GoHealth, Inc. · NASDAQ:GOCO
GoHealth — Q4 2020 Earnings Presentation
32 slides from GoHealth's earnings presentation, Mar 8, 2021
Slide 1: Fourth Quarter 2020 Earnings Slides
Fourth Quarter 2020 Earnings Slides March 8, 2021
Slide 2: Disclaimer
Disclaimer 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 re
Slide 3: Key Topics
Key Topics GoHealth – Highlights & Continued Market Leadership Detailed Review of Q420 & FY2020 2021 Outlook – Investing for Scale 3
Slide 4: GoHealth – Year In Review
GoHealth – Year In Review Record year of growth and profitability 2020 brought unforeseen challenges… …which we overcame and hit new records Managing COVID-19 risks and Market leading submissions & onboarding challenges revenue growth Never before tested, fully remote Growing LTVs & revenue per AEP
Slide 5: GoHealth – Highlights from FY 2020
GoHealth – Highlights from FY 2020 Extending our leadership position with best-in-class growth and top-tier margins Largest DTC 730K $877M Largest Revenue Medicare Enroller TTM Submissions TTM Revenue 677% $271M Scalable Model Two Year Adjusted Most Profitable TTM Adjusted EBITDA Growth EBITDA1 +31%
Slide 6: The GoHealth Platform
The GoHealth Platform Technology Agents Marketing LeadScore CallRouter Marketplace TeleCare / Encompass High-intent Prioritized by Matched with Proprietary tech Members receive consumers from expected LTV & specialized powers efficient support & added various channels conversion agents plan fit bene
Slide 7: Q4 and FY 2020 Financial Summary
Q4 and FY 2020 Financial Summary Overview of financial performance Q4 2020 Results FY 2020 Results Revenue $446M $877M Revenue Growth +55% +63% Medicare-Internal Segment Growth +75% +110% Submissions 374K 730K Submissions Growth +48% +71% Adjusted EBITDA1 $170M $271M Adjusted EBITDA Growth +31% +59%
Slide 8: FY 2021 Strategic Investments
FY 2021 Strategic Investments Investments in Sustainable, Long-Term, Profitable Growth $ Agent growth of 50+% with additional training and coaching Enhancements to Marketplace technology Expansion of GoHealth’s Brand & Encompass Accelerated investment during Q1-Q3 positions GoHealth for a strong FY
Slide 9: FY 2020 Financial Summary and 2021 Outlook
FY 2020 Financial Summary and 2021 Outlook Overview of financial performance FY 2020 Results FY 2021 Outlook1 Revenue $877M $1,150M – $1,300M Revenue Growth +63% +31% - 48% Adjusted EBITDA $271M $345M - $385M Adjusted EBITDA Growth +59% +27% - 42% Adjusted EBITDA Margin 31% 30% 1 See accompanying ap
Slide 10: Key Topics
Key Topics GoHealth – Highlights & Continued Market Leadership Detailed Review of Q420 & FY2020 2021 Outlook – Investing for Scale 10
Slide 11: Q4 2020 Results – Strong Revenue Growth
Q4 2020 Results – Strong Revenue Growth Q4 revenue came in above our expectations as we delivered quality submission growth Net Revenue ($ in millions) $446 +55% $289 Q4 2019 Q4 2020 ~328,000 carrier approved Q4 Medicare Advantage submissions (+63%), and growing LTVs +5% 11
Slide 12: Driving 2020 LTVs Higher Through Improved Persistency
Driving 2020 LTVs Higher Through Improved Persistency Investments reinforce LTVs and position GoHealth for continued gains LTV Change as of December 31, 2020 2020 Medicare Advantage Quarterly Change in LTV +2.8% +5.3% $995 $968 Q1 FY 2019 FY 2020 Q2 Q3 Q4 LTV Q1 Q2 Q3 Q4 FY 2019 $860 $873 $939 $1,01
Slide 13: LTV Per Approved Submission vs LTV Per Approved Policy/Member
LTV Per Approved Submission vs LTV Per Approved Policy/Member 3 Months ended December 31 LTV per Carrier Total MA Submission1 Comparison of Medicare Advantage Q4 2020 LTVs at Submission $914 $981 $1,064 $1,073 Nearest GOCO Competitor Commission $351.7M $264.6M Revenue Submissions 330.6K 246.5K LTV/S
Slide 14: Our Model Focuses on Maximizing Revenue per Submission
Our Model Focuses on Maximizing Revenue per Submission Unique carrier relationships and improving LTVs drive growing revenue per submission +19% $1,127 $1,012 $948 2018 2019 2020 Medicare Net Revenue / Medicare Submitted Policies Revenue per submission is steadily increasing on top of strong submiss
Slide 15: Revenue Upside from Increasing Penetration of Encompass Members
Revenue Upside from Increasing Penetration of Encompass Members Customer Engagement Journey Encompass LTV Drivers Submission Encompass Member Value-based care $1,330 Preferred pharmacy +18% enrollment Encompass Social determinants of $1,127 Member health Submission Health risk assessments Revenue Re
Slide 16: Q4 2020 Revenue Growth Powered by Commissions and Internal Medicare
Q4 2020 Revenue Growth Powered by 57% Growth in Commissions Revenue and 75% Growth in Internal Medicare Revenue – Segment Net Revenue Comparison1 ($ in millions) ($ in millions) $446 $446 $16 $85 $78 $289 $289 IFP $32 Enterprise $59 M-E $55 $361 $351 +57% +75% $230 M-I $201 Commission Q4 2019 Q4 202
