Ehealth Earnings 2020-09-30

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

ehth-20200930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-33071

_____________________________________________

EHEALTH, INC.

(Exact name of registrant as specified in its charter)

_____________________________________________


Delaware						56-2357876
(State or other jurisdiction of incorporation or organization)						(I.R.S Employer Identification No)

2625 AUGUSTINE DRIVE, SECOND FLOOR

SANTA CLARA, CA 95054

(Address of principal executive offices)

(650) 584-2700

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.001 per share	EHTH	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth Company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock, par value $0.001 per share, outstanding as of October 31, 2020 was 25,897,314 shares.

EHEALTH, INC.

FORM 10-Q

TABLE OF CONTENTS


PART I	FINANCIAL INFORMATION	PAGE
Item 1.	Financial Statements (unaudited)	2
	Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019	2
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2020 and 2019	3
	Condensed Consolidated Statements of Stockholders' Equity for the Three and Nine Months Ended September 30, 2020 and 2019	5
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2020 and 2019	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 4.	Controls and Procedures	48
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 6.	Exhibits	72
	Signatures	73

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

EHEALTH, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)


	September 30, 2020*		December 31, 2019
Assets	(Unaudited)
Current assets:
Cash and cash equivalents	$	87,833	$	23,466
Short-term marketable securities	108,637		—
Accounts receivable	3,854		2,332
Contract assets – commissions receivable – current	158,773		174,526
Prepaid expenses and other current assets	19,335		7,822
Total current assets	378,432		208,146
Contract assets – commissions receivable – non-current	445,572		414,696
Property and equipment, net	14,488		10,518
Long-term marketable securities	1,294		—
Operating lease right-of-use assets	43,886		36,621
Restricted cash	3,354		3,354
Other assets	24,790		18,004
Intangible assets, net	8,856		10,062
Goodwill	40,233		40,233
Total assets	$	960,905	$	741,634
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	21,439	$	24,554
Accrued compensation and benefits	22,140		29,578
Accrued marketing expenses	6,592		12,041
Earnout liability – current	—		37,273
Lease liabilities – current	5,111		4,759
Deferred revenue	26,471		2,570
Other current liabilities	4,731		2,210
Total current liabilities	86,484		112,985


Deferred income taxes – non-current	52,782		64,130
Lease liabilities – non-current	42,400		34,305
Other non-current liabilities	3,553		3,050
Stockholders’ equity:
Common stock	38		35
Additional paid-in capital	719,104		455,159
Treasury stock, at cost	(199,998)		(199,998)
Retained earnings	256,282		271,852
Accumulated other comprehensive income	260		116
Total stockholders’ equity	775,686		527,164
Total liabilities and stockholders’ equity	$	960,905	$	741,634

_____________

* Reflects the impact from the adoption of ASC 326 on January 1, 2020. See Note 1 – Summary of Business and Significant Accounting Policies for details.

The accompanying notes are an integral part of these condensed consolidated financial statements.

EHEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands, except per share amounts, unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Revenue:
Commission	$	73,544	$	59,762	$	253,986	$	184,595
Other	20,740		10,151		35,472		19,858
Total revenue	94,284		69,913		289,458		204,453
Operating costs and expenses:
Cost of revenue	482		410		2,160		782
Marketing and advertising	33,405		25,812		104,042		72,857
Customer care and enrollment	43,342		40,144		101,025		81,567
Technology and content	17,673		12,033		46,786		31,487
General and administrative	19,942		16,608		60,308		42,748
Amortization of intangible assets	287		547		1,207		1,641
Change in fair value of earnout liability	—		(5,400)		—		15,106


Total operating costs and expenses	115,131		90,154		315,528		246,188
Loss from operations	(20,847)		(20,241)		(26,070)		(41,735)
Other income (expense), net	(101)		568		724		1,824
Loss before benefit from income taxes	(20,948)		(19,673)		(25,346)		(39,911)
Benefit from income taxes	(6,443)		(8,649)		(10,923)		(17,974)
Net loss	$	(14,505)	$	(11,024)	$	(14,423)	$	(21,937)

Net loss per share:
Basic and diluted	$	(0.55)	$	(0.47)	$	(0.56)	$	(0.96)

Weighted-average number of shares used in per share amounts:
Basic and diluted	26,487		23,493		25,838		22,840

Comprehensive loss:
Net loss	$	(14,505)	$	(11,024)	$	(14,423)	$	(21,937)
Unrealized holding gain (loss) for available for sales debt securities, net of tax	(97)		—		71		—
Foreign currency translation adjustment	104		(34)		73		(30)
Comprehensive loss	$	(14,498)	$	(11,058)	$	(14,279)	$	(21,967)

The accompanying notes are an integral part of these condensed consolidated financial statements.

EHEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, unaudited)


Three Months Ended September 30, 2020
	Common Stock			Additional Paid-in Capital		Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Income		Total Stockholders’ Equity
	Shares	Amount				Shares	Amount
Balance as of June 30, 2020	37,373	$	37	$	720,976	11,698	$	(199,998)	$	270,787	$	253	$	792,055

Issuance of common stock in connection with equity incentive plans	275	1		262		—	—		—		—		263
Repurchase of shares to satisfy employee tax withholding obligations		—		(9,014)		112	—		—		—		(9,014)


Stock-based compensation	—	—		6,880		—	—		—		—		6,880
Other comprehensive income, net of tax	—	—		—		—	—		—		7		7
Net loss	—	—		—		—	—		(14,505)		—		(14,505)
Balance as of September 30, 2020	37,648	$	38	$	719,104	11,810	$	(199,998)	$	256,282	$	260	$	775,686


Three Months Ended September 30, 2019
	Common Stock			Additional Paid-in Capital		Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Income		Total Stockholders’ Equity
	Shares	Amount				Shares	Amount
Balance as of June 30, 2019	34,267	$	34	$	449,046	11,482	$	(199,998)	$	194,052	$	131	$	443,265
Issuance of common stock in connection with equity incentive plans	335	1		1,912		—	—				—		1,913
Repurchase of shares to satisfy employee tax withholding obligations	—	—		(8,059)		89	—				—		(8,059)


Stock-based compensation	—	—		5,510		—	—				—		5,510
Foreign currency translation adjustment, net of taxes	—	—		—		—	—				(34)		(34)
Net loss	—	—		—		—	—		(11,024)		—		(11,024)
Balance as of September 30, 2019	34,602	$	35	$	448,409	11,571	$	(199,998)	$	183,028	$	97	$	431,571

The accompanying notes are an integral part of these condensed consolidated financial statements.

EHEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, unaudited)


Nine Months Ended September 30, 2020
	Common Stock			Additional Paid-in Capital		Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Income		Total Stockholders’ Equity
	Shares	Amount				Shares	Amount
Balance as of December 31, 2019	34,752	$	35	$	455,159	11,616	$	(199,998)	$	271,852	$	116	$	527,164
Cumulative effect from the adoption of ASU 2016-13	—	—		—		—	—		(1,147)		—		(1,147)
Issuance of common stock in connection with equity incentive plans	531	1		1,576		—	—		—		—		1,577
Repurchase of shares to satisfy employee tax withholding obligations	—	—		(17,174)		194	—		—		—		(17,174)
Shares issued in equity offering	2,070	2		228,022		—	—		—		—		228,024
Settlement of earnout liability	295	—		28,521		—	—		—		—		28,521
Stock-based compensation	—	—		23,000		—	—		—		—		23,000
Other comprehensive income, net of tax	—	—		—		—	—		—		144		144
Net loss	—	—		—		—	—		(14,423)		—		(14,423)
Balance as of September 30, 2020	37,648	$	38	$	719,104	11,810	$	(199,998)	$	256,282	$	260	$	775,686


Nine Months Ended September 30, 2019
	Common Stock			Additional Paid-in Capital		Treasury Stock			Retained Earnings		Accumulated Other Comprehensive Income		Total Stockholders’ Equity
	Shares	Amount				Shares	Amount
Balance as of December 31, 2018	30,863	$	31	$	298,024	11,426	$	(199,998)	$	204,965	$	127	$	303,149
Issuance of common stock in connection with equity incentive plans	684	1		5,167		—	—		—		—		5,168
Repurchase of shares to satisfy employee tax withholding obligations	—	—		(11,511)		145	—		—		—		(11,511)
Shares issued in equity offering	2,760	3		126,048		—	—		—		—		126,051
Settlement of earnout liability	295	—		17,264		—	—		—		—		17,264
Stock-based compensation	—	—		13,417		—	—		—		—		13,417
Foreign currency translation adjustment, net of taxes	—	—		—		—	—		—		(30)		(30)
Net loss	—	—		—		—	—		(21,937)		—		(21,937)
Balance as of September 30, 2019	34,602	$	35	$	448,409	11,571	$	(199,998)	$	183,028	$	97	$	431,571

The accompanying notes are an integral part of these condensed consolidated financial statements.

EHEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, unaudited)


	Nine Months Ended September 30,
	2020		2019
Operating activities:
Net loss	$	(14,423)	$	(21,937)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	2,604		2,153
Amortization of internally developed software	5,307		2,443
Amortization of intangible assets	1,207		1,641
Stock-based compensation expense	21,722		13,417
Deferred income taxes	(10,982)		(18,166)
Change in fair value of earnout liability	—		15,106

Other non-cash items	421		(936)
Changes in operating assets and liabilities:
Accounts receivable	(1,522)		2,920
Contract assets – commissions receivable	(16,772)		(11,878)
Prepaid expenses and other assets	(9,398)		(9,346)
Accounts payable	(3,196)		13,155
Accrued compensation and benefits	(7,438)		(2,624)
Accrued marketing expenses	(5,449)		(6,927)
Deferred revenue	23,901		8,207
Accrued expenses and other liabilities	3,059		(1,942)
Net cash used in operating activities	(10,959)		(14,714)
Investing activities:
Capitalized internal-use software and website development costs	(12,082)		(6,356)
Purchases of property and equipment and other assets	(6,454)		(5,616)
Purchases of marketable securities	(180,505)		—
Proceeds from redemption and maturities of marketable securities	70,750		—
Payments for security deposits	—		(72)

Net cash used in investing activities	(128,291)		(12,044)
Financing activities:
Proceeds from issuance of common stock, net of issuance costs	228,024		126,051
Net proceeds from exercise of common stock options	1,577		5,168
Repurchase of shares to satisfy employee tax withholding obligations	(17,174)		(11,511)


Repayment of debt	—		(5,000)
Acquisition-related contingent payments	(8,751)		(9,542)
Principal payments in connection with leases	(121)		(81)
Net cash provided by financing activities	203,555		105,085
Effect of exchange rate changes on cash, cash equivalents and restricted cash	62		8
Net increase in cash, cash equivalents and restricted cash	64,367		78,335
Cash, cash equivalents and restricted cash at beginning of period	26,820		13,089
Cash, cash equivalents and restricted cash at end of period	$	91,187	$	91,424

The accompanying notes are an integral part of these condensed consolidated financial statements.

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1 – Summary of Business and Significant Accounting Policies

Description of Business – eHealth, Inc. (the “Company,” “eHealth,” “we” or “us”) is a leading health insurance marketplace with a technology and service platform that provides consumer engagement, education and health insurance enrollment solutions. Our mission is to connect every person with the highest quality, most affordable health insurance and Medicare plans for their life circumstances. Our platform integrates proprietary and third-party developed educational content regarding health insurance plans with decision support tools to aid consumers in what has traditionally been a confusing and opaque health insurance purchasing process, and to help them obtain the health insurance products that meet their individual health and economic needs. Our omni-channel consumer engagement platform is designed to meet the consumer wherever they prefer to engage with us, and enables consumers to use our services online, through interactive chat, or by telephone with a licensed insurance agent. We have created a marketplace that offers consumers a broad choice of insurance products that includes thousands of Medicare Advantage, Medicare Supplement, Medicare Part D prescription drug, individual and family, small business and other ancillary health insurance products from over 180 health insurance carriers across all fifty states and the District of Columbia.

Basis of Presentation – The accompanying condensed consolidated balance sheets as of September 30, 2020 and December 31, 2019, the condensed consolidated statements of comprehensive loss and stockholders’ equity for the three and nine months ended September 30, 2020 and 2019, and the condensed consolidated statements of cash flows for the nine months ended September 30, 2020 and 2019, respectively, are unaudited. The condensed consolidated balance sheet data as of December 31, 2019 was derived from the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the Securities and Exchange Commission on March 2, 2020. The accompanying financial statements and related notes should be read in conjunction with the audited consolidated financial statements and related notes included in our Annual Report on Form 10-K.

The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and reflect all normal recurring adjustments that are necessary to present fairly the results for the interim periods presented. The condensed consolidated financial statements include the accounts of eHealth, Inc. and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain information and disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in accordance with those rules and regulations. Certain reclassifications have been made to conform with the current presentation. However, the Company believes that the disclosures made are adequate to make the information not misleading.

