Thank you, Joelle, and good afternoon, everyone. First I want to apologize for the press release getting out a little late. We had some issues with PR Newswire. But thank you all for taking the time to join us for GoHealth's fourth quarter and full year 2020 earnings call.

Joining me today are Clint Jones, Co-Founder and Chief Executive Officer; Travis Matthiesen, Chief Financial Officer; Shane Cruz, our Chief Operating Officer; and Jake Gudmundsen, President of Medicare.

This afternoon's conference call contains forward-looking statements based on our current expectations. Numerous risks and uncertainties may cause actual results to differ materially from those anticipated or projected in these statements. Many of the factors that will determine future results are beyond the Company's ability to control or predict. You should not place undue reliance on any forward-looking statements and the Company undertakes no obligation to update any of these statements whether due to new information, future events or otherwise. After the market closed today, we issued a press release containing our results for the fourth quarter of fiscal 2020 in addition to presentation materials that Clint and Travis will walk through momentarily. Both the release and the slides can be found on GoHealth's website under the Investor Relations tab.

In the press release we've listed a number of the risk factors that you should consider in conjunction with our forward-looking statements. Other significant risk factors are described in our Form 10-K and 10-Q reports filed with the Securities and Exchange Commission. During this call we will be discussing certain non-GAAP financial measures. These measures, a reconciliation to the most directly comparable GAAP financial measures and the reason management believes they provide useful information to investors regarding the Company's financial condition and results of operation are contained in the press release and investor presentation.

So with that, I'd like to turn the call over to Clint.

Clint P. Jones - Co-Founder and Chief Executive Officer

Thanks, Jay, and thanks for joining us to discuss our fourth quarter and full year 2020 results. As Jay mentioned, we have posted a slide deck to our website and we will walk through before opening up the call to Q&A.

I'll start with some highlights from the 2020 annual enrollment period as well as our focus areas in 2021 that will position us to deliver another year of high-quality growth and then Travis can discuss the financials. But first let me thank my GoHealth colleagues for their hard work and long hours spent, educating and enrolling customers during AEP. This winning team executed well as evidenced by revenue that came in above our own expectations for the quarter, driving strong full-year revenue growth. These results were a huge accomplishment during what was anything but a normal year shown on Slide 4. Our team worked through the challenges associated with the pandemic, an entirely remote working environment for AEP, not to mention a most unusual election cycle. We are particularly proud of the quality results we delivered during the year with exceptional submission growth and growing LTVs. This is a testament to the strength of our people, process and technology. The pandemic highlighted the need to help seniors carefully choose their healthcare and our marketplace platform and agent-assisted model enables us to do that in a Medicare market that is poised to grow rapidly for many years to come.

Slide 5 looks at the key metrics that we use to measure our performance. While our marketplace has been built over 20 years, we only entered the Medicare space in 2016 and quickly became the largest enroller of Medicare plans by a wide margin helping over 730,000 Medicare consumers enrolled in 2020. A 60% increase in agent count in the year drove a 71% increase in submissions demonstrating how efficiently we can scale our agent base. We also drove a 3% increase in LTVs. Thanks to continued investment in our platform, our TeleCare team and our expanding carrier footprint.

Our team delivered revenue of $877 million, the largest in our space, with the highest efficiency. Adjusted EBITDA of $271 million equates to industry leading 31% margins and a two-year adjusted EBITDA growth of an astounding 677%.

So in five short years, our leading technology enabled marketplace is driving the largest and most profitable results with extremely high rates of growth. We know our size and scale offer a sustainable competitive advantage. First, our machine learning and data driven insights improve with more and more data. Second, as we scale we will continue to invest behind sustaining this growth in 2021 and beyond.

Slide 6 looks at how our leading marketplace platform has enabled us to become the largest and most profitable which positions us well to capitalize on a $30 billion addressable market for years to come. We have a data-driven, internal omnichannel marketing strategy that efficiently delivers consumers into our wide funnel. Our proprietary technology platform utilizes data to score our leads and route consumers to specialized agents. We have built and continue to improve our tech-enabled agent force to provide consumers with education, transparency and choice as seniors are making an incredibly important healthcare decision and we have cultivated unique carrier relationships that fuel enterprise revenue, including our Encompass programs. We believe this high-performing platform positions us well to continue delivering rapid growth over the coming years with industry-leading margins and fast cash payback periods.

Let's now look at our recent results from AEP shown on Slide 7. Our Medicare dedicated team of agents delivered excellent results, including 75% growth during the fourth quarter and capping off a year, up 110%. This growth is on top of prior year's triple-digit gains demonstrating the scalability of our marketplace. Total revenue grew 55% during AEP to $446 million. Thanks to strong consumer engagement, driven by our marketing team, solid agent performance and rapidly-evolving favorable industry trends. Full year revenue grew 63% to $877 million, representing an absolute revenue increase of $338 million during the year. Adjusted EBITDA grew 31% in the quarter and full-year adjusted EBITDA jumped 59%, equating to an absolute EBITDA increase of over $100 million.

