CHICAGO, Nov. 10,
2022 /PRNewswire/ -- GoHealth, Inc. (NASDAQ: GOCO), a
leading health insurance marketplace and Medicare-focused digital
health company, today announced financial results for the three and
nine months ended September 30,
2022.
- YTD 2022 positive cash flow from operations of $101.9 million compared to negative cash flow
from operations of $72.4 million in
the prior year period.
- Third quarter 2022 Medicare Submitted Policies of 132,831
decreased 34% compared to the prior year period. YTD 2022 Medicare
Submitted Policies of 611,385 increased 11% compared to the prior
year period.
- Third quarter 2022 net revenue of $133.1
million decreased 37% compared to the prior year period. YTD
2022 net revenue of $562.3 million
decreased 8% compared to the prior year period.
- Third quarter 2022 net loss of $74.7
million compared to a net loss of $55.5 million in the prior year period. YTD
2022 net loss of $225.6 million
compared to a net loss of $102.0
million in the prior year period.
- Third quarter 2022 Adjusted EBITDA1 of negative
$14.3 million compared to Adjusted
EBITDA1 of negative $14.2
million in the prior year period. YTD 2022 Adjusted
EBITDA1 of negative $35.0
million compared to Adjusted EBITDA1 of
$32.2 million in the prior year
period.
"During the third quarter, GoHealth went back to basics with a
clear focus on the fundamentals of the business and an aim to put
the beneficiary at the center of everything we do. We are making
meaningful progress on our transformation through our strategic
initiatives and diversification into Encompass. This has materially
changed the dynamics of cash flow for our business and we're
confident these positive trends will continue as we lean further
into our Encompass solution," said Vijay
Kotte, GoHealth's Chief Executive Officer.
"The market is in need of unbiased third parties to help support
the Medicare shopping and enrollment process. The challenge has
been the misaligned rewards structure and the lack of trust in the
industry. GoHealth is leveraging our Encompass solution, our health
plan relationships, our proprietary technology, and our
experienced, high-quality sales agents to solve these industry
challenges and act as a trusted partner to beneficiaries," said
Kotte.
Mr. Kotte continued, "I believe our end-to-end Encompass
solution will be a game changer for our customers, for health
plans, and for the financial profile of our business. So far this
Annual Enrollment Period, inclusive of a significant adoption of
Encompass, we're experiencing a 70% higher conversion rate than we
were last year at this time."
"I'm very pleased with the progress we've made in just a few
short months. I believe GoHealth is best positioned to seize the
opportunities at hand," concluded Mr. Kotte.
Conference Call Details
The Company will host a conference call today, Thursday,
November 10, 2022 at 5:00 p.m.
(ET) to discuss its financial results. Participants
can pre-register for the conference call at the following link:
https://register.vevent.com/register/BIe3f052938613486583fb292fcf47ae56.
A live audio webcast of the conference call will be available via
GoHealth's Investor Relations website,
https://investors.gohealth.com/. A replay of the call will be
available via webcast for on-demand listening shortly after the
completion of the call.
About GoHealth, Inc.:
As a leading health insurance marketplace and Medicare-focused
digital health company, GoHealth's mission is to improve access to
healthcare in America. Enrolling in a health insurance plan can be
confusing for customers, and the seemingly small differences
between plans can lead to significant out-of-pocket costs or lack
of access to critical medicines and even providers. GoHealth
combines cutting-edge technology, data science and deep industry
expertise to match customers with the healthcare policy and carrier
that is right for them. GoHealth has enrolled millions of people in
Medicare plans and individual and family plans. For more
information, visit https://www.gohealth.com.
Investor Relations:
IR@gohealth.com
Media Relations:
Pressinquiries@gohealth.com
(1)
|
Adjusted EBITDA is a
non-GAAP measure. For a definition of Adjusted EBITDA and a
reconciliation to the most comparable GAAP measure, please see
below.
|
Forward-Looking Statements
This release contains forward-looking statements. We
intend such forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements contained in
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All
statements other than statements of historical facts contained in
this press release may be forward-looking statements. Statements
regarding our future results of operations and financial position,
business strategy and plans and objectives of management for future
operations, including, among others, statements regarding our
expected growth, level of cash flow, future capital expenditures
and debt service obligations are forward-looking statements.
In some cases, you can identify forward-looking statements by
terms, such as "may," "will," "should," "expects," "plans,"
"anticipates," "could," "intends," "targets," "projects,"
"contemplates," "believes," "estimates," "predicts," "potential" or
"continue" or the negative of these terms or other similar
expressions. Accordingly, we caution you that any such
forward-looking statements are not guarantees of future performance
and are subject to risks, assumptions and uncertainties that are
difficult to predict. Although the we believe that the expectations
reflected in these forward-looking statements are reasonable as of
the date made, actual results may prove to be materially different
from the results expressed or implied by the forward-looking
statements.
