eHealth, Inc. Announces Second Quarter 2020 Results

 

SANTA CLARA, Calif., July 23, 2020 /PRNewswire/ -- eHealth, Inc. (NASDAQ: EHTH), a leading private online health insurance marketplace, announces today its financial results for the second quarter ended June 30, 2020.

Scott Flanders, chief executive officer of eHealth stated, "eHealth delivered another quarter of strong revenue and Medicare enrollment growth. The number of second quarter Medicare approved members grew ahead of our expectations driven by favorable market dynamics, growth in online enrollments and an increase in agent productivity compared to a year ago.  Importantly, this enrollment growth was achieved while also reducing our total acquisition costs per approved Medicare member allowing us to once again exceed our internal forecast for revenue and earnings. Based on the strength of our business and reflecting the capital raise we completed in March, we are increasing our financial guidance for the full year ending 2020."

GAAP — Second Quarter of 2020 Results
Revenue — Revenue for the second quarter of 2020 totaled $88.8 million, a 35% increase compared to $65.8 million for the second quarter of 2019. Commission revenue for the second quarter of 2020 totaled $80.8 million, a 33% increase compared to $60.6 million for the second quarter of 2019. Other revenue for the second quarter of 2020 was $8.0 million, a 55% increase compared to $5.2 million for the second quarter of 2019.

Revenue from our Medicare segment was $80.4 million for the second quarter of 2020, a 54% increase compared to $52.3 million for the second quarter of 2019. Revenue from our Individual, Family and Small Business segment was $8.4 million for the second quarter of 2020, a 38% decrease compared to $13.5 million for the second quarter of 2019.

Loss from Operations — Loss from operations for the second quarter of 2020 was $6.3 million compared to loss from operations of $12.3 million for the second quarter of 2019.

Pre-Tax Loss — Pre-tax loss for the second quarter of 2020 was $5.8 million compared to pre-tax loss of $11.6 million for the second quarter of 2019.

Benefit from Income Taxes — Benefit from income taxes for the second quarter of 2020 was $2.4 million compared to $5.9 million for the second quarter of 2019.

Net Loss — Net loss for the second quarter of 2020 was $3.4 million, or $0.13 net loss per diluted share, compared to net loss of $5.8 million, or $0.25 net loss per diluted share, for the second quarter of 2019.

Segment Profit — Medicare segment profit was $13.4 million for the second quarter of 2020, a 120% increase compared to $6.1 million for the second quarter of 2019. Profit from our Individual, Family and Small Business segment was $2.6 million for the second quarter of 2020, a 51% decrease compared to $5.3 million for the second quarter of 2019.

Non-GAAP — Second Quarter of 2020 Results

Non-GAAP Net Income — Non-GAAP net income for the second quarter of 2020 was $1.7 million, or $0.07 non-GAAP net income per diluted share, compared to non-GAAP net income of $2.3 million, or $0.10 non-GAAP net income per diluted share, for the second quarter of 2019.

Non-GAAP net income and non-GAAP net income per diluted share for the second quarter of 2020 are calculated by excluding $6.7 million of stock-based compensation expense, $0.4 million of amortization of intangible assets and $1.9 million of the income tax effect of these non-GAAP adjustments from GAAP net loss and GAAP net loss per diluted share.

Non-GAAP net income and non-GAAP net income per diluted share for the second quarter of 2019 are calculated by excluding $4.7 million of stock-based compensation expense, $7.2 million of expense for the change in fair value of earnout liability related to our acquisition of GoMedigap, $0.5 million of amortization of intangible assets, and $4.4 million of the income tax effect of these non-GAAP adjustments from GAAP net loss and GAAP net loss per diluted share.

Adjusted EBITDA — Adjusted EBITDA was $1.7 million for the second quarter of 2020 compared to $0.8 million for the second quarter of 2019. Adjusted EBITDA is calculated by adding stock-based compensation expense, change in fair value of earnout liability related to our acquisition of GoMedigap, depreciation and amortization, amortization of intangible assets, other income, net, and benefit from income taxes to GAAP net loss.

