Financial Data and Key Metrics Changes - Revenue for the third quarter totaled $275 million, representing a 4% increase year-over-year [11][34] - Adjusted EBITDA for the quarter was $13 million, impacted by year-over-year pressure on Medicare Advantage (MA) Lifetime Values (LTVs) [11][34] - The company expects overall operating costs to be over $200 million lower in fiscal 2023 compared to fiscal 2022, excluding SelectRx [36][61] Business Line Data and Key Metrics Changes - The Senior business saw a 33% increase in total approved policies and a 48% increase in MA approved policies, driven by more agents and improved close rates [37] - Marketing costs per approved policy decreased by 27% year-over-year, contributing to improved marketing efficiency [27][41] - The SelectRx business grew significantly, ending the quarter with over 23,000 active members, with expectations to surpass 25,000 by the end of fiscal 2022 [12][44] Market Data and Key Metrics Changes - The company noted a less competitive marketing environment during the Open Enrollment Period (OEP), which contributed to improved performance [38] - The overall market for Medicare Advantage remains large, but the company anticipates a year-over-year decline in submitted policies for 2023 to right-size the organization [16][60] Company Strategy and Development Direction - The company is focusing on a growth strategy that prioritizes cash flow and profitability over volume, with a commitment to reducing operational risk [15][17] - A strategic redesign is underway, with early actions yielding tangible improvements and a focus on optimizing marketing and agent training [7][14] - The company aims to evolve from a pure insurance distributor to a comprehensive healthcare services platform, enhancing customer relationships and driving future revenue [31][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the early results of their strategic actions and the potential for improved profitability moving forward [32][60] - The company is optimistic about the impact of their cost-saving measures and the growth of SelectRx on future cash flow [44][78] - Management acknowledged the challenges posed by COVID-19 on the Life business but noted improvements in conversion rates and operational efficiency [82][85] Other Important Information - The company is committed to a conservative approach in recruiting and training agents, ensuring they are well-prepared for the upcoming busy season [20][21] - Management highlighted the importance of optimizing marketing sources and refining targeting to focus on high Lifetime Value (LTV) producing leads [21][22] Q&A Session Summary Question: Clarification on guidance for EBITDA and net income - Management confirmed no one-time benefits in the third quarter and reiterated guidance for the fourth quarter, emphasizing a conservative approach [50] Question: Details on marketing channel optimization - The company is optimizing marketing channels without eliminating any, focusing on improving the quality of leads and training agents effectively [54][56] Question: Factors influencing the planned pullback in MA submissions - Management indicated that the pullback is a strategic decision to optimize operations and improve cash flow, with a focus on tenured agents [60] Question: Breakdown of the $200 million in expense reductions - The majority of the savings will come from variable costs, particularly marketing, with some fixed costs also being reduced [62][64] Question: Concerns about market share due to marketing spend pullback - Management expressed confidence in maintaining a significant role in carrier distribution despite the pullback, citing strong relationships with carriers [66][67] Question: Expected increase in spend with SelectRx - The company anticipates some initial costs associated with growth but expects margins to improve as the business scales [78][79] Question: Performance of the Life business in the quarter - Management noted that the Life business faced challenges due to COVID-19 but expects improvements in the fourth quarter as conditions stabilize [81][85]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 (913) 599-9225 (Registrant's telephone number, including area code) (Former name, former address and former fiscal year, if changed since last report) OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ...