These forward-looking statements speak only as of the date of
this release and are subject to a number of important factors that
could cause actual results to differ materially from those in the
forward-looking statements, including, but are not limited to, the
following: the marketing and sale of Medicare plans are
subject to numerous, complex and frequently changing laws,
regulations and guidelines; our business may be harmed if we lose
our relationships with carriers or if our relationships with
carriers change; our failure to grow our customer base or retain
our existing customers; carriers may reduce the commissions paid to
us and change their underwriting practices in ways that reduce the
number of, or impact the renewal or approval rates of, insurance
policies sold through our platform; factors that impact our
estimate of LTV (as defined below) may be adversely impacted; our
management and independent auditors have identified a material
weakness in our internal controls over financial reporting, and we
may be unable to develop, implement and maintain appropriate
controls in future periods, which may lead to errors or omissions
in our financial statements; the potential delisting of our common
stock from the Nasdaq Global Market; volatility in general economic
conditions, including inflation, interest rates, and other
commodity prices and exchange rates may impact our financial
position and performance; our ability to borrow under the Credit
Agreement is subject to ongoing compliance with a number of
financial covenants, affirmative covenants, and other restrictions,
which may limit our operations and our ability to take certain
actions; we currently depend on a small group of carriers for a
substantial portion of our revenue; information technology system
failures could interrupt our operations; our ability to sell
Medicare-related health insurance plans is largely dependent on our
licensed health insurance agents; operating and growing our
business may require additional capital; whether our Encompass
solution will achieve anticipated benefits; our strategic focus on
cash flow optimization may lead to decreased revenue or otherwise
adversely affect our business; we may lose key employees or fail to
attract qualified employees; our operations may be adversely
impacted by a reduction in employee headcount or other similar
actions; the Founders (as defined in our Annual Report on Form 10-K
for the year ended December 31, 2021
(the "2021 Form 10-K")) and Centerbridge (as defined in the 2021
Form 10-K) have significant influence over us, including control
over decisions that require the approval of stockholders; and other
important factors described in the section titled "Risk Factors" in
our 2021 Form 10-K, and the section titled "Management's Discussion
and Analysis of Financial Condition and Results of Operations" in
our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2022, and in our other
filings with the Securities and Exchange Commission.
The foregoing factors should not be construed as exhaustive and
should be read together with the other cautionary statements
included in this press release, as well as the cautionary
statements and other risk factors set forth in the 2021 Form 10-K,
Quarterly Report on Form 10-Q for the first quarter ended
March 31, 2022, Quarterly Report on
Form 10-Q for the second quarter ended June
30, 2022, and other SEC filings. If one or more events
related to these or other risks or uncertainties materialize, or
our underlying assumptions prove to be incorrect, actual results
may differ materially from what we anticipate. Many of the
important factors that will determine these results are beyond our
ability to control or predict. Accordingly, you should not place
undue reliance on any such forward-looking statements. Any
forward-looking statement speaks only as of the date on which it is
made, and, except as otherwise required by law, we do not undertake
any obligation to publicly update or review any forward-looking
statement, whether as a result of new information, future
developments or otherwise. New factors emerge from time to time,
and it is not possible for us to predict which will arise. In
addition, we cannot assess the impact of each factor on our
business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those
contained in any forward-looking statements.
Use of Non-GAAP Financial Measures and Key Performance
Indicators
In this press release, we use supplemental measures of our
performance that are derived from our consolidated financial
information, but which are not presented in our Consolidated
Financial Statements prepared in accordance with Generally Accepted
Accounting Principles ("GAAP"). These non-GAAP financial measures
include net income (loss) before interest expense, income tax
expense (benefit) and depreciation and amortization expense
("EBITDA"); Adjusted EBITDA and Adjusted EBITDA margin. Adjusted
EBITDA is the primary financial performance measure used by
management to evaluate its business and monitor its results of
operations.
Adjusted EBITDA represents, as applicable for the period, EBITDA
as further adjusted for certain items summarized below in this
press release. Adjusted EBITDA margin represents Adjusted
EBITDA divided by net revenues.
We use non-GAAP financial measures to supplement financial
information presented on a GAAP basis. We believe that excluding
certain items from our GAAP results allows management to better
understand our consolidated financial performance from period to
period and better project our future consolidated financial
performance as forecasts are developed at a level of detail
different from that used to prepare GAAP-based financial measures.
Moreover, we believe these non-GAAP financial measures provide our
stakeholders with useful information to help them evaluate our
operating results by facilitating an enhanced understanding of our
operating performance and enabling them to make more meaningful
period to period comparisons. There are limitations to the use of
the non-GAAP financial measures presented in this press release.
For example, our non-GAAP financial measures may not be comparable
to similarly titled measures of other companies. Other companies,
including companies in our industry, may calculate non-GAAP
financial measures differently than we do, limiting the usefulness
of those measures for comparative purposes.
The non-GAAP financial measures are not meant to be considered
as indicators of performance in isolation from or as a substitute
for net income (loss) prepared in accordance with GAAP, and should
be read only in conjunction with financial information presented on
a GAAP basis. Reconciliations of each of EBITDA and Adjusted EBITDA
to its most directly comparable GAAP financial measure, net income
(loss), are presented in the tables below in this press release. We
encourage you to review the reconciliations in conjunction with the
presentation of the non-GAAP financial measures for each of the
periods presented. In future periods, we may exclude similar items,
may incur income and expenses similar to these excluded items and
include other expenses, costs and non-recurring items.
Glossary
"Adjusted EBITDA" represents, as applicable for the
period, EBITDA as further adjusted for certain items summarized
below in this press release.
"Adjusted EBITDA Margin" refers to Adjusted EBITDA
divided by net revenues.
"Approved Submissions" refer to Submitted Policies
approved by carriers for the identified product during the
indicated period.
