Fourth Quarter of Fiscal Year 2024 – Consolidated Earnings
Highlights
- Revenue of $307.2 million
- Net loss of $31.0 million
- Adjusted EBITDA* of $14.4 million
Fiscal Year 2025 Guidance Ranges:
- Revenue expected in a range of $1.4 billion to $1.5
billion
- Net loss expected in a range of $42 million to $6 million
- Adjusted EBITDA* expected in a range of $90 million to $120
million
Fourth Quarter Fiscal Year 2024 – Segment Highlights
Senior
- Revenue of $114.1 million
- Adjusted EBITDA* of $27.9 million
- Approved Medicare Advantage policies of 107,272
Healthcare Services
- Revenue of $145.2 million
- Adjusted EBITDA* of $0.9 million
- Approximately 82,000 SelectRx members
Life
- Revenue of $42.1 million
- Adjusted EBITDA* of $7.2 million
Auto & Home
- Revenue of $7.6 million
- Adjusted EBITDA* of $2.5 million
SelectQuote, Inc. (NYSE: SLQT) reported consolidated revenue for
the fourth quarter of fiscal year 2024 of $307.2 million compared
to consolidated revenue for the fourth quarter of fiscal year 2023
of $221.8 million. Consolidated net loss for the fourth quarter of
fiscal year 2024 was $31.0 million compared to consolidated net
loss for the fourth quarter of fiscal year 2023 of $47.8 million.
Finally, consolidated Adjusted EBITDA* for the fourth quarter of
fiscal year 2024 was $14.4 million compared to consolidated
Adjusted EBITDA* for the fourth quarter of fiscal year 2023 of
$(5.8) million.
Consolidated revenue for the fiscal year ended June 30, 2024,
was $1.3 billion compared to consolidated revenue for the fiscal
year ended June 30, 2023, of $1.0 billion. Consolidated net loss
for the fiscal year ended June 30, 2024, was $34.1 million compared
to consolidated net loss for the fiscal year ended June 30, 2023,
of $58.5 million. Finally, consolidated Adjusted EBITDA* for the
fiscal year ended June 30, 2024, was $117.0 million compared to
consolidated Adjusted EBITDA* of $74.3 million for the fiscal year
ended June 30, 2023.
SelectQuote Chief Executive Officer, Tim Danker, commented,
“2024 was another successful and strong year for SelectQuote across
both Senior Medicare Advantage distribution and our Healthcare
Services business, driven by SelectRx. On a consolidated basis our
fiscal year revenue and Adjusted EBITDA outperformed the midpoint
of our original forecast by 17% and 26%, respectively. This marks
the 10th consecutive quarter of outperformance versus our internal
expectations, reaffirming our strategy to prioritize profitability
and cash efficiency over volume growth. Revenue growth was driven
primarily by 68% growth in SelectRx members and increasing
utilization. Our profitability was driven by another strong year of
execution in Senior, which achieved a 25% Adjusted EBITDA margin,
similar to a very strong fiscal 2023. Additionally, our Healthcare
Services segment achieved its 5th straight quarter of profitability
ending the year with Adjusted EBITDA of $7.8 million, which
compares to an Adjusted EBITDA loss of $22.8 million in fiscal
2023. Lastly, SelectQuote has signed a non-binding letter of intent
to complete an initial commissions receivable securitization of
approximately $100 million with certain of our term lenders.
Provided this deal closes in the coming weeks, we believe this will
be an important first step in our strategic imperative to
optimizing our balance sheet capacity, lowering our funding costs,
and extending our debt maturities.”
Mr. Danker continued, “SelectQuote’s unique healthcare
information platform remains best positioned as a value creation
conduit, efficiently connecting a large and growing population of
Americans in need of coverage and care with the best providers,
based on each of their distinct personal needs.”
