What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-07 compared with 2025-05-07 · 221 added, 134 removed, 372 unchanged (49% of the section changed)

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Business Update

Our fiscal 2025 growth strategy is focused on pursuing deliberate revenue diversification and scaling of our business, evolving our brand awareness for all products and channels, improving member retention and conversions on our platform while continuing to evolve our telesales organization, advancing our digital technology leadership, and strengthening and expanding health insurance carrier partnerships.

During the first quarter of 2025, we maintained the momentum we built during the most recent Annual Enrollment Period (“AEP”), which observed strong consumer demand driven by recent Medicare Advantage plan benefit and premium changes, plan cancellations and market exits due primarily to carriers facing higher medical costs and regulatory pressures.

As a result, we delivered strong Medicare Advantage enrollment growth in Q1 2025, with 25% growth in total Medicare Advantage submissions, inclusive of our broker of record and fee-based business process outsourcing (“BPO”) arrangements, compared to the same period in 2024.

Submissions describe applications that are submitted by individuals online through our eHealth platform or completed with the assistance of our benefit advisors where the individual provides authorization to the benefit advisor to submit the application to the insurance carrier partner.

The individual may have additional actions to take before the application will be reviewed by the insurance carrier and not all submissions ultimately become approved members.

Additionally, we observed improvements in our cash flow from operations for the three months ended March 31, 2025, compared to the same period in 2024, reflecting strong cash collections from new enrollments.

During the first quarter of 2025, we invested in our post-enrollment retention strategy and nearly doubled the size of our retention and customer service team.

Despite this investment, Medicare unit margins experienced meaningful expansion in Q1 2025, compared to the same period in 2024.

Additionally, we began piloting the

integration of artificial intelligence across several components of our telephonic enrollment platform during the second quarter of 2025.

Our 2025 growth strategy is focused on the scaling of our core Medicare Advantage business and pursuing revenue diversification initiatives, evolving our brand awareness across all products and enrollment channels, and improving member retention on our platform while continuing to evolve our telesales organization, advancing our digital technology leadership, and strengthening and expanding health insurance carrier partnerships.

During the first quarter of 2025, we generated strong Medicare Advantage enrollment growth during the Medicare Advantage Open Enrollment Period (“OEP”), maintaining the momentum we built during the most recent Annual Enrollment Period (“AEP”), which was characterized by elevated consumer demand driven by recent Medicare Advantage plan benefit and premium changes, plan cancellations and market exits due primarily to carriers facing higher medical costs and regulatory pressures.

During the second quarter of 2025, Medicare enrollment volume was lower than the second quarter of 2024, which was consistent with our expectations.

Our typical Medicare enrollment seasonality is heightened this year primarily as a result of the recent regulatory changes to enrollment rules for dual-eligible beneficiaries and those that receive Medicare Part D Low Income Subsidies (“LIS”).

Beginning in 2025, the U.S.

Centers for Medicare & Medicaid Services removed the special enrollment period that allowed dual-eligible and LIS beneficiaries to enroll in Medicare Advantage plans on a quarterly basis.

As these regulatory changes limit eligibility to enroll into or between Medicare Advantage plans outside of the AEP for this large portion of Medicare beneficiaries, we experienced a decline in Medicare Advantage plan submissions during the second quarter of 2025.

We successfully adjusted to this regulatory change by implementing a more flexible structure in our telesales organization, making it more agile and easier to flex advisor capacity up and down in alignment with anticipated enrollment volumes.

also have been piloting the integration of artificial intelligence (“AI”) across several components of our telephonic enrollment platform and intend on leveraging AI to help us serve beneficiaries during the upcoming AEP.

Additionally, we began our preparations for the 2026 AEP.

We expect to experience another dynamic AEP which will present the opportunity to drive strong consumer demand to our platform as beneficiaries face significant plan changes from Medicare Advantage insurance carriers.

At the same time, we plan to focus on preserving our existing book of business through our continued retention efforts.

Executive Leadership Transition

On July 28, 2025, we announced the planned appointment of Derrick Duke as our next chief executive officer.

Duke joined the Company on August 4, 2025 to begin the transition process prior to officially stepping into the chief executive officer role effective September 18, 2025.

Fran Soistman will continue to serve in his current role until September 18, 2025 and will remain with the Company as an executive advisor until December 31, 2025 to assist with the transition.

He will also remain as a member on the Company’s Board of Directors.

It is expected that the Board of Directors will approve the appointment of Mr.

Duke as a member of the Board on September 18, 2025.

This leadership change is part of the Company’s long-term succession planning and is intended to ensure continuity in strategic direction and operational execution.

Summary of Selected Metrics

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Three Months Ended

March 31, % Change

June 30, % Change Six Months Ended

June 30, % Change

2025 2024 2025 2024

Medicare Advantage 30,568 37,638 (19) % 113,239 103,388 10 %

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Total Approved Members 48,936 56,568 (13) % 160,746 154,827 4 %

Three Months Ended March 31, 2025 and 2024 – Total approved members grew 14% during the three months ended March 31, 2025 compared to the same period in 2024, driven by:

• 16% growth in Medicare approved members, as a result of:

◦ a 26% increase in Medicare Advantage approved members due to a 21% increase in Medicare Advantage broker of record submissions primarily as a result of the continued increase in consumer demand due to recent market disruptions, increased variable marketing spend and an increased number of benefit advisors with improved telesales conversion rates year-over-year,

◦ partially offset by a 59% and 26% decline in Medicare Supplement and Medicare Part D approved members, respectively, primarily caused by the shift of some Medicare Supplement

broker of record arrangements to fee-based arrangements within our Amplify platform and a shift away from standalone Medicare Part D plans.

• 21% growth in ancillary approved members primarily due to a targeted increase in hospital indemnity plan members and an increase in vision plan approved members, partially offset by declines in dental and short-term approved members;

• a 19% and 28% decline in individual and family plan and small business health insurance plan approved members, respectively, primarily due to a decrease in volume as we continued to focus on implementing operational enhancements in our E&I segment.

Three Months Ended June 30, 2025 and 2024 – Total approved members declined 13% during the three months ended June 30, 2025 compared to the same period in 2024, driven by:

• an 18% decline in Medicare approved members, primarily resulting from:

◦ a 19% decline in Medicare Advantage approved members due to a 23% decrease in Medicare Advantage broker of record submissions, primarily driven by an intentional decrease in variable marketing spend due to the 2025 regulatory changes that reduced the special enrollment period options for dual-eligible beneficiaries, which in the past represented a meaningful share of our second and third quarter Medicare Advantage enrollments;

◦ an 11% decline in Medicare Supplement approved members due to certain Q1 2024 submissions that were approved subsequently in Q2 2024 due to a delay in approval, partially offset by a 6% increase in broker of record submissions during the three months ended June 30, 2025 compared to the same period in 2024, and

◦ a 6% decline in Medicare Part D approved members due to the continued shift away from standalone Medicare Part D plans.

• a 41% and 9% decline in individual and family plan and small business health insurance approved members, respectively, primarily due to a decrease in volume as we continue to focus on implementing operational enhancements in our Employer and Individual (“E&I”) segment, and

• 12% growth in ancillary approved members primarily driven by targeted growth in hospital indemnity plans, partially offset by declines in short-term and dental plan approved members.