"LTV Per Approved Submission" refers to the Lifetime
Value of Commissions per Approved Submission, which we define as
(i) aggregate commissions estimated to be collected over the
estimated life of all commissionable Approved Submissions for the
relevant period based on multiple factors, including but not
limited to, contracted commission rates, carrier mix and expected
policy persistency with applied constraints, excluding revenue
adjustments recorded in the period, but relating to performance
obligations satisfied in prior periods, divided by (ii) the number
of commissionable Approved Submissions for such period.
"Submitted Policies" refer to completed applications
that, with respect to each such application, the consumer has
authorized us to submit to the carrier.
The following tables set forth the components of our results of
operations for the periods indicated (unaudited):
|
|
(in thousands, except
percentages and per share amounts)
|
|
Three months ended
Sep.
30, 2022
|
|
Three months ended
Sep.
30, 2021
|
|
|
|
|
|
Dollars
|
|
% of Net
Revenues
|
|
Dollars
|
|
% of Net
Revenues
|
|
$
Change
|
|
%
Change
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commission
|
|
$ 87,058
|
|
65.4 %
|
|
$
174,948
|
|
82.6 %
|
|
$
(87,890)
|
|
(50.2) %
|
Enterprise
|
|
45,994
|
|
34.6 %
|
|
36,786
|
|
17.4 %
|
|
9,208
|
|
25.0 %
|
Net revenues
|
|
133,052
|
|
100.0 %
|
|
211,734
|
|
100.0 %
|
|
(78,682)
|
|
(37.2) %
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
48,044
|
|
36.1 %
|
|
53,632
|
|
25.3 %
|
|
(5,588)
|
|
(10.4) %
|
Marketing and
advertising
|
|
22,661
|
|
17.0 %
|
|
59,511
|
|
28.1 %
|
|
(36,850)
|
|
(61.9) %
|
Customer care and
enrollment
|
|
51,153
|
|
38.4 %
|
|
86,775
|
|
41.0 %
|
|
(35,622)
|
|
(41.1) %
|
Technology
|
|
11,061
|
|
8.3 %
|
|
11,651
|
|
5.5 %
|
|
(590)
|
|
(5.1) %
|
General and
administrative
|
|
25,611
|
|
19.2 %
|
|
24,295
|
|
11.5 %
|
|
1,316
|
|
5.4 %
|
Amortization of
intangible assets
|
|
23,514
|
|
17.7 %
|
|
23,514
|
|
11.1 %
|
|
—
|
|
— %
|
Operating lease
impairment charges
|
|
350
|
|
0.3 %
|
|
1,062
|
|
0.5 %
|
|
(712)
|
|
N/M
|
Restructuring and
other related charges
|
|
9,797
|
|
7.4 %
|
|
—
|
|
— %
|
|
9,797
|
|
N/M
|
Total operating
expenses
|
|
192,191
|
|
144.4 %
|
|
260,440
|
|
123.0 %
|
|
(68,249)
|
|
(26.2) %
|
Income (loss) from
operations
|
|
(59,139)
|
|
(44.4) %
|
|
(48,706)
|
|
(23.0) %
|
|
(10,433)
|
|
21.4 %
|
Interest
expense
|
|
15,630
|
|
11.7 %
|
|
6,921
|
|
3.3 %
|
|
8,709
|
|
125.8 %
|
Other (income)
expense
|
|
(115)
|
|
(0.1) %
|
|
(30)
|
|
— %
|
|
(85)
|
|
N/M
|
Income (loss) before
income taxes
|
|
(74,654)
|
|
(56.1) %
|
|
(55,597)
|
|
(26.3) %
|
|
(19,057)
|
|
34.3 %
|
Income tax expense
(benefit)
|
|
—
|
|
— %
|
|
(79)
|
|
— %
|
|
79
|
|
N/M
|
Net income
(loss)
|
|
$
(74,654)
|
|
(56.1) %
|
|
$
(55,518)
|
|
(26.2) %
|
|
$
(19,136)
|
|
34.5 %
|
Net income (loss)
attributable to noncontrolling interests
|
|
(44,649)
|
|
(33.6) %
|
|
(35,278)
|
|
(16.7) %
|
|
(9,371)
|
|
26.6 %
|
Net income (loss)
attributable to GoHealth, Inc.
|
|
$
(30,005)
|
|
(22.6) %
|
|
$
(20,240)
|
|
(9.6) %
|
|
$
(9,765)
|
|
48.2 %
|
Net income (loss)
per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share of common stock — basic and diluted
|
|
$
(0.23)
|
|
|
|
$
(0.18)
|
|
|
|
|
|
|
Weighted-average shares
of Class A common stock outstanding —
basic and diluted
|
|
132,378
|
|
|
|
113,938
|
|
|
|
|
|
|
Non-GAAP financial
measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
(30,959)
|
|
|
|
$ (22,606)
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$ (14,327)
|
|
|
|
$ (14,155)
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
|
(10.8)
|
%
|
|
|
(6.7)
|
%
|
|
|
|
|
|
_________________________
|
|
|
|
|
|
|
|
|
|
|
|
|
N/M = Not
meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands, except
percentages and per share amounts)
|
|
Nine months ended
Sep.
30, 2022
|
|
Nine months ended
Sep.