Slide 17: Q4 2020 Results
Q4 2020 Results Adjusted EBITDA1 ($ in millions) $170 +31% Top-tier margins of 38% $130 40% Internal Medicare profit growth with 49% margins Large surplus of demand highlights 2021 opportunity Q4 2019 Q4 2020 Margins: 45% 38% 1 See accompanying appendix for a reconciliation of Adjusted EBITDA, which
Slide 18: FY 2020 Results - High-Quality Growth and Industry-Leading Margins
FY 2020 Results - High-Quality Growth and Industry-Leading Margins Net Revenue Adjusted EBITDA1 ($ in millions) ($ in millions) $877 $271 +63% +59% $540 $170 FY 2019 FY 2020 FY 2019 FY 2020 Margins: 32% 31% Internal customer acquisition and internal agents drives best-in-class margins, while full-ye
Slide 19: Strong Cash Collections Support LTV Growth
Strong Cash Collections Support LTV Growth Faster payback period Well-positioned for future cash flow generation CAS(1) 495,561 Cash collections greater than >100% expectations, supporting LTV as a reliable proxy for cash flow Fiscal 2020 cash collections 265,584 $244M (61% YoY growth) 57,744 Growth
Slide 20: The Largest and Fastest Growing Commissions Receivable Book
The Largest and Fastest Growing Commissions Receivable Book Highest quality growth measured by uniquely increasing LTVs Fastest Commissions Receivable Growth +112% (+428M) +72% (+306M) +34% (+203M) GOCO Comp A Comp B Total Commissions Receivable Growth High quality book of future cash flow streams N
Slide 21: Key Topics
Key Topics GoHealth – Highlights & Continued Market Leadership Detailed Review of Q420 & FY2020 2021 Outlook – Investing for Scale 21
Slide 22: FY 2021 Revenue Outlook Powered by Commissionable Growth
FY 2021 Revenue Outlook Powered by +42% to +64% Commissionable Growth Net Revenue – Commissionable and Net Revenue Enterprise ($ in millions) ($ in millions) $1,150 – $1,150 – 1,300 1,300 +31% to +48% $200 +42% to +64% $950 - $1100 $877 $877 Enterprise $206 $671 Commission FY 2020 FY 2021 FY 2020 FY
Slide 23: FY 2021 EBITDA Outlook of +27% to +42% Growth
FY 2021 EBITDA Outlook of +27% to +42% Growth Adjusted EBITDA1 2021 Key Investments ($ in millions) $345 – 385 >50% growth in licensed agents +27% to +42% $271 Technology enhancements to scale efficiencies in enrollments Encompass & scaling the GoHealth brand FY 2020 FY 2021 Multiple levers availabl
Slide 24: Compounding Growth
Compounding Growth 2021 Outlook anticipates revenue up 5x from 2018 and adjusted EBITDA up 10x from 2018 Net Revenue Adjusted EBITDA1 ($ in millions) ($ in millions) 365 1225 +5x +10x 271 877 170 540 226 35 2018 2019 2020 2021 Midpoint 2018 2019 2020 2021 Midpoint 1 See accompanying appendix for a r
Slide 25: Well Positioned to Grow Rapidly in a Fast Growing Medicare Market
Well Positioned to Grow Rapidly in a Fast Growing Medicare Market We are the leading DTC broker today with room to grow… …in a fast growing market with secular tailwinds 80M Baby boomers by 2030 11K Consumers turning 65 every day Estimated market share of digitally- 30% enabled brokers by 2022 10% P
Slide 26: GoHealth – Investing to Accelerate Our Long-Term Growth Trajectory
GoHealth – Investing to Accelerate Our Long-Term Growth Trajectory Extending our leadership position with rapid growth and top-tier margins Best-In-Class Growth, Margins and LTVs 730K 663% +31% +3% $271M $877M Two Year EBITDA TTM Submissions TTM Margins TTM LTV Growth TTM EBITDA TTM Revenue Growth O
Slide 27: Appendix A
Appendix A 27
Slide 28: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA Adjustments to EBITDA ($ in thousands) Description of Adjustments Q4 2019 Q4 2020 FY 2018 FY 2019 FY 2020 Net Income (Loss) $27,700 $133,100 $28,114 $(41,068) $(97,200) Represents non-cash share-based compensation expense 1 relating to stock options, r
Slide 29: Reconciliation of Net Income to Adjusted EBITDA (Quarterly)
Reconciliation of Net Income to Adjusted EBITDA (Quarterly) Adjustments to EBITDA ($ in thousands) Description of Adjustments Q1 2020 Q2 2020 Q3 2020 Q4 2020 Net Income (Loss) $(937) $(22,867) $(206,496) $133,100 Represents non-cash share-based compensation expense 1 relating to stock options, restr
Slide 30: Appendix B
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 31: Reconciliation of Net Income to Adjusted EBITDA – Combined Results
Reconciliation of Net Income to Adjusted EBITDA – Combined Results Twelve Months Ended December 31 31
Slide 32: Glossary
Glossary ♦ “Approved Submissions” refer to Submitted Policies approved by carriers for the identified product during the indicated period. ♦ “Adjusted EBITDA” represents, as applicable for the period, EBITDA as further adjusted for share-based compensation expense, expense related to the accelerated