While our Q4 results came within our range of expectations, let me share some additional insights. First, our agents spent more time per call this AEP helping consumers navigate their plan options in this environment across our expanded carrier footprint while performing a rigorous needs analysis. Consumers needed our platform more than ever demonstrating the power of our marketplace and consumer demand for education, choice and transparency. In the short term this resulted in longer than anticipated handle times that limited agent capacity to meet our record customer demand. But our increasing LTVs are proving that the additional time spent with customers is paying dividends and positions GoHealth for long-lasting benefits over the coming years, far in excess of the short-term opportunity cost. And second, we invested incremental marketing dollars to navigate an unusual election cycle. The additional marketing spend delivered abundant opportunities and highlighted the need for additional agent capacity in 2021 to address the opportunities our marketing engine can generate in a fast-growing industry. Simply put, we had more consumer demand on our platform than we could serve.

While both of these items dampened our short-term profitability, they create a clear path to delivering strong growth and efficiency gains in 2021 and beyond shown on Slide 8. With our record growth and insights from 2020, we aim to over-deliver by doubling down on our strength such as our proven, tech-enabled, agent-assisted model while looking to continuously improve our business through lessons learned such as optimizing the customer journey.

From this, we have identified three key areas of focus that we will accelerate investment in 2021 to expand our competitive advantages.

First is to grow our agent base by over 50% earlier in the year to meet continued demand we are seeing in 2021. Agent investments in TeleCare and Encompass would help power sustained benefits from the higher retention resulting from customer engagement and additional services. We are also enhancing training and coaching efforts geared towards a work-from-home environment, which should result in more higher-producing, career-oriented agents.

Second is to continue to invest thoughtfully in the technology to better support agent efficiency in a period of increased plan options for consumers. Two examples include our next generation plan fit tool to better help consumers find the right plan and speech analytics to continue to improve our sales results. This will help us deliver a greater customer experience and a more efficient sales process while continuing to generate top tier Medicare margins.

And third is to continue to build out our Encompass platform and the GoHealth brand as a trusted advisor among seniors through a superior customer journey. Thanks to our integrated marketing messages, TeleCare engagement and Encompass offerings. Our goal is to attract and retain members and the consumers we observe need to know that GoHealth will be there to help them utilize their benefits and navigate their evolving needs.

Technology enhancements and the additional training across our expanded agent force will allow us to grow submissions at a fast rate in 2021 with greater efficiency, not to mention, position us well for compounding growth in 2022 and beyond shown on Slide 9. Our superior business model and industry-leading adjusted EBITDA margins create opportunities to continue to drive market share. So we are investing ahead of the curve to extend our leading position and a very large and fast-growing Medicare market, resulting in commissionable revenue growth of 42% to 64% in 2021, more than $100 million higher than our expectations from the IPO. In total, we expect 2021 revenue of $1.15 billion to $1.3 billion equating to growth of 31% to 48%. We also expect adjusted EBITDA of $345 million to $385 million, representing an increase of 27% to 42% from 2020, resulting in EBITDA margins of 30%, five points higher than our closest competitor.

Our team is 100% committed to delivering these 2021 results as we believe that these ranges are both prudent and highly achievable. It is very encouraging to see that we are off to a strong start to the year including topline growth, hiring and efficiency gains tracking well towards full-year goals. This should position us well to meet the growing consumer demand from our internal marketing campaigns. We couldn't be more excited to help enroll and serve more customers.

Let me now turn the call over to Travis to review our results and discuss our 2021 operating plan in more detail.

Travis Matthiesen - Chief Financial Officer

Thanks, Clint and good afternoon everyone. I also want to start by thanking our teams for their hard work as they delivered record revenue and EBITDA in 2020, including roughly 60% top and bottom line growth demonstrating the scalability of our model.

Turning to Slide 11. Total revenue in the fourth quarter grew 55% to $446 million fueled by internal Medicare growth of 75%, ahead of our expectations and resulting in commission growth of 57% despite the declines from our under 65% or IFP offerings. We delivered 328,000 approved Medicare Advantage submission during the quarter, industry-leading and one-third more than our nearest public competitor. New carriers contributed over 30% of total submissions in the quarter. And we expect the benefits from carrier expansion to continue through 2021 as we fully integrate additional carriers on to our technology platform.

Medicare Advantage continues to grow quickly and our marketing teams were able to generate consumer demand in excess of agent capacity during the quarter, indicative of abundant market opportunities over the coming years. LTVs increased over 5% in the fourth quarter and almost 3% for the full year as we delivered quality submission growth which manifests in our LTV to CAC ratio of 3 times and our top-tier Medicare margins of 49% in the quarter.

Slide 12 highlights the year-over-year change in our LTVs. And while there are various puts and takes our investments are driving LTVs higher through improved persistency. As Clint mentioned, we made meaningful investments in our agents continuing to align them on delivering high-quality volume growth through better consumer engagement and more time spent addressing their unique needs as evidenced by the longer handle times in the quarter.

Our agents also drove higher engagement with consumers through the warm handoff to our TeleCare team to increase consumer conviction at the point of sale, leading to improved effectuation and persistency for our two largest carriers. We believe we are uniquely positioned amongst our competitive set to continue to drive LTVs higher over the coming years. Thanks to accelerated TeleCare investments, broadened carrier footprint as well as additional benefits from expanding our Encompass program to our members.

Slide 13 helps compare our LTVs to our closest agent-assisted competitor. The strength of our platform and the use of data has enabled us to produce strong and growing LTVs, which when combined with CAC efficiencies has resulted in great margins and high returns. On this page we calculate the life time value of a policy at the time of submission. It's the starting point of that policy where we believe there is the least variability around definitional differences between companies. So to compare apples to apples, we divided this competitor's Medicare Advantage revenue by their total submissions to calculate their LTV at the point of submission to compare to our own reported LTVs at the time of submission. Multi-year improvements in LTV have pulled our fourth quarter LTV per submission to within 1% of this peer and our LTVs are growing, given our investment posture. We are also pleased to report that January's persistency and renewals have come in better than the prior year.

