SelectQuote(SLQT) - 2025 Q4 - Annual Results

Executive Summary & FY2026 Guidance Consolidated Earnings Highlights (Q4 FY2025) SelectQuote, Inc. achieved significant financial improvement in Q4 FY2025, with consolidated revenue growth and a swing from net loss to net profit, despite a decrease in Adjusted EBITDA Q4 FY2025 Consolidated Earnings Highlights: | Metric | Q4 FY2025 (million USD) | Q4 FY2024 (million USD) | Change | | :--- | :--- | :--- | :--- | | Consolidated Revenue | 345.1 | 307.2 | +12.3% | | Consolidated Net Income (Loss) | 12.9 | (31.0) | Swung to Profit | | Consolidated Adjusted EBITDA* | 2.7 | 14.4 | -81.3% | Fiscal Year 2026 Guidance The company issued its financial guidance for FY2026, projecting growth in both revenue and Adjusted EBITDA FY2026 Guidance Range: | Metric | Range (million USD) | | :--- | :--- | | Revenue | 1,650 - 1,750 | | Adjusted EBITDA* | 120 - 150 | CEO Commentary CEO Tim Danker highlighted the strength of the company's holistic healthcare services model and expressed confidence in future value creation for all stakeholders, noting three consecutive years of exceeding Adjusted EBITDA expectations - The company's holistic healthcare services model performed strongly in FY2025, with expectations for substantial future value creation for all stakeholders[2] - The company has exceeded initial financial expectations for the third consecutive year, with Adjusted EBITDA surpassing projections by over 20% annually[2] Segment Results Overview Definition of Segments and Adjusted EBITDA SelectQuote currently operates three reportable segments: Senior, Healthcare Services, and Life, utilizing Adjusted EBITDA as a key metric for evaluating business operational performance - The company operates three reportable segments: Senior, Healthcare Services, and Life[4] - Adjusted EBITDA is defined as income (loss) before income tax expense (benefit), plus net interest expense, depreciation and amortization, stock-based compensation, goodwill, long-lived asset and intangible asset impairment, transaction costs, net loss on disposal of property, equipment and software, other non-recurring expenses and income, and fair value changes in warrant liabilities[4] Senior Segment Senior Financial Results The Senior segment experienced declines in both revenue and Adjusted EBITDA for Q4 and full-year FY2025, with a notable contraction in Adjusted EBITDA margin during the fourth quarter Senior Segment Financial Results (thousand USD): | Metric | Q4 FY2025 | Q4 FY2024 | QoQ Change | FY2025 | FY2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $82,464 | $114,143 | (28)% | $600,393 | $655,849 | (8)% | | Adjusted EBITDA* | $7,722 | $27,872 | (72)% | $161,671 | $166,744 | (3)% | | Adjusted EBITDA Margin* | 9 % | 24 % | -15pp | 27 % | 25 % | +2pp | Senior Operating Metrics Senior segment operating metrics indicate a decline in submitted and approved policies for Q4 and full-year FY2025, with a slight decrease in the lifetime value of commissions per approved policy, despite growth in other product policies Submitted Policies Submitted policies decreased in Q4 and full-year FY2025, primarily due to a significant decline in Medicare Advantage plans, though other product submissions saw growth Submitted Policies: | Product | Q4 FY2025 | Q4 FY2024 | QoQ Change | FY2025 | FY2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Medicare Advantage | 85,979 | 117,091 | (27)% | 674,851 | 720,027 | (6)% | | (1)All Other | 21,438 | 15,260 | 40 % | 87,413 | 72,906 | 20 % | | Total | 107,417 | 132,351 | (19)% | 762,264 | 792,933 | (4)% | Approved Policies Approved policies declined in Q4 and full-year FY2025, mainly driven by a substantial decrease in Medicare Advantage plans, while other product approvals increased Approved Policies: | Product | Q4 FY2025 | Q4 FY2024 | QoQ Change | FY2025 | FY2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Medicare Advantage | 85,344 | 107,272 | (20)% | 592,874 | 625,245 | (5)% | | (1)All