Third Quarter of Fiscal Year 2024 – Consolidated Earnings
Highlights
- Revenue of $376.4 million
- Net income of $8.6 million
- Adjusted EBITDA* of $46.6 million
Raising Fiscal Year 2024 Guidance Ranges:
- Revenue expected in a range of $1.25 billion to $1.3 billion vs
prior range of $1.23 billion to $1.3 billion
- Net loss expected in a range of $34 million to $21 million vs
prior range of $45 million to $22 million
- Adjusted EBITDA* expected in a range of $100 million to $110
million vs prior range of $90 million to $105 million
Third Quarter of Fiscal Year 2024 – Segment
Highlights
Senior
- Revenue of $204.3 million
- Adjusted EBITDA* of $61.5 million
- Approved Medicare Advantage policies of 185,716
Healthcare Services
- Revenue of $124.2 million
- Adjusted EBITDA* of $1.6 million
- Over 75,000 SelectRx members
Life
- Revenue of $40.7 million
- Adjusted EBITDA* of $3.1 million
Auto & Home
- Revenue of $9.1 million
- Adjusted EBITDA* of $3.6 million
SelectQuote, Inc. (NYSE: SLQT) reported consolidated revenue for
the third quarter of fiscal year 2024 of $376.4 million, compared
to consolidated revenue for the third quarter of fiscal year 2023
of $299.4 million. Consolidated net income for the third quarter of
fiscal year 2024 was $8.6 million, compared to consolidated net
income for the third quarter of fiscal year 2023 of $9.3 million.
Finally, consolidated Adjusted EBITDA* for the third quarter of
fiscal year 2024 was $46.6 million, compared to consolidated
Adjusted EBITDA* for the third quarter of fiscal year 2023 of $44.0
million.
Chief Executive Officer Tim Danker commented, “SelectQuote
outperformed our own expectations for the 9th consecutive quarter,
and the company has never been better positioned to drive
shareholder value. We firmly believe SelectQuote can amplify the
strong operating results achieved over the past two years since our
foundational strategic redesign.”
“Our Senior business completed another highly successful
Medicare Advantage busy season in the quarter, which produced
stable and attractive economics across both policy growth, LTV
expansion, and operating efficiency. The segment’s core tenured
agents helped over 185,000 Americans find the right Medicare
Advantage policy and did so with strong overall cost per policy and
efficient close rates, which drove a Senior Adjusted EBITDA margin
above 30% in one of our highest open enrollment period (OEP)
quarters for revenue in company history. The success in our Senior
business also enhanced the continued expansion of our Healthcare
Services business, which saw SelectRx grow by over 12,000 members,
significantly exceeding our original outlook. Overall, our holistic
healthcare platform created new customers at a highly efficient
revenue to customer acquisition cost of over 4x, which will drive
significant Adjusted EBITDA contribution as Healthcare Services
continues to scale.”
Mr. Danker concluded, “The teams at SelectQuote and our
leadership are energized about the successes experienced
year-to-date. We have conviction that 2024 will prove to be an
inflection point in our company’s history, and SelectQuote is
poised to leverage our unique healthcare platform to drive
attractive returns for our shareholders in the quarters and years
ahead.”
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, Adjusted EBITDA,* and
Adjusted EBITDA Margin.* Costs of 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 calculated
as total revenue for the applicable segment less direct and
allocated costs of revenue, cost of goods sold, marketing and
advertising, technical development, and selling, general, and
administrative operating costs and expenses, excluding depreciation
and amortization expense; gain or loss on disposal of property,
equipment, and software; share-based compensation expense; and
non-recurring expenses such as severance payments and transaction
costs.