PART I FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents SelectQuote, Inc.'s unaudited condensed consolidated financial statements for the periods ended December 31, 2021, including balance sheets, income, equity, cash flows, and notes on accounting policies and a prior period correction Condensed Consolidated Balance Sheets (In thousands) | (In thousands) | December 31, 2021 | June 30, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$1,444,833** | **$1,425,795** | | Total current assets | $555,556 | $485,358 | | Commissions receivable | $683,516 | $756,777 | | Goodwill | $73,732 | $68,019 | | **Total Liabilities** | **$952,429** | **$757,235** | | Total current liabilities | $135,407 | $108,817 | | Long-term debt, net | $700,350 | $459,043 | | **Total Shareholders' Equity** | **$492,404** | **$668,560** | Condensed Consolidated Statements of Comprehensive Income (Loss) (In thousands, except per share data) | (In thousands, except per share data) | Three Months Ended Dec 31, 2021 | Three Months Ended Dec 31, 2020 | Six Months Ended Dec 31, 2021 | Six Months Ended Dec 31, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | **$194,981** | **$357,565** | **$352,508** | **$480,339** | | Income (Loss) from Operations | ($172,906) | $123,445 | ($227,466) | $129,324 | | **Net Income (Loss)** | **($137,008)** | **$89,856** | **($184,161)** | **$89,591** | | Diluted EPS | ($0.84) | $0.54 | ($1.12) | $0.54 | Condensed Consolidated Statements of Cash Flows (In thousands) | (In thousands) | Six Months Ended Dec 31, 2021 | Six Months Ended Dec 31, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($305,741) | ($103,148) | | Net cash used in investing activities | ($31,062) | ($9,096) | | Net cash provided by (used in) financing activities | $243,706 | ($10,719) | | **Net Decrease in Cash** | **($93,097)** | **($122,963)** | - The company identified an error in its provision for first-year commission revenue for certain final expense policies due to using an **incorrect lapse rate**, resulting in **misstatements of commission revenue and accounts receivable** in prior periods[28](index=28&type=chunk)[29](index=29&type=chunk) - Management concluded the error was **not material to prior periods** but is **correcting the financial statements** for comparative purposes to avoid a significant impact on the current period's results[28](index=28&type=chunk)[29](index=29&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion of financial condition and results for Q4 2021, detailing a significant revenue decline, segment performance, liquidity, and cash flow dynamics [Key Business and Operating Metrics](index=34&type=section&id=Key%20Business%20and%20Operating%20Metrics) - In the Senior segment, total submitted policies increased **29% YoY** for the quarter, driven by a **140% increase in average productive agents**, offset by a **45% decrease in average agent productivity** and lower submitted-to-approved conversion rates[133](index=133&type=chunk) Medicare Advantage and Supplement Approved Policies | Metric | Three Months Ended Dec 31, 2021 | Three Months Ended Dec 31, 2020 | | :--- | :--- | :--- | | Medicare Advantage Approved Policies | 265,538 | 208,714 | | Medicare Supplement Approved Policies | 2,097 | 10,451 | Life-Time Value (LTV) per Approved Policy | Metric | Three Months Ended Dec 31, 2021 | Three Months Ended Dec 31, 2020 | | :--- | :--- | :--- | | LTV per MA Approved Policy | $922 | $1,268 | | LTV per MS Approved Policy | $1,347 | $1,233 | - In the Life segment, final expense premiums grew **82% YoY** for the quarter due to an increase in agents selling these policies, while term life premiums decreased by **18%**[148](index=148&type=chunk) - In Auto & Home, total premiums decreased **20%** as part of a strategy to reduce growth in this segment[151](index=151&type=chunk) [Results of Operations](index=43&type=section&id=Results%20of%20Operations) - Total revenue for the three months ended December 31, 2021, decreased **45% YoY to $195.0 million**[167](index=167&type=chunk) - The primary driver was a **56% drop in commission revenue**, largely due to a **$145.0 million downward adjustment** from a change in estimate of Senior MA cohort transaction prices because of higher-than-expected policy lapses[167](index=167&type=chunk) Operating Expenses (in thousands) | Expense Category (in thousands) | Three Months Ended Dec 31, 2021 | Three Months Ended Dec 31, 2020 | % Change | | :--- | :--- | :--- | :--- | | Cost of Revenue | $148,108 | $84,121 | 76% | | Marketing and Advertising | $193,246 | $132,206 | 46% | | General and Administrative | $20,147 | $13,043 | 54% | - Operating costs increased significantly, with cost of revenue rising **76%** due to higher agent compensation and new medication costs from SelectRx[171](index=171&type=chunk) - Marketing and advertising expenses increased **46%** due to higher lead generation costs for a larger agent base and lower marketing efficiency during the Annual Enrollment Period (AEP)[174](index=174&type=chunk) [Segment Performance](index=48&type=section&id=Segment%20Performance) Segment Adjusted EBITDA (in millions) | Segment Adjusted EBITDA (in millions) | Three Months Ended Dec 31, 2021 | Three Months Ended Dec 31, 2020 | | :--- | :--- | :--- | | Senior | $(148.6) | $134.6 | | Life | $1.9 | $5.7 | | Auto & Home | $1.4 | $2.2 | - The Senior segment's Adjusted EBITDA plummeted from **$134.6 million to a loss of $(148.6) million YoY** for the quarter[208](index=208&type=chunk) - This was caused by a **$157.5 million revenue decrease** (including the large cohort adjustment) and a **$125.6 million