: That's where you need the most training to be great.

Speaker Change: It's what our agents do better than anyone else. It is their ability to anticipate the needs of special needs populations, the unique questions about how to access care and be able to resolve and build that trust on the phone. That is what is truly differentiating, and our AI tools have enabled us to do that with training. It's enabling us to do that with high-value recommendations, so it drives high retention. And we're continuing to use that information to figure out how to best anticipate the needs of the consumers and market to them directly and support that effort.

Vijay Kotte: When you take the 30 million interactions that we've had and the live interactions we're having every day with consumers and feathering that into how to make the best recommendations for plans. We know, for instance, that when a plan fit checkup is done and our proprietary plan fit tool uses its logic and AI thinking to really estimate and rank the appropriate most suitable plans for the consumers, that when we write one of the top plans, it has the highest retention, highest satisfaction for the consumers.

Speaker Change: Thank you. One moment for our next question.

Speaker Change: Our next question comes from the line of Sandeep Soorya of Delaware Street Capital. Your line is now open.

Sandeep Soorya: Hi, this is Sandeep. Can you guys hear me okay? Yep. Good morning, Sandeep. Hi. Good morning. Thanks for taking the question. First question was, why did non-agency revenue decline year over year, given kind of the shifts and the repositioning of the business? And I have a couple other questions, but I'm going to ask them one at a time.

Vijay Kotte: So when we start to think again about around the agency versus non-agency model, regardless of what type of contract it is, we know that our tools have been designed now to be able to enable the agent to recommend a plan that has the highest probability of the highest tenure and retention value for that consumer because it's the most drive the most customer satisfaction. So that's one big place that we've been doing and continuing to develop to do it.

Speaker Change: Yeah, I think the question on non-agency is one that's really determined on market dynamics. Like we said, there's one big piece which is market dynamics of which products are most appropriate this year.

Speaker Change: and what are the contracts that we have in place. The other piece that Katie highlighted was the dynamic around the change healthcare outage because there are a number of components of things that we need to do in the way we enroll a consumer to be eligible for non-agency.

Vijay Kotte: We highlighted on the prepared remarks around what we've been doing on our training, which is going to come through in significant efficiencies as AP as we think about the onboarding speed, 40% improvements in that, getting to double the productivity that we saw last year in early phases of the gestation of these agents with us. It's a really important component of how you can give live advance for agents to learn on the fly and so you can do it on their schedule and we can do it on our appropriate timeline in different scenarios.

Speaker Change: compensation with the different health plans. And due to some of the eligibility challenges we had due to the change healthcare outage, it led us to needing to write some of those enrollments or those applications under an agency.

Speaker Change: So, there was some shift for that alone, but generally speaking, it really is just a distribution of what consumers came in and which products best match for them. And we don't put our thumb on the scale to push it one way or the other. Really, it's consumers' needs and who comes in determines.

Vijay Kotte: So they're most prepared to serve this population and given the amount of focus that health lens have been putting specifically on why to grow within special needs populations, that's where you need the most training to be great. It's what our agents do better than anyone else. It is their ability to anticipate the needs of special needs populations. The unique question about how to access care and be able to resolve and build that trust on the phone, that is what is truly differentiating.

Speaker Change: what that that split will be and and we are comfortable with those splits because we think those are the best value for us as well if those were to match for the consumers.

Speaker Change: Got it. So the $7 million impact that was highlighted earlier, that could have been more on the non-agency side, but because of the change outage, there was a complete shift to the commission part, commission revenue. Is that the right takeaway? I don't think it's all of it, but I'd say a good portion of it, that's a fair assessment.

Vijay Kotte: And our AI tools have enabled us to do that with training. It's enabling us to do that with high-value recommendations so we drive highest retention. And we're continuing to use that information to figure out how to best anticipate the needs of the consumers and mark it to them directly and support that effort.

Operator: Thank you. One moment for our next question.

Speaker Change: Okay, got it. Great. Thanks. And then on the GPS agents, why did they go down? Why did that performance go down? And are those agents shifting to another or an FMO? Are they leaving the industry? Can you give us a little more color on what happened there?

Sandeep Soorya: Our next question comes from a line of San Diego, a Delaware Street Capitol. The line is now open. Hi, this is Sunday. Can you guys hear me? Okay. Good morning, Steve. Hi, good morning. Thanks for taking the question.

Speaker Change: Yeah, I mean, it's twofold. So one, in any given year, you also always have, well, let's, let's, let me take a step back and talk about the strategic value of what the partner solutions or GPS is for.

Vijay Kotte: First question was why did non-agency revenue decline? You're given kind of the shifts and the repositioning of the business. And I have a couple other questions that I'm going to ask and want to. Talk. Yeah, I think the question on non-agency is one that's really determined on market dynamics, like we said, there's one big piece which is market dynamics of which products are most appropriate this year and what are the contracts we have in place.

Speaker Change: It's a great way for us to get access to high quality variable capacity with no fixed cost expense for those periods of high volume in AEP, OEP, etc., and even through the SEC period.

Speaker Change: as well. So we think it's a unique differentiator for us to do that. We provide them tools, we provide them, you know, access to our relationships, insights, training, etc. to do that. And we've had many, we have different agencies of different size that participate in our downline business.

Vijay Kotte: The other piece that Katie highlighted was the dynamic around the change healthcare outage because there are a number of components to think that we need to do in the way we enroll a consumer to be eligible for non-agency compensation with the different health plans. And due to some of the eligibility challenges we had to do to the change healthcare outage, it led us to needing to write some of those enrollments or those applications under an agency basis.

Speaker Change: And some of them went out of business, like we said before, they were trying to grow really fast, and they didn't have the cash to really support it, and they didn't have the continued access to capital to make the investments that they needed, and so some of them just went away.

Speaker Change: Some of them have decided to reprioritize where they want to grow and what they're going to offer and whether it's different in the extent of the volume they're going to devote to this type of this product. Therefore, you can see some differences there. Some will leave on their own and want to go do their own thing and that's great for them. It could be the right thing for them to do, depending on what size they're at, and that makes a lot of logical sense.

Vijay Kotte: So there was some shift for that alone, but generally speaking, it really is just a distribution of what consumers came in and which products best match for them. And we don't put our thumb on the scale to push it one way or the other really the consumer's needs and who comes in determined what that split will be. And we are comfortable with those split because we think those are the best value for us as well if those were to match for the consumer's needs.

Speaker Change: But at the same time, we are also onboarding.

Speaker Change: Right, and we've onboarded, you know, you know, let's call it

Vijay Kotte: Got it. So the $7 million impact that was highlighted earlier, that could have been more on the non-agency side, but because of the change outage, there was a complete shift to the commission part, commission revenue. Is that the right take away? I don't think it's all of it, but I'd say a good portion of it. That's a fair set. Okay. Got it. Great. Thanks.

Speaker Change: Up to 10, maybe even more, we might pull into the process by the time we're all done in this AEP, and those will be significant, you know, contributors to our volume in that channel. But it's a normal cycle. You'll have ones that come in and go out, but I'll say over the last couple years, we've seen more that shut down and shut their doors.

Speaker Change: due to all the market dynamics that we've been seeing out there. Some of you are seeing it more explicitly at the largest scale of some of the players that are shutting it down. And ours are more mid to smaller scale that are participating in our TPS external.

Vijay Kotte: And then on the GPS agents, why did they go down? Why did that performance go down? And are those agents shifting to another or an FMO? Are they leaving the industry? Can you give us a little more color on what happened there? Yeah, I mean, it's two folds. So one, in any given year, you also always have, well, let's let me take a step back and talk about strategic value with the apartment solutions or GPS is for us.

Speaker Change: agent. We're good.

Speaker Change: Great, thanks. And then when I looked at trailing 12-month submissions,

Speaker Change: I noticed that obviously the company went through a period of massive growth years ago and then it was negative growth as the business destabilized.

Speaker Change: like very negative and now it's starting to flatten.

Vijay Kotte: It's a great way for us to get access to high quality quality variable capacity with no fixed cost expense for those periods of high volume and AEP, OED, et cetera, and even through the RSSD periods as well. So we think it's a unique differentiator for us to do that. We provide them tools. We provide them access to our relationships, insights, training, et cetera, to do that. And we've had many, we have different agencies of different size that participate in our downline business.

Speaker Change: on a trailing 12-month basis, and I believe revenues are as well. How should we think about that? Is that the sign that, like, I'm just wondering your thoughts when you look at the business on a trailing 12-month basis from a submissions perspective and then also from a revenue perspective.

Speaker Change: No, it's a great question. I really appreciate it, Sandeep, because this is the, what I say is conviction to the business strategy that's really important, is that if, you know, I know everybody wants growth, but you've got to determine what the market allows to drive efficiency and prudence around cash.

Vijay Kotte: And some of them went out of business, like we said before, they were trying to grow really fast and they didn't have the cash to really support it. And they didn't have the continued access to capital to make the investments that they needed. And so some of them just went away. Some of them have decided to reprioritize where they want to grow and what they're going to offer and what is different, the extent of the volume they're going to devote to this type of this product.

Speaker Change: Deployment.

Speaker Change: You can drive your growth if you wanted to if you want to burn a bunch of cash to go there and the market will Determine how efficient you can be

Vijay Kotte: Therefore, you can see some differences there. Some will leave on their own and want to go do their own thing. And that's great for them. It could be the right thing for them to do, depending on what size they're at. And that makes a lot of logical sense. But at the same time, we are also on board, right? And we've on boarded, you know, let's call it up to 10, maybe even more, we might fall into the process by the time we're all done in the AEP.

Vijay Kotte: And those will be significant contributors to our volume in that channel. But it's a normal cycle. You'll have one to come in and go out. But I'll say over the last couple of years, we've seen more that shut down and shut their doors. You do all the market dynamics, that we've been seeing out there. Some of you are seeing a more explicitly of the largest scale of some of the players that are shutting it down. And ours are more mid to smaller scale that are participating in our GPS external agent group. Got it. Great. Thanks.

Speaker Change: We see those dynamics can be seen since last AEP and that will run through the third quarter of this year. If you want us to be prudent and deployment of cash because it is not an efficient way to deploy cash to drive growth you want to be thoughtful about saving that dry powder and being effective when you see the market dynamics coming as we're anticipating in Q4 this year, but what you.

Speaker Change: You have been seeing is over that time, we've been investing and driving efficiencies. So that when you do deploy that cash youre not getting the diseconomies of scale I think we have a lot of tailwind around that given the fewer mouths to feed around lead volume because of industry compression of agents out there trying to sell more.

Vijay Kotte: And then when I looked at trailing 12 months, the missions, I noticed that the obviously the company went through a period of massive growth years ago. And then it was negative growth as a business stabilized. Very negative. And now it's starting to flatten on a trailing 12 month basis. And I believe revenues are as well. How should we think about that? Is that the sign that, like, just, I just wonder your thoughts when you look at the business on a trailing 12 month basis from a submission perspective and then also from a revenue perspective?

Speaker Change: Seniors are Medicare consumers as well as our deployment of technology to drive efficiency on the operational side of those two things are preparing us to have a pretty exciting what we think AEP with lots of dynamism that really are positive for the health business.

Speaker Change: Great.

Speaker Change: Thanks for that color last question for me is how do you think about revenue from planned fit checks and.

Vijay Kotte: No, it's a great question. I really appreciate it. Because this is the, what I say is conviction to the business strategies. That's really important is that it's, you know, I know everybody wants growth, but you've got to determine what the market allows to drive efficiency and prudence around cash. You can drive a growth if you wanted to if you want to burn a bunch of cash to go there and the market will determine how efficient you can be.

Speaker Change: And the secondary follow up question to plants that in the quarter was I saw that submissions.

Speaker Change: Sure.

Speaker Change: We're down about 6%, but.

Speaker Change: Plants. It was I think you said 125000 and I can't remember so should I be thinking Oh, if I add submissions to plan fit that gives any idea of the number of engagements that you guys did in the quarter Walk me through how we should think about both the revenue opportunity for plant and then how I should think about submissions and plant.

Vijay Kotte: And so as you think about the market dynamics, we saw last day T on a TTM basis, you're getting a bunch of that, right? The market dynamics that we've already highlighted in any given marketplace, you can have three scenarios, right? Of market dynamics, we can have a scenario where health plans are all being really aggressive and want to grow and that causes disruption. And that's an efficient market for us to deploy cash and drive, you know, submission volumes.

Vijay Kotte: The next option is that there's not a lot of investment and benefits. It's kind of a push. And if you care about doing what's only appropriate for the consumer, it could be a less efficient market. Lots of window shopping, not a lot of appropriate switching. And then finally, you're going to have a market where there's a lot of negative disruption that brings a lot of shoppers in place. And that's a very efficient market.

Speaker Change: It is a metric so I can better understand.

Speaker Change: The underlying business.

Speaker Change: As you think about this is.