Other | 19,979 | 13,849 | 44 % | 70,295 | 62,419 | 13 % | | Total | 105,323 | 121,121 | (13)% | 663,169 | 687,664 | (4)% | Lifetime Value of Commissions per Approved Policy The lifetime value of commissions per approved policy slightly decreased in Q4 and full-year FY2025, with a more significant decline observed in other products Lifetime Value of Commissions per Approved Policy (USD per Policy): | Product | Q4 FY2025 | Q4 FY2024 | QoQ Change | FY2025 | FY2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Medicare Advantage | $837 | $847 | (1)% | $884 | $910 | (3)% | | (1)All Other | $125 | $186 | (33)% | $134 | $146 | (8)% | Healthcare Services Segment Healthcare Services Financial Results The Healthcare Services segment achieved significant revenue and Adjusted EBITDA growth in Q4 and full-year FY2025, accompanied by substantial margin expansion Healthcare Services Segment Financial Results (thousand USD): | Metric | Q4 FY2025 | Q4 FY2024 | QoQ Change | FY2025 | FY2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $214,028 | $145,223 | 47 % | $742,705 | $478,508 | 55 % | | Adjusted EBITDA* | $11,853 | $909 | 1,204 % | $25,387 | $7,821 | 225 % | | Adjusted EBITDA Margin* | 6 % | 1 % | +5pp | 3 % | 2 % | +1pp | Healthcare Services Operating Metrics Healthcare Services segment operating metrics show substantial growth in both SelectRx members and daily prescription shipments, reflecting successful membership growth strategies SelectRx Members As of June 30, 2025, total SelectRx members increased by 31% year-over-year, driven by the company's proactive membership growth strategy Total SelectRx Members: | Date | Members | | :--- | :--- | | June 30, 2025 | 108,018 | | June 30, 2024 | 82,385 | - SelectRx member count increased by 31% year-over-year, primarily due to the company's strategy to grow SelectRx membership[16] Prescriptions Per Day Daily prescription shipments demonstrated significant growth in both Q4 and full-year FY2025 Daily Prescription Shipments: | Period | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :--- | :--- | :--- | :--- | :--- | | Daily Prescriptions | 30,630 | 22,950 | 27,867 | 18,935 | Combined Senior and Healthcare Services - Consumer Per Unit Economics Per Unit Economics Analysis For the twelve months ended June 30, 2025, combined Senior and Healthcare Services total revenue per MA/MS approved policy grew by 22%, primarily due to increased pharmacy revenue, while total operating expenses also rose with business expansion Combined Senior and Healthcare Services Consumer Per Unit Economics (USD per Approved Policy): | Metric | As of June 30, 2025 (12 months) | As of June 30, 2024 (12 months) | | :--- | :--- | :--- | | MA and MS Approved Policies | 594,572 | 627,130 | | MA and MS Commissions per MA/MS Policy | $885 | $910 | | Other Commissions per MA/MS Policy | $12 | $12 | | Pharmacy Revenue per MA/MS Policy | $1,219 | $741 | | Other Revenue per MA/MS Policy | $86 | $146 | | Total Revenue per MA/MS Policy | $2,202 | $1,809 | | Total Operating Expenses per MA/MS Policy | ($1,937) | ($1,530) | | Adjusted EBITDA* per MA/MS Policy | $265 | $279 | | Adjusted EBITDA Margin* per MA/MS Policy | 12 % | 15 % | | Revenue/Customer Acquisition Cost Multiple | 6.1X | 4.5X | - Total revenue per MA/MS approved policy increased by 22% for the twelve months ended June 30, 2025, primarily due to increased pharmacy revenue[21] - Total operating expenses per MA/MS approved policy increased by 27% for the twelve months ended June 30, 2025, driven by higher cost of goods sold for the Healthcare Services business growth[21] Life Segment Life Financial Results The Life segment reported revenue growth in Q4 and full-year FY2025, with full-year Adjusted EBITDA significantly increasing, though Q4 Adjusted EBITDA saw a slight decline Life Segment Financial Results (thousand USD): | Metric | Q4 FY2025 | Q4 FY2024 | QoQ Change | FY2025 | FY2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $47,984 | $42,074 | 14 % | $172,978 | $157,930 | 10 % | | Adjusted EBITDA* | $6,922 | $7,217 | (4)% | $26,669 | $20,164 | 32 % | | Adjusted EBITDA Margin* | 14 % | 17 % | -3pp | 15 % | 13 % | +2pp | Life Operating Metrics Life segment operating metrics show overall premium growth in Q4 and full-year FY2025, with permanent life insurance premiums experiencing particularly strong increases Term and Permanent Life Insurance Premiums (thousand USD): | Premium Type | Q4 FY2025 | Q4 FY2024 | QoQ Change | FY2025 | FY2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Term Life Premiums | $19,989 | $18,074 | 11 % | $71,448 | $70,450 | 1 % | | Permanent Life Premiums | $30,807 | $23,789 | 30 % | $105,099 | $86,600 | 21 % | | Total | $50,796 | $41,863 | 21 % | $176,547 | $157,050 | 12 % | Non-GAAP Financial Measures Definition and Reconciliation Note This report includes non-GAAP financial measures, such as Adjusted EBITDA, intended to supplement rather than replace GAAP metrics; management and the board use Adjusted EBITDA to assess operational performance, but forward-looking quantitative reconciliation to the most directly comparable GAAP measure is not provided due to the unpredictability of certain information - Adjusted EBITDA is a non-GAAP financial measure defined as net income (loss) before income tax expense (benefit), plus interest expense, depreciation and amortization, fair value changes in warrant liabilities, and certain non-cash or non-recurring expenses (including restructuring and stock-based compensation expenses)[26] - Company management and the board of directors use Adjusted EBITDA to understand and evaluate operational performance, and to set budgets and operational goals[26] - The company cannot provide a quantitative reconciliation of forward-looking Adjusted EBITDA to the most directly comparable GAAP measure because certain information, such as warrant fair value, cannot be reasonably predicted[27] Forward-Looking Statements & Risk Factors Forward-Looking Statements This report contains forward-looking statements reflecting the company's current views on future events and financial performance, which are not historical facts and are subject to unpredictable risks, assumptions, and uncertainties - Forward-looking statements reflect the company's current views on future events and financial performance, but are not historical facts and are based on current expectations, estimates, and projections[28] - These statements are subject to unpredictable risks, assumptions, and uncertainties, and actual results may differ materially from those expressed or implied by forward-looking statements[28] Risk Factors Key factors that could cause actual results to differ materially from forward-looking statements include reliance on a few insurance carrier partners, changes in health insurance market regulations, competition, dependence on Senior segment revenue, ability to attract and retain qualified personnel, reliance on lead providers, data access and accuracy, global economic conditions, and technology infrastructure disruptions - Key risk factors include: reliance on a few insurance carrier partners, impact of existing and future laws and regulations in the health insurance market, changes in health insurance products and markets, competition from direct sales, dependence on Senior segment revenue, ability to attract and retain qualified personnel, reliance on lead providers, data access and accuracy, cost-effective advertising, global economic conditions, acquisition disruptions, significant estimates and assumptions in financial statements, goodwill impairment, existing or potential litigation, existing and future indebtedness, ability to comply with debt covenants, access to additional capital, intellectual property protection, seasonality, accuracy and timeliness of commission reporting, timing of insurance carrier approvals and payments, factors affecting lifetime value of commissions estimates, changes in accounting rules and