Health Insurance Innovations (HIIQ) Q4 2019 Earnings Call Transcript

Health Insurance Innovations (BFYT)
Q4 2019 Earnings Call
Mar 04, 2020, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Greetings. And welcome to the Health Insurance Innovations fourth-quarter 2019 earnings conference. [Operator instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mike DeVries, senior vice president of finance.

Thank you. You may begin. 

Mike DeVries -- Senior Vice President of Finance

Thank you Donna. And good morning everyone. We're excited to have you join us today for a discussion about Health insurance Innovations fourth-quarter and full-year 2019 financial results. By now, you should have received a copy of the earnings release.

If you do not have a copy and would like one, please visit our website at hiiq.com. On the call with me, we have Gavin Southwell, HIIQ's CEO and president; and Erik Helding, HIIQ's chief financial officer.  As a reminder, today's conference call is being recorded, and a replay of the call will be available on the investor relations section of our website following the call. We will be making forward-looking statements on the call. All statements, other than statements of historical facts, are forward-looking statements.

Such statements may describe future plans, objectives or goals. Forward-looking statements are subject to future risks and uncertainties including the risks outlined in the company's Form 10-K. These risks and uncertainties include, among other things, the company's focus on Medicare market, ability to maintain relationships and develop new relationships within health insurance carriers and distribution and its ability to retain its members, the amount of commissions paid to the company or changes in health insurance plan pricing practices, state and federal regulatory compliance and changes in the United States health insurance systems and laws. Actual results could differ materially from those projected or expected in these forward-looking statements.

Listeners are urged to review and consider the various disclosures made by the company on this conference call and the risk factors disclosed in the company's annual report on Form 10-K as well as other reports we have filed with the Securities and Exchange Commission. The company expects to file its Form 10-K tomorrow after market close. Copies of the company's SEC reports are available on our website at hiiq.com and the SEC's website. The company disclaims any obligation to update any forward-looking statements after this conference call.

And with that, I'll turn the call over to our CEO, Gavin Southwell. 

Gavin Southwell -- Chief Executive Officer and President

Thank you Mike. And good morning everyone. I've been looking forward to reporting our fourth-quarter and full-year 2019 results as well as providing an update on our continuing transition toward an emphasis on Medicare-related business. On the call today, I will provide a few key updates regarding our company, and I will spend the bulk of my time discussing the progress we've made in growing the Medicare segment and building out our capabilities.

I'm excited about the progress we have made so far, and I am optimistic for the future growth that we anticipate lies ahead within the Medicare segment and what that means for our company and for investors. To that point, we view this transition to Medicare-related business as a key point in our company's history which marks the beginning of the company's next phase of growth while becoming differentiated from its legacy business. To mark this period as a launch pad into a new era for our company as well as a new strategic focus for our business, I am happy to announce that our corporate name will be changed to  Benefytt Technologies Inc., effective this Friday, March 6, 2020. Our NASDAQ ticker will accordingly be changed to BFYT at the open of trading on the same date.

The name change is intended to highlight and emphasize the company's go-forward strategy to be a premier technology-focused company that offers a range of Medicare-related insurance plans as well as other health and life insurance products that meet the demands and needs of consumers. As we have previously announced, we are engaged in an ongoing process to explore, review and evaluate strategic alternatives focused on maximizing shareholder value. And the company is meeting with interested parties including both strategic and financial institutions. While this review continues and remains open-ended in both duration and potential outcomes, it is important to note that our name change and our shift in emphasis toward Medicare is being undertaken in an effort to build shareholder value regardless of the outcome of the strategic review process.

Now on to our results. We are really pleased with results in the fourth quarter, particularly with our success in the Medicare annual election period. Medicare revenues represented approximately 35% of total revenues in the quarter and full-year adjusted EBITDA and EPS were in line with expectations. We are excited about the potential momentum and the opportunities to continue to scale our Medicare business in 2020.