Speaker Change: I'm going to try to keep this as organized as possible, but the way youre thinking about it right. So we havent X number of submissions.

Speaker Change: Let me take you to the top of funnel, we have a number of consumers that reach out to us who need support in a shopping spree of those we're able to take them through a full plan fit checkout right and that experience can result in those three outcomes that I described before either we enrolled him a new product that's better for them.

Vijay Kotte: So what you'd want to see from us is that when we see those dynamics that we've seen since last AAC and that will run through the third quarter of this year, that you want us to be prudent in deployment of cash because it is not an efficient way to deploy cash to drive growth. You want to be thoughtful about saving that drive powder and being effective when you see the market dynamics coming as we're anticipating you for this year.

Speaker Change: Tell them I'm gonna another products better for them, but they choose they don't want to do anything or you go all the way to the end and we tell them Hey, you are on the right product and of that total process you would take the total submission plus a number ones that we just gave peace of mind, Adam together and that's the ones that would be generally.

Speaker Change: Payable call. It I think with 230000 or so we talk about what we did in our internal agent pool.

Vijay Kotte: But what you have been seeing is over that time, we've been investing in driving efficiencies so that when you do deploy that cash, you're not getting the diseconomies of scale. I think we have a lot of tailwinds around that given the fewer mouths to feed around lead volume because of industry compression of agents out there trying to sell the normal markets as seniors or Medicare consumers, as well as our deployment of technology drive efficiency on the operational side. Those two things are preparing us to have a pretty exciting what we think AAP with lots of dynamism that really are positive for the go health business. Great. Thanks for that color.

Speaker Change: Last quarter, and so you would say of those which one they have a distribution of how many get enrolled and how many would be eligible potentially for plan fit because you got to get them through the whole process, you'll pull checkup to get eligible for a plant that today and then it varies by health plan from there, but the way I think about our business plan. Our business plan is to take the top of funnel.

Dave: All the way through anybody has outreached us how do we get as many of those interactions to add value to the consumer and then be able to generate revenue for us we're doing that work, but staying true to do right for the consumer and find ways to make it work for everybody. So what's beautiful about that plant that Dave is that when we do that work, we're providing peace of mind to the consumer we are providing.

Vijay Kotte: Last question for me is, how do you think about revenue from plan fit check and and the secondary follow question to plan fit in the quarter was I saw that submissions. The questions were down about six percent, but plan fit was I think you said 125,000, I can't remember. So should I be thinking, oh, if I add submissions to plan fit that gives me the idea of the number of engagements that you guys did in the in the quarter.

Dave: Really low cost no cost retention services for health plans, who invest.

Speaker Change: The $1 every year trying to figure out how to engage with that population and keep them retain satisfied and we're also able to reorient that consumer so that they can really get the maximum value out of those benefits that made them shopping and firstly it will remember what the benefits were they werent understanding how to utilize them, we can reorient them at that time and now.

Speaker Change: We're having the ability to start to get compensated for that work and that is what you can expect from US do the right thing prove that everybody wins from it and then find a way to ensure that we are getting.

Vijay Kotte: Walking through how I should think about both the revenue opportunity for plan fit and then how I should think about submissions in plan fit as a metric so I can better understand the underlying. Yes, as you think about, I'm going to try to keep this as organized as possible, but the way you're thinking about it's right, so we have an X number of submissions, or let me kind of take you to the top of funnel.

Speaker Change: Revenue are compensated for that work that we're doing in a very symbiotic way and so that that's the way to think about it think of top of funnel. All those interactions. We are continuously working to find more and more of that that is going to be able to be compensated for hard work. We do most of the industry driving that just conversion conversion converts convert to <unk>.

Vijay Kotte: We have a number of consumers that reach out to us who need support in the shopping industry. Of those, we're able to take them through a full plan fit checkup, right? And that experience can result in those three outcomes that I described before, either we enroll them in a new product that's better for them, we tell them I'm not another product's better for them, but they choose they don't want to do anything, or you go all the way to the end and we tell them, hey, you're on the right product.

Speaker Change: New enrollment that's the only thing that triggered compensation in the past and now we're finding ways from just doing the right thing, we're starting to get compensated for that as well. In addition to appropriately enrolling all doing whats right for the consumer and right for the health. So that's what's really exciting about where we're going what plant that state is opening up and we're making great.

Vijay Kotte: And of that total process, you would take the total submission plus the number ones that we just gave peace of mind, Adam, together, and that's the ones that would be generally available. Call it, I think, with 230,000 or so, we talk about what we did in our internal agent pool, this last quarter. And so you say, oh, those, which ones, you know, they have a distribution of how many get enrolled, and then how many would be eligible potentially for a plan fit check?

Speaker Change: Progress and had really good demand from the health plans to jump onboard to this added element of the reorientation on top of a typical claims at checkout to re engage the consumer with themselves.

Speaker Change: Okay.

Speaker Change: Thank you. This concludes our question and answer session I would now like to turn it back to Vijay Kotte for closing remarks.

Vijay Kotte: Because you got to get them through the whole process, do a full checkup to get eligible for a plan fit check. And then it varies by how planned from there, but the way I think about our business plan, our business plan is to take the top of funnel all the way through it. Anybody is outreach to us. How do we get as many of those interactions to add value to the consumer and then be able to generate revenue for us for doing that work?

Vijay Kotte: Thank you all for your attention and participation in today's call. We are very excited about what is there to come our team has been working diligently to prepare not just for this annual enrollment period, but we are we anticipating the needs of the population and the overall.

Speaker Change: Medicare landscape to be for years to come.

Speaker Change: You learn.

Vijay Kotte: But staying true to do right for the consumer and find ways to make it work for everybody. So what's beautiful about that plan fit save is that when we do that work, we're providing peace of mind at the consumer. We're providing really low cost to no cost for tension services for a health plan, who invests, you know, millions of dollars every year trying to figure out how to engage with that population and keep them retained and satisfied.

Speaker Change: <unk> been around this business for a while it's not just the seasonal business its a cyclical business and you need to make investments and prepare for all that.

Speaker Change: And we made those investments and plan for Checkups last year. He has seen the value of that with plant that Dave as we anticipated the need for health plans to really focus on retention as well as targeted growth our tools our team our commitment to the consumer is what differentiates us and enables us to be more predictable in these types of.

Vijay Kotte: And we're also able to reorient that consumer so that they can really get the maximum value out of those benefits that made them shopping in first place. They don't remember what the benefits were. They weren't understanding how to utilize them. We can reorient them at that time. And now we're having the ability to start to get compensated for that work. And that is what you can expect from us. Do the right thing, prove that everybody wins from it, and then find a way to ensure that we are getting revenue or compensated for that work that we're doing in a very symbiotic way.

Speaker Change: Changing environment, we stabilized what seems to be a volatile market and thats exciting I think for us for our consumers for our team and for our shareholders. So thank you for your time and your continued interest in our organization.

Speaker Change: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.

Speaker Change: [music].

Vijay Kotte: And so that's the way to think about it. Think of top of funnel, all those interactions, because we're continuously working to find more, more of that that is going to be able to be compensated for hard work we do. Most of the industry is driving a just conversion, conversion, conversion, convert to a new enrollment. That's the only thing that triggered competition in the past. And now we're finding ways from just doing the right thing.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: [music].

Vijay Kotte: We're starting to get compensated for that as well, in addition to appropriately enrolling, all doing what's right for the consumer and right for the health plan. So that's what's really exciting about where we're going, what plan fifth state is opening up. And we're making great progress and have really good demand from the health plan to jump on board to this added element of the reorientation on top of a typical plan to check out, to reengage the consumer with those help.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: [music].

Operator: Thank you. This concludes the question and suggestion.

Marvin: Good morning, and welcome to go Health second quarter 2024 earnings Conference call. My name is Marvin and I'll be your operator for today's call. Currently all participants are in listen only mode. Following the prepared remarks, we will conduct a question and answer session.

Speaker Change: A reminder, this conference is being recorded I'll now turn the call over to John Shave Vice President of Investor Relations. John You may begin.

Speaker Change: Thank you and good morning, welcome to <unk> Health's second quarter 2024 earnings call. Joining me today are <unk>, Chief Executive Officer, and Katie O'halloran interim Chief Financial Officer.

Speaker Change: Today's conference call contains forward looking statements based on our current expectations.

Speaker Change: Numerous known and unknown risks and uncertainties may cause actual results to differ materially from those anticipated or projected in these statements.

Speaker Change: Any of the factors that will determine future results are beyond the company's ability to control or predict.

Speaker Change: You should not place undue reliance on any forward looking statements and the company undertakes no obligation to update or revise any of these statements whether due to new information future events or otherwise.

Speaker Change: Earlier today, we issued a press release containing our results for the second quarter of 2024, we have posted the release on the go help website under the Investor Relations tab.

Speaker Change: In conjunction with our forward looking statements. We encourage you to consider the other risk factors described in our 2023 annual report on Form 10-K, and our other filings with the SEC for additional information.

Speaker Change: During this call we will be discussing certain non-GAAP financial measures. These measures are reconciled to the most directly comparable GAAP financial measures and the reconciliations are set forth in the press release I will now turn the call over to <unk> CEO the J code.

<unk>: Thank you John and good morning, everyone.

Speaker Change: Like to begin by sharing commentary on our quarterly performance along with updates on our general business activities and initiatives.

Speaker Change: In the second quarter of 2024 hour internal captive team empowered nearly 525000 consumers to navigate their Medicare option utilizing the Atlantic checkup via our proprietary encompass workflow.

Speaker Change: Along with supporting over 155000, new enrollments in Q2, we also provided peace of mind to over 125000 consumers confirming their current plan is best for their needs.

Speaker Change: Our performance during Q2 special enrollment period, or SVP exceeded our expectations for submissions revenue and adjusted EBITDA.

Speaker Change: While our total submissions were down 6% submission generated by our internal captive agents increased 14% year over year versus the 33% decline in submission from our external partner solutions or GPS agents.

Vijay Kotte: I would not like to turn it back to Vijay Kote for closing remarks. Thank you all for your attention and participation in today's call. We are very excited about what is there to come. Our team has been working diligently to prepare not just for this annual enrollment period, but we're anticipating the needs of the population and the overall, you know, Medicare landscape to be for years to come. What you learned, if you've been around this business for a while, it's not just a seasonal business, it's a cyclical business.

Vijay Kotte: And you need to make investments and prepare for all of that. And we made those investments in 2020 to check up last year and you're seeing the value of that with plan fifth state as we anticipated the need for health plans to really focus on retention as well as targeted growth. Our tools, our teams, our commitment to the consumer is what differentiates us and enables us to be more predictable in these types of changing environment.

Speaker Change: We are particularly pleased with our internal captive results, especially considering the shopping and switching dynamics have remained unchanged since the last annual enrollment period or AEP and are not expected to change significantly until Q4 of this year when health plans to release new benefits.

Speaker Change: Due to market dynamics, we anticipated year over year declines from Q1 through Q3. Our team has managed these expected factors by driving efficiencies and reducing costs. We believe these results show the benefit of our proprietary encompass workflow and planned FID checkup process.

Speaker Change: And they'll help our mission is to provide support and clarity to Medicare consumers in a landscape often marked by confusion and uncertainty.

Speaker Change: There are over 65 million Medicare eligible individuals in the United States and approximately half of them are enrolled in Medicare advantage plan.

Speaker Change: One third of Medicare consumers living counting that more than 50 plans available the abundance of options can be overwhelming.

Speaker Change: This complexity often deterred consumers from shopping for better options, because they are unsure of who to trust or where to begin.

Vijay Kotte: We stabilize what seems to be a volatile market and that's exciting, I think for us, for our consumers, for our team and for our share. So thank you for your time, and you're continued in our organization.

Speaker Change: We believe go health is the premier resorts to empower these individuals to make informed and personnel decisions because of our proprietary and objected tools as well as our well trained tenured agent workforce.

Operator: Thank you for your participation in today's conference, this is a Conclude program you may now disconnect.

Operator: James Sidoti, John Shave, Vijay Kotte James Sidoti, John Shave, Vijay Kotte, James Sidoti, John Shave, Vijay Kotte, Benjamin Hendrix, James Sidoti, John Shave, Vijay Kotte,[inaudible] John Shave, Vijay Kotte, Benjamin Hendrix, John Shave,[inaudible] Vijay Kotte, Benjamin Hendrix, John Shave, Vijay Good morning and welcome to Gohealth 2nd order, 2024, earnings conference call. My name is Marvin and I'll be your operator for today's call. Currently, all participants are listening only mode. Following the prepared marks, we'll conduct the question and answer session. As a reminder, this conference is being recorded.

