Company Overview - SelectQuote is a direct-to-consumer insurance platform that offers health, life, auto, and home insurance policies, as well as medication management services through its SelectRx pharmacy division [3] Allegations and Legal Issues - The Department of Justice filed a False Claims Act complaint against SelectQuote on May 1, 2025, alleging the company received millions of dollars in kickbacks from Humana in exchange for specific Medicare Advantage plan enrollments [4] - The complaint claims SelectQuote maintained a sales division that exclusively offered Humana policies and directed a significant portion of its business to Humana [4] Market Reaction - Following the filing of the complaint, SelectQuote's stock price fell by $0.61 per share, or 19.2%, closing at $2.56 per share on May 1, 2025 [5]

Core Viewpoint - SelectQuote Inc. is facing significant investor pressure due to a sharp decline in share prices following disappointing quarterly earnings and ongoing legal issues related to alleged violations of the False Claims Act [1][3]. Financial Performance - For the quarter ended March 2025, SelectQuote reported earnings of $0.03 per share, missing the Zacks Consensus Estimate of $0.04 per share [2]. - The company posted revenues of $408.16 million, falling short of the Zacks Consensus Estimate of $417.01 million by 2.12% [2]. Legal Issues - The U.S. Department of Justice (DOJ) announced a lawsuit on May 1, 2025, alleging that SelectQuote and other health insurers violated the False Claims Act in their marketing of Medicare Advantage plans [3][4]. - The lawsuit claims that from 2016 to at least 2021, SelectQuote received significant payments from insurers for Medicare Advantage enrollments, but allegedly steered beneficiaries toward higher-commission plans, disregarding their suitability [4]. Investor Sentiment - The combination of poor earnings and serious legal allegations has heightened concerns regarding SelectQuote's financial stability and operational integrity [5]. - Hagens Berman, a law firm investigating SelectQuote, emphasizes that the recent earnings figures raise existing concerns about the company's alleged steering tactics in light of the DOJ's allegations [5].

Core Viewpoint - Rosen Law Firm is investigating potential securities claims on behalf of shareholders of SelectQuote, Inc. due to allegations of materially misleading business information issued by the company [1] Group 1: Legal Actions and Investigations - SelectQuote is facing a class action lawsuit initiated by Rosen Law Firm, which seeks recovery of investor losses without any out-of-pocket fees for the shareholders [2] - The U.S. Department of Justice has charged SelectQuote in connection with a False Claims Act complaint against three national health insurance companies and three brokers, alleging unlawful kickbacks and discrimination against disabled Americans [3] - The allegations state that from 2016 to at least 2021, SelectQuote's associated insurers paid hundreds of millions of dollars in illegal kickbacks to brokers for enrollments into Medicare Advantage plans [3] Group 2: Market Impact - Following the announcement of the charges on May 1, 2025, SelectQuote's stock experienced a significant decline of 19.2% [3] Group 3: Rosen Law Firm's Credentials - Rosen Law Firm has a strong track record in securities class actions, having achieved the largest securities class action settlement against a Chinese company at the time and being ranked No. 1 by ISS Securities Class Action Services for the number of settlements in 2017 [4] - The firm has consistently ranked in the top 4 for securities class action settlements since 2013 and has recovered hundreds of millions of dollars for investors, including over $438 million in 2019 alone [4]

Core Viewpoint - Pomerantz LLP is investigating claims of potential securities fraud and unlawful business practices involving SelectQuote, Inc. and its officers or directors [1] Group 1: Legal Issues - The U.S. Department of Justice filed a False Claims Act complaint against SelectQuote and other health insurance companies, alleging that from 2016 to 2021, they paid hundreds of millions of dollars in illegal kickbacks to brokers for enrollments in Medicare Advantage plans [3] - Following the DOJ's announcement, SelectQuote's stock price dropped by $0.61, or 19.24%, closing at $2.56 per share on May 1, 2025 [3] Group 2: Company Background - Pomerantz LLP is recognized as a leading firm in corporate, securities, and antitrust class litigation, with a history of over 85 years in fighting for victims of securities fraud and corporate misconduct [4]

Core Viewpoint - Rosen Law Firm is investigating potential securities claims on behalf of shareholders of SelectQuote, Inc. due to allegations of materially misleading business information issued by the company [1]. Group 1: Legal Investigation and Class Action - Shareholders who purchased SelectQuote securities may be entitled to compensation through a class action lawsuit without any out-of-pocket fees [2]. - The Rosen Law Firm is preparing a class action to seek recovery of investor losses related to SelectQuote [2]. Group 2: Allegations and Stock Impact - SelectQuote was charged by the U.S. Department of Justice for allegedly paying hundreds of millions of dollars in illegal kickbacks to brokers from 2016 to 2021 in exchange for enrollments into Medicare Advantage plans [3]. - Following the announcement of these charges, SelectQuote's stock experienced a significant decline of 19.2% on May 1, 2025 [3]. Group 3: Rosen Law Firm's Credentials - The Rosen Law Firm has a strong track record in securities class actions, having achieved the largest settlement against a Chinese company at the time and being ranked No. 1 for securities class action settlements in 2017 [4]. - The firm has recovered hundreds of millions of dollars for investors, including over $438 million in 2019 alone [4].

