Welcome to the GoHealth Q1 2022 Earnings Conference Call. My name is Darryl, and I'll be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded. I will now turn the call over to Brian Farley. Brian, you may begin.

Thank you, and good afternoon, everyone. Thanks for joining GoHealth's First Quarter 2022 Earnings Call. Joining me today are Clint Jones, Co-Founder and Chief Executive Officer; and Travis Matthiesen, Interim Chief Financial Officer. This afternoon's conference call contains forward-looking statements based on our current expectations. Numerous risks and uncertainties may cause actual results to differ materially from those anticipated or projected in these statements. Many of the factors that will determine future results are beyond the company's ability to control or predict. You should not place undue reliance on any forward-looking statements, and the company undertakes no obligation to update any of these statements whether due to new information, future events or otherwise. After the market closed today, we issued a press release containing our results for the first quarter of 2022. We have posted the release on the GoHealth website under the Investor Relations tab. We have also posted on our website the presentation materials that Clint and Travis will walk through momentarily. In the press release, we have listed a number of risk factors that you in conjunction with our forward-looking statements. Other risk factors are described in our Form 10-K and Form 10-Q reports filed with the Securities and Exchange Commission. During this call, we will be discussing certain non-GAAP financial measures. These measures are reconciled to the most directly comparable GAAP financial measures, and the reconciliations are set forth in the press release and investor presentation. And with that, I'd like to turn the call over to Clint.

Thank you, Brian, and thank you all for joining us to review our first quarter 2022 results. As Brian mentioned, we have posted a slide deck to our Investor Relations website that we will walk through before opening up to Q&A. Starting on Slide 4. We had a strong first quarter with revenues of $271 million and adjusted EBITDA of $11 million, which does not include the impact of our cost actions taken to date. We grew submission volume by 62% year-over-year, leveraging the investments we made in our agent force last year and continued technology enhancements. Our strategy this year is deliberately slow down and focus on operational efficiencies that will position the company for sustainable, long-term success. We continue to focus on serving the Medicare market with the best consumer experience, while delivering high-quality member growth for our carrier partners. As more and more plan options are available for consumers that have evolving needs, our end-to-end platform aims to be the industry leader in choice, transparency and customer experience. By reducing our growth rates in 2022 relative to previous years, we can maintain attractive margins and accelerate our path to positive operating cash flow, while continuing to be a reliable partner to our members and carriers. During the first quarter, we have seen this strategy begin to play out. We have been strategic with our advertising, maximizing the return on each dollar spent. Leveraging our technology, our team has worked hard to achieve reductions to our marketing and advertising spend for submission, resulting in a 10% decline year-over-year in the last month of the quarter. We have also been hard at work improving our quality of enrollments, and we observed a decline in CTMs of 20% compared to last year in a very promising agent retention rate. We…

Thanks, Clint. Slide 8 looks at our top line results over the first 3 months of the year, which were in line with our expectations. The continued growth in Medicare, powered by our internal channel, continued in the first quarter. Our Internal Medicare team of agents delivered commission revenue growth of 20%. Medicare commissions were fueled by the combination of 62% growth in carrier-approved submissions and were offset by a decrease in absolute LTVs. Total revenue grew 33% during OEP to $271 million, including enterprise revenue of $61 million, up 102% in the quarter. As a reminder, our enterprise solution offerings are made up of marketing, enrollment and technology solutions for carriers. Clint will touch on it more in a minute, but we anticipate a higher percentage of our revenue will be from an expanded set of Encompass offerings going forward, which will be reflected in the Enterprise segment. Over time, this will provide better predictability, transparency and unit economics, while also driving more cash into the business. Slide 9 illustrates our key unit economics for the first quarter relative to last year. As mentioned earlier, strong submission growth was driven by both an increase in agents in the first quarter of this year relative to last year, combined with continued growth of our external channel. We continue to see strong demand during OEP as consumers continue to seek out our platform. Moving to revenue per submission. We saw a 5% decline in first quarter revenue per submission, and it includes commissions, enterprise revenue and Encompass revenue. As a reminder, we collect cash for Enterprise and Encompass services on an accelerated basis relative to commissions, and these accelerated collections continue to improve our payback period. Encompass is fast becoming a meaningful incremental revenue driver for us. Last year, the majority…

