OVERLAND PARK, Kan.--(BUSINESS WIRE)--SelectQuote, Inc. (NYSE: SLQT) reported consolidated revenue for the second quarter of fiscal year 2025 of $481.1 million compared to consolidated revenue for the second quarter of fiscal year 2024 of $405.4 million. Consolidated net income for the second quarter of fiscal year 2025 was $53.2 million compared to consolidated net income for the second quarter of fiscal year 2024 of $19.4 million. Finally, consolidated Adjusted EBITDA* for the second quarter of fiscal year 2025 was $87.5 million compared to consolidated Adjusted EBITDA* for the second quarter of fiscal year 2024 of $67.4 million.
SelectQuote Chief Executive Officer, Tim Danker, remarked, "SelectQuote delivered impressive results during our fiscal second quarter despite a historically disruptive Annual Enrollment Period. Our strong policy volume and Senior Adjusted EBITDA margin of 39%, up approximately 750 basis points year-over-year, are additional proof points of our differentiated, high-touch, agent-led model. American Seniors faced an unprecedented level of plan terminations and benefit changes this season, and we take great pride in that fact that consumers sought out SelectQuote as they navigated such a challenging market backdrop. As we've said before, SelectQuote wins when our customers win, and this quarter is evidence of that."
Mr. Danker continued, "SelectQuote also delivered another quarter of strong results within our Healthcare Services segment, led by SelectRx. We now have over 96,000 members, which represents growth of 54% compared to a year ago. Importantly, we expanded our global Revenue to CAC to 5.3X, which demonstrates our continued ability to generate attractive returns as a comprehensive healthcare services provider."
"Additionally, we took another large step to improve our capital structure with today's announcement of a $350 million strategic investment led by Bain Capital and Morgan Stanley Private Credit. The transaction provides improved liquidity and operating flexibility to grow within our Senior and Healthcare Services businesses. We are excited to have Bain Capital and Morgan Stanley Private Credit as strategic partners as we pursue the tremendous growth opportunity provided by our unique platform within the healthcare ecosystem."
* See "Non-GAAP Financial Measures" below.
Segment Results
We currently have three reportable segments: 1) Senior, 2) Healthcare Services and 3) Life. The performance measures of the segments include total revenue and Adjusted EBITDA.* Costs of commissions and other services revenue, cost of goods sold-pharmacy revenue, marketing and advertising, selling, general, and administrative, and technical development operating expenses that are directly attributable to a segment are reported within the applicable segment. Indirect costs of revenue, marketing and advertising, selling, general, and administrative, and technical development operating expenses are allocated to each segment based on varying metrics such as headcount. Adjusted EBITDA is our segment profit measure to evaluate the operating performance of our business. We define Adjusted EBITDA as income (loss) before income tax expense (benefit) plus: (i) interest expense, net; (ii) depreciation and amortization; (iii) share-based compensation; (iv) goodwill, long-lived asset, and intangible assets impairments; (v) transaction costs; (vi) loss on disposal of property, equipment and software, net; (vii) other non-recurring expenses and income; (viii) changes in fair value of warrant liabilities. Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by revenue.
Senior
Financial Results
The following table provides the financial results for the Senior segment for the periods presented:
Three Months Ended
| Six Months Ended
| ||||||||||||||||||||
(in thousands) | 2024 | 2023 | % Change | 2024 | 2023 | % Change | |||||||||||||||
Revenue | $ | 255,578 | $ | 247,529 | 3 | % | $ | 348,487 | $ | 337,445 | 3 | % | |||||||||
Adjusted EBITDA* | 100,521 | 78,713 | 28 | % | 108,247 | 77,376 | 40 | % | |||||||||||||
Adjusted EBITDA Margin* | 39 | % | 32 | % | 31 | % | 23 | % | |||||||||||||
Operating Metrics
Submitted Policies
Submitted policies are counted when an individual completes an application with our licensed agent and provides authorization to the agent to submit the application to the insurance carrier partner. The applicant may have additional actions to take before the application will be reviewed by the insurance carrier.
