Financial Data and Key Metrics Changes - The company generated consolidated revenue of $329 million, representing a 13% growth year-over-year, primarily driven by strong growth in healthcare services [4][17] - Senior revenues declined to $59 million from $93 million a year ago, a decrease of 37%, attributed to lower policy production due to new eligibility requirements [4][18] - The company reported a quarterly EBITDA loss of $32 million, which was below the guided loss range of $25-$30 million [8][17] Business Line Data and Key Metrics Changes - The senior business segment experienced a 32% reduction in policy production compared to the previous year, leading to a negative EBITDA of $21 million [5][18] - Healthcare services EBITDA was impacted by changes in drug reimbursement rates, with an expected second-quarter adjusted EBITDA of approximately break-even [6][20] - The life insurance business saw nearly 20% revenue growth, driven by balanced growth in term life and final expense policies [22] Market Data and Key Metrics Changes - The company noted an elevated level of policyholder volatility due to shifts in planned benefits and structures from carriers, which is expected to continue in the upcoming AEP season [9][10] - The Medicare Advantage (MA) market is experiencing a high level of consumer engagement as beneficiaries evaluate options, with a focus on simplifying benefits [34][36] Company Strategy and Development Direction - The company aims to leverage its data-enabled agent-led model as a competitive advantage in the dynamic Medicare Advantage market [9][10] - There is a strategic focus on improving policyholder retention and understanding their plans better, which is seen as critical in the current environment [10][27] - The company is negotiating a longer-term reimbursement agreement with its PBM partner to enhance visibility and predictability for its healthcare services business [6][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term economics of healthcare services despite short-term reimbursement challenges [7][20] - The company remains optimistic about the upcoming AEP and OEP seasons, supported by strong agent retention and successful preseason hiring [10][23] - The fiscal 2026 financial outlook remains unchanged at $1.65 billion to $1.75 billion in revenue and $120 million to $150 million in adjusted EBITDA [23] Other Important Information - The company is actively working on improving medication adherence through its SelectRx program, which has shown positive results in reducing hospital days and improving health outcomes [16][12] - The company is expanding its healthcare services offerings to address social determinants of health, enhancing its value proposition to members [31] Q&A Session Summary Question: Concerns about SelectRx reimbursement headwinds - Management reassured that they are in constructive discussions with their PBM partner to solidify a longer-term agreement, emphasizing the clinical value of their solution [24][25] Question: Impact of SelectRx on LTV - Management noted that while they observe improved persistency among SelectRx members, this is not currently factored into the lifetime value calculations [25][26] Question: Strategies for helping policyholders understand their plans - Management highlighted their proactive approach to assist beneficiaries in navigating plan changes, utilizing AI and data to enhance customer engagement [27][29] Question: Market dynamics in the AEP season - Management indicated that the current AEP season is dynamic, with high consumer engagement and a focus on profitability among carriers [34][36] Question: Managing growth in SelectRx - Management emphasized a measured approach to member growth, focusing on profitability and partnerships with payers that value their services [38][40]

1st Quarter Fiscal 2026 Earnings Presentation November 6, 2025 | We shop. You save. 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," "continu ...

Financial Data and Key Metrics Changes - Consolidated revenue for fiscal year 2025 reached $1.5 billion, representing a 16% increase year-over-year [5] - Adjusted EBITDA totaled $126 million, with an EBITDA margin of 8%, consistent with the previous year despite revenue growth from lower-margin healthcare services [6][26] - Healthcare Services revenue grew approximately 55% to nearly $500 million, driven by the SelectRx platform [5][11] Business Line Data and Key Metrics Changes - Senior Medicare Advantage business generated $600 million in revenue, with adjusted EBITDA of $162 million, reflecting a 200 basis point increase in EBITDA margins despite a smaller agent workforce [27] - Healthcare Services segment saw membership grow by 31%, with revenue of $743 million and adjusted EBITDA of $25 million, indicating significant progress in scale and profitability [11][30] - Life division revenues grew 10% to $173 million, with a 32% increase in adjusted EBITDA to $27 million, representing a 15% margin [31] Market Data and Key Metrics Changes - The company noted a challenging market backdrop for the Senior Medicare Advantage business due to significant plan changes by carriers and new eligibility parameters [6] - The addressable market for SelectRx is described as massive, with expectations for continued strong growth in healthcare services [30] Company Strategy and Development Direction - The company aims to leverage its information and connectivity advantage within healthcare to drive profitability and cash flow [10][14] - SelectQuote's strategic vision includes becoming a holistic solution provider across the $5 trillion U.S. healthcare market, focusing on efficiency and cash flow generation [13][22] - The company plans to balance growth with sustainable cash flows, with expectations for a flatter year in Medicare Advantage submissions [23][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 20% plus EBITDA margins driven by technology and agent-led models [23] - The company anticipates generating positive operating cash flow in fiscal 2026, with a focus on capital allocation to improve the balance sheet [38] - Management highlighted the importance of technology and AI in enhancing operational efficiency and customer service [17][19] Other Important Information - The company has made significant investments in technology to automate tasks and optimize decision-making, which has improved enrollment times by 25% [20][68] - The Kansas distribution facility is expected to enhance capacity and drive margin improvements in the healthcare services segment [12][44] Q&A Session Summary Question: Can you discuss the path to target margins as SelectRx scales? - Management indicated that as the business scales, they expect to drive variable costs down and enhance margins through automation and operational refinements [40][43] Question: Is there a catalytic level of EBITDA contribution that could accelerate the securitization program? - Management noted that while there is no specific threshold, increasing EBITDA generation will open up various paths for capital structure improvements [46][47] Question: What dynamics have changed regarding SelectRx growth? - Management clarified that while membership growth may slow, they expect strong EBITDA growth due to operational refinements and partnerships with carriers [51][52] Question: How significant is AI in serving more customers? - Management highlighted that AI is used to enhance agent efficiency and improve customer interactions, resulting in significant time savings [54][66] Question: What are the capital allocation priorities moving forward? - Management emphasized the importance of balancing growth with cash flow generation, focusing on improving the capital structure while exploring growth opportunities in healthcare services [74][78]

