eHealth (EHTH 1.43%), a major online health insurance marketplace, reported results for Q2 2025 on August 6, 2025. The company posted GAAP revenue of $60.8 million, easily beating consensus estimates of $46.0 million. Earnings per share (EPS, GAAP) landed at $(0.98), above both the forecasted GAAP $(1.22) and last year’s GAAP $(1.33). While the company’s top-line (GAAP revenue) beat was attributed to higher net adjustment (“tail”) revenue, overall GAAP revenue fell 8.0% year over year. Management described ongoing cost discipline and improved profit metrics, including a GAAP net loss of $17.4 million, which improved by $10.6 million compared to the prior year, but membership volumes declined. The quarter’s results showed eHealth matched profit expectations and demonstrated cost controls, yet underlying new business trends remained challenged.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $(0.98) | $(1.22) | $(1.33) | 26.3 % |
| Revenue (GAAP) | $60.8 million | N/A | $65.9 million | (8.0 %) |
| Adjusted EBITDA | $(14.1) million | $(15.5) million | -9.0 % | |
| Revenue – Medicare segment (GAAP) | $58.1 million | N/A | N/A | |
| Revenue – Employer & Individual segment (GAAP) | $2.7 million | $6.6 million | (59.0 %) |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Company Focus
eHealth operates an online and telephonic platform for shopping, comparing, and enrolling in health insurance. Its core business centers on selling Medicare Advantage, Medicare Supplement, and prescription drug plans to older Americans.
The company’s recent strategic focus has been on strengthening its platform technology and engaging consumers through both digital and call-center channels. Key factors for its success include cost discipline, regulatory compliance, and maintaining strong carrier relationships.
Quarterly Highlights and Performance Drivers
eHealth reported a GAAP revenue decline of 8.0% year-over-year to $60.8 million in Q2 2025. Despite this, the GAAP revenue figure beat analyst estimates by over $14 million, driven largely by elevated net adjustment revenue—receipts recognized for prior enrollments that stayed on the books longer or provided higher commissions than initially projected.
Most of eHealth’s revenue continues to come from Medicare-related products. The Medicare segment posted $58.1 million in GAAP revenue, a 2% decrease compared to Q2 2024, but segment gross profit rose 26%. This improvement came from lower marketing spend and higher lifetime value (LTV) per approved Medicare member, particularly in Medicare Supplement, where constrained LTV increased 29% to $1,435 per member.
Growth in net adjustment revenue contributed to the outperformance, but fewer new members enrolled compared to a year ago. Approved Medicare members dropped 18%, with Medicare Advantage enrollments down 19%. According to management, regulatory restrictions—including new rules on plan switching for dual-eligible beneficiaries—directly contributed to this trend. The company cited: “■Lower Medicare approved members as a result of the recent regulatory changes that limit dual-eligible beneficiaries from switching plans outside of the main enrollment periods.”
On the cost side, eHealth reported a 13% reduction in GAAP technology and content expenses compared to the prior year. The variable marketing cost per Medicare Advantage-equivalent approved member improved 7%, driven by favorable channel mix and strong conversion rates. The company credited its omni-channel platform—combining online, phone, and direct branded channels—with helping improve both conversion and retention. Prior investments in artificial intelligence for telephonic sales and customer support were reiterated as differentiators.
The Employer & Individual segment saw steep declines, with total revenue (GAAP) down 59% year-over-year, and approved members for Individual and Family plans decreased 41% year over year. The company attributed this to continued competition and regulatory-driven market shifts, and the Employer and Individual segment’s gross profit (GAAP) swung negative. Carrier relationships remained broad, with nearly 50 Medicare Advantage carrier partnerships noted, adding some insulation from single-carrier decisions. However, management emphasized that commissions from these carriers are still the company’s primary income source.
Litigation remains an overhang, as eHealth continues to face a Department of Justice lawsuit under the Federal False Claims Act. Management said it is cooperating with authorities but does not see the claims as merited.
Looking Forward: Guidance and Market Outlook
Management raised its full-year 2025 GAAP revenue outlook to a range of $525.0 million to $565.0 million, up from prior guidance of $510.0 million to $550.0 million. GAAP net income guidance rose to $5.0 million to $26.0 million, with adjusted EBITDA guidance also increased to a range of $55.0 million to $75.0 million, up from the prior range of $35.0 million to $60.0 million. Operating cash flow guidance remained unchanged. The higher forecast largely reflects greater expected net adjustment revenue, not a projected rebound in new member enrollments.
As most enrollments and revenue are concentrated during the Annual Enrollment Period in the fourth quarter, future performance will rely heavily on trends in that period. Notes that additional changes could affect the outlook. Investors should watch for eHealth’s ability to spur growth in new approved members and maintain margin improvements, particularly in Medicare plans, as total Medicare approved members increased 16% year-over-year and Medicare Advantage approved members increased 26% year-over-year in Q1 2025.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