Segment Results
We currently report on four segments: 1) Senior, 2) Healthcare
Services, 3) Life, and 4) Auto & Home. 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 net loss plus: (i) interest
expense, net; (ii) benefit for income taxes; (iii) depreciation and
amortization; (iv) share-based compensation; (v) goodwill,
long-lived asset, and intangible assets impairments; (vi)
transaction costs; (vii) loss on disposal of property, equipment
and software, net; and (viii) other non-recurring expenses and
income. 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:
(in thousands)
4Q 2024
4Q 2023
% Change
FY 2024
FY 2023
% Change
Revenue
$
114,143
$
103,592
10
%
$
655,849
$
590,131
11
%
Adjusted EBITDA*
27,872
16,147
73
%
166,744
155,077
8
%
Adjusted EBITDA Margin*
24
%
16
%
25
%
26
%
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:
4Q 2024
4Q 2023
% Change
FY 2024
FY 2023
% Change
Medicare Advantage
117,091
114,383
2
%
720,027
652,630
10
%
Medicare Supplement
456
539
(15
)%
2,790
3,444
(19
)%
Dental, Vision and Hearing
12,821
14,668
(13
)%
61,713
74,181
(17
)%
Prescription Drug Plan
404
351
15
%
3,100
2,433
27
%
Other
1,579
2,099
(25
)%
5,303
7,501
(29
)%
Total
132,351
132,040
—
%
792,933
740,189
7
%
*See “Non-GAAP Financial Measures”
below.
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.
The following table shows the number of approved policies for
the periods presented:
4Q 2024
4Q 2023
% Change
FY 2024
FY 2023
% Change
Medicare Advantage
107,272
110,027
(3
)%
625,245
577,567
8
%
Medicare Supplement
307
435
(29
)%
1,885
2,619
(28
)%
Dental, Vision and Hearing
10,995
12,884
(15
)%
52,469
60,824
(14
)%
Prescription Drug Plan
545
350
56
%
3,229
2,144
51
%
Other
2,002
1,356
48
%
4,836
5,288
(9
)%
Total
121,121
125,052
(3
)%
687,664
648,442
6
%
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:
(dollars per policy):
4Q 2024
4Q 2023
% Change
FY 2024
FY 2023
% Change
Medicare Advantage
$
847
$
830
2
%
$
910
$
877
4
%
Medicare Supplement
245
1,207
(80
)%
967
1,030
(6
)%
Dental, Vision and Hearing
168
121
39
%
114
100
14
%
Prescription Drug Plan
181
185
(2
)%
228
207
10
%
Other
282
105
169
%
115
101
14
%
Healthcare Services
Financial Results
The following table provides the financial results for the
Healthcare Services segment for the periods presented:
(in thousands)
4Q 2024
4Q 2023
% Change
FY 2024
FY 2023
% Change
Revenue
$
145,223
$
82,803
75
%
$
478,508
$
252,075
90
%
Adjusted EBITDA*
909
1,685
(46
)%
7,821
(22,769
)
NM
Adjusted EBITDA Margin*
1
%
2
%
2
%
(9
)%
*See “Non-GAAP Financial Measures”
below.
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.
The following table shows the total number of SelectRx members
as of the periods presented:
June 30, 2024
June 30, 2023
Total SelectRx Members
82,385
49,044
The total number of SelectRx members increased by 68% as of June
30, 2024, compared to June 30, 2023, due to our operating strategy
to grow SelectRx.
The following table shows the average prescriptions shipped per
day for the periods presented:
FY 2024
FY 2023
Prescriptions Per Day
18,935
10,657
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 derived
from 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 June
30,
(dollars per approved policy):
2024
2023
MA and MS approved policies
627,130
580,186
MA and MS commission per MA / MS
policy
$
910
$
877
Other commission per MA/MS policy
12
12
Pharmacy revenue per MA/MS policy
741
412
Other revenue per MA/MS policy
146
150
Total revenue per MA / MS policy
1,809
1,451
Total operating expenses per MA / MS
policy
(1,530
)
(1,224
)
Adjusted EBITDA per MA/MS policy *
$
279
$
227
Adjusted EBITDA Margin per MA/MS policy
*
15
%
16
%
Revenue / CAC multiple
4.5X
4.1X
Total revenue per MA/MS policy increased 25% for the twelve
months ended June 30, 2024, compared to the twelve months ended
June 30, 2023, primarily due to the increase in pharmacy revenue.
Total operating expenses per MA/MS policy increased 25% for the
twelve months ended June 30, 2024, compared to the twelve months
ended June 30, 2023, driven by an increase in cost of goods
sold-pharmacy revenue for Healthcare Services due to the growth of
the business, offset by a decrease in our marketing and advertising
costs.
