Online health insurance comparison site eHealth (NASDAQ:EHTH) reported Q2 CY2025 results beating Wall Street’s revenue expectations, but sales fell by 7.7% year on year to $60.78 million. The company’s full-year revenue guidance of $545 million at the midpoint came in 2.5% above analysts’ estimates. Its GAAP loss of $0.98 per share was 32.6% above analysts’ consensus estimates.
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eHealth (EHTH) Q2 CY2025 Highlights:
- Revenue: $60.78 million vs analyst estimates of $46.41 million (7.7% year-on-year decline, 31% beat)
- EPS (GAAP): -$0.98 vs analyst estimates of -$1.45 (32.6% beat)
- Adjusted EBITDA: -$14.14 million vs analyst estimates of -$34.92 million (-23.3% margin, 59.5% beat)
- The company lifted its revenue guidance for the full year to $545 million at the midpoint from $530 million, a 2.8% increase
- EBITDA guidance for the full year is $65 million at the midpoint, above analyst estimates of $51.68 million
- Operating Margin: -37.9%, up from -42.5% in the same quarter last year
- Free Cash Flow was -$47.05 million, down from $73.7 million in the previous quarter
- Estimated Membership: 1.15 million, down 31,137 year on year
- Market Capitalization: $99.17 million
Company Overview
Aiming to address a high-stakes and often confusing decision, eHealth (NASDAQ:EHTH) guides consumers through health insurance enrollment and related topics.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Over the last three years, eHealth grew its sales at a sluggish 5.7% compounded annual growth rate. This fell short of our benchmark for the consumer internet sector and is a rough starting point for our analysis.
This quarter, eHealth’s revenue fell by 7.7% year on year to $60.78 million but beat Wall Street’s estimates by 31%.
Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months, a deceleration versus the last three years. This projection doesn't excite us and indicates its products and services will face some demand challenges.
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Estimated Membership
User Growth
As an online marketplace, eHealth generates revenue growth by increasing both the number of users on its platform and the average order size in dollars.
eHealth struggled with new customer acquisition over the last two years as its estimated membership have declined by 2.2% annually to 1.15 million in the latest quarter. This performance isn't ideal because internet usage is secular, meaning there are typically unaddressed market opportunities. If eHealth wants to accelerate growth, it likely needs to enhance the appeal of its current offerings or innovate with new products. 
In Q2, eHealth’s estimated membership once again decreased by 31,137, a 2.6% drop since last year. The quarterly print isn’t too different from its two-year result, suggesting its new initiatives aren’t accelerating user growth just yet.
Revenue Per User
Average revenue per user (ARPU) is a critical metric to track because it measures how much the company earns in transaction fees from each user. ARPU also gives us unique insights into a user’s average order size and eHealth’s take rate, or "cut", on each order.
eHealth’s ARPU growth has been excellent over the last two years, averaging 9.4%. Although its estimated membership shrank during this time, the company’s ability to successfully increase monetization demonstrates its platform’s value for existing users. 
This quarter, eHealth’s ARPU clocked in at $53.06. It declined 5.2% year on year, worse than the change in its estimated membership.
Key Takeaways from eHealth’s Q2 Results
We were impressed by how significantly eHealth blew past analysts’ EBITDA expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. On the other hand, its number of users declined. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 27.1% to $4.14 immediately following the results.
Indeed, eHealth had a rock-solid quarterly earnings result, but is this stock a good investment here? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it’s free.