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Press release content from PR Newswire. The AP news staff was not involved in its creation.

GoHealth Reports Third Quarter 2021 Results

November 9, 2021 GMT
GoHealth, Inc. (PRNewsfoto/GoHealth, Inc.)
GoHealth, Inc. (PRNewsfoto/GoHealth, Inc.)
GoHealth, Inc. (PRNewsfoto/GoHealth, Inc.)

CHICAGO, Nov. 9, 2021 /PRNewswire/ -- GoHealth, Inc. (NASDAQ: GOCO), a leading health insurance marketplace and Medicare-focused digital health company, announced financial results for the three and nine months ended September 30, 2021.

  • Third quarter 2021 net revenue of $211.7 million increased 30% compared to the prior year period. YTD 2021 net revenue of $612.8 million increased 42% compared to the prior year period.
  • Third quarter 2021 Medicare—Internal revenue of $158.6 million increased 19% compared to the prior year period. YTD 2021 Medicare—Internal revenue of $476.4 million increased 51% compared to the prior year period.
  • Third quarter 2021 Medicare Advantage (“MA”) Approved Submissions of 193,107 increased 100% compared to the prior year period. YTD 2021 MA Approved Submissions of 516,983 increased 67% compared to the prior year period.
  • Third quarter 2021 MA LTV Per Approved Submission of $926 decreased 6% compared to the prior year period. YTD 2021 MA LTV Per Approved Submission of $957 increased 5% compared to the prior year period.
  • Third quarter 2021 net loss of $55.4 million compared to a net loss of $206.5 million in the prior year period; Adjusted EBITDA1 of negative $14.1 million decreased 136% compared to the prior year period due to the 2021 strategic investments in agent capacity, marketplace technology, branding and the Encompass Platform. YTD 2021 net loss was $101.9 million compared to a net loss of $230.3 million in the prior year period; Adjusted EBITDA1 of $32.3 million decreased 68% compared to the prior year period.
  • The Company reaffirmed its full-year 2021 outlook, and expects total net revenue of $1,200 - $1,300 million (+37% to +48%) powered by commission net revenue of $1,000 - $1,100 million (+49% to +64%). The Company also reaffirms its Adjusted EBITDA1 outlook of $300 - $330 million (+11% to +22%).

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Clint Jones, co-founder and CEO said, “During the third quarter, we delivered revenue growth of 30%, while also exceeding our agent hiring goals in preparation for a successful Annual Enrollment Period. We are excited about our ability to grow our membership base during AEP and deliver the trusted healthcare advice seniors need to navigate the increasingly complex Medicare market. This increase in our agent force will enable us to better serve more seniors during this year’s AEP, grow our membership base and realize the potential of this enormous market opportunity. As a result of our agent hiring and momentum in our Encompass Platform, we are reaffirming our full-year 2021 guidance.”

Third Quarter 2021 Highlights2

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  • Total company revenue grew 30% to $211.7 million, net of a $6.7 million negative revenue adjustment relating to revenue estimates from prior periods
  • Medicare—Internal net revenue increased 19% to $158.6 million
  • LTV Per carrier Approved MA Submission decreased 6% to $926
  • Adjusted EBITDA1 decreased 136% to negative $14.1 million
    • Investment in customer care and enrollment grew to $87.8 million, an increase of 112% excluding non-cash share-based compensation expense relating to the accelerated vesting of performance-vesting units in connection with the IPO in prior year results, which primarily represents the costs to hire and onboard agents in advance of the Annual Enrollment Period (“AEP”)
      • Agent counts grew well ahead of the 50% target as the Company prepares for the AEP and fiscal 2022
    • Total cost of revenue, marketing and advertising expense grew 28%, roughly in line with sales growth

YTD 2021 Highlights2

  • Total company revenue grew 42% to $612.8 million
  • Medicare—Internal net revenue increased 51% to $476.4 million
  • LTV Per carrier Approved MA Submission increased 5% to $957
  • Adjusted EBITDA1 decreased 68% to $32.3 million
    • Investment in customer care and enrollment grew to $196.8 million, an increase of 110% excluding non-cash share-based compensation expense relating to the accelerated vesting of performance-vesting units in connection with the IPO in prior year results, which primarily represents the costs to hire and onboard agents in advance of the AEP
    • Total cost of revenue, marketing and advertising expense grew 44%, roughly in line with sales growth