30, 2021
|
|
|
|
|
|
Dollars
|
|
% of Net
Revenues
|
|
Dollars
|
|
% of Net
Revenues
|
|
$
Change
|
|
%
Change
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commission
|
|
$
414,735
|
|
73.8 %
|
|
$
496,437
|
|
81.0 %
|
|
$
(81,702)
|
|
(16.5) %
|
Enterprise
|
|
147,564
|
|
26.2 %
|
|
116,378
|
|
19.0 %
|
|
31,186
|
|
26.8 %
|
Net revenues
|
|
562,299
|
|
100.0 %
|
|
612,815
|
|
100.0 %
|
|
(50,516)
|
|
(8.2) %
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
|
167,041
|
|
29.7 %
|
|
139,449
|
|
22.8 %
|
|
27,592
|
|
19.8 %
|
Marketing and
advertising
|
|
151,408
|
|
26.9 %
|
|
169,730
|
|
27.7 %
|
|
(18,322)
|
|
(10.8) %
|
Customer care and
enrollment
|
|
196,150
|
|
34.9 %
|
|
195,796
|
|
32.0 %
|
|
354
|
|
0.2 %
|
Technology
|
|
34,569
|
|
6.1 %
|
|
33,251
|
|
5.4 %
|
|
1,318
|
|
4.0 %
|
General and
administrative
|
|
90,859
|
|
16.2 %
|
|
69,277
|
|
11.3 %
|
|
21,582
|
|
31.2 %
|
Amortization of
intangible assets
|
|
70,543
|
|
12.5 %
|
|
70,543
|
|
11.5 %
|
|
—
|
|
— %
|
Operating lease
impairment charges
|
|
25,345
|
|
4.5 %
|
|
1,062
|
|
0.2 %
|
|
24,283
|
|
NM
|
Restructuring and
other related charges
|
|
11,872
|
|
2.1 %
|
|
—
|
|
— %
|
|
11,872
|
|
NM
|
Total operating
expenses
|
|
747,787
|
|
133.0 %
|
|
679,108
|
|
110.8 %
|
|
68,679
|
|
10.1 %
|
Income (loss) from
operations
|
|
(185,488)
|
|
(33.0) %
|
|
(66,293)
|
|
(10.8) %
|
|
(119,195)
|
|
179.8 %
|
Interest
expense
|
|
39,752
|
|
7.1 %
|
|
23,886
|
|
3.9 %
|
|
15,866
|
|
66.4 %
|
Loss on extinguishment
of debt
|
|
—
|
|
— %
|
|
11,935
|
|
1.9 %
|
|
(11,935)
|
|
N/M
|
Other (income)
expense
|
|
(65)
|
|
— %
|
|
27
|
|
— %
|
|
(92)
|
|
(340.7) %
|
Income (loss) before
income taxes
|
|
(225,175)
|
|
(40.0) %
|
|
(102,141)
|
|
(16.7) %
|
|
(123,034)
|
|
120.5 %
|
Income tax expense
(benefit)
|
|
472
|
|
0.1 %
|
|
(142)
|
|
— %
|
|
614
|
|
N/M
|
Net income
(loss)
|
|
$
(225,647)
|
|
(40.1) %
|
|
$
(101,999)
|
|
(16.6) %
|
|
$ (123,648)
|
|
121.2 %
|
Net loss attributable
to noncontrolling interests
|
|
(138,340)
|
|
(24.6) %
|
|
(67,668)
|
|
(11.0) %
|
|
$
(70,672)
|
|
104.4 %
|
Net loss
attributable to GoHealth, Inc.
|
|
$
(87,307)
|
|
(15.5) %
|
|
$
(34,331)
|
|
(5.6) %
|
|
$
(52,976)
|
|
154.3 %
|
Net income (loss)
per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share of common stock — basic and diluted
|
|
$
(0.70)
|
|
|
|
$
(0.33)
|
|
|
|
|
|
|
Weighted-average shares
of Class A common stock outstanding —
basic and diluted
|
|
124,401
|
|
|
|
102,939
|
|
|
|
|
|
|
Non-GAAP financial
measures:
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
(104,999)
|
|
|
|
$
(1,080)
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$ (34,995)
|
|
|
|
$ 32,197
|
|
|
|
|
|
|
Adjusted EBITDA
margin
|
|
(6.2)
|
%
|
|
|
5.3
|
%
|
|
|
|
|
|
_________________________
|
|
|
|
|
|
|
|
|
|
|
|
|
NM = Not
meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
The following tables set forth the reconciliations of GAAP net
income (loss) to EBITDA and Adjusted EBITDA for the periods
indicated (unaudited):
|
|
Three months ended
Sep. 30,
|
(in
thousands)
|
|
2022
|
|
2021
|
Net revenues
|
|
$
133,052
|
|
$
211,734
|
Net income
(loss)
|
|
(74,654)
|
|
(55,518)
|
Interest
expense
|
|
15,630
|
|
6,921
|
Income tax expense
(benefit)
|
|
—
|
|
(79)
|
Depreciation and
amortization expense
|
|
28,065
|
|
26,070
|
EBITDA
|
|
(30,959)
|
|
(22,606)
|
Restructuring and
other related charges (1)
|
|
9,797
|
|
—
|
Share-based
compensation expense (2)
|
|
6,456
|
|
7,389
|
Operating lease
impairment charges (3)
|
|
350
|
|
1,062
|
Professional services
(4)
|
|
29
|
|
—
|
Adjusted
EBITDA
|
|
$ (14,327)
|
|
$ (14,155)
|
Adjusted EBITDA
margin
|
|
(10.8) %
|
|
(6.7) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents employee
termination benefits and other associated costs related to
restructuring activities.
|
(2)
|
Represents non-cash
share-based compensation expense relating to equity awards, as well
share-based compensation expense relating to liability classified
awards that will be settled in cash.
|
(3)
|
Represents operating
lease impairment charges, reducing the carrying value of the
associated ROU assets and leasehold improvements to the estimated
fair values.
|
(4)
|
Represents costs
associated with non-recurring consulting fees and other
professional services.
|
|
|
Nine months ended
Sep. 30,
|
(in
thousands)
|
|
2022
|
|
2021
|
Net revenues
|
|
$
562,299
|
|
$
612,815
|
Net income
(loss)
|
|
(225,647)
|
|
(101,999)
|
Interest
expense
|
|
39,752
|
|
23,886
|
Income tax expense
(benefit)
|
|
472
|
|
(142)
|
Depreciation and
amortization expense
|
|
80,424
|
|
77,175
|
EBITDA
|
|
(104,999)
|
|
(1,080)
|
Share-based
compensation expense (1)
|
|
25,868
|
|
20,100
|
Operating lease
impairment charges (2)
|
|
25,345
|
|
1,062
|
Restructuring and
other related charges (3)
|
|
11,872
|
|
—
|
Professional services
(4)
|
|
3,979
|
|
—
|
Severance costs
(5)
|
|
2,940
|
|
—
|
Loss on extinguishment
of debt (6)
|
|
—
|
|
11,935
|
Legal fees
(7)
|
|
—
|
|
180
|
Adjusted
EBITDA
|
|
$ (34,995)
|
|
$
32,197
|
Adjusted EBITDA
margin
|
|
(6.2) %
|
|
5.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents non-cash
share-based compensation expense relating to equity awards, as well
share-based compensation expense relating to liability classified
awards that will be settled in cash.
|
(2)
|
Represents operating
lease impairment charges, reducing the carrying value of the
associated ROU assets and leasehold improvements to the estimated
fair values.
|
(3)
|
Represents employee
termination benefits and other associated costs related to
restructuring activities.
|
(4)
|
Represents costs
associated with non-recurring consulting fees and other
professional services.
|
(5)
|
Represents costs
associated with the termination of employment and associated fees
unrelated to restructuring activities.
|
(6)
|
Represents the loss
on debt extinguishment related to the Initial Term Loan
Facility.
|
(7)
|
Represents
non-recurring legal fees unrelated to our core
operations.
|
The following table summarizes share-based compensation expense
by operating function for the periods indicated (unaudited):
|
|
|
Three months ended
Sep. 30,
|
|
Nine months ended
Sep. 30,
|
(in
thousands)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Marketing and
advertising
|
|
$
556
|
|
$
698
|
|
$
1,212
|
|
$
1,462
|
Customer care and
enrollment
|
|
738
|
|
957
|
|
1,993
|
|
2,796
|
Technology
|
|
884
|
|
910
|
|
2,493
|
|
2,791
|
General and
administrative
|
|
4,277
|
|
4,824
|
|
20,170
|
|
13,051
|
Total share-based
compensation expense
|
|
$
6,456
|
|
$
7,389
|
|
$
25,868
|
|
$
20,100
|
The following table sets forth our balance sheets for the
periods indicated (unaudited):
|
(in thousands, except
per share amounts)
|
|
Sep. 30,
2022
|
|
Dec. 31,
2021
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
215,403
|
|
$
84,361
|
Accounts receivable,
net of allowance for doubtful accounts of $271 in 2022 and $558 in
2021
|
|
4,835
|
|
17,276
|
Commissions receivable
- current
|
|
217,937
|
|
268,663
|
Prepaid expense and
other current assets
|
|
29,972
|
|
58,695
|
Total current
assets
|
|
468,147
|
|
428,995
|
Commissions receivable
- non-current
|
|
959,105
|
|
993,844
|
Operating lease ROU
asset
|
|
21,436
|
|
23,462
|
Other long-term
assets
|
|
1,932
|
|
3,608
|
Property, equipment,
and capitalized software, net
|
|
26,930
|
|
24,273
|
Intangible assets,
net
|
|
524,126
|
|
594,669
|
Total
assets
|
|
$
2,001,676
|
|
$
2,068,851
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
9,370
|
|
$
39,843
|
Accrued
liabilities
|
|
32,316
|
|
52,788
|
Commissions payable -
current
|
|
69,501
|
|
104,160
|
Short-term operating
lease liability
|
|
9,381
|
|
6,126
|
Deferred
revenue
|
|
114,181
|
|
536
|
Current portion of
long-term debt
|
|
5,270
|
|
5,270
|
Other current
liabilities
|
|
15,402
|
|
8,344
|
Total current
liabilities
|
|
255,421
|
|
217,067
|
Non-current
liabilities:
|
|
|
|
|
Commissions payable -
non-current
|
|
305,909
|
|
274,403
|
Long-term operating
lease liability
|
|
38,671
|
|
19,776
|
Long-term debt, net of
current portion
|
|
660,387
|
|
665,115
|
Other non-current
liabilities
|
|
3,624
|
|
—
|
Total non-current
liabilities
|
|
1,008,591
|
|
959,294
|
Commitments and
Contingencies (Note 11)
|
|
|
|
|
Series A redeemable
convertible preferred stock — $0.0001 par value; 50 shares
authorized; 50 shares issued and
outstanding at September 30, 2022. No shares issued and
outstanding as of December 31, 2021. Liquidation preference
of $1,001 per share at September 30, 2022.