John Shave: I'll now turn the call over to John Shave, Vice President of the Western Relations. John, you may begin. Thank you and good morning. Welcome to Gohealth 2nd order, 2024, earnings call. Joining me today are Vijay Kotte, Chief Executive Officer, Acadio Haloret, Interim Chief Financial Officer. Today's conference call contains forward-looking statements based on our current expectations. Numerous known and unknown risks and uncertainties may cause actual results as different materially from those anticipated or projected in these statements.

John Shave: Many of the factors that will determine future results are beyond the company's ability to control or predict. You should not place undue reliance on any forward-looking statements and the company undertakes no obligation to update or revise any of these statements, whether due to new information, future events, or otherwise. Earlier today, we issued a press release containing our results for the 2nd quarter of 2024. We have posted the release on the Gohealth website under the Investor Relations tab.

Speaker Change: We're continuing our evolution from a traditional Medicare enrollment company to our Medicare engagement company, focusing on building high quality long term relationships with our consumers.

Speaker Change: We believe this shift emphasizes a more integrated and interactive approach to consumer care cementing our unique and vital role in the Medicare landscape.

John Shave: In conjunction with our forward-looking statements, we encourage you to consider the other risk factors described in our 2023 annual report on Form 10K and our other filings with the SEC for additional information. During this call, we will be discussing certain non-gap financial measures. These measures are reconciled to the most directly comparable gap financial measure and the reconcilations are set forth in the press release.

Speaker Change: On our last two quarterly calls we highlighted several market factors that could influence our performance this year.

Vijay Kotte: I will now turn the call over to Gohealth CEO Vijay Kotte. Thank you, John.

Speaker Change: Due to the dynamics of the industry, we expect clarity on the impact of these factors in Q4 once AEP starts.

Speaker Change: As typical the market dynamics, we observed in the fourth quarter of 2024 for AEP will continue for a full four quarters running through the third quarter of 2025.

Vijay Kotte: Good morning, everyone. I'd like to begin by sharing commentary on our quarterly performance, along with updates on our general business activities and initiatives. In the 2nd quarter of 2024, our internal captive team empowered nearly 525,000 consumers to navigate their Medicare option, utilizing the plan-fit check-up via our proprietary encompass workflow. Along with supporting over 155,000 new enrollments in Q2, we also provide a piece of line to over 125,000 consumers confirming their current plan is best for their needs.

Speaker Change: As a reminder, there are five key market factors.

Vijay Kotte: Our performance during Q2's special enrollment period or SEP exceeded our expectations for submissions, revenue, and adjusted EBITDA. While our total submissions were down 6%, submissions generated by our internal captive agents increased 14% year over year versus a 33% decline in submission from our external Go partner solutions or GPS agents. We are particularly pleased with our internal captive results, especially considering the shopping and switching dynamics have remained unchanged since the last annual enrollment period or AEP and are not expected to change significantly until Q4 of this year when health plans release new benefits.

Speaker Change: One the final rate notice on commissions for the 2025 plan year.

Speaker Change: To the final 2020 by marketing role from the centers for Medicare and Medicaid services or CMS.

Speaker Change: Three planned product and benefit differentiation between 2024 and 2025.

Vijay Kotte: Due to market dynamics, we anticipated year over year declines from Q1 through Q3. Our team has managed these expected factors by driving efficiencies and reducing costs. We believe these results show the benefit of our proprietary encompass workflow and plan-fit checkup process At Gohealth, our mission is to provide support and clarity to Medicare consumers in a landscape often marked by confusion and uncertainty. There are over 65 million Medicare eligible individuals in the United States and approximately half of them are enrolled in Medicare vantage points.

Speaker Change: For marketing efficiency within this election season.

Speaker Change: And finally.

Speaker Change: Relative to health plan competitiveness and its effect on plan mix.

Speaker Change: As we become more selective in the health plans. We include in our marketplace. This factor impact sales for submission or revenue per sale and agency versus non agency revenue distribution.

Speaker Change: As we report our second quarter results, we have updates regarding these factors.

Speaker Change: On market back to one <unk>.

Speaker Change: As we previously discussed CMS issued the final rate notice, which aligns with our expectations for the base Commission schedule.

Vijay Kotte: One third of Medicare consumers live in counties with more than 50 plans available. The abundance of options can be overwhelmed. This complexity often deters consumers from shopping for better options because they are unsure who to trust or where to begin. We believe Gohealth is the premier resource to empower these individuals to make informed and personal decisions because of our proprietary and objective tools as well as our well-trained, tenured agent workforce. We are continuing our evolution from a traditional Medicare enrollment company to a Medicare engagement company focusing on building high quality long-term relationships with our consumers.

Speaker Change: The 2025 final rate notice introduced margin pressure for health plans, which we believe will likely lead to benefit disruptions and market exits, particularly for non special needs plan.

Speaker Change: Major health plans confirmed significant upcoming benefit disruption in their Q1 earnings calls.

Speaker Change: Similarly, we expect on average 20% plus increases in premiums for beneficiaries currently on Medicare supplement.

Speaker Change: We believe these rate increases and disruptions could lead to a significant increase in consumer shopping and switching during the upcoming AEP presenting a positive opportunity for <unk> business model.

Vijay Kotte: We believe this shift emphasizes a more integrated and interactive approach to consumer care, cementing our unique and vital role in the Medicare landscape. On our last two quarterly calls, we highlighted several market factors that could influence our performance this year. Due to the dynamics of the industry, we expect clarity on the impact of these factors into four once AEP starts. As typical, the market dynamics we observe in the fourth quarter of 2024 for AEP will continue for a full four quarters running through the third quarter of 2025.

Speaker Change: More recently, many health plan had the opportunity to resubmit their bids due to a series of successful lawsuits on star scores.

Speaker Change: While this may change Aep's competitive dynamics, we know that many health plans are targeting growth in specific markets and products.

Speaker Change: Notably some are focusing on our special needs population segment that <unk> is uniquely equipped to attract and serve.

Speaker Change: These strategies and priorities will vary by health plan and geography, but we believe we are ideally positioned to help health plans achieved targeted and measured growth.

Vijay Kotte: As a reminder, there are five key market factors. One, the final rate notice on commissions for the 2025 plan year. Two, the final 2025 marking rule from the Centers for Medicare and Medicaid Services or CMS. Three, plan product and benefit differentiation between 2024 and 2025. Four, marketing efficiency within this election season. And finally, relative health plan competitiveness and its effect on plan mix. As we become more selective in the health plans, we include in our marketplace, this factor impacts sales for submission or revenue for sale and agency versus non-agency revenue distribution.

Speaker Change: On market factor too in.

Speaker Change: In April CMS published the final 2025, marketing rules addressing independent agent and broker compensation and introducing new guidelines.

Speaker Change: However, the U S District Court in Texas State the effective date of the compensation provisions of the rule and later CMS acknowledged that because of the court's order the status quo would be maintained through AEP.

Speaker Change: As we have already commented we believe the final rule as published had minimal impact to our business model, but the court order and subsequent CMS guidance confirmed that it is business as usual.

Speaker Change: The one part of the rule that we expect to be implemented as planned pretends to the restrictions and the new rules surrounding conduct commonly attributed to lead generators.

Vijay Kotte: As we report our second quarter results, we have updates regarding these factors. On market factor one, as we previously discussed, CMS issued the final rate notice, which aligns with our expectations for the base commission schedule. The 2025 final rate notice introduced margin pressure for health plans, which we believe will likely lead to benefit disruption and market exits, particularly for non-special needs plans. Major health plans confirm significant upcoming benefit disruption in their Q1 earnings calls.

Speaker Change: These restrictions should not affect to go help because we held ourselves to the standards of the new rule years before the rule with even propose and accordingly, we think these restrictions are good for the industry at large to protect consumers from confusing and unintended sales calls.

Speaker Change: As we contemplate the remaining factors, we're cautiously optimistic about shopping and appropriate switching during AEP.

Speaker Change: As part of our strategic shift from enrollment to engagement, we believe in building trusted relationships with consumers and putting them in the right plan for their needs.

Vijay Kotte: Similarly, we expect on average 20% plus increases in premiums for beneficiaries currently on Medicare supplements. We believe these rate increases and disruption could lead to a significant increase in consumer shopping and switching during the upcoming AEP, presenting a positive opportunity for Go Health business model. More recently, many health plans had the opportunity to resubmit their bid due to a series of successful lawsuits on charge, course. While this may change AP's competitive dynamics, we know that many health plans are targeting growth in specific markets and products.

Speaker Change: As a reminder, we have always indicated that we plan to have a portfolio of agency and non agency contracts varying by health plan and product, but mix would be dependent on the plans most suitable for the consumers we serve.

Speaker Change: Based on our early reads, though still to be refined based on actual benefit releases. Later this year, we see a mix shifting towards context with agency arrangements versus non agency arrangements.

Speaker Change: Of all the market dynamics are expected to result in tailwind for submissions revenue and adjusted EBITDA. However, we expect a year over year decline in cash flow from operations due to the shift from non agency revenue.

Vijay Kotte: Notably, some are focusing on a special needs population, a segment that go how to uniquely equip to attract and serve. These strategies and priorities will vary by health plan and geography, but we believe we are ideally positioned to help health plans achieve targeted and measure growth. On market factor two, in April, CMS published the final 2025 market rules addressing independent agent and broker compensation and introducing new guidelines. However, the U.S. District Court in Texas stayed the effective date of the compensation provisions of the rule.

Speaker Change: We are committed to supporting the consumer throughout their Medicare journey and believe doing the right thing will ultimately increase engagement and retention.

Speaker Change: We look forward to providing an update during our November quarterly results call once AP dynamics start to play out.

Speaker Change: Additionally, there are two emerging market factors that I'd like to discuss.

Speaker Change: First several mid sized brokers had ceased operations due to evolving market dynamics and poor management of customer acquisition cost.

Speaker Change: We believe this will lead to less competition for leads and generally for the attention.

Vijay Kotte: And later, CMS acknowledged that because of the course order, the status quo would be maintained through A.E.P. As we have already commented, we believe the final rule as published had minimal impact to our business model, but the court order and subsequent CMS guidance confirms that it is business as usual. The one part of the rule that we expect to be implemented as planned pretends to the restrictions and the new rules surrounding conduct commonly attributed to lead generators.

Speaker Change: Of Medicare consumers during AEP, a potential tailwind for <unk> health.

Speaker Change: In addition, the seasoned agents entering the market offer us the opportunity to pick up tenured new hires as we ramp for AEP.

Speaker Change: Second Bill help external GPS agents had seen fewer submissions year over year through Q2 <unk>.

Speaker Change: Ill health partners with several smaller brokers as download to leverage our technology platform health plan relationships and support teams to operate effectively. These brokers are also experiencing market pressures, resulting in lower production.

Vijay Kotte: Those restrictions should not affect the Gohealth because we held ourselves to the standards of the new rule years before the rule was even proposed. And accordingly, we think these restrictions are good for the industry at large to protect consumers from confusing and unintended sales calls. As we contemplate the remaining factors, we are cautiously optimistic about shopping and appropriate switching during A.E.P. As part of our strategic shift from enrollment to engagement, we believe in building trusted relationships with consumers and putting them in the right plan for their needs.

Speaker Change: To offset the lower production we are in the midst of Onboarding several new agencies, who we expect to meaningfully contribute to GBS submission. This AEP.

Speaker Change: Now, let me move from market factors to some exciting developments regarding our strategic investments.

Speaker Change: In the fourth quarter of 2023, we announced the launch of planned FID checkup. This innovative service powered by our proprietary AI driven planted tool is designed to alleviate stress and enhances the experience for consumers shopping for a Medicare advantage plan.

Vijay Kotte: As a reminder, we have always indicated that we plan to have a portfolio of agency and non-agency contracts varying by health plan and products, but mix would be dependent on the plans most suitable for the consumers we serve. Based on our early reads, though still to be refined based on actual benefit releases later this year, we see a mix shifting towards contracts with agency arrangements versus non-agency arrangements. The evolving market dynamics are expected results in tailwinds for submissions, revenue, and adjusted EBITDA.

Speaker Change: As we have previously shared plant that checkup delivered three key consumer outcomes.

Speaker Change: One enrolling a consumer and a new plan that better suits their needs.

Speaker Change: To informing the consumer about our superior plant, even if they choose not to switch.

Speaker Change: And three reassuring the consumer that their current plan remains the best option for their needs, resulting in no enrollment change.

Speaker Change: Importantly go help agents are compensated for completing a plant that checkup, regardless of whether the assessment leads to a new enrollment distant.

Vijay Kotte: However, we expect a year over year to climb and cash flow from operations due to the shift from non-agency revenue. We are committed to supporting the consumers throughout their Medicare journey and believe doing the right thing will ultimately increase engagement and retention.

Speaker Change: This ensured that our agents remains focused on providing the best advice and service to our consumers.

Speaker Change: Based on our launch results, we are well on our way to operationalize the reimbursement for a subset of these plants get checkups and what we call our plan fit safe with a select few strategic health plan partners.

