GoHealth, Inc. Price & Performance (GOCO)

Thank you, and good morning. Welcome to GoHealth's fourth quarter and full year 2024 results call. Joining me today are Vijay Cote, Chief Executive Officer and Brendan Shanahan, Chief Financial Officer. Today's conference call contains forward looking statements based on our current Numerous known and unknown risks and uncertainties may cause actual results to 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. 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 fourth quarter and full year 2024. We have posted the release on the GoHealth website under the Investor Relations tab. In the press release, we have listed a number of risk factors that you should consider in conjunction with our forward looking statements. We encourage you to consider the other risks factors described in our Form 10 ks and Form 10 Q reports filed with the Securities and Exchange Commission for additional information.

During this call, we will be discussing certain non GAAP financial measures. These measures are reconciled to the most directly comparable GAAP financial measure in our press release. You may also refer to the Investor Present for reconciliations of non GAAP measures to the most comparable GAAP measures discussed during this earnings call. I will now turn the call over to GoHealth's CEO, Vijay Kote.

Thank you, John, and good morning, everyone. Our 2024 results reflect robust financial growth and operational excellence. The success of 2024 is a testament to our continued unwavering dedication to empowering and engaging Medicare consumers by simplifying the complexities of Medicare with personalized guidance from a licensed agent using leading technology, we're enabling millions of consumers to make more informed and transparent healthcare decisions. For those new to the BillHealth story, our mission is to provide support, clarity and ultimately peace of mind to Medicare consumers and landscape often marked by confusion, and uncertainty. The U. S. Has over 67,000,000 Medicare eligible consumers. With over half enrolled in Medicare Advantage or MA. In many geographic regions, consumers face 40 plus plan options in Medicare Advantage. Creating confusion and deterring them from exploring better options. GoHealth seeks to simplify these decisions by empowering consumers with unbiased tools and guidance. For example, Susan, a retiree and Medicare Advantage enrollee, reached out to GoHealth and afterwards left us an unpaid online review. Susan was frustrated by the lack of understanding of her current coverage steadily increasing out of pocket costs and a suspicion that she may be in the wrong plan. Susan felt uneasy and confused overwhelmed by a flurry of calls from various marketers.

Susan reached out to GoHealth for a marketplace view of the Medicare Advantage option available to her and her husband.

A licensed agent at Go help listened to Susan's concerns.

Gathered her profile and goals, and educated her on the plan options with a thorough comparison of coverage and benefits. Susan selected enrolled in a new plan with GoHealth for her and her husband.

And reports that they are now saving more than $500 per month According to Susan, she left the call with the confidence that she understood her options better than she ever had before and with a sense of relief saying that a weight has been lifted from my shoulders. Susan goes on to say, she plans to come back next year to revisit her situation review options and confirm she's in the right plan. At GoHealth, we empower Medicare eligible consumers with proprietary and unbiased tools used by our highly trained and experienced license agents. We have evolved from a traditional Medicare enrollment company a Medicare engagement company. Focusing on building long term high quality relationships with our consumers. We believe this shift allows us to deliver a more integrated, and personalized approach to care. Reinforcing our unique role in the Medicare landscape. The 2024 Annual Enrollment Period or AEP drove exceptional results for GoHealth compared to the prior year. We surpassed expectations across key metrics which we believe solidifies our market leadership and demonstrate the strength of our strategy and team. We are proud to have supported nearly 3,000,000 consumers in assessing their benefit in 2024. During Q4, this resulted in over 481,000 submissions a 67% improvement year over year.

This achievement reflects the powerful combination of our people, processes and technology platform which together drove these improved results. Q4 twenty twenty four, we achieved significant year over year improvements in both operational efficiency and financial performance. Our submission volume increased in Q4 from the previous year driven in part by the following factors: First, our captive Medicare team inclusive of eTelequo, saw submissions increased by approximately 82% driven by improved conversion rates and improved call efficiency times. And second, Go Partner Solutions, our external agents, also demonstrated a 25% year over year increase in submissions attributed to effective onboarding of eight new agency partners. Our marketing and agent efficiencies have also translated into meaningful cost reductions. Direct operating cost per submission or customer acquisition costs CAC, decreased by 27% year over year in Q4 to $5.00 $1 Our Q4 twenty twenty four revenue increased to $389,000,000 compared to $277,000,000 in Q4 twenty twenty three. Representing a 41% Q4 twenty twenty four adjusted EBITDA grew to $118,000,000 a 107% year over year improvement. Looking ahead, the positive market dynamics we observed in Q4 twenty twenty four expected to remain favorable through at least the first three quarters of twenty twenty five.

