Slides
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First Quarter 2025 Results May 13, 2025
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2 This earnings presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are made in reliance upon the safe harbor provision of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this earnings presentation 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, future capital expenditures, debt service obligations, adoption and use of artificial intelligence technologies, the impact on our business from regulatory changes, the impact on our business from theacquisition of e-TeleQuote Insurance, Inc. (“e-TeleQuote”) and our ability to successfully integrate e-TeleQuote’s operations, technologies and employees into our business, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “aims,” “expects,” “plans,”“anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “likely,” “future” or “continue” or the negative of these terms or other similar expressions. The forward-looking statements in this earnings presentation are only predictions, projections and other statements about future events that are based on current expectations and assumptions. 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 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 earnings presentation 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 the factors described in the sections titled “Summary Risk Factors,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (“2024 Annual Report on Form 10-K”), our forthcoming Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2025 (“Q1 2025 Quarterly Report on Form 10-Q”) and in our other filings with the Securities and Exchange Commission. The factors described in our 2024 Annual Report on Form 10-K and our forthcoming Q1 2025 Quarterly Report on Form 10-Q should not be construed as exhaustive and should be read together with the other cautionary statements included in this earnings presentation, as well as the cautionary statements and other risk factors set forth in our other filings with the Securities and Exchange Commission. You should read this earnings presentation and the documents that we reference in these slides completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise. FORWARD-LOOKING STATEMENTS
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3 Non-GAAP Financial Measures In this earnings presentation we use supplemental measures of our performance that are derived from our consolidated financial information, but which are not presented in our Condensed Consolidated Financial Statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). These non-GAAP financial measures include net income (loss) before interest expense, income tax (benefit) expense and depreciation and amortization expense, or EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin. Adjusted EBITDA is the primary financial performance measure used by management to evaluate the business and monitor the results of operations. Adjusted EBITDA represents, as applicable for the period, EBITDA as further adjusted for certain items summarized in the slide furnished in the Appendix to this earnings presentation. 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. Adjusted EBITDA is used as a basis for certain compensation programs sponsored by the Company. There are limitations to the use of the non-GAAP financial measures presented in this earnings presentation. 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 the most directly comparable financial measures prepared in accordance with GAAP and should be read only in conjunction with financial information presented on a GAAP basis. Reconciliations of EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin to their most directly comparable GAAP financial measures are presented in the slide furnished in the Appendix to this earnings presentation. 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 may include other expenses, costs and non-routine items. Key Business Performance and Operating Metrics Direct Operating Cost of Submission, Direct Operating Cost per Submission, Sales per Submission and Submissions are key operating metrics used by management to understand the Company’s underlying financial performance and trends. Sales per Submission is an operating metric that represents the average performance of Submissions generated during a particular period. Sales per Submission measures revenues only from the Submissions generated in the period and excludes items that are unrelated to such Submissions, including any impact of revenue adjustments recorded in the period, but relating to performance obligations satisfied in prior periods. Direct Operating Cost of Submission is an operating metric that represents costs directly attributable to Submissions generated during a particular period and excludes costs that are indirect or fixed. Direct Operating Cost of Submission is comprised of the portion of the respective operating expenses for revenue share, marketing and advertising and consumer care and enrollment that are directly related to the Submissions generated in the particular period. Direct Operating Cost per Submission is an operating metric that represents the average performance of Submissions generated during a particular period. Direct Operating Cost per Submission refers to (x) Direct Operating Cost of Submission for a particular period divided by (y) the number of Submissions generated for such period. Submissions represent completed applications with our licensed agents and transfers by our agents to the health plan partners. Management uses these metrics to measure the performance of the Submissions generated in a reporting period by reviewing and presenting average performance on a per Submission basis over time. USE OF NON-GAAP FINANCIAL MEASURES AND KEY BUSINESS PERFORMANCE AND OPERATING METRICS