Vijay Kotte: We look forward to providing an update during our November quarterly results call once AP dynamics start to play out.

Vijay Kotte: Additionally, there are two emerging market factors that I'd like to discuss. First, several mid-size brokers have ceased operations due to evolving market dynamics and poor management of customer acquisition costs. We believe this will lead to less competition for leads and generally for the attention of Medicare consumers during A.E.P., a potential tailwind for GoHell. In addition, the season agents entering the market offer us the opportunity to pick up tenured new hires as we ramp for A.E.P.

Speaker Change: Our plan to date is a plant that checkup, where our agents reassure the consumer that their current plan remains the best option for their needs, resulting in no enrollment change and we help the consumer understand and navigate the benefits of their current plan that are most valuable to them.

Speaker Change: In this process, we earned compensation for doing the right thing for consumers as well as protecting the existing membership of our health plan partners.

Speaker Change: This year, we are focusing on streamlining processes and improving call handle times.

Vijay Kotte: Second, GoHell's external GPS agents have seen fewer submissions year over year through Q2. GoHell partners with several smaller brokers as downline to leverage our technology platform, health plan relationships, and support teams to operate effectively. These brokers are also experiencing market pressures resulting in lower production. Action. The offset their lower production, we are in the midst of onboarding several new agencies who we expect to meaningfully contribute to GPS submission to this AEP. Now let me move from market factors to some exciting developments regarding our strategic investments.

Speaker Change: As part of this effort, we launched encompass express and enhanced consumer centric model built on the foundation of our original encompass workflow.

Speaker Change: Encompass express includes streamline scripting and Handoffs utilizing tech driven standardization and automation to deliver efficiency and enhance the consumer experience while maintaining quality.

Speaker Change: Notably we have reduced consumer on phone time by approximately 25% from 90 minutes to 67 minutes we.

Speaker Change: <unk> made these changes will positively impact our financial results more substantively this fall during AEP.

Vijay Kotte: In the fourth quarter of 2023, we announced the launch of Plan Fid Checkup. This innovative service powered by our proprietary AI-driven plan fit tool is designed to alleviate stress and enhance the experience for consumers shopping for a Medicare-vanished plan. As we have previously shared, Plan Fid Checkup delivered three key consumer outcomes. One, and rolling a consumer in a new plan that better suits their needs. Two, informing the consumer about a superior plan even if they choose not to switch.

Speaker Change: We are dedicated to advancing our technology to elevate the consumer experience boost agent efficiency and enhance overall quality.

Speaker Change: Our strategic investments focused on several key areas.

Speaker Change: First we are running programs integrating AI and automation into our operations. This initiative aimed to streamline processes, including agent Onboarding enhanced agent efficiency and deliver more precise data driven insights to improve the overall consumer experience.

Vijay Kotte: And three, reassuring the consumer that their current plan remains the best option for their needs, resulting in no enrollment change. Importantly, Gohealth agents are compensated for completing a plan fit checkup regardless of whether the assessment leads to a new enrollment. This ensures that our agents remain focused on providing the best advice and service to our consumers. Based on our launch results, we are well on our way to operationalizing reimbursement for subset of these plan fit checkups and what we call a plan fit save with a select few strategic health plan purpose.

Speaker Change: One Great example of this is how we have deployed AI to support agent ramp.

Speaker Change: History has shown that the training and Onboarding of new sales agents is a cash drain given their low initial productivity and long ramped up.

Speaker Change: We've used conversational AI role play stimulations in our agent training program, reducing onboarding time for new agents by 40%.

Speaker Change: In addition, new agents are now providing double the productivity in the first three months compared to new agents last year Youll see this efficiency reflected in our results this year.

Speaker Change: Next our customer 360 capabilities empower us to drive a central business insights. For example, we can now track a single consumer across multiple shopping seasons and monitor her progression across all touch points.

Vijay Kotte: A plan fit save is a plan fit checkup where our agents reassure the consumer that their current plan remains the best option for their needs, resulting in no enrollment change, and we help the consumer understand and navigate the benefits of their current plan that are most valuable to them. In this process, we earn compensation for doing the right thing for consumers as well as protecting the existing membership of our health plan partners.

Speaker Change: When we return consumer calls us, we're able to recognize that consumer and auto populate where we left off the last time, we spoke to them be it five minutes five months or five years ago.

Speaker Change: This memory of the consumer both reinforces the trust built with them that motivated they're proactive outreach to us as well as provides valuable information to the agent to support added effectiveness and efficiency during the call.

Vijay Kotte: This year, we are focusing on streamlining processes and improving call handle time. As part of this effort, we launched Incomeus Express, an enhanced consumer-centric model built on the foundation of our original Incomeus workforce. Incomeus Express includes streamlined scripting and handoffs utilizing tech-driven standardization and automation to deliver efficiency and enhance the consumer experience while maintaining quality. Notably, we have reduced consumer on phone time by approximately 25% from 90 minutes to 67 minutes. We anticipate these changes will positively impact our financial results more substantively this fall during AAP.

Speaker Change: Keep in mind on average 30% of the calls we get each AEP are from consumers. We have served before.

Speaker Change: Additionally, we can analyze the behaviors of repeat consumers versus first time consumers advil health delivering customized messaging and services to best serve their needs.

Speaker Change: We continue to be the industry leader in implementing technology and automation and we believe we are extending that lead.

Speaker Change: These initiatives are integral to our long term transformation from a company focused on Medicare enrollment to one that prioritizes continuous engagement with Medicare consumers.

Vijay Kotte: We are dedicated to advancing our technology to elevate the consumer experience, boost agent efficiency, and enhance overall quality. Our strategic investments focus on several key areas. First, we are running programs integrating AI and automation into our operations. This initiative aims to streamline processes including agent onboarding, enhance agent efficiency, and deliver more precise, data-driven insights to improve the overall consumer experience. One great example of this is how we have deployed AI to support agent ramp.

Speaker Change: This shift aimed to build lasting relationships and improve the overall consumer journey and the Medicare landscape.

Speaker Change: As we prepare for this year's AEP, which begins at 67 days, we are intensifying our targeted marketing efforts to better identify and reach consumers in need of new options.

Speaker Change: I am proud of our team's innovation and adaptability, which have led to just over 11% improvement.

Speaker Change: Consumer acquisition cost or direct cost per submission, while upholding the integrity of our encompass workflow and delivering exceptional service.

Vijay Kotte: History has shown us that training and onboarding in new sales agents is a cash train given their low initial productivity and long ramp time. We've used conversational AI role-play simulations in our agent training program, reducing onboarding time from new agents by 40%. In addition, new agents are now providing double the productivity in the first three months compared to new agents last year. You'll see this efficiency reflected in our AAP result, this year.

Speaker Change: Market dynamics have remained consistent since the last AEP, which are expected to yield lower volume at a higher cost to those dynamics change in Q4.

Speaker Change: Due to the resiliency of the team we have been able to offset some of these headwinds the operating efficiencies.

Speaker Change: You can expect us to continue delivering a superior direct cost per submission compared to the industry.

Speaker Change: We believe our focus on direct cost per submission enabled us to effectively manage expenses and investment in a highly regulated industry, where benefits change annually contracting dynamics change annually and consumer behavior can vary.

Vijay Kotte: Next, our customer 360 capabilities empower us to drive essential business insights. For example, we can now track a single consumer across multiple shopping seasons and monitor her progression across all touch points. When a return consumer calls us, we're able to recognize that consumer and auto-populate where we left off the last time we spoke to them, be it five minutes, five months, or five years ago. This memory of the consumer both reinforces the trust built with them that motivated their proactive outreach to us, as well as provides valuable information to the agent to support added effectiveness and efficiency during the call.

Speaker Change: We remain confident in our performance expectations for 2024, and beyond and continue to be driven by our commitment to transform the consumer health care journey through continuous innovation and strategic foresight.

Speaker Change: I want to thank our team for their dedication to our values and our stakeholders for their ongoing support and commitment to delivering long term value.

Speaker Change: With that I will turn it to Katie to detail our financial results. Thank.

Katie: Thank you Jay and good morning, our 2024 second quarter performance continues to demonstrate the overall stability and resilience in our business model.

Vijay Kotte: Keep in mind, on average, 30% of the calls we get each AEP are from consumers we have served before. Additionally, we can analyze the behaviors of repeat consumers versus first-time consumers at Gohealth delivering customized messaging and services to best serve their needs.

Katie: Second quarter net revenues were $106 million.

Katie: Down from $143 million in the second quarter of 2023.

Speaker Change: Primarily due to a decrease in total submissions compared to the prior year.

Vijay Kotte: We continue to be the industry leader in implementing technology and automation and we believe we are extending that lead. These initiatives are integral to our long-term transformation from a company focused on Medicare enrollment to one that prioritizes continuous engagement with Medicare consumers. This shift aims to build lasting relationships and improve the overall consumer journey in the Medicare landscape.

Katie: While our total submissions were down submissions generated by our internal captive agents increased 14% year over year versus the 33% decline in submissions from our external GPS agents.

Katie: A combination of enhanced training and technology for our agents along with more effective marketing efforts helped drive the submission improvement by our internal captive team.

Speaker Change: I'd like to touch on the change healthcare and crowd strike technology incidents and how they've impacted go health.

Vijay Kotte: As we prepare for this year's AEP, which begins in 67 days, we are intensifying our targeted marketing efforts to better identify and reach consumers in need of new options. I am proud of our team's innovation and adaptability, which have leds just over 11% improvement in consumer acquisition costs or direct costs for submission, while upholding the integrity of our encompassed workflow and delivering exceptional service. Market dynamics have remained consistent since last AEP, which are expected to yield lower volumes at higher cost to those dynamics changed in Q4.

Katie: We have change healthcare to assess Medicaid eligibility for consumers during our enrollment process.

Katie: The change healthcare cyber attack and their subsequent outage affected our ability to enroll some consumers.

Katie: This incident negatively impacted second quarter revenue by over $7 million in earnings in the quarter by over $6 million.

Katie: Our teams worked diligently to work around this issue and the primary result, with an increase in submissions under our traditional agency contracts versus our non agency contracts, we expect to have the tissue fully resolved for AAP.

Vijay Kotte: Due to the resiliency of the team, we have been able to offset some of these headwinds via operating efficiencies. You can expect us to continue delivering a superior direct cost per submission compared to the industry. We believe a focus on direct cost per submission enables us to effectively manage expenses and investment in a highly regulated industry where benefits change annually, contracting dynamics change annually, and consumer behavior can vary.

Katie: The more recent crowd strike outage had minimal impact on Gulf Health, and we do not expect it to impact our third quarter results.

Katie: Adjusted EBITDA was negative $12 million for the quarter, a decrease of $13 million from the same period of the prior year.

Katie: The reduction in revenue and impact from change healthcare I noted were partially offset by improvements in our cost structure represented by a 12% reduction in direct cost per submission.

Vijay Kotte: We remain confident in our performance expectations for 2024 and beyond and continue to be driven by our commitment to transforming the consumer health care journey through continuous innovation and strategic foresight.

Katie: These cost savings were primarily attributable to our targeted marketing efforts and we continue to gain more efficiencies through our investments in our proprietary technology and our operating model.

Katie: I want to thank our team for their dedication to our values and our stakeholders for their ongoing support and commitment to delivering long-term value.

Katie: With that, I will turn it to Katie to detail our financial results. Thank you, Bj. And good morning.

Katie: Cash flow used in operations was negative $24 million year to date versus cash flow generated from operations of $31 million in the first half of the prior year.

Katie: Our 2024 sector core performance continues to demonstrate the overall stability and resilience in our business model. Second quarter net revenues for $106 million down from $143 million in the second quarter of 2023. Primarily due to a decrease in total submissions compared to the prior year. While our total submissions were down, submissions generated by our internal captive agents increased every 14% year over year versus a 33% decline in submissions from our external GPS agents.

Katie: The decrease of $55 million year over year was primarily driven by $14 million of fewer agency and non agency receipts.

Katie: And $11 million payment made in March to settle the securities class action litigation.

Katie: And $11 2 million of interest paid in 2024 that related to the last two months of 2023.

Katie: As a result of the nearly $60 million paid to our term loan lenders during the quarter, we drew $15 million from our revolving credit facility to fund operations during SCP.

Katie: Accompanation of enhanced training and technology for our agents, along with more effective marketing efforts, helped drive the submission improvement by our internal cap- I'd like to touch on the change healthcare and crowd strike technology incidents and how they've impacted Gohealth. We use change healthcare to assess Medicaid eligibility for consumers during our enrollment process. The change healthcare cyber attack and their subsequent outage affected our ability to enroll some consumers. This incident negatively impacted second quarter revenues by over $7 million and earnings in the quarter by over $6 million.

Katie: As is typical this time of year, we made investments to increase marketing efforts enhanced consumer engagement and maintain the level of service quality that our Medicare consumers expect.