The following table shows the number of submitted policies for the periods presented:
Three Months Ended
| Six Months Ended
| ||||||||||||
2024 | 2023 | % Change | 2024 | 2023 | % Change | ||||||||
Medicare Advantage | 284,774 | 271,712 | 5 | % | 387,055 | 376,244 | 3 | % | |||||
All other (1) | 26,861 | 24,049 | 12 | % | 43,117 | 38,969 | 11 | % | |||||
Total | 311,635 | 295,761 | 5 | % | 430,172 | 415,213 | 4 | % | |||||
(1) Represents the submitted policies for medicare supplement, dental, vision and hearing, prescription drug plan and other.
Approved Policies
Approved policies represents the number of submitted policies that were approved by our insurance carrier partners for the identified product during the indicated period. Not all approved policies will go in force.
* See "Non-GAAP Financial Measures" below.
The following table shows the number of approved policies for the periods presented:
Three Months Ended
| Six Months Ended
| ||||||||||||
2024 | 2023 | % Change | 2024 | 2023 | % Change | ||||||||
Medicare Advantage | 247,849 | 234,576 | 6 | % | 339,529 | 332,257 | 2 | % | |||||
All other (1) | 19,714 | 19,985 | (1 | )% | 32,693 | 32,180 | 2 | % | |||||
Total | 267,563 | 254,561 | 5 | % | 372,222 | 364,437 | 2 | % | |||||
(1) Represents the approved policies for medicare supplement, dental, vision and hearing, prescription drug plan and other.
Lifetime Value of Commissions per Approved Policy
Lifetime value of commissions per approved policy represents commissions estimated to be collected over the estimated life of an approved policy based on multiple factors, including but not limited to, contracted commission rates, carrier mix and expected policy persistency with applied constraints. The lifetime value of commissions per approved policy is equal to the sum of the commission revenue due upon the initial sale of a policy, and when applicable, an estimate of future renewal commissions.
The following table shows the lifetime value of commissions per approved policy for the periods presented:
Three Months Ended
| Six Months Ended
| ||||||||||||||||
(dollars per policy): | 2024 | 2023 | % Change | 2024 | 2023 | % Change | |||||||||||
Medicare Advantage | $ | 907 | $ | 934 | (3 | )% | $ | 881 | $ | 883 | - | % | |||||
All other (1) | 111 | 112 | (1 | )% | 134 | 131 | 2 | % | |||||||||
(1) Represents the weighted average LTV per approved policy.
Healthcare Services
Financial Results
The following table provides the financial results for the Healthcare Services segment for the periods presented:
Three Months Ended
| Six Months Ended
| ||||||||||||||||||||
(in thousands) | 2024 | 2023 | % Change | 2024 | 2023 | % Change | |||||||||||||||
Revenue | $ | 183,370 | $ | 111,710 | 64 | % | $ | 339,108 | $ | 209,078 | 62 | % | |||||||||
Adjusted EBITDA* | 2,212 | 2,981 | (26 | )% | 7,089 | 5,304 | 34 | % | |||||||||||||
Adjusted EBITDA Margin* | 1 | % | 3 | % | 2 | % | 3 | % | |||||||||||||
Operating Metrics
Members
The total number of SelectRx members represents the amount of active customers to which an order has been shipped and the prescriptions per day represents the total average prescriptions shipped per business day. These two metrics are the primary drivers of revenue for Healthcare Services.
* See "Non-GAAP Financial Measures" below.
The following table shows the total number of SelectRx members as of the periods presented:
December 31, 2024 | December 31, 2023 | |||
Total SelectRx Members | 96,695 | 62,623 |
The total number of SelectRx members increased by 54% as of December 31, 2024, compared to December 31, 2023, due to our continued operating strategy to grow SelectRx.
The following table shows the average prescriptions shipped per day for the periods presented:
Three Months Ended
| Six Months Ended
| |||||||
2024 | 2023 | 2024 | 2023 | |||||
Prescriptions Per Day | 26,846 | 17,010 | 25,922 | 16,244 | ||||
Combined Senior and Healthcare Services - Consumer Per Unit Economics
The opportunity to leverage our existing database and distribution model to improve access to healthcare services for our consumers has created a need for us to review our key metrics related to our per unit economics. As we think about the revenue and expenses for Healthcare Services, we note that they are primarily driven by the marketing acquisition costs associated with the sale of an MA or MS policy, some of which costs are allocated directly to Healthcare Services, and therefore determined that our per unit economics measure should include components from both Senior and Healthcare Services. See details of revenue and expense items included in the calculation below.