Senior
Financial Results
The following table provides the financial results for the
Senior segment for the periods presented:
Three Months Ended March
31,
Nine Months Ended March
31,
(in thousands)
2024
2023
% Change
2024
2023
% Change
Revenue
$
204,259
$
185,200
10
%
$
541,705
$
486,541
11
%
Adjusted EBITDA*
61,494
59,166
4
%
138,871
138,933
—
%
Adjusted EBITDA Margin*
30
%
32
%
26
%
29
%
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 March
31,
Nine Months Ended March
31,
2024
2023
% Change
2024
2023
% Change
Medicare Advantage
226,692
196,372
15
%
602,936
538,247
12
%
Medicare Supplement
650
675
(4
)%
2,334
2,905
(20
)%
Dental, Vision and Hearing
16,588
21,175
(22
)%
48,892
59,513
(18
)%
Prescription Drug Plan
665
416
60
%
2,696
2,082
29
%
Other
774
1,864
(58
)%
3,724
5,402
(31
)%
Total
245,369
220,502
11
%
660,582
608,149
9
%
*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:
Three Months Ended March
31,
Nine Months Ended March
31,
2024
2023
% Change
2024
2023
% Change
Medicare Advantage
185,716
165,530
12
%
517,973
467,540
11
%
Medicare Supplement
445
557
(20
)%
1,578
2,184
(28
)%
Dental, Vision and Hearing
14,042
16,968
(17
)%
41,474
47,940
(13
)%
Prescription Drug Plan
1,114
521
114
%
2,684
1,794
50
%
Other
789
1,029
(23
)%
2,834
3,932
(28
)%
Total
202,106
184,605
9
%
566,543
523,390
8
%
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 March
31,
Nine Months Ended March
31,
(dollars per policy):
2024
2023
% Change
2024
2023
% Change
Medicare Advantage
$
995
$
965
3
%
$
923
$
888
4
%
Medicare Supplement
1,271
871
46
%
1,108
994
11
%
Dental, Vision and Hearing
101
91
11
%
100
95
5
%
Prescription Drug Plan
237
194
22
%
237
211
12
%
Other
36
123
(71
)%
(3
)
100
(103
)%
Healthcare Services
Financial Results
The following table provides the financial results for the
Healthcare Services segment for the periods presented:
Three Months Ended March
31,
Nine Months Ended March
31,
(in thousands)
2024
2023
% Change
2024
2023
% Change
Revenue
$
124,207
$
70,725
76
%
$
333,284
$
169,270
97
%
Adjusted EBITDA*
1,609
(3,366
)
148
%
6,911
(24,456
)
128
%
Adjusted EBITDA Margin*
1
%
(5
)%
2
%
(14
)%
*See “Non-GAAP Financial Measures”
below.
Operating Metrics
Total Members
The total number of SelectRx members represents the amount of
customers to which an order has been shipped, as this is the
primary key driver of revenue for Healthcare Services.
The following table shows the total number of SelectRx members
for the date presented:
March 31, 2024
March 31, 2023
Total SelectRx Members
75,074
44,993
Prescriptions Per Day
Prescriptions per day represents the total average prescriptions
shipped per business day, as this is a primary key driver of
revenue for Healthcare Services.
The following table shows the prescriptions shipped per day for
the periods presented:
Three Months Ended March
31,
Nine Months Ended March
31,
2024
2023
2024
2023
Prescriptions Per Day
20,216
11,737
17,582
9,753
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 costs, 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 March
31,
(dollars per approved policy):
2024
2023
Medicare Advantage and Medicare Supplement
approved policies
630,013
586,238
Medicare Advantage and Medicare Supplement
commission per MA/MS policy
$
907
$
886
Other commission per MA/MS policy
10
15
Pharmacy revenue per MA/MS policy
641
320
Other revenue per MA/MS policy
126
66
Total revenue per MA/MS policy
1,684
1,287
Total operating expenses per MA/MS
policy
(1,425
)
(1,167
)
Adjusted EBITDA per MA/MS policy (1)
$
259
$
120
Adjusted EBITDA Margin per MA/MS policy
(1)
15
%
9
%
Revenue/CAC multiple
4.2
X
3.5
X
(1) These financial measures are not
calculated in accordance with GAAP. See “Management’s Discussion
and Analysis of Financial Condition and Results of
Operations—Non-GAAP Financial Measures” in the Company’s Quarterly
Report on Form 10-Q for information regarding our use of these
non-GAAP financial measures and a reconciliation of such measures
to their nearest comparable financial measures calculated and
presented in accordance with GAAP.
Total revenue per MA/MS policy increased 31% for the twelve
months ended March 31, 2024, compared to the twelve months ended
March 31, 2023, primarily due to the increase in pharmacy revenue.
Total operating expenses per MA/MS policy increased 22% for the
twelve months ended March 31, 2024, compared to the twelve months
ended March 31, 2023, primarily driven by increase in cost of goods
sold-pharmacy revenue for SelectRx 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 March
31,
Nine Months Ended March
31,
(in thousands)
2024
2023
% Change
2024
2023
% Change
Revenue
$
40,686
$
36,950
10
%
$
115,855
$
107,780
7
%
Adjusted EBITDA*
3,138
5,303
(41
)%
12,945
16,371
(21
)%
Adjusted EBITDA Margin*
8
%
14
%
11
%
15
%
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.