Katie: As part of our ongoing efforts to strengthen our financial position and support our growth initiatives.

Katie: We are actively working to refinance our term loan and revolving credit facility.

Katie: We have been pleased by the Receptiveness and interest thus far.

Katie: Our goal is to find the right structure and partner to ensure we can execute our long term strategy.

Katie: Our teams worked diligently to work around this issue and the primary result was an increase in submission under our traditional agency contract versus our non-agency contract. We expect to have this issue fully resolved for AAP. The more recent crowd strike outage had a minimal impact on Gohealth and we do not expect it to impact our third quarter results.

Katie: We are assessing numerous options to address the upcoming maturities and look forward to updating you in the coming months.

Katie: As Jay mentioned several factors will influence our full year performance, many of which will become clearer during AEP.

Jay: The evolving market dynamics are expected to result in tailwind for submissions revenue and adjusted EBITDA.

Katie: Adjusted EBITDA was negative $12 million for the quarter a decrease of $13 million from the same period of the prior year. The reduction in revenue and impact from change healthcare I noted were partially offset by improvements in our cost structure represented by a 12% reduction in direct cost per submission. These cost savings were primarily attributable to our targeted marketing efforts and we continue to gain more efficiencies through our investments in our proprietary technology and our operating model.

Jay: However, we expect a year over year decline in cash flow from operations due to the shift from non agency revenue.

Katie: Looking forward, we remain confident in our performance expectations for 2024.

Jay: I will now turn the call back over to Jay for closing remarks.

Jay: Thank you Katie we believe our strategic initiatives, particularly encompass express compensation for plant that saves and investments in cutting edge technologies, such as AI and automation and not only boosted our operational efficiency, but also enhance the service quality provided to Medicare consumers and our health plan partners.

Katie: Cashable use operations was negative $24 million year date versus cash flow generated from operations of $31 million in the first half of the prior year. The decrease of $55 million year over year was primarily driven by $14 million of fewer agency and non-agency receipts and $11 million dollar payment made in March to settle the securities class action litigation and $11.2 million of interest paid in 2024 that related to the last two months of 2023. As a result of the nearly $60 million paid to our term loan lenders during the quarter we drew $15 million from our revolving credit facility to fund operations during SCP.

Speaker Change: As I've mentioned previously.

Speaker Change: Operating in a dynamically changing market landscape.

Jay: However, we believe our nimbleness and resilience as an organization position us well to seize the many opportunities that will arise during this annual enrollment period and beyond.

Katie: We expect go health to continue as a national leader in enrolling consumers an appropriate Medicare advantage plans for their needs.

Speaker Change: We are now ready to take your questions.

Speaker Change: Thank you at this time, we will conduct a question and answer session to ask a question you will need to press star one wanted to telephone and wait for your name to announce to withdraw. Your question. Please press star one again, please stand by while we compile the Q&A roster.

Katie: As is typical this time of year we made investments to increase marketing efforts enhance consumer engagement and maintain the level of service quality that our Medicare consumers expect. As part of our ongoing efforts to strengthen our financial position and support our growth initiatives we are actively working to refinance our term loan and revolving credit facilities. We have been pleased by the receptiveness and interest thus far. Our goal is to find the right structure and partner to ensure we can execute our long term strategy.

Speaker Change: Our first question comes from the line of Ben Hendrix with RBC capital markets. Your line is now open.

Ben Hendrix: Hey, good morning, guys. Thank you very much.

Speaker Change: Quick question on.

Ben Hendrix: Going back to the market dynamics I was wondering if you could provide some more color on your thoughts on what is driving some of the competitor exits and if there are parallels there to kind of the lower submission volume among your external GPS agents is that all regulatory or are there other factors and then maybe a little more detail on.

Katie: We are assessing numerous options to address the upcoming securities and look forward to updating you in the coming months. As Jay mentioned several factors will influence our full year performance many of which will become clearer during AEP. The evolving market dynamics are expected to result in tailwind for submission revenue and adjusted EBITDAQ. However we expect a year over year decline in cash flow from operations due to the shift from non-agency revenue.

Speaker Change: Kind of how you are positioned to.

Vijay Kotte: Looking forward we remain confident in our performance expectations for 2024 and will now turn the call back over to Jay for closing remarks.

Katie: To address some of the challenges there and.

Speaker Change: An opportunity that might present ahead of AEP. Thank you.

Speaker Change: Thank you Ben for the question. When you are speaking of market dynamics I'm, assuming you're talking about other brokerages in agencies and other entities, who are in that shopping experience with exited that space.

Speaker Change: Thats correct, yes.

Speaker Change: Yes, that's right.

Katie: Thank you.

Jay: As it relates to that again I can't go too far into the details I don't know all there the reason behind it but what I will highlight for you is that I think those of us who've been around this industry for a long time understand that it is constantly changing you've got to have an appetite for understanding what the business is going to be able to predict.

Vijay Kotte: Thank you Katie. We believe our strategic initiatives particularly encompass express compensation for plan 5 saves and investments in cutting edge technology such as AI and automation have not only boosted our operational efficiency but also enhanced the service quality provided to Medicare consumers and our health plan partners.

Jay: Things will continue to change and be prepared for those and that includes investing in efficiency and not always just trying to maximize growth in the current period, but you need to make investments for the future you have to have conviction to that model you have to have the ability to deploy the cash to make those investments and you need to be prepared to work and be.

Vijay Kotte: As I mentioned previously, we operate in a dynamically changing market landscape. However, we believe our nimbleness and resilience as an organization positioned us well to seize the many opportunities that will arise during this annual enrollment period and beyond. We expect Gohealth to continue as a national leader in enrolling consumers and appropriate Medicare Advantage plans for their needs.

Jay: Nimble within any given enrollment season to do just that and from our observations that have been.

Jay: Other parties, who have been challenged by those.

Jay: Changing dynamics, maybe they werent as.

Speaker Change: Focused on just the Medicare population to understanding how that works there may be parts of portfolios within larger organizations, where there wasn't patients.

Operator: We are now ready to take your questions. Thank you. At this time, we'll conduct a question and a session to ask a question. You'll need to press start 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press start 1-1 again. Please stand by while we compile the Q&A roster.

Speaker Change: Or what is a very nuanced business that you need to be focused on.

Jay: So.

Jay: Some of the information is around those cash cost per acquisition going up for those entities, where we've seen nice efficiencies improvements year over year, because we thought through those dynamics, but really I think it's a question about how you deploy your cash invest and how you can meet your expectations on a multiyear basis.

Benjamin Hendrix: Our first question comes from the line of Ben Hendrix, of RBC Capital Markets. Your line is now open. Hey, good morning, guys. Thank you very much. Quick question on someone going back to the market dynamic.

Vijay Kotte: Soorya, if you could provide some more color on your thoughts on what is driving some of the competitor exits, and if there are parallels there to the lower submission volume among your external GPS agents, is that all regulatory or their other factors, and then maybe a little more detail on how your position to address some of the challenges there, and an opportunity that might present ahead of AP. Thank you. Thank you, Ben, for the question.

Speaker Change: As opposed to.

Speaker Change: To maximize what you saw last year. The next year because of the dynamics are always changing so I know thats not a fulsome answer because I just don't know all the details for everybody else and I don't want to try to presume too much but as it relates to some of our owned online yes, they've had some of those same challenges assets their own capital structure, how they market where they get how they.

Speaker Change: Can support their own agents throughout the course of the year all of those things are relevant factors as to how they can produce more or less in any given timeframe.

Vijay Kotte: When you're speaking about market dynamics, I'm assuming you're talking about other brokerages and agencies and other entities who are in that shopping experience, who have exited that space. That's correct, right, Ben? Yes, that's right. Thank you. As it relates to that, again, I can't go too far into the details. I don't know all the reasons behind it, but what I'll highlight for you is that, I think those of us who've been around this industry for a long time understand that it is constantly changing.

Speaker Change: Hopefully thats helpful is that work for you Ben.

Ben Hendrix: Yes, absolutely we go in.

Ben Hendrix: A little more detail on how you're approaching this kind of the changes in the regulations for 2025 any specific strategy to mitigate.

Ben Hendrix: Negative impacts from regulations and.

Ben Hendrix: What you're doing there.

Speaker Change: Yes, and actually I think I forgot one portion of your question earlier and it relates to this as well as just as we think about AEP and these competitive dynamics of another a lot of the different brokers agencies that arent going to be there anymore.

Vijay Kotte: You've got to have an appetite for understanding what the business is going to be, be able to predict, you know, things will continue to change and be prepared for those. And that includes investing in efficiency and not always just trying to maximize growth in the current creator, but you need to make investments for the future. You have to have the ability to deploy the cash to make those investments, and you need to be prepared to work and be nimble within any given enrollment season to do just that.

Speaker Change: Either shut their doors or.

Speaker Change: <unk> significantly decreased in size, we believe that's a positive for us because theres less mouths to feed theres less lead demand theres less confusing advertising and this is why it's related to the regulatory component of what you described.

Speaker Change: You look at the 2025 rule, that's the main thing Thats going to stick now, which is the ability to enforce what has been really a lot of that at bad actors within the lead generation space to stop.

Vijay Kotte: And from our observations, there have been, you know, other parties who've been challenged by those changing dynamics. Maybe they weren't as focused on just the Medicare population understanding how that works. They may be parts of portfolios within larger organizations where they're with onto business that you need to be focused on. So some of the information is around those CACs, cost for acquisition going up for those entities where we've seen nice efficiencies improvements year over year because we've thought through those dynamics.

Speaker Change: Reselling consumer leads to multiple parties and leading to that confusion and the reason why those lead generated were able to get away with that or at least to continue to do that as the business was because it was so much demand for lead.

Speaker Change: So when we think about the compounding effect of these other brokerages and agencies within the landscape shutting down or no longer operating in this space that will also help us. So that we can have more efficiencies in our own lead generation.

Vijay Kotte: But really, I think it's a question about how you deploy your cash and best and how you can meet your expectations on a multi-year basis as opposed to trying to maximize what you saw last year, the next year, because the dynamics are always changing. So I know that's not a full of demand because I just don't know all the details for everybody else and I don't want to try to presume too much.

Speaker Change: And avoid confusion and I am hopeful that will lead to better compliance with what CMS has put out in the regulation that we've been compliant with for years.

Speaker Change: As we think about the overall implications as we stayed as I said earlier all reads are that it's more business as usual for a company like ourselves.

Vijay Kotte: But as it relates to some of our own online, yes, they've had some of those same challenges access to their own capital structure, how they market, where they get, you know, how they can support their own agents throughout the course of the year. All of those things are relevant factors as to how they can produce more or less in any given time. Hopefully, that's helpful. Is that work for you, Ben? Yes, absolutely.

Speaker Change: <unk> final rule on the marketing rules really had very little implication on us at all anyway, but this just reinforces that theres less.

Speaker Change: Confusion and uncertainty among health plans as well on their interpretation of the rules that could have been there now we're able to really focus on how we can serve as many consumers as possible as we go into AEP.

Speaker Change: Thank you very much if we could shift over to cap structure and your refinancing negotiations.

Vijay Kotte: Maybe go into a little more detail on how you're approaching this kind of changes in the regulations for 2025, any specific strategies to mitigate negative impacts from regulations and what you're doing there. Yeah, and actually, I think I forgot one portion of your question earlier and it will relate to this as well, just as we think about AEP and these competitive dynamics of another lot of the different brokers agencies that aren't going to be there anymore, that have either shut their doors or significantly decrease in size.

Speaker Change: You mentioned that you are kind of assessing multiple structures wonder if you could give us some more detail on on kind of receptivity to those structures are you looking at any type of unique securitization of receivables within those negotiations and kind of what are the what are the big sticking point in <unk>.

Nancy: Nancy negotiations.

Nancy: Yes, I think Ben let me just start with the fact that we are where we've been.

Vijay Kotte: We believe that's a positive for us because there's less mouths to feed, there's less lead demand, there's less confusing advertising, and this is why it's related to the regulatory component of what you describe. If you look at the 2025 rule, that's the main thing that's going to stick now, which is the ability to enforce what has been really a lot of bad actors within the lead generation space to stop reselling consumer leads to multiple parties and leading to that confusion.

Speaker Change: Working really hard as a company for multiple years to make sure that were solid and operating well and that's coming through and the conversation we're having about looking at the capital structure of the company and looking at different refinancing options. We're looking at all the different options that are on the table and we made good progress on all fronts.

Nancy: And we're pretty excited about where we stand with it so.

Nancy: I won't go too far into that but I will say that we wanted to make sure. We exhausted all the different potential options for an organization like us and where we are relative to the industry and so we're pretty excited about how that's progressing thus far.