The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2019 and include all adjustments necessary for the fair presentation of our financial position as of September 30, 2020 and December 31, 2019, and our results of operations for the periods presented. Our financial position as of September 30, 2020, results of operations for the three and nine months ended September 30, 2020, and cash flows for the nine months ended September 30, 2020 were not materially impacted by the COVID-19 pandemic but the Company is continuously assessing the evolving situation related to the pandemic. The results for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for any subsequent period or for the year ending December 31, 2020 and therefore should not be relied upon as an indicator of future results.

Significant Accounting Polices, Estimates and Judgements – The preparation of condensed consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the condensed consolidated financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates, including those related to, but not limited to, the commissions we expect to collect for each approved member cohort, allowance for credit loss, the useful lives of intangible assets, fair value of investments, recoverability of intangible assets, valuation allowance for deferred income taxes, provision (benefit) for income taxes and the assumptions used in determining stock-based compensation. We base our estimates of the carrying value of certain assets and liabilities on historical experience and on various other assumptions that we believe to be reasonable. Actual results may differ from these estimates.

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

With the exception of the change for the accounting of credit losses as a result of the adoption of Accounting Standard Updates (“ASU”) No. 2016-13, Financial Instruments – Credit Losses discussed below, there have been no material changes to our significant accounting policies discussed in our Annual Report on Form 10-K for the year ended December 31, 2019.

Seasonality – Open enrollment periods drive the seasonality of our business. A greater number of our Medicare-related health insurance plans are sold in our fourth quarter during the Medicare annual enrollment period when Medicare-eligible individuals are permitted to change their Medicare Advantage, Medicare Supplement, and Medicare Part D prescription drug coverage for the following year. As a result, our Medicare plan-related commission revenue is highest in our fourth quarter. Any changes or additional enrollment periods may change the seasonality of our business. For instance, due to the recent reintroduction of the Medicare Advantage open enrollment period that takes place in the first quarter of the year, our first quarter is generally the second-highest revenue generating quarter.

The majority of our major medical individual and family health insurance plans are sold in the fourth quarter during the annual open enrollment period under the federal Patient Protection and Affordable Care Act and related amendments in the Health Care and Education Reconciliation Act. Individuals and families generally are not able to purchase major medical individual and family health insurance outside of the open enrollment period, unless they qualify for a special enrollment period as a result of certain qualifying events, such as losing employer-sponsored health insurance or moving to another state.

Recently Adopted Accounting Pronouncement

Financial Instruments – Credit Losses (Topic 326) – In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326), that requires companies to present certain financial assets net of the amount expected to be collected. The guidance requires the measurement of expected credit losses to be based on relevant information from past events, including historical experiences, current conditions and reasonable and supportable forecasts that affect collectability. Contract assets – commissions receivable were the Company's only financial assets that were materially impacted by this guidance.

We adopted ASU 2016-13, including applicable amendments in other ASUs issued subsequent to ASU 2016-13, using a modified retrospective transition method on January 1, 2020 for all financial assets measured at amortized cost. Results for periods after January 1, 2020 are presented under ASU 2016-13 while prior period amounts continue to be reported under the previous accounting standards. We recorded a $1.1 million decrease, net of income taxes, to retained earnings as of January 1, 2020 for the cumulative effect of adopting ASU 2016-13. See Note 3 – Supplemental Financial Statement Information for further discussion on credit losses.

The impact from the adoption of ASU 2016-13 is summarized as follows (in thousands):


Balance Sheet Impact:	December 31, 2019		Transition Adjustments		January 1, 2020
Contract assets – commissions receivable – current	$	174,526	$	(71)	$	174,455
Contract assets – commissions receivable – non-current	414,696		(1,442)		413,254
Other assets*	18,004		366		18,370
Total assets	741,634		(1,147)		740,487

Retained earnings	271,852		(1,147)		270,705

____________

*Adjustment to Other assets is due to the increase in deferred tax assets resulting from the adoption of ASU 2016-13.

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Financial Instruments (Topic 820) – In 2018, the FASB issued ASU No. 2018-13, to change the disclosure requirements for fair value measurement with the objective of improving the effectiveness of the notes to financial statements. This new guidance removed and modified certain disclosure requirements under Topic 820. We adopted this guidance in the first quarter of 2020 with no material impact on our condensed consolidated financial statements.