We've enhanced digital capabilities, captive distribution and strategic outsourced relationships. We believe that our fourth-quarter results reflect initial success in our efforts to build out and execute on our growth strategy in the Medicare space, with more than 50% of our net income in the quarter coming from our Medicare segment in what was its first annual election period. Additionally, we recorded 48,500 submitted applications in the Medicare segment in the quarter which we believe is a strong start to build from. As a reminder, our entrance into the Medicare sales and consumer engagement business was marked by acquisitions in the second half of 2019.

This marked our strategic shift toward Medicare as the core product line. And during the fourth quarter, we concluded that we require a two segment reporting view to better measure performance and profitability of the two segments of business. Therefore, we are now reporting results by our Medicare segment and our legacy IFP segment. So far, we believe we have only started to scratch the surface on our Medicare segment, and we will continue to build out our Medicare segment throughout 2020 and 2021, and we will provide additional updates on our progress throughout the year.

In the IFP segment, we have seen the effects of intentional deemphasis leading to a decrease of submitted applications in the segment. We expect this to continue and for the IFP segment to become a smaller part of the overall business as we shift more toward Medicare. As we have previously announced, we are deemphasizing the segment. What this means is that we will continue to renew policies within our existing book of business, and that new product distribution will be concentrated on a smaller number of high-quality e-commerce focused distributors.

By decreasing our focus on the IFP business, we are able to use the strong cash flow from our existing IFP book of business and remaining IFP business to invest in accelerating growth of the Medicare segment. I'd now like to take a moment to provide a brief update on our operations, so our investors are better informed as to how we are progressing in the transformation of our business and the execution of our strategy. Our Medicare business is centered around two activities, consumer engagement and Medicare-related insurance enrollment. The consumer engagement business operates through a direct-to-consumer platform which connects individuals with licensed insurance agents serving the Medicare insurance market through inbound live telephone calls via third-party telephony platform which transfers inbound calls in real-time.

In the Medicare insurance business, we route inbound calls to both our internal captive distribution channel as well as to our outsourced BPO distribution channel who provide Medicare-related health insurance plans on our behalf. Medicare products offered include Medicare Advantage, Medicare supplement and Medicare Part D Prescription Drug plans. As we generate more demand for Medicaid-related insurance products through the consumer engagement business, we are increasing our capacity to internalize a larger amount of inbound calls in our Medicare insurance business by expanding both the outsourced BPO and captive distribution channels. On the BPO side, we're working with our existing partners to increase the number of agents at each location, and we've added additional BPO partners in both the fourth-quarter 2019 as well as in early 2020.

We intend to continue evaluating and adding BPO partners as necessary to handle the increased demand being generated by our television, print and digital marketing efforts in 2020. As I mentioned, in the Q3 conference call, our captive distribution was fully integrated significantly ahead of what we planned which gives us additional strength and ability to grow throughout 2020. Our captive distribution is becoming larger and more efficient and is anticipated to be much more impactful as we move toward -- as we move through 2020 toward the next annual election period. In addition, we've recently expanded the physical footprint of our captive distribution channel by moving into a much larger office space with more capacity for growth.

We are also expanding to additional locations to increase our captive distribution capabilities and also increase the percentage of Medicare business that is submitted through the captive channels. Previously, we announced that we had acquired what we anticipate could be an important digital asset and domain name. I'm excited to announce our new digital asset will offer seniors and Medicare-eligible consumers, the ability to access powerful online comparison tools and educational resources that will enable efficient self-guided navigation and enrollment of available Medicare health insurance options. This has the potential to become a significant growth driver within our Medicare segment, generating a large amount of consumer demand which will flow through all distribution channels, while also significantly contributing fully self-guided online enrollments.

As we continue to build out our Medicare business, we'll be leveraging our digital assets to seek to increase the percentage of Medicare applications submitted online. To supplement our digital assets and technologies and support our Medicare growth, we've added a number of management hires with vast experience in the Medicare market. One example, as we continue to build our digital marketing and e-commerce teams, is our new VP of e-commerce, Travis Ledwith, who joins us from Aon. We are continuing to recruit and add top talent as we continue to expand and ramp up on this front.