*See “Non-GAAP Financial Measures”
below.
The following table shows term and final expense premiums for
the periods presented:
Three Months Ended March
31,
Nine Months Ended March
31,
(in thousands)
2024
2023
% Change
2024
2023
% Change
Term Premiums
$
16,788
$
17,512
(4
)%
$
52,376
$
48,433
8
%
Final Expense Premiums
23,724
19,308
23
%
62,811
58,766
7
%
Total
$
40,512
$
36,820
10
%
115,187
107,199
7
%
Auto & Home
Financial Results
The following table provides the financial results for the Auto
& Home segment for the periods presented:
Three Months Ended March
31,
Nine Months Ended March
31,
(in thousands)
2024
2023
% Change
2024
2023
% Change
Revenue
$
9,134
$
8,238
11
%
$
28,649
$
23,128
24
%
Adjusted EBITDA*
3,609
2,591
39
%
11,654
7,315
59
%
Adjusted EBITDA Margin*
40
%
31
%
41
%
32
%
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:
Three Months Ended March
31,
Nine Months Ended March
31,
(in thousands):
2024
2023
% Change
2024
2023
% Change
Premiums
$
14,180
$
12,828
11
%
$
42,746
$
36,456
17
%
Amendment to Credit
Agreement
On May 8, 2024, the Company and its lenders agreed to amend the
Company’s credit agreement to extend the maturity date with respect
to $683.8 million of extended term loans from February 15,
2025 to May 15, 2025. The amendment also provides for a minimum
asset coverage ratio and minimum liquidity requirements for the
extension period. Additional information regarding the amendment
will be included in the Company’s Quarterly Report on Form 10-Q for
the period ended March 31, 2024.
Earnings Conference Call
SelectQuote, Inc. will host a conference call with the
investment community today, Thursday, May 9, 2024, beginning at
9:00 a.m. ET. To register for this conference call, please use this
link:
https://www.netroadshow.com/events/login?show=2a79382d&confId=63927.
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.
*See “Non-GAAP Financial Measures” below.
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 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 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 the differences between the
non-GAAP financial measures included herein and their most directly
comparable GAAP financial measures are set forth below beginning on
page 12.
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: the impacts of the COVID-19 pandemic and any other
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, including
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 and meet our scheduled repayment obligations under our
debt arrangements; our ability to access additional capital on
acceptable terms; 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 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 Patient-Centered
Pharmacy Home™ (PCPH) accredited pharmacy, and Population Health,
which proactively connects consumers with a wide breadth of
healthcare services supporting their needs..
SELECTQUOTE, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(Unaudited)
(In thousands)
March 31, 2024
June 30, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
37,808
$
83,156
Accounts receivable, net of allowances of
$6.5 million and $2.7 million, respectively
253,083
154,565
Commissions receivable-current
69,165
111,148
Other current assets
24,115
14,355
Total current assets
384,171
363,224
COMMISSIONS RECEIVABLE—Net
763,958
729,350
PROPERTY AND EQUIPMENT—Net
22,536
27,452
SOFTWARE—Net
13,952
14,740
OPERATING LEASE RIGHT-OF-USE ASSETS
19,341
23,563
INTANGIBLE ASSETS—Net
7,926
10,200
GOODWILL
29,136
29,136
OTHER ASSETS
4,119
21,586
TOTAL ASSETS
$
1,245,139
$
1,219,251
LIABILITIES AND SHAREHOLDERS’
EQUITY
CURRENT LIABILITIES:
Accounts payable
$
61,168
$
27,577
Accrued expenses
21,058
16,993
Accrued compensation and benefits
57,483