increase in operating costs** from higher marketing spend and personnel costs for AEP[208](index=208&type=chunk) - The Life segment's Adjusted EBITDA decreased by **68% to $1.9 million**, driven by lower term life revenue and higher marketing and sales commission expenses for the growing final expense business[209](index=209&type=chunk) [Liquidity and Capital Resources](index=53&type=section&id=Liquidity%20and%20Capital%20Resources) - As of December 31, 2021, the company had cash and cash equivalents of **$193.4 million**, a decrease from **$286.5 million** at June 30, 2021[216](index=216&type=chunk) - For the six months ended December 31, 2021, net cash used in operating activities was **$305.7 million**, a significant increase from **$103.1 million** in the prior-year period[216](index=216&type=chunk)[221](index=221&type=chunk) - This was driven by a net loss and increased working capital needs to fund upfront marketing and personnel costs for AEP[216](index=216&type=chunk)[221](index=221&type=chunk) - Financing activities provided **$243.7 million** in cash, primarily from drawing **$242.0 million** from the senior secured delayed draw term loan (DDTL) facility[227](index=227&type=chunk)[229](index=229&type=chunk) - As of December 31, 2021, **$471.9 million** was outstanding under the Term Loans and **$245.0 million** under the DDTL Facility[227](index=227&type=chunk)[229](index=229&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=56&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposure is to unfavorable interest rate movements, with no material changes to policies or positions since the 2021 Annual Report - The company is primarily exposed to market risk from **adverse changes in interest rates** and reported **no material changes** to market risk policies or positions during the quarter[235](index=235&type=chunk) [Item 4. Controls and Procedures](index=56&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were ineffective as of December 31, 2021, due to a material weakness in internal controls over financial reporting related to commission revenue provision, with remediation initiated - The CEO and CFO concluded that disclosure controls and procedures were **not effective** as of December 31, 2021[236](index=236&type=chunk) - A **material weakness** was identified in internal controls over financial reporting, specifically that controls over the completeness and accuracy of carrier and policy data for determining the first-year commission provision for certain Life segment final expense policies were **not designed effectively**[236](index=236&type=chunk) - Management has initiated a **remediation plan** that includes obtaining complete carrier information feeds, reviewing policies for risk mitigation, and enhancing procedures to assess data accuracy[238](index=238&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=58&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to two putative securities class action lawsuits alleging securities fraud, which it believes are without merit and intends to vigorously defend - A putative securities class action lawsuit (Hartel v. SelectQuote, Inc.) was filed on August 17, 2021, alleging **securities fraud** for the period between February 8, 2021, and May 11, 2021[76](index=76&type=chunk) - A second putative securities class action lawsuit (West Palm Beach Police Pension Fund v. SelectQuote, Inc.) was filed on October 7, 2021, alleging violations related to the company's IPO and the period between May 20, 2020, and August 25, 2021[77](index=77&type=chunk) - The company believes the allegations in both complaints are **without merit** and has not accrued a liability, but notes the cases could be **costly to defend**[79](index=79&type=chunk) [Item 1A. Risk Factors](index=58&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since those disclosed in its amended Form 10-K/A for the fiscal year ended June 30, 2021 - There have been **no material changes** to the risk factors as disclosed in the Company's Form 10-K/A for the year ended June 30, 2021[244](index=244&type=chunk) [Item 5. Other Information](index=58&type=section&id=Item%205.%20Other%20Information) Details an immaterial correction of prior period financial statements due to an error in the lapse rate for first-year commission revenue, to be corrected in future comparative filings - An error was discovered where the provision for first-year commission revenue for certain final expense policies should have been accrued based on a **higher lapse rate**[248](index=248&type=chunk) Prior Period Commission Revenue Misstatement and Net Income Impact | Period | Commission Revenue Misstatement | Net Income Impact | | :--- | :--- | :--- | | Year Ended June 30, 2021 | $6.1 million | ($4.8 million) | | Year Ended June 30, 2020 | $2.0 million | ($1.5 million) | | Three Months Ended Sep 30, 2021 | $2.4 million | ($1.8 million) | - The company plans to **correct the consolidated financial statements** for prior periods that will be presented in future Form 10-K and 10-Q filings to reflect these adjustments[248](index=248&type=chunk)[249](index=249&type=chunk) [Item 6. Exhibits](index=66&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the quarterly report, including amendments to the Credit Agreement, CEO and CFO certifications, and XBRL data files - Key exhibits filed include the **Second Amendment** (dated Nov 2, 2021) and **Third Amendment** (dated Dec 23, 2021) to the company's Credit Agreement[269](index=269&type=chunk) - Certifications from the CEO and CFO pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are included as exhibits[269](index=269&type=chunk)