Slide 14 is a more holistic view of how we approach our business to create value for carriers and drive higher revenue per submission. This slide divides total Medicare revenue by our total Medicare submitted policies to calculate the revenue generated from each submission up 19% since 2018. Improving LTVs and Encompass opportunities create additional revenue upside per submission.

Slide 15 looks at that opportunity from our enterprise programs in another way. It highlights the long-term potential to keep driving revenue per submission higher by increasing the penetration of our Encompass offerings across our customer base. Initial Encompass pilots represent a small subset of our total members, but their early success implies meaningful upside potential. We are well positioned to do this through more effective and efficient delivery of services, ranging from member risk assessments to value based care initiatives, vastly expanding our total addressable market.

Over the last year, we have ramped up investment in our Encompass Platform, including building out the team with Dr. Paul Hain, our Chief Medical Officer, during the fourth quarter as well as rolling out additional pilots in 2021 to make seniors healthier in alignment with insured goals and help carriers drive star rating. We will continue to invest behind the strategy to go deeper into healthcare delivery over the coming years and drive higher revenue per member through Encompass.

Over the near term, we can grow LTVs through continued investments in our TeleCare team including plan fit checks as we have seen a high correlation between consumer engagement and education around their plan benefits and persistency, not to mention driving better effectuation by getting consumers into the best plan through additional carrier expansion.

Slide 16 provides some color on the components of our revenue growth in the quarter. In addition to the 57% increase in commissions, we delivered 44% enterprise revenue growth by providing carriers with direct programs on technology and enrollment in marketing services. These programs create additional value to carriers beyond our choice platform and given great year one cash characteristics, they help fund our commissionable growth.

External Medicare revenue grew 42% during AEP. As a reminder, our external programs are yet another way for us to drive quality membership growth as these small and mid-sized agencies write policies under a revenue share arrangement where they are paid only when we are paid. These agents are not outsourced BPO programs, rather they utilize our technology, compliance and carrier contracts to write quality business for carriers. And finally we have our IFP business with revenue up [Phonetic] 49% as we reallocate towards the faster growing and higher margin Medicare business. The topline drag from IFP lessons going forward as IFP share of total Company revenue has diminished from 20% in 2019 to 6% in 2020. In summary, we are very pleased with our 54% topline performance during the fourth quarter.

Let's now move to Slide 17. Fourth quarter adjusted EBITDA of $170 million grew 31% with top tier margins of 38%. The internal Medicare segment profit grew 40% with excellent margins of 49%. Strong consumer response to our marketing, including TV, is indicative of a very healthy fast-growing market and our agents did an excellent job spending the needed time to help seniors make an important decision across a vastly expanded carrier footprint. But in the spirit of continuous improvement, we have also identified several opportunities for 2021. For example, our agent focus on LTVs and retention led to a unique position in the industry where our LTVs are improving. But we also saw significantly more leads in agent capacity underscoring additional opportunity for 2021 and directing our investment focus. So given the strength of our marketing capabilities, as well as our integrated business model developed over the last 20 years, it all comes down to agents, including not just absolute numbers, but the opportunity to invest more aggressively in technology and training to enable them to deliver submissions efficiently across broadened carrier offerings. So we have the plans in motion to deliver on that in 2021. I'll come back to that in a minute. But first let me look at our full-year 2020 results shown on Slide 18.

Full year revenue of $877 million was an increase of 63% on top of the prior year's 139% growth, powering two-year growth of 288%. Full year submissions totaled 730,000 powered by outperformance of internal Medicare up 110%. Commission revenue grew 60% and enterprise revenue grew 71%. EBITDA of $271 million grew 59%, in line with expectations and with a 31% margin. Our producing licensed agent count in 2020 was 60% higher than the prior year which drove internal submission growth 71% higher at the same time LTVs increased over 3%, demonstrating the power of our platform, the scalability among agents.

One quick comment regarding our marketing and advertising expenses. As we shift to more internal Medicare, this will lead to outsized growth in our internal marketing expenses while reducing the growth rate for cost of revenue from external Medicare. So, it's worth looking at the year-over-year growth of the combined line items in line with our revenue growth. But I think it's most powerful about our results is how they stand in stark contrast to some competitors and validate our superior tech-enabled agent strategy.

Over 96% of our full-year, segment profits were generated by our internal Medicare business with internal customer acquisition and internal career focused agents. And enterprise creates opportunities to further monetize our membership base through our Encompass Platform driving revenue per submission higher.

Moving on to cash flow on Slide 19 where our strong LTV performance has been further validated by strong cash collections. We collect collected a record $244 million of cash during the year, which we reinvested into building a larger book of future commission streams. Cash collections came in over 100% of expectations for the year, supporting our confidence in our LTV calculations as a proxy for cash flow. And growing cash flow streams from a high-quality book combined with our seasonal revolver positions us well to fund the faster-than-anticipated commission growth in 2021. So while we have grown our submission count dramatically over the last few years, we are delivering rapid cash payback periods of roughly one-year. Thanks to the strength of our platform, delivering strong LTVs and leveraging efficient marketing as well as creating value for carriers through our enterprise programs.