In conclusion, I've highlighted some of the exciting progress that has been made so far in our initial strategic shift toward Medicare as well as our name change and repositioning of the company. But I'd like to note that this is just the beginning for us. We are proud of what we've accomplished in such a short period of time and excited about the opportunity ahead. We believe the company's business is now in a much stronger position with an excellent foundation for growth.

And as we continue to develop powerful technology focused on the fast-growing Medicare market, we look forward to keeping you updated. With that, I'd like to hand the call over to our CFO, Erik Helding. 

Erik Helding -- Chief Financial Officer

Thank you Gavin. And good morning everyone. Fourth-quarter 2019 financial results reflect what we consider to be a successful rollout of our Medicare distribution platform as well as the continued deemphasis of our individual and family plan business. Revenues for the fourth quarter were $161 million, representing a 22% year-over-year increase.

Our Medicare and consumer engagement segment accounted for $56 million or approximately 35% of overall revenues. Our IFP segment including supplemental revenues were $105 million. For the year, total revenues were $382 million, up 9% over the prior year. Medicare and consumer engagement was $68 million and IFP and supplemental revenue was $314 million which was down 11% over the prior year as expected.

In the quarter, adjusted EBITDA was $46.2 million compared to $21.6 million in the prior year. And GAAP diluted net income per share was $1.77 compared to $0.40. For the year, adjusted EBITDA was $82 million which was in line with our previous guidance and up 38% over the prior year. In the quarter, adjusted earnings per share was $2.48 compared to $0.97 in the prior year.

For the year, adjusted earnings per share was $4.24, in line with prior guidance and up 63% over the prior year. We ended the quarter with cash and cash equivalents of approximately $4 million at $146 million outstanding on our term loan facility and having drawn a total of $34 million against our revolving line of credit which leaves $31 million undrawn and available. During the quarter, we used approximately $23 million in our operating activities, consistent with our expectation to increase media and advertising spend to fund lead generation in the Medicare annual election period, for which we do not receive commission payments until the first quarter of 2020. Looking ahead to 2020, we are expecting overall revenues to be in the $290 million to $350 million range, with Medicare segment revenues being in the $190 million to $210 million range, and IFP segment revenues decreasing year over year to $100 million to $140 million.

Adjusted EBITDA is expected to be in the range of $65 million to $80 million, with Medicare segment profits of $70 million to $80 million, IFP segment profits of $50 million to $20 million and corporate expenses of approximately $20 million. A few comments on seasonality. Because we will be ramping up our Medicare captive distribution as we go through the year in order to be ready for the annual election period, we expect 8% to 10% of Medicare revenues to be realized in the first quarter with that number growing to be approximately 50% to 60% in the fourth quarter. As we recently also made changes to our IFP distribution agreements, we would expect approximately 35% to 40% of full-year revenues to be realized in the first quarter of the year for this segment.

From an earnings perspective, we would expect overall adjusted EBITDA to be in the mid single-digit millions in each of the first three quarters of the year and increasing substantially in the fourth quarter. Lastly, adjusted earnings per share are expected to be in the $3.10 to $4.15 range for 2020. With respect to cash flows for the year, we expect to be breakeven as approximately $100 million of cash inflows from our IFP net contract asset are expected to be collected over the course of the year, an additional $85 million is expected to be collected from Medicare-related production and approximately $18 million of tax refunds are expected to be collected. These anticipated positive cash flows would be used to fund growth in 2020, in our Medicare business to cover SG&A and to service our debt.

With that, I'd like to hand the call back to Gavin for concluding remarks. Gavin? 

Gavin Southwell -- Chief Executive Officer and President

Thank you Erik. We're excited about the trajectory we are now on. And as we continue to execute, we'll continue to invest in what we consider to be attractive growth opportunities throughout the year. So with that, we will now open the lines for Q&A.