Financial Performance - Consolidated revenue totaled $195 million in 2Q 2022[11] - Consolidated Adjusted EBITDA was $(163) million in 2Q 2022[11] - Consolidated net loss totaled $137 million, or $(0.84) loss per diluted share in 2Q 2022[11] - SelectQuote anticipates a net loss between $(255) million and $(236) million for FY2022[61] - SelectQuote projects Adjusted EBITDA to be between $(260) million and $(235) million for FY2022[62] Key Performance Indicators - Approved policies in MA and MS were 209,000 and 10,000 respectively in 2Q 2022, compared to 261,000 and 2,000 in 2Q 2021[42] - MA LTV (Lifetime Value) decreased from $1,268 in 2Q 2021 to $922 in 2Q 2022[42] Factors Affecting Performance - Actual results have significantly underperformed internal expectations year-to-date[10] - Greater parity in plan benefits for the 2022 benefit year suppressing close rates relative to prior year[10] - Hiring and onboarding delays related to the tight labor market[10] - CMS marketing review process that created advertising delays early in AEP (Annual Enrollment Period)[10] - Increased falloff in approved policies post-submission[10] - Persistency and lapse rate pressure continue to create earnings volatility[10]

Financial Data and Key Metrics Changes - SelectQuote's consolidated revenue for Q2 2022 totaled $195 million, a decrease of 45% year-over-year, while adjusted EBITDA was negative $163 million [9][10][44] - The company recognized a cohort sale adjustment of $145 million, reflecting lower persistency primarily due to higher intra-year loss rates experienced in 2021 [9][10][45] - The new outlook for full-year revenue is projected to be between $810 million and $850 million, with adjusted EBITDA expected to be negative between $235 million and $260 million [10][71] Business Line Data and Key Metrics Changes - The total approved policies grew by 22%, and Medicare Advantage (MA) approved policies increased by 27%, although the growth was lower than submitted policy growth due to higher switching activity [51][52] - Agent productivity declined by 45%, with average close rates down more than 20% compared to the previous season, significantly impacting overall performance [52][54] Market Data and Key Metrics Changes - The Medicare Advantage market experienced increased shopping behavior among consumers, but this led to lower close rates due to greater parity in plan features across carriers [17][19][76] - The company noted that the competitive landscape has changed, with carriers focusing on specific benefits, which has created challenges in closing sales [88] Company Strategy and Development Direction - SelectQuote is actively reviewing its business strategy, particularly in the senior Medicare Advantage distribution business, aiming to reset growth philosophy to focus on repeatable unit operating margins and predictable cash flows [11][25][30] - The company plans to reduce the number of flex agents and hire core agents earlier to improve training and onboarding, thereby enhancing close rates and agent productivity [40][48] Management's Comments on Operating Environment and Future Outlook - Management described the quarter as disappointing and acknowledged the need for a strategic shift to mitigate volatility and improve profitability [7][10][47] - The company remains committed to leveraging its unique position in the healthcare landscape, particularly through its Population Health initiatives, which are expected to contribute to future growth [29][72] Other Important Information - SelectQuote's SelectRx pharmacy solution has seen strong consumer interest, with over 40,000 gross customer enrollments and 10,000 active members receiving prescriptions [12][64][67] - The company ended the quarter with $193 million in cash and $717 million in debt, indicating a significant cash outflow during the quarter due to operational expenses [68][70] Q&A Session Summary Question: Understanding the impact of plan parity on close rates - Management explained that the AEP was unique due to industry-wide CMS issues and a tight labor market, which masked underlying issues, with plan parity being a significant factor in lower close rates [76][77] Question: Long-term growth expectations - Management indicated that while they are not providing specific guidance for fiscal '23, they plan to reset the baseline for policy production and expect modest growth thereafter [79][81] Question: Correlation with competitors' results - Management acknowledged that while some issues may correlate with competitors like Humana, they believe their engagement with carriers remains strong and beneficial [86][87] Question: Cash flow breakeven timeline - Management stated that by pulling back on growth and resetting the baseline, they expect to see benefits in cash flow and aim for breakeven in the near future [91][93] Question: Customer acquisition and lead generation - Management noted that while lead costs have remained stable, the focus will be on optimizing lead channels and improving the quality of leads to enhance close rates [94][96]

SelectQuote, Inc. (NYSE:SLQT) Q3 2021 Earnings Conference Call November 4, 2021 5:00 PM ET Company Participants Matt Gunter - IR Tim Danker - CEO Raff Sadun - CFO Bob Grant - President, Senior Division Bill Grant - COO Conference Call Participants Jailendra Singh - Credit Suisse Elizabeth Anderson - Evercore Jeff Garro - Piper Sandler Daniel Grosslight - Citi Frank Morgan - RBC Capital Markets Meyer Shields - KBW Operator Good day, and thank you for standing by. Welcome to the SelectQuote fiscal first quart ...

