SLQT

Image source: The Motley Fool. Tuesday, Aug. 25, 2026 at 8:30 a.m. ET Chief Executive Officer - Timothy Danker Chief Financial Officer - Ryan Clement Investor Relations - Matthew Gunter Operator: Welcome to SelectQuote's fourth quarter 2026 earnings conference call. [Operator Instructions] It is now my pleasure to introduce Matt Gunter, SelectQuote's Investor Relations. Mr. Gunter, you may begin the conference. Matthew Gunter: Thank you, and good morning, everyone. Welcome to SelectQuote's fiscal fourth quarter earnings call. Before we begin our call, I would like to mention that on our website we have provided a slide presentation to help guide our discussion. After today's call, a replay will also be available on our website. Joining me from the company, I have our Chief Executive Officer, Tim Danker; and Chief Financial Officer, Ryan Clement. Following Tim and Ryan's comments today, we will have a question and answer session. As referenced on Slide 2, during this call, we will be discussing non-GAAP financial measures. The most directly comparable GAAP financial measures and a reconciliation of the differences between the GAAP and non-GAAP financial measures are available in our earnings release and investor presentation on our website. And finally, a reminder that certain statements made today may be forward-looking statements. These statements are made based upon management's current expectations and beliefs concerning future events impacting the company, and therefore involve a number of uncertainties and risks, including but not limited to those described in our earnings release, annual report on Form 10-K for the period ended June 30, 2026, and subsequent filings with the SEC. Therefore, the actual results of operations or financial condition of the company could differ materially from those expressed or implied in our forward-looking statements. And with that, I'd like to turn the call over to our Chief Executive Officer, Tim Danker. Tim? Timothy Danker: Thank you, Matt, and thanks to everyone joining us this morning. Before we begin, I'd like to start with what we believe is the most important takeaway from today's call. SelectQuote's highest priority continues to be driving profitable cash flow, and our fiscal 2026 results demonstrate meaningful progress against that objective. As you'll hear throughout our remarks, we're managing the business with a focus on cash generation and leverage reduction, which we believe is the best way to create long-term shareholder value. We believe the platform we've built is capable of generating substantially more cash flow over time, and we are beginning to see that potential translate into tangible results. Looking towards the future, we expect the Medicare Advantage industry to remain fluid as our carrier partners continue to right-size and get closer to their own operating margin targets. As a result, in fiscal '27, we will be prudent with our MA growth investments, while our primary focus will be to grow and compound our cash flow. Meanwhile, we reached an inflection point in fiscal 2026 with the Healthcare Services division becoming SelectQuote's largest revenue contributor. And we anticipate increasing cash flow and earnings power from that business in fiscal '27. Beyond fiscal '27, we firmly believe SelectQuote is well positioned to grow both our Senior and Healthcare Services revenues, which will further accelerate cash flow generation. Now moving to our recent performance. SelectQuote delivered a strong fourth quarter in what has been a highly successful fiscal year for our company. As you know, 2026 was another challenging year for Medicare Advantage as carriers shifted policy benefits and had widely varying origination volumes. In Healthcare Services, we successfully managed a shift in reimbursement rate from a SelectRx payer partner and changes in drug pricing from the Inflation Reduction Act. Through it all, we modestly grew revenue, maintained strong margins, and significantly increased operating cash flow. Looking ahead, our highest priority is to realize value for our shareholders, which, as I mentioned, is best achieved through cash flow. To be blunt, we see a wide disconnect in the value of our shares relative to the real cash flow generation of our platform. I'll end today's prepared remarks with more detail on that point, but I'll reiterate that we see fiscal 2027 as a real inflection point for compounding cash flow growth and the value of our equity. Turning to Slide 3, I want to frame fiscal 2026 around the key areas where SelectQuote made the most meaningful progress. First, in Healthcare Services, SelectRx continued to prove the earnings power of its scaled membership base, producing approximately $25 million of adjusted EBITDA for the year, while exiting at nearly $50 million annual run rate in the fourth quarter. This is an important milestone for a business we built essentially from scratch over the past several years. And we believe there's still meaningful room to grow profitably as we continue to drive operating leverage across the platform. Second, our Senior business remained highly profitable despite another dynamic Medicare Advantage environment. The business generated adjusted EBITDA margins of 26%, which we believe reflects the durability of our model, the strength of our carrier relationships, and the efficiency of our agent-led, technology-enabled distribution platform. And third, most importantly, we delivered more than $40 million of year-over-year improvement in operating cash flow. As I mentioned before, that cash flow progress is central to the story we're telling investors today. We have been very clear that our priority is not simply growth for growth's sake, but profitable growth that compounds into stronger cash generation, lower leverage, and ultimately greater equity value for shareholders. To emphasize the point, it is important to remember that there is significant cash flow scale both in our $1 billion plus commissions receivable balance, which we grew in fiscal 2026, and our scaling Healthcare Services platform. As we increase operating efficiency and reduce costs, the equity accretion of compounding cash flow will be increasingly powerful. So when we look back on fiscal '26, we see a year where the model worked well and our teams executed yet again. We navigated industry complexity, delivered value for customers and partners, and took a meaningful step forward in translating the underlying earnings power of SelectQuote into visible cash flow. Now let me turn to Slide 4 and how SelectQuote is driving value and cash flow through our ongoing effort to maximize operating efficiency. As part of our fiscal 2027 planning process, we identified more than $30 million of annualized run rate expense improvement across the business. Importantly, these benefits are the result of a combination of actions, including AI and technology-enabled efficiencies, process improvements, organizational rightsizing, and prudent cost management. Today, I'd like to double-click on a few of the technology-enabled efficiencies we're capturing. As you know, SelectQuote was founded with a clear view that technology and information are critical for operating efficiency and the value we deliver to our customers. Our investments in technology and data increasingly help us improve both efficiency and customer outcomes. Across the business, we are deploying AI-enabled enrollment support tools that help us flex capacity with demand. This ensures we preserve valuable agent talk time and allow our highly trained live agents to do their most valuable work. We've also streamlined agent workflows through sales assist technology, and we'll expand the use of AI-powered quality assurance tools to review and coach our agents. We're also automating revenue generation processes and leveraging internally developed technology to increase efficiency within both our Senior and Pharmacy businesses. These initiatives reduce manual work, improve scalability, and help generate meaningful cost savings while optimizing the high level of service our customers expect. Additionally, as discussed on our 3Q call during fiscal 2026, we built, deployed, tested, and are now leveraging our new custom-built pharmacy management system. This system not only enables streamlined day-to-day pharmacy operations, but also provides the technical infrastructure we need to continue to process more scripts through our new state-of-the-art Olathe, Kansas facility. In this facility, we are already recognizing around 30% efficiency gains on shipments relative to our two legacy locations. This is yet another way we are meeting the market given that the U.S. healthcare system demands increasing efficiency. And you can see that with the improvement in our Kansas facility. The challenge for most operators in our industry has been trying to balance speed and efficiency with services that fit the individual customer and drive value. There are some that do one or the other, but in our view, only SelectQuote succeeds at both. These initiatives build on a long history of incremental operational improvements across the company. While the over $30 million of savings reflects actions already taken or underway, we believe our technology platform positions us to capture incremental savings over the next several years as automation, data analytics, and workflow optimization become increasingly embedded across our operations. We are seeing that technology is allowing us to further unlock the value of our core assets. The success you see in both our Senior and Healthcare Services businesses begins and ends with real conversations between real people. We have a long track record of these conversations and earning the trust of America's seniors, who give us unmatched insights into their needs. We firmly believe our scale and, increasingly, our technology are exceptionally valuable assets that will continue to broaden our competitive advantage and allow us to meet the needs of America's seniors as they navigate the complex healthcare environment. These factors are not only allowing us to serve them better, but also powerfully contribute ongoing leverage to our cash flows. With that, let me turn