How is the company thinking about the level and mix of marketing spend relative to last year, given deeper cuts in Q3?

Marketing spend is focused on branded channels due to higher quality enrollments and better retention. Spend is deployed in periods with highest LTV to CAC ratios (Q4). Q3 spend will be lower to allow advisers to focus on member engagement under the new model. “In order to create space for our advisers, obviously we're going to bring down marketing spend, which will give them the capacity to work under that advisory model. With that lower spend, we'll see some lower commission revenue in third and fourth.”

What is a realistic attach rate for the lifetime advisory model over time, and when can success be measured?

Early Q2 cross-sell rates doubled year-over-year. Expect cross-sell rates to vary by quarter. A full year cycle is needed to understand member and adviser responses. A mature model in Medicare could see a 0.5 cross-sell rate. “Over time, I don't think it's unrealistic to expect a cross-sell rate in a mature model, and it's hard to, at least at this point, just one quarter in, to define how long that we think it takes to get to full maturity. I don't think it's unrealistic in the Medicare space to assume a cross-sell rate of 0.5”

How are plan terminations shaping up this year, and how targeted can marketing be for shoppers in areas with high conversion?

Too early to definitively say on plan terminations; some carriers expect similar/slightly higher churn, others stability. The company's brand and marketing channels perform well in high disruption. They also surgically target their own members impacted by term plans. “I would just say, I think it's too early for us to sort of make a call on sort of the totality of the market. Again, we're encouraged at least that we're hearing from some of our carrier partners that they believe that stability is returning.”

EHTH

eHealth (EHTH) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Financials· Aug 4, 2026

Source: earnings call transcript

Executive summary

eHealth Q2 FY26 — Lifetime Advisory Model Launch and Cash Flow Improvement

eHealth launched its lifetime advisory model in Q2 FY26, shifting focus to member engagement and retention, which led to a 45% revenue decline but also a significant $36.2 million improvement in operating cash flow. The company is on track for substantial cost savings and expects a return to sustainable revenue growth and improved cash flow profile in 2027, driven by this new model, ICHRA expansion, and AI initiatives.

Highlights

Non-GAAP operating expenses declined by $42 million in the first 6 months compared to prior year.
Annual variable cost savings projected at more than $60 million and fixed cost savings at approximately $30 million.
Second-quarter ancillary cross-sell rates doubled compared to a year ago.
AI-enabled call screening expected to replace the majority of manual screening processes for the upcoming AEP, with past AEP showing 80-85% of calls answered by AI screeners.
Operating cash flow was negative $5 million, a substantial year-over-year improvement from negative $41.2 million.

Concerns

Second quarter revenue was $33.6 million, down 45% year-over-year.
GAAP net loss was $23.6 million, compared to $17.4 million in the prior year.
Adjusted EBITDA was a negative $21.8 million, compared to negative $14.1 million in the prior year.
Non-commission revenue was $3.8 million, down 38% from the prior year, primarily due to lower sponsorship revenue.
Medicare submissions declined 44% during the quarter.

Guidance & targets

Category	Target	Timeline	Confidence
Annual variable cost savings	more than $60 million medium materiality	FY26	High
Annual fixed cost savings	approximately $30 million medium materiality	FY26	High
ICHRA revenue	below $5 million low materiality	FY26	Medium
Net adjustment revenue	$16 million to $20 million medium materiality	FY26	High
Operating cash flow	positive high materiality	FY27	High
Sustainable revenue growth	return to growth high materiality	beginning in 2027 · FY27	High
EBITDA margin	meaningful expansion high materiality	FY27	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Medicare Primarily reflecting lower Medicare Advantage approved member volume and lower tail revenue. Gross profit compared to $19.1 million in the prior year period. Submissions: declined 44%Variable marketing and advertising expense: declined 58%Customer care and enrollment expense: declined 21%Total acquisition cost per MA equivalent approved member: increased 16%Customer care and enrollment cost per MA equivalent approved member: increased 42%Variable marketing cost per MA equivalent approved member: declined 23%	$31.8 million	-45%	—	$6 million gross profit
Employer and Individual Compared to a loss of approximately $0.3 million in the prior year. Decline expected to be offset by growth in emerging ICHRA platform.	$1.8 million	-33.3%	—	loss of $0.8 million

Product announcements

Product	Type	Timeline	Details
Final Expense	launch	Q2 FY26

Deals & partnerships

H.I.G. Capital (HIG) Discussions regarding the converts from the balance sheet and ability to clean up the balance sheet.