Slide 20 showcases our growing commissions receivables balance. Put simply, it's the largest absolute and percentage growth in the industry. During fiscal 2020, we grew our commissions receivable balance by one 112% to $810 million. And we collected $244 million in cash, a year-over-year increase of 61%.

Our 2021 areas for investment are not new to us. Much of our plan consist on doubling down in areas under our control where we have already been investing. First is hiring additional agents with enhanced training, second is to invest in the technology and tools to enhance agent productivity and third is to expand the GoHealth brand as the trusted advisor for our seniors.

So with that, let me now move on to the 2021 revenue outlook shown on Slide 22. We expect to deliver full-year revenue of $1.15 billion to $1.3 billion, representing growth of 31% to 48% and well above prior expectations. This includes 53% commissionable revenue growth at the midpoint, fueled by even faster growth for our internal Medicare business including several points of contribution from our Encompass Platform. We expect short-term low single-digit increases in our LTVs in line with commission growth. Upside would result from our efforts to drive higher persistency and increased penetration of Encompass members. Continued care expansion should also drive higher LTVs after the modest 1 point drag from our 2020 investments while also creating additional enterprise opportunities amongst a broader set of carriers to drive higher revenue per member over the coming years.

Regarding enterprise revenue, we have built in prudent assumptions on enterprise revenue despite the encouraging conversations we are having with carriers about expanding our partnerships, be it marketing services, enrollment, technology or Encompass programs. We expect enterprise revenue to be roughly flat this year or less than 20% of revenue combined to enterprise at 22% to 23% of total revenue over the past two years. Finally, we expect modest growth from our external Medicare business as carriers increasingly push agencies to work with us on our platform and continued declines in our IFP business.

Moving on to Slide 23. 2021 adjusted EBITDA should come in at $345 million to $385 million, representing growth of 27% to 42% and industry-leading margins of 30% as growth in our high margin internal Medicare business offsets the ramped-up investment plans that we are executing on earlier in the year. In addition to the direct cost of increasing agents, training, tech and other brand building, there is a short-term opportunity cost as we pull agents off production during the first nine months to invest more in their careers and capabilities. These additional investments position us to capitalize on the accelerated demand we are seeing and drive sustained growth in our internal Medicare business over the coming years with great margins.

To help you better model the impact and timing of these 2021 investments, we expect lower absolute EBITDA during the first nine months of the year particularly as investments ramp up into the second and third quarter to position us very well for a successful 2021 annual enrollment period and drive momentum as we head into 2022 and beyond. Combined marketing and cost of revenue will grow less than revenue growth, but the composition is more heavily weighted towards marketing costs as our marketing team drives more high-quality consumer volume internally, while continuing to develop our GoHealth brand amongst consumers.

As we move into the annual enrollment period in the fourth quarter, we anticipate continued strong revenue gains powered by our agent growth as well as improvements in efficiency at capturing opportunities and against an unusual election year costs this past year. We won't need a dramatic increase in qualified leads to hit our numbers, but rather we are working towards better capitalizing on delivered opportunities through higher-ranked answer rates due to our agent hiring plan and increased conversion which drive down the CPAs.

We are off to a strong start in 2021 with top line growth in the first quarter trending in line with full year expectations for 31% to 48% growth. We are ahead of plan from a hiring standpoint with year-over-year agent growth of 60% and first quarter agent efficiency is also trending above what we have built into the full-year outlook. So in summary, we delivered record 2020 results, maintained our leadership position as the largest and most profitable in our space and have identified the investment areas that will position us to hit our 2021 numbers as well as deliver compounding growth over the coming years.

Regarding the compounding point. Slide 24 highlights the substantial growth since 2018 that we expect to continue to deliver. The midpoint on our revenue outlook is 5 times 2018's revenue while adjusted EBITDA would be 10 times as large as 2018's. Thanks to our scale efficiencies. And 2021 is the first of many years of strong compounding growth we expect to deliver for shareholders as a public company.

With that, let me now turn the call back over to Clint for some closing remarks.

Clint P. Jones - Co-Founder and Chief Executive Officer

Thanks, Travis. Our team came together really well throughout the year to deliver record results in 2020 and we have taken our success stories and lessons learned to identify areas to improve and accelerate our profitable growth trajectory into 2021 as a stronger and better company. While 2020 was not without its challenges, our solid results continue to validate the need for our marketplace to help consumers in a very strong and growing Medicare market and we are more bullish than ever on our position in the space shown on Slide 25.

With very attractive industry dynamics, we see a long runway ahead as the current Medicare Advantage market is massive at $30 billion and forecasted to grow by 10% per year with commission rate increases in the low to mid single digits. We enjoy the leading position as the largest D2C broker in the Medicare market, yet we have only 1% market share today.

Let me wrap up on Slide 26 as the market leader. We delivered the highest submissions in revenue fast and profitable growth and the leading Medicare margins and increasing LTVs. When we reflect on 2020, our biggest takeaway is the sheer magnitude of the impact COVID has had on consumer behavior, creating a seismic shift in demand towards our marketplace from traditional distribution. This crystallized during AEP, as we generated demand well in excess of agent capacity, highlighting the opportunity to pull forward some investments to lengthen our leadership position. The three areas of accelerated investment include agents, technology and GoHealth brand and Encompass Platform. We believe these investments will position us well for the 2021 AEP, not to mention future years given our focus on delivering sustainable long-term growth.