Six Months Ended June 30, 2025 and 2024 – Total approved members grew 4% during the six months ended June 30, 2025 compared to the same period in 2024, driven by:

• 4% growth in Medicare approved members, primarily as a result of:

◦ a 10% increase in Medicare Advantage approved members due to a 5% increase in Medicare Advantage broker of record submissions due to the increased consumer demand during the first quarter of 2025 Medicare Advantage OEP, as well as improved telesales conversion rates year-over-year, slightly offset by decreased volume in the second quarter due to the dual-eligible regulations that became effective in 2025,

◦ a 47% decline in Medicare Supplement approved members, primarily caused by the shift of some Medicare Supplement broker of record arrangements to fee-based arrangements within our Amplify platform, which are not reflected as approved members, and

◦ a 20% decline in Medicare Part D approved members due to the continued shift away from standalone Medicare Part D plans.

• 17% growth in ancillary approved members primarily due to a targeted increase in hospital indemnity plan members and an increase in vision plan approved members, partially offset by declines in short-term and dental plan approved members;

• a 26% and 21% decline in individual and family plan and small business health insurance plan approved members, respectively, primarily due to a decrease in volume as we continue to focus on implementing operational enhancements in our E&I segment.

Estimated Constrained Lifetime Value of Commissions Per Approved Member

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Medicare (1) (2)

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For additional information on constrained LTV, see “ Critical Accounting Estimates” in our Annual Report on Form 10-K for the year ended December 31, 2024.

(2) The constraints applied to the total estimated lifetime value of commissions we expect to receive for selling the plan after the carrier approves an application in order to derive the constrained LTV of commissions for approved members recognized for Medicare Advantage, Medicare Supplement and Medicare Part D were 5.5%, 9% and 7%, respectively, for the three months ended March 31, 2025 and 7%, 9% and 7%, respectively, for the three months ended March 31, 2024.

Three Months Ended March 31, 2025 and 2024 – The changes in constrained LTV of commissions per approved member primarily consisted of:

• a 5% decrease in Medicare Advantage plans, reflecting less favorable retention assumptions for the Q1 2025 cohorts compared to Q1 2024 cohorts, partly offset by lower constraint due to a decline in volatility and observed LTV trends;

• a 31% increase in Medicare Supplement plans, primarily due to favorable carrier and contract mix and favorable retention assumptions for the Q1 2025 cohorts compared to Q1 2024 cohorts;

• a 30% decrease in Medicare Part D plans, primarily driven by unfavorable carrier and contract mix, partially offset by improved retention assumptions for the Q1 2025 cohorts compared to Q1 2024 cohorts;

• a 3% increase in qualified health plans, primarily due to improved enrollment quality;

(2) The constraints applied to the total estimated lifetime value of commissions we expect to receive for selling the plan after the carrier approves an application in order to derive the constrained LTV of commissions for approved members recognized for Medicare Advantage, Medicare Supplement and Medicare Part D were 5.5%, 4% and 7%, respectively, for the three months ended June 30, 2025 and 5.5%, 9% and 7%, respectively, for the three months ended June 30, 2024.

Three Months Ended June 30, 2025 and 2024 – The changes in constrained LTV of commissions per approved member primarily consisted of:

• a 1% increase in Medicare Advantage plans, primarily due to favorable carrier and contract mix, partially offset by less favorable retention assumptions for the Q2 2025 cohorts compared to the Q2 2024 cohorts;

• a 29% increase in Medicare Supplement plans, primarily due to favorable carrier and contract mix, favorable retention assumptions for the Q2 2025 cohorts compared to the Q2 2024 cohorts and a decrease in the constraint from 9% to 4% due to observed LTV trends;

• a 24% decrease in Medicare Part D plans, primarily driven by unfavorable carrier and contract mix;

• a 7% decrease in non-qualified health plans, primarily due to a decline in enrollment quality as well as unfavorable retention trends;

• an 11% decrease in qualified health plans, primarily due to an increase in the constraint from 4% to 10% due to observed unfavorable retention trends;

• a 35% decrease in short-term plans, primarily driven by unfavorable retention assumptions year-over-year as a result of the regulatory change that decreased term limits for short-term health plans;

• an 8%, 5% and 16% increase in dental, vision and small business plans, respectively, primarily driven by favorable carrier and contract mix.

• an 11%, 4% and 2% increase in vision, small business and dental plans, respectively.

Estimated Membership

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The following table shows estimated membership by product as of the dates presented below:

As of March 31, % Change

As of June 30, % Change

Medicare Advantage 596,397 584,649 2 %

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We often are made aware of policy cancellations and group size changes at the time of annual renewal and update our membership statistics accordingly in the period they are reported.

March 31, 2025 compared to March 31, 2024 – Total estimated membership declined 2% as of March 31, 2025 compared to March 31, 2024 due to:

• a 14%, 2% and 8% decline year-over-year in individual and family plan, ancillary plan and small business plan estimated membership, respectively, primarily due to a decrease in approved applications as we focus on implementing operational enhancements in our E&I segment;

• Medicare estimated membership remained flat year-over-year primarily due to:

◦ a 1% increase in Medicare Advantage estimated membership as a result of increased approved applications,

◦ partially offset by a 2% and 4% decrease in Medicare Supplement and Medicare Part D plans, respectively, as a result of decreased approved applications due to the shift of some broker of record arrangements to fee-based arrangements within our Amplify platform, which are not included in estimated membership, as well as a decline in Medicare Part D plan approved applications due to the shift away from standalone Medicare Part D plans.

June 30, 2025 compared to June 30, 2024 – Total estimated membership declined 3% as of June 30, 2025 compared to June 30, 2024 due to:

• a 2% decline year-over-year in Medicare estimated membership primarily due to:

◦ a 6% and 10% decrease in Medicare Supplement and Medicare Part D plans, respectively, as a result of decreased approved applications due to the decline in Medicare Supplement plan approved members as well as a decline in Medicare Part D plan approved members due to the shift away from standalone Medicare Part D plans,

◦ partially offset by a 2% increase in Medicare Advantage estimated membership as a result of increased Medicare Advantage approved member volume from the most recent AEP and OEP.

• a 17% and 11% decline year-over-year in individual and family plan and small business plan estimated membership, respectively, primarily due to a decrease in approved applications and unfavorable retention trends in individual and family plans.

Member Acquisition

Marketing initiatives are an important component of our strategy to increase revenue and are primarily designed to encourage consumers to complete an application for health insurance.

We calculate and evaluate the customer care and enrollment (“CC&E”) cost per approved member and the variable marketing cost per approved member.

We incur CC&E expenses in assisting applicants during the enrollment process.

Marketing initiatives are an important component of our strategy to increase revenue and are primarily designed to encourage consumers to complete an application for health insurance.

Variable marketing costs represent costs incurred in member acquisition from our direct marketing and marketing partner channels.

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CC&E cost per MA-equivalent approved member (1)

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(2) We calculate the number of IFP-equivalent approved members by adding the total number of approved qualified and non-qualified health plan members and 33% of the total number of short-term approved members during the periods presented.

