eHealth, Inc. (NASDAQ:EHTH) Q3 2018 Earnings Conference Call Transcript
Oct 25, 2018 • 05:00 pm ET
Good day, ladies and gentleman, and welcome to the Q3 2018 eHealth, Incorporated Earnings Conference Call. At this time all participants are in a listen-only mode. Later we'll conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, this conference is being recorded.
I would now like to introduce your host for today's conference, Kate Sidorovich, company's VP of IR. Ma'am, you may begin.
Thank you. Good afternoon and thank you all for joining us today, either by phone or by webcast, for a discussion about eHealth Inc.'s Third Quarter 2018 Financial Results.
On the call this afternoon, we'll have Scott Flanders, eHealth's CEO; Dave Francis, eHealth's COO; and Derek Yung, CFO. After management completes its remarks, we'll open the line for questions. As a reminder today's conference call is being recorded and a webcast from the IR section of our website. A replay of the call will be available on our website following the call.
(Forward-Looking Cautionary Statements)
We will be presenting certain financial measures on the call that are considered non-GAAP under SEC Regulation G. For reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure, please refer to the information included in our press release and in our SEC filings, which can be found in the About Us section of our corporate website under the heading IR.
And at this point, I will turn the call over to Scott Flanders.
Thank you, Kate, and welcome, everyone. I am pleased with eHealth's solid third quarter performance and our increased momentum as we enter the important fourth quarter selling season. Third quarter revenue of $40.8 million grew 30% on a year-over-year basis, the company's strongest growth rate since 2015. Third quarter adjusted EBITDA was negative $6.9 million, an improvement of $5.6 million compared to the same quarter a year ago.
Third quarter GAAP net loss was $9 million. Our financial performance in third quarter was largely driven by: one, the acceleration in new Medicare enrollment growth compared to the rates we posted in the first half of the year, combined with an increase in the lifetime values of our Medicare Advantage and Medicare Supplement plan members. Second, a significant increase in sponsorship revenue from insurance carriers, which serves as a direct validation of our value proposition. And third, our new initiative to optimize our investments and direct-to-consumer marketing by creating a market for customer leads that are not fulfilled in-house.
During the quarter, we made the final preparation to deliver strong growth at attractive acquisition cost during the Medicare annual enrollment period, which started on October 15. We entered this AEP from a position of strength to (ph) many months of expanding and strengthening our strategic partner channel, refining our direct-to-consumer marketing strategies, expanding our telesales agent capacity and improving the overall digital enrollment experience for our customers.
I'd like to give you a better sense for how this selling season compares to the Medicare AEP a year ago in