Good afternoon, everyone, and welcome to the eHealth, Inc. Conference Call to discuss the company's Fourth Quarter and Fiscal Year 2022 Financial Results. At this time, all participants have been placed in a listen-only mode. The floor will be open to your questions following the presentation. It is my pleasure to turn the floor over to Eli Newbrun-Mintz, Senior Investor Relations Manager. Please go ahead.

Good morning, and thank you all for joining us today. On the call this morning, Fran Soistman, eHealth's Chief Executive Officer and John Stelben, Chief Financial Officer will discuss our fourth quarter and fiscal year 2022 financial results and our financial outlook for 2023. Following these prepared remarks, we will open the line for a Q&A session with industry analysts. As a reminder, this call is being recorded and webcast from the Investor Relations section of our website. A replay of the call will be available on our website later today. Today's press release, our historical financial news releases and our filings with the SEC are also available on our Investor Relations website. We will be making forward-looking statements on this call about certain matters that are based upon management's current beliefs and expectations relating to future events, impacting the company and our future financial or operating performance. Forward-looking statements on this call represent eHealth's views as of today, and actual results could differ materially. We undertake no obligation to publicly address or update any forward-looking statements in future filings or communications regarding our business or results. The forward-looking statements, we will be making during this call are subject to a number of uncertainties and risks, including, but not limited to, those described in today's press release, our Annual Report on Form 10-K and our other filings with the SEC. We will also be discussing certain non-GAAP financial measures on this call. Management's definitions of these non-GAAP measures and reconciliations to the most directly comparable GAAP financial measures are included in today's press release. With that, I'll turn the call over to Fran Soistman.

Thank you, Eli, and good morning to everyone joining us today, as we report our fiscal year and fourth quarter 2020 financial results. On this call, I will, one, review our annual enrollment period performance, which exceeded our expectations and reflected the early progress of our transformation plan; two, update our strategic and operational priorities for 2023 and finally, share our outlook for this year. I'd like to begin by sharing our view of the Medicare market and eHealth's critically important role. The Medicare Advantage Program offers strong value propositions to seniors through superior health outcomes compared to traditional Medicare and a wide selection of quality and robust plans at affordable premiums. Today, seniors have a large choice of provider networks, coverage options and supplemental benefits, such as over-the-counter medications, dental, vision and hearing, as well as membership through the plans offered by multiple health insurance carriers. Further, many carriers provide beneficiaries with access to programs to address social determinants of health, including transportation and food assistance as examples. For certain segments of the senior demographic, a combination of traditional Medicare with Med Sup can also be an attractive choice of health coverage, complemented with ancillary services, such as dental, vision and hearing. With all the robust options, however, comes complexity. We view our role in this industry as a trusted and transparent adviser to seniors as they make the critical decision of assessing their options and choosing a health care plan that best fits their needs and preferences. We are well positioned to deliver on this mission, based on our broad network of leading carriers, unbiased plan recommendation tools and our unique omnichannel consumer platform. Our omnichannel platform allows customers to seamlessly shift between telephonic, self-serve online and online-assisted interactions with eHealth, while researching and enrolling into plan. Simply…

Thank you, Fran. I'm excited to join eHealth at this vital time in the company's evolution. Our 2022 financial results reflect the impact of a transformational plan that touched every area of the organization, drove strong execution during the annual enrollment period and allowed us to enter this year on a significantly reduced cost run rate and in a solid liquidity position. In the fourth quarter, we achieved significant improvements in critical financial and operating metrics compared to Q4 a year ago. We turned to profitability on a GAAP net income basis and reported a meaningful expansion of adjusted EBITDA margins year-over-year, despite an intentional reduction in enrollment volume and total revenue. This was accomplished in part by driving higher quality leads to our omnichannel consumer platform and converting those leads at higher rates compared to a year ago. In preparation for this AEP, we made a decision to reduce our total marketing spend and our licensed benefit advisor headcount compared to a year ago, while we implemented a more disciplined ROI-driven approach to demand generation and focused on increasing benefit adviser productivity. The emphasis on best performing marketing channels and higher telesales conversion led to a significant increase in per unit gross margin in our Medicare business compared to last year. We defined per unit gross margin as a spread between lifetime value, or LTV, and total variable acquisition costs per enrollment. Fourth quarter Medicare Advantage LTVs grew 2% year-over-year, while combined fourth quarter marketing and telesales caused current approved Medicare member declined 18%. The resulting Q4 per unit gross margin for Medicare Advantage plan was 29%, above our expectations and meaningful improvement compared to 12% in the fourth quarter of last year. I see further upside to this important metric, as we continue to execute on the transformation…

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Your first question comes from George Sutton of Craig-Hallum. Please go ahead.

Thank you. It is nice to be able to say congratulations on the results and outlook. So your co-browsing and chat tools, which were obviously very successful, I'm curious how much you were able to use those this season versus as we look further out into the future? Will that become a more significant part of your offering and therefore, have a bigger impact overall?

George, it's Fran. Thanks for the encouraging words, and we're just as happy to be able to put a smile on your face and all of our – all those who cover us. Your question is a good one. I think, it's fair to say that, our chat capabilities, was an important contributor to our AEP performance. I can also tell you that, we were making adjustments to that chat capability throughout the AEP. So it's fair to say, we didn't enjoy all of its benefits, meaning it didn't perform as strong as I think it could have through the beginning of AEP, but when we made some course corrections, it really kicked in rather nicely. And that – just to be transparent, it was about moving the chat capability further up into the call as opposed to the enrollment, it was done more in the shopping experience. So it works. It's scalable and it provides a wonderful experience for beneficiaries and it certainly supports our efforts to increase conversion rates. Co-browsing, a little different in that it's really about providing a better experience for beneficiaries as well as enhancing our agents' capabilities through the shop advise, educate and enroll process. It takes – but could be viewed as a one-dimensional encounter, meaning verbal to now verbal and sharing of the screen, so the documents can be viewed simultaneously with the conversation, which just makes for a much more productive process and a much more favorable experience for beneficiaries. So I do see us evolving our capabilities this year and adding new capabilities beyond the chat.