Combined Senior and Healthcare Services consumer per unit economics represents total MA and MS commissions; other product commissions; other revenues, including revenues from Healthcare Services; and operating expenses associated with Senior and Healthcare Services, each shown per number of approved MA and MS policies over a given time period. Management assesses the business on a per-unit basis to help ensure that the revenue opportunity associated with a successful policy sale is attractive relative to the marketing acquisition cost. Because not all acquired leads result in a successful policy sale, all per-policy metrics are based on approved policies, which is the measure that triggers revenue recognition.
The MA and MS commission per MA/MS policy represents the LTV for policies sold in the period. Other commission per MA/MS policy represents the LTV for other products sold in the period, including DVH prescription drug plan, and other products, which management views as additional commission revenue on our agents' core function of MA/MS policy sales. Pharmacy revenue per MA/MS policy represents revenue from SelectRx, and other revenue per MA/MS policy represents revenue from Population Health, production bonuses, marketing development funds, lead generation revenue, and adjustments from the Company's reassessment of its cohorts' transaction prices. Total operating expenses per MA/MS policy represents all of the operating expenses within Senior and Healthcare Services. The revenue to customer acquisition cost ("CAC") multiple represents total revenue as a multiple of total marketing acquisition cost, which represents the direct costs of acquiring leads. These costs are included in marketing and advertising expense within the total operating expenses per MA/MS policy.
The following table shows combined Senior and Healthcare Services consumer per unit economics for the periods presented. Based on the seasonality of Senior and the fluctuations between quarters, we believe that the most relevant view of per unit economics is on a rolling 12-month basis. All per MA/MS policy metrics below are based on the sum of approved MA/MS policies, as both products have similar commission profiles.
Twelve Months Ended December 31, | |||||||
(dollars per approved policy): | 2024 | 2023 | |||||
MA and MS approved policies | 634,135 | 609,939 | |||||
MA and MS commission per MA / MS policy | $ | 909 | $ | 896 | |||
Other commission per MA/MS policy | 12 | 11 | |||||
Pharmacy revenue per MA/MS policy | 938 | 575 | |||||
Other revenue per MA/MS policy | 153 | 140 | |||||
Total revenue per MA / MS policy | 2,012 | 1,622 | |||||
Total operating expenses per MA / MS policy | (1,685 | ) | (1,365 | ) | |||
Adjusted EBITDA per MA/MS policy * | $ | 327 | $ | 257 | |||
Adjusted EBITDA Margin per MA/MS policy * | 16 | % | 16 | % | |||
Revenue / CAC multiple | 5.3X | 4.2X | |||||
Total revenue per MA/MS policy increased 24% for the twelve months ended December 31, 2024, compared to the twelve months ended December 31, 2023, primarily due to the increase in pharmacy revenue. Total operating expenses per MA/MS policy increased 23% for the twelve months ended December 31, 2024, compared to the twelve months ended December 31, 2023, driven by an increase in cost of goods sold-pharmacy revenue for Healthcare Services due to the growth of the business.
Life
Financial Results
The following table provides the financial results for the Life segment for the periods presented:
Three Months Ended
| Six Months Ended
| ||||||||||||||||||||
(in thousands) | 2024 | 2023 | % Change | 2024 | 2023 | % Change | |||||||||||||||
Revenue | $ | 39,861 | $ | 37,367 | 7 | % | $ | 79,151 | $ | 75,170 | 5 | % | |||||||||
Adjusted EBITDA* | 7,423 | 4,569 | 62 | % | 13,383 | 9,808 | 36 | % | |||||||||||||
Adjusted EBITDA Margin* | 19 | % | 12 | % | 17 | % | 13 | % | |||||||||||||
Operating Metrics
Life premium represents the total premium value for all policies that were approved by the relevant insurance carrier partner and for which the policy document was sent to the policyholder and payment information was received by the relevant insurance carrier partner during the indicated period. Because our commissions are earned based on a percentage of total premium, total premium volume for a given period is the key driver of revenue for our Life segment.