49,966
Operating lease liabilities—current
4,663
5,175
Current portion of long-term debt
37,717
33,883
Contract liabilities
3,655
1,691
Other current liabilities
4,227
1,972
Total current liabilities
189,971
137,257
LONG-TERM DEBT, NET—less current
portion
648,331
664,625
DEFERRED INCOME TAXES
35,057
39,581
OPERATING LEASE LIABILITIES
22,326
27,892
OTHER LIABILITIES
2,649
2,926
Total liabilities
898,334
872,281
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Common stock, $0.01 par value
1,692
1,669
Additional paid-in capital
577,389
567,266
Accumulated deficit
(238,752
)
(235,644
)
Accumulated other comprehensive income
6,476
13,679
Total shareholders’ equity
346,805
346,970
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
1,245,139
$
1,219,251
SELECTQUOTE, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)
(In thousands)
Three Months Ended March
31,
Nine Months Ended March
31,
2024
2023
2024
2023
REVENUE:
Commission
$
230,763
$
197,258
$
611,744
533,627
Pharmacy
120,282
66,948
323,865
159,641
Other
25,355
35,192
78,958
87,802
Total revenue
376,400
299,398
1,014,567
781,070
OPERATING COSTS AND EXPENSES:
Cost of revenue
84,315
79,186
254,250
235,827
Cost of goods sold—pharmacy revenue
106,172
62,302
284,360
154,753
Marketing and advertising
109,276
90,205
288,676
237,724
Selling, general, and administrative
34,971
27,544
97,049
86,662
Technical development
8,604
6,434
24,291
18,860
Total operating costs and expenses
343,338
265,671
948,626
733,826
INCOME FROM OPERATIONS
33,062
33,727
65,941
47,244
INTEREST EXPENSE, NET
(24,330
)
(21,105
)
(70,141
)
(58,885
)
OTHER INCOME (EXPENSE,) NET
(12
)
(206
)
(51
)
(118
)
INCOME (LOSS) BEFORE INCOME TAX EXPENSE
(BENEFIT)
8,720
12,416
(4,251
)
(11,759
)
INCOME TAX EXPENSE (BENEFIT)
169
3,152
(1,143
)
(1,053
)
NET INCOME (LOSS)
$
8,551
$
9,264
$
(3,108
)
(10,706
)
NET INCOME (LOSS) PER SHARE:
Basic
$
0.05
$
0.06
$
(0.02
)
$
(0.06
)
Diluted
$
0.05
$
0.06
$
(0.02
)
$
(0.06
)
WEIGHTED-AVERAGE COMMON STOCK OUTSTANDING
USED IN PER SHARE AMOUNTS:
Basic
169,070
166,543
168,291
165,951
Diluted
170,956
167,905
168,291
165,951
OTHER COMPREHENSIVE INCOME (LOSS) NET OF
TAX:
Gain (loss) on cash flow hedge
(1,771
)
(2,661
)
(7,203
)
1,358
OTHER COMPREHENSIVE INCOME (LOSS)
(1,771
)
(2,661
)
(7,203
)
1,358
COMPREHENSIVE INCOME (LOSS)
$
6,780
$
6,603
$
(10,311
)
$
(9,348
)
SELECTQUOTE, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Nine Months Ended March
31,
2024
2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$
(3,108
)
$
(10,706
)
Adjustments to reconcile net loss to net
cash and cash equivalents used in operating activities:
Depreciation and amortization
18,591
21,087
Loss on disposal of property, equipment,
and software
13
390
Share-based compensation expense
10,512
8,525
Deferred income taxes
(2,151
)
(1,416
)
Amortization of debt issuance costs and
debt discount
4,863
6,250
Write-off of debt issuance costs
293
710
Accrued interest payable in kind
14,323
8,450
Non-cash lease expense
1,945
3,115
Changes in operating assets and
liabilities:
Accounts receivable, net
(98,519
)
(62,738
)
Commissions receivable
7,375
17,092
Other assets
(2,620
)
3,166
Accounts payable and accrued expenses
36,073
6,440
Operating lease liabilities
(3,802
)
(4,331
)
Other liabilities
11,453
(8,869
)
Net cash used in operating activities
(4,759
)
(12,835
)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment
(3,114
)
(1,056
)
Proceeds from sales of property and
equipment
253
—
Purchases of software and capitalized
software development costs
(6,065
)
(5,804
)
Net cash used in investing activities
(8,926
)
(6,860
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on Term Loans
(30,412
)
(17,833
)
Payments on other debt
(112
)
(123
)
Proceeds from common stock options