the call to our CFO, Ryan Clement, to review our financials. Ryan? Ryan Clement: Thanks, Tim. I will begin on Slide 5 with our consolidated financial results for the fourth quarter and fiscal year 2026. As Tim mentioned, our results reflect strong execution across the business and continued progress against our goal of driving profitable cash flow. In the full year, revenue totaled to $1.62 billion, up 6% year over year and within our guidance range. Adjusted EBITDA was $109 million, finishing well ahead of our guidance range of $90 million to $100 million. Most importantly, the business made substantial progress on operating cash flow, which we will touch on later. For the fourth quarter, revenue was $322 million compared to $345 million in the prior year. Adjusted EBITDA increased to $12 million compared to $3 million last year. That fourth quarter improvement reflects the operating discipline we have emphasized throughout the year, including actions to improve efficiency, manage costs, and focus resources behind the areas of the business with the clearest path to durable cash generation. The key message is that SelectQuote exited fiscal 2026 with a more efficient operating model and a clear path to expanding cash flow again in fiscal 2027. We remain focused on profitable growth, not simply top-line growth, and we are managing the business with that framework in mind. Before I detail our segments, let me first call out SelectQuote's improvement in operating cash flow on Slide 6. As Tim noted, we realized a $44 million year-over-year improvement, which was driven by progress within each of our divisions. In Senior, we delivered strong operating results despite a challenging market backdrop. Similarly, in fiscal 2026, we generated more operating cash flow per SelectRx member than we ever have, driven by both operating scale from our Olathe, Kansas distribution facility, but also from a maturing member base. Lastly, our Life Insurance business, while smaller, delivered strong cash flows. Turning to Slide 7, our Senior business remained highly profitable despite another dynamic Medicare Advantage environment. Senior revenue declined 4% compared to last year, totaling $576 million. In addition to another volatile season for Medicare Advantage, part of the reduction in revenue was tied to a change in a key carrier partner's strategic marketing investment. Despite this headwind, we were still able to drive very strong margins. In fact, the Senior segment generated 26% adjusted EBITDA margin for the full year. As Tim noted, we have now recorded four consecutive years with Senior margins in the mid-20% range, which demonstrates the durability of the business and the strength of our agent-led, technology-enabled distribution platform. The Medicare Advantage market continues to evolve, and we expect carrier strategies and benefit designs to remain important variables. As we've said in the past, growth in our Senior business is a choice, and the engine we've built is ready when the markets support a return to responsible growth. While we've started to see green shoots of a turnaround within the MA market, our expectation is that this upcoming AEP will remain dynamic. Moving to Slide 8, the Healthcare Services segment continues to generate scaled revenue and is making meaningful progress on profitability. As previously forecasted, membership moderated in the fourth quarter to 109,000 as we continue to focus on members that receive the largest benefit from our services while producing the best unit economics. Looking ahead, we expect members to moderate again in the first quarter leading up to the AEP selling season, but to finish 2027 around 2026 levels. To be clear, demand remains very strong, but we continue to focus on driving further improvements in segment profitability. Additionally, it is important to remember that Healthcare Services membership growth is synergistic with Medicare Advantage policyholder onboarding. As Tim noted, improvements in that market should serve as a tailwind for SelectRx membership growth in future seasons. While members remained flat year over year in fiscal 2026, total revenue in Healthcare Services totaled $845 million, up 14% compared to full year 2025. This growth was achieved despite the impact from the Inflation Reduction Act, which went into effect on January 1, 2026, and hit the third quarter and fourth quarter of this year. I'll touch on the implications for 2027 during my guidance commentary. Moving to the bottom of the slide, the Healthcare Services business is scaling into a more profitable operating model, driven increasingly by further utilization of our Kansas distribution facility and our prescription management systems. For the full year, the business delivered $25 million of adjusted EBITDA, effectively all of which converts to cash. You'll recall that our first quarter and second quarter results were affected by the reimbursement renegotiation with one of our PBM partners, which we have called out here in the chart. Also, as a reminder, while the Inflation Reduction Act drives a material reduction in revenue, it does not materially impact EBITDA given the geography of reimbursements to SelectRx on the P&L. The most important takeaway for this slide is that Healthcare Services exited fiscal 2026 at an annual EBITDA run rate of nearly $50 million. Although we expect EBITDA to moderate in the first quarter as we make investments in preparation for the AEP and OEP enrollment season, we feel that EBITDA performance reflects continued execution across the member base and the early contribution from efficiency initiatives across the pharmacy platform. We're particularly focused on continued efficiency gains in our Kansas SelectRx facility. As we increase utilization and continue to advance our pharmacy management system, we believe Healthcare Services can contribute even more meaningfully to profitability and cash flow over time. Turning to Life on Slide 9, the business delivered $186 million of revenue, up 8% year over year. The business generated adjusted EBITDA of $27 million for the year, which we remind everyone is highly cash efficient. We are pleased with these results, but remain measured in our outlook. While our final expense business continues to perform nicely, the term life insurance market remains competitive and customer acquisition costs are worth monitoring. As a result, we continue to focus on disciplined execution and profitable growth, rather than assuming the strong trends we've seen recently will continue uninterrupted. Lastly, let me conclude with our financial outlook for fiscal 2027. Starting with revenue, we are guiding to consolidated revenue of $1.35 billion to $1.45 billion in 2027, 14% below 2026 levels at the midpoint. This reduction is driven by factors in both Senior and Healthcare Services. In Senior, as we noted, we expect 2027 to be a transition year for Medicare Advantage carriers. As a result, we are being prudent with our investment with a greater focus on Senior profitability and cash flow over growth. We expect this will result in MA approved policies declining 10% to 15% year over year. In Healthcare Services, we expect revenue to be down 10% to 15%, primarily due to the Inflation Reduction Act. The IRA will create year-over-year revenue headwinds throughout fiscal 2027, including particularly noisy comparisons in the first half of the year. To reiterate Tim's comment about the platform, SelectQuote is well positioned to grow both businesses in the future, but will purposely remain disciplined in 2027 to drive profit and cash flow. Turning to adjusted EBITDA, we are guiding to a range of $90 million to $115 million for 2027. While down year over year on a dollar basis, the midpoint reflects consolidated margin expansion of about 60 basis points. We expect Senior margins will be strong, coming down from 2026 levels but remain above our 20% target. This will be more than driven off by our expectations that Healthcare Services margins will approximately double in 2027. We expect the efficiency gains to be driven by continuing to scale our pharmacy management system in Kansas, as an increasingly higher percentage of our scripts are routed through this facility in 2027. Finally, we are introducing an operating cash flow guide for the upcoming year. Despite the top-line pullback we discussed, we expect SelectQuote to approximately double operating cash flow in fiscal 2027 to $60 million plus. We also believe the business will generate free cash flow of around $50 million, which is aligned with our strategic priority to demonstrate meaningful and compounding value for shareholders. With that, let me turn the call over to Tim to drill down on that strategy before we take your questions. Tim? Timothy Danker: Thanks, Ryan. We wanted to close with additional context on our most important strategic priority, cash flow. As I mentioned in my opening, we're pleased with the durability of returns we've built into our business. This is evidenced by our performance over the past four years. In Senior, we have high conviction that our model can execute in a range of Medicare Advantage environments. In Healthcare Services, we're excited about the inflection occurring and expect our scale to drive significant profit contribution in 2027 and beyond. While we're pleased with the business performance, I'll reiterate that we're not satisfied with our valuation and want to be clear about our plan to drive shareholder returns. We know our credit partners see the value of our platform and our current $1 billion plus commissions receivable balance. That said, we know equity investors want to see expanding cash flow creation and lower leverage. As we show here, we believe fiscal 2027 will be another strong year following the $44 million improvement made in fiscal 2026. As Ryan mentioned, we expect operating cash flow in 2027 to approximately double compared to fiscal '26 and for the business to generate free cash flow of around $50 million in the year ahead. What isn't shown here is how a growing base of operating and free cash flow can compound. As you know, we continue to work to optimize our balance sheet and believe we are well positioned to reduce our funding costs more meaningfully in the future. Today, our debt and preferred equity total around $800 million at a cost of approximately 12%. We pay annual cash interest of approximately $45 million in addition to our preferred equity dividend. For illustration, every 100-basis-point decrease in that overall funding cost would equate to nearly $8 million of savings that accretes to equity holders. Similarly, we expect to reduce aggregate leverage in the future, both through debt repayment and expanding EBITDA. The bottom line is, we see significant value in SelectQuote and believe there is a real and observable roadmap to grow our equity and generate attractive returns for shareholders. The North Star of our strategy is to grow our equity base through expanding cash flow. We will achieve this through operating efficiency, responsible growth, lower leverage, and reduced funding costs. Best of all is the more cash flow we create, the more cash efficient SelectQuote becomes. 