With cautious optimism, for similar favorable dynamics, for the fourth quarter. Which we anticipate could drive continued opportunity. We are immensely proud of the team's achievements this quarter which we believe showcase not only outstanding performance, but also our ability to lead with the [indiscernible] and innovation in the dynamic and ever evolving Medicare landscape. As we reflect on our performance in Q4, it's essential to unpack the operational milestones that contributed to these results. In addition to the financial metrics shared earlier, we achieved several operational milestones that provide further context our success. Let's explore how our strategy is translated into meaningful outcomes. There were three primary contributors to our operational success in Q4. Agent productivity, our PlanGrid technology platform and our integration of the eTeleco business. A brief word on all of these contributors. First, agent productivity. Through enhanced training programs and the adoption of advanced tools, we reduced average handle time by 8.6% in Q4 twenty twenty four compared to Q4 twenty twenty three. The captive team was significantly more efficient year over year when measured by our average handle time alongside the number of consumers we serve the actual conversion rate. Our team consulted with more consumers per agent per day while decreasing average handle time even amidst a conversion rate improvement, which usually increases average handle time and decreases capacity to serve pork and serve.

Second, our Encompass and PlantFit platforms continued to set us apart from our competitors. A cornerstone of our transformation into a Medicare engagement company has been the successful rollout of our Plan Fit Checkup. Introduced in Q4 twenty twenty three. Powered by our AI driven PlantFit tool, this initiative has significantly enhanced the Medicare Advantage shopping experience for consumers. Plan Fit Checkup offers three key outcomes. One, enrolling in a new plan Two, informing consumers about a better option. Or three, reassuring them that their current plan is the right choice. By compensating our agents for each completed checkup, regardless of the outcome, we ensure a strong focus on delivering the best possible guidance to our consumers. Planned Fit checkups grew 72% in Q4 twenty twenty four compared to the same period in 2023. Reflecting strong consumer engagement Due to significant disruption caused by health plans, or benefit degradations more planned pick checkups resulted in recommendations of new plan enrollment. Via our plan fit tool than in previous years. Additionally, we recommended approximately 29,000 consumers remain in their current Medicare Advantage Plan during Q4. Ensuring they stayed in a plan best suited to their personal needs and long term value.

In 2024, we launched the Plan Fit Save initiative, a program where we partnered with select health plans ensure agents were properly incentivized to prioritize the best interest of the consumer. And we began receiving compensation from those initial participating health plans for driving member retention. Since its initial launch, implementation has been smooth and we are seeing continued interest from health plans looking to integrate this program. As we expand Plant It Safe, we remain focused on growing our partnerships and enhancing the value we deliver to both consumers [indiscernible] Third, our transformation and acceleration of the etail or EGQ business We believe this acquisition demonstrates how strategic integration the deployment of our proprietary AI driven tools [indiscernible] training and sales management drive positive results despite the transaction closing just two weeks prior to the start of AEP. ETQ delivered 54,000 submissions during AEP, an impressive 170% improvement year over year and materially higher than ETQ's expectations prior to the close of our transaction. We believe these results reflect the combined impact of our platform's efficiency, enhanced training program, a relentless focus on execution and partnership with the ETQ team. We focus on three important attributes of success for ETQ prior to AEP.

First, operational improvements. We replaced the marketplace technology platform ETQ operate on with GoHealth's proprietary planted tool and marketplace. The deployment of the GoHealth marketplace significantly improved call efficiency and improved agent optimization. Enabling ETQ to process more consumers skillfully and compliantly. Second, enhanced training program Our operations leaders designed and executed comprehensive training programs including customized onboarding tracks for new agents and targeted coaching for leaders at all levels. This focus on upscaling contributed to readiness and excellence throughout the AEP period. Finally, inbound lead optimization. Shifting to primarily inbound leads sourced through digital and mail campaigns, scored and matched to the appropriate agents using GoHealth proprietary AI tools resulted in higher conversion rates and a more efficient sales funnel. Building on the solid foundation of 2024, we intend to capitalize on favorable market conditions that lie ahead. Our outlook for 2025 reflects confidence in our strategies and we are optimistic that the positive market dynamics we witnessed in Q4 twenty twenty four will remain favorable throughout the first three quarters of twenty twenty five. Rather than issuing specific guidance, we will outline our general expectations across several key financial indicators. For 2025, we anticipate meaningful revenue growth and profit expansion in the first three quarters versus 2024.