2021 Financial Outlook

The trajectory of the U.S. economy remains challenging to predict, particularly given the continued uncertainty associated with the pace of recovery from the COVID-19 pandemic. The Company is reaffirming its financial outlook for the fiscal year ending December 31, 2021 based on current market conditions and expectations:

  • Full-year 2021 net revenue of $1,200 - $1,300 million, representing year-over-year growth of 37% - 48%
    • Full-year 2021 commission revenue of $1,000 - $1,100 million, representing year-over-year growth of 49% - 64%, fueled by the Company’s continued investment in its Medicare business, including GoHealth’s Encompass Platform
  • Full-year 2021 Adjusted EBITDA1 of $300 - $330 million, representing year-over-year growth of 11% - 22%


Conference Call Details

The Company will host a conference call today, Tuesday, November 9, 2021 at 5:00 p.m. (ET) to discuss its financial results. A live audio webcast and a supplemental presentation will be available online at https://investors.gohealth.com. The conference call can also be accessed by dialing 1-833-519-1310 for U.S. participants, or 1-914-800-3876 for international participants, and referencing participant code 2553159. A replay of the call will be available for 30 days via webcast for on-demand listening shortly after the completion of the call, at the same web link.

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.

(2)

Third quarter and YTD 2021 results compared to the comparable prior year period.

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this press release may be forward-looking statements. Statements regarding the Company’s future results of operations and financial position, business strategy and plans and objectives of management for future operations, including, among others, statements regarding expected financial performance and operational performance for the fiscal year 2021, including with respect to revenue and Adjusted EBITDA, the growth of our membership base, and our ability to realize the potential of our market opportunity 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 Company believes 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. There are or will be important factors that could cause the Company’s actual results to differ materially from those indicated in these forward-looking statements, including, but are not limited to, the following: the Company’s ability to comply with the numerous, complex and frequently changing laws regulating the marketing and sale of Medicare plans; the potential for an adverse change in the Company’s relationships with carriers, including a loss of a carrier relationship; failure to grow the Company’s customer base or retain its existing customers; the time and cost of training agents are significant and can increase during a period of high attrition; carriers’ ability to reduce commissions paid to the Company and adversely change their underwriting practices; significant consolidation in the healthcare industry which could adversely alter the Company’s relationships with carriers; information technology systems failures or capacity constraints interrupting the Company’s operations; factors that adversely impact the Company’s estimate of LTV; the Company’s dependence on agents to sell insurance plans; changes in the health insurance system and laws and regulation governing health insurance markets; the inability to effectively advertise the Company’s products; and our ability to successfully implement our business plan during a global economic downturn caused by the COVID-19 pandemic.

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 Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and other SEC filings. If one or more events related to these or other risks or uncertainties materialize, or if the Company’s underlying assumptions prove to be incorrect, actual results may differ materially from what the Company anticipates. Many of the important factors that will determine these results are beyond the Company’s 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, the Company does 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, the Company cannot assess the impact of each factor on its 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 share-based compensation expense, accelerated vesting of certain equity awards, loss on extinguishment of debt, loss on sublease, non-recurring legal fees, change in fair value of contingent consideration liability, IPO transaction costs, and severance costs. 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.

Management has provided its outlook regarding Adjusted EBITDA, which is a non-GAAP financial measure and excludes certain charges. Reconciliations of Adjusted EBITDA to its most directly comparable GAAP financial measure, net income (loss), is presented in the table below in this press release.

Glossary

“Adjusted EBITDA” represents, as applicable for the period, EBITDA as further adjusted for share-based compensation expense, accelerated vesting of certain equity awards, loss on extinguishment of debt, loss on sublease, non-recurring legal fees, change in fair value of contingent consideration liability, IPO transaction costs, and severance costs.

“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.