2026 was a great year of inflection for our strategy, and we believe fiscal '27 presents an even greater opportunity to demonstrate our value to shareholders. With that, let me turn the call back to the operator for your questions. Operator: [Operator Instructions] Your first question comes from the line of Ben Hendrix from RBC Capital Markets. Benjamin Hendrix: Just a couple of questions on the Health Services segment. Can you talk about any kind of opportunities you might have to grow membership outside of kind of congruency with the Senior business? Are there opportunities? I know you guys are very focused on cross-selling those two segments, but is there an opportunity to look outside of the Senior and AEP trends, kind of given the softer dynamics in the MA over the next year? Timothy Danker: Yes, Ben. This is Tim. Thank you for joining. I'll make a few comments and ask Bob Grant to talk to some of your specifics. But again, really pleased with the inflection point in the fourth quarter for our Healthcare Services business. So you can see how this business is certainly picking up steam, as you indicated. There is a very synergistic relationship between our Senior platform and our Healthcare Services division. And given the small, kind of prudent pullback that we're making in the Senior division, given the market dynamics, that will have some pull-through impact to healthcare. Our current focus is really around driving operational efficiencies and some additional technology that we think will help us prove out the doubling of margins in healthcare that we mentioned. To your point, we're still a small piece of the market and have opportunities outside just the pure-play relationship with seniors. Bob, if you want to comment on what we're doing there, I'd appreciate it. Robert Grant: Yes, absolutely. So Ben, to your point, right now, we are -- we have historically been and are still very focused on cross-sell, and with the mild pullback in Medicare, it's why not as much growth that we would expect in the top line or membership there. However, we are very, very focused in efficiency, replacing a lot of our technology, you know, using AI to help assist and make things much faster and smoother and drop cost per shipment out the door so that we can increase margins, especially on kind of new membership and kind of get there a lot quicker. You see that really reflected in the guide and what we saw in the fourth quarter where we have nearly a $50 million run rate. I would say with that, this year, we'll really, really hone in on that, use this kind of mild pullback in Medicare as an opportunity to really focus on the cash flow and efficiency of that business. And then, yes, as we get even more efficient, it allows us to afford some CAC on the Rx side of the house and really allows us to start testing and learning on, kind of, third parties and things like that because there is a massive market opportunity beyond just what we do as a cross-sell within Medicare, but it does come at a little bit of a cost. So as we increase that margin, it allows us, again, to really lean into that and find those sources and test and vet. So we're a little bit focused on both, but I would say this year, it's hyper-focused on increasing that margin and cash flow efficiency. Benjamin Hendrix: Appreciate that. And just a little -- one more on kind of the integration of operations through the Kansas City facility. Can you remind us where that stands in terms of penetration in your total volume, where that could go? And then ultimately, what you would expect target margins for the segment to be once that's fully integrated? Robert Grant: Yes, we are -- I'll let Ryan actually speak to the margins at the end. As far as integration, it's still a relatively small percentage of our overall volume because we're very focused on, kind of, our new technologies and different things within that facility. And then as of this AEP, we would expect a huge percentage of our enrollments and overall members to move to Kansas City, which as Tim said is far more efficient and has higher margins than our other sites. We'll then take those learnings and retrofit our other sites to make them more efficient and better. So every -- all of those dollars to, as we decrease that cost per shipment out the door, increase those margins. It all falls to the bottom line, right? So it's a really exciting thing as we've seen the reality play out of Kansas City. As Tim said, it's about 30% more efficient than our other sites, so we know that there's a path there. Now it's just being very tactical in how we go and get that. But we are very close. And again, this AEP, you'll see a massive growth within the Kansas City facility. Ryan? Ryan Clement: Yes. And with respect to the margins, obviously, we're at an inflection point. We had a really great quarter. We saw this step increase in terms of margin progression. And we talked about this coming year expecting margins to double on a year-over-year basis. Over the long term, we are still expecting low double-digit EBITDA margins. That's our long-term target for this segment. Obviously, efficiency gains both in Kansas City and other things that are on the horizon are all part of that story. Operator: Your next question comes from the line of George Sutton from Craig-Hallum. George Sutton: My first question is around the MA market. You used a few adjectives like fluid, dynamic, and volatile, but you also mentioned green shoots that you're starting to see. I wondered if you can give us an updated thought on carrier messaging that you're getting. You're obviously investing less this season. So just kind of curious, are we maintaining upside potential if the market turns? Any thoughts that would be helpful. Timothy Danker: George, appreciate you joining this morning and the question. Yes, I think more broadly, we are seeing a healing in the MA market. There's been year-over-year improvement, but there's still work to do. The payers are signaling to get to their 3% to 4% operating margin. So there's more work that needs to happen. And we expect to see a lot of discipline in the market. That's been our conversations with carriers. Their MLRs are still elevated relative to historical norms, maybe better than forecast, but higher than historical. And a byproduct of that will be a continuation of some level of market disruption via plan terminations and benefit pullbacks. And our conversations, it feels like, carrier-dependent, they're getting towards hopefully the later innings of this recovery and a reemergence to what we would call responsible or targeted growth in plan year 2028. Certainly, things around special needs plans continue to be a focus for the payers and one that we over-index to and are very aligned to. So our current plan of action, as you heard from our comments, is to match the market in terms of prudence around MA growth that's -- and continue to focus on cash flow. That was our indication around slightly lower policy volumes. But we will continue to be opportunistic around, as we see opportunities, we're nimble. And I think we've proven that over the past 4 years, it's been honestly tough sledding, and we've produced mid-20s EBITDA margins for 4 years. We'll be in position to do that again. We'll be in position to react to the market if there's interesting opportunities. But overall, the message is a resounding enterprise-wide focus on cash flow, how that can accrete equity value to shareholders and improvement of our equity value. George Sutton: On the Rx side, a couple of dynamics I just wanted to ask about. First on the pricing impacts of the IRA, just so we fully understand. I understand that went in effect in early '26, but how impactful, if you can quantify that. And then, Ryan mentioned serving the customers that need us the most. What I read into that is those who need -- who have the most prescriptions and therefore are more profitable versus those who have limited needs. Can you just walk through how you're managing that relative to the growth of that segment? Robert Grant: Yes, sorry. On the IRA and the impact of that, it's obviously trying to push down costs to the overall consumer. There's some really tough dynamics on that because it puts a lot of pressure on the payers and then puts pressure on the pharmacies from a revenue perspective. But to Ryan's point, doesn't put a lot of pressure on the pharmacies from an overall margin perspective. So the IRA, though, has introduced some things where because the payers' cost for drugs has gone up so much because they're eating a lot of that. They have changed some of the plan designs. I mean, that's been part of some of the impact of this kind of disruption to where they're introducing coinsurance for drugs and things like that. Those things that we hadn't really seen before. So the IRA has ultimately though put a lot of pressure, I'd say in the front half of the year on the cost of drugs for consumers because of the coinsurance and those things. That'll continue to be the case. And again, Ryan will talk about it. It does put pressure on our revenue, not our margins though, which is why you see margin progression but revenue pressure. Ryan? Ryan Clement: Yes. So with respect to -- I mean, the way it works, I mean, the overarching cost to the consumer comes down. But we actually do receive elsewhere in the cost of goods line item, a rebate back from manufacturers. So again, the impact at the top line is more meaningful than it is on the bottom line. As you mentioned, went into effect calendar Q1. And so that's created some pressure. And certainly, as we look to 2027, where you've got, kind of, the wraparound impact and having a full year plus 2027 IRA drugs, we expect it to be a headwind to the top line. But again, it's less significant in terms of EBITDA margin where we expect margins to actually double year over year. And we're really, really pleased with the businesses' results and the cash generation both in 2027, but also what we see beyond 2027. George Sutton: So I thought the points on leverage reduction and the impact to your cash flows being pretty meaningful. Ryan, I'm just curious, what is a realistic assumption for leverage reduction? Is it just simply limited to the cash flows that you generate, or are there considerations around more aggressive use of the receivables balance or segment M&A, anything like that? Ryan Clement: Yes, I mean, I think obviously we, kind of -- this is a key area for the business and how do we reduce our overall cost of capital. So I'd say there are a range of paths, but I think the one that's probably most prominent, obviously, is the significant progression in operating cash flow is our key area of focus. 