The following table shows term and final expense premiums for the periods presented:
Three Months Ended
| Six Months Ended
| ||||||||||||||||
(in thousands) | 2024 | 2023 | % Change | 2024 | 2023 | % Change | |||||||||||
Term Premiums | $ | 17,311 | $ | 17,398 | (1 | )% | $ | 32,529 | $ | 35,588 | (9 | )% | |||||
Final Expense Premiums | 22,139 | 19,388 | 14 | % | 46,612 | 39,087 | 19 | % | |||||||||
Total | $ | 39,450 | $ | 36,786 | 7 | % | $ | 79,141 | $ | 74,675 | 6 | % | |||||
* See "Non-GAAP Financial Measures" below.
Earnings Conference Call
SelectQuote, Inc. will host a conference call with the investment community on February 10, 2025, beginning at 5:00 p.m. ET. To register for this conference call, please use this link: https://registrations.events/direct/Q4I731198247. After registering, a confirmation will be sent via email, including dial-in details and unique conference call codes for entry. Registration is open through the live call, but to ensure you are connected for the full call we suggest registering at least 10 minutes before the start of the call. The event will also be webcasted live via our investor relations website https://ir.selectquote.com/investor-home/default.aspx.
Non-GAAP Financial Measures
This release includes certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. To supplement our financial statements presented in accordance with GAAP and to provide investors with additional information regarding our GAAP financial results, we have presented in this release Adjusted EBITDA and Adjusted EBITDA Margin, which are non-GAAP financial measures. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly titled measures presented by other companies. We define Adjusted EBITDA as net income (loss) before income tax expense (benefit), plus interest expense, depreciation and amortization, changes in fair value of warrant liabilities, and certain add-backs for non-cash or non-recurring expenses, including restructuring and share-based compensation expenses. The most directly comparable GAAP measure is income (loss) before tax expense (benefit). We define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue. The most directly comparable GAAP measure is net income margin. We monitor and have presented in this release Adjusted EBITDA and Adjusted EBITDA Margin because they are key measures used by our management and Board of Directors to understand and evaluate our operating performance, to establish budgets, and to develop operational goals for managing our business. In particular, we believe that excluding the impact of these expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core operating performance. We believe that these non-GAAP financial measures help identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude in the calculations of these non-GAAP financial measures. Accordingly, we believe that these financial measures provide useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects. Reconciliations of net income (loss) before income tax expense (benefit) to Adjusted EBITDA are presented below beginning on page 11.
Forward Looking Statements
This release contains forward-looking statements. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as "may," "should," "could," "predict," "potential," "believe," "will likely result," "expect," "continue," "will," "anticipate," "seek," "estimate," "intend," "plan," "projection," "would" and "outlook," or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management's beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.