Life
Financial Results
The following table provides the financial results for the Life
segment for the periods presented:
(in thousands)
4Q 2024
4Q 2023
% Change
FY 2024
FY 2023
% Change
Revenue
$
42,074
$
38,052
11
%
$
157,930
$
145,832
8
%
Adjusted EBITDA*
7,217
6,702
8
%
20,164
23,073
(13
)%
Adjusted EBITDA Margin*
17
%
18
%
13
%
16
%
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:
(in thousands)
4Q 2024
4Q 2023
% Change
FY 2024
FY 2023
% Change
Term Premiums
$
18,074
$
20,507
(12
)%
$
70,450
$
68,941
2
%
Final Expense Premiums
23,789
18,960
25
%
86,600
77,725
11
%
Total
$
41,863
$
39,467
6
%
$
157,050
$
146,666
7
%
*See “Non-GAAP Financial Measures”
below.
Auto & Home
Financial Results
The following table provides the financial results for the Auto
& Home segment for the periods presented:
(in thousands)
4Q 2024
4Q 2023
% Change
FY 2024
FY 2023
% Change
Revenue
$
7,580
$
(1,266
)
(1)
699
%
$
36,228
$
21,862
(1)
66
%
Adjusted EBITDA*
2,474
(7,235
)
(1)
NM
14,127
81
(1)
NM
Adjusted EBITDA Margin*
33
%
NM
39
%
—
%
(1) Decrease is due to the impact of the
$10.4 million change in estimate related to the mutual termination
of a contract with a certain Auto & Home carrier to provide for
the ability to migrate the book of business to other carriers.
Operating Metrics
Auto & Home premium represents the total premium value of
all new policies that were approved by our insurance carrier
partners 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 Auto &
Home segment.
The following table shows premiums for the periods
presented:
(in thousands):
4Q 2024
4Q 2023
% Change
FY 2024
FY 2023
% Change
Premiums
$
13,891
$
14,460
(4
)%
$
56,637
$
50,917
11
%
*See “Non-GAAP Financial Measures”
below.
Earnings Conference Call
SelectQuote, Inc. will host a conference call with the
investment community on September 13, 2024, beginning at 8:30 a.m.
ET. To register for this conference call, please use this link:
https://www.netroadshow.com/events/login?show=7297aa9f&confId=70516.
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 interest expense, income tax expense
(benefit), depreciation and amortization, 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 net income (loss). 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) to Adjusted EBITDA are presented below beginning on page
13.
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: impacts of the COVID-19 pandemic and any other
significant public health events; 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; our ability to regain
and maintain compliance with NYSE listing standards; 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) provides solutions
that help consumers protect their most valuable assets: their
families, health, and property. The company 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.
With an ecosystem offering high touchpoints for consumers across
Insurance, Medicare, Pharmacy, and Value-Based Care, the company
now has four core business lines: SelectQuote Senior, SelectQuote
Healthcare Services, SelectQuote Life, and SelectQuote Auto and
Home. 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 specialized
medication management pharmacy, and Population Health which
proactively connects its members with best-in-class healthcare
services that fit each member's unique healthcare needs. The
platform improves health outcomes and lowers healthcare costs
through proactive engagement and access to high-value healthcare
solutions.
SELECTQUOTE, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(In thousands)
June 30, 2024
June 30, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
42,690
$
83,156
Accounts receivable, net of allowances of
$8.2 million and $2.7 million, respectively
150,035
154,565
Commissions receivable-current
119,871
111,148
Other current assets
20,327
14,355
Total current assets
332,923
363,224
COMMISSIONS RECEIVABLE—Net
761,446
729,350
PROPERTY AND EQUIPMENT—Net
18,973
27,452
SOFTWARE—Net
13,978
14,740
OPERATING LEASE RIGHT-OF-USE ASSETS
23,437