Intangible – Goodwill and Other (Topic 350) – In 2017, the FASB issued ASU 2017-04 to simplify the subsequent measurement of goodwill by removing the requirement to perform a hypothetical purchase price allocation to compute the implied fair value of goodwill to measure impairment. Instead, any goodwill impairment will equal the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. In addition, the guidance eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. This standard is effective for annual or any interim goodwill impairment test in fiscal years beginning after December 15, 2019. We adopted this guidance in the first quarter of 2020 with no material impact on our condensed consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

Income Taxes (Topic 740) – In December 2019, the FASB issued ASU No. 2019-12, Income Tax, Simplifying the Accounting for Income Taxes, which aims to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and improve consistent application of and simplify U.S. GAAP for other areas under this Topic by clarifying existing guidance. ASU 2019-12 will be effective for us beginning January 1, 2021. The amendments in this standard update have individually different adoption approaches. We do not anticipate a material impact on our consolidated financial statements and disclosures from the adoption of this standard update.

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 2 – Revenue

Disaggregation of Revenue – The table below disaggregates our revenue by product (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Medicare
Medicare Advantage	$	41,901	$	36,735	$	168,834	$	113,185
Medicare Supplement	7,321		8,229		32,384		25,082
Medicare Part D	329		1,805		7,148		5,906
Total Medicare	49,551		46,769		208,366		144,173
Individual and Family (1)
Non-Qualified Health Plans	9,915		3,146		12,585		11,592
Qualified Health Plans	1,466		839		3,559		4,900
Total Individual and Family	11,381		3,985		16,144		16,492
Ancillary
Short-term	2,438		3,151		6,724		7,162
Dental	4,452		1,420		5,791		3,138
Vision	1,798		537		2,228		1,294
Other	847		1,104		2,693		2,778
Total Ancillary	9,535		6,212		17,436		14,372
Small Business	1,723		1,938		6,975		6,576
Commission Bonus	1,354		858		5,065		2,982
Total Commission Revenue	73,544		59,762		253,986		184,595
Other Revenue	20,740		10,151		35,472		19,858
Total Revenue	$	94,284	$	69,913	$	289,458	$	204,453

_____________

(1)We define our individual and family plan offerings as major medical individual and family health insurance plans, which does not include Medicare-related, small business or ancillary plans. Individual and family health insurance plans include both qualified and non-qualified plans. Qualified health plans are individual and family health insurance plans that meet the requirements of the Affordable Care Act and are offered through the government-run health insurance exchange in the relevant jurisdiction. Non-qualified health plans are individual and family health insurance plans that meet the requirements of the Affordable Care Act and are not offered through the exchange in the relevant jurisdiction. Individuals that purchase non-qualified health plans cannot receive a subsidy in connection with the purchase of non-qualified plans.

Revenue Recognition Based on Estimated Constrained LTV

Our revenue primarily consists of commission revenue generated from health insurance carriers, which we define as our customers under the Accounting Standards Codification 606 – Revenue from Contracts with Customers (“ASC 606”). We recognize revenue for plans approved during the period by applying the latest estimated constrained lifetime value (“LTV”) for that product. We recognize adjustment revenue for plans approved in prior periods when changes in assumptions for constrained LTV calculations are made and when there is sufficient evidence demonstrating a trend that is different from the estimated constrained LTV at the time of approval resulting in a change in estimate to expected cash collections. Net adjustment revenue consists of increases in revenue for certain prior period cohorts as well as reductions in revenue for certain prior period cohorts. We recognize positive adjustment revenue to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur. We assess the risk of significant revenue reversal based on statistical and qualitative analysis given historical information and current market conditions.

EHEALTH, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Our commission revenue for each product line is based on a number of assumptions, which include, but are not limited to, estimating conversion of an approved member to a paying member, forecasting average plan duration and forecasting the commission amounts likely to be received per member. These assumptions are based on our analysis of historical trends for different cohorts and incorporate management’s judgment in interpreting those trends and in applying the constraints discussed below. For our Medicare commission revenue, which represented 82% and 78% of our total commission revenue for the nine months ended September 30, 2020 and 2019, respectively, the estimated average plan duration, which is the average length of time paying members are active on their plans, used to calculate Medicare health insurance plan LTVs historically has been approximately 3 years for Medicare Advantage plans, approximately 5 years for Medicare Part D prescription drug plans, and approximately 5 years for Medicare Supplement plans. While the average plan duration has been approximately 3 years for Medicare Advantage plans, certain members may have a duration of up to 15 years. The estimated average plan duration used to calculate the LTV for major medical individual and family health insurance plans historically has been approximately