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4 $26.9 $42.1 Q1'24 Q1'25 Q1’24 TO Q1’25 ADJ. EBITDA2 $M1 1. There may be slight differences compared to numbers shown in the Press Release due to rounding. 2. See tables in the Appendix for reconciliation of Adjusted EBITDA to the GAAP comparison. Q1’25 Financial Comparison Year-over-Year Revenue and Adjusted EBITDA improvements $185.6 $221.0 Q1'24 Q1'25 Q1’24 TO Q1’25 REVENUE $M1 19% 56%
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51. There may be slight differences compared to numbers shown in the Press Release due to rounding. Commissions Receivable and Cash Flow from Operations $12.5 ($12.4) Q1'24 Q1'25 Q1’24 vs. Q1’25 CASH FLOW FROM OPERATIONS $M1 Shift in enrollments from non-agency to agency contracts, a dynamic expected to remain fluid year-to-year, was influenced by various market factors and dynamics. 199% $843.1 $1,000.6 March 31, 2024 March 31, 2025 ENDING COMMISSIONS RECEIVABLE (Current and Non-Current) $M1 19%
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6 1. There may be slight differences compared to numbers shown in the Press Release due to rounding. 2. Sales per Submission is an operating metric that represents the average performance of Submissions generated during a particu lar period. Sales per Submission measures revenues only from the Submissions generated in the period and excludes items that are unrelated to such Submissions, including any impact of revenue adjustments recorded in the period, but relating to performance obligations sati sfied in prior periods. 3. Direct Operating Cost per Submission is an operating metric that represents the average performance of Submissions generated during the reporting period. Direct Operating Cost per Submission measures costs directly attributable to Submissions generated in the period and excludes costs that are indirect or fixed. The numerator of Direct Operating Cost per Submission, referred to as Direct Operating Cost of Submission, is the portion of the respective operating expenses for revenue share, marketing and advertising, and consumer ca re and enrollment that are directly related to the Submissions generated in the reporting period. The denominator of Direct Operating Cost per Submission is the number of Submissions generated for such period. Q1’25 Medicare Unit Economics Year-over-Year Continued improvements in efficiency and cost-effectiveness drive lower Direct Operating Cost per Submission UNIT ECONOMICS PER SUBMISSION ($’s in ones)1 Q1’24 Q1’25 $856 $724 Q1'24 Q1'25 SALES PER SUBMISSION2 $640 $522 Q1'24 Q1'25 DIRECT OPERATING COST PER SUBMISSION3 15% 18% Improvement
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7 Appendix
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8 1. Numbers may not sum due to rounding. There may be slight differences compared to numbers shown in the Press Release due to rounding. 2. Represents severance costs and other fees associated with a reduction in workforce. 3. Represents non-cash share-based compensation expense relating to equity awards as well as share-based compensation expense relating to liability classified awards that will be settled in cash. 4. Represents costs primarily associated with non-routine consulting fees and other professional services. 5. Represents operating lease impairment charges, reducing the carrying value of the associated ROU assets and leasehold improvements to their estimated fair values. For the three months ended March 31, 2025, the amount includes a one-time gain of $0.2 million from the remeasurement of the lease liability and adjustment of the ROU asset (which was previously impaired) related to the early termination of one of its leases. 6. Represents legal fees, settlement accruals and other expenses related to certain acquisitions, litigation, Credit Agreement amendments and other non-routine legal or regulatory matters. Appendix – Reconciliation of Net Income to Adjusted EBITDA (in thousands)1 Three months ended Mar. 31, Net revenues $220,972 $185,600 Net income (loss) (9,786) (21,346) Interest expense 15,954 17,951 Income tax expense (benefit) 1,102 (71) Depreciation and amortization expense 26,477 26,246 EBITDA $33,747 $22,780 Severance cost2 3,815 1,828 Share-based compensation expense3 2,803 1,783 Professional Services4 796 - Operating lease impairment and other charges5 474 - Legal fees6 425 503 Adjusted EBITDA $42,060 $26,894 Net income (loss) margin (4.4)% (11.5)% Adjusted EBITDA margin 19.0% 14.5% 2025 2024 The following table sets forth the reconciliations of GAAP net income (loss) to EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin for the periods presented:
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