Financial Data and Key Metrics Changes - Consolidated revenues for the third quarter reached $408 million, an 8% increase compared to the previous year [5][24] - Consolidated EBITDA totaled $38 million, maintaining healthy margins despite a shift in business mix [6][24] - The trailing twelve-month revenue to customer acquisition cost (CAC) ratio improved to 5.8x from 4.2x a year ago, indicating enhanced marketing efficiency [10][11] Business Line Data and Key Metrics Changes - Senior segment revenues totaled $169 million, with adjusted EBITDA of $46 million, resulting in a 27% EBITDA margin despite a 26% reduction in agent headcount [25][26] - Healthcare Services revenue grew 53% year-over-year to $190 million, with adjusted EBITDA of $6 million [29] - Life Insurance revenues increased by 13% to $46 million, with adjusted EBITDA more than doubling to $6 million, resulting in a 14% EBITDA margin [31] Market Data and Key Metrics Changes - The SelectRx business saw membership grow by 41% year-over-year, reaching 106,000 members [5][29] - The Medicare Advantage environment was characterized by a strong close rate despite a smaller agent force, with policies totaling 168,000, down less than 10% [12][26] Company Strategy and Development Direction - The company aims to enhance profitability in the Healthcare Services segment by refining membership parameters and focusing on efficiency [18][55] - Plans to increase agent hiring are underway to capitalize on market improvements, particularly in the Medicare Advantage space [42][43] - The opening of a new facility in Kansas is expected to drive long-term operational efficiency and margin expansion, although it may initially drag profitability [62] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the final rate notice for Medicare Advantage, which is expected to improve carrier reimbursement rates and market conditions [60] - The company anticipates potential headwinds in the fourth quarter due to new beneficiary eligibility parameters and the ramp-up of the Kansas facility [32][62] - Overall, management remains confident in the business model's ability to generate operating leverage and shareholder value [66] Other Important Information - The company is facing a Department of Justice complaint related to the Medicare Advantage system but plans to mount a vigorous defense [21][22] - Significant progress has been made on the capital structure, including a $100 million securitization and a $350 million strategic investment [34][35] Q&A Session Summary Question: Can you walk through the separation of growth in Medicare Advantage and SelectRx? - Management noted that while there was a 26% reduction in agent count, the close rates were strong due to tenured agents, which helped drive efficiency and attach rates to SelectRx [37][39] Question: What are the plans for agent growth in the upcoming season? - Hiring is currently underway, with expectations to discuss more in the upcoming guidance [42][43] Question: Can you provide insights on the receivable securitization? - Management indicated that securitization is a potential path for capital structure optimization, with several options being explored [44][45] Question: How should investors think about MA LTV moving forward? - A decline in MA LTV is expected in the fourth quarter due to the shift in commission structure, with further details to be shared in the next earnings call [49][51] Question: What benefits are expected from the new Kansas facility? - The facility is anticipated to improve operating efficiency and customer experience, although there will be a short-term drag on profitability [61][62]

Financial Performance - Revenue increased by 8% year-over-year, reaching $408.2 million in 3Q25 compared to $376.4 million in 3Q24[14] - Adjusted EBITDA decreased to $37.7 million in 3Q25 from $46.6 million in 3Q24[14] - The combined Senior and Healthcare Services Revenue-to-Customer Acquisition Cost (Rev-to-CAC) multiple was 5.8x[14] - The company anticipates full year 2025 revenue between $1500 billion and $1575 billion, representing a 16% year-over-year increase at the midpoint[38] - The company anticipates full year 2025 Adjusted EBITDA between $115 million and $140 million, representing a 9% year-over-year increase at the midpoint[38] - The company anticipates full year 2025 Net Income (Loss) between $(1) million and $28 million, representing a 140% year-over-year increase at the midpoint[38] Senior Segment - Approved Medicare Advantage (MA) policies exceeded forecasts, despite a 26% reduction in the number of agents, resulting in only a 10% decrease in MA policies[14] - Strong close rates contributed to robust performance and Adjusted EBITDA margins of 27% in 3Q25[14,17] - Total approved policies decreased from 202,000 in 3Q24 to 186,000 in 3Q25[30] - Medicare Advantage Lifetime Value (MA LTV) decreased from $995 in 3Q24 to $915 in 3Q25[30] Healthcare Services (SelectRx) - SelectRx membership grew by 41% year-over-year, reaching nearly 106,000 members in 3Q25[14,22] - SelectRx generated nearly $675 million in trailing 12-month revenue[22]