2027, we've talked about $60 plus million. We're not specifically guiding to 2028. But we see increasing levels of cash flow in our multi-year forecast. And we do expect to be a cash payer in terms of the PIK, but also see a path to delevering and a lower cost of capital via future refinancing. Timothy Danker: George, I would just add all those options are on the table. We absolutely want to be really clear that, to Ryan's point, we see a clear path in terms of increasing cash flow generation, natural deleveraging, a better cost of capital, all of the above that can lead to enhances in equity value for shareholders. Operator: Your next question comes from the line of Steven Couche from Jefferies. Steven Couche: This is Steven on for Dave. So the cash flow, I wanted to start there. So the EBITDA down a little under $10 million year over year, but operating cash flow improving $30 million. Is that $40 million delta primarily a function of the slower growth in Senior, or are there other factors in play? Ryan Clement: No. I mean the primary drivers of the improved cash flow is continued progression in Healthcare Services as we expect those margins to expand. We've highlighted the significant progress we're seeing from our Kansas pharmacy, and we expect that to continue to build upon that as we roll out the pharmacy management system that we built out. Additionally, the AI technology efforts are also ranking nicely, which is a meaningful contributor to pretty significant anticipated cost savings around $30 million. A lot of that's tied to kind of a combination of reducing labor intensity through AI, but also streamlining some of our back office functions. So we have -- as you mentioned, we have been prudent with our investments, but the vast majority of that step increase is actually driven by the Healthcare Services segment. Steven Couche: Okay. And then on Healthcare Services, I just wanted to clarify, you expect membership by the end of fiscal year '27 to be roughly flat with the end of fiscal year '26. And so, is that despite sort of lower approved policies coming out of Senior? Ryan Clement: That is correct. Timothy Danker: Yes, that's correct. That's correct, Steven. We do expect to be roughly flat at the end of the year. We'll go through our normal. There'll be a little bit of a pullback going into 1Q as we come off of the SEP period before ramping into AEP and OEP. Again, part of this is predicated upon the slight pullback in our Senior business, but again, the real focus is what Bob was highlighting around operational efficiencies, the introduction of new technology, the hyper focus around margin accretion, nailing down the operations, improving the cash flow, and then pushing more into the scaling of the business. Steven Couche: Got it. And then maybe if I could sneak in one more, on Senior, conversion rates remained really strong. It was actually above 100% this quarter. Can you help us understand how that's possible and then any impact that had on the quarter financially? And then do you expect -- I know you've done some work around conversion rates and trying to improve those, do you expect the conversion rates in fiscal '27 to stay high like we've seen in the back half of fiscal '26? Robert Grant: If you're talking to sales agent conversion, is that what you're speaking to or Ryan... Steven Couche: Yes. Right. Robert Grant: I'll speak [indiscernible] on the actual policies themselves. So as far as sales agent close rates, just as a reminder, because SEP has materially changed, right? We've pulled back a little bit, which was reflected in the number of policies in that quarter year over year due to there not being as many opportunities for a consumer to buy. When we do that, right, our best people end up taking those leads and we see higher conversion rates, which took down the estimated pressure we had on Q4 conversion rates. I would say for the next year, as a percentage of our overall policies, core agents, which I think everybody here, that means you've been through one AEP with us, have significantly higher conversion rates. So we would anticipate AEP and OEP to have high conversion rates relative to the environment. And we should see those push and be similar to last year, maybe a little bit greater due to a greater percentage of our overall agent base being core agents, even though we're pulling back on policies a little bit. So we do feel really good about where we are there and especially the force of agents that we have. Ryan, do you want to talk about approval rates? Ryan Clement: Yes. And so in terms of approval, and I think the dynamic that you were speaking to was approved policies exceeded submitted policies, which -- what actually allows that to happen is not all policies get approved in the first month that they're submitted. And so, you have the busy OEP season and then you've got a slowing down into SEP. But there's still approvals that trickle in from the OEP season. And so that's really what drove that. But as Bob mentioned, the approval rates have been strong. The conversion rates within our agent workforce has also been strong. And we're pleased with the overall performance. Operator: Your next question comes from the line of Michael Kupinski from NOBLE Capital Markets, Inc. Michael Kupinski: You guys have a very strong cash flow story. I can't imagine that the market couldn't recognize that at some point here. You have $1 billion of commissions receivable and more than $60 million of operating cash flow expected this year. Can you kind of help me understand how much of the fiscal '27 cash generation is coming from the existing commissions receivable book? And more broadly, can you give us a framework for the cash you expect to generate over the next 3 to 5 years? Ryan Clement: Yes. So, in terms of operating cash flow, as you mentioned, strong progress in 2026. Expect to build upon that in 2027 with operating cash flow exceeding $60 million. In terms of the commission receivables, obviously, we've sold policies for years and have a billion dollars in receivables, like you mentioned, and those cash flows trickle in. When you think about where we ended fiscal '26 and where we end 2027, we actually expect that commission receivables balance to be relatively flat. So we are writing policies and replacing that balance as we are drawing down on or collecting on the prior policy sales. And in terms of future periods, while we're not specifically guiding to 2028, we are absolutely managing the business for -- to grow operating cash flow over the long term. We have a multi-year plan, and we, again, have visibility and line of sight to stronger operating cash flow in the future that we believe will ultimately lead to refinancing and lower cost of capital. So we are intensely focused on cash generation. Timothy Danker: Yes, Michael. I might just add to Ryan's comment that hopefully we've made it really clear that we have a lot of conviction around the improvement in cash flow. You saw the $44 million year-over-year improvement. We're talking about a doubling this year. We're talking about the doubling of margins in Healthcare Services. So while we can't provide -- today, we're not here to talk about a three-year outlook. That might be something we talk about in the future. All of our business lines are operating cash flow generative. Healthcare Services, you can see the inflection point in the fourth quarter and our $50 million run rate, the doubling of margins, that business is going to continue to grow and kick off cash flow. Our Life Insurance business, we didn't spend a lot of time talking about it, but it's a very nice contributor to cash flow. And a Senior business that has a lot of utility around $1 billion back book. And what we're choosing to do around being prudent this year. So more to come on that front, but would make a point that we have a high degree of conviction and a growing cash flow base, which will help the company lead to deleveraging, a better cost of capital, and a lot of accretion of value to shareholders. Michael Kupinski: Got you. And then, obviously, your outlook for a very strong free cash flow, has that changed your thinking around another receivable securitization? Ryan Clement: I don't know that it's changed our position. Obviously, we put a tremendous amount of effort into putting the infrastructure in place in support of securitization, and it's still in place. It's performing, and it is a path that's available to us given our current capital structure like there is an immediate need to make a change. It is something that again we have out there as an option. Obviously, one other piece, though, is the Medicare market dynamics, which in the last two years have been somewhat