Thanks, Travis. Before we close, I'm excited to turn to Slide 15, which covers the future of our evolving Encompass Platform. Our Encompass Platform was launched in 2020 to serve the unique needs of our members post-enrollment, and quickly proved to be a powerful tool in connecting seniors to the care they needed the most. We're proud to announce that we are expanding our Encompass Platform to serve our carrier partners as a holistic enterprise solution. Historically, we provided outsourced marketing, enrollment and technology solutions to carriers as an enterprise capability. We've now expanded upon that capability to serve our carrier partner's most pressing needs, introducing 2 new modules: Encompass Connect and Encompass Engage. Encompass Connect is an enterprise solution designed to help carriers target the right consumers in the right geographies, then leverages proprietary data and technology to enroll those consumers in the best plans. Encompass Connect will be a strategic and competitive force multiplier for the carriers to adopt our platform. Our second module, Encompass Engage, expands on our legacy offering to help carriers elevate the sophistication with which they serve their members post enrollment. This system of engagement harnesses deep consumer insights to customize contact strategies for specific member segments, ultimately increasing engagement, retention and driving positive outcomes at scale. This offering will be essentially powerful connecting at-risk populations and underserved Americans with a critical health care they deserve. Early response to our expanded enterprise solutions has been incredibly positive, and we're actively discussing the adoption of these modules with several of our carrier partners. We expect these industry-leading offerings to improve member outcomes, strengthen the value we bring to carriers and drive more predictable and attractive economics within our revenue model. You can expect to hear more updates throughout the year on these new exciting services and tools. I'd now like to turn the call over to the operator for Q&A.

[Operator Instructions] We do have a question from [Brad Hill].

Yes. Regarding the efficiency notice, for being under $1. Are there any strategic plans to get that over $1? What would it be? And is there any talk about a reserve stock split to do it?

Yes, we are aware of the issue. Thanks, Brad, for the question. Obviously, as you know, there's variety of options at our disposal to maintain compliance with NASDAQ trading rules, and our Board is considering all those options.

Okay. Great. Just want to know where you go on in that because it could be an issue here pretty soon.

[Operator Instructions] And we have a question from Jonathan Yong.

This is Carl for Jonathan. And my question is just Encompass revenues are higher, they were leading to higher enterprise revs. I mean, I was just trying to see if you guys can discuss how much of a PMPM uplift GOCO gets from the Encompass on a policy basis? And also, I believe most of the investments on Encompass were from last year. Just kind of curious if there's -- how much investments you're putting to Encompass this year.

Yes. So the arrangements we have within our Encompass programs vary by different carrier. And as far as investment goes, we'll continue to invest in the platform as we bring out additional services and features for our carrier partners. We continue to have technology investments throughout the year as we expand those relationships.

Okay. And just a follow-up question. Just was kind of curious also on -- I know some of the peers are pulling back given their own situations. But carrier partners sounds like they're increasing their spend, at least with Humana. So they're pulling a lot into marketing and benefits. Just kind of curious, any thoughts on this aspect where they may be taking share, internal share, with your sales force?

Yes. So we're not seeing material changes with different spend in different channels. We are seeing kind of an overall pullback in the market, based on the channels we're in, but we cast pretty big wide net when it comes to the areas we target. And we are seeing kind of competitive pressures come down, but we'll kind of maintain kind of focused throughout the year on what all competitors are doing.

[Operator Instructions] And we don't have any more questions. I'll turn it back to the speakers for final comments.

Thank you all for attending today to hear our Q1 2022 results. We're looking forward to updating you further throughout the year on the progress to date. Thank you so much.

And thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.