GoHealth, Inc. · NASDAQ:GOCO
GoHealth — Q3 2020 Earnings Presentation
27 slides from GoHealth's earnings presentation, Nov 11, 2020
Slide 1: Third Quarter 2020 Earnings Slides
Third Quarter 2020 Earnings Slides November 11, 2020
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements o ther than statements of historical facts contained in this presentation may be forward-looking statements. Statemen
Slide 3: Key Topics
Key Topics GoHealth - The Leading Medicare DTC Marketplace Strong Q3 and YTD 2020 Results Upgraded 2020 Outlook and Encouraging October Trends 3
Slide 4: Delivered Strong Results and Increasing 2020 Outlook
Delivered Strong Results and Increasing 2020 Outlook GoHealth is tracking well towards FY2020 given October submission growth of 83% Q3 2020 Revenue, Profit, & LTVs Increasing (YoY % Change) Strategic Investments FY 2020 Outlook • Revenue +52% • 76% increase in licensed • Raising revenue outlook to
Slide 5: Biggest, Fastest Growing, & Most Profitable
GoHealth - Positioned for Sustainable Growth Improving Access to Healthcare in America Biggest and Fastest Growing Public DTC Marketplace for Medicare Advantage Proprietary Tech and Data Drive Best in Class Biggest, Margins Fastest Growing, & Carrier Relationships Drive Enterprise Revenue and Rapid
Slide 6: The Leading End-to-End Health Insurance Marketplace
The Leading End-to-End Health Insurance Marketplace Powerful Technology Solution with Highly Trained Agents Lead to Industry Leading Margins Key Differentiators: Convenient access to Efficient customer Consumers Carriers large selection of plans acquisition at scale Marketing Omni-Channel Customer A
Slide 7: Lead Scoring and Routing to GoHealth Agents Optimizes LTV/CAC
Lead Scoring and Routing to GoHealth Agents Optimizes LTV/CAC Utilizing Matching Technology to Maximize Conversion and Customer Satisfaction Illustrative Example of Matching Technology Example 1: Example 2: Cindy’s MA Jim’s SNP $1,140 $950 LTV LTV Name: Cindy Name: Karen Gender: Female Gender: Femal
Slide 8: Expanding Carrier Relationships Supports Growth, Conversion and Persistency
Expanding Carrier Relationships Supports Growth, Conversion and Persistency Carrier Expansion Maximizes Policy Choice for Consumers 2019 2020 Covers 1 of the Top 2 Carriers Covers Both of Top 2 Carriers Rifle-shot approach with Broader policy offerings post Humana and Anthem: UnitedHealthcare, Aetna
Slide 9: Proven Efficiency Creates Revenue Opportunities with Carrier Partners
Proven Efficiency Creates Revenue Opportunities with Carrier Partners GoHealth’s Encompass Platform positions us to own the customer journey and help improve healthcare outcomes through additional carrier programs Future revenue from driving better health outcomes Value based care Preferred pharmacy
Slide 10: Well Positioned to Capture Share in the Growing DTC Medicare Market
Well Positioned to Capture Share in the Growing DTC Medicare Market 19-Year Track Record of Innovation and Execution Aging Baby Boomers Driving Growth in Medicare Enrollments3 (~10,000 people turning 65 every day) 76.7 66% 59.9 26.1 60% 45.5 24.2 44% 25.5 50.6 35.7 20.0 2008A 2008A 2018A 2028E 2028E
Slide 11: Balanced Strategy Using Our Integrated Marketplace Delivers Sustainable Growth
Balanced Strategy Using Our Integrated Marketplace Delivers Sustainable Growth, Industry-leading LTV/CAC and Cash Generation Enhance Carriers Expand Carriers / Improve Consumer Persistency and Products “Fit Score” Conversion Drive Provide Broad Capture Other TeleCare & Engagement, Member Service Ben
Slide 12: Key Topics
Key Topics GoHealth - The Leading Medicare DTC Marketplace Strong Q3 and YTD 2020 Results Upgraded 2020 Outlook and Encouraging October Trends 12
Slide 13: Q3 2020 Results – Strong Growth and Operating Leverage
Q3 2020 Results – Strong Growth and Operating Leverage Net Revenue1 Adjusted EBITDA2 ($ in millions) ($ in millions) $ 163.4 $ 39.3 +52% +142% $ 107.2 $ 16.3 Q3 2019 Q3 2020 Q3 2019 Q3 2020 Generated Cash From Operations of $33 million in Q3 2020 1 Net loss for the third quarter of 2020 was $206.5 m
Slide 14: Q3 2020 Internal Growth of 112% Drove Strong Margin Expansion
Q3 2020 Internal Growth of 112% Drove Strong Margin Expansion Medicare – Internal Adjusted EBITDA Revenue Margins1 ($ in millions) $133.7 24.0% High Quality Growth +112% $57.1 Leading EBITDA +880 bps Margins Strong Operating $63.1 Cash Flow Enterprise $18.8 15.2% Best in Class LTV/CAC $76.6 Commissi
Slide 15: YTD 2020 Results - High Quality Growth and Margin Expansion
YTD 2020 Results - High Quality Growth and Margin Expansion Adjusted EBITDA Net Revenue1 Adjusted EBITDA2 Margins ($ in millions) ($ in millions) $ $ 431.4 101.1 23.4% +72% +720 bps +149% 16.2% $ 250.8 $ 40.7 YTD 2019 YTD 2020 YTD 2019 YTD 2020 YTD 2019 YTD 2020 EBITDA margins expanded 720bps to 23.
