Good day, and thank you for standing by. Welcome to the GoHealth Third Quarter 2022 Earnings Conference Call. At this time, all participants on a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference call recorded. I would now like to turn the call over to Brian Farley.

Thank you, and good afternoon, everyone. Thanks for joining GoHealth's third quarter 2022 earnings call. Joining me today are Vijay Kotte, Chief Executive Officer; and Jason Schulz, our 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 or revise 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 third quarter of 2022. We have posted the release on the GoHealth website under the Investor Relations tab. In the press release, we have listed a number of risk factors that you should consider in conjunction with our forward-looking statements. We encourage you to consider the other risk factors described in our Form 10-K and Form 10-Q reports filed with the Securities and Exchange Commission for additional information. During this call, we will be discussing certain non-GAAP financial measures. These measures are reconciled to the most directly comparable GAAP financial measure and the reconciliations are set forth in the press release. Please refer to today's press release for the reconciliation of non-GAAP measures to the most comparable GAAP measures discussed during this earnings call. And with that, I'd like to turn the call over to Vijay.

Thank you all for joining us this afternoon to discuss our third quarter 2022 results. As promised on our last quarterly call, we're going to spend some time addressing the key elements of our go-forward strategy with a more full fill look to come after AEP. We continue to put beneficiaries at the center of what we do, transforming ourselves from a transactional e-broker to a trusted consumer marketplace. In the past quarter, our internal agents fielded over 630,000 calls, completed nearly 56,000 retention conversations and started Medicare valuations with over 251,000 Medicare beneficiaries. Together with our external partners, we completed over 130,000 enrollments. Before I get into our main topics for today's call, I want to note that we have posted a presentation on our IR website that provides a more comprehensive overview of Encompass than we've shared before. We'll be referencing these slides when we dive deeper into Encompass later in the call. I'll kick things off with a high-level overview of the third quarter numbers and let Jason go into more detail on financials in just a bit. Our cash flow from operations has improved meaningfully from a loss of $40 million in last year's third quarter to a positive $96 million this quarter. The $136 million delta in cash flow is a direct result of ramping up our Encompass solution and getting back to basics with the strategic cost initiatives we implemented during the quarter. This has fundamentally changed the dynamics of cash flow for our business, and we're confident these positive trends will continue as we lean further into our Encompass solution. As anticipated, revenue of $133 million is down year-over-year as we have focused our efforts on higher-quality revenue with a more experienced albeit smaller sales force. As a testament to our renewed focus…

Thanks, Vijay, and thank you all for joining us today. I'm going to start off with discussing the Encompass platform and the positive impact it will have to the financial performance of our business. Then I'll review the third quarter results, and I'll wrap up with a couple of highlights from our balance sheet. As Vijay mentioned, Encompass leverages our proprietary technology that supports enrollment and engagement across the Medicare beneficiary journey. We believe that this offering is unmatched in the market and the service that our carrier partners regard very highly. As we evolve from a transaction oriented business to a trusted partner role, our financial makeup will evolve as well. We expect Encompass to have a dramatic impact to our cash flow to diversify against our traditional LTV business and to improve our overall margin profile. As Vijay mentioned, the improved cash flow profile with Encompass is a very significant impact. This is already evident in our Q3 results with cash flow from operations improving by $136 million year-over-year, of which $114 million was driven by the Encompass Connected deferred revenue. Encompass Connect diversifies our exposure to the more sensitive LTV commissions business. This is due to several factors. First, the revenue is much more predictable, as the service requirements and the pricing are clearly laid out in our carrier agreements. Second, cash flow has significantly improved as we collect cash in a much more timely basis than the traditional LTV model. Lastly, by the nature of the service requirements of the Encompass Connect agreements, revenue is less likely to be subject to material adjustments. From a margin profile perspective, we are improving our revenue economics as a result of Encompass's broader scope of services. We believe that this will drive margin improvement over time as more of…

Good afternoon. And thank you for taking the questions. Maybe just I want to make sure I got this right on the deferred revenue dynamics, obviously, a big jump, I appreciate you calling that out. Is that a onetime change that's now a permanent baseline to be expected on the balance sheet? Or is this something we should expect to grow? Is it something that will just reverse next quarter as you had the Encompass adjustment, especially given your commentary around getting the cash flow breakeven. Obviously, you're going to have a 4Q [ph] use of cash, but just curious how we should think about that line.

Thanks, Michael. This is Vijay. Just to respond to your question, obviously, this is directly related to how we have entered into the Encompass arrangement. And therefore, we have prefunding associated with it. And as you see the volumes through the year, you will see this prefunding dynamic continue. And so you'll have the largest amount of deferred revenue happening prior to Q4. And then you'll see that settle out as we get through to lower production years - the quarters throughout the year. So we'll obviously give you more updates. But you should see it go up and down with the associated volume distribution of how the business operates.

Got it. That's certainly helpful. And then when you think about AEP and you think about your go-forward strategy, I get the components of Encompass, will your - will seniors feel it, i.e., what will be some of the different ways if we go a little deeper that they'll be interacting with you as you focus on your own internal operations and pushing forward on these cash flow and profitability targets that you're going after?

It's a great question. It's a different experience. So let me start with - the way we have entered into the program has a number of key drivers of success. One was you kind of had to have the right relationship with the health plans and the carriers to be able to begin. So we had to have quality that we could deliver with really high you know, strong and experienced agents. And you can see we did that to make sure we had the most experienced agents that we've ever had. Then you needed to compound that with the best technology tools to ensure that we're supporting a thorough process. We've had a planned fit tool in previous years. This year, we went to 100% adoption of that planned fit tool. So every time a beneficiary comes in, there's a standard set of questions to ensure that they're getting the key parameters entered into the tool to get them matched with the right plan for them. That's a multi-plan selection process. And then once - what's very different in the process is typically that would happen with our captive agents, they would then submit an application, and that will go directly to the carrier. In the Encompass model, we have a model where there's an interim step where those beneficiaries would actually transition to a carrier designated agent with its seamless transition of that data that was already provided due to the final application commission, reconfirmation of all the parameters that would identify this plan as being best for them. So they're more satisfied, one with the experience that they feel is that they've been matched the right plan, and therefore, that translates into lower cancellation rates for them because they understand it better and now understand what is to come with that next level of follow-up on how to activate those benefits and use them through the engaged component of Encompass. So it is a very different experience versus the traditional as we move to diversify away from the traditional model into more of the Encompass model.

Understood. Thanks. Appreciate the time.

Thank you, Mike.

Thank you for your questions. [Operator Instructions] At this time, there are no more questions in the queue. And I would like to turn the call back over to Vijay Kotte. Please go ahead and for closing remarks.

Thank you, Lisa. I really appreciate everybody's attention today participating in the call and your interest in our organization. We look forward to updating you as our progress continues and really refocus as an organization on the beneficiary of being at the center of everything we do. So thanks again, and we look forward to hearing and speaking with you all soon.

This concludes today's conference call. Everyone may disconnect. You all enjoy the rest of your evening.