GoHealth, Inc. · NASDAQ:GOCO
GoHealth — Q2 2020 Earnings Presentation
39 slides from GoHealth's earnings presentation, 2020
Slide 1: Second quarter fiscal 2020 earnings slides
Second quarter fiscal 2020 earnings slides
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 other than statements of historical facts contained in this presentation may be forward-looking statements. Statement
Slide 3: Agenda
Agenda Q2 and First Half 2020 Results FY 2020 Outlook GoHealth Competitive Advantages 3
Slide 4: Q2 2020 Results – High Quality Growth
Q2 2020 Results – High Quality Growth ($ in millions) Net Revenue Adjusted EBITDA* $26.9 $127.1 56% 71% $17.3 $74.5 Q2 2019 Q2 2020 Q2 2019 Q2 2020 Continue to invest and execute on a strategy that ensures success • See accompanying appendix for a reconciliation of Adjusted EBITDA, which is a non-GA
Slide 5: First Half 2020 Results – Strong Growth Trajectory for FY 2020
First Half 2020 Results – Strong Growth Trajectory for FY 2020 ($ in millions) Net Revenue Adjusted EBITDA* $268.1 $61.9 87% 154% $143.6 $24.4 1H 2019 1H 2020 1H 2019 1H 2020 EBITDA margins expand due to scale efficiencies • See accompanying appendix for a reconciliation of Adjusted EBITDA, which is
Slide 6: LTV/CAC Focus Drives Margins and Rapid Cash Payback
LTV/CAC Focus Drives Margins and Rapid Cash Payback ($ in millions) LTV/CAC(1) Optimal LTV/CAC Range 4.0X 2.7X 2.5X $22.6M 2.3X 2.3X 1H 2019 1H 2020 Trailing twelve months ¹ Medicare-Internal Segment 6
Slide 7: FY 2020 Outlook – Strong Top and Bottom Line Growth
FY 2020 Outlook – Strong Top and Bottom Line Growth ($ in millions) Net Revenue Adjusted EBITDA* $290 $890 $265 +56% to +65% +55% to +71% $840 $540 $170 FY 2019 FY 2020 FY 2019 FY 2020 Continued top and bottom line growth with more efficient cash utilization * Management has provided its outlook reg
Slide 8: Medicare Cash Payback in Under 12 Months in FY 2019
Medicare Cash Payback in Under 12 Months in FY 2019 Cash-flow Dynamic per Medicare Submitted Policy (1) $1,072 $870 $546 $504 $476 $510 $526 $366 FY 2018 FY 2019 Year 1 Cost Year 1 Cash Future Cash Focus on strong LTV/CAC drove FY19 cash payback during first year 1 Cash-flow on a per Medicare Submit
Slide 9: GoHealth’s Key Differentiators vs. Peers
GoHealth’s Key Differentiators vs. Peers ♦ The bigger we get the better we get (scale creates opportunities to leverage data and technology to optimize LTV/CAC) ♦ On track to add over 1,000 agents to focus on Internal Medicare Advantage ♦ Deep and tenured relationships with carriers supports opportu
Slide 10: Introduction To GoHealth
Introduction To GoHealth “Greg was so helpful and patient with me. I tried doing the enrollment myself and got confused. He made it a lot easier for me. I'm very thankful for his help. He said I can call him anytime I need something. I feel very comfortable having him help me at each enrollment peri
Slide 11: GoHealth: The Leading, End-to-End Health Insurance Marketplace
GoHealth: The Leading, End-to-End Health Insurance Marketplace We believe we are one of the largest Medicare telesales / digital distributor by submissions, with compelling growth and margins, and in-flight initiatives to drive further upside 2019 by the Numbers Leading health insurance marketplace
Slide 12: 19-Year Track Record of Innovation and Execution
19-Year Track Record of Innovation and Execution, Driving Consistent Industry-Leading Growth Exponential Growth Integration of new Track record of carriers, plans, and consistent, strong supplemental growth revenue streams to drive growth CAGR: ~52%¹ Investment in business analytics to optimize perf
Slide 13: Bridging the Gap Between Carrier and Consumers
Bridging the Gap Between Carrier and Consumers Technology, Data, Customer Service and Carrier Relationships at Industry Leading Scale Convenient access Efficient customer Consumers to large selection Carriers acquisition at scale of plans Omni-Channel Customer Acquisition Platform Search SEO/Organic
Slide 14: Key Capabilities of GoHealth
Key Capabilities of GoHealth 1 Fully Integrated End-to-End Marketplace Technology 2 Omni-Channel Customer Acquisition Platform 3 Deep, Tenured and Growing Relationships with Top Carriers Sales Platform Leveraging Data and Machine-Learning, 4 Driving Agent Performance and Efficiency Founder-Led Manag