Approved Members, New Paying Members and Estimated Membership

Approved Members — The number of approved members for all Medicare products, which includes Medicare Advantage, Medicare Supplement and Medicare Part D Prescription Drug Plans, was 76,874 in the second quarter of 2020, a 46% increase compared to 52,569 in the second quarter of 2019. The number of approved members for major medical individual and family plan products was 5,310 in the second quarter of 2020, an 86% increase compared to 2,854 in the second quarter of 2019.

New Paying Members — The number of new paying members for all Medicare products was 72,651 in the second quarter of 2020, a 40% increase compared to 51,730 in the second quarter of 2019. The number of new paying members for major medical individual and family plan products was 6,912, a 116% increase compared to 3,196 in the second quarter of 2019. New paying members consist of approved members from the period presented and any periods prior to the period presented from whom we have received an initial commission payment during the period presented.

Estimated Membership — Total estimated membership as of June 30, 2020 was 1,117,423, a 15% increase compared to 967,697 estimated members we reported as of June 30, 2019. Estimated Medicare membership as of June 30, 2020 was 716,030, a 37% increase compared to 521,262 estimated members reported as of June 30, 2019. Estimated major medical individual and family plan membership as of June 30, 2020 was 115,832, a 13% decrease compared to 133,543 estimated members reported as of June 30, 2019.

Cash — Second Quarter of 2020

Cash Flows — Net cash used in operating activities was $21.3 million for the second quarter of 2020, compared to net cash used in operating activities of $11.5 million for the second quarter of 2019.

GAAP — Year-to-Date Results

Revenue — Revenue for the six months ended June 30, 2020 totaled $195.2 million, a 45% increase compared to $134.5 million for the six months ended June 30, 2019. Commission revenue for the six months ended June 30, 2020 totaled $180.4 million, a 45% increase compared to $124.8 million for the six months ended June 30, 2019. Other revenue for the six months ended June 30, 2020 was $14.7 million, a 52% increase compared to $9.7 million for the six months ended June 30, 2019.

Revenue from our Medicare segment was $176.5 million for the six months ended June 30, 2020, a 65% increase compared to $107.2 million for the six months ended June 30, 2019. Revenue from our Individual, Family and Small Business segment was $18.6 million for the six months ended June 30, 2020, a 32% decrease compared to $27.4 million for the six months ended June 30, 2019.

Loss from Operations — Loss from operations for the six months ended June 30, 2020 was $5.2 million compared to loss from operations of $21.5 million for the six months ended June 30, 2019.

Pre-Tax Loss — Pre-tax loss for the six months ended June 30, 2020 was $4.4 million compared to pre-tax loss of $20.2 million for the six months ended June 30, 2019.

Benefit from Income Taxes — Benefit from income taxes for the six months ended June 30, 2020 was $4.5 million compared to $9.3 million for the six months ended June 30, 2019.

Net Income (Loss) — Net income for the six months ended June 30, 2020 was $0.1 million, or $0.00 net income per diluted share, compared to net loss of $10.9 million, or $0.48 net loss per diluted share, for the six months ended June 30, 2019.

Segment Profit — Medicare segment profit was $35.4 million for the six months ended June 30, 2020, a 109% increase compared to $16.9 million for the six months ended June 30, 2019. Profit from our Individual, Family and Small Business segment was $5.2 million for the six months ended June 30, 2020, a 54% decrease, compared to $11.3 million for the six months ended June 30, 2019.

Non-GAAP — Year-to-Date Results

Non-GAAP Net Income — Non-GAAP net income for the six months ended June 30, 2020 was $12.1 million, or $0.45 non-GAAP net income per diluted share, compared to non-GAAP net income of $9.5 million, or $0.42 non-GAAP net income per diluted share, for the six months ended June 30, 2019.

Non-GAAP net income and non-GAAP net income per diluted share for the six months ended June 30, 2020 are calculated by excluding $15.4 million of stock-based compensation expense, $0.9 million of amortization of intangible assets and $4.3 million of the income tax effect of these non-GAAP adjustments from GAAP net income and GAAP net income per diluted share.

Non-GAAP net income and non-GAAP net income per diluted share for the six months ended June 30, 2019 are calculated by excluding $7.9 million of stock-based compensation expense, $20.5 million of expense for the change in fair value of earnout liability related to our acquisition of GoMedigap, $1.1 million of amortization of intangible assets, and $9.1 million of the income tax effect of these non-GAAP adjustments from GAAP net loss and GAAP net loss per diluted share.

