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Share Name | Share Symbol | Market | Type |
---|---|---|---|
SelectQuote Inc | NYSE:SLQT | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.0299 | 1.15% | 2.6199 | 2.77 | 2.55 | 2.67 | 1,240,657 | 01:00:00 |
Second Quarter of Fiscal Year 2024 – Consolidated Earnings Highlights
Raising Fiscal Year 2024 Guidance Ranges:
Second Quarter of Fiscal Year 2024 – Segment Highlights
Senior
Healthcare Services
Life
Auto & Home
SelectQuote, Inc. (NYSE: SLQT) reported consolidated revenue for the second quarter of fiscal year 2024 of $405.4 million, compared to consolidated revenue for the second quarter of fiscal year 2023 of $319.2 million. Consolidated net income for the second quarter of fiscal year 2024 was $19.4 million, compared to consolidated net income for the second quarter of fiscal year 2023 of $22.5 million. Finally, consolidated Adjusted EBITDA* for the second quarter of fiscal year 2024 was $67.4 million, compared to consolidated Adjusted EBITDA* for the second quarter of fiscal year 2023 of $63.6 million.
Chief Executive Officer Tim Danker stated, “The second quarter marked SelectQuote’s eighth consecutive quarter of performance ahead of expectations, and we remain confident that our strategy to prioritize predictable and cash efficient growth will continue to generate value for both our customers and shareholders. We are also pleased with our progress on operating cash flow and now anticipate that SelectQuote will approach positive free cash flow in fiscal 2024.”
“SelectQuote drove strong results throughout the annual enrollment period for Medicare Advantage where our Senior business grew revenues by double digits, and our second quarter Adjusted EBITDA margin of 32% remains attractive. These strong Senior operating results were a function of higher tenured agent productivity and solid policyholder persistency, which we expect to benefit SelectQuote in the open enrollment period as well.”
“Additionally, Healthcare Services, and our SelectRx business specifically, drove substantial growth in excess of our original forecast. As of the end of the second quarter, SelectRx members have surpassed 62,000, which is in excess of our original expectation for the full year. More importantly, the business was again Adjusted EBITDA profitable.”
Mr. Danker continued, “We are pleased to increase our fiscal year 2024 outlook based on the strength of both businesses year-to-date.”
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 December 31,
Six Months Ended December 31,
(in thousands)
2023
2022
% Change
2023
2022
% Change
Revenue
$
247,529
$
223,826
11
%
$
337,445
$
301,340
12
%
Adjusted EBITDA*
78,713
83,617
(6
)%
77,376
79,766
(3
)%
Adjusted EBITDA Margin*
32
%
37
%
23
%
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:
Three Months Ended December 31,
Six Months Ended December 31,
2023
2022
% Change
2023
2022
% Change
Medicare Advantage
271,712
251,847
8
%
376,244
341,875
10
%
Medicare Supplement
1,203
1,565
(23
)%
1,684
2,230
(24
)%
Dental, Vision and Hearing
19,808
22,004
(10
)%
32,304
38,338
(16
)%
Prescription Drug Plan
1,720
1,302
32
%
2,031
1,666
22
%
Other
1,318
1,512
(13
)%
2,950
3,538
(17
)%
Total
295,761
278,230
6
%
415,213
387,647
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:
Three Months Ended December 31,
Six Months Ended December 31,
2023
2022
% Change
2023
2022
% Change
Medicare Advantage
234,576
218,837
7
%
332,257
302,010
10
%
Medicare Supplement
773
1,127
(31
)%
1,133
1,627
(30
)%
Dental, Vision and Hearing
16,903
18,697
(10
)%
27,432
30,972
(11
)%
Prescription Drug Plan
1,316
883
49
%
1,570
1,273
23
%
Other
993
1,241
(20
)%
2,045
2,903
(30
)%
Total
254,561
240,785
6
%
364,437
338,785
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 December 31,
Six Months Ended December 31,
(dollars per policy):
2023
2022
% Change
2023
2022
% Change
Medicare Advantage
$
934
$
870
7
%
$
883
$
845
4
%
Medicare Supplement
1,045
994
5
%
1,044
1,037
1
%
Dental, Vision and Hearing
69
116
(41
)%
99
97
2
%
Prescription Drug Plan
230
212
8
%
237
219
8
%
Other