1 st Quarter Fiscal 2022 | We shop. You save. 1 Earnings Conference Call Presentation November 4, 2021 Disclaimer Forward-Looking Statements This presentation 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," ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to 001-39295 (Commission File Number) SelectQuote, Inc. (Exact name of registrant as specified in its charter) Delaware 94-3339273 (State or other ...

PART I [Business](index=4&type=section&id=Item%201.%20Business) SelectQuote operates as a technology-enabled, direct-to-consumer insurance distribution platform, earning commissions from insurance carriers across senior health, life, and auto & home segments without underwriting risk - The company is a direct-to-consumer (DTC) insurance distribution platform that earns commissions from carrier partners and does not bear underwriting risk[13](index=13&type=chunk)[25](index=25&type=chunk) - The business operates through three segments: SelectQuote Senior (Medicare products), SelectQuote Life (term and final expense), and SelectQuote Auto & Home[40](index=40&type=chunk)[41](index=41&type=chunk)[43](index=43&type=chunk) - Recent strategic initiatives include the launch of the Population Health platform in April 2021, designed to improve health outcomes and consumer persistency, and the acquisition of Express Med Pharmaceutical Inc (now SelectRx) to provide prescription drug management[16](index=16&type=chunk)[22](index=22&type=chunk)[250](index=250&type=chunk) - The company's technology stack includes proprietary systems like SelectBid for lead purchasing, Get A Lead (GAL) for lead routing, and Automated Rate Calculators (ARC/AQE) for real-time quoting[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk) - The business is highly seasonal, with **38% of FY2021 revenue** generated in the second quarter, driven by the Senior segment's activity during the Medicare Annual Enrollment Period (AEP)[98](index=98&type=chunk) [Risk Factors](index=19&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including high dependence on key insurance carriers, regulatory changes in Medicare, intense competition, lead generation costs, and cybersecurity threats - The company has a significant concentration of revenue from a few insurance carriers, with UnitedHealthcare, Humana, and Wellcare accounting for **24%**, **19%**, and **15%** of total revenue respectively in fiscal year 2021[121](index=121&type=chunk) - The business is substantially dependent on the Senior segment, which generated **78% of total revenue** in fiscal year 2021[127](index=127&type=chunk) - Approximately **50% of Medicare Advantage and Medicare Supplement policies** are submitted during the Annual Enrollment Period (AEP), making any disruption during this time particularly harmful[136](index=136&type=chunk) - The Senior segment is subject to a complex and frequently changing legal and regulatory framework by CMS, and non-compliance could materially harm the business[197](index=197&type=chunk)[198](index=198&type=chunk) - The company's business model relies on its ability to obtain a large quantity of quality insurance sales leads in a cost-effective manner and convert them into sales[139](index=139&type=chunk)[141](index=141&type=chunk) - Cybersecurity breaches involving the company's systems or those of its partners pose a material risk, potentially leading to data loss, litigation, and reputational damage[184](index=184&type=chunk)[186](index=186&type=chunk) [Unresolved Staff Comments](index=43&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[223](index=223&type=chunk) [Properties](index=43&type=section&id=Item%202.%20Properties) As of August 15, 2021, the company leases all of its principal properties, with its corporate headquarters in Overland Park, Kansas, and other operational sites across several states Principal Leased Properties as of August 15, 2021 | Location | Approximate Leased Square Footage | Primary Use | | :--- | :--- | :--- | | Overland Park, Kansas | 295,658 | Corporate headquarters, operations for all segments | | Centennial, Colorado | 45,373 | Senior operations | | Des Moines, Iowa | 24,464 | Senior operations | | San Diego, California | 21,396 | Life and Auto & Home operations | | Jacksonville, Florida | 15,231 | Life operations | | Monaca, Pennsylvania | 15,000 | SelectRx operations | [Legal Proceedings](index=43&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in routine litigation and a securities class action lawsuit filed in August 2021, which it intends to vigorously defend - A putative securities class action lawsuit, Hartel v SelectQuote, Inc, et al, was filed on August 17, 2021, alleging securities fraud claims on behalf of purchasers of the company's stock