The strategy committee, which HIG is actively participating in, is continuing conversations to achieve a resolution that benefits all stakeholders regarding the April 2027 converts.

Risks & headwinds

Moderated Medicare Advantage growth current

Carriers focusing more heavily on profitability

Mitigation:eHealth's value proposition for targeted member acquisition and high-quality enrollments.

Industry consolidation and rationalization in tele broker channel current

Participants adjusting to a new operating environment

Mitigation:eHealth's value as a trusted adviser with extensive plan inventory.

Lower sponsorship revenue Q2 FY26

Non-commission revenue down 38% YoY to $3.8 million

Mitigation:Expects sponsorship revenue to become a meaningful source of upside as industry growth normalizes.

Potential for elevated churn/plan terminations in MA upcoming AEP

Some carriers expect similar to slightly higher plan terms than prior year

Mitigation:Proactive outreach to members in at-risk plans; strong brand and broad carrier mix to assist consumers.

Midterm election impact on advertising spend Q4 FY26

Potential for higher engagement on news stations

Mitigation:Ability to mitigate rate spikes through media buying strategy; leaning into strong performing content/media.

What to watch in Q3 FY26

Carrier commission strategies for AEP

Q3 FY26

Current CMS finalized 4.5% maximum increase for PY27; carrier approaches likely to vary

Target Greater visibility into carrier plans for AEP commissions, including non-commissionable plans

Why it matters

Carrier commission strategies directly impact eHealth's revenue and profitability for the upcoming AEP.

We expect to gain greater visibility into carrier plans during the third quarter as AEP preparations accelerate.

Find out whether EHTH delivers this. Inve re-checks your case every morning.

Q&A highlights

What are the expectations for carrier commission strategies and potential changes in non-commissionable plans for 2027 AEP?

CMS finalized a 4.5% maximum broker commission increase. Carriers will likely have varied strategies by plan type and geography. No material change expected in non-commissionable plan opportunities, though carriers may use them to manage growth.

“As it relates to non-commissionable revenue, that was the second part of your question. As we discussed, in Q1, we still don't see any material change in non-commissionable revenue opportunities as we prepare for AEP.”

asked by Maxi Ma · answered by Derrick Duke

2 min read 5 chapters

Detailed narrative

Lifetime Advisory Model Launch & Early Validation

eHealth launched its lifetime advisory model in Q2 FY26, shifting from one-time enrollment to ongoing member engagement. This model aims to improve retention and increase member value through ancillary product cross-selling and referrals. Early indicators show positive consumer response and significant cross-selling opportunities, with Q2 ancillary cross-sell rates doubling year-over-year. The company is shifting KPIs to member-driven metrics like retention and member-based lifetime value.

AI Integration for Efficiency and Scalability

The company is leveraging AI to enhance efficiency, scalability, and customer experience. AI is currently used for after-hours interactions, call screening, and customer service inquiries, with plans for AI-enabled call screening to handle 100% of calls for the upcoming AEP. AI also supports back-office functions like product management, software development, UX design, and carrier plan content ingestion, significantly reducing manual effort and improving accuracy.

ICHRA as a Growth Pillar

eHealth is pursuing measured, profitable growth in the under-65 market, with ICHRA as a key component. Industry forecasts project ICHRA to cover approximately 5 million lives by 2029. The company's strategy focuses on building a scalable platform and ecosystem, establishing a foundation for future growth, even though ICHRA revenue is expected to remain below $5 million in FY26.

Medicare Advantage Market Dynamics

The Medicare Advantage market, despite recent disruption, shows compelling long-term opportunity with enrollment exceeding 35.5 million beneficiaries and projected to reach 63% penetration by 2034. The industry is gradually moving towards stability, with CMS finalizing a 4.5% maximum broker commission increase for plan year 2027. The market is rewarding high-quality, retention-oriented distribution models, aligning with eHealth's strategy.

Strategic Priorities and 2027 Outlook

eHealth's 2026 priorities include scaling the lifetime advisory model, improving cash flow towards break-even, and advancing diversification through ancillary products and ICHRA. The company anticipates a return to sustainable revenue growth in 2027, driven by the transition to relationship economics, ICHRA growth, and selective expansion of its Amplify business, alongside meaningful EBITDA margin expansion.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.