Driven by ongoing refinements to our operating model. Enhanced efficiencies, and favorable market dynamics. Reflecting on the unique dynamics of the 2024 annual enrollment period, we identified and capitalized on opportunities that yielded substantial returns. Though 2024 AEP had very unique market dynamics, led by very high consumer disruption We believe the fourth quarter or AEP of twenty twenty five still have positive market dynamics but less disruption than this past year. As a result, we believe the market conditions will be slightly less favorable though still positive and thus our AEP efficiency will be contingent upon both our process and automation progress as well as the degree to which these market conditions change. As the year progresses, we expect to gain clearer insights into emerging opportunities enabling us to make informed decisions aligned with our strategic and financial objectives. As we stated last year and always expect to be true, regulatory and market factors could influence our performance in the year ahead. First, CMS final rate notice remains a key determinant of health plan funding and revenue assumptions. This year, CMS is projecting a 4.3% average revenue increase for Medicare Advantage Health Plans in 2026. Inclusive of a 7.7% increase to broker commission.

The highest effective growth rate in nearly a decade. This increase may signal a more consumer friendly and growth oriented MA market and we are well positioned to capture additional market share. While deepening our relationships with both consumers and health plan partners. Next, we believe that CMS final marketing rules will play a critical role in shaping our marketing effectiveness [indiscernible] [indiscernible] For example, we continue to monitor the implementation of the guidelines in the SCP of 2025 around the Medicare dual eligible special enrollment period eligibility and access to integrated dual eligible plans. As regulations evolve, we have a proven ability to use our integrated technology and guided sales processes to adapt swiftly and are prepared to maintain engagement efficiency and compliance while continuing to connect consumers with the most suitable plans. Finally, health plan relative competitiveness and thus mix is driven by the dynamic interplay between Health Plan profitability consumer switching behavior, plan affordability As always, the impact of these factors whether individually or in combination, will shape our performance throughout 2025. Some of these key variables will become clearer as the year progresses. While others may remain uncertain until the early part of the fourth quarter.

Leading into and during AEP. As we continue to navigate these industry shifts, our agile approach and strategic investments should ensure capitalize on opportunities and drive sustained growth. Brendan Shanahan, our CFO, provide a detailed review of our financial performance for Q4 Thank you, Vijay.

As we review our financial performance, let us begin with the fourth quarter of twenty twenty four. Fourth quarter revenue totaled $389,100,000.0 representing a 41% increase compared to Q4 twenty twenty three. Higher submission volumes drove growth and improved operationally Adjusted EBITDA for Q4 more than doubled to $117,800,000 a 107% increase from $57,000,000 in Q4 twenty twenty three. For the full year 2024, revenue was $798,900,000 reflecting a 9% year over year increase compared to $734,700,000 in 2023. Driven by ongoing operational improvements, we achieved $120,300,000 in adjusted [indiscernible] compared to $75,100,000 in 2023. A 60% increase For full year 2024 resulted in negative cash flow from operations of $21,600,000 from $130,700,000 in the prior year period. During AEP, we observed a shift in enrollments from non agency to agency contracts a dynamic that is expected to remain fluid year to year influence by a variety of market factors and dynamics. We recognize the unique opportunity of this AEP season to invest capital in the fourth quarter in both ETQ and our own operations for high returns on cash deployed. Our agent productivity, technology and pivoting eTeleQuote into a growth business for all good returns on deployed cash. Cost optimization efforts significantly improved our margins A key driver of these results was the Q4 twenty twenty four reduction in our direct operating cost per submission or customer acquisition costs by 27% from $688 to $5.00 $1 which we believe is a testament to our targeted marketing strategies and efficient agent performance.