“Revenue Per Submission” refers to the total net revenues per Submitted Policy, which we define as (i) total net revenue, excluding revenue adjustments recorded in the period, but relating to performance obligations satisfied in prior periods, divided by (ii) the number of Submitted Policies 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, 2021


Three months ended Sep.
30, 2020






Dollars


% of Net
Revenues


Dollars


% of Net
Revenues


$ Change


% Change

Net revenues:













Commission


$

174,948



82.6

%


$

101,390



62.1

%


$

73,558



72.5

%

Enterprise


36,786



17.4

%


61,970



37.9

%


(25,184)



(40.6)

%

Net revenues


211,734



100.0

%


163,360



100.0

%


48,374



29.6

%

Operating expenses:













Cost of revenue


53,632



25.3

%


25,827



15.8

%


27,805



107.7

%

Marketing and advertising


59,511



28.1

%


62,848



38.5

%


(3,337)



(5.3)

%

Customer care and enrollment


87,813



41.5

%


52,896



32.4

%


34,917



66.0

%

Technology


11,651



5.5

%


39,520



24.2

%


(27,869)



(70.5)

%

General and administrative


24,232



11.4

%


156,551



95.8

%


(132,319)



(84.5)

%

Amortization of intangible assets


23,514



11.1

%


23,514



14.4

%




%

Total operating expenses


260,353



123.0

%


361,156



221.1

%


(100,803)



(27.9)

%

Income (loss) from operations


(48,619)



(23.0)

%


(197,796)



(121.1)

%


149,177



(75.4)

%

Interest expense


6,921



3.3

%


8,636



5.3

%


(1,715)



(19.9)

%

Loss on extinguishment of debt




%




%




N/M

Other (income) expense


(30)



%


2



%


(32)



N/M

Income (loss) before income taxes


(55,510)



(26.2)

%


(206,434)



(126.4)

%


150,924



(73.1)

%

Income tax expense (benefit)


(79)



%


62



%


(141)



N/M

Net income (loss)


$

(55,431)



(26.2)

%


$

(206,496)



(126.4)

%


$

151,065



(73.2)

%

Net income (loss) attributable to noncontrolling interests


(35,248)



(16.6)

%


(150,076)



(91.9)

%


114,828



N/M

Net income (loss) attributable to GoHealth, Inc.


$

(20,183)



(9.5)

%


$

(56,420)



(34.5)

%


$

36,237



(64.2)

%

Net income (loss) per share:













Net income (loss) per share of common stock — basic and diluted (1)


$

(0.18)





$

(0.65)








Weighted-average shares of Class A common stock outstanding — basic and diluted


113,938





84,183








Non-GAAP financial measures:













EBITDA


$

(22,519)





$

(173,021)








Adjusted EBITDA


$

(14,068)





$

39,284








Adjusted EBITDA margin


(6.6)

%




24.0

%













NM = Not meaningful

(1)

Net loss per share of Class A common stock—basic and diluted is the same for both the three and nine months ended September 30, 2020 as both periods are based on the post-IPO net loss from July 17, 2020 to September 30, 2020.

(in thousands, except percentages and per share amounts)


Nine months ended Sep.
30, 2021


Nine months ended Sep.
30, 2020






Dollars


% of Net
Revenues


Dollars


% of Net
Revenues


$ Change


% Change

Net revenues:













Commission


$

496,437



81.0

%


$

310,506



72.0

%


$

185,931



59.9

%

Enterprise


116,378



19.0

%


120,921



28.0

%


(4,543)



(3.8)

%

Net revenues


612,815



100.0

%


431,427



100.0

%


181,388



42.0

%

Operating expenses:













Cost of revenue


139,449



22.8

%


104,520



24.2

%


34,929



33.4

%

Marketing and advertising


169,730



27.7

%


110,556



25.6

%


59,174



53.5

%

Customer care and enrollment


196,834



32.1

%


105,267



24.4

%


91,567



87.0

%

Technology


33,251



5.4

%


49,818



11.5

%


(16,567)



(33.3)

%

General and administrative


69,176



11.3

%


177,400



41.1

%


(108,224)



(61.0)

%

Change in fair value of contingent consideration liability




%


19,700



4.6

%


(19,700)



N/M

Amortization of intangible assets


70,543



11.5

%


70,543



16.4

%




%

Total operating expenses


678,983



110.8

%


637,804



147.8

%


41,179



6.5

%

Income (loss) from operations


(66,168)



(10.8)

%


(206,377)



(47.8)

%


140,209



(67.9)

%

Interest expense


23,886



3.9

%


24,378



5.7

%


(492)



(2.0)

%

Loss on extinguishment of debt


11,935



1.9

%




%


11,935



N/M

Other (income) expense


27



%


(494)



(0.1)

%


521



(105.5)

%

Income (loss) before income taxes


(102,016)



(16.6)

%


(230,261)



(53.4)

%


128,245



(55.7)

%

Income tax expense (benefit)


(142)



%


38



%


(180)



N/M

Net income (loss)


$

(101,874)



(16.6)

%


$

(230,299)



(53.4)

%


$

128,425



(55.8)

%

Net loss attributable to noncontrolling interests


(67,612)



(11.0)

%


(150,076)



(34.8)

%


$

82,464



(54.9)

%

Net loss attributable to GoHealth, Inc.