Operator? 

Questions & Answers:

Operator

[Operator instructions] Our first question is coming from Randy Binner of B. Riley FBR. Please go ahead.

Cullen Johnson -- B. Riley FBR -- Analyst

Hi. This is Cullen Johnson. I'm on for Randy at B. Riley FBR.

How you guys doing? 

Gavin Southwell -- Chief Executive Officer and President

Good morning. Thanks for joining.

Cullen Johnson -- B. Riley FBR -- Analyst

So the first question we have is just, kind of, you have like 47,000 applications in the fourth quarter and open enrollment. Will it be kind of like a bull and a bear case, perhaps for enrollment in 2020? 

Erik Helding -- Chief Financial Officer

Yeah. This is Erik. Let me take that one. I would say, I'm not going to comment on bear or bull cases there.

I think we're going to comment specifically on the guidance that we've provided. And so I think you can do the math yourself, based on the midpoint of the range being $200 million of Medicare revenues. That's about 170,000 to 175,000 submitted apps. And again, referring back to my prepared remarks, we're expecting 50% to 60% of the production to be in the fourth quarter.

So you can do the math from there. 

Cullen Johnson -- B. Riley FBR -- Analyst

OK. Thank you. I appreciate that. Then with respect to the captive workforce build out.

Could you just maybe walk through the 800 person, the build-out, how it's going and kind of discuss some of the sequencing of the hiring and training process? 

Gavin Southwell -- Chief Executive Officer and President

So we've moved into a bigger location. Also, as we commented on, we're opening additional locations as well. 2019, we added a lot of the infrastructure. And in the first part of 2020, we added some really powerful technology into the captive.

And so really now for us in 2020, it's a process of training and adding the number of agents. We feel like a lot of a hard set of work is being completed. And so now we're really in the sort of day-to-day, week-to-week ramp up, and we've got plenty of time between now and the next AEP. So we feel we're really well positioned to keep growing that side out. 

Erik Helding -- Chief Financial Officer

And this is Erik. Just some follow-on comments to that. So we haven't really talked about an absolute number of total agents. So -- but we have sort of directionally spoken about how we're thinking about that.

So we're expecting to grow the total number of agents, with special emphasis on growing captive distribution, such that I think in the fourth quarter last year, we had mentioned that we were about 80-20 BPO captive. And so as we move through the course of 2020, we're expecting that mix by the fourth quarter 80 -- to be a little closer to 50-50. 

Cullen Johnson -- B. Riley FBR -- Analyst

OK. Yes, thank you. I appreciate that. Could you perhaps walk through the new e-commerce platform, healthinsurance.com a little bit? 

Gavin Southwell -- Chief Executive Officer and President

Yes. Happy to. We acquired the asset in 2019, and we've been working on a build out. There's two parts about it which we're excited about.

One is, as a domain, its ability to simply just generate demand. It's also from a consumer engagement demand generation side. But secondly of course to build it to be a comparison and an enrollment tool is something we put a lot of time and effort into and that's a really exciting thing for us to have. So we're going to talk about it a lot more as we go through 2020, but I think having such a powerful domain and the ability to build on it and having this comparison and enrollment capability, is a really exciting thing for us.

So we've been investing not just in the asset, but in adding resource around it with leadership and key hires. So it's something we're going to talk a lot more about as we go through 2020. So no, but yes, thanks for asking. 

Cullen Johnson -- B. Riley FBR -- Analyst

Of course. Thank you.

Operator

Thank you. Our next question is coming from Mike Grondahl of Northland Capital Markets. Please go ahead.

Mike Grondahl -- Northland Capital Markets -- Analyst

Yeah. Thanks guys. At a high level, can you just walk us through how the Medicare business sort of triples or quadruples in 2020? What's kind of the easy way to think about that? 

Gavin Southwell -- Chief Executive Officer and President

So just to remind everyone. We came into Medicare in the second part -- the later part of 2019. And so this year, we benefit from having a full year. We started 2020 in a similar position to how we ended 2019, and 2019 was about scaling up.