As previously announced, we successfully completed the refinancing of our term loan credit facility a milestone that accentuates confidence in Grow Health's financial stability and strengthens our foundation for long term growth. The new $475,000,000 term loan facility set to mature in 2029 offers improved financial terms including an interest rate of SOFR plus 7.5%, with a 25 basis point reduction upon the termination of our current revolver This refinancing not only extends the maturity of GoHealth's term loans through 2029, but we believe it also provides us the opportunity to continue pursuing strategic growth initiatives and innovation. We are proud of this outcome which we believe reflects dedicated support from our investors and their confidence in GoHealth's business model and financial health. With extended maturities and improved terms, we are confident that GoHealth is well positioned to capitalize on favorable market dynamics and remain focused on delivering sustainable value for our stakeholders. Importantly, I also want to highlight highlight our commitment to risk management in our calculation of life time values or LTVs. Our approach incorporates comprehensive risk assessment mitigation strategies ensuring that our LTV calculations accurately reflects potential uncertainties and align with our strategic financial objectives. We believe this strategy not only supports our current performance, but also provides a solid foundation for scalable and sustainable growth.

Our commissions receivable totaled approximately $1,100,000,000 at 12/31/2024. As we close the discussion of our 2024 financial it is essential to highlight the strong connection between our operation [indiscernible] and the exceptional results we've achieved. We believe the year over year profitable growth is a test to the efficiency of our proprietary technology platforms and the dedication of our agents. We are confident the strong operational performance directly translates into tangible financial success exemplifying the alignment between strategy execution and measurable outcomes. Our focus on cost efficiency further amplifies these results. The Q4 reduction in direct operating cost per submission from $688 to $5.00 $1 reflects the impact of innovative marketing strategies and streamlined agent training programs. Enabling us to achieve a 107% improvement in adjusted EBITDA for the fourth quarter compared to the prior year period in 2023. We believe these advancements not only strengthen our financial foundation, but also reinforce our ability to allocate resources strategically ensuring sustainable growth, Moreover, the strong performance of eTelequo delivering 54,000 submissions during 90,000 interactions in Q4 twenty twenty loans, and driving revenue growth of 41% year over year. We believe our achievements extend beyond financial metrics underscoring GoHealth's leadership in the dynamic Medicare landscape.

By aligning strategic investments with innovation and operational efficiency, we believe we have built a resilient business model that prioritizes long term value creation for all stakeholders as we move forward our focus remains on leveraging those strengths to capitalize on future opportunities and striving toward continued success in the years to come. As we conclude this financial review, we are confident that our progress in 2024 has set us solid foundation for sustained growth. I will now hand it back to Vijay for his reflections and closing remarks. Thank you, Brendan. As we reflect on 2024, we view our achievements as more than just milestones. They are building blocks for a future aligned with GoHealth's mission to provide clarity, [indiscernible] and peace of mind to Medicare consumers. Each success this year to the operational efficiencies achieved throughout our Encompass platform. Represent a step forward in transforming how we engage with and empower our consumers. Our innovations like Plan Fit and the Encompass model exemplify our commitment to leveraging technology to simplify the Medicare landscape. We believe these tools don't just drive numbers, they redefine the consumer experience. By offering personalized data driven solutions that inspire trust and long term loyalty.

Our 2024 success enables us to invest in innovation, strengthen partnerships and scale impact. The eTelequota integration and turnaround demonstrates our ability to thrive in a dynamic market paving the way for sustainable growth in 2025 and beyond. We will now take your questions.

Thank you. Our first question coming from the line of Ben Hendrix with RBC Capital Markets. Your line is now open.

GoHealth. Thank you. Congratulations on the quarter guys.

Clearly, there's a strong margin story developing here even with some contraction in revenue per submission. Can you talk about how you're thinking about revenue per currently? What is driving the offsets you're seeing that are kind of emerging in lower customer acquisition costs? And then how you how much room to run you think we see on this on these margin expansion? Initiatives? Thanks.

Good morning, Ben. Thanks for joining. Always great to hear your voice. Just to repeat the question you were asking about, some of the trends we're seeing on the revenue per side as well as the margin expansion dynamics underneath that regarding efficiency and able to continue to drive that. Is that a fair representation of the question?