Three Months Ended March 31, 2025 and 2024 – Total acquisition cost per MA-equivalent approved member decreased $80, or 10%, during the three months ended March 31, 2025 compared to the same period in 2024, driven by:

• a $58, or 14%, decrease in CC&E cost per MA-equivalent approved member due to:

◦ efficiencies resulting from a benefit advisor mix that is more tenured when compared to the same period in 2024 as well as the increased use of screeners to answer calls from beneficiaries, and

◦ continued optimization of our sales force operations driven by enhanced training protocols and new agent-facing sales tools.

• a $22, or 5%, decrease in variable marketing cost per MA-equivalent approved member, primarily due to continued marketing efficiencies as our brand continues to scale, enabling improvement in our marketing channel mix.

Three Months Ended June 30, 2025 and 2024 – Total acquisition cost per MA-equivalent approved member increased $31, or 3%, during the three months ended June 30, 2025 compared to the same period in 2024, driven by:

• a $65, or 11%, increase in CC&E cost per MA-equivalent approved member primarily due to:

◦ the elevated seasonal decline in Medicare Advantage approved members driven by the dual-eligible regulations that became effective in 2025,

◦ slightly offset by lower overall personnel and compensation costs, including cost savings as a result of our more flexible telesales organization structure which allows us to adjust capacity more efficiently to match the Medicare business seasonality.

• a $34, or 7%, decrease in variable marketing cost per MA-equivalent approved member, primarily due to an intentional reduction in spend during a lower volume quarter as a result of the dual-eligible regulations that became effective in 2025, a more favorable marketing channel mix and continued marketing efficiencies as our brand continues to scale, enabling enhanced lead quality, and strong conversion rates, including improved conversion rates in our online unassisted channel.

Individual and Family

Three Months Ended March 31, 2025 and 2024 – Total acquisition cost per IFP-equivalent approved member increased $89, or 41%, during the three months ended March 31, 2025 compared to the same period in 2024, driven by:

Three Months Ended June 30, 2025 and 2024 – Total acquisition cost per IFP-equivalent approved member increased $178, or 52%, during the three months ended June 30, 2025 compared to the same period in 2024, driven by:

• a $138, or 49%, increase in CC&E cost per IFP-equivalent approved member due to the overall decline in individual and family plan and short-term plan approved members;

• a $61, or 105%, increase in variable marketing cost per IFP-equivalent approved member, primarily driven by an increase in marketing spend as we pursue growth in the E&I segment as well as the decline in individual and family plan and short-term plan approved members.

• a $40, or 68%, increase in variable marketing cost per IFP-equivalent approved member, primarily driven by the overall decline in individual and family plan and short-term plan approved member.

Critical Accounting Policies and Estimates

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There have been no changes to our critical accounting policies and estimates described in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on February 27, 2025, that have had a significant impact on our condensed consolidated financial statements and related notes.

Please refer to Management’s Discussion and Analysis of Financial Condition and Results of

Operations contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, for a complete discussion of our other critical accounting policies and estimates.

Please refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, for a complete discussion of our other critical accounting policies and estimates.

Results of Operations

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Commission $ 54,731 90 % $ 56,847 86 % $ 153,677 88 % $ 137,774 87 %

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Total operating costs and expenses 83,826 138 % 93,815 142 % 192,147 110 % 204,690 129 %

Income (loss) from operations 4,798 4 % (17,911) (19) %

Loss from operations (23,044) (38) % (27,959) (42) % (18,246) (10) % (45,870) (29) %

Interest expense (2,348) (4) % (2,849) (4) % (4,996) (3) % (5,658) (4) %

Other income, net 1,340 2 % 2,335 4 % 2,916 2 % 4,726 3 %

Income (loss) before income taxes 3,726 3 % (18,329) (20) %

Provision for (benefit from) income taxes 1,776 2 % (1,345) (1) %

Net income (loss) $ 1,950 2 % $ (16,984) (18) %

Loss before income taxes (24,052) (40) % (28,473) (43) % (20,326) (12) % (46,802) (29) %

Benefit from income taxes (6,654) (11) % (505) (1) % (4,878) (3) % (1,850) (1) %

Net loss $ (17,398) (29) % $ (27,968) (42) % $ (15,448) (9) % $ (44,952) (28) %

(1) Operating costs and expenses include the following amounts of stock-based compensation expense (in thousands):

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Marketing and advertising $ 585 $ 711 $ 1,082 $ 1,355

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Total revenue $ 60,782 $ 65,856 $ (5,074) (8) % $ 173,901 $ 158,820 $ 15,081 9 %

Three Months Ended March 31, 2025 and 2024 – Commission revenue increased $18.0 million, or 22%, during the three months ended March 31, 2025 compared to the same period in 2024 due to:

• a $19.0 million, or 27%, increase in commission revenue from our Medicare segment driven by:

◦ a 16% increase in overall Medicare plan approved members, specifically driven by 26% growth in Medicare Advantage approved members, and

◦ net adjustment revenue from prior periods of $8.0 million during the three months ended March 31, 2025 compared to $1.0 million in the same period in 2024.

• a $0.9 million, or 9%, decrease in commission revenue from our E&I segment driven by:

◦ a 19% and 28% decline in individual and family plan and small business plan approved members, respectively,

◦ partially offset by higher net adjustment revenue from prior periods enrollments, which was $2.5 million during the three months ended March 31, 2025 compared to $1.5 million in the same period in 2024 along with improved constrained LTV of commissions per approved member for most products in our E&I segment.

Other revenue increased $2.1 million, or 18%, during the three months ended March 31, 2025 compared to the same period in 2024 due to a $4.2 million increase in fee-based revenue driven by the expansion of our fee-based BPO arrangements, partially offset by a $2.0 million decline in sponsorship and advertising revenue.

Three Months Ended June 30, 2025 and 2024 – Commission revenue decreased $2.1 million, or 4%, during the three months ended June 30, 2025 compared to the same period in 2024 due to:

• a $3.7 million, or 60%, decrease in our E&I segment commission revenue driven by:

◦ net adjustment revenue from prior periods enrollments of $(1.3) million during the three months ended June 30, 2025 compared to $0.8 million in the same period in 2024,

◦ a 41% and 9% decline in individual and family plan and small business approved members, respectively, partially offset by a 12% increase in ancillary approved members, and

◦ lower constrained LTV of commissions per approved member for qualified health plans, non-qualified health plans and short-term health plans, slightly offset by higher constrained LTV of commissions per approved member for dental, vision and small business plans.

• a $1.6 million, or 3%, increase in our Medicare segment commission revenue driven by:

◦ higher net adjustment revenue from prior periods enrollments, which was $19.1 million during the three months ended June 30, 2025 compared to $10.7 million during the same period in 2024, and

◦ improved constrained LTV of commissions per approved member for Medicare Advantage and Medicare Supplement products,

◦ partially offset by a 19%, 11%, and 6% decrease in Medicare Advantage, Medicare Supplement and Medicare Part D plan approved members, respectively.

Other revenue decreased $3.0 million, or 33%, during the three months ended June 30, 2025 compared to the same period in 2024 primarily due to a decrease in sponsorship and advertising revenue.