$

(34,262)



(5.6)

%


$

(80,223)



(18.6)

%


$

45,961



(57.3)

%

Net income (loss) per share:













Net income (loss) per share of common stock — basic and diluted (1)


$

(0.33)





$

(0.65)








Weighted-average shares of Class A common stock outstanding — basic and diluted


102,939





84,183








Non-GAAP financial measures:













EBITDA


$

(955)





$

(132,441)








Adjusted EBITDA


$

32,322





$

101,141








Adjusted EBITDA margin


5.3

%




23.4

%













NM = Not meaningful

(1)

Net loss per share of Class A common stock—basic and diluted is the same for both the three and nine months ended September 30, 2020 as both periods are based on the post-IPO net loss from July 17, 2020 to September 30, 2020.


The following tables set forth the reconciliations of GAAP net income (loss) to EBITDA and Adjusted EBITDA for the periods indicated (unaudited):

(in thousands)


Three months
ended Sep.
30, 2021


Three months
ended Sep.
30, 2020

Net revenues


$

211,734



$

163,360


Net income (loss)


(55,431)



(206,496)


Interest expense


6,921



8,636


Income tax expense (benefit)


(79)



62


Depreciation and amortization expense


26,070



24,777


EBITDA


(22,519)



(173,021)


Share-based compensation expense (1)


7,389



2,770


Accelerated vesting of certain equity awards (2)




209,300


Loss on sublease (3)


1,062




IPO transaction costs (4)




235


Adjusted EBITDA


$

(14,068)



$

39,284


Adjusted EBITDA margin


(6.6)

%


24.0

%







(1)

Represents non-cash share-based compensation expense relating to equity awards.

(2)

Represents non-cash share-based compensation expense relating to the accelerated vesting of performance-vesting units in connection with the IPO for the three months ended September 30, 2020.

(3)

Represents the loss related to a sublease agreement entered into during the three months ended September 30, 2021.

(4)

Represents legal, accounting, consulting, and other indirect costs associated with the Company's IPO.

(in thousands)


Nine months
ended Sep.
30, 2021


Nine months
ended Sep.
30, 2020

Net revenues


$

612,815



$

431,427


Net income (loss)


(101,874)



(230,299)


Interest expense


23,886



24,378


Income tax expense (benefit)


(142)



38


Depreciation and amortization expense


77,175



73,442


EBITDA


(955)



(132,441)


Loss on extinguishment of debt (1)


11,935




Share-based compensation expense (2)


20,100



3,846


Accelerated vesting of certain equity awards (3)




209,300


Loss on sublease (4)


1,062




Legal fees (5)


180




Change in fair value of contingent consideration liability (6)




19,700


IPO transaction costs (7)




659


Severance costs (8)




77


Adjusted EBITDA


$

32,322



$

101,141


Adjusted EBITDA margin


5.3

%


23.4

%







(1)

Represents the loss on debt extinguishment related to the Initial Term Loan Facility.

(2)

Represents non-cash share-based compensation expense relating to equity awards.

(3)

Represents non-cash share-based compensation expense relating to the accelerated vesting of performance-vesting units in connection with the IPO for the nine months ended September 30, 2020.

(4)

Represents the loss related to a sublease agreement entered into during the nine months ended September 30, 2021.

(5)

Represents non-recurring legal fees unrelated to our core operations.

(6)

Represents the change in fair value of the contingent consideration liability due to the predecessor owners of the Company arising from the Centerbridge Acquisition.

(7)

Represents legal, accounting, consulting, and other indirect costs associated with the Company's IPO.

(8)

Represents costs associated with the termination of employment.