After 20 years of running this business, I have never been more excited about GoHealth's growth prospects, including strong market tailwinds. We will continue to do what we do best and focus our investments where we get the best returns, including growing our agent base and their efficiencies, enhancing our best-in-class proprietary technology for scalability and innovating with our carrier partners to strengthen our position as the industry leader. After a very memorable 2020, I'm pleased to see our great start to the year as our team is laser-focused on over-delivering for all our stakeholders, consumers, carriers and other partners and our shareholders.

Joelle, we'd now like to open up the call to questions.

Question & Answers

Operator

Thank you. [Operator Instructions] Our first question comes from Jailendra Singh with Credit Suisse. Your line is now open.

Jailendra Singh - Credit Suisse - Analyst

Yeah. Thank you. Thanks, everyone. I want to follow up on some data points you gave around conversion rate in the quarter for agents and leads unanswered, unaddressed. Is there any way you can size that opportunity in terms of percentage of calls unanswered or percentage of leads unaddressed? And also brokers spending more time with seniors in the quarter. Can you provide any data around what that meant for the year-over-year trends in agent productivity in fourth quarter and what are your expectations for 2021?

Clint P. Jones - Co-Founder and Chief Executive Officer

Yeah, Jailendra. Great question. So, yeah, just to take a step back, you think about us entering Q4 in a pandemic in a work-from-home environment with a very kind of unpredicted election cycle. We had pre-bought a lot of media in preparation for that. And ultimately what happened is we got into AEP. We noticed our consumers asking more questions. We revamped our needs analysis process with our expanded carrier footprint and we were spending more time with consumers walking them through their individual needs, which is ultimately led to increased LTVs, which we think is the right decision from a long-term. Our conversion rates were within our range of expectations. I think the one thing here is just that we were surprised by the amount of opportunities we generate from a marketing standpoint. The election had a factor there. There were some choppiness in supply and demand. For example, if we had advertisements running at 4:30, 5:30 and 7:00 and late-breaking news bumped to 5:30 - and the 4:30 and the 5:30, and [Indecipherable] at 7:00, obviously we didn't have the agent capacity to handle those calls and locked on the floor.

So good news is, from a TAM standpoint, really excited about the kind of the consumer shift and the need for our platform. And we've just kind of seen what we need to do from a 2021 standpoint to capture that opportunity.

Jailendra Singh - Credit Suisse - Analyst

Okay. And just a quick follow-up on your comments around increasing agent count by more than 50% with the focus on internal agents now seems like a priority cost to the industry. How do you think about your ability to hire, retain and attract more brokers and agents in a market which is likely to get more and more competitive?

Clint P. Jones - Co-Founder and Chief Executive Officer

Yeah. It's another great question. So with work from home, obviously there's pros and cons. And one of the pros, obviously expanding our footprint in the markets we're able to recruit out of. So we've taken a much broader approach from a recruiting standpoint. Also a high percentage of our agents we hire as non-licensed folks. So we take them through licensing process, sales and training process to get them really well ramped up where they can perform their duties. So we obviously have a very competitive pay package and focus on kind of a long-term career for an agent and we maintain a high percentage of our top producers. So from a retention standpoint, we really focus on that kind of career-oriented mindset where agents can build a career here. So we don't see that as a hindrance. If I look at 2020, the challenge we faced in Q2 and Q3 some of the states have shut down their licensing platforms that kind of limited our ability to get those agents through the funnel. We do not foresee that as a challenge this year as we move forward.

Okay. Thanks a lot.

Operator

Thank you. Our next question comes from Frank Morgan with RBC. Your line is now open.

Frank Morgan - RBC - Analyst

Good afternoon. Yes, I guess a question on the enterprise revenue. I think I recall from last quarter you said you thought that would be flat again from third quarter to fourth quarter and obviously up very nicely. But I'm curious if you're now saying it will be flat for all of 2021. So just a little more color on that and also the second question was, when you think about the sort of surge of demand relative to your sales capacity, other than just hiring more brokers is there anything else you can do? And is there any way you can monetize those excess leads that are coming in you really can't serve?. Thanks.

Clint P. Jones - Co-Founder and Chief Executive Officer

Yeah. Thanks, Frank. So I'll take the first part of that question around enterprise. Again, 2020 with COVID was a very kind of unscripted year and we were able to partner with our carriers and create opportunities there that they needed us to be good partners with. As I think about the outcomes and ultimately 2021, we over delivered on our choice platform for carriers and obviously we see the ability to scale that up even further. So we're going to be kind of conservative on the approach we take within the enterprise programs for 2021. We'll give you some additional updates on Encompass on our next call in Q1 that will kind of give clarity there.

Travis anything to add on there, on enterprise?

Travis Matthiesen - Chief Financial Officer

Yeah. I would just add that as you think about the makeup of the enterprise, while we are keeping - while we are keeping it flat in our projections, think about more and more of our enterprise revenue coming from Encompass and over 65 programs, while we're sun setting some of our legacy under 65 campaigns. As we mentioned we're bringing down IFP, continuing to bring down IFP, some of those programs were enterprise campaigns and so we're shifting the mix there.

Clint P. Jones - Co-Founder and Chief Executive Officer

Yeah. And then, Frank, in the second question around the surge in demand, we're still seeing that most consumers want to talk to somebody. And want to speak with one of our licensed agents where they can go through all the different options and the needs they have. I think this year, we had a quite a few consumers that have traditionally bought in maybe more of a face to face environment that this is their first time going through this experience. So we are able to spend more time with them. Now we will focus on not only the kind of agent growth but efficiencies per agent. A lot of the new technologies, we can deliver around speech analytics and our plan fits score to help navigate consumers in more efficiently through the process. But I think that we' really focused on that consumer journey and outcome and I think that played out well this year with our expanded LTVs. Thank you.