Core Viewpoint - SelectQuote Inc. is facing significant investor pressure due to a sharp decline in share prices following disappointing quarterly results and ongoing legal issues related to alleged violations of the False Claims Act [1][3]. Financial Performance - For the quarter ended March 2025, SelectQuote reported earnings of $0.03 per share, missing the Zacks Consensus Estimate of $0.04 per share [2]. - The company posted revenues of $408.16 million, falling short of the Zacks Consensus Estimate of $417.01 million by 2.12% [2]. Legal Issues - The U.S. Department of Justice (DOJ) announced a lawsuit on May 1, 2025, alleging that SelectQuote and other major health insurers violated the False Claims Act in their marketing of Medicare Advantage plans [3][4]. - The lawsuit claims that from 2016 to at least 2021, SelectQuote received significant payments from insurers for Medicare Advantage enrollments, but allegedly steered beneficiaries toward higher-commission plans, disregarding their suitability [4]. Investor Sentiment - The combination of a disappointing earnings report and serious legal allegations has heightened concerns regarding SelectQuote's financial stability and operational integrity [5]. - Hagens Berman is investigating potential violations of U.S. securities laws and is encouraging investors who have suffered losses to come forward [2][5].

Core Viewpoint - Pomerantz LLP is investigating claims of potential securities fraud and unlawful business practices involving SelectQuote, Inc. following a lawsuit filed by the U.S. Department of Justice against the company and others in the health insurance sector [1][3]. Group 1: Investigation Details - Pomerantz LLP is representing investors of SelectQuote and is looking into whether the company and its officers engaged in illegal activities [1]. - The investigation is prompted by allegations that SelectQuote participated in a scheme involving illegal kickbacks related to Medicare Advantage plan enrollments [3]. Group 2: Legal Context - On May 1, 2025, the DOJ filed a False Claims Act complaint against SelectQuote and other insurers, claiming they paid hundreds of millions in illegal kickbacks from 2016 to 2021 [3]. - Following the announcement of the DOJ's lawsuit, SelectQuote's stock price dropped by $0.61, or 19.24%, closing at $2.56 per share [3]. Group 3: Firm Background - Pomerantz LLP is recognized as a leading firm in corporate, securities, and antitrust class litigation, with a history of fighting for victims of securities fraud and corporate misconduct [4].

Core Insights - SelectQuote's shares fell by 12% following the release of its quarterly figures, contrasting with a 3.3% rise in the S&P 500 index [1] Financial Performance - For Q3 fiscal 2025, SelectQuote reported total revenue of over $408 million, an increase from over $376 million in Q3 fiscal 2024 [2] - GAAP net income was over $26 million ($0.03 per share), more than tripling the under-$8.6 million profit from the same period last year [2] - The company missed analyst expectations for net income, which was projected at $0.04 per share, but exceeded revenue estimates of over $402 million [4] Management Commentary - CEO Tim Danker highlighted the value of SelectQuote's agent-led model and technology-enabled information advantage in enhancing the platform's value to healthcare participants [5] Legal Concerns - Investors expressed concern over the lack of commentary regarding allegations from the Department of Justice (DoJ) about SelectQuote accepting illegal "kickback" payments from insurers [5] - SelectQuote issued a statement strongly disagreeing with the DoJ's allegations and expressed confidence in a positive outcome for the case [6]