That's great. One other question. When we look at the 6% growth expected for 2023, and I'm not sure what macro numbers you're looking at. Are you assuming that as a share maintenance? Is that a modest share gain? How are you thinking of your relative performance in 2023? A – Fran Soistman: Sure. I'll start, and I'll certainly ask John to supplement my comments. It's an important growth, meaning that it's coming from a more diversified set of products and capabilities. It's -- in the past, it's been nearly entirely reliant on broker record traditional Medicare Advantage business. And it's spread out much more widely between our MA business, our dedicated carrier business Med Sup and ancillary. So it's -- and those -- particularly the dedicated carrier and Med Sup, ancillary have much more favorable cash flow dynamics, which is important, as I know you appreciate to meet our liquidity needs. So let me see if John, would like to add to that.

Yes, George, I would say that the BPO deal that Fran mentioned in his prepared remarks, plus improvement in Medicare sup sales drive a good chunk of the year-over-year growth, but we still have absolute growth in the core MA business.

Okay. Perfect. Thanks, guys.

Thank you. The next question comes from Daniel Grosslight of Citi Group. Please go ahead. Q – Unidentified Analyst: Hi. This is Louis [ph] on for Daniel Grosslight. I just had one quick question. With greater emphasis on retaining agents, what is your approach outside the busy AEP and OEP season? And how should we think about agent costs throughout the year? Thank you. A – Fran Soistman: I missed the very first part of that. I heard the last part in terms of agent compensation. Let me address that, and I'll ask you to repeat your first part of the question. The agent compensation is market-based. It's performance-based as well. So clearly, we need to be market competitive in attracting the talent that we need for our telesales capabilities. And that has not been a challenge in the past year, and we're already underway to begin ramping up for the current year. So -- but it all starts with market competitive compensation and the emphasis on performance, which is pretty, I would say, consistent with the industry. And the first part of your question? Q – Unidentified Analyst: The first part of my question is more so what is your project outside of the busy AEP and APC seasons? And how should we think about that? A – Fran Soistman: For the first three quarters of the year. Well, I think the most important point would be in the first quarter were in 2022, we spent a fairly large sum of variable costs for marketing activities to support our agents. We're being much more prudent this year. And clearly, we want to keep agents productive, but we can do that through the progress we've made on the lead quality side, so we don't have to spend as much. But keeping our agents productive, and we've also begun ramping up our Med Sup capabilities. So you can sell that all year around, as you know, and we believe that, that's going to be a contributor for our revenue goals as well as keeping agents productive and sharp Q – Unidentified Analyst: Thank you.

Thank you. [Operator Instructions] The next question comes from George Hill from Deutsche Bank. Please go ahead.

Yes. Good morning guys and thanks for taking the question. Fran, as you guys look to diversify the revenue streams with the carrier dedicated segments, I’d say kind of the opposite of how the business model has been built historically on the MA side. I guess, so can you talk about how you think about those two businesses kind of running side-by-side? And does one tend to compete with the other -- and do you worry at all about kind of being able to maintain that unbiased kind of shopping point for the MA consumer?

George, thanks for the question. Good to hear you. They complement one another. I mean, this business, whether it's dedicated carrier or conventional or Medicare Advantage selling, it’s the same. It's product expertise. It's the ability to listen carefully to beneficiary’s needs and preferences and then help them through that shopping experience. They don't compete in that. We maintain the purity of eHealth, if you will, when we represent all of our carrier partners. And then the dedicated carriers think of us as an extension of their organization and that's walled off from the rest of eHealth. So it simply provides them the dedicated carrier partner with an opportunity to focus exclusively on their product as an extension. So, dedicated people supporting that and never shy to meet in terms of eHealth as an independent, neutral channel, distribution channel.

No. I mean, I imagine that you guys can probably manage that pretty separately. If I could do two quick follow-ups, I think probably most investors are focused about kind of cash flow and whether or not the company will need to raise capital at any point in the future. Given that, what you've provided today, it looks like that probably won't be need? And then just if you could talk for another second about the fixed costs, you're talking about targeting. I would love to hear more about where these cost savings are coming from. Thank you.

Sure. Again, thanks for the questions. I'll take the first, and I'll ask John to take the second. Our liquidity base, based on all of our modeling, we're in good shape for 2023, but to your point, longer term, we are looking at all of our options for sources of capital to make sure that eHealth can continue to perform up to our expectations and capitalize on opportunities, while manufacture opportunities. So I feel a lot of focus is on that, getting good guidance from our Board. And I'm confident we'll have something more to report on in the next several months. John, do you want to take the fixed cost question?

Sure. On the fixed costs, there are several areas. I mean it's really you look at everything, but it's going to be continued on our space. We're a virtual first company. We certainly took impairment against that to reduce future rent costs. It's going to be vendor costs, software redundancies and using our people more efficiently, as we grow.

Great. I appreciate the color, guys. Thank you.

Thank you. There are no further questions at this time. Please continue with closing remarks.

This is Fran again. Thank you again for joining us this morning. We look forward to our conversations in the coming days and weeks. Thank you, Operator.

Thank you. Ladies and gentlemen, this does conclude the conference call for today. We thank you for your participation. And ask that you please disconnect your lines.