Six Months Ended June 30, 2025 and 2024 – Commission revenue increased $15.9 million, or 12%, during the six months ended June 30, 2025 compared to the same period in 2024 due to:

• a $20.6 million, or 17%, increase in our Medicare segment commission revenue driven by:

◦ an overall 4% increase in Medicare plan approved members, specifically driven by 10% growth in Medicare Advantage approved members,

◦ improved constrained LTV of commissions per approved member for Medicare Advantage and Medicare Supplement products, and

◦ net adjustment revenue from prior periods of $27.1 million during the six months ended June 30, 2025 compared to $11.7 million in the same period in 2024.

• a $4.7 million, or 29%, decrease in our E&I segment commission revenue driven by:

◦ a 26% and 21% decline in individual and family plan and small business plan approved members, respectively, slightly offset by an increase in ancillary approved members,

◦ lower net adjustment revenue from prior periods enrollments, which was $1.2 million during the six months ended June 30, 2025 compared to $2.3 million in the same period in 2024, and

Other revenue decreased $0.8 million, or 4%, during the six months ended June 30, 2025 compared to the same period in 2024 due to a $4.8 million decrease in sponsorship and advertising revenue, partially offset by a $4.1 million increase in fee-based revenue driven by the expansion of our fee-based BPO arrangements.

See Summary of Selected Metrics above and Segment Information below for further discussion.

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We generally compensate our marketing partners for referrals based on the consumer submitting a health insurance application on our platform, regardless of whether the consumer’s application is approved by the health insurance carrier, or for the referral of a Medicare-related lead to us by the marketing partner.

Some of our marketing partners have tiered arrangements where the amount we pay the marketing partner per submitted application increases as the volume of submitted applications we receive from the marketing partner

We recognize these expenditures in the period when a marketing partner’s referral results in the submission of a health insurance application.

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% of total revenue 35 % 41 % 36 % 41 %

Three Months Ended March 31, 2025 and 2024 – Marketing and advertising expenses increased $2.5 million, or 6%, during the three months ended March 31, 2025 compared to the same period in 2024, primarily driven by a $3.9 million increase in variable advertising costs, partly offset by a $1.0 million decrease in fixed marketing costs.

The increase in variable advertising costs was due to an increased investment in our direct marketing channels and an increase in affiliate partner channels.

Three Months Ended June 30, 2025 and 2024 – Marketing and advertising expenses decreased $5.4 million, or 20%, during the three months ended June 30, 2025 compared to the same period in 2024, primarily driven by a $4.4 million decrease in variable advertising costs and a $0.7 million decrease in personnel and compensation costs.

The decrease in variable advertising costs was primarily due to an intentional decrease in affiliate partner channel spend due to the dual-eligible regulations that became effective in 2025, which contributed to decreased Medicare Advantage submissions.

Six Months Ended June 30, 2025 and 2024 – Marketing and advertising expenses decreased $2.9 million, or 4%, during the six months ended June 30, 2025 compared to the same period in 2024, driven by a $0.7 million decrease in operating costs due to lower software and consulting expenses, a $0.7 million decrease in fixed marketing costs, a $0.6 million decrease in cost of revenue and a $0.5 million decrease in variable advertising costs.

The decrease in variable advertising costs was due to a decreased spend in our affiliate partner channels partially offset by increased investment in direct marketing channels.

Customer Care and Enrollment

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% of total revenue 46 % 43 % 37 % 39 %

Three Months Ended March 31, 2025 and 2024 – Customer care and enrollment expenses increased $4.3 million, or 13%, during the three months ended March 31, 2025 compared to the same period in 2024.

This increase was primarily due to a $5.8 million increase in personnel and compensation costs associated with a higher number of screeners, licensed benefit advisors and retention advisors, partially offset by a $1.3 million decrease in other operating expenses due to lower consulting and licensing costs.

Three Months Ended June 30, 2025 and 2024 – Customer care and enrollment expenses decreased $0.6 million, or 2%, during the three months ended June 30, 2025 compared to the same period in 2024, primarily due to a $0.9 million decrease in personnel and compensation costs as we implemented a more flexible structure in our telesales organization to adjust to anticipated enrollment volumes, partially offset by a $0.3 million increase in other operating expenses due to higher third-party recruiting and software costs.

Six Months Ended June 30, 2025 and 2024 – Customer care and enrollment expenses increased $3.7 million, or 6%, during the six months ended June 30, 2025 compared to the same period in 2024.

This increase was primarily due to a $5.0 million increase in personnel and compensation costs associated with a higher number of screeners, licensed benefit advisors and retention advisors to support the continued momentum in consumer demand during the first quarter of 2025 Medicare Advantage OEP, partially offset by a $1.0 million decrease in other operating expenses due to lower recruiting and licensing costs, offset by higher software costs, and a $0.4 million decrease in stock based compensation expense.

Technology and Content

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% of total revenue 19 % 20 % 14 % 17 %

Three Months Ended March 31, 2025 and 2024 – Technology and content expenses decreased $0.7 million, or 5%, during the three months ended March 31, 2025 compared to the same period in 2024, primarily driven by a $0.4 million decrease in amortization of internally developed software, a $0.3 million decrease in personnel and compensation costs and a $0.3 million decrease in stock-based compensation expense, partly offset by an increase of $0.4 million in other operating costs, particularly consulting expenses.

Three Months Ended June 30, 2025 and 2024 – Technology and content expenses decreased $1.7 million, or 13%, during the three months ended June 30, 2025 compared to the same period in 2024, primarily driven by a $1.5 million decrease in personnel and compensation costs and a $0.8 million decrease in amortization of internally developed software, partly offset by an increase of $0.8 million in other operating costs, particularly consulting expenses.

Six Months Ended June 30, 2025 and 2024 – Technology and content expenses decreased $2.4 million, or 9%, during the six months ended June 30, 2025 compared to the same period in 2024, primarily driven by a $1.9 million decrease in personnel and compensation costs, a $1.2 million decrease in amortization of internally developed software and a $0.4 million decrease in stock-based compensation expense, partly offset by an increase of $1.1 million in other operating costs, particularly consulting expenses.

General and Administrative

General and administrative expenses include compensation and benefits costs for personnel working in our executive, finance, investor relations, government affairs, legal, compliance, human resources, facilities and internal information technology departments.

information technology departments.

These expenses also include fees paid for outside professional services, including audit, tax, legal, government affairs and information technology fees.

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% of total revenue 36 % 34 % 22 % 26 %

Three Months Ended March 31, 2025 and 2024 – General and administrative expenses decreased $2.3 million, or 12%, during the three months ended March 31, 2025 compared to the same period in 2024, primarily driven by a $1.1 million decrease in professional fees and a $1.1 million decrease in stock-based compensation expense.

Three Months Ended June 30, 2025 and 2024 – General and administrative expenses decreased $0.8 million, or 4%, during the three months ended June 30, 2025 compared to the same period in 2024, primarily driven by a $0.8 million decrease in stock based compensation expense and a $0.5 million decrease in facilities and other operating expenses, partly offset by an increase of $0.6 million in personnel and compensation costs.

