GoHealth Inc. reported a challenging third quarter as the company navigates a transformed Medicare Advantage environment, with net revenues declining to $34.2 million from $118.3 million a year earlier. This significant revenue contraction reflects an intentional reduction in Medicare Advantage volume, decreased non-agency activity, and broader industry shifts toward margin integrity and renewal stability. The results underscore the substantial challenges facing health insurance marketplaces and the strategic adjustments required for sustainable operations.
Both Medicare agency and non-agency revenues experienced meaningful year-over-year declines, while other revenue streams showed growth as GoHealth Protect and related offerings continued to scale and diversify the company's revenue base. The financial results were further impacted by significant non-cash impairment charges that affected reported margins, even as management focused on preserving liquidity, platform efficiency, and maintaining a high-quality member base. As 2025 progresses, company leadership remains committed to retention, quality, and disciplined execution through the current Annual Enrollment Period, with plans to re-accelerate growth when market conditions stabilize.
During the quarter, GoHealth advanced its strategic and capital initiatives, building on the super priority term loan facility established earlier in the year. The senior secured super priority term loan, including $80.0 million of new capital, continues to support working capital needs and enhance strategic flexibility while maintaining compliance with debt covenants and providing capacity for future consolidation. The company also refreshed its Board of Directors and continues to evaluate integration opportunities across the fragmented broker landscape. Stonegate Capital Partners provides detailed analysis of these developments through their research coverage available at https://www.stonegateinc.com.
Sales metrics revealed substantial changes, with sales per submission declining 34.3% year-over-year to $461, reflecting both the deliberate volume reduction and evolving revenue mix. Agency revenue decreased by 71.5% while non-agency revenue declined by 96.5% compared to the previous year. The growth in other revenue categories, supported by continued momentum in GoHealth Protect, indicates the company's successful efforts to diversify revenue beyond traditional commission streams. The Sales/Direct Operating Cost of Submission ratio decreased to 0.6x from 1.1x as lower scale and mix shifts affected operational leverage.
The company encountered additional challenges in customer acquisition costs, with average CAC increasing 14.0% year-over-year to $716. While near-term margins remain compressed due to the intentional volume pullback and higher quarterly unit costs, management maintains a disciplined approach to acquisition efficiency, focusing on agent productivity, enhanced training, and data-driven marketing strategies. Stonegate Capital Partners' valuation analysis employs a combined historical FY24 EBITDA blended with expected FY27 EBITDA, normalizing to a medium-term EBITDA of approximately $85.0 million, resulting in a valuation range of $7.46 to $14.32 with a midpoint of $10.89.