Vijay Kotte: And the reason why those lead generation were able to get away with that or at least to continue to do that as a business was because there were so much demand for leads. And so, when we think about the compounding effect of these other brokerages and agencies within the landscape shutting down or no longer operating in the space, that will also help us so that we can have more efficiencies in our own lead generation and avoid confusion.

Nancy: Thank you Amit for next question.

Speaker Change: Our next question comes from the line of Pat Mccann of Noble capital markets. Your line is now open.

Pat McCann: Hey, good morning, and thanks for taking my questions.

Pat McCann: My first question is I wanted to talk a little bit about the agency versus non agency.

Vijay Kotte: And I'm hopeful that will lead to better compliance with what CMS has put out in the regulations that we've been compliant with for years. As we think about the overall implications as we said earlier, all reads are that it's more business as usual for a company like ourselves. The final rule on the marketing rules really had very little implication on that at all anyway, but this just reinforces that there's less confusion and uncertainty among health plans as well on their interpretation of the rules that could have been there. Now we're able to really focus on how we can serve as many consumers as possible to go into AP. Thank you very much.

Pat McCann: Just particularly because of the whole lifetime value issue that comes up with the agency business. So I was wondering if you could maybe give a little more details as to how you consider customer retention.

Pat McCann: When it comes to negotiating agency versus non agency agreements with health carriers.

Pat: Now Pat.

Pat: Good to hear from you. Thanks for the question. This is a really important component to our strategy and has been for a number of years now which is this dynamic of agency versus non agency contract structures and as we've said from the beginning we never expect nor would want to have 100% one way or the other and it is a.

Vijay Kotte: If we shift over to cap structure and you know you're refinancing negotiations, you know you mentioned you're kind of assessing multiple structures. I wonder if you could give us some more detail on kind of receptivity to those structures. Are you looking at any type of unique securitization of receivables within those negotiations and kind of what are the one of the big sticking points in financing negotiations. Yeah, I think Ben, let me just start with the fact that we're we've been working really hard as a company for multiple years to make sure that we're solid operating well.

Pat McCann: Year by year decision as to how we think about the market landscape, how we think about the trip.

Pat McCann: Our track record of the health plans and their benefit structures byproduct and population type.

Pat McCann: And so even given was that any one carrier you may have or health plan you might have one agency versus non agency contract.

Pat McCann: Health plans that we might do a more exhaustive pre.

Pat McCann: Pre and post enrollment relationship on an agency or non agency basis. There are a lot of different structures that you might put in place, but as we think about the market dynamics on a year over year basis. As you think the pressures that are put in place. When you see market dynamics that health plans are trying to do land grabs and really grow fast and aggressively.

Vijay Kotte: And that's coming through in the conversation we're having about looking at capital structure of the company and looking at different refinancing options. We're looking at all the different options that are on the table and we've made progress in all fronts and we're pretty excited about where we stand with it. So I won't go too far into that, but I'll say that we wanted to make sure we've got to all the different potential options for an organization like us. And and where we are relative the industry and so we're pretty excited about how that progress, and thus far. Thank you.

Pat McCann: You kind of start to think about what does that do on an LTV basis of the tenure of that consumer a consumer coming in with a very high benefit plan will have a higher probability of benefit coming down versus going up overtime.

Pat McCann: When you reset benefits and you bring the benefits down to a more.

Patrick McCann: We'll move it for next question. Our next question comes from a line of McCann of Noble Capital Markets. Your line is now open. Hey, good morning and thanks for taking my questions. You know, my first question is I wanted to talk a little bit about the agency versus non agency, just particularly because of the whole lifetime value issue that comes up with agency business. So I was wondering if you could maybe give a little more detail as to how you consider customer retention when it comes to negotiating agency versus non agency agreements with health carriers.

Pat McCann: Stable systematic basis, youre going to have more upward opportunity or stability and those benefit plans as we think about trajectories track records of product. We think about in that vein you may actually be better off staying on an agency contract versus a non agency contract with certain carriers.

Pat McCann: Based upon those dynamics and where we feel those benefits backup for consumers and so as you think about where we were last year. There were some major players.

Pat McCann: For example, Aetna grabbed a lot of share last year.

Pat McCann: There were a big leader in this space.

Pat McCann: And based upon.

Pat McCann: That structure, we had them on non agency contracts right and and you can see that play through as being a very good view on where the market was given that aetna is making a big claw back on their benefits. This year as they have said publicly so we didn't have that tail risk on that business and so we're able to continue to serve that population as appropriate as we look into the cup.

Patrick McCann: Now Pat, good to hear from you. Thanks for the question. This is a really important component to our strategy and has been for a number of years now, which is this dynamic of agency versus non agency contract structures. And as we've said from the beginning, we never expect nor would want to have 100% one way or the other. And it's a year by year decision as to how we think about the market landscape, how we think about the track record of the health plans and their benefit structures by product and population types.

Patrick McCann: And so even given it was that any one carrier you may have or health plan, you might have one agency versus and one non agency contract. Some health plans we might do a more exhaustive pre and post enrollment relationship on an agency or non agency basis. There are a lot of different structures that you might put in place. But as we think about the market dynamics on a year over your basis, as you think the pressures that are put in place, when you see market dynamics that health plans are trying to do land grabs and really grow fast and aggressively, you kind of start to think about what does that do on an LTV basis of the tenure of the consumer.

Speaker Change: Here, we make decisions as to which plans will be in our marketplace.

Speaker Change: And offered to our consumers based on what we think is going to be best for them and their rankings et cetera. So I guess, what I'm coming down to is if I believe this AEP right as we think about different carriers and what they're doing and thing about bringing the benefits down to a more stable level to drive their margins. When you write business in that environment different from even today when you're right in the new.

Pat McCann: AEP with the new benefits that we expect to come out you should have higher confidence in those cohorts retaining potentially better than historically have.

Pat McCann: So that's how we're starting to think about it but again its plan by plan and it's a product by product and population by population and the way we've discussed those with an emphasis on those health plans to allow us to really serve the consumer in a greater way post enrollment because thats, where the real service comes on retention and long term satisfaction.

Speaker Change: Got it that makes sense it sounds like the strategy has a lot to do with of course your expectations for the upcoming enrollment period, which which sort of leads me to my next question, which was just around the financial projections and.

Patrick McCann: A consumer coming in with a very high benefit plan will have a higher probability of benefits coming down versus going up over time. When you reach that benefit, and you bring the benefits down to a more stable systematic basis, you're going to have more upward opportunity or stability in those benefit plans. So as we think about trajectories, track records, the product, we think about in that vein, you may actually be better off staying on an agency contract versus a non agency contract with certain carriers, based upon those dynamics and where we feel those benefits stack up for consumers.

Pat McCann: Yes.

Speaker Change: The idea that you would have.

Pat McCann: Revenue.

Speaker Change: Relatively flat with some modest margin expansion I was wondering to what extent.

Pat McCann: Sure.

Speaker Change: To what extent does that.

Pat McCann: Thats.

Pat McCann: Bake in.

Speaker Change: Some of the possible upswings from the upcoming period, given the market dynamics.

Patrick McCann: And so as you think about where we were last year, there were some major players. For example, Edna grabbed a lot of share last year as you know, there were big leaders in the space. And based upon that structure we had them on a non agency contract, right? And you can see that play through it as being a very good student view on where the market was given that Edna is making a big clawback on their benefits this year as they said publicly.

Pat McCann: Or to what extent does it sort of conservatively.

Speaker Change: Not include.

Speaker Change: Considerations for.

Speaker Change: Our strong enrollment period upcoming.

Speaker Change: So let me just kind of take you to a couple of things we said in our prepared remarks, one is that when we gave you those qualitative statements for the full year, what was contemplated that time, whereas the fact that market dynamics, we saw last AEP.

Patrick McCann: So we didn't have that tail risk on that business. And so we were able to continue to serve that population as appropriate. As we look into the coming year, we make decisions as to which plans will be in our marketplace and offer to our consumers based on what we think is going to be best for them in their rankings, et cetera. So I guess what I'm coming down to is if I believe this AEP, right?

Speaker Change: Lots of shopping with no reason for appropriate switching would continue until new benefits released so that would be net Q.

Speaker Change: Q1 through Q3, should've been lower than last year because of the market dynamics that we're continuing going forward and if you kind of do the math on that with us staying generally flat year over year, you would have seen an upward expectation on the back part of the new benefit plan market dynamics in Q4.

Vijay Kotte: As we think about different carriers and what they're doing thing about bringing the benefits down to a more stable level to drive their margins, when you write business in that environment, different from even today, when you write in the new AEP with the new benefits that we expect to come out, you should have higher confidence in those cohorts retaining potentially better than you can store it. We have. So that's how we're starting to think about it, but again, it's planned by plan and it's product by product and population by population, the way we've discussed those with an emphasis on those health plans to allow us to really start the consumer in a greater way, post enrollment because that's where the real service comes on retention and long term satisfaction. Got it. That makes sense.

Speaker Change: Based upon our early reads right now we're seeing that there is some tailwind we believe based upon what we've observed so far we don't know to the extent that that would be there, but we do believe there tail winds on revenue adjusted EBITDA and total submission counts, especially given the advancements we've also been making and the early results and we feel pretty.

Pat McCann: Good about on efficiencies on that direct cost per submission VR.

Pat McCann: Our technology et cetera, so the only switch as we've said is that we're starting to see that potential decline on agency versus non agency mix that could impact the cash flow from operations estimate versus last year, but that's really the way we think about it right now is that we do see that on those qualitative top line bottom line items, we see some positive tailwind.

Vijay Kotte: And you know, it sounds like the strategy has a lot to do with, of course, your expectations for the upcoming enrollment period, which sort of leads me to my next question, which was just around the financial projections and and you know, with the idea that you would have revenue that is relatively flat with some modest margin expansion, I was wondering to what extent does that that's baked in some of the possible up swings from the upcoming period given, you know, the market dynamics or to what extent does it sort of conservatively not include considerations for, you know, a strong enrollment period of coming. You know, so let me just kind of take you to a couple of things we said in our prepared remarks.

Pat McCann: From the market dynamics, we visit we're observing right now arent expecting to come this AEP.

Speaker Change: Thank you <unk> for our next question.

Speaker Change: Yeah.

Speaker Change: Our next question comes from the line of Jim Sidoti of Sidoti <unk> Co. Your line is now open.

Jim Sidoti: Alright, thanks for taking the questions. So if you do have that shift towards agency revenue do you still expect to be cash flow positive this year and how do you do that.

Speaker Change: But still.

Speaker Change: I think it's too early for us to get too far into exactly the extent to which shifts will happen. These are these are the right ways that we think about setting up our contracts again.

Pat McCann: We design the conflicts with our assessment of the product qualities and we think our extent to which we can serve the consumers. The best and then whatever those contracts are year over year, we have a distribution of agency versus non agency and depending on which product matches basketball determined the extent to which that shift may happen between agency and non agency.

Vijay Kotte: One is that when we gave you those qualitative statements for the full year, what was contemplated at that time was the fact that market dynamics, we saw last day of lots of shopping with no reason for appropriate switching would continue to new benefits release. So that would be that the Q1 through Q3 should have been lower than last year because of the market dynamics that were continuing going forward. And if you kind of do the math on that with us saying generally flat year year, you would have seen an upward expectation on the back part of the new benefit plan market dynamics and Q4.

Speaker Change: It's too early to tell I don't want to get you. There all I know is that it's likely not going to be the same distribution.

Speaker Change: Non agencies, we saw last year.

Speaker Change: And therefore that would lead to a lower than what we experienced last year in cash flow from operations, but again. They are all for the right reasons. It's the right plan for the consumer and the way we are.

Speaker Change: At appropriately decided which contracts into a product that we prefer to be on agency versus non agency to deliver the greatest value for us as well right, meaning on our revenue and adjusted EBITDA basis.

Vijay Kotte: Based upon our early reads right now, we're seeing that there are some tailwinds. We believe based on what we've observed so far, we don't know to the extent that that will be there, but we do believe there are tailwinds on revenue, adjusted EBITDA and total submission counts. Especially given the advancements we've also been making and the early results, we feel pretty good about on efficiencies on that direct cost for submission, the art technology, et cetera.

Speaker Change: Risk adjusted from the way, we think about it so I know you're looking for more of a specific answer but I just think it's a little too early for us to get too far into that until we know more about the details of the benefit of distribution in a more precise way, which won't be evident until closer to October.

Speaker Change: Alright.

Speaker Change: How is it how would you do with <unk>.

Vijay Kotte: So the only switch, as we said, is that we're starting to see that potential decline on agency versus non agency mix that could impact the cash flow from operations estimates versus last year. But that's really the way we think about it right now is that we do see that on those qualitative top line bottom line items, we see some positive tailwinds from the market dynamics. We're observing right now and expecting to come to say you see.

Speaker Change: Using use of AI to improve efficiency.

Speaker Change: Are there any.

Speaker Change: How is that going so far and do you expect that to continue to improve throughout the year.