Yes. Thank you.

Great. So first on the revenue side, obviously, there's always a mix dynamic. Right. So we're always balancing thinking about agency versus non agency, thinking about which products are going to be most for the consumers as to how we think about agency, non agency. There's always a mixed dynamic that will be there And so we don't put our thumb on the scale. Right? We let the benefits for what's the right plan and most suitable plan for the consumer. And so when we do that, the best hedge for us is to continuously drive our efficiency on our cost that we can control. On a day to day basis. So though there may be always some fluctuation on the revenue per sale, it can go up, go down. Primarily driven by the mix of products more so than anything else. The cost of things that we are driving aggressively and have been for the last three years where we've been focused on it standardizing our processes, through our guided sales process that fits through the plant to check up in the Encompass model. You've heard these words time and time again. By reinforcing the standardization, we were able to gain a significant amount of efficiency.

By enhancing our marketing analytics to be able to tie supply demand, gave been able to generate a significant amount of And then by automating more of the tools within these standardized processes, We're unlocking more and more automation opportunity. We see more opportunity to come. As we've said from time to time, as we've discussed the efficiencies in the technology platform, We have done more with our agents every year consecutively. Meaning we've had the same or fewer agents yet they are able to interact with each year That's a really important dynamic. We believe there's more of an opportunity there. So the margin expansions, we expect to continue to be investing in [indiscernible] And we're really excited about how we continue to show even this year a year over year basis, I believe a number of 27% improvement on our direct cost per submission.

And that is getting us to just around $500 now.

For submission, which is unseen from our perspective within the industry.

GoHealth. Thank you. That's helpful.

And then looking forward, you've stressed some cautious optimism for 4Q twenty twenty five. It seems like your peers have also been somewhat cautious and guarded around expectations for AEP. Just wanted to get a little more detail on what you see as the biggest kind of risk and reward swing factors there and Mark kind of competitive positioning going forward through to the end of the year? Thanks. No, this is a great question, Ben.

You referred to cautious optimism. I think the way I think about the fourth quarter of twenty twenty five as we compare that to last year, we don't expect as many planned exits. Right? So that was a major catalyst of a significant disruption in 2024 versus what we're likely going to see in 2025. But we do expect a lot of disruption. Right? That disruption is going to come because we still know some health plans have margin challenges and we expect them to degrade some benefits. And we can clearly see from some of the most updated data some certain health plans need to and are interested in growing. If you look geography by geography around the country, you're going to find markets where one carrier or health plan wants to grow and another wants to decline and vice versa, where they're investing and or trying to pull back. The uniqueness of our model and what our marketing and sales team is able to do is we're able to be very targeted into those geographies to identify where disruption is happening and optimize for it, so that we can serve as many consumers as possible there match them with the right agents who have the skills to serve them and to be able to support that at scale and really tap into the opportunity.

So I don't think it's an overly conservative view on the difference of AEPs going to be a little bit different. Disruption type. And I think we're well poised for it given our tech platform and our marketing capabilities. To be very, very laser alike in the way we target consumers who can use our help the most. And then match them with the agent. And so we're excited about that this year.

Thank you. And our next question coming from the line of Fatima Ken with Noble Capital Markets. Your line is now open.

Good morning, guys, and congratulations on the quarter. Just a couple of questions. First, I just wanted to touch on plan fit save. I know that this particular AEP maybe that's the headline was up and running last year. But nonetheless, I'm wondering how was it a meaningful impact to revenue Could you quantify in any way how plant Fit Save played into the fourth quarter?

Hi, Pat. Great to hear your voice as well. Glad you joined. On Plantfit States, we are super excited about what Plantfit States are. It is the natural alignment of ensuring that you can do the right thing for the consumer which doesn't always mean switching plans. And to be able to not only compensate our agents, which we have been doing for over a year now, but to also be rewarded by GoHealth plan or doing network of driving member retention and stability offering peace of mind to the consumer. As we went into the fourth quarter, as I said in the prepared remarks, we had entered into agreements to be able to be rewarded in that way. But given the disruptions to your point, there were less scenarios where it was applicable. I think in our prepared remarks, we were pretty about 29,000 times. We actually recommended that consumers stay with the plan that they're currently on. As it relates to this impact on the overall performance for the quarter, it was small. It was materially smaller than it probably would have been point if we were in 2023. AEP, given there was more of a push of benefit and a lot of disruption and justified reasons In this last AEP, for consumers to make changes.

