SelectQuote(SLQT)2024-02-07 17:37Financial Data and Key Metrics Changes - SelectQuote reported consolidated revenue of 67 million compared to 112 million [13][28] - The company expects to approach breakeven free cash flow for fiscal 2024, with cash flow generation anticipated to expand as healthcare services scale [7][12] Business Line Data and Key Metrics Changes - In the Senior segment, revenue grew to 934 per policy, reflecting stable policyholder persistency [9][36] - The Healthcare Services segment surpassed original member growth expectations, reaching nearly 63,000 members, with a sequential growth of 19% compared to the previous quarter [16][29] Market Data and Key Metrics Changes - The company noted a more rational competitive landscape in the industry compared to previous years, with stable agent efficiency despite increased marketing costs due to new CMS marketing rules [9][15] - The average prescription shipped per member grew by 76% year-over-year, indicating significant scale in the distribution business [38] Company Strategy and Development Direction - SelectQuote aims to generate stable and attractive EBITDA margins while focusing on returns to invested capital and growing cash flow [6] - The company is leveraging its existing marketing spend to create new revenue streams, particularly in healthcare services, which is expected to drive future growth [49][74] - The strategic focus includes enhancing automation and improving system architecture to reduce costs while continuing to grow [68] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to maintain persistency and stability in policyholder retention, despite increased shopping behavior in the market [23][65] - The company is optimistic about the future, citing strong performance in both the Senior and Healthcare Services divisions, and has increased revenue and adjusted EBITDA outlooks for fiscal 2024 [27][40] Other Important Information - SelectQuote is actively working on restructuring its balance sheet to improve its earnings profile and operating flexibility, with a focus on securitization as a potential solution [20][56] - The company highlighted that it is on track to produce approximately $100 million of unlevered operating cash flow in fiscal 2024 [20] Q&A Session Summary Question: What are the prospects for continued synergies between the pharmacy business and the senior segment? - Management highlighted strong growth in SelectRx, indicating significant synergy with the Medicare Advantage customer base and potential for further adoption [63][64] Question: How does the company view its debt levels as it progresses towards free cash flow generation? - Management acknowledged the meaningful debt balance and emphasized that addressing it is a priority, with ongoing negotiations for a long-term solution [56][70] Question: Can you comment on the lifetime value outlook and the impact of carrier mix? - Management expressed confidence in maintaining persistency and noted that the stabilization observed is a strong foundation for future growth [22][45]