eHealth (EHTH) Announces Prelim. Q4 Results

eHealth, Inc. (Nasdaq: EHTH), a leading private online health insurance exchange in the United States, today announced preliminary financial results and select key operating metrics for the fourth quarter and fiscal year ended December 31, 2017. Revenue for the fourth quarter of 2017 is expected to be in the range of $39 million to $40 million. GAAP net loss for the fourth quarter of 2017 is expected to be in the range of $(23.5) million to $(22.5) million. Adjusted EBITDA for the fourth quarter of 2017 is expected to be in the range of $(19.3) million to $(18.3) million.

(Street sees Q4 revenue of $37.04 million)

For the year ended December 31, 2017 eHealth anticipates revenue to be in the range of $172.5 to $173.5 million as compared to the company’s guidance of $165 to $175 million. eHealth anticipates GAAP net loss for the year ended December 31, 2017 to be in the range of $(28.0) million to $(27.0) million as compared to the company’s guidance of $(29.8) to $(27.8) million. eHealth anticipates Adjusted EBITDA for the year ended December 31, 2017 to be in the range of $(15.5) million to $(14.5) million as compared to the company’s guidance of ($16.1) million to ($14.1) million.

(a) Adjusted EBITDA is calculated by adding stock-based compensation expense, depreciation and amortization expense, acquisition costs, amortization of intangible assets, other income (expense), net and provision (benefit) for income taxes to GAAP net loss.

Submitted applications for all Medicare products grew 16% during the fourth quarter of 2017 compared to the fourth quarter a year ago. For the full year 2017 submitted Medicare applications grew 10% compared to 2016.

Submitted applications for individual and family plan (IFP) products declined 23% during the fourth quarter of 2017 compared to the fourth quarter a year ago. For the full year 2017 submitted IFP applications declined 51% compared to 2016. The decline in IFP submitted applications was partially offset through eHealth’s strategy of offering non-ACA compliant packages of health insurance benefits to address a broader spectrum of consumer needs and income levels. During the fourth quarter of 2017 there were approximately 7,200 submitted applications for packages.

“We are pleased with our financial performance during the quarter and for the full year 2017,” commented Scott Flanders, chief executive officer of eHealth. “A return to financial and operating discipline under the new leadership team has been an important goal for the company as we have worked to transform the business during this transition year for eHealth. In the important Medicare business unit, we posted 17% application growth in the second half of the year, but fell short of our targets for annual application growth in the ‘high teens.’ Our strategy of focusing on strategic partnerships in addition to traditional marketing efforts has resulted in meaningful progress in driving growth on a more attractive cost basis, but the slower than expected roll-out of selected partner relationships relative to plan caused us to fall short of our submitted application objectives for the year.”

“The individual and family market remained challenged during the Open Enrollment Period occurring during the fourth quarter,” continued Flanders. “We saw an increase in submitted applications for qualified health plans compared to the fourth quarter of 2016, driven in part by the new Centers for Medicare and Medicaid Services enrollment framework that allowed us to enroll subsidy-eligible customers into qualified health plans through the Federal exchange without the customers having to leave our website. At the same time, we experienced a decline in non-subsidized plan applications as a result of premium inflation and lack of inventory across the market, among other factors.”

These preliminary, unaudited results are based on management's initial review of operations for the quarter ended December 31, 2017, and remain subject to change based on management's ongoing review of the fourth-quarter results. eHealth anticipates providing its full financial and operating results for 2017, as well as financial guidance for 2018 and an update on its adoption of the new ASC 606 revenue recognition standard, on or about March 1, 2018.

eHealth's preliminary results for the fourth quarter and full year ended December 31, 2017 are based on information available as of January 16, 2018. These expectations are forward-looking statements and eHealth assumes no obligation to update these statements. Results may be materially different and are affected by the risk factors and uncertainties identified in this release and in eHealth’s annual and quarterly filings with the Securities and Exchange Commission.

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