And so the way you should start to think about this as we move forward is that it's just an arrow in the quiver. We're going to have more opportunities. It's the market is one that's highly disruptive, then we're likely going to have higher conversions and less planned bid stays. In a market where there's less more stability and benefits, you would see more clients that say, [indiscernible] And what we're trying to build is a model that can be more responsive to the dynamism in the marketplace. If we can make sure that we are we can do the right thing for the consumer and still be rewarded in all scenarios, for doing that work that's really the right way to build your business. And that's what we set ourselves up to do. But to be very specific on your question, the plant that saves was a very small portion of our performance in the fourth quarter, primarily because it worked the way it should have. And that is there were more consumers who needed changes we supported that.

GoHealth. Thanks for that. And then I also just wanted to touch on the balance I think Brendan mentioned the over $1,000,000,000 in commission receivables and I was just wondering if a securitization of of those would potentially be part of your plan for improving the balance sheet. And if so, to what magnitude might you look to go with something like that?

Great question. We came in, when I started about three years ago now, we were very focused on how do we optimize our cash position and really think about our debt and making sure that we had the best arrangements in place at that time. And as you know, and we've had discussions and you've seen the math, we, from that time back in 2022 to current date, we paid down about 25% of that debt We figured out how to do that. And then as Brendan illuminated in his prepared remarks, we refi with three new investors and lenders in that process, late last year. And so we found ways to be very efficient in resetting the cash structure, cost structure to allow us more funds to invest in the business and our technology, which we've been good opportunity with out there. As we continue to look at our balance sheet and look at the opportunities available in the marketplace, we're continuously assessing how do we decrease our cost of capital, how to enable more funds to be able to invest to serve the consumer, And all of those things will be on the table for us to be monitoring to see if we can find the best terms available to us.

And what I think we're trying to make sure we've done and I hopefully everyone sees that we've been able to do a good job up. Did not do it in a situation of desperation. We can be opportunistic. Find the right situation with the right arrangement the right parties, that is going to be constructive the way we want to invest in the business. So I guess to be somewhat responsive, not directly responsive, We're considering all alternatives and we're always monitoring what could be a good alternative for us. To decrease our cost of capital and reinvest in the business.

And that's inclusive of not just what you described, but all different options that could be on the table.

And our next question coming from the line of Robert Maguire with Granite Research. Your line is now open.

Good morning, Vijay. Congratulations on the quarter.

Just with regards to can you kind of give us a discussion on where you think it might end up at year end 2025 and you want to look out a few years, where do you think it could go? I don't know if I'm willing to give or ready to provide multiyear guidance on our cost structure. But what I'll tell you is, we have very and sorry, let me just say Good morning, Rob. And thanks for joining us. I didn't say that beginning, so my apologies. But as I think about where we are we are very focused on cash on cash return. Right? And so we want to make sure that we're building a operating model an engine that can produce highly efficient volume and serve as many consumers as we can while ensuring that we are able to get a U. S. In year one cash on cash return. And so as you think about the costs that are incurred there, the lower the costs are can be, the higher the probability you can get there. So that again, going back to some of the previous questions, we can decrease our debt profile or improve our debt profile and we can ensure that we have the ability to churn up and down and refocus based on where the market's at.

Again, to take away some of the entryway in the market and make it more predictable, So there is more runway there. We do have we've gotten a lot of the easy stuff. We're starting to get into the harder stuff. But there's still a lot more opportunity as we proved in the fourth quarter of this past year we were able to really kind of hit the accelerator on what the engine can do when the market allows for it. And there's still more efficiency to be able to be delivered there.

I appreciate that. Just next question, it's exciting just to see the the opportunity to invest in the business this year. Can you kind of give us an idea of your free cash flow expectations for twenty twenty five, how they might flow through the year and how much cash you anticipate investing this year?