There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following: our reliance on a limited number of insurance carrier partners and any potential termination of those relationships or failure to develop new relationships; existing and future laws and regulations affecting the health insurance market; changes in health insurance products offered by our insurance carrier partners and the health insurance market generally; insurance carriers offering products and services directly to consumers; changes to commissions paid by insurance carriers and underwriting practices; competition with brokers, exclusively online brokers and carriers who opt to sell policies directly to consumers; competition from government-run health insurance exchanges; developments in the U.S. health insurance system; our dependence on revenue from carriers in our senior segment and downturns in the senior health as well as life, automotive and home insurance industries; our ability to develop new offerings and penetrate new vertical markets; risks from third-party products; failure to enroll individuals during the Medicare annual enrollment period; our ability to attract, integrate and retain qualified personnel; our dependence on lead providers and ability to compete for leads; failure to obtain and/or convert sales leads to actual sales of insurance policies; access to data from consumers and insurance carriers; accuracy of information provided from and to consumers during the insurance shopping process; cost-effective advertisement through internet search engines; ability to contact consumers and market products by telephone; global economic conditions, including inflation; disruption to operations as a result of future acquisitions; significant estimates and assumptions in the preparation of our financial statements; impairment of goodwill; potential litigation and other legal proceedings or inquiries; our existing and future indebtedness; our ability to maintain compliance with our debt covenants; access to additional capital; failure to protect our intellectual property and our brand; fluctuations in our financial results caused by seasonality; accuracy and timeliness of commissions reports from insurance carriers; timing of insurance carriers' approval and payment practices; factors that impact our estimate of the constrained lifetime value of commissions per policyholder; changes in accounting rules, tax legislation and other legislation; disruptions or failures of our technological infrastructure and platform; failure to maintain relationships with third-party service providers; cybersecurity breaches or other attacks involving our systems or those of our insurance carrier partners or third-party service providers; our ability to protect consumer information and other data; failure to market and sell Medicare plans effectively or in compliance with laws; and other factors related to our pharmacy business, including manufacturing or supply chain disruptions, access to and demand for prescription drugs, and regulatory changes or other industry developments that may affect our pharmacy operations. For a further discussion of these and other risk factors that could impact our future results and performance, see the section entitled "Risk Factors" in the most recent Annual Report on Form 10-K (the "Annual Report") and subsequent periodic reports filed by us with the Securities and Exchange Commission. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as otherwise required by law, we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
About SelectQuote:
Founded in 1985, SelectQuote (NYSE: SLQT) pioneered the model of providing unbiased comparisons from multiple, highly-rated insurance companies, allowing consumers to choose the policy and terms that best meet their unique needs. Two foundational pillars underpin SelectQuote's success: a strong force of highly-trained and skilled agents who provide a consultative needs analysis for every consumer, and proprietary technology that sources and routes high-quality leads. Today, the Company operates an ecosystem offering high touchpoints for consumers across insurance, pharmacy, and virtual care.