tax laws, technology infrastructure disruptions, relationships with third-party service providers, cybersecurity breaches, and pharmacy business-related factors[29][30] About SelectQuote Company Overview and Business Lines Founded in 1985, SelectQuote provides insurance solutions to consumers by offering unbiased comparisons from multiple highly-rated carriers, leveraging skilled agents and proprietary technology across its three core business lines: SelectQuote Senior, SelectQuote Healthcare Services, and SelectQuote Life - SelectQuote was founded in 1985, helping consumers choose the most appropriate policies by providing unbiased comparisons from multiple highly-rated insurance carriers[31] - The company's success is built on two pillars: highly-trained agents offering consultative needs analysis and proprietary technology for acquiring and distributing high-quality leads[31] - The company currently operates three core business lines: SelectQuote Senior (senior insurance), SelectQuote Healthcare Services (healthcare services, including SelectRx pharmacy and chronic care management services), and SelectQuote Life (life insurance)[32] Financial Statements Consolidated Balance Sheets As of June 30, 2025, SelectQuote's consolidated total assets slightly increased, while total liabilities significantly decreased, and total stockholders' equity rose, primarily due to the issuance of preferred stock Consolidated Balance Sheets (thousand USD): | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total Assets | $1,249,356 | $1,193,908 | | Total Liabilities | $673,838 | $877,107 | | Preferred Stock | $224,374 | — | | Total Stockholders' Equity | $351,144 | $316,801 | Consolidated Statements of Comprehensive Income (Loss) SelectQuote achieved revenue growth and a swing from net loss to net profit in Q4 and full-year FY2025, though net income attributable to common stockholders remained a loss in the fourth quarter Consolidated Statements of Comprehensive Income (Loss) (thousand USD): | Metric | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $345,102 | $307,208 | $1,526,594 | $1,321,776 | | Operating Income (Loss) | ($12,522) | ($1,391) | $68,499 | $64,550 | | Net Income (Loss) | $12,868 | ($31,017) | $47,580 | ($34,125) | | Net Income (Loss) Attributable to Common Stockholders | ($3,894) | ($31,017) | $25,032 | ($34,125) | | Basic Earnings (Loss) Per Share | ($0.02) | ($0.18) | $0.14 | ($0.20) | | Diluted Earnings (Loss) Per Share | ($0.02) | ($0.18) | $0.01 | ($0.20) | Consolidated Statements of Cash Flows In FY2025, the company experienced cash outflows from operating and investing activities, offset by cash inflows from financing activities, resulting in a net decrease in cash, cash equivalents, and restricted cash Consolidated Statements of Cash Flows (thousand USD): | Cash Flow Type | Q4 FY2025 | Q4 FY2024 | FY2025 | FY2024 | | :--- | :--- | :--- | :--- | :--- | | Net Cash from Operating Activities | ($37,482) | $19,995 | ($11,666) | $15,236 | | Net Cash from Investing Activities | ($3,111) | ($5,920) | ($11,314) | ($14,846) | | Net Cash from Financing Activities | ($8,563) | ($9,193) | $17,356 | ($40,856) | | Net Increase (Decrease) in Cash, Cash Equivalents, and Restricted Cash | ($49,156) | $4,882 | ($5,624) | ($40,466) | | End of Period Cash, Cash Equivalents, and Restricted Cash | $37,066 | $42,690 | $37,066 | $42,690 | Adjusted EBITDA Reconciliation Q4 FY2025 Reconciliation In Q4 FY2025, the company's total Adjusted EBITDA was $26,497 thousand, leading to income before income tax expense (benefit) of $9,375 thousand after various adjustments Q4 FY2025 Adjusted EBITDA to Income Before Income Tax Expense (Benefit) Reconciliation (thousand USD): | Item | Amount | | :--- | :--- | | Senior Segment Adjusted EBITDA | $7,722 | | Healthcare Services Segment Adjusted EBITDA | $11,853 | | Life Segment Adjusted EBITDA | $6,922 | | Total Adjusted Segment EBITDA | $26,497 | | All Other Adjusted EBITDA | $950 | | Corporate | ($24,753) | | Stock-based Compensation Expense | ($4,852) | | Transaction Costs | ($1,257) | | Depreciation and Amortization | ($4,876) | | Net Loss on Disposal of Property, Equipment and Software | ($80) | | Long-lived Asset Impairment | ($4,209) | | Fair Value Change in Warrant Liabilities | $34,181 | | Net Interest Expense | ($12,226) | | Income Before Income Tax Expense (Benefit) | $9,375 | Q4 FY2024 Reconciliation In Q4 FY2024, the company's total Adjusted EBITDA was $35,998 thousand, resulting in a loss before income tax expense (benefit) of $24,815 thousand after various adjustments Q4 FY2024 Adjusted EBITDA to Loss Before Income Tax Expense (Benefit) Reconciliation (thousand USD): | Item | Amount | | :--- | :--- | | Senior Segment Adjusted EBITDA | $27,872 | | Healthcare Services Segment Adjusted EBITDA | $909 | | Life Segment Adjusted EBITDA | $7,217 | | Total Adjusted Segment EBITDA | $35,998 | | All Other Adjusted EBITDA | $2,474 | | Corporate | ($24,115) | | Stock-based Compensation Expense | ($3,304) | | Transaction Costs | ($5,529) | | Depreciation and Amortization | ($6,407) | | Net Loss on Disposal of Property, Equipment and Software | ($523) | | Net Interest Expense | ($23,409) | | Loss Before Income Tax Expense (Benefit) | ($24,815) | FY2025 Reconciliation For full-year FY2025, the company's total Adjusted EBITDA was $213,727 thousand, leading to income before income tax expense (benefit) of $48,511 thousand after various adjustments FY2025 Adjusted EBITDA to Income Before Income Tax Expense (Benefit) Reconciliation (thousand USD): | Item | Amount | | :--- | :--- | | Senior Segment Adjusted EBITDA | $161,671 | | Healthcare Services Segment Adjusted EBITDA | $25,387 | | Life Segment Adjusted EBITDA | $26,669 | | Total Adjusted Segment EBITDA | $213,727 | | All Other Adjusted EBITDA | $10,597 | | Corporate | ($98,070) | | Stock-based Compensation Expense | ($18,357) | | Transaction Costs | ($14,617) | | Depreciation and Amortization | ($20,460) | | Net Loss on Disposal of Property, Equipment and Software | ($240) | | Long-lived Asset Impairment | ($4,209) | | Fair Value Change in Warrant Liabilities | $59,525 | | Net Interest Expense | ($79,385) | | Income Before Income Tax Expense (Benefit) | $48,511 | FY2024 Reconciliation For full-year FY2024, the company's total Adjusted EBITDA was $194,729 thousand, resulting in a loss before income tax expense (benefit) of $29,066 thousand after various adjustments FY2024 Adjusted EBITDA to Loss Before Income Tax Expense (Benefit) Reconciliation (thousand USD): | Item | Amount | | :--- | :--- | | Senior Segment Adjusted EBITDA | $166,744 | | Healthcare Services Segment Adjusted EBITDA | $7,821 | | Life Segment Adjusted EBITDA | $20,164 | | Total Adjusted Segment EBITDA | $194,729 | | All Other Adjusted EBITDA | $14,127 | | Corporate | ($91,863) | | Stock-based Compensation Expense | ($13,816) | | Transaction Costs | ($13,158) | | Depreciation and Amortization | ($24,998) | | Net Loss on Disposal of Property, Equipment and Software | ($536) | | Net Interest Expense | ($93,551) | | Loss Before Income Tax Expense (Benefit) | ($29,066) | Additional Information Earnings Conference Call SelectQuote, Inc. will host an earnings conference call on August 21, 2025, at 8:30 AM ET, with investor participation available via a registration link or the investor relations website - The earnings conference call will be held on August 21, 2025, at 8:30 AM ET[25] - Investors can participate via the registration link https://registrations.events/direct/Q4I547808 or the company's investor relations website https://ir.selectquote.com/investor-home/default.aspx[25](index=25&type=chunk) Investor Relations & Media Contact Detailed contact information for investor relations and media is provided - Investor Relations Contact: Sloan Bohlen, Phone: 877-678-4083, Email: investorrelations@selectquote.com[33] - Media Contact: Matt Gunter, Phone: 913-286-4931, Email: matt.gunter@selectquote.com[33]