The following table summarizes share-based compensation expense by operating function for the periods indicated (unaudited):

(in thousands)


Three
months
ended Sep.
30, 2021


Three
months
ended Sep.
30, 2020


Nine
months
ended Sep.
30, 2021


Nine
months
ended Sep.
30, 2020

Marketing and advertising


$

698



$

24,709



$

1,462



$

24,829


Customer care and enrollment


957



11,993



2,796



12,050


Technology


910



32,748



2,791



32,907


General and administrative


4,824



142,620



13,051



143,360


Total share-based compensation expense


$

7,389



$

212,070



$

20,100



$

213,146



The following table sets forth our balance sheets for the periods indicated (unaudited):

(in thousands, except per share amounts)


Sep. 30, 2021


Dec. 31, 2020

Assets





Current assets:





Cash and cash equivalents


$

85,221



$

144,234


Accounts receivable, net of allowance for doubtful accounts of $634 in 2021 and $787 in 2020


8,578



14,211


Receivable from NVX Holdings, Inc.




3,395


Commissions receivable - current


133,422



188,128


Prepaid expense and other current assets


29,291



41,854


Total current assets


256,512



391,822


Commissions receivable - non-current


837,958



622,270


Other long-term assets


3,988



2,072


Property, equipment, and capitalized software, net


27,424



17,353


Intangible assets, net


618,183



688,726


Goodwill


386,553



386,553


Total assets


$

2,130,618



$

2,108,796


Liabilities and Stockholders' Equity





Current liabilities:





Accounts payable


$

24,297



$

8,733


Accrued liabilities


32,737



26,926


Commissions payable - current


60,303



78,478


Deferred revenue


561



736


Current portion of long-term debt


4,270



4,170


Other current liabilities


10,764



8,328


Total current liabilities


132,932



127,371


Non-current liabilities:





Commissions payable - non-current


237,005



182,596


Long-term debt, net of current portion


439,216



396,400


Other non-current liabilities


3,676



3,274


Total non-current liabilities


679,897



582,270


Stockholders' equity:





Class A common stock – $0.0001 par value; 1,100,000 shares authorized; 114,713 and 84,196 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively.


11



8


Class B common stock – $0.0001 par value; 588,002 and 619,004 shares authorized; 205,995 and 236,997 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively.


21



24


Preferred stock – $0.0001 par value; 20,000 shares authorized; no shares issued and outstanding at September 30, 2021 and December 31, 2020.





Additional paid-in capital


550,455



399,169


Accumulated other comprehensive income (loss)


(4)



17


Accumulated deficit


(53,064)



(18,802)


Total stockholders' equity attributable to GoHealth, Inc.


497,419



380,416


Non-controlling interests


820,370



1,018,739


Total stockholders' equity


1,317,789



1,399,155


Total liabilities and stockholders' equity


$

2,130,618



$

2,108,796


The following table sets forth our statements of cash flows for the periods indicated (unaudited):

(in thousands)


Nine months
ended Sep.
30, 2021


Nine months
ended Sep.
30, 2020

Operating Activities





Net income (loss)


$

(101,874)



$

(230,299)


Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:





Share-based compensation


20,100



213,146


Depreciation and amortization


6,632



2,899


Amortization of intangible assets


70,543



70,543


Amortization of debt discount and issuance costs


1,696



1,744


Change in fair value of contingent consideration




19,700


Loss on extinguishment of debt


11,935




Loss on sublease


1,062




Other non-cash items


(708)



(1,100)


Changes in assets and liabilities, net of acquisition:





Accounts receivable


6,173



14,860


Commissions receivable


(160,982)



(117,888)


Prepaid expenses and other assets


10,471



(10,884)


Accounts payable


18,298



(4,402)


Accrued liabilities


5,693



(1,793)


Deferred revenue


(175)



40,188


Commissions payable


36,233



27,983


Other liabilities


2,484



4,138


Net cash provided by (used in) operating activities


(72,419)



28,835


Investing Activities





Purchases of property, equipment and software


(19,269)



(12,023)


Net cash used in investing activities


(19,269)



(12,023)


Financing Activities





Proceeds from issuance of Class A common stock sold in initial public offering, net of offering costs




852,407


Payment of partial consideration of the Blocker Merger




(96,165)


Purchase of LLC Interests




(508,320)


Settlement of Senior Preferred Earnout Units




(100,000)


Proceeds received upon issuance of common units




10,000


Borrowings under term loans


335,000



117,000


Payments of term loans


(297,903)



(2,835)


Call premium paid for debt extinguishment


(5,910)




Debt issuance cost payments


(1,608)



(6,291)


Principal payments under capital lease obligations


(231)



(218)


Cash received on advancement to NVX Holdings, Inc.