Operator: Thank you.

Speaker Change: No I love. The question, it's one of the things that had been at the core of what we've been doing for the last couple of years, you talked about planned fit and we really haven't described it in a way I think the market really has had a chance to understand how unique it really is when you take the 30 million interactions that we've had and the live interactions we're having every day with consumers.

Sandeep Soorya: One word for our next question. Our next question, because on line of Jim Sardotti, a Sardotti poll, your line is now open. Hi, thanks for taking the questions. So if you do have that shift towards agency revenue, do you still expect expect to be casual positive this year? And how do you do that? I think it's too early for us to get too far into exactly the extent to which shifts will happen.

Speaker Change: And feathering that into how to make the best recommendations for plan. We know for instance that when a plan fit checkup is done and our proprietary plan fit tool uses its logic and AI thinking to really estimate the rank the appropriate most suitable plans for the consumers that when we write one of the top plan.

Sandeep Soorya: These are the right ways that we think about setting up our contracts. Again, we design the contracts with our assessment of the product qualities and we think our extent to which we can serve the consumers the best. And then whatever those contracts are your year, we have a description of agency versus non agency. And depending on which product matches best will determine the extent to which that shift may happen between agency and non agency.

Speaker Change: It has the highest retention highest satisfaction for the consumers. So when we start to think again about around the agency versus non agency model.

Speaker Change: Regardless of what type of contract. It is we know that our tools have been design now to be able to enable that the agent to recommend a plan that has the highest probability of the highest tenure.

Speaker Change: And the retention value for that consumer because it's the most that drives the most customer satisfaction. So that's one big place that we've been doing and continuing to develop to do it we highlighted on the prepared remarks around what we've been doing our training, which is going to come through in a significant efficiencies. This AEP as we think about the onboard.

Sandeep Soorya: So it's just it's too early to tell I don't want to get you there. All I know is that it's likely not going to be the same distribution of non agency as we saw last year. And therefore that would lead to a lower than what we experienced last year in cash flow from operations. But again, they're all for the right reasons. It's the right plan for the consumer. And the way we've, you know, appropriately decided which contract and real product that we prefer to be on agency versus non agency to deliver the greatest value for us as well. Right, meaning on a revenue and adjusted even that basis risk adjusted from the way we think about it.

Speaker Change: <unk> speed up 40% improvements in that getting to double the productivity that we saw last year in early phases of the gestation of these agents with us it's <unk>.

Speaker Change: Really important component of how you can give a live at bats for agents to learn.

Vijay Kotte: So I know you're looking for more of a specific answer, but I just think it's a little too early for us to get too far into that till we know more about the details of the benefit distribution or more precise way, which won't be evident until closer talk. Soorya. How are you doing with the use of AI to improve efficiency? You know, how's that going so far and you expect that to continue to improve throughout the year?

Speaker Change: On the fly and so they can do it on their schedule and we can do it on an appropriate timeline and different scenarios. So theyre. Most before are prepared to serve this population and given the amount of focus that health plans are putting specifically unwind to grow within special needs population.

Speaker Change: That's why you need the most training to be great. It's what our agents do better than anyone else. It is their ability to anticipate the needs of special needs population that unique question about how to access care and be able to resolve and build that trust on the phone that is what is truly differentiating in our AI tools have enabled us to do that with training, it's enabling us.

Vijay Kotte: No, I love the question. It's one of the things that has been at the core of what we've been doing for the last couple of years. We talked about plan fit and we really haven't described it in a way that I think the market really has had a chance to understand how unique it really is. When you take the 30 million interactions that we've had and the live interactions we're having every day with consumers and feathering that into how to make the best recommendations for plans, we know, for instance, that when a plan fit checkup is done and our proprietary plan fit tool uses its logic and AI thinking to really estimate and rank the appropriate most suitable plans for the consumer, that when we write one of the top plans, it has the highest retention, highest satisfaction for the consumers.

Speaker Change: To do that was high record high value recommendations that would drive the highest retention and we're continuing to use that information to figure out how to that anticipate the needs of the consumers and market to them directly and support that effort.

Speaker Change: Thank you Mohammed for next question.

Speaker Change: Yes.

Speaker Change: Our next question comes from the line of Sandeep <unk> of Delaware Street Capital. Your line is now open.

Speaker Change: Hi. This is sandeep can you guys hear me Okay, yes, good morning, Nick.

Sandeep Soorya: Hi, good morning, Thanks for taking the question.

Speaker Change #100: First question was why did non agency revenue decline year over year, given kind of the shifts in the repositioning of the business.

Vijay Kotte: So when we start to think again about around the agency versus non-agency model, regardless of what type of contract it is, we know that our tools have been designed now to be able to enable the agent to recommend a plan that has the highest probability of the highest tenure and retention value for that consumer because it's the most drive the most customer satisfaction. That's one big place that we've been doing and continuing to develop to do it.

Speaker Change: I have a couple of other questions, but I'm going to ask them one at a time.

Speaker Change: Yes, I think the question on non agency is one it's really determined on market dynamics I would say theres, one big piece, which is market dynamics of which products are most appropriate this year.

Kt: What are the contracts we have in place the other piece that that Kt highlighted was the dynamic around the change healthcare outage because there.

Speaker Change: There are a number of components to think that we need to do and the way we enroll a consumer to be eligible for non agency.

Vijay Kotte: We highlighted on the prepared remarks around what we've been doing on our training, which is going to come through in significant efficiencies as AP as we think about the onboarding speed, 40% improvements in that, getting to double the productivity that we saw last year in early phases of the gestation of these agents with us. It's a really important component of how you can give live advance for agents to learn on the fly and so you can do it on their schedule and we can do it on our appropriate timeline and different scenarios.

Speaker Change: Compensation with the different health plans and due to some of the eligibility challenges we had due to.

Speaker Change #102: The crowds are sorry, the change healthcare outage led us to needing to write some of the enrollment.

Speaker Change: Enrolment is those applications under an agency basis. So there was some shift for that alone, but generally speaking it really is just a distribution of what consumers came in and which products best match for them and we don't put them on a scale that push it one way or the other really the consumers' needs and who comes in determined.

Vijay Kotte: So they're most prepared to serve this population and given the amount of focus that health plans have been putting specifically on why to grow within special needs populations, that's where you need the most training to be great. It's what our agents do better than anyone else. It is their ability to anticipate the needs of special needs populations, the unique question about how to access care and be able to resolve and build that trust on the phone.

Speaker Change: What that split will be and and we are comfortable with those split because we think those are the best value for us as well.

Speaker Change: If those were to master the consumers' needs.

Speaker Change #105: Got it.

Speaker Change #101: The $7 million impact that was highlighted earlier.

Speaker Change #102: That could have been more on the non agency side, but because of the change outage. It was there was a there was a complete shift to the.

Vijay Kotte: That is what is truly differentiating and our AI tools have enabled us to do that with training. It's enabling us to do that with high-value recommendations so we drive highest retention. And we're continuing to use that information to figure out how to best anticipate the needs of the consumers and mark it to them directly and support that effort. Thank you.

Vijay Kotte: One moment for our next question.

Speaker Change: Commission part Caribbean revenue.

Speaker Change: Is that the right takeaway I don't think its all of it but I'd say a good portion of it.

Speaker Change: Thats a fair set.

Speaker Change: Okay got it great. Thanks, and then on the GPS agents why did they go down why did that performance go down and are those agents shifting too.

Speaker Change: Another or <unk> are they leaving the industry can you give us a little more color on what happened there.

Sandeep Soorya: Our next question comes from a line of Sunday's story of Delaware Street Capital. Your line is now open.

Sandeep Soorya: Hi, this is Sunday. Can you guys hear me? Okay. Good morning, Steve. Hi, good morning. Thanks for taking the question.

Speaker Change: It's twofold one in any given year you also always have.

Speaker Change: Let me take a step back and talk about the strategic value.

Sandeep Soorya: First question was, why did non-agency revenue decline? You're given kind of the shifts and the repositioning of the business. And I have a couple other questions that I'm going to ask and want to. Talk. Yeah, I think the question on non agency is one that's really determined on market dynamics. Like I said, there's one big piece which is market dynamics of which products are most appropriate this year. And what are the contracts that we have in place?

Speaker Change: <unk> solutions are GPS is for us, it's a great way for us to get access to high quality quality variable capacity with no fixed cost expense for those periods of.

Speaker Change: High volume in AEP, OE et cetera, and even through the SEC periods as well. So we think it's a unique differentiator for us to do that we provide them tools, we provide them.

Speaker Change: Access to our relationships insights training et cetera to do that.

Sandeep Soorya: The other piece that Katie highlighted was the dynamic around the change healthcare outage. Because there are a number of components to think that we need to do in the way we enroll a consumer to be eligible for non agency, you know, compensation with the different health plans. And due to some of the eligibility challenges we had to do to the crowd, or sorry, the change healthcare outage, it led us to needing to write some of those enrollments or those applications under an agency basis.

Speaker Change: And we've had many we have different agencies are different sized that participate in our down line business and some of them.

Speaker Change: Went out of business like we said before they were trying to grow really fast and they didn't have the cash really supported and they didn't have the continued access to capital to make investments as they need it and so some of them just went away.

Speaker Change: Some of them have decided to re prioritize where they want to grow and what theyre going to offer them, whether it's different to the extent the volumes are going to devote to this type of this product and therefore, you can see some differences there some will leave on their own and wanted to do their own thing and that's great for them. It could be the right thing for them to do depending on what size. They are at and that makes it a lot.

Sandeep Soorya: So there was some shift for that alone, but generally speaking, it really is just a distribution of what consumers came in and which products best match for them. And we don't put our thumb on the scale to push it one way or the other really the consumers needs and who comes in determined what that split will be. And we are comfortable with those split because we think those are the best value for us as well if those were to match for the consumers need. Got it.

Speaker Change: Logical sense.

Speaker Change: But at the same time, we are also onboard right and we've on boarded.

Speaker Change: Let's call it up to 10, maybe even more we might pull into the process by the time, we're all done and its AEP and those will be significant.

Vijay Kotte: So the $7 million impact that was highlighted earlier, that could have been more on the non agency side, but because of the change outage, there was a complete shift to the commission part, commission revenue. Is that the right takeaway? I don't think it's all of it, but I'd say good portion of it that's a fair set. Okay. Got it. Great. Thanks.

Speaker Change: Contributors to our volume in that channel, but it's a normal cycle, you'll have ones that come in and go out, but I will say over the last couple of years, we've seen more shut down and shut their doors.

Speaker Change: Due to all the market dynamics that we've been seeing out there. Some are you seeing a more explicit the largest scale of some of the players theyre shutting it down and ours are more mid to smaller scale that are participating in our GTS external.

Vijay Kotte: And then on the GPS agents, why did they go down? Why did that performance go down? And are those agents shifting to another or an FMO? Are they leaving the industry? Can you give us a little more color on what happened there? Yeah, I mean, it's twofold. So one in any given year you also always have.

Speaker Change: Got it.

Speaker Change: Thanks, and then when I look at trailing 12 month submissions.

Speaker Change: Noticed that.

Speaker Change: Obviously, the company went through a period of massive growth years ago, and then it was negative growth as the business has stabilized.

Vijay Kotte: Well, let's let me take a step back and talk about strategic value with the apartment solutions or GPS is for us. It's a great way for us to get access to high quality, quality variable capacity with no fixed cost expense for those periods of high volume and AEP, OED, etc. And even through the rest of these periods as well. So we think it's a unique differentiator for us to do that. We provide them tools, we provide them access to our relationships, insights, training, etc, to do that.

Speaker Change: Very negative and now it's starting to flatten on a trailing 12 month basis and I believe revenues are as well how should we think about that is that the sign that like just I'm. Just wondering your thoughts when you look at the business on a trailing 12 month basis from our submissions perspective, and then also from a revenue perspective, no. It's a great question.

Speaker Change #109: I really appreciate it because this is the.

Speaker Change: What I'd say is conviction to the business strategies, that's really important is that.

Vijay Kotte: And we've had many, we have different agencies of different size that participate in our downline business. And some of them went out of business. Like we said before, they were trying to grow really fast and they didn't have the cash to really support it. And they didn't have the continued access to capital to make the investments that they needed. And so some of them just went away. Some of them have decided to reprioritize where they want to grow and what they're going to offer and what is different.

Speaker Change: I know everybody wants growth, but you've got to determine what the market allows us to drive efficiency and prudence around cash deployment you can drive your growth do you wanted to if you want to burn a bunch of cash to go there and the market will determine how efficient you can be and so as you think about the market dynamics. We saw last AP on a TTM basis, youre getting a bunch of that right.

Speaker Change: The market dynamics that we've already highlighted in any given market place you can have three scenario right of market dynamics. We didn't help US you can have a scenario where health plans are all being really aggressive and want to grow and that causes disruption and that is an efficient market for us to deploy cash and drive submission volumes et cetera.