Adjusted EBITDA — Adjusted EBITDA was $12.8 million for the six months ended June 30, 2020 compared to $9.4 million for the six months ended June 30, 2019. Adjusted EBITDA is calculated by adding stock-based compensation expense, change in fair value of earnout liability related to our acquisition of GoMedigap, depreciation and amortization, amortization of intangible assets, other income, net, and benefit from income taxes to GAAP net income (loss).

Approved Members and New Paying Members

Approved Members — The number of approved members for all Medicare products, which includes Medicare Advantage, Medicare Supplement and Medicare Part D Prescription Drug Plans, was 161,576 in the six months ended June 30, 2020, a 46% increase compared to 110,468 in the six months ended June 30, 2019. The number of approved members for major medical individual and family plan products was 14,675 in the six months ended June 30, 2020, a 2% increase compared to 14,452 in the six months ended June 30, 2019.

New Paying Members — The number of new paying members for all Medicare products was 234,215 in the six months ended June 30, 2020, a 54% increase compared to 151,843 in the six months ended June 30, 2019. The number of new paying members for major medical individual and family plan products was 22,422 in the six months ended June 30, 2020, a 9% decrease compared to 24,598 in the six months ended June 30, 2019. New paying members consist of approved members from the period presented and any periods prior to the period presented from whom we have received an initial commission payment during the period presented.

Cash — Year-to-Date Results

Cash Flows — Net cash used in operating activities was $12.4 million for the six months ended June 30, 2020, compared to net cash provided by operating activities of $1.2 million for the six months ended June 30, 2019.

2020 Guidance

Based on information available as of July 23, 2020, eHealth is updating its guidance for the full year ending December 31, 2020 previously provided on April 23, 2020. These expectations are forward-looking statements and eHealth assumes no obligation to update these statements. Actual results may be materially different and are affected by the risk factors and uncertainties identified in this press release and in eHealth's annual and quarterly filings with the Securities and Exchange Commission.

The following is the updated guidance for the full year ending December 31, 2020:

• Total revenue is expected to be in the range of $630.0 million to $670.0 million, compared to the previous guidance of $600.0 million to $640.0 million. Revenue from the Medicare segment is expected to be in the range of $583.0 million to $619.0 million, compared to the previous guidance of $553.0 million to $589.0 million. Revenue from the Individual, Family and Small Business segment is expected to be in the range of $47.0 million to $51.0 million, consistent with the previous guidance.
• GAAP net income is expected to be in the range of $79.0 million to $94.0 million, compared to the previous guidance of $70.0 million to $85.0 million.
• Adjusted EBITDA(a) is expected to be in the range of $140.0 million to $155.0 million, compared to the previous guidance of $125.0 million to $140.0 million.
• Medicare segment profit(b) is expected to be in the range of $176.0 million to $193.0 million, compared to the previous guidance of $157.0 million to $174.0 million. Individual, Family and Small Business segment profit is expected to be in the range of $17.0 million to $18.0 million, consistent with the previous guidance.
• Corporate(c) shared service expenses, excluding stock-based compensation and depreciation and amortization, is expected to be in the range of $53.0 million to $56.0 million, compared to the previous guidance of $49.0 million to $52.0 million.
• Cash used in operations is expected to be in the range of $85.0 million to $95.0 million, compared to the previous guidance of $61.0 million to $64.0 million, and cash used for capital expenditures is expected to be in the range of $23.0 million to $25.0 million, compared to the previous guidance of $18.0 million to $20.0 million.
• GAAP net income per diluted share is expected to be in the range of $2.91 to $3.47, compared to the previous guidance of $2.55 to $3.10 per share.
• Non-GAAP net income per diluted share(d) is expected to be in the range of $3.83 to $4.32, compared to the previous guidance of $3.41 to $3.90 per share.

Webcast and Conference Call Information

A Webcast and conference call will be held today, Thursday, July 23, 2020 at 5:00 p.m. Eastern / 2:00 p.m. Pacific Time. The live Webcast and supporting presentation slides will be available on the Investor Relations section of eHealth's website at http://ir.ehealthinsurance.com. Individuals interested in listening to the conference call may do so by dialing (877) 930-8066 for domestic callers and (253) 336-8042 for international callers. The participant passcode is 7129788. A telephone replay will be available two hours following the conclusion of the call for a period of seven days and can be accessed by dialing (855) 859-2056 for domestic callers and (404) 537-3406 for international callers. The call ID for the replay is 7129788. The live and archived webcast of the call will also be available on eHealth's website at http://www.ehealthinsurance.com under the Investor Relations section.