3,395




Net cash provided by financing activities


32,743



265,578


Effect of exchange rate changes on cash and cash equivalents


(68)



(68)


Increase in cash and cash equivalents


(59,013)



282,322


Cash and cash equivalents at beginning of period


144,234



12,276


Cash and cash equivalents at end of period


$

85,221



$

294,598


Supplemental Disclosure of Cash Flow Information





Non-cash investing and financing activities:





Purchases of property, equipment and software included in accounts payable


$

2,734



$

1,104


Issuance of senior preferred earnout units to settle contingent consideration liability


$



$

100,000


Issuance of common A and B units to settle contingent consideration liability


$



$

100,000


Issuance of Class A and Class B common stock in connection with Reorganization Transactions


$



$

30


Settlement of contingent consideration liability


$



$

62,400


The following tables set forth operating segment results for the periods indicated (unaudited):

(in thousands, except percentages)


Three months ended Sep.
30, 2021


Three months ended Sep.
30, 2020






Dollars


% of Net
Revenues


Dollars


% of Net
Revenues


$ Change


% Change

Net revenues:













Medicare - Internal


$

158,605



74.9

%


$

133,723



82.0

%


$

24,882



18.6

%

Medicare - External


46,237



21.8

%


20,252



12.4

%


25,985



128.3

%

IFP and Other - Internal


5,742



2.7

%


6,147



3.8

%


(405)



(6.6)

%

IFP and Other - External


1,150



0.5

%


3,238



2.0

%


(2,088)



(64.5)

%

Net revenues


211,734



100.0

%


163,360



100.0

%


48,374



29.6

%

Segment profit (loss):













Medicare - Internal


(4,126)



(1.9)

%


49,464



30.3

%


(53,590)



(108.3)

%

Medicare - External


1,866



0.9

%


720



0.4

%


1,146



N/M

IFP and Other - Internal


2,186



1.0

%


(245)



(0.1)

%


2,431



N/M

IFP and Other - External


(330)



(0.2)

%


147



0.1

%


(477)



(324.5)

%

Segment profit (loss)


(404)



(0.2)

%


50,086



30.7

%


(50,490)



(100.8)

%

Corporate expense


24,701



11.7

%


224,368



137.3

%


(199,667)



(89.0)

%

Amortization of intangible assets


23,514



11.1

%


23,514



14.4

%




%

Interest expense


6,921



3.3

%


8,636



5.3

%


(1,715)



(19.9)

%

Other (income) expense


(30)



%


2



%


(32)



N/M

Income (loss) before income taxes


$

(55,510)



(26.2)

%


$

(206,434)



(126.4)

%


$

150,924



(73.1)

%







NM = Not meaningful



Nine months ended Sep.
30, 2021


Nine months ended Sep.
30, 2020





(in thousands, except percentages)


Dollars


% of Net
Revenues


Dollars


% of Net
Revenues


$ Change


% Change

Net revenues:













Medicare - Internal


$

476,391



77.7

%


$

316,211



73.3

%


$

160,180



50.7

%

Medicare - External


117,116



19.1

%


77,305



17.9

%


39,811



51.5

%

IFP and Other - Internal


13,505



2.2

%


21,798



5.1

%


(8,293)



(38.0)

%

IFP and Other - External


5,803



0.9

%


16,113



3.7

%


(10,310)



(64.0)

%

Net revenues


612,815



100.0

%


431,427



100.0

%


181,388



42.0

%

Segment profit (loss):













Medicare - Internal


73,574



12.0

%


123,946



28.7

%


(50,372)



(40.6)

%

Medicare - External


(453)



(0.1)

%


892



0.2

%


(1,345)



N/M

IFP and Other - Internal


657



0.1

%


181



%


476



N/M

IFP and Other - External


(227)



%


789



0.2

%


(1,016)



(128.8)

%

Segment profit (loss)


73,551



12.0

%


125,808



29.2

%


(52,257)



(41.5)

%

Corporate expense


69,176



11.3

%


241,942



56.1

%


(172,766)



(71.4)

%

Change in fair value of contingent consideration liability




%


19,700



4.6

%


(19,700)



N/M

Amortization of intangible assets


70,543



11.5

%


70,543



16.4

%




%

Loss on extinguishment of debt


11,935



1.9

%




%


11,935



N/M

Interest expense


23,886



3.9

%


24,378



5.7

%


(492)