So there's a big benefit simply from having the full year. I think that we could learn a lot of important lessons from 2019. We always describe 2019, really, as best efforts. And 2020, we're able to really build on what we achieved in '19.

I think that expanding out our outsourced relationships and our captive relationships and finally, being able to bring out our digital asset. There's a number of tailwinds we have there, but a really nice part of it is simply having more time. We have -- it's March now, we've got plenty of time before the important fourth quarter in AEP. Last year, everything was really best efforts. 

Mike Grondahl -- Northland Capital Markets -- Analyst

Got it. And could you talk a little bit about TogetherHealth. How that did for your kind of number of leads in 2019? And what you expected to do in 2020? 

Gavin Southwell -- Chief Executive Officer and President

It's been a great asset for us. I mean, those guys have been in the Medicare market for a long time. They're used to dealing with a lot of the large and important players. So we knew it would be a great asset when we invested in it, and it's proven to do that.

It outperformed our expectations in the fourth quarter. And we're excited about its potential for 2020. So really, there, we did get a lot of experience in demand generation and now taking that experience in demand generation, consumer acquisition and being able to increase our kind of enrollment capabilities, our abilities to consume that. That's our execution challenge for 2020, and that's something we feel really good about.

But yeah, they continue to outperform and we're excited to keep building on that success. 

Mike Grondahl -- Northland Capital Markets -- Analyst

Got it. Then just lastly, what are you assuming for LTV for Medicare Advantage, your Medicare supplement policies? Can you kind of talk about that? 

Gavin Southwell -- Chief Executive Officer and President

Yeah. Yeah we can. I mean, we look at other comparable people in the market. We use various professional advisors when we do valuation.

So we certainly try to be consistent. Each quarter, we get additional information which builds into the valuations which are there. We certainly try to provide a lot more information in the notes to allow people to pick out some key metrics of their modeling. So I'll hand over to Erik.

Erik Helding -- Chief Financial Officer

Yeah. Hi Mike. This is Erik. I think -- so I think our assumption for 2020 is going to be pretty comparable to what it was in 2019.

Now from quarter to quarter, it moves around a little bit based on who enrolls. But overall, over the course of the year, should be pretty comparable to what we saw mainly in the fourth quarter. And so there's a lot of assumptions that go into it. And as Gavin mentioned, we really went out of our way this quarter to enhance our disclosure around Medicare because we know that's top of investors' minds.

And so we've done that, and you can see some of the assumptions that we're using such as the constraint which we have as 10% which we think is a very reasonable number, if not slightly conservative. Our approve to submit is about 92% again is based on historical activity and other comps out there. But again, we think that might be a little conservative. So I feel like we're in a good place and we're being judicious about the assumptions that go into LTV. 

Mike Grondahl -- Northland Capital Markets -- Analyst

Great. OK. Thanks guys.

Operator

Thank you. Our next question is coming from Steve Halper of Cantor Fitzgerald. Please go ahead.

Steve Halper -- Cantor Fitzgerald -- Analyst

Hi. Good morning. When you think about the guidance for the IFP business, it's a pretty wide range. So can you just walk us through the puts and the takes in terms of the low end versus the high end? 

Erik Helding -- Chief Financial Officer

Yeah. Steve, this is Erik. So this is a little bit of an unknown this year right, because we're really sort of making the changes at the IFP segment effectively last week. And so in essence, what we did was to remove all advantages -- all but a select few strategic distributors who, as Gavin mentioned, are focused on e-commerce and technology.

And so we expect production to be down, and I think we took best efforts to stab at how much it's going to be down. And just to kind of let you know, I mean, we're basically assuming that, in essence, there's no production from anybody that's not getting in advanced. That may be the case, that may not be the case. And we're expecting production to be down slightly for the partners that we continue with.

And that may be the case, may not be the case. So only time will tell whether that number is conservative or aggressive. 