With an ecosystem offering engagement points for consumers across insurance, Medicare, pharmacy, and value-based care, the company now has three core business lines: SelectQuote Senior, SelectQuote Healthcare Services, and SelectQuote Life. SelectQuote Senior serves the needs of a demographic that sees around 10,000 people turn 65 each day with a range of Medicare Advantage and Medicare Supplement plans. SelectQuote Healthcare Services is comprised of the SelectRx Pharmacy, a Patient-Centered Pharmacy Home (PCPH) accredited pharmacy, SelectPatient Management, a provider of chronic care management services, and Healthcare Select which proactively connects consumers with a wide breadth of healthcare services supporting their needs.
SELECTQUOTE, INC. AND SUBSIDIARIES | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(Unaudited) | |||||||
(In thousands) | |||||||
December 31, 2024 | June 30, 2024 | ||||||
ASSETS | |||||||
CURRENT ASSETS: | |||||||
Cash and, cash equivalents, and restricted cash | $ | 12,104 | $ | 42,690 | |||
Accounts receivable, net of allowances of $12.1 million and $8.2 million, respectively | 115,795 | 150,035 | |||||
Commissions receivable-current | 224,787 | 119,871 | |||||
Other current assets | 19,686 | 20,327 | |||||
Total current assets | 372,372 | 332,923 | |||||
COMMISSIONS RECEIVABLE-Net | 812,037 | 761,446 | |||||
PROPERTY AND EQUIPMENT-Net | 16,257 | 18,973 | |||||
SOFTWARE-Net | 14,127 | 13,978 | |||||
OPERATING LEASE RIGHT-OF-USE ASSETS | 22,002 | 23,437 | |||||
INTANGIBLE ASSETS-Net | 8,130 | 10,194 | |||||
GOODWILL | 29,438 | 29,438 | |||||
OTHER ASSETS | 4,804 | 3,519 | |||||
TOTAL ASSETS | $ | 1,279,167 | $ | 1,193,908 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable | $ | 87,165 | $ | 36,587 | |||
Accrued expenses | 12,617 | 16,904 | |||||
Accrued compensation and benefits | 55,666 | 57,594 | |||||
Operating lease liabilities-current | 4,981 | 4,709 | |||||
Current portion of long-term debt | 27,577 | 45,854 | |||||
Contract liabilities | 954 | 8,066 | |||||
Other current liabilities | 5,440 | 4,873 | |||||
Total current liabilities | 194,400 | 174,587 | |||||
LONG-TERM DEBT, NET-less current portion | 684,284 | 637,480 | |||||
DEFERRED INCOME TAXES | 31,868 | 37,478 | |||||
OPERATING LEASE LIABILITIES | 23,539 | 25,685 | |||||
OTHER LIABILITIES | 19,074 | 1,877 | |||||
Total liabilities | 953,165 | 877,107 | |||||
COMMITMENTS AND CONTINGENCIES | |||||||
SHAREHOLDERS' EQUITY: | |||||||
Common stock, $0.01 par value | 1,721 | 1,694 | |||||
Additional paid-in capital | 585,360 | 580,764 | |||||
Accumulated deficit | (261,079 | ) | (269,769 | ) | |||
Accumulated other comprehensive income | - | 4,112 | |||||
Total shareholders' equity | 326,002 | 316,801 | |||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 1,279,167 | $ | 1,193,908 | |||
SELECTQUOTE, INC. AND SUBSIDIARIES | |||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | |||||||||||||||
(Unaudited) | |||||||||||||||
(In thousands) | |||||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
REVENUE: | |||||||||||||||
Commissions and other services | $ | 301,069 | $ | 296,643 | $ | 440,449 | $ | 434,584 | |||||||
Pharmacy | 180,000 | 108,795 | 332,883 | 203,583 | |||||||||||
Total revenue | 481,069 | 405,438 | 773,332 | 638,167 | |||||||||||
OPERATING COSTS AND EXPENSES: | |||||||||||||||
Cost of commissions and other services revenue | 101,138 | 97,424 | 166,872 | 169,935 | |||||||||||
Cost of goods sold-pharmacy revenue | 156,201 | 94,180 | 285,724 | 178,188 | |||||||||||
Marketing and advertising | 97,725 | 117,078 | 161,489 | 179,400 | |||||||||||
Selling, general, and administrative | 45,021 | 33,412 | 81,166 | 62,078 | |||||||||||
Technical development | 10,044 | 8,050 | 19,119 | 15,687 | |||||||||||
Total operating costs and expenses | 410,129 | 350,144 | 714,370 | 605,288 | |||||||||||