exercised and employee stock purchase plan
8
1,187
Payments of tax withholdings related to
net share settlement of equity awards
(374
)
(40
)
Payments of debt issuance costs
(773
)
(10,110
)
Payment of acquisition holdback
—
(2,335
)
Net cash used in financing activities
(31,663
)
(29,254
)
NET DECREASE IN CASH AND CASH
EQUIVALENTS
(45,348
)
(48,949
)
CASH AND CASH EQUIVALENTS—Beginning of
period
83,156
140,997
CASH AND CASH EQUIVALENTS—End of
period
$
37,808
$
92,048
SELECTQUOTE, INC. AND
SUBSIDIARIES
Net Income (Loss) to Adjusted
EBITDA Reconciliation
(Unaudited)
Three Months Ended March 31,
2024
(in thousands)
Senior
Healthcare Services
Life
Auto & Home
Corp & Elims
Consolidated
Revenue
$
204,259
$
124,207
$
40,686
$
9,134
$
(1,886
)
$
376,400
Operating expenses
(142,765
)
(122,598
)
(37,548
)
(5,524
)
(21,355
)
(329,790
)
Other income (expense), net
—
—
—
(1
)
(11
)
(12
)
Adjusted EBITDA
$
61,494
$
1,609
$
3,138
$
3,609
$
(23,252
)
$
46,598
Share-based compensation expense
(3,515
)
Transaction costs
(3,325
)
Depreciation and amortization
(6,704
)
Loss on disposal of property, equipment,
and software
(4
)
Interest expense, net
(24,330
)
Income tax expense
(169
)
Net income
$
8,551
Three Months Ended March 31,
2023
(in thousands)
Senior
Healthcare Services
Life
Auto & Home
Corp & Elims
Consolidated
Revenue
$
185,200
$
70,725
$
36,950
$
8,238
$
(1,715
)
$
299,398
Operating expenses
(126,034
)
(74,091
)
(31,446
)
(5,648
)
(17,947
)
(255,166
)
Other income (expense), net
—
—
(201
)
1
(6
)
(206
)
Adjusted EBITDA
$
59,166
$
(3,366
)
$
5,303
$
2,591
$
(19,668
)
$
44,026
Share-based compensation expense
(2,959
)
Transaction costs
(433
)
Depreciation and amortization
(7,098
)
Loss on disposal of property, equipment,
and software
(15
)
Interest expense, net
(21,105
)
Income tax expense
(3,152
)
Net income
$
9,264
Nine Months Ended March 31,
2024
(in thousands)
Senior
Healthcare Services
Life
Auto & Home
Corp & Elims
Consolidated
Revenue
$
541,705
$
333,284
$
115,855
$
28,649
$
(4,926
)
$
1,014,567
Operating expenses
(402,834
)
(326,373
)
(102,910
)
(16,994
)
(62,770
)
(911,881
)
Other income (expense), net
—
—
—
(1
)
(50
)
(51
)
Adjusted EBITDA
$
138,871
$
6,911
$
12,945
$
11,654
$
(67,746
)
$
102,635
Share-based compensation expense
(10,512
)
Transaction costs
(7,629
)
Depreciation and amortization
(18,591
)
Loss on disposal of property, equipment,
and software
(13
)
Interest expense, net
(70,141
)
Income tax benefit
1,143
Net loss
$
(3,108
)
Nine Months Ended March 31,
2023
(in thousands)
Senior
Healthcare Services
Life
Auto & Home
Corp & Elims
Consolidated
Revenue
$
486,541
$
169,270
$
107,780
$
23,128
$
(5,649
)
$
781,070
Operating expenses
(347,608
)
(193,726
)
(91,409
)
(15,812
)
(52,270
)
(700,825
)
Other income (expense), net
—
—
—
(1
)
(117
)
(118
)
Adjusted EBITDA
$
138,933
$
(24,456
)
$
16,371
$
7,315
$
(58,036
)
$
80,127
Share-based compensation expense
(8,525
)
Transaction costs
(3,003
)
Depreciation and amortization
(21,087
)
Loss on disposal of property, equipment,
and software
(386
)
Interest expense, net
(58,885
)
Income tax benefit
1,053
Net loss
$
(10,706
)
SELECTQUOTE, INC. AND
SUBSIDIARIES
Net Loss to Adjusted EBITDA
Reconciliation
(Unaudited)
Guidance net loss to Adjusted EBITDA
reconciliation, year ending June 30, 2024:
(in thousands)
Range
Net loss
$
(34,000
)
$
(21,000
)
Income tax benefit
(12,000
)
(8,000
)
Interest expense, net
96,000
94,000
Depreciation and amortization
26,000
24,000
Share-based compensation expense
14,000
13,000
Non-recurring expenses
10,000
8,000
Adjusted EBITDA
$
100,000
$
110,000
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240509711518/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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