eHealth Inc. reported its fourth‑quarter and full‑year 2025 results on February 25, 2026, showing revenue of $326.2 million—$10 million above the consensus estimate of roughly $316 million—while earnings per share fell short of expectations, with GAAP EPS of $2.06 versus an estimate of $2.38 and non‑GAAP EPS of $2.17 versus an estimate of $2.51. The revenue beat was driven by a 4% year‑over‑year increase, largely supported by growth in the Medicare segment, which continued to outperform other business lines.
The Medicare unit economics improved, with the LTV‑to‑CAC ratio rising to 2.2× from 2.0×, reflecting stronger customer acquisition efficiency and higher persistence. Revenue growth in Medicare was offset by modest gains in other segments, but the overall mix shift toward higher‑margin direct branded channels helped lift top‑line performance.
The EPS miss was largely attributable to a higher effective tax rate in the quarter, which compressed net income margins. While total revenue rose, the increase in tax expense reduced the bottom line, and GAAP net income margin fell to 27% from 31% in the prior year. Cost control measures were insufficient to offset the tax impact, leading to the earnings shortfall relative to consensus.
Adjusted EBITDA expanded to 41% of revenue in Q4, up from 38% in Q4 2024, driven by the higher margin mix and disciplined operating expenses. GAAP net income of $97.5 million in Q4 2024 was surpassed by $97.5 million in Q4 2025, but the margin compression indicates pressure on profitability from the tax environment and ongoing investments in growth initiatives.
For fiscal 2026, eHealth guided revenue of $405 million to $445 million, GAAP net income of $8 million to $25 million, and adjusted EBITDA of $55 million to $75 million—down from the prior year’s guidance. The company emphasized a focus on cash flow and margin preservation, signaling caution amid a challenging Medicare Advantage market and a strategic shift toward higher‑margin direct channels.
Market reaction was mixed: initial enthusiasm stemmed from the revenue beat and improved Medicare unit economics, while later concerns about the EPS miss and the more conservative 2026 outlook tempered sentiment. Investors weighed the company’s operational gains against the headwinds of a restructuring Medicare market and higher tax costs, leading to a nuanced view of the company’s near‑term prospects.
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