INCOME FROM OPERATIONS | 70,940 | 55,294 | 58,962 | 32,879 | |||||||||||
INTEREST EXPENSE, NET | (23,721 | ) | (24,415 | ) | (46,752 | ) | (45,811 | ) | |||||||
OTHER EXPENSE, NET | (7,663 | ) | - | (7,674 | ) | (39 | ) | ||||||||
INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT) | 39,556 | 30,879 | 4,536 | (12,971 | ) | ||||||||||
INCOME TAX EXPENSE (BENEFIT) | (13,680 | ) | 11,487 | (4,154 | ) | (1,312 | ) | ||||||||
NET INCOME (LOSS) | $ | 53,236 | $ | 19,392 | $ | 8,690 | $ | (11,659 | ) | ||||||
NET INCOME (LOSS) PER SHARE: | |||||||||||||||
Basic | $ | 0.31 | $ | 0.12 | $ | 0.05 | $ | (0.07 | ) | ||||||
Diluted | $ | 0.30 | $ | 0.11 | $ | 0.05 | $ | (0.07 | ) | ||||||
WEIGHTED-AVERAGE COMMON STOCK OUTSTANDING USED IN PER SHARE AMOUNTS: | |||||||||||||||
Basic | 171,802 | 168,349 | 171,116 | 167,901 | |||||||||||
Diluted | 175,101 | 169,737 | 175,024 | 167,901 | |||||||||||
OTHER COMPREHENSIVE INCOME (LOSS) NET OF TAX: | |||||||||||||||
Change in cash flow hedge | (1,327 | ) | (3,422 | ) | (4,112 | ) | (5,432 | ) | |||||||
OTHER COMPREHENSIVE INCOME (LOSS) | (1,327 | ) | (3,422 | ) | (4,112 | ) | (5,432 | ) | |||||||
COMPREHENSIVE INCOME (LOSS) | $ | 51,909 | $ | 15,970 | $ | 4,578 | $ | (17,091 | ) | ||||||
SELECTQUOTE, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
Six months ended December 31, | ||||||||
2024 | 2023 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income (loss) | $ | 8,690 | $ | (11,659 | ) | |||
Adjustments to reconcile net income (loss) to net cash, cash equivalents, and restricted cash used in operating activities: | ||||||||
Depreciation and amortization | 10,659 | 11,887 | ||||||
Loss on disposal of property, equipment, and software | 157 | 9 | ||||||
Share-based compensation expense | 8,545 | 6,997 | ||||||
Deferred income taxes | (4,154 | ) | (1,182 | ) | ||||
Amortization of debt issuance costs and debt discount | 2,379 | 3,356 | ||||||
Write-off of debt issuance costs | 93 | - | ||||||
Change in fair value of warrant liabilities | 7,642 | - | ||||||
Accrued interest payable in kind | 9,673 | 9,020 | ||||||
Non-cash lease expense | 1,846 | 1,528 | ||||||
Bad debt expense | 4,203 | 2,743 | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable, net | 30,038 | 9,232 | ||||||
Commissions receivable | (155,507 | ) | (113,860 | ) | ||||
Other assets | (4,802 | ) | (2,075 | ) | ||||
Accounts payable and accrued expenses | 46,211 | 29,206 | ||||||
Operating lease liabilities | (2,285 | ) | (2,689 | ) | ||||
Other liabilities | (8,692 | ) | 8,248 | |||||
Net cash used in operating activities | (45,304 | ) | (49,239 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Purchases of property and equipment | (741 | ) | (2,062 | ) | ||||
Proceeds from sales of property and equipment | - | 253 | ||||||
Purchases of software and capitalized software development costs | (4,105 | ) | (3,883 | ) | ||||
Net cash used in investing activities | (4,846 | ) | (5,692 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from revolving line of credit | 84,900 | - | ||||||
Payments on revolving line of credit | (26,900 | ) | - | |||||
Payments on Term Loans | (123,215 | ) | (16,942 | ) | ||||
Proceeds on ABS Notes | 99,095 | - | ||||||
Payments on ABS Notes | (6,272 | ) | - | |||||
Payments on other debt | (114 | ) | (75 | ) | ||||
Proceeds from common stock options exercised and employee stock purchase plan | 38 | - | ||||||
Payments of tax withholdings related to net share settlement of equity awards | (3,960 | ) | (359 | ) | ||||
Payments of debt issuance costs | (2,479 | ) | - | |||||
Net cash provided (used in) financing activities | 21,093 | (17,376 | ) | |||||
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | (29,057 | ) | (72,307 | ) | ||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH -Beginning of period | 42,690 | 83,156 | ||||||
CASH, CASH EQUIVALENTS AND RESTRICTED CASH -End of period | $ | 13,633 | $ | 10,849 | ||||
SELECTQUOTE, INC. AND SUBSIDIARIES | ||||||||||||
Adjusted EBITDA to Income (Loss) before income tax expense (benefit) Reconciliation | ||||||||||||