(50
)
115
(143
)%
(18
)
91
(120
)%
Healthcare Services
Financial Results
The following table provides the financial results for the Healthcare Services segment for the periods presented:
Three Months Ended December 31,
Six Months Ended December 31,
(in thousands)
2023
2022
% Change
2023
2022
% Change
Revenue
$
111,710
$
55,480
101
%
$
209,078
$
98,546
112
%
Adjusted EBITDA*
2,981
(9,301
)
132
%
5,304
(21,089
)
125
%
Adjusted EBITDA Margin*
3
%
(17
)%
3
%
(21
)%
*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:
December 31, 2023
December 31, 2022
Total SelectRx Members
62,623
39,308
Prescriptions Per Day
Prescriptions per day represents the total 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 December 31,
Six Months Ended December 31,
2023
2022
2023
2022
Prescriptions Per Day
17,010
9,652
16,244
8,754
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 December 31,
(dollars per approved policy):
2023
2022
Medicare Advantage and Medicare Supplement approved policies
609,939
617,687
Medicare Advantage and Medicare Supplement commission per MA/MS policy
$
896
$
880
Other commission per MA/MS policy
11
19
Pharmacy revenue per MA/MS policy
575
225
Other revenue per MA/MS policy
140
62
Total revenue per MA/MS policy
1,622
1,186
Total operating expenses per MA/MS policy
(1,365
)
(1,111
)
Adjusted EBITDA per MA/MS policy (1)
257
75
Adjusted EBITDA Margin per MA/MS policy (1)
16
%
6
%
Revenue/CAC multiple
4.2X
3.0X
(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” 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 37% for the twelve months ended December 31, 2023, compared to the twelve months ended December 31, 2022, primarily due to the increase in pharmacy revenue. Total operating expenses per MA/MS policy increased 23% for the twelve months ended December 31, 2023, compared to the twelve months ended December 31, 2022, driven by a 100% increase in operating expenses related to SelectRx due to the growth of the business, offset by a 3% decrease in other operating expenses driven by a decrease in marketing and advertising costs for the second half of fiscal year 2023 compared to the second half of fiscal year 2022.
Life
Financial Results
The following table provides the financial results for the Life segment for the periods presented:
Three Months Ended December 31,
Six Months Ended December 31,
(in thousands)
2023
2022
% Change
2023
2022
% Change
Revenue
$
37,367
$
33,995
10
%
$
75,170
$
70,830
6
%
Adjusted EBITDA*
4,569
5,843
(22
)%
9,808
11,068
(11
)%
Adjusted EBITDA Margin*
12
%
17
%
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.
*See “Non-GAAP Financial Measures” below.
The following table shows term and final expense premiums for the periods presented:
Three Months Ended December 31,
Six Months Ended December 31,
(in thousands)
2023
2022
% Change
2023
2022
% Change
Term Premiums
$
17,398
$
15,824
10
%
$
35,588
$
30,922
15
%
Final Expense Premiums
19,388
17,093
13
%
39,087
39,457
(1
)%
Total
$
36,786
$
32,917
12
%
74,675
70,379
6
%
Auto & Home
Financial Results
The following table provides the financial results for the Auto & Home segment for the periods presented:
Three Months Ended December 31,
Six Months Ended December 31,
(in thousands)
2023
2022
% Change
2023
2022
% Change
Revenue
$
10,487
$
7,808
34
%
$
19,515
$
14,890
31
%
Adjusted EBITDA*
4,725
2,284
107
%
8,045
4,725
70
%
Adjusted EBITDA Margin*
45
%
29
%
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 December 31,
Six Months Ended December 31,
(in thousands):
2023
2022
% Change
2023
2022
% Change
Premiums
$
14,689
$
12,080
22
%
$
28,566
$
23,628
21
%
*See “Non-GAAP Financial Measures” below.
Earnings Conference Call
SelectQuote, Inc. will host a conference call with the investment community today, Wednesday, February 7, 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=3bad4d79&confId=59966. 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 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 out debt arrangement; our ability to access to 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.
Source: SelectQuote, Inc.
SELECTQUOTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
December 31, 2023
June 30, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
10,849
$
83,156
Accounts receivable, net of allowances of $4.7 million and $2.7 million, respectively
142,590
154,565
Commissions receivable-current
207,279
111,148
Other current assets
27,100
14,355
Total current assets
387,818
363,224
COMMISSIONS RECEIVABLE—Net
747,079
729,350
PROPERTY AND EQUIPMENT—Net
23,389
27,452
SOFTWARE—Net
14,428
14,740
OPERATING LEASE RIGHT-OF-USE ASSETS
22,035
23,563
INTANGIBLE ASSETS—Net
8,684
10,200
GOODWILL
29,136
29,136
OTHER ASSETS
3,350
21,586
TOTAL ASSETS
$
1,235,919
$
1,219,251
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable
$
57,392
$
27,577
Accrued expenses
16,698
16,993
Accrued compensation and benefits
48,680
49,966
Operating lease liabilities—current
5,133
5,175
Current portion of long-term debt
42,766
33,883
Contract liabilities
9,092
1,691
Other current liabilities
4,211
1,972
Total current liabilities
183,972
137,257
LONG-TERM DEBT, NET—less current portion
650,772
664,625
DEFERRED INCOME TAXES
36,668
39,581
OPERATING LEASE LIABILITIES
25,245
27,892
OTHER LIABILITIES
2,745
2,926
Total liabilities
899,402
872,281
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Common stock, $0.01 par value
1,690
1,669
Additional paid-in capital
573,883
567,266
Accumulated deficit
(247,303
)
(235,644
)
Accumulated other comprehensive income
8,247
13,679
Total shareholders’ equity
336,517
346,970
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
1,235,919
$
1,219,251
SELECTQUOTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)
(In thousands)
Three Months Ended December 31,
Six Months Ended December 31,
2023
2022
2023
2022
REVENUE:
Commission
$
263,225
$
230,033
$
380,981
336,368
Pharmacy
108,795
51,601
203,583
92,694
Other
33,418
37,554
53,603
52,610
Total revenue
405,438
319,188
638,167
481,672
OPERATING COSTS AND EXPENSES:
Cost of revenue
97,424
91,477
169,935
156,641
Cost of goods sold—pharmacy revenue
94,180
50,096
178,188
92,450
Marketing and advertising
117,078
89,925
179,400
147,519
Selling, general, and administrative
33,412
28,412
62,078
59,118
Technical development
8,050
6,245
15,687
12,427
Total operating costs and expenses
350,144
266,155
605,288
468,155
INCOME FROM OPERATIONS
55,294
53,033
32,879
13,517
INTEREST EXPENSE, NET
(24,415
)
(21,044
)
(45,811
)
(37,780
)
OTHER INCOME (EXPENSE), NET
—
(70
)
(39
)
88
INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT)
30,879
31,919
(12,971
)
(24,175
)
INCOME TAX EXPENSE (BENEFIT)
11,487
9,405
(1,312
)
(4,205
)
NET INCOME (LOSS)
$
19,392
$
22,514
$
(11,659
)
(19,970
)
NET INCOME (LOSS) PER SHARE:
Basic
$
0.12
$
0.14
$
(0.07
)
$
(0.12
)
Diluted
$
0.11
$
0.14
$
(0.07
)
$
(0.12
)
WEIGHTED-AVERAGE COMMON STOCK OUTSTANDING USED IN PER SHARE AMOUNTS:
Basic
168,349
166,486
167,901
165,655
Diluted
169,737
166,548
167,901
165,655
OTHER COMPREHENSIVE INCOME (LOSS) NET OF TAX:
Gain (loss) on cash flow hedge
(3,422
)
(381
)
(5,432
)
4,019
OTHER COMPREHENSIVE INCOME (LOSS)
(3,422
)
(381
)
(5,432
)
4,019
COMPREHENSIVE INCOME (LOSS)
$
15,970
$
22,133
$
(17,091
)
$
(15,951
)
SELECTQUOTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
Six Months Ended December 31,
2023
2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$
(11,659
)
$
(19,970
)
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities:
Depreciation and amortization
11,887
13,990
Loss on disposal of property, equipment, and software
9
376
Share-based compensation expense
6,997
5,566
Deferred income taxes
(1,182
)
(4,572
)
Amortization of debt issuance costs and debt discount
3,356
3,919
Write-off of debt issuance costs
—
710
Accrued interest payable in kind
9,020
4,920
Non-cash lease expense
1,528
2,082
Changes in operating assets and liabilities:
Accounts receivable, net
11,975
14,036
Commissions receivable
(113,860
)
(114,701
)
Other assets
(2,075
)
1,578
Accounts payable and accrued expenses
29,206
950