About eHealth, Inc. 

eHealth, Inc. (NASDAQ: EHTH) operates a leading health insurance marketplace at eHealth.com and eHealthMedicare.com with a technology and service platform that provides consumer engagement, education and health insurance enrollment solutions. Our mission is to connect every person with the highest quality, most affordable health insurance and Medicare plans for their life circumstances. Our platform integrates proprietary and third-party developed educational content regarding health insurance plans with decision support tools to aid consumers in what has traditionally been a confusing and opaque health insurance purchasing process, and to help them obtain the health insurance products that meet their individual health and economic needs. Our omni-channel consumer engagement platform is designed to meet the consumer wherever they prefer to engage with us, and enables consumers to use our services online, through interactive chat, or by telephone with a licensed insurance agent. We have created a marketplace that offers consumers a broad choice of insurance products that include thousands of Medicare Advantage, Medicare Supplement, Medicare Part D prescription drug, individual and family, small business and other ancillary health insurance products from over 180 health insurance carriers across all fifty states and the District of Columbia.

Forward-Looking Statements

This press release contains statements that are forward-looking statements as defined within the Private Securities Litigation Reform Act of 1995. These include statements regarding our expected growth in 2020, our estimates regarding total membership, Medicare membership, Individual and Family plan membership and ancillary and small business membership, our estimates regarding constrained lifetime values of commissions per member and constraints on lifetime value by product category, our plans to invest in our Medicare business, and our guidance for the full year ending December 31, 2020, including our guidance for total revenue and revenue from our Medicare segment and our Individual, Family and Small Business segment, GAAP net income, Adjusted EBITDA, profit from our Medicare segment and our Individual, Family and Small Business segment, Corporate shared service expense, cash used in operations and cash used for capital expenditures, and GAAP net income per diluted share and non-GAAP net income per diluted share.

These forward-looking statements are inherently subject to various risks and uncertainties that could cause actual results to differ materially from the statements made. In particular, we are required by the Accounting Standards Codification 606 — Revenue from Contracts with Customers to make numerous assumptions that are based on historical trends and our management's judgment. These assumptions may change over time and have a material impact on our revenue recognition, guidance, and results of operations. Please review the assumptions stated in this press release carefully.

The risks and uncertainties that could cause our results to differ materially from those expressed or implied by such forward-looking statements include our ability to retain existing members and enroll new members; changes in laws and regulations, including in connection with healthcare reform or with respect to the marketing and sale of Medicare plans; competition, including competition from government-run health insurance exchanges; the seasonality of our business and the fluctuation of our operating results; our ability to accurately estimate membership and lifetime value of commissions; changes in product offerings among carriers on our ecommerce platform and the resulting impact on our commission revenue; our ability to execute on our growth strategy in the Medicare market; the continued impact of the COVID-19 pandemic on our operations, business, financial condition and growth prospects, as well as on the general economy; exposure to security risks and our ability to safeguard the security and privacy of confidential data; our relationships with health insurance carriers; customer concentration and consolidation of the health insurance industry; our success in marketing and selling health insurance plans and our unit cost of acquisition; our ability to hire, train and retain licensed health insurance agents and other employees; the need for health insurance carrier and regulatory approvals in connection with the marketing of Medicare-related insurance products; changes in the market for private health insurance; consumer satisfaction of our service; changes in member conversion rates; changes in commission rates; our ability to sell qualified health insurance plans to subsidy-eligible individuals and to enroll subsidy-eligible individuals through government-run health insurance exchanges; our ability to maintain and enhance our brand identity; our ability to derive desired benefits from investments in our business, including membership growth initiatives; reliance on marketing partners; the impact of our direct-to-consumer email, telephone and television marketing efforts; timing of receipt and accuracy of commission reports; payment practices of health insurance carriers; our ability to successfully make and integrate acquisitions; dependence on our operations in China; the restrictions in our debt obligations; compliance with insurance and other laws and regulations; and the performance, reliability and availability of our ecommerce platform and underlying network infrastructure. Other factors that could cause operating, financial and other results to differ are described in eHealth's most recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K filed with the Securities and Exchange Commission and available on the investor relations page of eHealth's website at http://www.ehealthinsurance.com and on the Securities and Exchange Commission's website at www.sec.gov.