Slide 15: Highly-Scalable, Flexible Distribution Model Captures Value of Every Consumer
Highly-Scalable, Flexible Distribution Model Captures Value of Every Consumer Diversified Customer Acquisition Channels Intelligent, Real-Time Scoring & Routing Driven by Proprietary Technology Platform Multi-Channel Distribution Internal Channel External Channel $376M of 2019 Net Revenue $163M of 2
Slide 16: Unmatched Ecosystem Powered by Technology and Data
Unmatched Ecosystem Powered by Technology and Data BEST-IN-CLASS AGENT INFRASTRUCTURE ROBUST DIY CAPABILITIES EVOLVING WITH CONSUMERS Full online plan comparison and shopping tool 1,453 5.3 Ability to switch between digital and agent- In-house licensed agents Sales per agent per day assisted during
Slide 17: Industry-Leading Data and Technology Drive Value Proposition
Industry-Leading Data and Technology Drive Value Proposition Scale and Years of Consumer Behavior Data Create a Powerful Competitive Moat Value Proposition To Value Proposition to Carriers Consumers Broad Consumer Customer Acquisition Choice at Scale Transaction Convenience of Data and Insights Pref
Slide 18: GoHealth Continues to Grow During COVID-19 Pandemic
GoHealth Continues to Grow During COVID-19 Pandemic 72 hour transition of 99%+ of agents to work from home Approved Submissions and Agent Efficiency1 121K 2.9 101K ♦ Medicare is resilient in downturns ♦ Medicare Advantage sales gaining share 54K 42K ♦ Telesales and DIY models have accelerated 2.1 1.
Slide 19: Key Strengths and Opportunities
Key Strengths and Opportunities “GoHealth is amazing! They answered all my questions and helped me in ways I didn't think were possible. I will recommend GoHealth to everyone. So many agencies are so hard to get through to on the phone and on the website due to COVID-19 but GoHealth is perfect!” – T
Slide 20: Key Strengths and Opportunities
Key Strengths and Opportunities Best-in-Class Medicare Large Addressable LTV / CAC Ratio Driven 1 Market Supported by by Proprietary 5 Secular Growth Trends Technology Fully Integrated, Strong Growth Strategy 2 End-to-End with “GoHealth 6 Marketplace Encompass Platform” Compelling Financial Data-Dri
Slide 21: Large and Growing Addressable Market
1 Large and Growing Addressable Market GoHealth Represents ~1% of Addressable Market Aging Baby Boomers Driving Growth in Medicare Enrollments1 76.7 66% 59.9 26.1 60% 45.5 24.2 44% 25.5 50.6 35.7 20.0 2008A 2018A 2028E MA / MS Other MA / MS Enrollment Medicare Enrollment as % Enrollment of Total Med
Slide 22: Change in Consumer Preferences Creates Opportunity for Digital and Telesales Distribution
Change in Consumer Preferences and Technology Adoption 1 Creates Significant Opportunity for Digital and Telesales Distribution Digitally-Enabled, Independent Brokers Rapidly Key Technological and Consumer Tailwinds Gaining Market Share Increasing adoption of technology 25% 35% 45% 10% 15% Rising co
Slide 23: Transforming the Health Insurance Distribution Market
1 Transforming the Health Insurance Distribution Market GoHealth Is Meeting the Market as the Traditional Insurance Sales Model Becomes Obsolete Traditional Field Distribution GoHealth’s Innovative Model High acquisition costs / low agent Significantly lower acquisition costs / high productivity
Slide 24: Integrated Funnel Enables GoHealth to Leverage Data
Integrated Funnel Enables GoHealth to Leverage Data 2 to Optimize Acquisition and Retention Diverse channel sourcing strategy 42M+ Marketing 2019 Consumer Real-time performance based spend Interactions LTV / Conversion by Lead Source Proprietary LeadScore technology Lead Scoring # Predicts LTV and c
Slide 25: Highly Productive and Scalable Customer Acquisition Platform
Highly Productive and Scalable Customer Acquisition Platform 3 That Generates Industry Leading Cost per Opportunities (CPOs) Access to a Variety of Marketing Channels Medicare Internal Prospects1 Proprietary +292% 930K Audiences = Low CPOs 237K Search Engine SEO/Organic Social & Display Mailer TV Ma
Slide 26: Sophisticated Matching Technology Connects Customers with Best-Suited Agents