Operator

Our next question comes from Michael Cherny with Bank of America. Your line is now open.

Mike Cherny - Bank of America - Analyst

Good afternoon. Just to dive in, you mentioned, Clint, the LTV question. As you think on a go-forward basis if the LTV has been a bit, I would say, moving piece so to speak over the course of the year, how do you think about the further positioning LTVs over time? And specifically within some of the incremental investments you're making, is there anything that you can point to anything that you're tracking to make sure that LTVs stay on the trajectory that you've been able generate especially over the course of 2020?

Clint P. Jones - Co-Founder and Chief Executive Officer

Yeah. For sure. So great question. So you think about, take a step back, we started investing in our TeleCare team and some of the retention activities 18 months ago and there is - we're still in early innings and early learnings. Now what you've seen in Q2, Q3 and Q4 in 2020 increased LTV over the prior-year's quarter. And we still think we're kind of early stages of making a pure impact there on what we can do.

We also kind of - we mentioned we had some pilots in our Encompass Platform in Q4 at a small scale, but we saw some really good leading indicators as we scale those out in more of a productive standpoint in 2021, some upside there as well. I think from a planning standpoint, we're going to be conservative with LTVs in 2021 with potential room for upside.

Mike Cherny - Bank of America - Analyst

Got it. And as you head into '21 you mentioned I think rightfully so some of the dynamics on the election skewing with some of the ad buys. How do you think though about the reallocation of spend? Have you noticed anything in terms of the way that some of your returns and hits on some of the marketing you did could be used for further ad campaigns, further marketing spend in terms of where those allocation dollars could go?

Clint P. Jones - Co-Founder and Chief Executive Officer

Yeah. I mean, obviously, any kind of time you're running a marketing campaign across multiple verticals, you're going to have winners and losers. We saw from the actual cost of the opportunity, the raw lead within our range and obviously the cost here was a cost of acquisition standpoint that's where the higher costs were. But we still see kind of some of the traditional channels like TV and direct mail being extremely powerful. Our digital channel was really strong as well.

One interesting note that we found this year is on our digital channels especially, we had about - we had 90% of those consumers started journey on mobile, once you think about that new buyer leveraging an iPhone or a tablet. So as we think about kind of moving into 2021 and creating technology engagement solutions for that type of consumer, we think we have a big opportunity there as well.

Mike Cherny - Bank of America - Analyst

Great. Thanks.

Operator

Thank you. Our next question comes from Tobey Sommer with Truist Securities. Your line is now open.

Tobey Sommer - Truist Securities - Analyst

Thank you. What - how would you describe your visibility into enterprise revenue in 2021? In other words, in this case sort of how much of [Technical Issues] versus adhoc projects that may come from your carrier partners throughout the year but you're not yet predicate?

Clint P. Jones - Co-Founder and Chief Executive Officer

Sure. Yeah. So most of the enterprise revenue is contracted multi-year revenue. So you've got a pretty good line of sighter [Phonetic] there. Now there is some, what I'll call, variable revenue that we might have carriers come to us in a particular quarter and ask for a special project. The other part this year that's a little more variable because it's newer is some of the Encompass activities we're doing that are ramping up. Obviously we've got really good early wins, but as we get those to more scale that's going to be a little bit less predictable in this early kind of journey with Encompass.

Tobey Sommer - Truist Securities - Analyst

Kind of majority, if you could give us a sense for the proportion that you actually do have visibility into?

Travis Matthiesen - Chief Financial Officer

Yeah.

Clint P. Jones - Co-Founder and Chief Executive Officer

Yeah. Travis, you want to take that?

Travis Matthiesen - Chief Financial Officer

Yeah, I can take that one, Tobey. So again we were prudent with our modeling here. So as you think about the enterprise revenue being flat that all falls into the bucket that Clint described as the multi-year contract and the visibility there. So again we will see what happens from carriers but from where we're at today we've been conservative with our enterprise forecast for purposes of guidance.

Tobey Sommer - Truist Securities - Analyst

And incremental project that comes due in the spring or summer is kind of great to be at this point.

Travis Matthiesen - Chief Financial Officer

Is exactly right.

Tobey Sommer - Truist Securities - Analyst

Okay. Could you give us a sense for the arc of your retention experience here in the first quarter to date, at least in your fourth quarter sales? Thanks.

Travis Matthiesen - Chief Financial Officer

Yeah. So we mentioned in the script the - here in January, as you think about the renewal rate, so these are the legacy policies that were up for renewal this past AEP. The renewal rate we experienced here in January was higher than our expectations and higher than the prior year.

So again, the investments we've made over the last 18 months in our TeleCare team reminding individuals of all of their benefits and why their plans are the best. We're continuing to see the fruits, not just in higher effectuation of new vintages, but better overall persistency of legacy vintages as well.

Clint P. Jones - Co-Founder and Chief Executive Officer

Yeah, Shane anything you want to add to that?

Shane Cruz - Chief Operating Officer

No, I think Travis covered it pretty well. But as you know with our retention curves, it's pretty exponential. So we see early on, we call our micro churn period, we see those effectuation rates and those early retention rates and we're really pleased with the results that we're seeing, significant improvements year-over-year.