PART I FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) The unaudited condensed consolidated financial statements for the period ended March 31, 2025, show a significant increase in total assets to $1.30 billion from $1.19 billion at June 30, 2024, primarily driven by an increase in cash and commissions receivable [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were $1.296 billion, an increase from $1.194 billion at June 30, 2024 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash, cash equivalents, and restricted cash | $84,795 | $42,690 | | Commissions Receivable—Net | $839,757 | $761,446 | | Total Assets | $1,295,833 | $1,193,908 | | **Liabilities & Equity** | | | | Total current liabilities | $193,703 | $174,587 | | Long-term debt, net | $362,493 | $637,480 | | Total liabilities | $738,008 | $877,107 | | Senior Non-Convertible Preferred Stock | $207,613 | $0 | | Total shareholders' equity | $350,212 | $316,801 | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) For the nine months ended March 31, 2025, the company reported a net income of $34.7 million, compared to a net loss of $3.1 million for the same period in 2024 Financial Performance for the Nine Months Ended March 31 (in thousands, except per share data) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total Revenue | $1,181,492 | $1,014,567 | | - Commissions and other services | $663,338 | $690,702 | | - Pharmacy | $518,154 | $323,865 | | Income from Operations | $81,022 | $65,941 | | Change in Fair Value of Warrants | $25,344 | $0 | | Net Income (Loss) | $34,712 | $(3,108) | | Net Income (Loss) Attributable to Common Shareholders | $28,925 | $(3,108) | | Diluted EPS | $0.13 | $(0.02) | Financial Performance for the Three Months Ended March 31 (in thousands, except per share data) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total Revenue | $408,160 | $376,400 | | Income from Operations | $22,059 | $33,062 | | Net Income | $26,022 | $8,551 | | Diluted EPS | $0.03 | $0.05 | [Condensed Consolidated Statements of Changes in Shareholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) For the nine months ended March 31, 2025, total shareholders' equity increased from $316.8 million to $350.2 million - Shareholders' equity for the nine months ended March 31, 2025, increased by **$33.4 million**, primarily due to net income of **$34.7 million**[14](index=14&type=chunk) - Share-based compensation expense for the nine months ended March 31, 2025, was **$13.5 million**, compared to **$10.5 million** in the prior-year period[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended March 31, 2025, net cash provided by operating activities was $25.8 million, a significant improvement from the $4.8 million used in the prior-year period Cash Flow Summary for the Nine Months Ended March 31 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $25,816 | $(4,759) | | Net cash used in investing activities | $(8,203) | $(8,926) | | Net cash provided by (used in) financing activities | $25,919 | $(31,663) | | **Net Increase (Decrease) in Cash** | **$43,532** | **$(45,348)** | | **Cash at End of Period** | **$86,222** | **$37,808** | - Significant financing activities in the nine months to March 31, 2025 include proceeds from Senior Non-Convertible Preferred Stock (**$337.9M**), proceeds from ABS Notes (**$99.1M**), and payments on Term Loans (**$384.6M**)[16](index=16&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's accounting policies and significant financial events [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the 17% year-over-year revenue growth for the nine months ended March 31, 2025, to the successful expansion of the Healthcare Services segment, particularly the SelectRx pharmacy business, which saw revenue increase by 60% - The company operates through three reportable segments: Senior (Medicare products), Healthcare Services (pharmacy and health services), and Life (term life and final expense insurance)[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - As of July 1, 2024, the Auto & Home business was reclassified from a reportable segment to the "All Other" category due to not meeting quantitative thresholds[135](index=135&type=chunk)[204](index=204&type=chunk) - The company's primary performance measure for segments is Adjusted EBITDA, which excludes items like interest, taxes, depreciation, amortization, share-based compensation, and changes in fair value of warrants[137](index=137&type=chunk)[207](index=207&type=chunk) [Key Business and Operating Metrics by Segment](index=40&type=section&id=Key%20Business%20and%20Operating%20Metrics%20by%20Segment) In the Senior segment, for the nine months ended March 31, 2025, total approved policies decreased by 2% to 557,846, and the LTV per Medicare Advantage policy fell 3% to $892 Senior Segment - Approved Policies | Period | Medicare Advantage | Total Approved Policies | YoY Change (Total) | | :--- | :--- | :--- | :--- | | **Nine Months Ended Mar 31, 2025** | 507,530 | 557,846 | -2% | | **Nine Months Ended Mar 31, 2024** | 517,973 | 566,543 | | Senior Segment - LTV per MA Approved Policy | Period | LTV per MA Policy | YoY Change | | :--- | :--- | :--- | | **Nine Months Ended Mar 31, 2025** | $892 | -3% | | **Nine Months Ended Mar 31, 2024** | $923 | | Healthcare Services & Life Segment Metrics | Metric | As of/For Nine Months Ended Mar 31, 2025 | YoY Change | | :--- | :--- | :--- | | Total SelectRx Members | 105,523 | +41% | | Life - Total Premiums (in thousands) | $125,751 | +9% | [Results of Operations](index=44&type=section&id=Results%20of%20Operations) For