Great question. Again, we're not going to be providing that level of guidance. But what I'll tell you is the way we operate and again, you should see over the last couple of years. What we do is we try to read and react. And what we hold ourselves and we really pride ourselves on being able to do is to be prepared, be proactive but also understand that you're going to have to read what's happening in the marketplace and react to the And as we see market opportunity, what you all and the shareholders should want you're going to look at the investment returns on cash. If there is a high return on cash, it's greater than paying down debt or the cost of your capital, then you should invest in that. If you don't have a better return for that cash, you should pay down your debt because that costs you interest and other ones. So we're always balancing that based upon what we're seeing in the marketplace. So I think it's setting a bogey We don't want to increase our debt. That's for sure. But we want to be thoughtful about how are we deploying that cash which could be to have the highest return for shareholders with maybe building and growing and putting that either in technology or marketing more or hiring more agents.

If we see the market opportunity there. Or if we don't, then that could include paying down the net or doing something else that we can invest in other capabilities within the organization. So I know it's not completely responsive to your question, but hopefully that directionally how we think about it. It's a moving factor where we want to have we do want to generate cash, but we want to think about how we'll deploy it. Which when you think about your cash flow is going to be a hard measure to give you explicitly when we have got that mindset but generally with a view of trying to be accretive in total.

Thank you. And our next question coming from the line of Sidoti with Sidoti and Company. Your line is now open.

Hi, good morning. Thanks for taking the questions. This was, I guess, very different AEP period from the prior year, a lot of disruption. But if next year's AEB turns out to be more like the 02/2004 AEP.

How do you differentiate yourself against the competitors in the space and continue to grow Good morning, Jim.

I think you were saying what if it turns out to be more like a 2023 AEP, was that what you were saying?

Yes. I'm sorry. Yes. Right, the 2023 AEP going into 2024.

How do you maintain share against your competitors in that environment? Yes. I think there's one, just to be clear, we do not expect that the upcoming fourth quarter, right, more details to come We don't know for sure, but based upon the details we're seeing, of the body language and the commentary from different health plans, we would not expect what would be assumed in a twenty twenty three Q4, which was more stagnancy, not a lot of investment in benefits, not a lot of pullback in benefits. That's what '23 was. '24 is AEC this last fourth quarter was highly disruptive. Lots of benefit changes, mostly negative. And so force a lot of people to shop. But as I said earlier in one of the other Our hedge is you need to be able to find a way to one, use targeted marketing to identify those disruptive and to serve those consumers. That's one. Step two is, make sure in those markets where you do interact with the consumer is already on the right plan, you can be rewarded for that work. [indiscernible] the development of that program with the competitors leading into that idea of retention When you're able to do that effectively, you're able to know that for the activity you can perform, you are being adequately compensated.

You're not overly dependent on only disruption and for people having to switch to be able to drive your own top line ultimately then recover cost and drive bottom. So that is really what we've been trying to do. One, drive our cost down in total through direct cost improvement efficiencies with technology and standardization that we've been demonstrating for multiple quarters. And multiple years now and then incrementally adding new strategic initiatives with carriers to serve consumers in a way that whether you're providing a service of enrolling a new plan or providing confidence that they're already in the right plan, is being rewarded for delivering peace of mind and And that's what we've been spending really difficult times or a lot of times doing with carriers and with everybody to change the way brokers behave and to make sure that we're reimbursed for business. So that is how we try to Yes. That may be there [indiscernible] All right. And then just one other one. Something clearly worked with eTeleQuote with the AAP submission up 170%. What worked there and is those things that you can apply to your core business?

Yes. Actually, I would say it was the reverse. What we did is we learned what worked in our core business and we given the strength of our technology and the standardization was there and our and our comp models and everything that we have in there for our agent. We were able to take those learnings and deploy them very quickly just two weeks before AEV, and be able to get that capability launched with the eTeleco team that they were able to perform directionally closer on the same trajectory of our core Captivations. Not necessarily achieving what our average is on the core team, but directionally getting closer to it And I think it really just highlights the strength of that platform, the uniqueness of our built for purpose for price assist newer agents right, think about that. You have experienced eTeleco agent but they're new to our world. But our technology enhances their ability to feel confident that they're performing a value added service for the consumer and they're empowered to provide the details necessary give the consumer peace of mind with that product. And so that's exactly what did happen. So we're excited about it. It gives us confidence that we are definitely investing in the right things in our technology supporting our core team and other agents.