Steve Halper -- Cantor Fitzgerald -- Analyst

Thank you.

Operator

Thank you. Our next question is coming from Mark Argento of Lake Street Capital. Please go ahead.

Mark Argento -- Lake Street Capital Markets -- Analyst

Yeah. Good morning guys. A quick question around the captive distribution or refocus on captive distribution. So when you're saying captive distribution, they're only selling for you guys, I'm assuming.

And are they wholly owned or are they full employees or what's the economic arrangement with the captive distribution? 

Gavin Southwell -- Chief Executive Officer and President

Yeah. I'll try to take that in parts. So yes, they'll only be doing enrollment for us. It's fully owned which is great.

And then with the staff there, it's a mixture between full-time employees and others as is consistent with other people in the space. As we're scaling up, we're looking at it as a lot of our key hires in terms of sort of infrastructure, whether it's training or quality control or whatever else. We've done a lot of that already. And so this year for us is really scaling up the number of agents available and having more people available to answer phone calls.

So there's a very detailed plan around ramping that up. There's an infrastructure we've built around that. So it should be a really exciting year for us as we watch that scale over time. 

Mark Argento -- Lake Street Capital Markets -- Analyst

And Erik, as you've kind of looked at the business now, got more familiar with the numbers and everything, what -- can you quantify kind of the capex investment into the Medicare business? Kind of differentiate that, kind of the build-out capex from kind of run rate capex in terms of just better thinking about what this model looks like at scale? 

Erik Helding -- Chief Financial Officer

Yes, Steve. I think -- thanks for the question. I think most of our capex is largely been spent already. So when you think about the dollars that were used to acquire the three assets in 2019.

That was the vast, vast majority of what was going to be needed from a capex perspective. So I think most of what we're doing now really is really funding SG&A on an operating basis. 

Mark Argento -- Lake Street Capital Markets -- Analyst

Understood. And then lastly, in terms of the insurers you have on the platform, where are you at with the roster of insurers? Do you need to bring additional guys on? How you're feeling about that? 

Gavin Southwell -- Chief Executive Officer and President

We're feeling great about it. I mean people can see on healthinsurance.com. The carry is available to a lot of very well-known brand names, and we've been really encouraged as we move from '19 to '20, the type of contracts we've been able to negotiate. So we feel really good about that.

It's a really exciting time for us. 

Mark Argento -- Lake Street Capital Markets -- Analyst

Thanks guys.

Operator

Thank you. Our next question is coming from Richard Close of Canaccord Genuity. Please go ahead.

Richard Close -- Canaccord Genuity -- Analyst

Yeah. I wanted to go back to TogetherHealth. You said it outperformed expectations, but did it give the number of leads in 2019? And what you're expecting in 2020? So if you can give some specifics there that would be great. And then I think on TogetherHealth, when you did that transaction, there was some sort of earn-out or performance goals that led to an additional payment on that acquisition.

And just remind us what that was and whether that's been met? 

Gavin Southwell -- Chief Executive Officer and President

No, thank you. Great question. So in 2019, there's two kind of key parts of the business. One is the amount of demand you can generate, the amount of consumers you can acquire.

And then the second part is how many agents are available to help those people enroll. So in '19, we did very well at having the demand, the amount of consumers that we wanted, and that side outperformed. But because we didn't have enough time, we weren't able to get as many agents as we would have liked to be able to meet that demand. And that's a good thing.

It gives us a nice runway for '20. So in '20, our challenges and execution challenge of adding more and more agents in order to meet that demand and being able to consume more of it, that in fact gives us nice visibility over runway. It gives us a significant runway for expansion and what is a growing Medicare market. So TogetherHealth is about creating the demand.

And our challenge for '20 is around increasing the amount of agents to be able to consume that demand, and then now it's complemented by our digital asset, something that we didn't have until very, very recently available. We've been working on it for some time. So I hope that answers the question. And then the second part around the earn-out, the way the deal was structured, is if certain performance targets are exceeded, then they receive additional payments, essentially out of a profit that is made.