the nine months ended March 31, 2025, total revenue grew 17% to $1.18 billion, driven by a 60% increase in Pharmacy revenue Results of Operations for the Nine Months Ended March 31 (in thousands) | Line Item | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$1,181,492** | **$1,014,567** | **17%** | | - Pharmacy Revenue | $518,154 | $323,865 | 60% | | **Total Operating Costs** | **$1,100,470** | **$948,626** | **16%** | | - Cost of goods sold—pharmacy | $448,029 | $284,360 | 58% | | - Marketing and advertising | $254,222 | $288,676 | -12% | | - Selling, general, and administrative | $122,850 | $97,049 | 27% | | **Income from Operations** | **$81,022** | **$65,941** | **23%** | - Interest expense for the nine months ended March 31, 2025 decreased by **4%** to **$67.2 million**, resulting from a lower cost of capital following debt restructuring[200](index=200&type=chunk)[201](index=201&type=chunk) [Segment Information Analysis](index=49&type=section&id=Segment%20Information%20Analysis) For the nine months ended March 31, 2025, the Senior segment's revenue decreased 4% to $517.9 million, but its Adjusted EBITDA increased 11% to $153.9 million due to cost efficiencies Segment Revenue and Adjusted EBITDA for the Nine Months Ended March 31 (in millions) | Segment | Revenue 2025 | Revenue 2024 | Adj. EBITDA 2025 | Adj. EBITDA 2024 | | :--- | :--- | :--- | :--- | :--- | | Senior | $517.9 | $541.7 | $153.9 | $138.9 | | Healthcare Services | $528.7 | $333.3 | $13.5 | $6.9 | | Life | $125.0 | $115.9 | $19.7 | $12.9 | - Senior segment's Adjusted EBITDA increased despite lower revenue, driven by a **$38.9 million** decrease in operating costs, including a **$25.1 million** reduction in sales and marketing[228](index=228&type=chunk) - Healthcare Services' growth was fueled by a **$195.4 million** revenue increase, partially offset by a **$188.8 million** rise in operating costs to support the expansion[229](index=229&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company had $86.2 million in cash, cash equivalents, and restricted cash - On February 10, 2025, the company completed a **$350.0 million** Senior Non-Convertible Preferred Stock transaction, receiving net proceeds of **$337.9 million**[233](index=233&type=chunk) - During the nine months ended March 31, 2025, the company repaid **$384.6 million** of its outstanding term loans[236](index=236&type=chunk) Cash Flow Summary for the Nine Months Ended March 31 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $25,816 | $(4,759) | | Net cash used in investing activities | $(8,203) | $(8,926) | | Net cash provided by (used in) financing activities | $25,919 | $(31,663) | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=58&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk exposure is to unfavorable movements in interest rates - The company is primarily exposed to market risk from unfavorable movements in interest rates[253](index=253&type=chunk) [Item 4. Controls and Procedures](index=59&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2025 - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective[254](index=254&type=chunk) - No material changes to internal control over financial reporting occurred during the first quarter of fiscal 2025[256](index=256&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=60&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal proceedings - The company is involved in a securities class action lawsuit, which was dismissed on April 3, 2025, but the plaintiffs filed a notice of appeal on May 5, 2025[97](index=97&type=chunk) - On May 1, 2025, the company became aware of a qui tam action in which the U.S. Attorney's Office has partially intervened, alleging violations of the Federal False Claims Act. The company denies the allegations[100](index=100&type=chunk) [Item 1A. Risk Factors](index=60&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors disclosed in the Annual Report, except for an update highlighting the risks associated with legal proceedings - The company highlights the risk from various legal proceedings, specifically mentioning a subpoena received in August 2022 and a qui tam action where the U.S. Attorney's Office partially intervened on May 1, 2025[260](index=260&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=60&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Except for what was previously disclosed on Form 8-K reports, the company did not sell any unregistered securities during the period covered by this Form 10-Q - No unregistered sales of equity securities occurred during the period, other than those previously reported on Form 8-K[261](index=261&type=chunk) [Item 5. Other Information](index=61&type=section&id=Item%205.%20Other%20Information) On November 21, 2024, Sarah Anderson, Executive Vice President of Pharmacy, adopted a Rule 10b5-1 trading plan for the potential sale of up to 50,000 shares of common stock - Sarah Anderson, EVP of Pharmacy, adopted a Rule 10b5-1 trading arrangement on November 21, 2024, for the sale of up to **50,000 shares**[265](index=265&type=chunk) [Item 6. Exhibits](index=62&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including CEO and CFO certifications pursuant to the Sarbanes-Oxley Act and XBRL data files

SelectQuote (SLQT) came out with quarterly earnings of $0.03 per share, missing the Zacks Consensus Estimate of $0.04 per share. This compares to earnings of $0.05 per share a year ago. These figures are adjusted for non-recurring items. There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations hav ...