Tobey Sommer - Truist Securities - Analyst

Okay. Thank you very much.

Operator

Thank you. Our next question comes from Yaron Kinar with Goldman Sachs. Your line is now open.

Yaron Kinar - Goldman Sachs - Analyst

Thank you very much. Good evening, everybody. My first question goes to EBITDA for 2021 with the margin specifically. So I think you have it flat and I think in the script you talked about the shift in terms of the internal channel being offset by maybe moving some investments up. Can you maybe talk about the decision to move these investments forward and how you think about maybe structurally the EBITDA margin over the long run? What can they get to?

Clint P. Jones - Co-Founder and Chief Executive Officer

Yeah. Great question. So I think that - as we think about kind of exiting 2020 and understanding what we learned over the fourth quarter, just the opportunity in front of us. We're still in a fairly new market when it comes to the business we're in. And we think it's prudent to look at this from a revenue and a market share gain process here.

So as we think about making investments earlier in agents and technology and the Encompass Platform, that will obviously bring down kind of EBITDA in the first nine months of the year as we think about accelerating our growth in AEP next year in 2022 as well. With that said, we will still maintain a 30% overall EBITDA margin, which we're happy with and we think that just that position to continue to capture market share it has multiple things.

Obviously we build a leading platform because I think about our carrier partners and things we can do that are more strategic from an integration standpoint and new types of products and services to these consumers that's really exciting as well.

And Travis anything to add to it?

Travis Matthiesen - Chief Financial Officer

Yeah, I would just reiterate that we are investing ahead of the curve based off of the consumer demand we saw here in Q4 of more and more consumers moving to our platform. And so if you think about what we're doing investing in our agents, investing in our technology, focusing more on Medicare Internal, we talked about even during a volatile election year, we still experienced 50% margins on Medicare Internal. To the extent we're allocating those resources to that channel, it creates the opportunity to expand margins in '22 and beyond. But again we'll be thoughtful thereby balancing the growth of the continued consumer demand that we're seeing.

Yaron Kinar - Goldman Sachs - Analyst

Maybe to follow-up on that. Was the growth and was the consumer demand greater than you expected, let's say, a year ago as you were thinking of this year's AEP to the extent that you would move investments forward that you had previously not thought you would need to do?

Look, this is a growing market and a nascent market relatively speaking a year ago as well. So I'm just trying to understand what caused the acceleration of investment now specifically?

Clint P. Jones - Co-Founder and Chief Executive Officer

Yeah. So it's a great question. So prior to COVID, we thought like there would be a movement from traditional distribution to this telephonic or e-commerce model over a period of years. And what we experienced this year is a massive shift from that movement. So the demand we saw was nothing like we've seen in the past. And I think our ability to kind of accelerate investments to capture that market share and scale the platform is what we're focused on.

So I think that's where we made a decision like there's so much opportunity here, let's go after it. And we are in a kind of early market. And I think there's going to be a couple of clear winners here at the end of the day and we're going to make sure that we're well positioned to be there.

Yaron Kinar - Goldman Sachs - Analyst

Okay. And then my second question was, still on the MA internal submissions. So, I think last quarter you talked about 83% growth in the month of October and I guess the first two weeks of AEP. It slowed down a bit for the overall AEP period. Is that because the election cycle turned out to be more demanding than you expected? Is that because the time spent on the phone with clients increased over the course of the period? I'm just trying to understand why that 83% ended up being a little lower than that for the full period.

Clint P. Jones - Co-Founder and Chief Executive Officer

Yeah. Another really good question. So if we think about the first two weeks of AEP, we had the positives of a lot of follow-up meetings that our agents had set during the SEP time frame where consumers weren't eligible to enroll during SEP. So a lot of those kind of calls happened during the first couple of weeks of AEP which gave us a very high - those calls tend to close a lot faster because our agents have already made the relationship with that consumer. So that was kind of one factor.

The second factor, you're right. The election was not over on election day and those trends continue on. And I think that also was a little bit hard to forecast as we thought about that kind of going into AEP.

Yaron Kinar - Goldman Sachs - Analyst

Thank you.

Operator

Thank you. Our next question comes from Jonathan Yong with Barclays. Your line is now open.

Jonathan Yong - Barclays - Analyst

Thanks for taking my question. Just on the agent kind of marketing comments. It sounds like you're going to be increasing marketing spend at a pretty good clip, agents up 50%. So I understand the election component kind of drove up rates, maybe a little bit more difficult for your agents. But given one of your competitors is leaving say the TV channel in terms of generating their leads, shouldn't your marketing dollars go further in 2021? And given you are hiring 50% agents, will that be enough to cover all the marketing dollars that you're putting into the market?

Travis Matthiesen - Chief Financial Officer

Yeah. I can take that one. So, first and foremost, you're exactly right. We are ramping up the agents and in order to feed those agents were focusing more directly on our own marketing and advertising. But when you think about our marketing and advertising, if you think about our P&L, there is two - there is two different items that drive customer acquisition. It's our cost of revenue where we pay via revenue share as well as our marketing and advertising.

You think about those in aggregate the actual growth in 2021 compared to expectations is actually right in line. It's just more over skewing on marketing and advertising and then we are ensuring that we have additional agents to handle all of the over demand that we experience. So we won't need as many leads as an absolute level here in 2021.