Six Months Ended June 30, 2025 and 2024 – General and administrative expenses decreased $3.1 million, or 7%, during the six months ended June 30, 2025 compared to the same period in 2024, primarily driven by a $1.9 million decrease in stock based compensation expense, a $1.3 million decrease in professional fees and a $0.8 million decrease in facilities and other operating expenses, partly offset by an increase of $1.1 million in personnel and compensation costs.

Impairment, Restructuring and Other Charges

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Three Months Ended

March 31, Change

June 30, Change Six Months Ended

June 30, Change

2025 2024 $ % 2025 2024 $ %

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% of total revenue 3 % 5 % 1 % 6 %

Three Months Ended March 31, 2025 and 2024 – We incurred no impairment, restructuring and other charges for the three months ended March 31, 2025 compared to $6.3 million of impairment, restructuring and other charges for the same period in 2024.

These charges in 2024 consisted of $5.5 million of impairment related to several of our leased office spaces, which comprised of $5.1 million of operating lease right-of-use asset impairments and $0.4 million of property and equipment impairments.

We also incurred $0.8 million of restructuring charges which were primarily related to employee termination benefits as a result of our cost-reduction efforts during the first quarter of fiscal 2024.

Three Months Ended June 30, 2025 and 2024 – We incurred $1.6 million in impairment, restructuring and other charges for the three months ended June 30, 2025 compared to $3.0 million for the same period in 2024.

The charges in 2025 consisted of $0.4 million of pre-tax operating lease right-of-use asset impairment charges related to certain vacated leased office spaces.

We also incurred $1.1 million of restructuring charges which were primarily related to employee termination benefits as a result of macroeconomic changes and internal restructuring initiatives.

The charges in 2024 consisted of $1.9 million of impairment charges related to our leased office spaces, specifically related to our operating lease right-of-use assets.

We also incurred $1.1 million of restructuring charges which were primarily related to employee termination benefits as a result of continued cost reduction efforts since the beginning of 2024.

Six Months Ended June 30, 2025 and 2024 – We incurred $1.6 million impairment, restructuring and other charges for the six months ended June 30, 2025 compared to $9.3 million for the same period in 2024.

The charges in 2025 consisted of $0.4 million of impairment charges related to our operating lease right-of-use assets.

We also incurred $1.1 million of restructuring charges which were primarily related to employee termination benefits as a result of macroeconomic changes and internal restructuring initiatives.

The charges in 2024 consisted of $7.4 million of impairment related to several of our leased office spaces, specifically consisting of $6.9 million of operating lease right-of-use asset impairments and $0.5 million of property and equipment impairments.

We also incurred $1.9 million of restructuring charges which were primarily related to employee termination benefits as a result of cost-reduction efforts during the first quarter of 2024.

Interest Expense

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Three Months Ended

March 31, Change

June 30, Change Six Months Ended

June 30, Change

2025 2024 $ % 2025 2024 $ %

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% of total revenue (4) % (4) % (3) % (4) %

Three Months Ended March 31, 2025 and 2024 – Interest expense decreased by $0.2 million, or 6%, during the three months ended March 31, 2025 compared to the same period in 2024, primarily driven by lower interest rates.

Three Months Ended June 30, 2025 and 2024 – Interest expense decreased by $0.5 million, or 18%, three months ended June 30, 2025 compared to the same period in 2024, primarily driven by a $0.2 million decrease in debt interest expense as a result of lower interest rates.

Six Months Ended June 30, 2025 and 2024 – Interest expense decreased by $0.7 million, or 12%, during the six months ended June 30, 2025 compared to the same period in 2024, primarily driven by a $0.6 million decrease in debt interest expense as a result of lower interest rates.

Other Income, Net

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Three Months Ended

March 31, Change

June 30, Change Six Months Ended

June 30, Change

2025 2024 $ % 2025 2024 $ %

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% of total revenue 2 % 4 % 2 % 3 %

Three Months Ended March 31, 2025 and 2024 – Other income, net, was $1.6 million during the three months ended March 31, 2025, compared to $2.4 million during the three months ended March 31, 2024.

The change was primarily due to a $0.8 million decrease in interest income as a result of less favorable short-term investment returns and a decline in average short-term investment balances during the three months ended March 31, 2025.

Provision for (Benefit from) Income Taxes

Our provision for (benefit from) income taxes is summarized as follows (dollars in thousands):

Three Months Ended June 30, 2025 and 2024 – Other income, net, was $1.3 million during the three months ended June 30, 2025, compared to other income, net, of $2.3 million during the three months ended June 30, 2024.

The change was primarily due to a $0.9 million decrease in interest income as a result of less favorable short-term investment returns and a decline in average short-term investment balances during the three months ended June 30, 2025.

Six Months Ended June 30, 2025 and 2024 – Other income, net, was $2.9 million during the six months ended June 30, 2025, compared to $4.7 million during the six months ended June 30, 2024.

The change was primarily due to a $1.7 million decrease in interest income as a result of less favorable short-term investment returns and a decline in average short-term investment balances during the six months ended June 30, 2025.

Benefit from Income Taxes

Our benefit from income taxes is summarized as follows (dollars in thousands):

Three Months Ended

March 31, Change

June 30, Change Six Months Ended

June 30, Change

2025 2024 $ % 2025 2024 $ %

Provision for (benefit from) income taxes $ 1,776 $ (1,345) $ 3,121 (232) %

Benefit from income taxes $ (6,654) $ (505) $ (6,149) 1,218 % $ (4,878) $ (1,850) $ (3,028) 164 %

Effective tax rate 27.7 % 1.8 % 24.0 % 4.0 %

Three Months Ended March 31, 2025 and 2024 – Our effective tax rate of 47.7% for the three months ended March 31, 2025 was higher than our 7.3% effective tax rate for the three months ended March 31, 2024 primarily due to fluctuations in stock-based compensation adjustments, research and developments credits and state taxes.

Our effective tax rate for the three months ended March 31, 2025 was higher than the statutory federal tax rate due primarily to state taxes, nondeductible stock-based compensation, lobbying expenses and prior year discrete adjustments, partially offset by research and development credits.

Three Months Ended June 30, 2025 and 2024 – Our effective tax rate of 27.7% for the three months ended June 30, 2025 was higher than our 1.8% effective tax rate for the three months ended June 30, 2024 primarily due to a change from using the actual effective tax rate method to calculate our provision for income taxes for the period ended June 30, 2024 to using an annualized effective tax rate method for the period ended June 30, 2025 and changes in valuation allowance during the period ended June 30, 2024.

Our effective tax rate for the three months ended June 30, 2025 was higher than the statutory federal tax rate due primarily to state taxes, nondeductible stock-based compensation, and lobbying expenses, partially offset by research and development credits and discrete adjustments.

Six Months Ended June 30, 2025 and 2024 – Our effective tax rate of 24.0% for the six months ended June 30, 2025 was higher than our 4.0% effective tax rate for the six months ended June 30, 2024 primarily due to a change from using the actual effective tax rate method to calculate our provision for income taxes for the period ended June 30, 2024 to using an annualized effective tax rate method for the period ended June 30, 2025 and changes in valuation allowance during the period ended June 30, 2024.