between February 8, 2021, and May 11, 2021[529](index=529&type=chunk) - The company believes the allegations in the lawsuit are without merit and has not concluded that a loss is probable or accrued any liability for the matter[529](index=529&type=chunk) [Mine Safety Disclosures](index=43&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[227](index=227&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=44&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the NYSE since its May 2020 IPO, with no anticipated cash dividends or share repurchases in the foreseeable future - Common stock trades on the NYSE under the symbol "SLQT" since the IPO on May 21, 2020[229](index=229&type=chunk) - The company does not anticipate declaring or paying cash dividends in the foreseeable future[232](index=232&type=chunk) - No repurchases of the company's common stock were made during the fiscal year ended June 30, 2021[233](index=233&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) SelectQuote's FY2021 revenue grew 76% to $937.8 million, driven by a 101% increase in the Senior segment, while operating expenses rose significantly due to lead generation and agent force expansion, resulting in negative operating cash flow due to increased commissions receivable Consolidated Financial Highlights (in thousands) | Metric | FY 2021 | FY 2020 | FY 2019 | | :--- | :--- | :--- | :--- | | Total Revenue | $937,815 | $531,515 | $337,469 | | Income from Operations | $200,072 | $132,329 | $96,288 | | Net Income | $131,046 | $81,147 | $72,579 | | Adjusted EBITDA | $228,030 | $154,024 | $105,278 | - Total revenue increased by **76% in FY2021** compared to FY2020, primarily driven by a **101% increase** in the Senior segment's revenue[297](index=297&type=chunk)[328](index=328&type=chunk) Senior Segment - Key Operating Metrics | Metric | FY 2021 | FY 2020 | Change YoY | | :--- | :--- | :--- | :--- | | Approved Medicare Advantage Policies | 467,585 | 225,404 | +107% | | LTV per MA Approved Policy | $1,260 | $1,287 | -2% | | LTV per MS Approved Policy | $1,269 | $1,376 | -8% | - The LTV per MA policy decreased slightly due to lower persistency rates, higher intra-year lapse rates, and carrier mix, while the LTV per MS policy decreased due to a shift to a carrier pod with lower commissions but also lower marketing costs[268](index=268&type=chunk) - Operating expenses increased significantly, with Marketing and Advertising up **109%** and Cost of Revenue up **62%**, reflecting investments in lead generation and a larger agent force to drive revenue growth[301](index=301&type=chunk)[304](index=304&type=chunk) - Net cash used in operating activities was **$115.4 million in FY2021**, primarily due to a **$332.9 million increase** in commissions receivable, which reflects the working capital requirements of the business model where acquisition costs are paid upfront[341](index=341&type=chunk)[345](index=345&type=chunk) - A critical accounting policy is revenue recognition, which requires significant management judgment to estimate the lifetime value of commissions from policy renewals, with the company revising its estimation approach for the Senior segment in Q4 2021[372](index=372&type=chunk)[448](index=448&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=73&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks include credit risk concentration with major insurance carriers and interest rate risk from variable-rate debt, mitigated by interest rate swap agreements - As of June 30, 2021, three insurance carrier partners accounted for **29%**, **21%**, and **10%** of the company's total accounts and commissions receivable, representing a concentration of credit risk[383](index=383&type=chunk) - The company is exposed to interest rate risk due to its variable-rate Term Loans and uses interest rate swap agreements to hedge against unfavorable interest rate changes[384](index=384&type=chunk)[385](index=385&type=chunk) [Financial Statements and Supplementary Data](index=74&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for FY2019-2021, with an unqualified auditor opinion from Deloitte & Touche LLP, highlighting renewal commission revenue estimation as a Critical Audit Matter - The independent auditor, Deloitte & Touche LLP, issued an unqualified opinion on the financial statements and the effectiveness of internal control over financial reporting[390](index=390&type=chunk)[391](index=391&type=chunk) - The auditor identified the estimation of renewal commission revenue as a Critical Audit Matter, citing the significant management judgment required for key assumptions like historical lapse data and persistency rates[397](index=397&type=chunk)[398](index=398&type=chunk) Consolidated Balance