All forward-looking statements in this press release are based on information available to eHealth as of the date hereof, and eHealth does not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after the date on which they were made, except as required by law.

Non-GAAP Financial Information

This press release includes financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (GAAP). To supplement eHealth's condensed consolidated financial statements presented in accordance with GAAP, eHealth presents investors with non-GAAP financial measures, including non-GAAP net income (loss); non-GAAP net income (loss) per diluted share; and adjusted EBITDA.

• Non-GAAP net income (loss) consists of GAAP net income (loss) excluding the following items:
  • the effects of expensing stock-based compensation related to stock options and restricted stock units,
  • change in fair value of earnout liability,
  • amortization of intangible assets, and
  • the income tax impact of non-GAAP adjustments.
• Non-GAAP net income (loss) per diluted share consists of GAAP net income (loss) per diluted share excluding the following items:
  • the effects of expensing stock-based compensation related to stock options and restricted stock units per diluted share,
  • change in fair value of earnout liability per diluted share,
  • amortization of intangible assets per diluted share, and
  • the income tax impact of non-GAAP adjustments per diluted share.
• Adjusted EBITDA is calculated by adding stock-based compensation expense, change in fair value of earnout liability, depreciation and amortization, amortization of intangible assets, other income, net and provision (benefit) for income taxes to GAAP net income (loss).

eHealth believes that the presentation of these non-GAAP financial measures provides important supplemental information to management and investors regarding financial and business trends relating to eHealth's financial condition and results of operations. Management believes that the use of these non-GAAP financial measures provides consistency and comparability with eHealth's past financial reports. Management also believes that the items described above provides an additional measure of eHealth's operating results and facilitates comparisons of eHealth's core operating performance against prior periods and business model objectives. This information is provided to investors in order to facilitate additional analyses of past, present and future operating performance and as a supplemental means to evaluate eHealth's ongoing operations. eHealth believes that these non-GAAP financial measures are useful to investors in their assessment of eHealth's operating performance.

Non-GAAP net income (loss), non-GAAP net income (loss) per diluted share and Adjusted EBITDA are not calculated in accordance with GAAP, and should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Non-GAAP financial measures used in this press release have limitations in that they do not reflect all of the revenue and costs associated with the operations of eHealth's business and do not reflect income tax as determined in accordance with GAAP. As a result, you should not consider these measures in isolation or as a substitute for analysis of eHealth's results as reported under GAAP. eHealth expects to continue to incur the stock-based compensation costs and purchased intangible asset amortization costs described above, and exclusion of these costs, and their related income tax benefits, from non-GAAP financial measures should not be construed as an inference that these costs are unusual or infrequent. eHealth compensates for these limitations by prominently disclosing GAAP net income (loss) and GAAP net income (loss) per diluted share and providing investors with reconciliations from eHealth's GAAP operating results to the non-GAAP financial measures for the relevant periods.

The accompanying tables provide more details on the GAAP financial measures that are most directly comparable to the non-GAAP financial measures described above and the related reconciliations between these financial measures.

Investor Relations Contact

Kate Sidorovich, CFA
Vice President, Investor Relations
2625 Augustine Drive, Second Floor
Santa Clara, CA, 95054
650-210-3111
kate.sidorovich@ehealth.com
http://ir.ehealthinsurance.com 

 

 

          

 

Segment Information 

We evaluate our business performance and manage our operations as two distinct reporting segments:

• Medicare; and
• Individual, Family and Small Business.

 

 

 

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Approved Members

Approved members consist of the number of individuals on submitted applications that were approved by the relevant insurance carrier for the identified product during the period presented. Approved members may not pay for their plan and become paying members.

New Paying Members

New paying members consist of approved members from the period presented and any periods prior to the period presented from whom we have received an initial commission payment during the period presented.

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Estimated Membership

Estimated membership represents the estimated number of members active as of the date indicated based on the number of members for whom we have received or applied a commission payment during the month of estimation.