Our effective tax rate for the six months ended June 30, 2025 was higher than the statutory federal tax rate due primarily to state taxes, nondeductible stock-based compensation and lobbying expenses, partially offset by research and development credits and discrete adjustments.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”).

The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation.

ASC 740, “Income Taxes”, requires the effects of changes in tax rates and laws to be recognized in the period in which the legislation is enacted, which is the date the legislation is signed into law.

We are evaluating the impact of the OBBBA on our financial statements, but do not expect that it will have a material impact.

Segment Information

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Our commissions may include certain bonus payments, which are generally based on attaining predetermined target sales levels or other objectives, as determined by the health insurance carriers.

The Medicare segment also consists of amounts earned in connection with our advertising program that allows Medicare-related carriers to purchase advertising on a separate website developed, hosted and maintained by us or pursuant to which we perform other services as marketing and our delivery and sale to third parties of Medicare-related health insurance leads generated by our ecommerce platforms and our marketing activities.

ecommerce platforms and our marketing activities.

The Medicare segment also generates revenue from our fee-based BPO services where we are not the broker of record and cash is collected in advance or in close proximity to when revenue is recognized.

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Three Months Ended

2025 2024 % Change

June 30, Six Months Ended

2025 2024 % Change 2025 2024 % Change

Total revenue

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Three Months Ended

2025 2024 % Change

June 30, Six Months Ended

2025 2024 % Change 2025 2024 % Change

Employer and Individual:

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(62) (93) 33 % (154) (211) 27 %

E&I segment gross profit

$ 5,988 $ 7,405 (19) %

E&I segment gross profit (loss) $ (257) $ 3,682 (107) % $ 5,731 $ 11,087 (48) %

Three Months Ended

2025 2024 % Change

June 30, Six Months Ended

2025 2024 % Change 2025 2024 % Change

Consolidated:

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$ 18,888 $ 18,886 — % $ 60,623 $ 48,339 25 %

A reconciliation of our segment gross profit to the Condensed Consolidated Statements of Comprehensive Income (Loss) for the periods presented is as follows (in thousands):

A reconciliation of our segment gross profit to the Condensed Consolidated Statements of Comprehensive Loss for the periods presented is as follows (in thousands):

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Total segment gross profit

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Other CC&E (2)

(631) (731) (1,203) (1,406)

Technology and content (11,354) (13,044) (23,955) (26,349)

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Other income, net 1,340 2,335 2,916 4,726

Income (loss) before income taxes $ 3,726 $ (18,329)

Loss before income taxes $ (24,052) $ (28,473) $ (20,326) $ (46,802)

(1) Other marketing and advertising costs consist of fixed marketing and advertising, previously capitalized labor, depreciation and share-based compensation costs.

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Medicare Segment

Three Months Ended March 31, 2025 and 2024 – Revenue from our Medicare segment increased $21.3 million, or 26%, during the three months ended March 31, 2025 compared to the same period in 2024, primarily driven by:

• a $19.0 million increase in Medicare segment commission revenue due to:

◦ a $13.0 million increase in Medicare Advantage plan commission revenue, driven by 26% growth in Medicare Advantage plan approved members, and

◦ higher net adjustment revenue which was $8.0 million for the three months ended March 31, 2025 compared to $1.0 million for the three months ended March 31, 2024.

• a $2.3 million increase in Medicare segment other revenue driven by a $4.2 million increase from growth in our fee-based BPO arrangements, partially offset by a $2.0 million decline in sponsorship and advertising revenue.

Our Medicare segment gross profit was $35.7 million for the three months ended March 31, 2025, an increase of $13.7 million or 62%, compared to the same period in 2024 primarily driven by:

• a $21.3 million increase in Medicare segment revenue,

• partially offset by increases of $3.5 million in variable marketing and advertising expenses and $4.5 million in segment CC&E expenses primarily due to the continued execution of our initiatives to attract and retain beneficiaries, including having a larger group of screeners and benefit advisors compared to 2024.

Three Months Ended June 30, 2025 and 2024 – Revenue from our Medicare segment decreased $1.2 million, or 2%, during the three months ended June 30, 2025 compared to the same period in 2024, primarily driven by:

• a $2.8 million decrease in Medicare segment other revenue driven by a $2.7 million decline in sponsorship and advertising revenue,

• partially offset by a $1.6 million increase in Medicare segment commission revenue primarily due to:

◦ higher net adjustment revenue from prior periods enrollments, which was $19.1 million during the three months ended June 30, 2025 compared to $10.7 million during the same period in 2024, and

◦ improved constrained LTV of commissions per approved member for Medicare Advantage and Medicare Supplement products,

◦ partially offset by a decrease in approved members across all Medicare products.

Our Medicare segment gross profit was $19.1 million for the three months ended June 30, 2025, an increase of $3.9 million or 26%, compared to the same period in 2024 primarily driven by:

• a $4.5 million and $0.6 million decrease in variable marketing and advertising and segment CC&E expenses, respectively, primarily due to targeted cost reduction efforts as a result of the dual-eligible regulations that became effective in 2025,

• partially offset by a $1.2 million decrease in Medicare segment revenue.

Six Months Ended June 30, 2025 and 2024 – Revenue from our Medicare segment increased $20.1 million, or 14%, during the six months ended June 30, 2025 compared to the same period in 2024, primarily driven by:

• a $20.6 million increase in Medicare segment commission revenue primarily due to:

◦ a 10% increase in Medicare Advantage plan approved members, slightly offset by a decline in approved members for Medicare Supplement and Medicare Part D plans,

◦ higher net adjustment revenue, which was $27.1 million for the six months ended June 30, 2025 compared to $11.7 million for the six months ended June 30, 2024, and

◦ improved constrained LTV of commissions per approved member for Medicare Advantage and Medicare Supplement products.

• a $0.5 million decrease in Medicare segment other revenue driven by a $4.8 million decrease in sponsorship and advertising revenue, partly offset by a $4.1 million increase in fee-based revenue due to growth BPO arrangements.

Our Medicare segment gross profit was $54.9 million for the six months ended June 30, 2025, an increase of $17.6 million or 47%, compared to the same period in 2024 primarily driven by:

• a $20.1 million increase in Medicare segment revenue and a $1.0 million decrease in variable marketing and advertising expenses,

• partially offset by an increase of $3.9 million in segment CC&E expenses primarily due to the continued execution of our initiatives to attract and retain beneficiaries, including having a larger group of screeners and benefit advisors in the first quarter of 2025 compared to the same period in 2024 to support the OEP, slightly offset by cost reduction efforts supported by our more flexible telesales organization structure during the second quarter of 2025.

Employer and Individual Segment

Three Months Ended March 31, 2025 and 2024 – Revenue from our E&I segment decreased $1.1 million, or 11%, during the three months ended March 31, 2025 compared to the same period in 2024, primarily driven by a $0.9 million decrease in commission revenue as a result of:

Three Months Ended June 30, 2025 and 2024 – Revenue from our E&I segment decreased $3.9 million, or 59%, during the three months ended June 30, 2025 compared to the same period in 2024, primarily driven by a $3.7 million decrease in commission revenue due to:

• a 41% and 9% decline in individual and family plan and small business plan approved members, respectively, compared to the same period in 2024;

• partially offset by higher net adjustment revenue year-over-year, which was $2.5 million for the three months ended March 31, 2025 compared to $1.5 million in three months ended March 31, 2024;

Our E&I segment gross profit was $6.0 million for the three months ended March 31, 2025, a decrease of $1.4 million, or 19%, compared to the same period in 2024 primarily driven by:

• a $1.1 million decrease in E&I segment revenue;

• an increase of $0.4 million in variable marketing and advertising expenses mostly due to investments in our operational enhancements for our E&I segment that are underway.