23,563
INTANGIBLE ASSETS—Net
10,194
10,200
GOODWILL
29,438
29,136
OTHER ASSETS
3,519
21,586
TOTAL ASSETS
$
1,193,908
$
1,219,251
LIABILITIES AND SHAREHOLDERS’
EQUITY
CURRENT LIABILITIES:
Accounts payable
$
36,587
$
27,577
Accrued expenses
16,904
16,993
Accrued compensation and benefits
57,594
49,966
Operating lease liabilities—current
4,709
5,175
Current portion of long-term debt
45,854
33,883
Contract liabilities
8,066
1,691
Other current liabilities
4,873
1,972
Total current liabilities
174,587
137,257
LONG-TERM DEBT, NET—less current
portion
637,480
664,625
DEFERRED INCOME TAXES
37,478
39,581
OPERATING LEASE LIABILITIES
25,685
27,892
OTHER LIABILITIES
1,877
2,926
Total liabilities
877,107
872,281
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Common stock, $0.01 par value
1,694
1,669
Additional paid-in capital
580,764
567,266
Accumulated deficit
(269,769
)
(235,644
)
Accumulated other comprehensive income
4,112
13,679
Total shareholders’ equity
316,801
346,970
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
1,193,908
$
1,219,251
SELECTQUOTE, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE LOSS
(Unaudited)
(In thousands)
Three Months Ended June
30,
Year Ended June 30,
2024
2023
2024
2023
REVENUE:
Commissions and other services
$
165,656
$
141,873
$
856,923
$
763,301
Pharmacy
141,552
79,905
464,853
239,547
Total revenue
307,208
221,778
1,321,776
1,002,848
OPERATING COSTS AND EXPENSES:
Cost of commissions and other services
revenue
64,548
65,697
318,798
301,524
Cost of goods sold—pharmacy revenue
120,644
71,211
405,004
225,963
Marketing and advertising
70,181
63,521
358,858
301,245
Selling, general, and administrative
43,993
49,856
141,042
136,518
Technical development
9,233
7,154
33,524
26,015
Total operating costs and expenses
308,599
257,439
1,257,226
991,265
INCOME (LOSS) FROM OPERATIONS
(1,391
)
(35,661
)
64,550
11,583
INTEREST EXPENSE, NET
(23,409
)
(21,721
)
(93,551
)
(80,606
)
OTHER EXPENSE, NET
(15
)
(3
)
(65
)
(121
)
LOSS BEFORE INCOME TAX EXPENSE
(BENEFIT)
(24,815
)
(57,385
)
(29,066
)
(69,144
)
INCOME TAX EXPENSE (BENEFIT)
6,202
(9,547
)
5,059
(10,600
)
NET LOSS
$
(31,017
)
$
(47,838
)
$
(34,125
)
$
(58,544
)
NET LOSS PER SHARE:
Basic
$
(0.18
)
$
(0.29
)
$
(0.20
)
$
(0.35
)
Diluted
$
(0.18
)
$
(0.29
)
$
(0.20
)
$
(0.35
)
WEIGHTED-AVERAGE COMMON STOCK OUTSTANDING
USED IN PER SHARE AMOUNTS:
Basic
169,204
166,709
168,519
166,140
Diluted
169,204
166,709
168,519
166,140
OTHER COMPREHENSIVE INCOME (LOSS) NET OF
TAX:
Change in cash flow hedge
(2,364
)
605
(9,567
)
1,963
OTHER COMPREHENSIVE INCOME (LOSS)
(2,364
)
605
(9,567
)
1,963
COMPREHENSIVE LOSS
$
(33,381
)
$
(47,233
)
$
(43,692
)
$
(56,581
)
SELECTQUOTE, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Unaudited)
(In thousands)
Three Months Ended June
30,
Year Ended June 30,
2024
2023
2024
2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$
(31,017
)
$
(47,838
)
$
(34,125
)
$
(58,544
)
Adjustments to reconcile net loss to net
cash and cash equivalents used in operating activities:
Depreciation and amortization
6,407
6,794
24,998
27,881
Loss on disposal of property, equipment,
and software
523
364
536
754
Impairment of long-lived assets
—
17,332
—
17,332
Share-based compensation expense
3,304
2,785
13,816
11,310
Deferred income taxes
3,314
(9,760
)
1,163
(11,176
)
Amortization of debt issuance costs and
debt discount
1,279
2,426
6,142
8,676
Write-off of debt issuance costs
—
—
293
710
Accrued interest payable in kind
5,254
3,565
19,577
12,015
Non-cash lease expense
404
1,070
2,349
4,185
Changes in operating assets and
liabilities:
Accounts receivable, net
103,722
37,921
5,203
(24,817
)
Commissions receivable
(48,194
)
(18,964
)
(40,819
)
(1,872
)
Other assets
653
(2,997
)
(1,967
)
169
Accounts payable and accrued expenses
(28,726
)
(10,089
)
7,347
(3,649
)
Operating lease liabilities
(1,095
)
(1,312
)
(4,897
)
(5,643
)
Other liabilities
4,167
12,161
15,620
3,292
Net cash provided by (used in) operating
activities
19,995
(6,542
)
15,236
(19,377