So there's great alignment of interest and we're happy with how that is playing out. 

Richard Close -- Canaccord Genuity -- Analyst

So what is the specifics on that? Did they earn the -- achieve the targets or is that something that is considered in 2020? What is the level of the payment, the performance payment? 

Gavin Southwell -- Chief Executive Officer and President

So we -- so the payments are each based on each year. We believe that they'll hit the targets for the first year and that's good. We want them to hit each of the targets. In terms of the specific targets, I don't have those to hand.

We can follow that up later. But I believe that as part of the disclosures, that might be something that's available, but it's not something I have in front of me. But again, we do believe we'll be meeting the targets which is good. That's what we want.

We want to have good alignment. 

Richard Close -- Canaccord Genuity -- Analyst

OK. Thank you.

Operator

Thank you. Our next question is coming from Brian Hoffman of Canaccord Genuity. Please go ahead.

Brian Hoffman -- Canaccord Genuity -- Analyst

Hey. Thanks for taking the question. If you take the revenue from the consumer engagement piece which is about $7.4 million, and you assume that you're selling the leads for $40 to $50, that implies that about 166,000 leads were sold. So then if we compare that to the number of Medicare-approved applications, it implies that you're keeping about 20% of the leads in-house without the BPO or the captive distributors.

Is that accurate? 

Erik Helding -- Chief Financial Officer

I don't -- this is Erik. I don't believe so. I think we -- in dollar terms, I think for the year, we ended up selling about $13 million to $15 million which I believe was actually closer to 20% of the leads that were generated. And so that's something that we would love to improve upon as we go through 2020.

To Gavin, in my remarks, right, we want to build out our BPO relationships and our captive agents so that we have more agents who are able to consume more of the calls. And so I think that was -- on Gavin's point was we just didn't have enough agents to consume all those calls in the fourth quarter, and that's something that we would love to improve upon in 2020. 

Brian Hoffman -- Canaccord Genuity -- Analyst

OK. And then in 2020, do you expect TogetherHealth to grow the number of leads that they're generating? 

Gavin Southwell -- Chief Executive Officer and President

We do. Yes. 

Brian Hoffman -- Canaccord Genuity -- Analyst

OK. And then lastly, can you give us an update on the Spanish-speaking market, what you've been targeting? 

Gavin Southwell -- Chief Executive Officer and President

Yeah happy to. We've completed the full translation of the technology. We have a small number of products which are ready to go. We're working on several right now.

So it's something we continue to work on. There remains a great opportunity in that space, particularly on the e-commerce side. So it is something we continue to work on and we'll keep building out. But the main focus initially was put on the technology piece and getting the right mix of products. 

Brian Hoffman -- Canaccord Genuity -- Analyst

All right. Thank you.

Operator

Thank you. At this time, I'd like to turn the floor back over to management for closing comments. 

Gavin Southwell -- Chief Executive Officer and President

Thank you. And thank you everybody for the questions. We appreciate your interest in the company. Now we're in 2020, and we have what we believe is an excellent foundation in the Medicare segment to build on.

It's satisfying for us to be able to update you on our progress and the successful conclusion of our first AEP. We look forward to being able to provide you further updates on this as we are able. Have a great day and thank you very much. 

Operator

[Operator signoff]

Duration: 37 minutes

Call participants:

Mike DeVries -- Senior Vice President of Finance

Gavin Southwell -- Chief Executive Officer and President

Erik Helding -- Chief Financial Officer

Cullen Johnson -- B. Riley FBR -- Analyst

Mike Grondahl -- Northland Capital Markets -- Analyst

Steve Halper -- Cantor Fitzgerald -- Analyst

Mark Argento -- Lake Street Capital Markets -- Analyst

Richard Close -- Canaccord Genuity -- Analyst

Brian Hoffman -- Canaccord Genuity -- Analyst

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