disruptive. And so at this point, I'd say the probability in the short term is relatively low. Michael Kupinski: Got you. And then with the free cash flow, just a little bit about capital allocation, I was just wondering about how you are allocating between debt reduction, addressing the preferred securities and reinvesting the business, and then is there a leverage or capital structure target that you would consider returning capital to common shareholders? Ryan Clement: Yes. So we are obviously excited about the cash generation of the business and where we're headed. We -- in terms of capital allocation and what we're doing with it, delevering and high ROI investments would be, kind of, top of list. And when I say high ROI investments, I'm talking one that would further enhance the cash generation, but ultimately delevering is the key area of focus for the business and that could come in the form of cash pay on the PIK. We do intend to cash pay in the future, but again, it could also be other forms of delevering. So we haven't earmarked the dollars, if you will, but certainly are focused on cash generation and ultimately delevering. Operator: We have reached the end of the Q&A session. I will now turn the call back to Tim Danker, Chief Executive Officer, for closing remarks. Timothy Danker: I want to thank you all again for your time. We really do appreciate your support. As Ryan and I both noted, the SelectQuote model continues to drive consistent and reliable value to our customers and insurance carrier partners. We know the underlying cash flows for our services are real and significant, and we look forward to convincing more and more investors of that value in our equity in the months and years ahead. Thank you, and have a great day. We'll talk to you soon. Operator: This concludes today's conference. Thank you for attending. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. SelectQuote (SLQT) Q4 2026 Earnings Call Transcript was originally published by The Motley Fool

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management is prioritizing cash flow generation and leverage reduction over top-line growth, viewing fiscal 2027 as a critical inflection point for equity value accretion. The Healthcare Services division reached a milestone as the company's largest revenue contributor, exiting fiscal 2026 at a $50 million annual EBITDA run rate. Senior segment profitability remained durable with 26% adjusted EBITDA margins despite a challenging Medicare Advantage environment characterized by carrier benefit shifts and varying origination volumes. Operating cash flow improved by $44 million year-over-year, driven by increased scale at the Olathe, Kansas distribution facility and a maturing SelectRx member base. The company identified over $30 million in annualized expense improvements through AI-enabled enrollment tools, automated revenue processes, and organizational rightsizing. Strategic prudence in Medicare Advantage growth for fiscal 2027 is a deliberate choice to match market dynamics as carriers work toward their own 3% to 4% operating margin targets. Technology investments, specifically the new custom-built pharmacy management system, have already delivered 30% efficiency gains on shipments compared to legacy locations. Fiscal 2027 revenue is projected to decline 14% at the midpoint, reflecting a 10% to 15% drop in MA approved policies and a similar decline in Healthcare Services due to the Inflation Reduction Act. Operating cash flow is expected to approximately double to $60 million plus in fiscal 2027, with free cash flow targeted at approximately $50 million. Healthcare Services margins are projected to approximately double in fiscal 2027 as a higher percentage of scripts are routed through the more efficient Kansas facility. Management assumes the upcoming Annual Enrollment Period (AEP) will remain dynamic, with a return to 'responsible growth' for carriers potentially delayed until plan year 2028. The company plans to reduce funding costs and aggregate leverage through a combination of debt repayment from expanding EBITDA and potential future refinancing of its 12% cost-of-capital debt. The Inflation Reduction Act (IRA) is creating material revenue headwinds in Healthcare Services, though management notes it does not significantly impact EBITDA due to the geography of reimbursements. Medicare Advantage market disruption continues via plan terminations and benefit pullbacks, necessitating a shift toward Special Needs Plans (SNPs) where the company over-indexes. Customer acquisition costs in the Term Life insurance market remain competitive, leading management to maintain a measured outlook despite recent performance gains. A change in a key carrier partner's strategic marketing investment contributed to a 4% revenue decline in the Senior segment during fiscal 2026. Management is currently hyper-focused on margin and efficiency rather than aggressive external member acquisition. As margins increase through technology and AI, the company intends to test and vet third-party acquisition channels where they see a massive market opportunity beyond the core Medicare base. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Payers are signaling a move toward healing, but Medical Loss Ratios (MLRs) remain elevated relative to historical norms. SelectQuote is maintaining a nimble stance to react if opportunistic growth arises, but the 'North Star' remains cash flow over volume. High conversion rates in Q4 were partly due to a higher mix of 'core agents' (those with at least one AEP of experience) handling leads during a period of lower overall volume. Management expects these strong conversion trends to persist into the next AEP as the agent workforce remains highly experienced. The probability of a new receivable securitization is low in the short term due to current market dynamics. The company expects the receivable balance to remain relatively flat as new policy sales replace the cash collected from the prior back book. Deleveraging is the primary focus, including plans to transition to cash payments on PIK (Paid-in-Kind) interest. Management is targeting high-ROI investments that specifically enhance cash generation to eventually lower the overall cost of capital.

SelectQuote, Inc. SLQT used its fourth-quarter fiscal 2026 earnings call to put cash generation and leverage reduction ahead of near-term growth. Revenues for the reported quarter were $321.7 million, which missed the Zacks Consensus Estimate of $375 million. The company incurred a loss of 19 cents per share, wider than the Zacks Consensus Estimate of a loss of 15 cents. SelectQuote, Inc. price-consensus-eps-surprise-chart | SelectQuote, Inc. Quote Management focused on fiscal 2027, when it expects lower revenues, but materially higher operating cash flow as pharmacy margins improve and cost actions take hold. Tim Danker, CEO and director, said profitable cash flow is the company's highest priority, with operating efficiency and lower leverage central to building shareholder value. Ryan Clement, CFO, said fiscal 2026 operating cash flow improved by $44 million year over year to $31.9 million. For fiscal 2027, SelectQuote expects more than $60 million of operating cash flow and around $50 million of free cash flow. Fourth-quarter adjusted EBITDA rose to $11.9 million from $2.7 million a year earlier even as revenue declined from $345.1 million. Danker said Medicare Advantage remains fluid as carriers work toward 3% to 4% operating margins. He expects continued plan terminations and benefit pullbacks while carrier profitability normalizes. Clement said fiscal 2027 MA approved policies are expected to decline 10% to 15% year over year. Senior margins are expected to stay above the company's 20% target. A Craig-Hallum analyst asked whether improving carrier signals could create upside. Danker said the market is healing, but pointed to plan year 2028 for a return to more responsible or targeted carrier growth. Danker said Healthcare Services became SelectQuote's largest revenue contributor in fiscal 2026. SelectRx exited the year at a nearly $50 million annual adjusted EBITDA run rate. Robert Grant, president, said the pharmacy facility in Olathe, Kan., is about 30% more efficient on shipments than legacy sites. Management also highlighted a custom pharmacy system and AI-enabled tools supporting more than $30 million of annual expense savings. An RBC Capital Markets analyst asked about SelectRx growth outside Senior cross-selling. Grant said fiscal 2027 will prioritize margin and cash-flow efficiency, creating room to test third-party customer acquisition as economics improve. Clement guided fiscal 2027 revenues to $1.35 billion to $1.45 billion and adjusted EBITDA to $90 million to $115 million. Revenues at the midpoint would be 14% below fiscal 2026. Healthcare Services revenues are expected to fall 10-5%, primarily because of the Inflation Reduction Act. Clement said the revenue impact is more significant than the EBITDA impact and expects segment margins to approximately double. Clement also expects SelectRx membership to finish fiscal 2027 around fiscal 2026 levels. Consolidated adjusted EBITDA margin is expected to expand about 60 basis points at the guidance midpoint. A NOBLE Capital Markets analyst pressed management on the more than $1 billion commissions receivable balance and longer-term cash generation. Clement said the balance should remain relatively flat through fiscal 2027 as collections are replenished by new policies. Danker said debt and preferred equity total around $800 million at an approximate 12% cost. A 100-basis-point reduction in that funding cost would translate to nearly $8 million of savings. When NOBLE asked about securitization and capital allocation, Clement said the short-term probability of another receivables securitization is relatively low. He prioritized deleveraging and high-return investments that enhance cash generation. Danker closed by emphasizing cash flow over growth for its own sake. The fiscal 2027 plan centers on efficiency, disciplined Senior investment and stronger Healthcare Services profitability. Clement's outlook pairs lower top-line expectations with higher cash generation, while management keeps refinancing, debt reduction and funding-cost optimization in focus. SLQT carries a Zacks Rank #3 (Hold), with a Value Score of B, Growth Score of F, Momentum Score of A and VGM Score of C. Under the Zacks framework, Value is the strongest element and Momentum the weakest. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The Style Scores complement the Zacks Rank, with A and B grades preferred and the strongest combinations generally pairing those scores with a Zacks Rank #1 or 2 (Buy). SLQT's Zacks Rank can change as earnings estimates are revised after the newly reported results. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SelectQuote, Inc. (SLQT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Fourth Quarter of Fiscal Year 2026 – Consolidated Earnings Highlights Revenue of $321.7 million Net loss of $(16.8) million Adjusted EBITDA* of $11.9 million Fiscal Year 2027 Guidance Ranges: Revenue expected in a range of $1.35 billion to $1.45 billion Adjusted EBITDA* expected in a range of $90 million to $115 million Operating Cash Flow expected to be more than $60 million Fourth Quarter Fiscal Year 2026 – Segment Highlights Senior Revenue of $72.5 million Adjusted EBITDA of $8.0 million Approved Medicare Advantage policies of 72,180 Healthcare Services Revenue of $193.5 million Adjusted EBITDA of $12.1 million 109,039 SelectRx members Life Revenue of $47.9 million Adjusted EBITDA of $9.8 million OVERLAND PARK, Kan., August 25, 2026--(BUSINESS WIRE)--SelectQuote, Inc. (NYSE: SLQT) reported consolidated revenue for the fourth quarter of fiscal year 2026 of $321.7 million compared to consolidated revenue for the fourth quarter of fiscal year 2025 of $345.1 million. Consolidated net loss for the fourth quarter of fiscal year 2026 was $16.8 million compared to consolidated net income for the fourth quarter of fiscal year 2025 of $12.9 million. Consolidated Adjusted EBITDA* for the fourth quarter of fiscal year 2026 was $11.9 million compared to consolidated Adjusted EBITDA* for the fourth quarter of fiscal year 2025 of $2.7 million. Consolidated cash used in operations during the fourth quarter of fiscal year 2026 was $3.3 million compared to $37.5 million used during the fourth quarter of fiscal year 2025. SelectQuote reported consolidated revenue for the fiscal year 2026 of $1.6 billion compared to consolidated revenue for fiscal year 2025 of $1.5 billion. Consolidated net income for the fiscal year 2026 was $62.2 million compared to consolidated net income for fiscal year 2025 of $47.6 million. Consolidated Adjusted EBITDA* for the fiscal year 2026 was $109.1 million compared to consolidated Adjusted EBITDA* for the fiscal year 2025 of $126.3 million. Consolidated cash generated from operations was $31.9 million for the fiscal year 2026 compared to consolidated cash used in operations of $11.7 million during the fiscal year 2025. For the fiscal year 2026, SelectQuote improved operating cash flow by $44 million compared to fiscal 2025, driven largely by the scale in Healthcare Services and improved operating efficiency across SelectQuote. SelectQuote Chief Executive Officer Tim Danker commented, "It was a highly successful 4th quarter and full-year fiscal 2026 for our business. Our Senior Medicare Advantage distribution business excelled through another turbulent year for the industry. Insurance carriers continued to modify policy benefits and optimize volumes but through it all, SelectQuote remained the reliable partner of choice. SelectQuote’s Senior business delivered another strong year with an Adjusted EBITDA margin of 26%, which marks the 4th consecutive year with margins solidly above our long-term 20%+ operating target. We have high confidence in our Senior platform’s ability to generate durable returns across a range of Medicare Advantage environments and view fiscal 2027 as an important year to further compound cash flow while remaining disciplined in our growth investments as carrier profitability improves." * See "Non-GAAP Financial Measures" below. "We also increasingly realized our goal to scale Healthcare Services profitability and cash flow through our SelectRx business. We are excited to exit fiscal 2026 with run-rate Adjusted EBITDA of nearly $50 million, which will increasingly drive operating cash flow and ultimately accrue value to our shareholders." Mr. Danker continued, "Looking to fiscal 2027, we have conviction that the $44 million improvement in operating cash flow in fiscal 2026 will continue. As we have emphasized, our highest strategic priority is to deliver shareholder value through growth in profitability and scaled cash flow. In the year ahead, we plan to accelerate equity value accretion in multiple ways. Exiting 2026, we have successfully implemented technology-enabled workstream efficiencies that we expect will drive annual expense savings of over $30 million. Paired with the demonstrated durability of our Senior profitability and continued scale of Healthcare Services, we expect full-year 2027 operating cash flow to approximately double to over $60 million, with free cash flow generation of around $50 million. Best of all, we see opportunity to compound cash flow growth in the future through continued optimization of our leverage and funding costs, and we are excited to deliver this value to our shareholders in the years ahead." Segment Results We currently have three reportable segments: 1) Senior, 2) Healthcare Services and 3) Life. The performance measures of the segments include total revenue and adjusted EBITDA. Costs of commissions and other services revenue, cost of goods sold-pharmacy revenue, marketing and advertising, selling, general, and administrative, and technical development operating expenses that are directly attributable to a segment are reported within the applicable segment. Indirect costs of revenue, marketing and advertising, selling, general, and administrative, and technical development operating expenses are allocated to each segment based on varying metrics such as headcount. Senior Financial Results The following table provides the financial results for the Senior segment for the periods presented: Operating Metrics Submitted Policies Submitted policies are counted when an individual completes an application with our licensed agent and provides authorization to the agent to submit the application to the insurance carrier partner. The applicant may have additional actions to take before the application will be reviewed by the insurance carrier. The following table shows the number of submitted policies for the periods presented: Approved Policies Approved policies represents the number of submitted policies that were approved by our insurance carrier partners for the identified product during the indicated period. Not all approved policies will go in force. The following table shows the number of approved policies for the periods presented: Lifetime Value of Commissions per Approved Policy Lifetime value of commissions per approved policy represents commissions estimated to be collected over the estimated life of an approved policy based on multiple factors, including but not limited to, contracted commission rates, carrier mix and expected policy persistency with applied constraints. The lifetime value of commissions per approved policy is equal to the sum of the commission revenue due upon the initial sale of a policy, and when applicable, an estimate of future renewal commissions. The following table shows the lifetime value of commissions per approved policy for the periods presented: Healthcare Services Financial Results The following table provides the financial results for the Healthcare Services segment for the periods presented: Operating Metrics Members The total number of SelectRx members represents the amount of active customers to which an order has been shipped and the prescriptions per day represents the total average prescriptions shipped per business day. These two metrics are the primary drivers of revenue for Healthcare Services. The following table shows the total number of SelectRx members as of the periods presented: The total number of SelectRx members increased by 1% as of June 30, 2026, compared to June 30, 2025, due to a growth in membership during the AEP season. The following table shows the average prescriptions shipped per day for the periods presented: Combined Senior and Healthcare Services - Consumer Per Unit Economics Combined Senior and Healthcare Services consumer per unit economics represents total MA and MS commissions; other product commissions; other revenues, including revenues from Healthcare Services; and operating expenses associated with Senior and Healthcare Services, each shown per number of approved MA and MS policies over a given time period. Management assesses the business on a per-unit basis to help ensure that the revenue opportunity associated with a successful policy sale is attractive relative to the marketing acquisition cost. Because not all acquired leads result in a successful policy sale, all per-policy metrics are based on approved policies, which is the measure that triggers revenue recognition. The MA and MS commission per MA/MS policy represents the LTV for policies sold in the period. Other commission per MA/MS policy represents the LTV for other products sold in the period, including DVH prescription drug plan, and other products, which management views as additional commission revenue on our agents’ core function of MA/MS policy sales. Pharmacy revenue per MA/MS policy represents revenue from SelectRx, and other revenue per MA/MS policy represents revenue from Healthcare Select, production bonuses, marketing development funds, lead generation revenue, and adjustments from the Company’s reassessment of its cohorts’ transaction prices. Total operating expenses per MA/MS policy represents all of the operating expenses within Senior and Healthcare Services. The revenue to customer acquisition cost ("CAC") multiple represents total revenue as a multiple of total marketing acquisition cost, which represents the direct costs of acquiring leads. These costs are included in marketing and advertising expense within the total operating expenses per MA/MS