• lower net adjustment revenue year-over-year, which was $(1.3) million for the three months ended June 30, 2025 compared to $0.8 million in three months ended June 30, 2024.

Our E&I segment gross loss was $0.3 million for the three months ended June 30, 2025, a decrease of $3.9 million, compared to the same period in 2024 primarily driven by the $3.9 million decrease in E&I segment revenue.

Six Months Ended June 30, 2025 and 2024 – Revenue from our E&I segment decreased $5.0 million, or 29%, during the six months ended June 30, 2025 compared to the same period in 2024, primarily driven by a $4.7 million decrease in commission revenue as a result of:

• a 26% and 21% decline in individual and family plan and small business plan approved members, respectively, compared to the same period in 2024;

• lower net adjustment revenue year-over-year, which was $1.2 million for the six months ended June 30, 2025 compared to $2.3 million in six months ended June 30, 2024;

Our E&I segment gross profit was $5.7 million for the six months ended June 30, 2025, a decrease of $5.4 million, or 48%, compared to the same period in 2024 primarily driven by a $5.0 million decrease in E&I segment revenue and a $0.4 million increase in variable marketing and advertising expenses.

Liquidity and Capital Resources

As of March 31, 2025, we had cash, cash equivalents and short-term marketable securities of $155.6 million.

During the three months ended March 31, 2025, we generated operating cash flow of $77.1 million as summarized below.

As of June 30, 2025, we had cash, cash equivalents and short-term marketable securities of $105.2 million.

During the six months ended June 30, 2025, we generated operating cash flow of $35.9 million as summarized below.

We have historically financed our operations primarily through cash generated from our operations, equity issuances and debt financing.

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Our cash, cash equivalents and short-term marketable securities are summarized as follows (in thousands):

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Cash and cash equivalents $ 65,920 $ 39,197

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Cash equivalents, which are comprised of financial instruments with an original maturity of 90 days or less from the date of purchase, primarily consist of money market funds, commercial paper and government securities.

We also maintained $3.1 million in restricted cash as of March 31, 2025 and December 31, 2024.

We also maintained $3.1 million in restricted cash as of June 30, 2025 and December 31, 2024.

Material Cash Requirements

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See Note 8 – Commitments and Contingencies in our Notes to Condensed Consolidated Financial Statements.

Short-term obligations were $8.4 million for leases and $7.6 million for service and licensing as of March 31, 2025.

Long-term obligations were $21.3 million for leases and $2.9 million for service and licensing as of March 31, 2025.

Short-term obligations were $8.8 million for leases and $7.8 million for service and licensing as of June 30, 2025.

Long-term obligations were $18.6 million for leases and $2.8 million for service and licensing as of June 30, 2025.

We expect to fund these obligations through our existing cash and cash equivalents and cash generated from operations.

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Pursuant to an investment agreement dated February 17, 2021 with Echelon Health SPV, LP (“H.I.G.”) (the “H.I.G.

Investment Agreement”), we issued and sold 2,250,000 shares of Series A convertible preferred stock (“Series A Preferred Stock”) at an aggregate purchase price of $225.0 million to H.I.G.

Investment Agreement”), we issued and sold 2,250,000 shares of Series A convertible preferred stock

(“Series A Preferred Stock”) at an aggregate purchase price of $225.0 million to H.I.G.

in a private placement and received $214.0 million net proceeds on April 30, 2021 .

A s of March 31, 2025, we have accrued $1.4 million for cash dividends.

During the second quarter of 2025, we made a cash dividend payment of $2.9 million.

Investment Agreement also provides certain redemption rights on or after April 2027.

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The Second Amendment reduced the margin from 7.50% to 7.00% for Adjusted Term SOFR loans and from 6.50% to 6.00% for base rate loans.

As of March 31, 2025, the interest rate was 11.57%.

For the three months ended March 31, 2025 and 2024 we incurred interest expense of $2.0 million and $2.3 million, respectively.

As of March 31, 2025, the carrying value of the loan under the Credit Agreement was $68.8 million and we were in compliance with our loan covenants.

As of June 30, 2025, the interest rate was 11.59%.

For the three and six months ended June 30, 2025 we incurred interest expense of $2.1 million and $4.1 million, respectively.

For the three and six months ended June 30, 2024 we incurred $2.3 million and $4.6 million, respectively.

As of June 30, 2025, the carrying value of the loan under the Credit Agreement was $69.1 million and we were in compliance with our loan covenants.

See Note 12 – Debt in our Notes to Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for additional information regarding the Credit Agreement.

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We believe our current cash, cash equivalents and short-term marketable securities, including the proceeds from the equity financing we obtained on April 30, 2021 under the H.I.G.

Investment Agreement and the term loan we obtained on February 28, 2022 under the Credit Agreement, and expected cash collections will be sufficient to fund our operations for at least 12 months after the filing date of this Quarterly Report on Form 10-Q, including to refinance or select other alternative arrangements based on market conditions for our term loan under our Credit Agreement that matures in February 2026.

Investment Agreement and the term loan we obtained on February 28, 2022 under the Credit Agreement, and expected cash collections will be sufficient to fund our operations for at least 12 months after the filing date of this Quarterly Report on Form 10-Q, in addition to refinancing or selecting other alternative arrangements based on market conditions for our term loan under our Credit Agreement that matures in February 2026.

Our future capital requirements will depend on many factors, including our enrollment volume, membership, retention rates, telesales conversion rates, and our level of investment in technology and content, marketing and advertising, customer care and enrollment and other initiatives.

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Cash Activities

Our cash flows for the three months ended March 31, 2025 and 2024 are summarized as follows (in thousands):

Three Months Ended

Our cash flows for the six months ended June 30, 2025 and 2024 are summarized as follows (in thousands):

Six Months Ended

Net cash provided by operating activities $ 35,917 $ 38,579

Net cash provided by (used in) investing activities 5,472 (10,287)

Net cash used in investing activities (4,647) (23,735)

Net cash used in financing activities (4,543) (4,241)

Operating Activities

Net cash provided by operating activities primarily consists of net income (loss), adjusted for certain non-cash items, including, deferred income taxes, stock-based compensation expense, depreciation and amortization, amortization of internally developed software, other non-cash items, and the effect of changes in working capital and other activities.

Net cash provided by operating activities primarily consists of net loss, adjusted for certain non-cash items, including, deferred income taxes, stock-based compensation expense, depreciation and amortization, amortization of internally developed software, other non-cash items, and the effect of changes in working capital and other activities.

Collection of commissions receivable depends upon the timing of our receipt of commission payments and associated commission reports from health insurance carriers.

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Our fee-based BPO arrangements generate fee-based revenue, which is recorded in other revenue, and cash is collected in advance or in close proximity to when revenue is recognized.