(2.0)

%

Other (income) expense


27



%


(494)



(0.1)

%


521



(105.5)

%

Income (loss) before income taxes


$

(102,016)



(16.6)

%


$

(230,261)



(53.4)

%


$

128,245



(55.7)

%







NM = 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, 2021 and 2020, for those submissions that are commissionable (compensated through commissions received from carriers):

Medicare - Total Commissionable Submitted Policies


Three
months
ended Sep.
30, 2021


Three
months
ended Sep.
30, 2020


Nine
months
ended Sep.
30, 2021


Nine
months
ended Sep.
30, 2020

Medicare Advantage


149,680


97,675


475,717


314,088

Medicare Supplement


648


1,245


2,774


6,164

Prescription Drug Plans


1,923


2,006


6,890


6,437

Total Medicare


152,251


100,926


485,381


326,689

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, 2021 and 2020. Only commissionable policies are used to calculate LTV.

Medicare - Internal Commissionable Approved Submissions


Three
months
ended Sep.
30, 2021


Three
months
ended Sep.
30, 2020


Nine
months
ended Sep.
30, 2021


Nine
months
ended Sep.
30, 2020

Medicare Advantage


145,619


77,186


395,804


228,612

Medicare Supplement


183


315


702


1,602

Prescription Drug Plans


2,208


1,574


6,525


5,319

Total Medicare


148,010


79,075


403,031


235,533



Medicare - External Commissionable Approved Submissions


Three
months
ended Sep.
30, 2021


Three
months
ended Sep.
30, 2020


Nine
months
ended Sep.
30, 2021


Nine
months
ended Sep.
30, 2020

Medicare Advantage


47,488


19,390


121,179


80,656

Medicare Supplement


427


844


1,823


4,035

Prescription Drug Plans


191


352


716


1,206

Total Medicare


48,106


20,586


123,718


85,897

The following table presents the LTV per Approved Submission by product for the Medicare segments for the three and nine months ended September 30, 2021 and 2020:

LTV per Approved Submission


Three
months
ended Sep.
30, 2021


Three
months
ended Sep.
30, 2020


Nine
months
ended Sep.
30, 2021


Nine
months
ended Sep.
30, 2020

Medicare Advantage


$

926


$

987


$

957


$

913

Medicare Supplement


$

874


$

934


$

834


$

929

Prescription Drug Plans


$

215


$

215


$

215


$

216

The following table presents the number of Submitted Policies by product for the Medicare segments for the three and nine months ended September 30, 2021 and 2020, for those submissions that are non-commissionable (compensated via hourly fees and enrollment fees) and do not result in commission revenue:

Medicare - Total Non-Commissionable Submitted Policies


Three
months
ended Sep.
30, 2021


Three
months
ended Sep.
30, 2020


Nine
months
ended Sep.
30, 2021


Nine
months
ended Sep.
30, 2020

Medicare Advantage


1,532


6,472


10,703


20,806

Medicare Supplement


1,327


1,716


5,019


5,262

Prescription Drug Plans


542


1,034


2,218


2,787

Total Medicare


3,401


9,222


17,940


28,855

The following table presents a reconciliation from net income to non-GAAP Adjusted EBITDA guidance for the twelve months ended December 31, 2021:



Twelve months ended

Dec. 31, 2021



Guidance Range

(in thousands)


Low


High

Net revenues


$

1,200,000



$

1,300,000


Net income


126,603



156,603


Interest expense


30,000



30,000


Income tax expense


220



220


Depreciation and amortization expense


102,000



102,000


EBITDA


258,823



288,823


Loss on extinguishment of debt (1)


11,935



11,935


Share-based compensation expense (2)


28,000



28,000


Loss on sublease (3)


1,062



1,062


Legal fees (4)


180



180


Adjusted EBITDA


$

300,000



$

330,000


Adjusted EBITDA margin


25

%


25

%







(1)

Represents the loss on debt extinguishment related to the Term Loan Facility.

(2)

Represents non-cash share-based compensation expense relating to equity awards.

(3)

Represents the loss related to a sublease agreement.

(4)

Represents non-recurring legal fees unrelated to our core operations.

View original content to download multimedia: https://www.prnewswire.com/news-releases/gohealth-reports-third-quarter-2021-results-301420386.html

SOURCE GoHealth, Inc.