policy. The following table shows combined Senior and Healthcare Services consumer per unit economics for the periods presented. Based on the seasonality of Senior and the fluctuations between quarters, we believe that the most relevant view of per unit economics is on a rolling 12-month basis. All per MA/MS policy metrics below are based on the sum of approved MA/MS policies, as both products have similar commission profiles. Total revenue per MA/MS policy increased 13% for the twelve months ended June 30, 2026, compared to the twelve months ended June 30, 2025, primarily due to the increase in pharmacy revenue. Total operating expenses per MA/MS policy increased 13% for the twelve months ended June 30, 2026, compared to the twelve months ended June 30, 2025, driven by an increase in cost of goods sold-pharmacy revenue for Healthcare Services due to the growth of the business. Life Financial Results The following table provides the financial results for the Life segment for the periods presented: Operating Metrics Life premium represents the total premium value for all policies that were approved by the relevant insurance carrier partner and for which the policy document was sent to the policyholder and payment information was received by the relevant insurance carrier partner during the indicated period. Because our commissions are earned based on a percentage of total premium, total premium volume for a given period is the key driver of revenue for our Life segment. The following table shows term and final expense premiums for the periods presented: Earnings Conference Call SelectQuote, Inc. will host a conference call with the investment community on August 25, 2026, beginning at 8:30 a.m. ET. We encourage interested parties to access the live webcast of the event via our investor relations website https://ir.selectquote.com/investor-home/default.aspx or via this link: https://events.q4inc.com/attendee/890240794. For those interested in dialing into the conference call, please register using this link: https://events.q4inc.com/analyst/890240794?pwd=z46TrijY. After registering, a confirmation will be sent via email, including dial-in details and unique conference call codes for entry. Registration is open through the live call, but to ensure you are connected for the full call we suggest registering at least 10 minutes before the start of the call. Non-GAAP Financial Measures This release includes certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. To supplement our financial statements presented in accordance with GAAP and to provide investors with additional information regarding our GAAP financial results, we have presented in this release Adjusted EBITDA, which, when presented on a consolidated basis, is a non-GAAP financial measure. This non-GAAP financial measure is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to any similarly titled measure presented by other companies. We define Adjusted EBITDA as net income plus interest expense, income taxes, depreciation and amortization, changes in fair value of warrant liabilities, loss on extinguishment of debt, and certain add-backs for non-cash or non-recurring expenses, including restructuring and share-based compensation expenses. The most directly comparable GAAP measure is net income. We monitor and have presented in this release Adjusted EBITDA because it is a key measure used by our management and Board of Directors to understand and evaluate our operating performance, establish budgets, and develop operational goals for managing our business. In particular, we believe that excluding the impact of these expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core operating performance. A reconciliation of the differences between Adjusted EBITDA and its most directly comparable GAAP measure, net income, is presented below on page 13. The Company is unable to provide a quantitative reconciliation of forward-looking Adjusted EBITDA to its most directly comparable GAAP measure without unreasonable effort because it is not possible to predict certain information included in the calculation of such GAAP measure, including the fair value of outstanding warrants to purchase shares of the Company's common stock. The unavailable information could have a significant impact on the Company’s GAAP financial results. Forward Looking Statements This release 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," "continue," "will," "anticipate," "seek," "estimate," "intend," "plan," "projection," "would" and "outlook," or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following: our reliance on a limited number of insurance carrier partners and any potential termination of those relationships or failure to develop new relationships; existing and future laws and regulations affecting the health insurance market; changes in health insurance products offered by our insurance carrier partners and the health insurance market generally; insurance carriers offering products and services directly to consumers; changes to commissions paid by insurance carriers and underwriting practices; competition with brokers, exclusively online brokers and carriers who opt to sell policies directly to consumers; competition from government-run health insurance exchanges; developments in the U.S. health insurance system; our dependence on revenue from carriers in our senior segment and downturns in the senior health as well as life, automotive and home insurance industries; our ability to develop new offerings and penetrate new vertical markets; risks from third-party products; failure to enroll individuals during the Medicare annual enrollment period; our ability to attract, integrate and retain qualified personnel; our dependence on lead providers and ability to compete for leads; failure to obtain and/or convert sales leads to actual sales of insurance policies; access to data from consumers and insurance carriers; accuracy of information provided from and to consumers during the insurance shopping process; cost-effective advertisement through internet search engines; ability to contact consumers and market products by telephone; global economic conditions, including inflation; disruption to operations as a result of future acquisitions; significant estimates and assumptions in the preparation of our financial statements; impairment of goodwill; potential litigation and other legal proceedings or inquiries; our existing and future indebtedness; our ability to maintain compliance with our debt covenants; access to additional capital; our ability to regain and maintain compliance with NYSE listing standards; failure to protect our intellectual property and our brand; fluctuations in our financial results caused by seasonality; accuracy and timeliness of commissions reports from insurance carriers; timing of insurance carriers’ approval and payment practices; factors that impact our estimate of the constrained lifetime value of commissions per policyholder; changes in accounting rules, tax legislation and other legislation; disruptions or failures of our technological infrastructure and platform; failure to maintain relationships with third-party service providers; cybersecurity breaches or other attacks involving our systems or those of our insurance carrier partners or third-party service providers; our ability to protect consumer information and other data; failure to market and sell Medicare plans effectively or in compliance with laws; and other factors related to our pharmacy business, including manufacturing or supply chain disruptions, access to and demand for prescription drugs, changes in reimbursement rates under our contracts with pharmacy benefit managers, and regulatory changes or other industry developments that may affect our pharmacy operations. For a further discussion of these and other risk factors that could impact our future results and performance, see the section entitled "Risk Factors" in the most recent Annual Report on Form 10-K (the "Annual Report") and subsequent periodic reports filed by us with the Securities and Exchange Commission. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as otherwise required by law, we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. About SelectQuote: Founded in 1985, SelectQuote (NYSE: SLQT) pioneered the model of providing unbiased comparisons from multiple, highly-rated insurance companies, allowing consumers to choose the policy and terms that best meet their unique needs. Two foundational pillars underpin SelectQuote’s success: a strong force of highly-trained and skilled agents who provide a consultative needs analysis for every consumer, and proprietary technology that sources and routes high-quality leads. Today, the Company operates an ecosystem offering high touchpoints for consumers across insurance, pharmacy, and virtual care. With an ecosystem offering engagement points for consumers across insurance, Medicare, pharmacy, and value-based care, the company now has three core business lines: SelectQuote Senior, SelectQuote Healthcare Services, and SelectQuote Life. SelectQuote Senior serves the needs of a demographic that sees around 10,000 people turn 65 each day with a range of Medicare Advantage and Medicare Supplement plans. SelectQuote Healthcare Services is comprised of the SelectRx Pharmacy, a Patient-Centered Pharmacy Home™ (PCPH) accredited pharmacy, SelectPatient Management, a provider of chronic care management services, and Healthcare Select which proactively connects consumers with a wide breadth of healthcare services supporting their needs. View source version on businesswire.com: https://www.businesswire.com/news/home/20260825763454/en/ Contacts Investor Relations:Sloan [email protected] Media:Matt [email protected]