Three Months Ended March 31, 2025 – Net cash provided by operating activities was $77.1 million during the three months ended March 31, 2025 driven by changes in net operating assets and liabilities of $66.2 million, adjustments for non-cash items of $8.9 million and net income of $2.0 million.

Cash provided by changes in net

operating assets and liabilities during the three months ended March 31, 2025 primarily consisted of decreases of $77.0 million in contract assets – commissions receivable and $13.4 million in accounts receivable, partially offset by decreases of $16.0 million in accounts payable and $7.5 million in accrued marketing expenses.

Adjustments for non-cash items primarily consisted of $3.8 million of stock-based compensation expense, $3.5 million of amortization of internally developed software and a $1.5 million increase due to the change in deferred income taxes.

Three Months Ended March 31, 2024 – Net cash provided by operating activities was $70.8 million during the three months ended March 31, 2024, primarily driven by changes in net operating assets and liabilities of $73.8 million and adjustments for non-cash items of $14.0 million, partially offset by a net loss of $17.0 million.

Cash provided by changes in net operating assets and liabilities during the three months ended March 31, 2024 primarily consisted of decreases of $73.1 million in contract assets – commissions receivable and $2.6 million in accounts receivable and an $8.1 million increase in deferred revenue, partly offset by a decrease of $10.9 million in accrued marketing expenses.

Adjustments for non-cash items primarily consisted of $5.5 million of impairment charges, $5.5 million of stock-based compensation expense and $3.9 million of amortization of internally developed software, partially offset by a $1.4 million decrease due to the change in deferred income taxes.

Six Months Ended June 30, 2025 – Net cash provided by operating activities was $35.9 million during the six months ended June 30, 2025 driven by changes in net operating assets and liabilities of $41.7 million and adjustments for non-cash items of $9.7 million, partially offset by net loss of $15.4 million.

Cash provided by changes in net operating assets and liabilities during the six months ended June 30, 2025 primarily consisted of decreases of $83.5 million in contract assets – commissions receivable and $15.0 million in accounts receivable, partially offset by decreases of $26.8 million in accrued compensation and related expenses, $17.6 million in accounts payable and $12.6 million in accrued marketing expenses.

Adjustments for non-cash items primarily consisted of $7.7 million of stock-based compensation expense, $6.5 million of amortization of internally developed software, partially offset by a $5.2 million decrease due to the change in deferred income taxes.

Six Months Ended June 30, 2024 – Net cash provided by operating activities was $38.6 million during the six months ended June 30, 2024, primarily driven by changes in net operating assets and liabilities of $59.5 million

and adjustments for non-cash items of $24.0 million, partially offset by a net loss of $45.0 million.

Cash provided by changes in net operating assets and liabilities during the six months ended June 30, 2024 primarily consisted of a decrease of $86.7 million in contract assets – commissions receivable and $2.8 million in accounts receivable, a $2.3 million increase in accrued expenses and other liabilities and a $2.0 million increase in deferred revenue, partly offset by decreases of $20.8 million in accrued compensation and related expenses and $12.5 million in accrued marketing expenses.

Adjustments for non-cash items primarily consisted of $10.6 million of stock-based compensation expense, $7.7 million of amortization of internally developed software and $7.4 million of impairment charges, partially offset by a $2.6 million decrease due to the change in deferred income taxes.

Investing Activities

Our investing activities primarily consist of purchases and redemption of marketable securities, purchases of computer hardware and software to enhance our website and advisor enrollment center operations and capitalized internal-use software.

Three Months Ended March 31, 2025 – Net cash provided by investing activities of $5.5 million for the three months ended March 31, 2025 mainly consisted of $36.3 million in proceeds from the maturities and redemptions of marketable securities, partially offset by $27.4 million used to purchase marketable securities and $3.1 million in capitalized internal-use software and website development costs.

Three Months Ended March 31, 2024 – Net cash used in investing activities of $10.3 million for the three months ended March 31, 2024 mainly consisted of $13.8 million used to purchase marketable securities and $2.3 million in capitalized internal-use software and website development costs, partially offset by $6.0 million in proceeds from the maturities and redemptions of marketable securities.

Six Months Ended June 30, 2025 – Net cash used in investing activities of $4.6 million for the six months ended June 30, 2025 mainly consisted of $61.9 million used to purchase marketable securities and $7.4 million in capitalized internal-use software and website development costs, partially offset by $66.5 million in proceeds from the maturities and redemptions of marketable securities.

Six Months Ended June 30, 2024 – Net cash used in investing activities of $23.7 million for the six months ended June 30, 2024 mainly consisted of $37.4 million used to purchase marketable securities and $4.9 million in capitalized internal-use software and website development costs, partially offset by $19.0 million in proceeds from the maturities and redemptions of marketable securities..

Financing Activities

Three Months Ended March 31, 2025 – Net cash used in financing activities of $0.7 million for the three months ended March 31, 2025 was due to $0.7 million in repurchases of shares to satisfy employee tax withholding obligations.

Three Months Ended March 31, 2024 – Net cash used in financing activities of $1.3 million for the three months ended March 31, 2024 was primarily due to $1.3 million in repurchases of shares to satisfy employee tax withholding obligations.

Six Months Ended June 30, 2025 – Net cash used in financing activities of $4.5 million for the six months ended June 30, 2025 was due to a $2.9 million preferred stock dividend payment and $1.8 million in repurchases of shares to satisfy employee tax withholding obligations.

Six Months Ended June 30, 2024 – Net cash used in financing activities of $4.2 million for the six months ended June 30, 2024 was primarily due to a $2.7 million payment of preferred stock dividends and $1.9 million in repurchases of shares to satisfy employee tax withholding obligations.

Open enrollment periods drive the seasonality of our business.

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As a result, we generate a significant portion of our commission revenue related to new Medicare plan-related enrollments in the fourth quarter.

Additionally, our Medicare Advantage plan-related commission revenue is also elevated in the first quarter compared to the second and third quarters as a result of the Medicare Advantage open enrollment period that occurs from January 1 st to March 31 st , when Medicare Advantage plan enrollees may enroll in

another Medicare Advantage plan or disenroll from their Medicare Advantage plan and return to the Original Medicare program.

Any changes to or additional enrollment periods may change the seasonality of our business.

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As a result, we generate a significant portion of our commission revenue related to IFP plan-related enrollments in the fourth quarter.

In the states where the Federally Facilitated marketplace operates as the state health insurance exchange, individuals and families generally are not able to purchase individual and family health insurance outside of the annual 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.

enrollment period as a result of certain qualifying events, such as losing employer-sponsored health insurance or moving to another state.

Extended open enrollment or special enrollment periods may change the seasonality of our individual and family health insurance business.

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We plan to maintain our internal telesales benefit advisors year-round, net of natural attrition, and expect to increase our internal benefit advisors’ utilization outside of the enrollment periods by expanding our offerings of ancillary products and carrier call center outsourcing programs.

We plan to increase the use of career seasonal advisors as a percentage of our total telesales capacity beginning in 2025 to increase the flexibility of our telesales organization.

We also engage seasonal advisors who are not full-time employees to support our seasonally high volume.

6 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis