Edited Transcript of HIIQ earnings conference call or presentation 7-May-20 1:00pm GMT

Gavin D. Southwell, Benefytt Technologies, Inc. – President, CEO & Director [3]

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Thank you, Mike, and good morning everyone and thank you for joining the call. Compared to most industries which is significantly impacted by the current environment, our markets continue to grow and our technology driven model means we are well positioned for growth as we help consumers connect with Medicare under the health and life insurance products, something that is now more important than ever, in a safe and easy manner via e-commerce or on the telephone with a licensed agent.

We are working remotely having successfully executed the move of our entire workforce, including all captive and outsourced agents through a safe and effective work-at-home environment. Building upon our initial Medicare success in 2019, 2020 is a year where we expect to rapidly scale the Medicare business. We made good progress on that in the first quarter and positioned for the 2021 annual enrollment period later this year –Annual Election Period. The Medicare market continues to have significant growth potential, and we are seeing evolving tailwind in the IFP market also.

Before discussing the results for the quarter, let me comment on the ongoing strategic review process. As we had 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 in discussion with interested parties, including both strategic and financial institutions. This review continues and remains open-ended in both duration and potential outcome.

Turning to our first quarter financial results, we outperformed our revenue expectation whilst our earnings were slightly below expectations with EBITDA margin impacted by approximately $3.5 million due to accounting adjustments related to prior period lifetime value or LTV. Excluding this impact, adjusted EBITDA would have been largely in line of our expectation.

In Medicare, our business has two parts, demand generation and demand conversion. Demand generation was impacted in March as we saw the cost associated with the new enrollment increasing and this impacted margins, although (inaudible) this has shown an improvement as we have developed and rolled out, we created to further drives demand generation.

Demand conversion or enrollment was impacted mainly by challenges in our BPO or outsource agent relationship, resulting in an underperformance in the period whilst our captive agent continued to scale up and grow as planned. We cannot compare performance to the first quarter of last year as we were not operating in the Medicare market this time last year. However, as a reference, together [housed], the Medicare business that we purchased in mid-2019 generated approximately $8 million of revenue in its first quarter 2019. So, we are now about 3x larger or 250% at the same point in 2020.

As we have said in the past, 2020 is the year where we expect to rapidly scale the Medicare business in order to be in a strong position from the 2020 on AEP period later this year. And we made good progress on that in the first quarter despite some of the challenges we were presented with and have since overcome, which I will describe in more detail later in these remarks.

In IFP, the main positive impact was in March where IFP was significantly ahead of plan with the disruption caused by the pandemic to the economy creating significant demand in the IFP market. And that continued through April, which was also significantly ahead of plan. We are tracking this closely and will update our forecast at the end of Q2 once this emerging opportunity becomes more developed. We continue to add new insurance carriers for IFP without any delay and expect to add several new well-known brands to our platform throughout 2020. To remind everyone, our IFP business is focused on e-commerce with online enrollments making up most of the business. Our CFO will provide greater detail on the financial results later in the call.

I now want to talk about our demand generation or consumer engagement practice. In the first quarter, we added a new Chief Marketing Officer who joined us after 15 years at AARP, with extensive experience in marketing for seniors across all channels. We are executing on our plan to build out a comprehensive demand generation platform.

A large part of our future Medicare demand generation strategy involves digital marketing, and we are pleased with our progress having already submitted online marketing materials to our carrier partners for review and approval, well in advance of the annual election period. We launched our digital enrollment [field] in March and this is the first opportunity we have had to develop new enhanced marketing materials for our digital channel.

This is an important step in our evolution and up until now, as planned, we have relied almost entirely on direct response TV to create consumer engagement. Our Medicare revenue success in the first quarter shows the direct response TV is a great foundation for our business and we will build on this strong foundation with a comprehensive and diversified multi-channel consumer engagement and demand generation model, which we will roll out through the year in coordination with our partner provider offer.

As we ramp up and expand our direct to consumer channel, we are building data analytics which will allow us to better develop targeted in decision making. Throughout the second and third quarters, we will launch new campaigns via paid digital search and other programs that will allow us to scale successful campaign as we head into the important fourth quarter.

Another important part of our demand generation or consumer engagement platform that we are building is our partnership counter which we created in late 2019 having a senior leader with extensive experience of building strategic relationship with large hospitals and other [utility] groups and a proven track record of success. This channel has the potential to be a substantial driver of new business and we are making great progress so far in 2020 in this becoming revenue generating for later in the year. While production from this channel can take some time to develop, the advantage to this channel is that a small number of strategic partnerships can provide a substantial amount of revenue and earnings when they are realized.

Turning the eCommerce, the launch of healthinsurance.com in March was a transformational moment for this business and we are pleased with our progress. This has the potential to become a significant growth driver within our Medicare segment. And looking ahead to the fourth quarter, we expect digital demand generation to become an even more important channel as our market evolve and [seniors] wish to engaged and enroll in a safe and easy manner.

It is important to note that we are only aware of one other publicly traded business which had the powerful online enrollment capability, and digital is becoming a more important part of consumer engagement. In the second quarter, we will continue to invest in refining and adjusting our SEO and user experience as well as finalize our paid digital marketing campaign strategy for the upcoming AEP. This investment in the second quarter will help us get an enhanced return on our pay-per-click digital marketing spend as we progress through the year.

Since the launch of our digital enrollments here in March, as we continue to build our e-Commerce digital marketing plan with a focus on the fourth quarter, we expect to generate a large amount of consumer demand which will convert to enrollment either by fully self-guided online enrollment or supported telephonically by our captive agents. And we look forward to updating investors at the end of Q2.

Turning now to our captive agents, our captive agents have responded well moving to a work-at-home model and we completed the move of all internal and outsourced agents over a few days in mid March. We have experienced operating work-at-home scenes having done this for several years in IFP. All of our training and on-boarding material work well in a work-at-home model and we have continued to add new agents including in the last month. We have implemented enhanced reporting capabilities and metrics to track performance of captive agents, most of whom are new. And so, as these agents becomes seasoned, we anticipate to benefit from increased performance over time.

Our model with telephonic sales or with our captive agent compared to some competitors who work face to face with consumer and the powerful technology available to those agents makes us an attractive choice in a competitive market to attract the best talent. As we finalize our growth plans in the fourth quarter — in the second quarter, there is an emerging opportunity for additional growth of captive agents although it is still early to see the potential shift in our market.

Now, our BPO, our outsourced relationships. In the first quarter we expanded BPO relationship in keeping with our plan to ramp agent count as we head towards the fourth quarter AEP. Although we were encouraged by our revenue production results, which were in line with guidance, we were not satisfied with operating performance of certain BPO providers which had a negative impact on our Medicare results. We proactively took action to scale down one relationship and have made changes to the other and announced seeing an improved performance.

For our first quarter, we worked closely with the outsource providers to increase the timeliness and accuracy of reporting they were providing to us, and in Q2 we’re in a much stronger position backed by enhanced contract with performance obligations. We expect outsource BPO agents to be comfortable going forward as a result of the operating improvement and data analytics we put in place.

Having progressed over the next several months in the lead up to AEP, we will continue to assess performance and adjust our mix of BPO and captive agents in a manner that enables us to achieve the greatest value.

In summary, our first quarter results show a strong revenue performance despite disruption to the global economy. The Medicare market remains a growing and attractive market, and we see the potential for accelerated growth throughout the rest of 2020. Our model is in a position of strength as our market evolves. Our digital and telephonic model suits the work-at-home model well and our consumer engagement platform are expanding. We continue to build and continue to learn where we can improve.

The key initiative was to enhance our key data reporting analysis tools to better optimize our investments in consumer engagements in the first and second quarters, and we’ve also worked hard with our outsourced BPO partners to get more detailed and more timely reporting, having had challenges throughout the first part of the year. We identified the performance issues and we’ve taken action to resolve it. We will make investments in the second quarter as we continue to build towards the important fourth quarter, and we are enhancing our model to the potential tailwind we see in our market.

And now, I will hand the call over to our CFO, Erik Helding, who will review our first quarter financial results in more detail.

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Erik Magnus Helding, Benefytt Technologies, Inc. – CFO, Treasurer & Secretary [4]

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Thanks, Gavin, and good morning, everyone. Total recorded revenues were strong with significant outperformance in IFP, particularly in March when we improved from acceleration of sales activity. Medicare revenues were in line with guidance. Both segments recorded revenue adjustments related to policies sold in prior period. The IFP segment revenue was impacted in the amount of $2.9 million related to slightly lower persistency and policy cohorts from the fourth quarter of 2018.

Medicare segment revenue was impacted in the amount of $1.9 million related to reconciliation work completed for our first annual election period. That reconciliation was reflected that we had slightly less need of Medicare policy than previously expected. As a reminder, commissions paid on policies that are new to Medicare are significantly higher than what was paid on Medicare policies that are simply [switch and drop]. Important to note that the $1.9 million impact represented less than 3% of 2019 growth.

Excluding the impact on the change in estimate relating to policies sold in prior period, Medicare revenues would have exceeded the top end of the guidance range. Again, this is very encouraging that together how it generated only $8 million of revenue in the first quarter of last year and nearly a 250% increase year-over-year.

We reported a net loss of $50 million in the quarter, driven primarily by a $41 million pre-tax reduction in goodwill associated with the IFP business. The reduction in goodwill was a result of the company taking action in the first quarter of 2020 to execute on its stated objective to de-emphasize the IFP business in order to focus attention on resources on growing the Medicare.

Important to note that the analysis of goodwill through the quantitative GAAP prescribed practice and for which there is little ability to make qualitative assessment, while the write-down eliminates the vast majority of the goodwill related to the IFP business, we believe that our IFP business will continue to create value for shareholders over time. And perhaps most importantly to note, the goodwill reduction is a non-cash items has no impact to ongoing operations and had no impact on our debt covenant.

We reported $900,000 of adjusted EBITDA in the quarter, which was slightly below our expectation. EBITDA margin were negatively impacted by approximately $3.5 million from the previously mentioned adjustments related to prior period. Excluding these impacts, adjusted EBITDA would have been $4.4 million in the quarter, which was largely in line with our expectation. We saw higher EBITDA in our IFP segment with outperformance in revenue, but this was offset by lower margins in our Medicare segment.

As Gavin mentioned, in our Medicare — in Medicare our revenue hit guidance but earnings were below expectation. We saw higher cost per call as a result of a lower response rate through our direct TV ad at the height of the pandemic outbreak, which contributed approximately a $1.5 million negative parity in the quarter. In addition, as we were executing on our plan to rapidly scale and diversify our BPO relationship, our partners experienced some challenges that started taking longer than planned and this also had an approximate $1.5 million regulatory variance as well.

So in total, the estimated impact of Medicare EBITDA as a result of the description noted above was approximately $3 million in the quarter. These issues have since been addressed as we have modified ad spend, developed new creatives specifically tailored to address COVID-19 impact and have taken actions to address the mix of agents, both in our BPO relationship and our captives.

We ended the quarter with approximately $5 million in cash, up slightly from the previous quarter. We were expecting cash flow to be approximately breakeven for the quarter after giving consideration to approximately $15 million of payments related to regeneration activity in Medicare from the fourth quarter Annual Election Period. However, cash flows from operations ended up in the negative by approximately $12 million in the quarter. The main drivers of the variance was approximately $9 million of lower IFP cash flows, primarily as a result of [condition] advances related to the significantly higher sales than expected.

As a reminder, for most producers we did not stop commission advance until March 1st and for our e-commerce enable producers, continue to make advances. As we progressed in the quarter and events related to the COVID-19 outbreak unfolded, we saw an acceleration of IFP sales in the month of March. Also during the quarter, we continue to work diligently to address certain legacy issues and this led to approximately $30 million of higher legal and professional service spend anticipated. So while we spent more money in the quarter than we expected, we believe that was money well spent to generate growth and reduce risks.

As previously disclosed, we expected to generate approximately $18 million of positive cash flow from tax refund throughout the year. As a result of the passage of the CARES Act, we now expect that number to be approximately $24 million as a result of being able to carry back [in our loan]. That said,, because we were dependent on the $24 million of tax refunds to fund growth in 2020 and there is some level of uncertainty related to the timing, but not the ultimate receipt of those refunds, we decided to draw the remaining $15 million of our revolving credit facility down to $3 million, in order to keep investing in our growth.

And with that, I’ll turn it back over to Gavin.

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Gavin D. Southwell, Benefytt Technologies, Inc. – President, CEO & Director [5]

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Thank you, Erik. As we wrap up our prepared remarks before moving on to Q&A, some key takeaways are, the first quarter ended with an unprecedented period of disruption which has impacted all of our lives with challenges that have continued until today. Compared to most industries which are significantly impacted by the current environment, our markets continue to grow and our technology driven model means we are well positioned to continue to grow as we help consumers connect with Medicare and other health and life insurance products And make that now more important than ever in a safe and easy manner, either digitally via e-Commerce or on the telephone with the licensed agent. Building upon our initial Medicare success in 2019, 2020 is a year where we expected to scale the Medicare business in order to be in a strong position for the 2021 AEP period later this year and we made good progress on that in the first quarter.

So with that, we will now open the line for Q&A. Operator?

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Questions and Answers

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Operator [1]

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Thank you. (Operator Instructions). We’ll take our first question from Randy Binner with B. Riley.

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Randolph Binner, B. Riley FBR, Inc., Research Division – Analyst [2]

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Even though you addressed this somewhat in the opening remarks, I’m still struggling a little bit what the right level of marketing and advertising spend is kind of through the middle part of the year, understanding it’s going to ramp again fourth quarter, but can we just dig a little bit deeper and kind of help us size the right level for that in the model for this second and third quarter this year?

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Erik Magnus Helding, Benefytt Technologies, Inc. – CFO, Treasurer & Secretary [3]

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Yes, Randy, this is Erik. I think the marketing with — for Medicare spend was roughly on the Medicare past $15 million in the first quarter. We did have some sort of carryover marketing for IFP which is about $3 million, $3.5 million. That should reduce here over the first, second and be a much smaller number.

So I think in general, second quarter [spend] should be in the $15-ish million range and it should be something similar, maybe a little bit higher in the third quarter and then significantly higher in the fourth quarter, for obvious reasons, that’s [the ad] for me. So, that’s how we’re looking at it.

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Randolph Binner, B. Riley FBR, Inc., Research Division – Analyst [4]

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Okay. And then on legal, you said it was $3 million higher, that line item legal indemnity was $7 million in the quarter. So is there kind of a run rate legal cost that we should be modeling, we were not — we have not been modeling that high a number but is that going to run in kind of $3 million or $4 million?

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Erik Magnus Helding, Benefytt Technologies, Inc. – CFO, Treasurer & Secretary [5]

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Yes, Randy. It’s a good point. We definitely front-loaded a lot of our legal spend here in the first quarter. And so, there was a lot of work that happened in the tail end of the fourth quarter and into — a lot in the first quarter. So I don’t expect that line to be roughly $7 million going forward, it should be roughly half of that.

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Randolph Binner, B. Riley FBR, Inc., Research Division – Analyst [6]

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Okay. And just one more if I can. Just the free — so IFP revenues are higher and I sense those stay higher, there is some cash flow drag I guess in this quarter from advances. But generally speaking, I think that, that has been a more cash flow positive business than Medicare. So if IFP sales continue to grow like this, you’re well ahead of your pace for your guide. Would that kind of cash flow positive over the course of the year? How would that work?

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Erik Magnus Helding, Benefytt Technologies, Inc. – CFO, Treasurer & Secretary [7]

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Yes, Randy, the short answer is it depends upon the manner in which we move forward in IFP and a big piece of that is watching kind of how events unfold here in the second quarter and how we choose to respond. And so, in my remarks I made note that we really didn’t shut down the bulk of our advances until March 1st. And in March, we continue to advance with a couple of producers that had very big month. And so, that is a big part of the drag on cash flow. So we continue to advance on this program. So the question then is what do we do about advances if we want to take advantage of an opportunity there in the IFP space.

So it’s too early to answer that question. We’re working on it. Obviously, we’re looking at it and we’ll have a better beat on that — handle on that when we get our second quarter results.

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Operator [8]

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And we’ll move on to our next question from Mark Argento with Lake Street Capital Markets.

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Mark Nicholas Argento, Lake Street Capital Markets, LLC, Research Division – Senior Research Analyst, Founding Partner & Head of Institutional Equities [9]

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Gavin, Eric, just a couple of quick ones. I don’t know if you mentioned it, but the IFP strength you saw in March, has that carried through in April? And I’m guessing that just applies to the volatility, employment and people looking for alternatives on the short-term medical side. And then just quickly on distribution, I know you talked about kind of captive, BPO, the captive call centers. Could you just refresh us, what your distribution footprint looks like right now in terms of in-house third party Medicare versus IFP?

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Gavin D. Southwell, Benefytt Technologies, Inc. – President, CEO & Director [10]

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So great question. And so, the — first of all, on the IFP, it’s an evolving situation. We did see IFP continue to be significantly ahead at the start of Q2. It didn’t change our overall strategy. We remained focused on rapidly growing out the Medicare fees. But we will capitalize on the — this emerging opportunity in IFP. IFP is really built on e-commerce. So it’s a very scalable without us having to build anything here. It’s already in place.

And then to the second part of your question, kind of captive and BPO, we said in the prior quarter about adding additional BPO partners, the first quarter is the perfect time to do that. We identified areas of improvement and we took proactive action. And we’re on track with our captive build. We’ve added agents this month. Our training materials work well to keep adding agents in our work-at-home environment, but we also — we now have 3 locations with our basically our technology, So we’re also looking forward to welcome an agent back when able. Erik?

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Erik Magnus Helding, Benefytt Technologies, Inc. – CFO, Treasurer & Secretary [11]

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Mark, this is Erik, just a couple of thoughts on specifically on the IFP, that is worth noting. So remember that we didn’t shut off the advances on a broad basis until March 1st and so we had essentially all of our distribution in place for the first 2 months of the first quarter. After we shut off advances for most of those, a significant portion if not — it wasn’t all of them but a significant portion of them have stopped producing.

And then Q2 is — we had our first quarter, tends to be seasonally strong annually, so I think it’s important for you and everyone [else to understand, so we still expect IFP in the second quarter to be down year-over-year, but it’s also likely even with the strength that it’s going to be down sequentially during the first quarter as well.

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Operator [12]

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And our next question comes from Mike Grondahl with Northland Securities.

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Michael John Grondahl, Northland Capital Markets, Research Division – Head of Equity Research & Senior Research Analyst [13]

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Yes. Maybe specifically, how many captive brokers do you have at the end of this quarter? And how many are planned for 4Q open enrollment?

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Erik Magnus Helding, Benefytt Technologies, Inc. – CFO, Treasurer & Secretary [14]

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Yes, Mike, this is Erik. So at the end of the first quarter, we had our Tampa captive, I believe, they had another one in Texas and then we had our South Florida captive that was just getting started. And so, I believe we actually just started seeding agent here in the last week or 2 and they’re now on the phone. So at the moment, that’s our plan, is to have 3 basically captive ready to go. And we’ve got a lot of space in those locations to basically keep agents, so by the time we [get to more agents] So we got the three captive slots, with the seats available we should have plenty of agents for [seeding].

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Michael John Grondahl, Northland Capital Markets, Research Division – Head of Equity Research & Senior Research Analyst [15]

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Got it. And in terms of customer acquisition costs on the Medicare side, how do you handicap those in the quarter and how do you think about those going forward?

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Erik Magnus Helding, Benefytt Technologies, Inc. – CFO, Treasurer & Secretary [16]

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Yes, so that was — that customer acquisition cost per app, that’s where the lower response rate that we’ve experienced in the quarter really shows up. No, it’s not that we actually spent more money than we expected. It was just that the number of consumers that basically picked up a phone and enrolled in a Medicare Advantage Policy was bit lower because of the pandemic outbreak, and basically just the fear that ensued.

And if you think about whose buying, obviously, Medicare Advantage Policy, they’re enrolling. It’s people turning 55 and over. And so this is the most accurate portion of the population. So it was somewhat understandable that people were worried about other things and just not picking up the phone as mentioned. So, that’s really what drives the higher sort of unit cost there.

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Gavin D. Southwell, Benefytt Technologies, Inc. – President, CEO & Director [17]

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As we go through the year, direct response TV is a great foundation, so we are building out a comprehensive and diversified multi-channel consumer engagement and demand generation model, which we are rolling out through the year, which is always going to become a much bigger part. And we’ve submitted a lot of marketing material for approval with our [fund] partners, and what we — we’re rolling out this omnichannel approach as we go through the year.

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Erik Magnus Helding, Benefytt Technologies, Inc. – CFO, Treasurer & Secretary [18]

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I’d also add that we’re looking at our spend and our response rate at a pretty granular level pretty much on a daily basis. And so, we’re modifying and pivoting pretty quickly now based on what we’re seeing. And I mentioned this in our remarks as well, we’re modifying our spots as well. So we’ve been testing a couple of new ones that we just created and they’ve been testing pretty well. And we’re going to rolling this out here within the next week or so nationally.

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Michael John Grondahl, Northland Capital Markets, Research Division – Head of Equity Research & Senior Research Analyst [19]

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Got it. And then just lastly, can you repeat what you’ve said about sort of expected cash flow or usage for the year kind of on an overall basis?

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Erik Magnus Helding, Benefytt Technologies, Inc. – CFO, Treasurer & Secretary [20]

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Yes, I think my thoughts on cash flow, it’s not very different than it was when we — back in early March when we gave guidance on what we were expecting. Obviously, the first quarter came in little hot for some specific reasons. But I think the rest of the year should largely come in line with what we were expecting. I think the 2 things that I’m sort of looking at the hardest is, one is the timing of the tax refunds and again, there is no doubt about the $24 million and we’re going to collect that, the only question is — and that’s owed to us, there’s no doubt about it. The only question is when is it going to happen because IRS agent, just like a number of us — most of us also had to stay at home and a large percentage of them couldn’t work. And so there’s just a big backlog right now. So we’re just not really sure when we’re going to get our $24 million.