Operating lease liabilities
(2,689
)
(2,460
)
Other liabilities
8,248
18,002
Net cash used in operating activities
(49,239
)
(75,574
)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment
(2,062
)
(598
)
Proceeds from sales of property and equipment
253
—
Purchases of software and capitalized software development costs
(3,883
)
(3,870
)
Net cash used in investing activities
(5,692
)
(4,468
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on Term Loans
(16,942
)
(13,375
)
Payments on other debt
(75
)
(83
)
Proceeds from common stock options exercised and employee stock purchase plan
—
1,078
Payments of tax withholdings related to net share settlement of equity awards
(359
)
(33
)
Payments of debt issuance costs
—
(10,110
)
Payment of acquisition holdback
—
(2,335
)
Net cash used in financing activities
(17,376
)
(24,858
)
NET DECREASE IN CASH AND CASH EQUIVALENTS
(72,307
)
(104,900
)
CASH AND CASH EQUIVALENTS—Beginning of period
83,156
140,997
CASH AND CASH EQUIVALENTS—End of period
$
10,849
$
36,097
SELECTQUOTE, INC. AND SUBSIDIARIES
Net Income (Loss) to Adjusted EBITDA Reconciliation
(Unaudited)
Three Months Ended December 31, 2023
(in thousands)
Senior
Healthcare Services
Life
Auto & Home
Corp & Elims
Consolidated
Revenue
$
247,529
$
111,710
$
37,367
$
10,487
$
(1,655
)
$
405,438
Operating expenses
(168,816
)
(108,729
)
(32,798
)
(5,762
)
(21,919
)
(338,024
)
Other income (expense), net
—
—
—
—
—
—
Adjusted EBITDA
$
78,713
$
2,981
$
4,569
$
4,725
$
(23,574
)
$
67,414
Share-based compensation expense
(3,822
)
Transaction costs
(2,400
)
Depreciation and amortization
(5,898
)
Interest expense, net
(24,415
)
Income tax expense
(11,487
)
Net income
$
19,392
Three Months Ended December 31, 2022
(in thousands)
Senior
Healthcare Services
Life
Auto & Home
Corp & Elims
Consolidated
Revenue
$
223,826
$
55,480
$
33,995
$
7,808
$
(1,921
)
$
319,188
Operating expenses
(140,209
)
(64,781
)
(28,152
)
(5,524
)
(16,877
)
(255,543
)
Other income (expense), net
—
—
—
—
(70
)
(70
)
Adjusted EBITDA
$
83,617
$
(9,301
)
$
5,843
$
2,284
$
(18,868
)
$
63,575
Share-based compensation expense
(2,936
)
Transaction costs
(442
)
Depreciation and amortization
(7,188
)
Loss on disposal of property, equipment, and software
(46
)
Interest expense, net
(21,044
)
Income tax expense
(9,405
)
Net income
$
22,514
Six Months Ended December 31, 2023
(in thousands)
Senior
Healthcare Services
Life
Auto & Home
Corp & Elims
Consolidated
Revenue
$
337,445
$
209,078
$
75,170
$
19,515
$
(3,041
)
$
638,167
Operating expenses
(260,069
)
(203,774
)
(65,362
)
(11,470
)
(41,415
)
(582,090
)
Other income (expense), net
—
—
—
—
(39
)
(39
)
Adjusted EBITDA
$
77,376
$
5,304
$
9,808
$
8,045
$
(44,495
)
$
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
(9
)
Interest expense, net
(45,811
)
Income tax benefit
1,312
Net loss
$
(11,659
)
Six Months Ended December 31, 2022
(in thousands)
Senior
Healthcare Services
Life
Auto & Home
Corp & Elims
Consolidated
Revenue
$
301,340
$
98,546
$
70,830
$
14,890
$
(3,934
)
$
481,672
Operating expenses
(221,574
)
(119,635
)
(59,963
)
(10,164
)
(34,322
)
(445,658
)
Other income (expense), net
—
—
201
(1
)
(112
)
88
Adjusted EBITDA
$
79,766
$
(21,089
)
$
11,068
$
4,725
$
(38,368
)
$
36,102
Share-based compensation expense
(5,566
)
Transaction costs
(2,570
)
Depreciation and amortization
(13,990
)
Loss on disposal of property, equipment, and software
(371
)
Interest expense, net
(37,780
)
Income tax benefit
4,205
Net loss
$
(19,970
)
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
$
(45,000
)
$
(22,000
)
Income tax benefit
(8,000
)
(4,000
)
Interest expense, net
97,000
92,000
Depreciation and amortization
24,000
22,000
Share-based compensation expense
15,000
12,000
Non-recurring expenses
7,000
5,000
Adjusted EBITDA
$
90,000
$
105,000
View source version on businesswire.com: https://www.businesswire.com/news/home/20240207634209/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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