Document eHealth, Inc. Announces Second Quarter 2024 Results Strong second quarter results driven by Medicare segment growth YoY Raises 2024 Annual Guidance

eHealth, Inc. Announces Second Quarter 2024 Results

Strong second quarter results driven by Medicare segment growth YoY

Raises 2024 Annual Guidance

AUSTIN, Texas - August 7, 2024 - eHealth, Inc. (Nasdaq EHTH), a leading private online health insurance marketplace, today announced its financial results for the second quarter ended June 30, 2024.

Q2 2024 total revenue of $65.9 million decreased 1% year-over-year, including $11.5 million in positive net adjustment revenue, as compared to Q2 2023 total revenue of $66.8 million, which includes $18.7 million of positive net adjustment revenue.

Q2 2024 Non-GAAP total revenue excluding net adjustment revenue(1) increased 13% year-over-year.

Q2 2024 Medicare submissions(a) across our core agency and carrier-dedicated Amplify platforms grew 16% compared to Q2 2023.

Q2 2024 Medicare Advantage LTV increased 4% to $927 from $891 in Q2 2023, driven primarily by favorable carrier and contract mix as well as constraint reduction.

Q2 2024 pre-tax impairment and restructuring charges of $3.0 million related to lease exits and other cost-reduction efforts.

Q2 2024 GAAP net loss of $28.0 million increased 19%, compared to Q2 2023 GAAP net loss of $23.5 million

Q2 2024 Non-GAAP net loss(1), which excludes the post-tax impact of positive net adjustment revenue and impairment and restructuring charges, improved 9% year-over-year.

Q2 2024 adjusted EBITDA(1) of $(15.5) million compared to Q2 2023 adjusted EBITDA(1) of $(14.8) million Q2 2024 adjusted EBITDA excluding net adjustment revenue(1) improved $6.5 million year-over-year driven primarily by Medicare Advantage approved member growth and improved LTVs as well as continued fixed cost reduction efforts.

Cash, cash equivalents and marketable securities of $151.1 million as of June 30, 2024.

Commissions receivable balance of $831.9 million as of June 30, 2024.

Note See the tables at the end of this press release for a reconciliation of our GAAP financial measures to our non-GAAP financial measures for the relevant periods and footnote (1) on page 15 at the end of this press release for definitions of our non-GAAP financial measures.

(a) Submissions describe applications that are submitted by individuals online through our eHealth platform or completed with the assistance of our benefit advisors where the individual provides authorization to the benefit advisor to submit the application to the insurance carrier partner. The individual may have additional actions to take before the application will be reviewed by the insurance carrier and not all submissions ultimately become approved members.

Based on information available as of August 7, 2024, we are revising guidance for the full year ending December 31, 2024. These expectations are forward-looking statements and we assume no obligation to update these statements. Actual results may be materially different and are affected by the risk factors and uncertainties identified in this press release and in eHealth's annual and quarterly reports filed with the Securities and Exchange Commission.

The following guidance is for the full year ending December 31, 2024

Total revenue is expected to be in the range of $470.0 million to $495.0 million compared to our prior guidance of $450.0 million to $475.0 million.

GAAP net income (loss) is expected to be in the range of $(36.5) million to $(22.0) million compared to our prior guidance of $(40.0) million to $(20.0) million.

Adjusted EBITDA(1) is expected to be in the range of $7.5 million to $25.0 million compared to our prior guidance of $(5.0) million to $20.0 million.

Operating cash flow is expected to be in the range of $(10.0) million to $0.0 million compared to our prior guidance of $(15.0) million to $(5.0) million.

The above guidance includes the expected impact of positive net adjustment revenue in the range of $14 to $20 million, compared to our prior guidance impact of positive net adjustment revenue in the range of $0 to $15 million. Excluding the impact of positive net adjustment revenue in both years, the mid-point of our 2024 guidance reflects approximately 15% growth in Non-GAAP total revenue excluding net adjustment revenue(1) and a substantial improvement in Non-GAAP net income (loss)(1) and adjusted EBITDA excluding net adjustment revenue(1).

Note See accompanying footnotes on page 15.

Webcast and Conference Call Information

A webcast and conference call will be held today, Wednesday, August 7, 2024 at 8 30 a.m. Eastern Time 7 30 a.m. Central Time. Individuals interested in listening to the conference call may do so by dialing (800) 245-3047. The participant passcode is 1407192. The live and archived webcast of the call will also be available under "News and Events" on the Investor Relations page of our website at https ir.ehealthinsurance.com.

We're Matchmakers. For over 25 years, eHealth has helped millions of Americans find the healthcare coverage that fits their needs at a price they can afford. As a leading independent licensed insurance agency and advisor, eHealth offers access to over 180 health insurers, including national and regional companies.