And the other item that we’re looking at really is kind of this IFP dynamic and what that’s going to look like through the second quarter, and if there is an opportunity to do more there, how do we sort of address advances.

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Operator [21]

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Our next question comes from Richard Close with Canaccord Genuity.

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Brian Evan Hoffman, Canaccord Genuity Corp., Research Division – Associate [22]

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This is Brian Hoffman on for Richard. Thanks for are all the detail that you guys provided, it’s been very helpful. If I could ask one more on the IFP guide as this slightly different. I’m curious why there was no change to the guidance given the strength that we saw in 1Q and continue to 2Q? And can we think about the guide this year as being conservative or perhaps you have a greater likelihood of achieving the high end?

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Gavin D. Southwell, Benefytt Technologies, Inc. – President, CEO & Director [23]

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It’s a great question and I think really it’s an evolving situation. So we certainly see tailwinds, so we’re — and we’re tracking it very closely. So it’s something that we think is really still emerging. I think — I reckon…

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Erik Magnus Helding, Benefytt Technologies, Inc. – CFO, Treasurer & Secretary [24]

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Yes. I mean really it is evolving, but there’s things beyond the second quarter that we also have to keep an eye on, right, and that’s what’s the outcome of the presidential election and what does that mean for the IFP space. That have in the past been a question, so we’ve got to be careful about that. And the other difficulty is what I just mentioned — the previous question is how do we go forward in IFP, given IFP looks very different now than it did 3 months ago? And what does that now look like in terms of advancing and distribution partner, something like that.

So those are just question marks that we’ve got to get through there over the quarter. I think we’ll have better line of sight on what 2020 looks like in total once we get second quarter earning.

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Brian Evan Hoffman, Canaccord Genuity Corp., Research Division – Associate [25]

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Great. And then one more on the Medicare business. It really looks like with respect to your BPO relationships, you scaled one down and made some changes to the other. If you could just give us a bit more color on what happened there, that’d be helpful.

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Gavin D. Southwell, Benefytt Technologies, Inc. – President, CEO & Director [26]

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I mean the plan of course is the — is stronger growth and expansion early in the year. Q1 is the perfect time to add new partners. And when we saw underperformance issues, we quickly took action. It’s the right time to take action, so scaling down one of the relationships, making improvements to the other. But generally, partners taking longer than anticipated to get set up and not being able to hit the targets expected, which is something that we had to respond for. It’s as simple as that.

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Operator [27]

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And we’ll take our final question from Steve Halper with Cantor Fitzgerald.

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Steven Paul Halper, Cantor Fitzgerald & Co., Research Division – Analyst [28]

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So in light of COVID and your work from home, have you sort of rethought your views on where the new captive agents that you plan to hire — do they have to be call center based or are there certain advantages just keeping them work from home? I’d love your thoughts on that.

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Gavin D. Southwell, Benefytt Technologies, Inc. – President, CEO & Director [29]

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Yes, it’s a really interesting point. I mean we’re adding a lot of new agents this year and previously it was probably one of 3 locations and now with a work at home model, we can obviously add agents from a much broader and bigger pool of people, which is an advantage. And we’re operating just fine in a work at home model. So, I think for a business where we are rapidly growing the number of agents, we do get benefit from agents becoming seasoned. And so, having people into our spaces and helping them seasoned and become more effective, we see an advantage of them being in that call center environment.

So I think there are a couple of pieces to it. I think it’s helpful to have a model available. I think that’s certainly helpful. But I think that overall, as we are growing quickly with these new agents, so they get seasoned and become as effective as possible. There are a lot of advantages to being able to put them into that environment with the support structure around them.

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Operator [30]

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And that concludes today’s Q&A session. I would like to turn the conference back over to Gavin Southwell for any concluding remarks.

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Gavin D. Southwell, Benefytt Technologies, Inc. – President, CEO & Director [31]

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Thank you. And thank you, everybody, for your interest in our business. We look forward to updating you on our progress as we go through the year. Everybody, stay safe, and have a great day.

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Operator [32]

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Again, ladies and gentlemen, that does conclude today’s conference. We appreciate your participation today.