)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment
(268
)
(391
)
(3,382
)
(1,447
)
Proceeds from sales of property and
equipment
—
—
253
—
Purchases of software and capitalized
software development costs
(2,219
)
(1,874
)
(8,284
)
(7,678
)
Acquisition of business
(3,433
)
—
(3,433
)
—
Net cash used in investing activities
(5,920
)
(2,265
)
(14,846
)
(9,125
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on Term Loans
(8,471
)
—
(38,883
)
(17,833
)
Payments on other debt
(37
)
(35
)
(149
)
(158
)
Proceeds from common stock options
exercised and employee stock purchase plan
74
—
81
1,187
Payments of tax withholdings related to
net share settlement of equity awards
(1
)
—
(374
)
(40
)
Payments of debt issuance costs
(758
)
—
(1,531
)
(10,110
)
Payment of acquisition holdback
—
(50
)
—
(2,385
)
Net cash used in financing activities
(9,193
)
(85
)
(40,856
)
(29,339
)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
4,882
(8,892
)
(40,466
)
(57,841
)
CASH AND CASH EQUIVALENTS—Beginning of
period
37,808
92,048
83,156
140,997
CASH AND CASH EQUIVALENTS—End of
period
$
42,690
$
83,156
$
42,690
$
83,156
SELECTQUOTE, INC. AND
SUBSIDIARIES
Adjusted EBITDA to Loss before
income tax expense (benefit) Reconciliation
(Unaudited)
Three Months Ended June 30,
2024
(in thousands)
Senior
Healthcare Services
Life
Auto & Home
Total
Adjusted Segment EBITDA
$
27,872
$
909
$
7,217
$
2,474
$
38,472
Corporate & elimination of
intersegment profits
(24,115
)
Adjusted EBITDA
14,357
Share-based compensation expense
(3,304
)
Transaction costs
(5,529
)
Depreciation and amortization
(6,407
)
Loss on disposal of property, equipment,
and software
(523
)
Interest expense, net
(23,409
)
Loss before income tax expense
(benefit)
$
(24,815
)
Three Months Ended June 30,
2023
(in thousands)
Senior
Healthcare Services
Life
Auto & Home
Total
Adjusted Segment EBITDA
$
16,147
$
1,685
$
6,702
$
(7,235
)
$
17,299
Corporate & elimination of
intersegment profits
(23,122
)
Adjusted EBITDA
(5,823
)
Share-based compensation expense
(2,785
)
Transaction costs
(2,568
)
Depreciation and amortization
(6,793
)
Loss on disposal of property, equipment,
and software
(363
)
Impairment of long-lived assets
(17,332
)
Interest expense, net
(21,721
)
Loss before income tax expense
(benefit)
$
(57,385
)
Year Ended June 30,
2024
(in thousands)
Senior
Healthcare Services
Life
Auto & Home
Total
Adjusted Segment EBITDA
$
166,744
$
7,821
$
20,164
$
14,127
$
208,856
Corporate & elimination of
intersegment profits
(91,863
)
Adjusted EBITDA
116,993
Share-based compensation expense
(13,816
)
Transaction costs
(13,158
)
Depreciation and amortization
(24,998
)
Loss on disposal of property, equipment,
and software
(536
)
Interest expense, net
(93,551
)
Loss before income tax expense
(benefit)
$
(29,066
)
Year Ended June 30,
2023
(in thousands)
Senior
Healthcare Services
Life
Auto & Home
Total
Adjusted Segment EBITDA
$
155,077
$
(22,769
)
$
23,073
$
81
$
155,462
Corporate & elimination of
intersegment profits
(81,159
)
Adjusted EBITDA
74,303
Share-based compensation expense
(11,310
)
Transaction costs
(5,569
)
Depreciation and amortization
(27,881
)
Loss on disposal of property, equipment,
and software
(749
)
Impairment of long-lived assets
(17,332
)
Interest expense, net
(80,606
)
Loss before income tax expense
(benefit)
$
(69,144
)
SELECTQUOTE, INC. AND
SUBSIDIARIES
Net Loss to Adjusted EBITDA
Reconciliation
(Unaudited)
Guidance net loss to Adjusted EBITDA
reconciliation, year ending June 30, 2025:
(in thousands)
Range
Net loss
$
(42,000
)
$
(6,000
)
Income tax benefit
(16,000
)
(2,000
)
Interest expense, net
102,000
92,000
Depreciation and amortization
24,000
20,000
Share-based compensation expense
16,000
13,000
Transaction costs
6,000
3,000
Adjusted EBITDA
$
90,000
$
120,000
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240913301009/en/
Investor Relations: Sloan Bohlen 877-678-4083
investorrelations@selectquote.com
Media: Matt Gunter 913-286-4931 matt.gunter@selectquote.com
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