Forward-Looking Statements

This press release contains statements that are forward-looking statements as defined within the Private Securities Litigation Reform Act of 1995. These include statements regarding our expectations regarding our business, operations and strategy our estimates regarding total membership, Medicare, individual and family plan, ancillary products and small business memberships our estimates regarding constrained lifetime values of commissions per approved member by product category our estimates regarding costs per approved member our 2024 annual guidance for total revenue, GAAP net income (loss), adjusted EBITDA and operating cash flow the expected impact of positive net adjustment revenue on our 2024 annual guidance and other statements regarding our future operations, financial condition, prospects and business strategies.

These forward-looking statements are inherently subject to various risks and uncertainties that could cause actual results to differ materially from the statements made. In particular, we are required by Accounting Standards Codification 606 - Revenue from Contracts with Customers to make numerous assumptions that are based on historical trends and our management's judgment. These assumptions may change over time and have a material impact on our revenue recognition, guidance, and results of operations. Please review the assumptions stated in this press release carefully.

The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, our ability to retain existing members and enroll new members during the annual healthcare open enrollment period, the Medicare annual enrollment period, the Medicare Advantage annual open enrollment period and other special enrollment periods changes in laws, regulations and guidelines, including in connection with healthcare reform or with respect to the marketing and sale of Medicare plans such as the Policy and Technical Changes to Medicare Advantage for Contract Year 2025 released by CMS on April 4, 2024 competition, including competition from government-run health insurance exchanges and other sources the seasonality of our business and the fluctuation of our operating results our ability to accurately estimate membership, lifetime value of commissions and commissions receivable changes in product offerings among carriers on our ecommerce platform and changes in our estimated conversion rate of an approved member to a paying member and the resulting impact of each on our commission revenue the concentration of our revenue with a small number of health insurance carriers our ability to execute on our growth strategy and other business initiatives changes in our management and key employees our ability to hire, train, retain and ensure the productivity of licensed insurance agents, or benefit advisors, and other personnel exposure to security risks and our ability to safeguard the security and privacy of confidential data our relationships with health insurance carriers the success of our carrier advertising and sponsorship program our success in marketing and selling health insurance plans and our unit cost of acquisition our ability to effectively manage our operations as our business evolves and execute on our business transformation plan and other strategic initiatives the need for health insurance carrier and regulatory approvals in connection with the marketing of Medicare-related insurance products changes in the market for private health insurance consumer satisfaction of our service and actions we take to improve the quality of enrollments changes in member conversion rates changes in commission rates our ability to sell qualified health insurance plans to subsidy-eligible individuals and to enroll subsidy-eligible individuals through government-run health insurance exchanges our ability to derive desired benefits from investments in our business, including membership growth and retention initiatives our reliance on marketing partners the success and cost of our marketing efforts, including branding, online advertising, direct-to-consumer mail, email, social media, telephone, television, radio and other marketing efforts timing of receipt and accuracy of commission reports payment practices of health insurance carriers dependence on our operations in China the restrictions in our debt obligations the restrictions in our investment agreement with our convertible preferred stock investor our ability to raise additional capital compliance with insurance, privacy, cybersecurity and other laws and regulations the outcome of litigation in which we may from time to time be involved the performance, reliability and availability of our information technology systems, ecommerce platform and underlying network infrastructure, including any new systems we may implement public health crises, pandemics, natural disasters, changing climate conditions and other extreme events general economic conditions, including inflation, recession, financial, banking and credit market disruptions and our ability to effectively administer our self-insurance program. Other factors that could cause operating, financial and other results to differ are described in our most recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K filed with the Securities and Exchange Commission and available on the Investor Relations page of our website at https ir.ehealthinsurance.com and on the Securities and Exchange Commission's website at www.sec.gov.

All forward-looking statements in this press release are based on information available to us as of the date hereof, and we do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law.

Investor Relations Contact

Kate Sidorovich, CFA

Senior Vice President, Investor Relations Strategy

investors ehealth.com

https ir.ehealthinsurance.com

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, unaudited)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts, unaudited)

* Percentage calculated is not meaningful.

Note See accompanying footnotes on page 15.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)

(in thousands, unaudited)

We evaluate our business performance and manage our operations as two distinct reporting segments Medicare and Employer and Individual ("E I"). In the fourth quarter of 2023, the Individual, Family and Small Business segment was renamed "Employer and Individual". The E I segment name change was to the name only and had no impact on our historical financial position, results of operations, cash flow or segment level results previously reported. This identification of reportable segments is consistent with how the segments report to and are managed by our chief executive officer, who is our chief operating decision maker ("CODM"). The Medicare segment consists primarily of amounts earned from our sale of Medicare-related health insurance plans, including Medicare Advantage, Medicare Supplement and Medicare Part D prescription drug plans (collectively, the "Medicare Plans"), fees earned for the performance of administrative services, amounts earned from our non-broker of record arrangements, our performance of various post-enrollment services for members and to a lesser extent, amounts earned from our sale of ancillary products sold to our Medicare-eligible customers, including but not limited to, dental and vision plans, as well as amounts we are paid in connection with our advertising program for marketing and other services. The E I segment consists primarily of amounts earned from our sale of individual, family and small business health insurance plans, including both qualified and non-qualified plans, and ancillary products sold to our non-Medicare-eligible customers, including but not limited to, dental, vision, and short-term insurance. To a lesser extent, the E I segment consists of amounts earned from our online sponsorship and advertising program that allows carriers to purchase advertising space in specific markets in a sponsorship area on our website and our technology licensing and lead referral activities.