Health insurance carriers bill and collect insurance premiums paid by our members. The carriers do not report to us the number of members that we have as of a given date. The majority of our members who terminate their policies do so by discontinuing their premium payments to the carrier and do not inform us of the cancellation. Also, some of our members pay their premiums less frequently than monthly. Given the number of months required to observe non-payment of commissions in order to confirm cancellations, we estimate the number of members who are active on insurance policies as of a specified date.

After we have estimated membership for a period, we may receive information from health insurance carriers that would have impacted the estimate if we had received the information prior to the date of estimation. We may receive commission payments or other information that indicates that a member who was not included in our estimates for a prior period was in fact an active member at that time, or that a member who was included in our estimates was in fact not an active member of ours. For instance, we reconcile information carriers provide to us and may determine that we were not historically paid commissions owed to us, which would cause us to have underestimated membership. Conversely, carriers may require us to return commission payments paid in a prior period due to policy cancellations for members we previously estimated as being active. We do not update our estimated membership numbers reported in previous periods. Instead, we reflect updated information regarding our historical membership in the membership estimate for the current period. As a result of the delay in our receipt of information from insurance carriers, actual trends in our membership are most discernible over periods longer than from one quarter to the next. As a result of the delay we experience in receiving information about our membership, it is difficult for us to determine with any certainty the impact of current conditions on our membership retention. Healthcare reform and its impacts as well as other factors could cause the assumptions and estimates that we make in connection with estimating our membership to be inaccurate, which would cause our membership estimates to be inaccurate.

Constrained Lifetime Value of Commissions Per Approved Member

(1) Constrained lifetime value ("LTV") of commissions per approved member represents commissions estimated to be collected over the estimated life of an approved member's policy after applying constraints in accordance with our revenue recognition policy. The estimate is driven by multiple factors, including but not limited to, contracted commission rates, carrier mix, estimated average plan duration, the regulatory environment, and cancellations of insurance plans offered by health insurance carriers with which we have a relationship. These factors may result in varying values from period to period.

(2) For small business, the amount represents the estimated commissions we expect to collect from the plan over the following twelve months. The estimate is driven by multiple factors, including but not limited to, contracted commission rates, carrier mix, estimated average plan duration, the regulatory environment, and cancellations of insurance plans offered by health insurance carriers with which we have a relationship and applied constraints. These factors may result in varying values from period to period.

Constraints on Lifetime Value of Commissions Per Approved Member

Constraints are applied to derive LTV of commissions per approved member for revenue recognition in accordance with our revenue recognition policy. The constraints are applied to help ensure that commissions estimated to be collected over the estimated life of an approved member's plan are recognized as revenue only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with future commissions receivable from the plan is subsequently resolved. We evaluate constraints on a quarterly basis for factors affecting our estimate of LTV of commissions per approved member and apply management judgment to determine the constraints based on current trends impacting our business.

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Expense Metrics Per Approved Member

Marketing initiatives are an important component of our strategy to increase revenue and are primarily designed to encourage consumers to complete an application for health insurance. Variable marketing cost represents direct costs incurred in member acquisition from our direct, marketing partners and online advertising channels. In addition, we incur customer care and enrollment expenses in assisting applicants during the enrollment process.

The numerator used to calculate each metric is the portion of the respective operating expenses for marketing and advertising and customer care and enrollment that is directly related to member acquisition for our sale of Medicare Advantage, Medicare Supplement and Medicare Part D prescription drug plans (collectively, the "Medicare Plans") and for all IFP plans including individual and family plans and short-term health insurance (collectively, the "IFP Plans"), respectively. The denominator used to calculate each metric is based on a derived metric that represents the relative value of the new members acquired. For Medicare Plans, we call this derived metric Medicare Advantage ("MA")-equivalent members, and for IFP Plans, we call this derived metric IFP-equivalent members. The calculations for MA-equivalent members and for IFP-equivalent members are based on the weighted number of approved members for Medicare Plans and IFP Plans during the period, with the number of approved members adjusted based on the relative LTV of the product they are purchasing. Since the LTV for any product fluctuates from period to period, the weight given to each product was determined based on their relative LTVs at the time of our adoption of ASC 606.

Explanation of Adjustments

 

Explanation of Adjustments