As you know, we also have our Go Partner Solutions, which are our external agent partners that work with us.

And we're exposing more and more and giving them more access to those tools so they can tap into those same efficiencies. And serve consumers with the same level of confidence and quality.

Thank you. And our next question coming from the line of Hey, good morning. Thank you for taking my questions.

My first one, I thought you mentioned earlier that you're not expecting as many plan exits this year. This leading to any changes in assumptions for your LTV model [indiscernible] persistency expectations Can you describe that question? Sorry, Dave, can you just say that one more time? I want to make sure I understand what you're saying.

With you mentioned earlier that you're not expecting as many planned exits this year. Is that translating into any major changes to your LTV model.

I understand what you're saying. So as we think about our LTV models and Brendan highlighted it what we try to do is try to anticipate the average behavior of what you're going to see. And of course, when you start to think about disruption, one year renewals are very important. Disruption of planned exits are very important in how you analyze it. But generally, LTV assumptions are built on a concept that over time, right, over the ten, fifteen years that you're making these estimates, what is the average amount of disruption that may or may not happen on a health plan or product basis And so we try to factor those into the likelihood of those things happening. And not try to be overly reactive to that.

But one would intuitively say that if you were to see that happen, which again, you can only really base on what can't really try to bake into new bookings what you expect to happen when you don't have enough data behind it yet. So I guess what I'm saying is what may or may not have in this next AEP is we have some dealings, you don't bake that into your book, Del LTV till you know more details around it. So right now, we're going to hold firm with the data we've got what we know, and that's what you book again.

Understood. Very helpful. Thank you. And then maybe just a long term question. Given the tech platform and strength of your agent workforce, Are you seeing any opportunities to expand beyond Medicare Advantage?

You know, Dave, we get this question a lot. And one thing that we know for sure is we have a differential technology and we have an excellent capability to serve the Medicare consumer. We've proven it time and time again on both those fronts. If we were to expand populations of products or otherwise, we'd have to believe that we have a right to be successful and or differentially be better than the field to do those things. Not diversification for diversification sake, not to just sell whatever we can sell. It's got to meet the needs of the consumers that we serve. And if we could find a model that continues to serve new population, identify their needs and match them with those needs, and not just say, well, we're able to make a bunch of money doing something. We're going to do a lot of it and try to see how many people we can convince to do it. Then I think we would absolutely be open to finding ways that we can serve more consumers. First and foremost, it's going to be serving the Medicare consumer because again, we have a right to serve them. Proven very exceptional at it.

We'd like to continue doing that. But if there are other populations where we can provide an unbiased objective assessment of needs, matching with those needs, and then be able to diversify in that vein. Then we would absolutely do that too. But right now, we've got a lot of still within the Medicare space. And we're again cautiously optimistic of the demand for services like ours in the near term to mid term for sure.

I will now turn the call back over to Vijay Kote for any final remarks. Thank you, Olivia.

I really do appreciate everybody spending the time with us today. As I reflect, it's been almost three years since we came in and since I joined. GoHealth. And a big part of that was I wanted to really find a way that we can change the way brokers and this the Medicare marketplace is viewed and we've invested in that. Through technology standardization, higher quality standards, putting our money where our mouth is to do what's right for the consumer. Making the individual consumer the customer. [indiscernible] [indiscernible] compensating our agents for providing peace of mind I'm extremely proud of that. We've been building an engine that can be nimble and that's the dynamic needs that may happen. Disruption, no disruption, we're preparing for that. We'll never be perfect. We're going to read it and react. And our team has built a muscle to do that. As we've done that, we've had an absolute focus on our cash and our capital structure, and we're going to continue to find ways to optimize that. So that we can use whatever assets we have whatever tools we've got in place, to be able to invest more into the business. And I can tell you that there's nothing I'm more excited about it's having the team around us that enables us to do it.

Our team has made this possible I appreciate everything they do. [indiscernible] the support of the shareholders to allow us to serve as many consumers as we had and do the difficult decisions to do the right thing, and prove that we have conviction So we invest in serving more consumers. And finding ways to change this industry to help all those who need it I appreciate your attention. Your willingness to listen and your partnership on this journey. So thank you again and we look forward to speaking to you all again very soon.

You all for your participation and you may now disconnect. [indiscernible]