|
|
48,426
|
|
—
|
Series A-1 redeemable
convertible preferred stock— $0.0001 par value; 200 shares
authorized; no shares issued and
outstanding at September 30, 2022 and December 31, 2021.
|
|
—
|
|
—
|
Stockholders'
equity:
|
|
|
|
|
Class A common stock –
$0.0001 par value; 1,100,000 shares authorized; 133,462 and 115,487
shares issued;
133,271 and 115,487 shares outstanding at September 30, 2022 and
December 31, 2021, respectively.
|
|
13
|
|
11
|
Class B common stock –
$0.0001 par value; 578,192 and 587,360 shares authorized; 196,184
and 205,352 shares
issued and outstanding at September 30, 2022 and December 31, 2021,
respectively.
|
|
20
|
|
21
|
Preferred stock –
$0.0001 par value; 20,000 shares authorized (including 50 shares of
Series A redeemable
convertible preferred stock authorized and 200 shares of
Series A-1 redeemable convertible preferred stock
authorized); 50 shares issued and outstanding at September 30, 2022
and no shares issued and outstanding at
December 31, 2021.
|
|
—
|
|
—
|
Treasury stock – at
cost; 191 shares of Class A common stock at September 30,
2022
|
|
(345)
|
|
—
|
Additional paid-in
capital
|
|
621,118
|
|
561,447
|
Accumulated other
comprehensive income (loss)
|
|
(171)
|
|
(59)
|
Accumulated
deficit
|
|
(295,691)
|
|
(208,317)
|
Total stockholders'
equity attributable to GoHealth, Inc.
|
|
324,944
|
|
353,103
|
Non-controlling
interests
|
|
364,294
|
|
539,387
|
Total stockholders'
equity
|
|
689,238
|
|
892,490
|
Total liabilities,
redeemable convertible preferred stock and stockholders'
equity
|
|
$
2,001,676
|
|
$
2,068,851
|
The following table sets forth our statements of cash flows for
the periods indicated (unaudited):
|
|
|
Nine months ended
Sep.
30,
|
(in
thousands)
|
|
2022
|
|
2021
|
Operating
Activities
|
|
|
|
|
Net loss
|
|
$ (225,647)
|
|
$ (101,999)
|
Adjustments to
reconcile net income (loss) to net cash provided by (used in)
operating activities:
|
|
|
|
|
Share-based
compensation
|
|
22,776
|
|
20,100
|
Depreciation and
amortization
|
|
9,881
|
|
6,632
|
Amortization of
intangible assets
|
|
70,543
|
|
70,543
|
Amortization of debt
discount and issuance costs
|
|
2,163
|
|
1,696
|
Loss on extinguishment
of debt
|
|
—
|
|
11,935
|
Operating lease
impairment charges
|
|
25,345
|
|
1,062
|
Non-cash restructuring
charges
|
|
976
|
|
—
|
Non-cash lease
expense
|
|
4,064
|
|
3,765
|
Other non-cash
items
|
|
(517)
|
|
(607)
|
Changes in assets
and liabilities:
|
|
|
|
|
Accounts
receivable
|
|
12,852
|
|
6,173
|
Commissions
receivable
|
|
85,522
|
|
(160,982)
|
Prepaid expenses and
other assets
|
|
29,608
|
|
10,471
|
Accounts
payable
|
|
(30,573)
|
|
18,298
|
Accrued
liabilities
|
|
(20,818)
|
|
5,693
|
Deferred
revenue
|
|
113,645
|
|
(175)
|
Commissions
payable
|
|
(3,153)
|
|
36,233
|
Operating lease
liabilities
|
|
(5,885)
|
|
(3,678)
|
Other
liabilities
|
|
11,121
|
|
2,421
|
Net cash provided by
(used in) operating activities
|
|
101,903
|
|
(72,419)
|
Investing
Activities
|
|
|
|
|
Purchases of property,
equipment and software
|
|
(12,096)
|
|
(19,269)
|
Net cash used in
investing activities
|
|
(12,096)
|
|
(19,269)
|
Financing
Activities
|
|
|
|
|
Proceeds from sale of
Series A redeemable convertible preferred stock
|
|
50,000
|
|
—
|
Issuance cost payments
from issuance of Series A redeemable convertible preferred
stock
|
|
(1,641)
|
|
—
|
Proceeds from
borrowings
|
|
—
|
|
335,000
|
Repayment of
borrowings
|
|
(3,953)
|
|
(297,903)
|
Call premium paid for
debt extinguishment
|
|
—
|
|
(5,910)
|
Debt issuance cost
payments
|
|
(2,763)
|
|
(1,608)
|
Principal payments
under finance lease obligations
|
|
(103)
|
|
(231)
|
Cash received on
advancement to NVX Holdings, Inc.
|
|
—
|
|
3,395
|
Net cash (used in)
provided by financing activities
|
|
41,540
|
|
32,743
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
(305)
|
|
(68)
|
Increase (decrease) in
cash and cash equivalents
|
|
131,042
|
|
(59,013)
|
Cash and cash
equivalents at beginning of period
|
|
84,361
|
|
144,234
|
Cash and cash
equivalents at end of period
|
|
$
215,403
|
|
$
85,221
|
Supplemental
Disclosure of Cash Flow Information
|
|
|
|
|
Non-cash investing
and financing activities:
|
|
|
|
|
Purchases of property,
equipment and software included in accounts payable
|
|
$
100
|
|
$
2,734
|
The following tables set forth operating segment results for the
periods indicated (unaudited):
|
(in thousands, except
percentages)
|
|
Three months ended
Sep.