(Unaudited) | ||||||||||||
Three Months Ended December 31, 2024 | ||||||||||||
(in thousands) | Senior | Healthcare Services | Life | Total | ||||||||
Adjusted Segment EBITDA | $ | 100,521 | $ | 2,212 | $ | 7,423 | $ | 110,156 | ||||
All other Adjusted EBITDA | 2,303 | |||||||||||
Corporate & elimination of intersegment profits | (24,940 | ) | ||||||||||
Adjusted EBITDA | $ | 87,519 | ||||||||||
Share-based compensation expense | (4,699 | ) | ||||||||||
Transaction costs | (6,719 | ) | ||||||||||
Depreciation and amortization | (5,060 | ) | ||||||||||
Loss on disposal of property, equipment, and software, net | (122 | ) | ||||||||||
Change in fair value of warrant liabilities | (7,642 | ) | ||||||||||
Interest expense, net | (23,721 | ) | ||||||||||
Income before income tax expense (benefit) | $ | 39,556 | ||||||||||
Three Months Ended December 31, 2023 | ||||||||||||
(in thousands) | Senior | Healthcare Services | Life | Total | ||||||||
Adjusted Segment EBITDA | $ | 78,713 | $ | 2,981 | $ | 4,569 | $ | 86,263 | ||||
All other Adjusted EBITDA | 4,725 | |||||||||||
Corporate & elimination of intersegment profits | (23,574 | ) | ||||||||||
Adjusted EBITDA | $ | 67,414 | ||||||||||
Share-based compensation expense | (3,822 | ) | ||||||||||
Transaction costs | (2,400 | ) | ||||||||||
Depreciation and amortization | (5,898 | ) | ||||||||||
Loss on disposal of property, equipment, and software, net | - | |||||||||||
Interest expense, net | (24,415 | ) | ||||||||||
Income before income tax expense (benefit) | $ | 30,879 | ||||||||||
Six Months Ended December 31, 2024 | ||||||||||||
(in thousands) | Senior | Healthcare Services | Life | Total | ||||||||
Adjusted Segment EBITDA | $ | 108,247 | $ | 7,089 | $ | 13,383 | $ | 128,719 | ||||
All other Adjusted EBITDA | 6,099 | |||||||||||
Corporate & elimination of intersegment profits | (48,983 | ) | ||||||||||
Adjusted EBITDA | $ | 85,835 | ||||||||||
Share-based compensation expense | (8,545 | ) | ||||||||||
Transaction costs | (7,544 | ) | ||||||||||
Depreciation and amortization | (10,659 | ) | ||||||||||
Loss on disposal of property, equipment, and software, net | (157 | ) | ||||||||||
Change in fair value of warrant liabilities | (7,642 | ) | ||||||||||
Interest expense, net | (46,752 | ) | ||||||||||
Income before income tax expense (benefit) | $ | 4,536 | ||||||||||
Six Months Ended December 31, 2023 | ||||||||||||
(in thousands) | Senior | Healthcare Services | Life | Total | ||||||||
Adjusted Segment EBITDA | $ | 77,376 | $ | 5,304 | $ | 9,808 | $ | 92,488 | ||||
All other Adjusted EBITDA | 8,045 | |||||||||||
Corporate & elimination of intersegment profits | (44,495 | ) | ||||||||||
Adjusted EBITDA | $ | 56,038 | ||||||||||
Share-based compensation expense | (6,997 | ) | ||||||||||
Transaction costs | (4,305 | ) | ||||||||||
Depreciation and amortization | (11,887 | ) | ||||||||||
Loss on disposal of property, equipment, and software, net | (9 | ) | ||||||||||
Interest expense, net | (45,811 | ) | ||||||||||
Loss before income tax expense (benefit) | $ | (12,971 | ) | |||||||||
SELECTQUOTE, INC. AND SUBSIDIARIES | ||||||
Net Income (Loss) to Adjusted EBITDA Reconciliation | ||||||
(Unaudited) | ||||||
Guidance Net income (loss) to Adjusted EBITDA reconciliation, year ending June 30, 2025: | ||||||
(in thousands) | Range | |||||
Net income (loss) | $ | (24,000 | ) | $ | 11,000 | |
Income tax expense (benefit) | (7,000 | ) | 2,000 | |||
Interest expense, net | 85,000 | 75,000 | ||||
Depreciation and amortization | 24,000 | 20,000 | ||||
Share-based compensation expense | 19,000 | 16,000 | ||||
Change in FV of warrant liability | 8,000 | 8,000 | ||||
Transaction costs | 10,000 | 8,000 | ||||
Adjusted EBITDA | $ | 115,000 | $ | 140,000 | ||
Contacts
Investor Relations:
Sloan Bohlen
877-678-4083
investorrelations@selectquote.com
Media:
Matt Gunter
913-286-4931
matt.gunter@selectquote.com
View source version on businesswire.com: https://www.businesswire.com/news/home/20250210814597/en/