Sophisticated Matching Technology Connects Customers with Best- 3 Suited Agents to Maximize Conversion and Customer Satisfaction Illustrative Example of Matching Technology Available Plans Name: Cindy Name: Karen Existing Gender: Female Gender: Female Coverage Age: 70 Years Age: 32 Years Family Skil
Slide 27: Deep, Tenured, and Expanding Relationships with Top Carriers
Deep, Tenured, and Expanding Relationships with Top 4 Carriers 19 Years of Relationship Building with Blue Chip Carriers Across Products, Geographies, and Channels Critical part of Deep integration with Mission critical carriers’ distribution carriers compliance strategies infrastructure 27
Slide 28: Best-in-Class Medicare LTV / CAC Ratio Driven by Proprietary Technology
Best-in-Class Medicare LTV / CAC Ratio Driven by 5 Proprietary Technology LTV / CAC1 Drivers of LTV / CAC Improvements 3.9x Addition of top carriers and plans Efficiencies of scale in marketing and agent / platform costs 2.7x 2.7x Increased use of internally generated 2.3x leads and preferred
Slide 29: Executing on 2020 Growth Strategy
6 Executing on 2020 Growth Strategy Using Data, Technology, and Training to Improve Agent Productivity Initiatives Outcomes Improve Recruiting ♦ Top quartile agents are 61% more productive than all other and agents based on prospect conversion rates Training Leverage ♦ Investment in Marketplace 2.0
Slide 30: In-Flight Strategy to Drive New Revenue Streams
6 In-Flight Strategy to Drive New Revenue Streams TeleCare Team Helps Drive Healthier Members and Brand Equity While Creating New Revenue Streams Understand and Save Money and Buy with Confidence Maximize Benefits Collect Rewards TeleCare Team Additional Revenue Opportunities with “GoHealth Encompas
Slide 31: Encompass improves access to healthcare in America
Encompass is a GoHealth Platform that further empowers GoHealth’s mission to 6 improve access to healthcare in America GoHealth has historically impacted member health by connecting members to the right health plans. Encompass enables GoHealth to continue pursuit of its mission via downstream expans
Slide 32: Compelling Financial Profile Combining Strong Growth with Attractive Margins
7 Compelling Financial Profile Combining Strong Growth with Attractive Margins 139% 3.9x Strong Organic 2018 – 2019 2019 Strong LTV Unit Revenue Growth Net Revenue LTV / CAC1 Economics Growth Meaningful Operating 32% $152M Strong Capital Position Leverage 2019 Cash in 31-Mar-20 to Adjusted EBITDA be
Slide 33: Founder-Led Team with Proven Track Record of Innovation and Growth
8 Founder-Led Team with Proven Track Record of Innovation and Growth Clint Jones Brandon Cruz Co-Founder, CEO and Director Co-Founder, Chief Strategy Officer, Special Advisor, and Director ♦ Co-founder of GoHealth and a member of the board, ♦ Co-founder of GoHealth and a member of the board, since f
Slide 34: Financial Overview and Outlook
Financial Overview and Outlook “Ed who supported me from GoHealth really helped me resolve a stressful loss of coverage when I moved. I couldn't have figured it all out without him.” – Karen
Slide 35: Overview of Key Financial Drivers
Overview of Key Financial Drivers Business Optimized to Drive Growth and Maximize LTV / CAC Driving Growth Generating Compelling Economics ♦ Gaining share in large and expanding ♦ Variable cost model Medicare market ♦ Modest ongoing technology / R&D ♦ Scaling internal lead generation spend capabilit
Slide 36: GoHealth Is Well Positioned to Capture Share in the Large and Expanding Medicare Market
GoHealth Is Well Positioned to Capture Share in the Large and Expanding Medicare Market Drive Additional Revenue Streams with Carriers through Supplemental Services using “GoHealth Encompass Platform” Grow, Retain, and Train Agent Force to Drive Revenue Growth and Improve Performance Leverage Techno
Slide 37: Appendix
GoHealth? Appendix
Slide 38: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Adjustments to EBITDA ($ in thousands) Description of Adjustments 1H 1H 2020 2019 Represents non-cash share-based compensation expense in 1 Net income (loss) (23,804) 20,278 connection with profits interests Interest expense 15,742 109 Income tax expen
Slide 39: 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, change in fair value of earnout liability, Centerbridge Acquisition costs