30, 2022
|
|
Three months ended
Sep.
30, 2021
|
|
|
|
|
|
Dollars
|
|
% of Net
Revenues
|
|
Dollars
|
|
% of Net
Revenues
|
|
$
Change
|
|
%
Change
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicare -
Internal
|
|
$
79,266
|
|
59.6 %
|
|
$
158,605
|
|
75.0 %
|
|
$
(79,339)
|
|
(50.0) %
|
Medicare -
External
|
|
49,793
|
|
37.4 %
|
|
46,237
|
|
21.8 %
|
|
3,556
|
|
7.7 %
|
IFP and Other -
Internal
|
|
3,459
|
|
2.6 %
|
|
5,742
|
|
2.7 %
|
|
(2,283)
|
|
(39.8) %
|
IFP and Other -
External
|
|
534
|
|
0.4 %
|
|
1,150
|
|
0.5 %
|
|
(616)
|
|
(53.6) %
|
Net revenues
|
|
133,052
|
|
100.0 %
|
|
211,734
|
|
100.0 %
|
|
(78,682)
|
|
(37.2) %
|
Segment profit
(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicare -
Internal
|
|
2,609
|
|
2.0 %
|
|
(4,126)
|
|
(1.9) %
|
|
6,735
|
|
(163.2) %
|
Medicare -
External
|
|
(2,201)
|
|
(1.7) %
|
|
1,866
|
|
0.9 %
|
|
(4,067)
|
|
(218.0) %
|
IFP and Other -
Internal
|
|
496
|
|
0.4 %
|
|
2,186
|
|
1.0 %
|
|
(1,690)
|
|
(77.3) %
|
IFP and Other -
External
|
|
(576)
|
|
(0.4) %
|
|
(330)
|
|
(0.2) %
|
|
(246)
|
|
74.5 %
|
Segment profit
(loss)
|
|
328
|
|
0.2 %
|
|
(404)
|
|
(0.2) %
|
|
732
|
|
(181.2) %
|
Corporate
expense
|
|
25,806
|
|
19.4 %
|
|
23,726
|
|
11.2 %
|
|
2,080
|
|
8.8 %
|
Amortization of
intangible assets
|
|
23,514
|
|
17.7 %
|
|
23,514
|
|
11.1 %
|
|
—
|
|
— %
|
Operating lease
impairment charges
|
|
350
|
|
0.3 %
|
|
1,062
|
|
0.5 %
|
|
(712)
|
|
N/M
|
Restructuring and
other related charges
|
|
9,797
|
|
7.4 %
|
|
—
|
|
— %
|
|
9,797
|
|
N/M
|
Interest
expense
|
|
15,630
|
|
11.7 %
|
|
6,921
|
|
3.3 %
|
|
8,709
|
|
125.8 %
|
Other (income)
expense
|
|
(115)
|
|
(0.1) %
|
|
(30)
|
|
— %
|
|
(85)
|
|
283.3 %
|
Income (loss) before
income taxes
|
|
$
(74,654)
|
|
(56.1) %
|
|
$
(55,597)
|
|
(26.3) %
|
|
$
(19,057)
|
|
34.3 %
|
_________________________
|
N/M = Not
meaningful
|
|
|
Nine months ended
Sep.
30, 2022
|
|
Nine months ended
Sep.
30, 2021
|
|
|
|
|
(in thousands, except
percentages)
|
|
Dollars
|
|
% of Net
Revenues
|
|
Dollars
|
|
% of Net
Revenues
|
|
$
Change
|
|
%
Change
|
Net
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicare -
Internal
|
|
$
386,796
|
|
68.8 %
|
|
$
476,391
|
|
77.7 %
|
|
$
(89,595)
|
|
(18.8) %
|
Medicare -
External
|
|
161,382
|
|
28.7 %
|
|
117,116
|
|
19.1 %
|
|
44,266
|
|
37.8 %
|
IFP and Other -
Internal
|
|
11,904
|
|
2.1 %
|
|
13,505
|
|
2.2 %
|
|
(1,601)
|
|
(11.9) %
|
IFP and Other -
External
|
|
2,217
|
|
0.4 %
|
|
5,803
|
|
0.9 %
|
|
(3,586)
|
|
(61.8) %
|
Net revenues
|
|
562,299
|
|
100.0 %
|
|
612,815
|
|
100.0 %
|
|
(50,516)
|
|
(8.2) %
|
Segment profit
(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Medicare -
Internal
|
|
26,408
|
|
4.7 %
|
|
73,574
|
|
12.0 %
|
|
(47,166)
|
|
(64.1) %
|
Medicare -
External
|
|
(15,629)
|
|
(2.8) %
|
|
(453)
|
|
(0.1) %
|
|
(15,176)
|
|
3350.1 %
|
IFP and Other -
Internal
|
|
2,668
|
|
0.5 %
|
|
657
|
|
0.1 %
|
|
2,011
|
|
306.1 %
|
IFP and Other -
External
|
|
(1,245)
|
|
(0.2) %
|
|
(227)
|
|
— %
|
|
(1,018)
|
|
448.5 %
|
Segment profit
(loss)
|
|
12,202
|
|
2.2 %
|
|
73,551
|
|
12.0 %
|
|
(61,349)
|
|
(83.4) %
|
Corporate
expense
|
|
89,930
|
|
16.0 %
|
|
68,239
|
|
11.1 %
|
|
21,691
|
|
31.8 %
|
Amortization of
intangible assets
|
|
70,543
|
|
12.5 %
|
|
70,543
|
|
11.5 %
|
|
—
|
|
— %
|
Operating lease
impairment charges
|
|
25,345
|
|
4.5 %
|
|
1,062
|
|
0.2 %
|
|
24,283
|
|
N/M
|
Restructuring and
other related charges
|
|
11,872
|
|
2.1 %
|
|
—
|
|
— %
|
|
11,872
|
|
N/M
|
Loss on extinguishment
of debt
|
|
—
|
|
— %
|
|
11,935
|
|
1.9 %
|
|