Vijay Kotte: The extent of the volume they're going to devote to this type of this product. Therefore, you can see some differences there. Some will leave on their own and want to go do their own thing. And that's great for them. It could be the right thing for them to do, depending on what size they're at. And that makes a lot of logical sense. But at the same time, we are also onboarding, right?

Speaker Change: Next option is that theres not a lot of investment and benefit is kind of a push and if you care about doing whats only appropriate for the consumer is going to be a less efficient market lots of window shopping not a lot of appropriate switching and then finally youre going to have a market, where there's a lot of negative disruption that brings a lot of shoppers in place and that's a very efficient market. So what you'd want to see from us is that when.

Vijay Kotte: And we've onboarded, you know, let's call it up to 10, maybe even more. We might fall into the process by the time we're all done in the AEP. And those will be significant contributors to our volume in that channel. But it's a normal cycle. You'll have one to come in and go out. But I'll say over the last couple of years, we've seen more that shut down and shut their doors due to all the market dynamics, that we've been seeing out there.

Speaker Change: We see those dynamics can be seen since last AEP and that will run through the third quarter of this year that you want us to be prudent and deployment of cash because it is not an efficient way to deploy cash to drive growth you want to be thoughtful about saving that dry powder and being effective when you see the market dynamics coming as we're anticipating in Q4 this year, but what you.

Vijay Kotte: Some of you are seeing a more explicit of the larger scale of some of the players that are shutting it down. And ours are more mid to smaller scale that are participating in our TPS external agent group. Great. Thanks.

Speaker Change: You have been seeing is over that time, we've been investing and driving efficiencies. So that when you do deploy that cash youre not getting the diseconomies of scale I think we have a lot of tailwind is around that given the fewer mouths to feed around lead volume because of industry compression of agents out there trying to sell.

Vijay Kotte: And then when I looked at trailing 12 month submissions, I noticed that obviously the company went through a period of massive growth years ago, and then it was negative growth as a business to stabilize very negative. And now it's starting to flatten on a trailing 12 month basis. And I believe revenues are as well. How should we think about that? Is that the sign that like just one of your thoughts when you look at the business on a trailing 12 month basis from a submissions perspective and then also from a revenue perspective?

Speaker Change: Seniors are Medicare consumers as well as our deployment of technology to drive efficiency on the operational side of those two things are preparing us to have a pretty exciting what we think AEP with lots of dynamism that really are positive for the health business.

Speaker Change: Great.

Speaker Change: Thanks for that color last question for me is how do you think about revenue from planned fit checks and.

Vijay Kotte: No, it's a great question. I really appreciate it. Because this is the, what I say is conviction to the business strategies. That's really important is that it's, you know, I know everybody wants growth, but you've got to determine what the market allows to drive efficiency and prudence around cash. You can drive a growth you wanted to if you want to burn a bunch of cash to go there and the market will determine how efficient you can be.

Speaker Change: And the secondary follow up question to plants that in the quarter was I saw that submissions.

Speaker Change: <unk>.

Speaker Change: We're down about 6%, but.

Speaker Change: Plants. It was I think you said 125000 and I can't remember so should I be thinking Oh, if I add submissions to plant fit that gives any idea of the number of engagements that you're you guys did.

Vijay Kotte: And so as you think about the market dynamics, we saw last day be on a TTM basis, you're getting a bunch of that, right? The market dynamics that we've already highlighted in any given marketplace, you can have three scenarios, right? Of market dynamics, we can have a scenario where health plans are all being really aggressive and want to grow and that causes disruption. And that's an efficient market for us to deploy cash and drive, you know, submission volumes.

Speaker Change: In the quarter walk me through how we should think about both the revenue opportunity for plant and then how I should think about submissions and plant.

Vijay Kotte: The next option is that there's not a lot of investment and benefits. It's kind of a push. And if you care about doing what's only appropriate for the consumer, it could be a less efficient market for lots of window shopping, not a lot of appropriate switching. And then finally, you're going to have a market where there's a lot of negative disruption that brings a lot of shoppers in place. And that's a very efficient market.

Speaker Change: As a metric so I can better understand.

Speaker Change #105: The underlying business.

Speaker Change: Yes, as you think about this is Ed.

Ed: I'm going to try to keep this as organized as possible, but the way youre thinking about is right. So we have X number of submissions.

Speaker Change: Let me kind of take you to the top of funnel, we have a number of consumers that reach out to us who need support in a shopping spree.

Speaker Change: We're able to take them through a full plan fit.

Speaker Change: Right and that experience can result in those three outcomes that I described before either we enrolled him a new product that's better for them, we tell them I'm gonna another products better for them, but they choose they don't want to do anything or you go all the way to the end and we tell them Hey, you are on the right product and of that total process you would take the total submission plus a number of ones that we just gave peace of mind, Adam together and that's the ones that would be.

Vijay Kotte: So what you'd want to see from us is that when we see those dynamics that we've seen since last A&C and that will run through the third quarter of this year, that you want us to be prudent in deployment of cash because it is not an efficient way to deploy cash to drive growth. You want to be thoughtful about saving that drive powder and being effective when you see the market dynamics coming as we're anticipating you for this year.

Speaker Change: Generally avail.

Speaker Change #103: Available call. It I think with 230000 or so we talk about what we did in our internal agent pool.

Vijay Kotte: But what you have been seeing is over that time, we've been investing in driving efficiencies so that when you do deploy that cash, you're not getting the diseconomies of scale. I think we have a lot of tailwinds around that given the fewer mouths to feed around lead volume because of industry compression of agents out there trying to sell the, you know, or markets of seniors or Medicare consumers, as well as our deployment of technology drive efficiency on the operational side. Those two things are preparing us to have a pretty exciting and what we think AEP with lots of dynamism that really are positive for the go health business. Great. Thanks for that color.

Speaker Change: Last quarter, and so you would say of those which one do you have a distribution of how many get enrolled and then how many would be eligible potentially for a plant that today, because you've got to get them through the whole process, you'll pull checkup to get eligible for a plant that today and then it varies by health plan from there, but the way I think about our business plan. Our business plan is to take the top of funnel all the way.

Dave: Anybody has outreached us how do we get as many of those interactions to add value to the consumer and then be able to generate revenue for us for doing that work, but staying true to do right for the consumer and find ways to make it work for everybody. So what's beautiful about that plant that Dave is that when we do that work, we're providing peace of mind of the consumer we're providing.

Vijay Kotte: Last question for me is, how do you think about revenue from plan fit check and and the secondary follow question to plan fit in the quarter was I saw that submissions. Questions were down about 6%, but plan fit was I think you said 125,000 that can't remember. So should I be thinking, oh, if I add submissions to plan fit that gives me the idea of the number of engagements that you guys did in the in the quarter, walking through how I should think about both the revenue opportunity for plan fit and then how I should think about submissions in plan fit as a metric.

Dave: Low cost no cost retention services for health plans to invest millions of dollars every year trying to figure out how to engage with that population and keep them retain satisfied.

Speaker Change: And we're also able to reorient that consumer so that they can really get the maximum value out of those benefits that made them shopping and firstly it will remember what the benefits were they werent understanding how to utilize them. We can reorient them at that time and now we're having the ability to start to get compensated for that work and that is what you can expect from us due to the right.

Dave: <unk> proved that everybody wins from it and then find a way to ensure that we are getting.

Vijay Kotte: So I can better understand the underlying this. Yes, too. As you think about, I'm going to try to keep this as organized as possible, but the way you're thinking about it's right. We have an X number of submissions, or let me tell you to do the top upon all. We have a number of consumers that reach out to us who need support in the shopping industry. Up those were able to take them through a full plan, fit, check out, right.

Dave: Revenue were compensated for that work that we're doing in a very symbiotic way and so that that's the way to think about I think a top of funnel all those interactions we're continuously working to find more and more of that that is going to be able to be compensated for hard work. We do most of the industry driving that just conversion conversion converted Cooper.

Vijay Kotte: And that experience can result in those three outcomes that I described before, either we enroll them in a new product that's better for them. We tell them I'm not another product's better for them, but they choose they don't want to do anything or you go all the way to the end and we tell them, hey, you're on the right. And of that total process, you would take the total submission plus the number ones that we just gave peace of mind, Adam, together, and that's the ones that would be generally available.

Speaker Change: A new enrollment that's the only thing that triggered the compensation in the past and now we're finding ways from just doing the right thing, we're starting to get compensated for that as well. In addition to appropriately enrolling all doing whats right for the consumer and rightfully. So that's what's really exciting about where we're going what plant that state is opening up and we are making.

Speaker Change: Progress and have really good demand from the health plan to jump onboard. So there's added element of the reorientation on top of a typical planes at checkout to re engage the consumer with themselves.

Vijay Kotte: Call it, I think with 230,000 or so, we talked about what we did in our internal agent pool, this last quarter. And so you say of those, which ones, you know, they have a distribution of how many get enrolled and then how many would be eligible potentially for a plan fit today because you got to get them through the whole process. Do a full checkup to get eligible for a plan fit today.

Speaker Change: Thank you. This concludes our question and answer session I would now like to turn it back to Vijay Kotte for closing remarks.

Vijay Kotte: Thank you all for your attention and participation in today's call. We are very excited about what is there to come our team has been working diligently to prepare not just for this annual enrollment period, but we are we anticipating the needs of the population and the overall.

Vijay Kotte: And then it varies by health plan from there, but the way I think about our business plan, our business plan is to take the top of funnel all the way through anybody's outreach to us. How do we get as many of those interactions to add value to the consumer and then be able to generate revenue for us for doing that work, but staying true to do right for the consumer and find ways to make it work for everybody.

Vijay Kotte: Medicare landscape to be for years to come.

Speaker Change #107: You learn.

Speaker Change #112: You've been around this business for a while it's not just the seasonal business its a cyclical business and you need to make investments and prepare for all of that.

Vijay Kotte: So what's beautiful about plan fit today is that when we do that work, we're providing peace of mind and the consumer, we're providing really low cost to no cost, retention services for a health plan, who invest, you know, millions of dollars every year trying to figure out how to engage with that population and keep them retained and satisfied. And we're also able to reorient that consumer so that they can really get the maximum value out of those benefits that made them shopping in first place.

Speaker Change #107: And we made those investments and planned for checkups last year and has seen the value of that wood plant that Dave as we anticipated the need for health plans to really focus on retention as well as targeted growth.

Speaker Change: Our tools our team our commitment to the consumer is what differentiates us and enables us to be.

Speaker Change: More predictable in these types of.

Speaker Change: Changing environment, we stabilized what seems to be a volatile market and thats exciting I think for us for our consumers for our team and for our shareholders. So thank you for your time and your continued interest in our organization.

Vijay Kotte: And remember what the benefits were. They weren't understanding how to utilize them. We can reorient them at that time. And now we're having the ability to start to get compensated for that work. And that is what you can expect from us. Do the right thing, prove that everybody wins from it, and then find a way to ensure that we are getting revenue or compensated for that work that we're doing in a very syndiotic way.

Speaker Change #107: Thank you for your participation in today's conference. This does conclude the program you may now disconnect.

Vijay Kotte: And so that's the way to think about it. I think the top of funnel, all those interactions, we're continuously working to find more and more of that that is going to be able to be compensated for hard work we do. Most of the industry driving it just conversion, conversion, conversion, convert to a new enrollment. That's the only thing that triggered compensation in the past. And now we're finding ways from just doing the right thing.

Vijay Kotte: We're starting to get compensated for that as well in addition to appropriately enrolling, all doing what's right for the consumer and right for the health plan. So that's what's really exciting about where we're going, what plan fits state is opening up. And we're making great progress and have really good demand from the health plan to jump on board to this added elements of the reorientation on top of the typical plan to check out to reengage the consumer with those help.

Operator: Thank you. This concludes the question answer session.

Vijay Kotte: I'll not like to turn it back to Vagiacal Tay for closing remarks. Thank you all for your attention and participation in today's call. We are very excited about what is there to come. Our team has been working diligently to prepare not just for this annual enrollment period, but we're anticipating the needs of the population and the overall, you know, Medicare landscape to be for years to come. What you learned, if you've been around this business for a while, it's not just a seasonal business.

Vijay Kotte: It's a cyclical business. And you need to make investments and prepare for all that. And we made those investments in plans to check up last year and you're seeing the value of that with plan fits days as we anticipated the need for health plans to really focus on retention as well as targeted growth. Our tools, our team, our commitment to the consumer is what differentiates us and enables us to be more predictable in these types of changing environment.

Vijay Kotte: We stabilize what seems to be a volatile market. And that's exciting, I think, for us, for our consumers, for our team and for our shareholders. So thank you for your time and your continued interest in our organization. Thank you for your participation in today's conference.

Operator: This is the Conclude Program. You may now disconnect.