We'll have more agents that we'll be able to handle the capacity and a fewer opportunities hit the floor. And so that's how we're thinking about the balance of the growth there. But incrementally between cost of revenue and marketing and advertising, it's really just shifting more into our internal marketing and less from cost of revenue, but those still going up from an absolute standpoint at the same level.

Jonathan Yong - Barclays - Analyst

Okay. And then you obviously added new carriers in 2020 but for 2021, are you contemplating any new carrier adds or geographies where you're going to focus a little bit more on or is it pretty much segregated just 2020 where we'd see that type of impact? Thanks.

Clint P. Jones - Co-Founder and Chief Executive Officer

No. Great questions. I think obviously 2020 was when we made the major carrier additions to the platform. And we're, honestly, still going through integrations with some of those carriers as well, which we think will drive additional gains in 2021. As we think about new carriers, we're constantly evaluating. We have identified a few smaller regional players that we'll probably add this year. Just to give us some coverage of plans that we don't currently have, but it's not a - not kind of a major initiative of ours.

Jonathan Yong - Barclays - Analyst

Great. Thanks.

Operator

Thank you. Our next question comes from Lauren Schenk with Morgan Stanley. Your line is now open.

Nathan Abraham - Morgan Stanley - Analyst

Hi. This is Nathan Abraham [Phonetic] for Lauren. In terms of this new carriers you onboarded this year, where are you relatively in terms of scaling? I know they're still ramping up. But how far back do you expect go out of these integrations? And then can you touch on the impact, if any, the new carriers have on LTVs persistency and conversion rate within the quarter? Thank you.

Clint P. Jones - Co-Founder and Chief Executive Officer

Yeah. So as far as kind of new carriers, the carriers are at kind of different levels along the way from an integration standpoint. But I would say still first or second quarter out of four, if you play that. Just, we've got a lot of technology. We're still investing in to get the right integrations, a lot of datasets we're capturing, we've not rolled them out to all of our sales floor and again, it takes time to get there. The early winds we're seeing from LTVs and conversion rates are really, really strong though. So we get excited about what kind of opportunity that can lead into in 2021 as we think about growth there.

And Travis you want to take the second one?

Travis Matthiesen - Chief Financial Officer

Yeah. So specifically to the impact of new carriers on LTVs, as we mentioned on our Q2 and Q3 earnings call, so adding a new carrier to the platform can, at times, create a short-term drag on LTVs depending on the override or the overall commission rate that we have with that carrier. Based off of the volume that we've done here in Q4, we mentioned 30% of our submissions were from new carriers we've onboarded.

We see that as an opportunity to LTV here in 2021 as we've moved up to higher tiers of contracts with our carriers. And obviously with new carriers we have less data on. So we've been conservative with our assumptions with the LTVs. But as we aggregate more and more data around these new carriers that also creates upside as we see more - more fulsome dataset around the persistency.

Clint P. Jones - Co-Founder and Chief Executive Officer

Yeah, Shane, you want to add to it?

Shane Cruz - Chief Operating Officer

Yeah, the only thing that I'd add to that is as you think about the power of our end-to-end marketplace, a lot of our investment this year is going into enhancing the decision support platform. And so as you think about new carriers in the platform, it's not just about helping somebody applying a plan, but there's been a proliferation of Medicare Advantage products that are available to the consumer.

So we're leveraging the data we have with our consumers, plan data, retention data to let our marketplace recommend not only the best plan for consumer to optimize their retention but even services the optimal supplemental benefits within these products helping people find the right doctors to meet their needs, the pharmacies to optimize their prescription costs and then other options - transportation benefits and other things. So all these things will plan to not only helping build the GoHealth brand as the trusted advisor, but also help improve our retention in LTVs over time.

Nathan Abraham - Morgan Stanley - Analyst

Great. Thank you.

Operator

Thank you. And our last question comes from Elizabeth Anderson with Evercore. Your line is now open.

Elizabeth Anderson - Evercore ISI - Analyst

Hi. Thanks so much for the question. I wanted to ask if there is anything to point out on the cash flow mix given the factors that you talked about during the year and the pace of collections that you guys have seen so far with your prior sales? Thanks.

Clint P. Jones - Co-Founder and Chief Executive Officer

Yeah. It's a great question. So as you think about cash here in 2021, clearly a pivot towards more commissions, more internal Medicare and more marketing and advertising is going to create more short-term cash burn as opposed to leveraging revenue share or external relationships, but because of the power of the commissions receivable balance we've built, we had $810 million, we have $202 million through both our current cash balance, as well as our seasonal revolver. So we're still in a really strong place to continue to drive this growth. But just based off of the mix of where this growth is coming from in the investments, there will be some more cash burn here in 2021 originally contemplated.

Elizabeth Anderson - Evercore ISI - Analyst

Got it. Thanks so much.

Clint P. Jones - Co-Founder and Chief Executive Officer

Okay. Thank you all for the interest and continued support of GoHealth. I wanted to take the time to thank all of our employees and partners who have helped make 2020 a record year for us. Couldn't be more excited about what the future holds and the opportunity in front of us. We will remain focused on delivering high-quality results and find ways to continue to innovate with our carrier partners. So we look forward to speaking to you and giving you more updates as we get further into 2021. Thanks again and have a great week.

Jay Koval - GoHealth, Inc.Vice President of Investor Relations

Thanks everybody. Let us know if you have any additional questions.

Operator

AI Assistant

GOHEALTH INC

Q4 2020

Earnings Transcript

Find Answers

Ask about any part of the document to get insights, explanations, or key details.