Price	75.05	EPS	0
Shares	23	P/E	426
MCap	1,763	P/FCF	-120
Net Debt	-91	EBIT	-14
TEV	1,672	TEV/EBIT	-121
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-09-30	Filed 2020-11-05
10-Q	2020-06-30	Filed 2020-08-06
10-Q	2020-03-31	Filed 2020-05-11
10-K	2019-12-31	Filed 2020-03-02
10-Q	2019-09-30	Filed 2019-11-08
10-Q	2019-06-30	Filed 2019-08-08
10-Q	2019-03-31	Filed 2019-05-07
10-K	2018-12-31	Filed 2019-03-14
10-Q	2018-09-30	Filed 2018-11-06
10-Q	2018-06-30	Filed 2018-08-07
10-Q	2018-03-31	Filed 2018-05-09
10-K	2017-12-31	Filed 2018-03-19
10-Q	2017-09-30	Filed 2017-11-07
10-Q	2017-06-30	Filed 2017-08-07
10-Q	2017-03-31	Filed 2017-05-05
10-K	2016-12-31	Filed 2017-03-16
10-Q	2016-09-30	Filed 2016-11-08
10-Q	2016-06-30	Filed 2016-08-08
10-Q	2016-03-31	Filed 2016-05-09
10-K	2015-12-31	Filed 2016-03-14
10-Q	2015-09-30	Filed 2015-11-06
10-Q	2015-06-30	Filed 2015-08-07
10-Q	2015-03-31	Filed 2015-05-08
10-K	2014-12-31	Filed 2015-03-16
10-Q	2014-09-30	Filed 2014-11-10
10-Q	2014-06-30	Filed 2014-08-08
10-Q	2014-03-31	Filed 2014-05-09
10-K	2013-12-31	Filed 2014-03-12
10-Q	2013-09-30	Filed 2013-11-08
10-Q	2013-06-30	Filed 2013-08-07
10-Q	2013-03-31	Filed 2013-05-07
10-K	2012-12-31	Filed 2013-03-13
10-Q	2012-09-30	Filed 2012-11-06
10-Q	2012-06-30	Filed 2012-08-09
10-Q	2012-03-31	Filed 2012-05-08
10-K	2011-12-31	Filed 2012-03-15
10-Q	2011-09-30	Filed 2011-11-08
10-Q	2011-06-30	Filed 2011-08-05
10-Q	2011-03-31	Filed 2011-05-06
10-K	2010-12-31	Filed 2011-03-15
10-Q	2010-09-30	Filed 2010-11-09
10-Q	2010-06-30	Filed 2010-08-09
10-Q	2010-03-31	Filed 2010-05-10
10-K	2009-12-31	Filed 2010-03-05

8-K	2020-10-22	Earnings, Exhibits
8-K	2020-08-14	Officers
8-K	2020-07-23	Earnings, Exhibits
8-K	2020-06-09
8-K	2020-06-04
8-K	2020-04-23
8-K	2020-03-03
8-K	2020-02-20
8-K	2020-02-20
8-K	2020-01-29
8-K	2020-01-23
8-K	2019-12-20
8-K	2019-11-19
8-K	2019-10-24
8-K	2019-10-24
8-K	2019-09-06
8-K	2019-08-29
8-K	2019-08-19
8-K	2019-08-06
8-K	2019-07-25
8-K	2019-06-14
8-K	2019-06-10
8-K	2019-06-07
8-K	2019-05-13
8-K	2019-05-06
8-K	2019-05-03
8-K	2019-04-25
8-K	2019-04-11
8-K	2019-03-26
8-K	2019-02-21
8-K	2019-01-24
8-K	2019-01-22
8-K	2019-01-22
8-K	2018-12-21
8-K	2018-12-17
8-K	2018-11-27
8-K	2018-10-25
8-K	2018-09-18
8-K	2018-07-26
8-K	2018-06-12
8-K	2018-05-31
8-K	2018-04-25
8-K	2018-04-24
8-K	2018-03-29
8-K	2018-03-01
8-K	2018-01-22
8-K	2018-01-16

EX-10.1	exhibit101twelfthamend.htm
EX-31.1	a2020q3ex311.htm
EX-31.2	a2020q3ex312.htm
EX-32.1	a2020q3ex321.htm
EX-32.2	a2020q3ex322.htm

EHTH 10Q Quarterly Report

Ehealth Earnings 2020-09-30