SelectQuote(SLQT)2023-02-07 16:45Financial Data and Key Metrics Changes - The company reported consolidated revenue of $319 million for the quarter, with adjusted EBITDA of $64 million, indicating strong performance ahead of expectations [10][97] - Senior revenue grew over 50% year-over-year to $224 million, with senior adjusted EBITDA margin reaching 37% [12][14] - Operating expense per approved policy declined by 41% year-over-year, contributing significantly to EBITDA outperformance [6][78] Business Line Data and Key Metrics Changes - The healthcare services segment, particularly Select Rx, saw a member growth of about 20% over the last quarter and 411% compared to a year ago, with over 39,000 members [4][5] - The volume of approved Medicare Advantage policies declined by 18% to 219,000, which was better than the original plan of a 35% to 45% decline [15][13] - The company achieved a significant reduction in marketing costs per approved policy, down 50%, driven by improved agent close rates and optimized marketing channels [25][23] Market Data and Key Metrics Changes - The company had a cash position of $96 million as of January 31, compared to $36 million as of December 31, indicating improved liquidity [11] - The annual enrollment period (AEP) was described as the heaviest cash use season, with the company positioned well to drive growth in cash-efficient profitability [10][47] Company Strategy and Development Direction - The overarching strategy focuses on optimizing unit and enterprise-level profitability and cash efficiency over growth, with a commitment to balance growth opportunities with profitability [26][48] - The company plans to slow growth in Select Rx members to prioritize profitability and cash flow, while still recognizing the significant market opportunity [5][22] - Strategic changes have been made to improve agent efficiency and marketing effectiveness, which are expected to be repeatable in future Medicare Advantage seasons [31][87] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to drive positive cash EBITDA for fiscal 2023, with expectations for continued improvement in profitability and cash efficiency [47][56] - The company noted stability in policyholder persistency and improved approval rates, which are critical for delivering predictable profit and growth [98][52] - Management emphasized the importance of maintaining a focus on cash and profitability, rather than solely on growth metrics [40][62] Other Important Information - The company has increased its full-year adjusted EBITDA outlook to a range of $5 million to $25 million, reflecting confidence in its strategic execution [93] - The strategic redesign has led to a significant improvement in cash efficiency, with the cash breakeven period for Medicare Advantage policies now just over two years [86][87] Q&A Session Summary Question: Comments on the broader marketing and revenue to CAC - Management highlighted improvements in revenue to customer acquisition costs, emphasizing a focus on unit economics and profitability [37] Question: LTV dynamics and future expectations - Management indicated that LTVs exceeded internal expectations for Q2 and are expected to remain at or above $875 for the full year, with positive trends in retention [62][60] Question: Liquidity needs and funding strategy - Management confirmed that the company is well ahead of its cash plan and is actively engaging with lenders for a more permanent capital structure solution [68]