Slide 16: Driving YTD 2020 LTVs Higher Through Improved Persistency
Driving YTD 2020 LTVs Higher Through Improved Persistency Carrier expansion and TeleCare investments position GoHealth for continued LTV gains Decomposition of YTD LTV Change as of September 30, 2020 Medicare Advantage Quarterly Change in LTV +2% -1% +5% -1% +2% +2% $913 $899 Q1 YTD Q319 Commissions
Slide 17: Driving YTD 2020 CPAs Lower; Resulting in LTV/CAC Improvements
Driving YTD 2020 CPAs Lower; Resulting in LTV/CAC Improvements Strong efficiency gains on CPOs and higher conversion rates powered the declines Strong Agent Conversion Drives Lower YTD Acquisition Costs -7% -11% -18% $398 $328 CPA YTD Q319 CPO Conversion Rate CPA YTD Q320 Strong YTD LTV/CAC M-I segm
Slide 18: Key Topics
Key Topics GoHealth - The Leading Medicare DTC Marketplace Strong Q3 and YTD 2020 Results Upgraded 2020 Outlook and Encouraging October Trends 18
Slide 19: Upgraded FY 2020 Outlook Above Prior Expectations
Upgraded FY 2020 Outlook Above Prior Expectations On track for full year adjusted EBITDA growth of 58% to 70% Net Revenue Adjusted EBITDA1 ($ in millions) ($ in millions) $290 $890 $270 +58% to +65% +58% to +70% $850 $540 $170 FY 2019 FY 2020 FY 2019 FY 2020 Strong Momentum into AEP given Investment
Slide 20: October – An Encouraging Start to AEP
October – An Encouraging Start to AEP October Submissions +83% vs Q4 implied revenue growth of 46% to 60% October Submissions Implied Q4 2020 Net Revenue ($ in millions) $459 69.0k +83% $419 +46% to +60% 37.7k $287 FY 2019 FY 2020 FY 2019 FY 2020 On Track to Hit FY 2020 Growth Outlook, Expect Moment
Slide 21: GoHealth – Delivering Industry Leading Results
GoHealth – Delivering Industry Leading Results The Biggest, Fastest Growing, and Most Profitable Platform Large and Growing $28B+ $720M Largest Revenue Market Opportunity TAM TTM Revenue $231M 212% Most Profitable TTM EBITDA Fastest Growing TTM EBITDA Growth +$4M High Quality +2% Most Efficient TTM
Slide 22: Appendix A
Appendix A 22
Slide 23: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Adjustments to EBITDA ($ in thousands) Description of Adjustments YTD YTD 2019 Q3 2019 Q3 2020 2019 2020 TTM Represents non-cash share-based compensation expense relating Net Income (Loss) $(41,068) $(89,046) $(206,496) $ (68,769) $(230,299) $(202,598)
Slide 24: Appendix B: Combined Results
Appendix B Combined Results On September 13, 2019, Centerbridge Capital Partners III, L.P., indirectly through a subsidiary of GoHealth Holdings, LLC, (formerly known as Blizzard Parent, LLC), an entity formed in contemplation of the acquisition, acquired a 100% interest in Norvax, LLC. We refer to
Slide 25: Reconciliation of Net Income to Adjusted EBITDA – Combined Results
Reconciliation of Net Income to Adjusted EBITDA – Combined Results Three Months Ended September 30 25
Slide 26: Reconciliation of Net Income to Adjusted EBITDA – Combined Results
Reconciliation of Net Income to Adjusted EBITDA – Combined Results Nine Months Ended September 30 26
Slide 27: Glossary
Glossary ♦ “Approved Submissions” refer to Submitted Policies approved by carriers for the identified product during the indicated period. ♦ “Adjusted EBITDA” represents EBITDA as further adjusted for share-based compensation, expense related to the accelerated vesting of certain equity awards, chan