Marketing and advertising, customer care and enrollment, technology and content and general and administrative operating expenses that are directly attributable to a segment are reported within the applicable segment. Indirect marketing and advertising, customer care and enrollment and technology and content operating expenses are allocated to each segment based on usage. Corporate consists of other general and administrative operating expenses, excluding stock-based compensation expense, depreciation and amortization, which are managed in a corporate shared services environment and, since they are not the responsibility of segment operating management, are not allocated to the reportable segments and are instead reported within Corporate. Our results below reflect our updated methodology used in allocating certain expenses beginning in the first quarter of fiscal 2024, and results from the prior period presented have been recast to conform with the current period presentation. See accompanying footnotes on page 15 for further information.

The performance of each reportable segment is evaluated based on several factors, including revenue and segment profit (loss), which is calculated as total revenue for the applicable segment less direct and indirect allocated marketing and advertising, customer care and enrollment, technology and content and general and administrative operating expenses, excluding stock-based compensation expense, depreciation and amortization, impairment, restructuring and other charges, interest expense and other income (expense), net. Senior management uses segment profit (loss) to evaluate segment performance because they believe this measure is indicative of performance trends and the overall earnings potential of each segment.

Note See accompanying footnotes on page 15.

(in thousands, unaudited)

Our commission revenue results from approval of an application from health insurance carriers, which we define as our customers under Accounting Standards Codification 606 - Revenue from Contracts with Customers ("ASC 606"). Our commission revenue is primarily comprised of commissions from health insurance carriers which is computed using the estimated constrained lifetime values of commission payments that we expect to receive. Our commissions may include certain bonus payments, which are generally based on our attaining predetermined target sales levels or other objectives, as determined by the health insurance carriers. For Medicare Advantage and Medicare Part D prescription drug plans, our commissions also include regular payments related to administrative services we perform.

The following table presents commission revenue by product for the periods indicated

The following table presents a summary of commission revenue by segment for the periods indicated

(a) These amounts reflect our revised estimates of cash collections for certain members approved prior to the relevant reporting period that are recognized as adjustments to revenue within the relevant reporting period. The net commission revenue from members approved in prior periods, or net adjustment revenue, includes both increases in revenue for certain prior period cohorts as well as reductions in revenue for certain prior period cohorts. The total reductions to revenue from members approved in prior periods were $3.1 million and $2.9 million for the three months ended June 30, 2024 and 2023, respectively, and $3.6 million and $2.9 million for the six months ended June 30, 2024 and 2023, respectively. These reductions to revenue primarily relate to the Medicare segment.

SUMMARY OF SELECTED METRICS

(in thousands, except member and per member data, unaudited)

Selected Metrics - Second Quarter of 2024

Note See accompanying footnotes on page 15.

SUMMARY OF SELECTED METRICS

(in thousands, except member and per member data, unaudited)

Selected Metrics - Six Months Ended June 30, 2024

Note See accompanying footnotes on page 15.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

Reconciliation of GAAP Operating Costs and Expenses to Non-GAAP Operating Costs and Expenses(1) (in thousands)

Reconciliation of GAAP Total Revenue to Non-GAAP Total Revenue Excluding Net Adjustment Revenue(1) (in thousands)

Note See accompanying footnotes on page 15.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

Reconciliation of GAAP Net Loss to Non-GAAP Net Loss(1) and GAAP Net Loss to Adjusted EBITDA Excluding Net Adjustment Revenue(1) (in thousands)

Reconciliation of GAAP Net Loss Attributable to Common Stockholders to Adjusted EBITDA(1) (in thousands) and Adjusted EBITDA Margin(1)

Note See accompanying footnotes on page 15.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

Reconciliation of Medicare Segment Revenue to Non-GAAP Medicare Segment Revenue(1) (in thousands)

Reconciliation of E I Segment Revenue to Non-GAAP E I Segment Revenue(1) (in thousands)

Reconciliation of Segment Profit (Loss) to Segment Profit (Loss) Excluding Net Adjustment Revenue(1), Medicare Segment Profit (Loss) to Medicare Segment Profit (Loss) Excluding Net Adjustment Revenue(1) and E I Segment Profit (Loss) to E I Segment Profit (Loss) Excluding Net Adjustment Revenue(1) (in thousands)

Note See accompanying footnotes on page 15.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

Reconciliation of Guidance GAAP Net Loss Attributable to Common Stockholders to Adjusted EBITDA(1) (in millions)

Reconciliation of Guidance GAAP Total Revenue to Guidance Non-GAAP Total Revenue Excluding Net Adjustment Revenue(1) (in millions)

Note See accompanying footnotes on page 15.

Footnotes to Preceding Financial Statements and Metrics