(11,935)
|
|
N/M
|
Interest
expense
|
|
39,752
|
|
7.1 %
|
|
23,886
|
|
3.9 %
|
|
15,866
|
|
66.4 %
|
Other (income)
expense
|
|
(65)
|
|
— %
|
|
27
|
|
— %
|
|
(92)
|
|
(340.7) %
|
Income (loss) before
income taxes
|
|
$
(225,175)
|
|
(40.0) %
|
|
$
(102,141)
|
|
(16.7) %
|
|
$
(123,034)
|
|
120.5 %
|
_________________________
|
N/M = Not
meaningful
|
The following table presents the number of Submitted Policies by
product for the Medicare segments for the three and nine months
ended September 30, 2022 and 2021,
for those submissions that are commissionable (compensated through
commissions received from carriers):
|
|
|
|
Three months ended
Sep. 30,
|
|
Nine months ended
Sep. 30,
|
Medicare - Total
Commissionable Submitted Policies
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Medicare
Advantage
|
|
123,523
|
|
195,414
|
|
577,139
|
|
521,451
|
Medicare
Supplement
|
|
113
|
|
751
|
|
809
|
|
2,877
|
Prescription Drug
Plans
|
|
4,025
|
|
2,740
|
|
15,485
|
|
7,707
|
Total
Medicare
|
|
127,661
|
|
198,905
|
|
593,433
|
|
532,035
|
The following tables present the number of Approved Submissions
by product relating to commissionable policies for the Medicare
segments for three and nine months ended September 30, 2022 and 2021. Only commissionable
policies are used to calculate LTV.
|
|
|
|
Three months ended
Sep. 30,
|
|
Nine months ended
Sep. 30,
|
Medicare -
Internal Commissionable Approved Submissions
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Medicare
Advantage
|
|
51,848
|
|
145,619
|
|
334,361
|
|
395,804
|
Medicare
Supplement
|
|
31
|
|
183
|
|
249
|
|
702
|
Prescription Drug
Plans
|
|
1,223
|
|
2,208
|
|
6,096
|
|
6,525
|
Total
Medicare
|
|
53,102
|
|
148,010
|
|
340,706
|
|
403,031
|
|
|
|
|
Three months ended
Sep. 30,
|
|
Nine months ended
Sep. 30,
|
Medicare -
External Commissionable Approved Submissions
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Medicare
Advantage
|
|
62,928
|
|
47,488
|
|
218,371
|
|
121,179
|
Medicare
Supplement
|
|
14
|
|
427
|
|
279
|
|
1,823
|
Prescription Drug
Plans
|
|
2,761
|
|
191
|
|
8,874
|
|
716
|
Total
Medicare
|
|
65,703
|
|
48,106
|
|
227,524
|
|
123,718
|
The following table presents the LTV per Approved Submission by
product for the Medicare segments for the three and nine months
ended September 30, 2022 and
2021:
|
|
|
|
Three months ended
Sep. 30,
|
|
Nine months ended
Sep. 30,
|
LTV per Approved
Submission
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Medicare
Advantage
|
|
$
771
|
|
$
917
|
|
$
754
|
|
$
874
|
Medicare
Supplement
|
|
$
733
|
|
$
874
|
|
$
826
|
|
$
834
|
Prescription Drug
Plans
|
|
$
200
|
|
$
215
|
|
$
202
|
|
$
215
|
The following table presents the number of Submitted Policies by
product for the Medicare segments for the three and nine months
ended September 30, 2022 and 2021,
for those submissions that are non-commissionable (compensated via
hourly fees and enrollment fees) and do not result in commission
revenue:
|
|
|
|
Three months ended
Sep. 30,
|
|
Nine months ended
Sep. 30,
|
Medicare - Total
Non-Commissionable Submitted Policies
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Medicare
Advantage
|
|
2,631
|
|
1,532
|
|
9,868
|
|
10,703
|
Medicare
Supplement
|
|
1,805
|
|
1,327
|
|
5,790
|
|
5,019
|
Prescription Drug
Plans
|
|
734
|
|
542
|
|
2,294
|
|
2,218
|
Total
Medicare
|
|
5,170
|
|
3,401
|
|
17,952
|
|
17,940
|
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multimedia:https://www.prnewswire.com/news-releases/gohealth-reports-third-quarter-2022-results-301675048.html
SOURCE GoHealth, Inc.