Sheet Summary (in thousands) | | June 30, 2021 | June 30, 2020 | | :--- | :--- | :--- | | Total Current Assets | $493,435 | $513,834 | | Total Assets | $1,433,872 | $1,073,793 | | Total Current Liabilities | $108,817 | $95,811 | | Total Liabilities | $758,983 | $528,104 | | Total Shareholders' Equity | $674,889 | $545,689 | Consolidated Statement of Comprehensive Income Summary (in thousands) | | Year Ended June 30, 2021 | Year Ended June 30, 2020 | | :--- | :--- | :--- | | Total Revenue | $937,815 | $531,515 | | Income from Operations | $200,072 | $132,329 | | Net Income | $131,046 | $81,147 | [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=120&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[583](index=583&type=chunk) [Controls and Procedures](index=120&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of June 30, 2021, with an unqualified audit opinion from Deloitte & Touche LLP - Management concluded that disclosure controls and procedures were effective as of June 30, 2021[584](index=584&type=chunk) - Management's report concluded that internal control over financial reporting was effective as of June 30, 2021[587](index=587&type=chunk) - The independent registered public accounting firm, Deloitte & Touche LLP, issued an unqualified audit report on the company's internal control over financial reporting[590](index=590&type=chunk) - There were no changes in internal control over financial reporting during the fourth quarter of fiscal 2021 that materially affected, or are reasonably likely to materially affect, internal controls[588](index=588&type=chunk) [Other Information](index=122&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[597](index=597&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=123&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2021 Proxy Statement, including the adopted Code of Business Conduct and Ethics - Required information regarding directors, executive officers, and corporate governance is incorporated by reference from the 2021 Proxy Statement[600](index=600&type=chunk)[601](index=601&type=chunk)[604](index=604&type=chunk) - The company has adopted a written Code of Business Conduct and Ethics, which is available on its corporate website[605](index=605&type=chunk) [Executive Compensation](index=123&type=section&id=Item%2011.%20Executive%20Compensation) All information regarding executive and director compensation is incorporated by reference from the company's 2021 Proxy Statement - Information regarding executive compensation, director compensation, and related matters is incorporated by reference from the 2021 Proxy Statement[606](index=606&type=chunk)[607](index=607&type=chunk)[608](index=608&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=124&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership and equity compensation plans is incorporated by reference from the company's 2021 Proxy Statement - Information regarding security ownership and equity compensation plans is incorporated by reference from the 2021 Proxy Statement[610](index=610&type=chunk)[611](index=611&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=124&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding related party transactions and director independence is incorporated by reference from the company's 2021 Proxy Statement - Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the 2021 Proxy Statement[612](index=612&type=chunk)[613](index=613&type=chunk) [Principal Accountant Fees and Services](index=124&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information regarding principal accountant fees and services is incorporated by reference from the company's 2021 Proxy Statement - Information regarding principal accountant fees and services is incorporated by reference from the 2021 Proxy Statement[614](index=614&type=chunk) PART IV [Exhibit and Financial Statement Schedules](index=125&type=section&id=Item%2015.%20Exhibit%20and%20Financial%20Statement%20Schedules) This section lists consolidated financial statements, confirms omission of schedules, and provides an index of all exhibits filed with the Form 10-K - This item lists the consolidated financial statements, confirms the omission of financial statement schedules, and provides an index of all exhibits filed with the Form 10-K[617](index=617&type=chunk)[618](index=618&type=chunk)[619](index=619&type=chunk) [Form 10-K Summary](index=127&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports no Form 10-K summary - None[627](index=627&type=chunk)

4 th Quarter and Fiscal Year End 2021 Earnings Conference Call Presentation August 25, 2021 Disclaimer Forward-Looking Statements This presentation 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," ...