Interested in SelectQuote, Inc.? Here are five stocks we like better. Fiscal 2026 results exceeded expectations: Revenue rose 6% to $1.62 billion, while adjusted EBITDA reached $109 million, above guidance. Operating cash flow also improved by $44 million year over year. Fiscal 2027 will prioritize profitability and deleveraging over growth: SelectQuote expects revenue to decline to $1.35 billion-$1.45 billion, but projects more than $60 million in operating cash flow, about $50 million in free cash flow and over $30 million in annualized cost savings. Healthcare Services is becoming the key growth and efficiency driver: The segment’s revenue increased 14% to $845 million, and management expects significant margin expansion from greater use of its Kansas pharmacy facility, despite a projected 10%-15% revenue decline in fiscal 2027. Is SelectQuote a Double-Bagger Stock? Analysts Predict Huge Gains SelectQuote (NYSE:SLQT) reported fiscal 2026 revenue growth, improved profitability and a $44 million year-over-year increase in operating cash flow, while outlining a fiscal 2027 plan centered on cost efficiency, cash generation and lower leverage rather than top-line expansion. For fiscal 2026, revenue totaled $1.62 billion, up 6% from the prior year and within the company’s guidance range. Adjusted EBITDA reached $109 million, exceeding SelectQuote’s prior outlook of $90 million to $100 million. Fourth-quarter revenue was $322 million, compared with $345 million a year earlier, while adjusted EBITDA rose to $12 million from $3 million. → Rocket Lab's Sell-Off Is Fading—Is It Finally Safe to Buy? 3 Small-Cap Stocks to Buy and Hold For 2025 and Beyond Chief Executive Officer Tim Danker said the company’s principal objective remains generating profitable cash flow. “We’re managing the business with a focus on cash generation and leverage reduction,” Danker said, adding that management sees fiscal 2027 as an inflection point for compounding cash-flow growth. Healthcare Services, which includes the SelectRx pharmacy business, became SelectQuote’s largest revenue contributor during fiscal 2026. The segment generated $845 million in annual revenue, an increase of 14% from fiscal 2025, despite effects from the Inflation Reduction Act and a reimbursement renegotiation with a pharmacy benefit manager partner earlier in the year. → Travel + Leisure Goes Big—Is It Ready to Rally? The business generated $25 million of adjusted EBITDA for the full year and exited the fourth quarter at an annualized EBITDA run rate of nearly $50 million, according to management. SelectQuote said the Inflation Reduction Act has a material impact on reported revenue but does not materially affect EBITDA because of how reimbursements are reflected in the company’s profit-and-loss statement. Healthcare Services membership stood at 109,000 at the end of the fourth quarter. Chief Financial Officer Ryan Clement said membership is expected to moderate again in the first fiscal quarter ahead of the annual enrollment season, but is projected to finish fiscal 2027 near fiscal 2026 levels. → What Rising Delivery Forecasts Say About Rivian's Stock Prospects Management expects Healthcare Services revenue to decline 10% to 15% in fiscal 2027, primarily due to the Inflation Reduction Act. However, the company expects segment margins to approximately double, supported by greater utilization of its Olathe, Kansas, pharmacy distribution facility and prescription management system. President Bob Grant said the Kansas facility is currently a relatively small portion of total fulfillment volume, but SelectQuote expects a “massive growth” in enrollment and member activity at the site during the coming annual enrollment period. The facility is about 30% more efficient on shipments than the company’s two legacy locations, executives said. Over the longer term, Clement said SelectQuote targets low-double-digit adjusted EBITDA margins for Healthcare Services. SelectQuote’s Senior business generated $576 million in fiscal 2026 revenue, down 4% from the prior year. The reduction reflected continuing volatility in the Medicare Advantage market and a change in a key carrier partner’s strategic marketing investment, the company said. Despite the revenue decline, the Senior segment produced a 26% adjusted EBITDA margin for the year. Danker said the result marked the fourth consecutive year in which the business generated margins in the mid-20% range. Management expects Medicare Advantage carriers to continue adjusting plan benefits, origination volumes and marketing strategies as they work toward operating-margin targets. Danker said the company has seen “green shoots” of improvement in the market, but expects carriers to remain disciplined and sees fiscal 2027 as a transition year. As a result, SelectQuote expects Medicare Advantage approved policies to decline 10% to 15% year over year in fiscal 2027. The company said it will remain positioned to pursue growth when market conditions support responsible investment, but will prioritize profitability and cash flow in the near term. Grant said the company’s expected policy pullback and changes in special enrollment period opportunities have concentrated leads among more experienced agents, contributing to stronger conversion rates. He added that a larger share of the agent base will consist of “core agents” who have completed at least one annual enrollment period with the company. SelectQuote’s Life business generated fiscal 2026 revenue of $186 million, up 8% year over year, and adjusted EBITDA of $27 million. Clement described the segment as highly cash efficient. The company said its final-expense business continued to perform well, although management remains cautious about the competitive term-life market and customer acquisition costs. SelectQuote guided for fiscal 2027 consolidated revenue of $1.35 billion to $1.45 billion, representing a 14% decline at the midpoint from fiscal 2026. Adjusted EBITDA is projected at $90 million to $115 million. Although the midpoint is lower on a dollar basis than fiscal 2026, management expects consolidated adjusted EBITDA margin expansion of approximately 60 basis points. The company introduced an operating cash-flow outlook of more than $60 million for fiscal 2027, which would approximately double fiscal 2026 operating cash flow. SelectQuote also forecast free cash flow of about $50 million. Management identified more than $30 million of annualized run-rate expense improvements through artificial intelligence tools, workflow automation, organizational resizing, technology investments and other process improvements. Danker said AI-enabled enrollment support, sales-assist tools, automated quality assurance and pharmacy technology are intended to reduce manual work while preserving agent time for customer interactions. SelectQuote ended fiscal 2026 with more than $1 billion in commissions receivable. Danker said debt and preferred equity total about $800 million, carrying an overall cost of approximately 12%, including roughly $45 million in annual cash interest plus preferred-equity dividends. He said every 100-basis-point reduction in the overall funding cost would result in nearly $8 million of savings for equity holders. Clement said the company expects commissions receivable to remain relatively flat between the end of fiscal 2026 and fiscal 2027 as new policy production replaces receivables collected from prior policy sales. He said deleveraging and investments with high returns on cash generation are SelectQuote’s primary capital-allocation priorities. SelectQuote, Inc (NYSE: SLQT) is a U.S.-based insurance brokerage and lead generation company that connects consumers with a range of insurance products through proprietary technology and licensed agents. The company specializes in life insurance, supplemental health coverage and Medicare plans, leveraging its digital platform and call center operations to help individuals compare policies and find cost-effective solutions tailored to their needs. Through a single point of contact, policy seekers can evaluate offerings from multiple carriers, including term life, whole life, accidental death, critical illness and long-term care products. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "SelectQuote Q4 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

SelectQuote, Inc. (NYSE:SLQT) shares dropped 14.69% in pre-market trading on Tuesday after the insurance distribution and healthcare services company reported fourth-quarter fiscal 2026 earnings and revenue below Wall Street expectations and issued a cautious outlook for the new financial year. The company recorded an adjusted loss of $0.19 per share, wider than the $0.15 per-share loss expected by analysts. Quarterly revenue fell 7% year-on-year to $321.7 million from $345.1 million, also missing the consensus forecast of $345.29 million. SelectQuote posted a fourth-quarter net loss of $16.8 million, reversing a net profit of $12.9 million in the corresponding period a year earlier. However, adjusted EBITDA improved considerably, rising to $11.9 million from $2.7 million in the prior-year quarter. Chief Executive Officer Tim Danker said, “It was a highly successful 4th quarter and full-year fiscal 2026 for our business. Our Senior Medicare Advantage distribution business excelled through another turbulent year for the industry.” The Senior segment generated $72.5 million in revenue during the quarter and recorded 72,180 approved Medicare Advantage policies. Healthcare Services remained the largest contributor, producing revenue of $193.5 million and ending the period with 109,039 SelectRx members. The Life segment generated $47.9 million in revenue. Investor attention was also focused on SelectQuote’s outlook for fiscal 2027, with the company’s revenue forecast coming in well below market expectations. Management expects annual revenue of between $1.35 billion and $1.45 billion. The midpoint of $1.40 billion is substantially below the analyst consensus estimate of $1.65 billion. SelectQuote is forecasting adjusted EBITDA of between $90 million and $115 million and expects operating cash flow to exceed $60 million during the year. The weaker-than-anticipated revenue guidance added to concerns generated by the fourth-quarter miss and contributed to the sharp decline in the shares before the opening bell. Despite the disappointing final quarter and cautious outlook, SelectQuote delivered growth across fiscal 2026 as a whole. Full-year revenue increased to $1.6 billion from $1.5 billion in fiscal 2025, while net income climbed to $62.2 million from $47.6 million. The annual improvement contrasts with the weaker fourth-quarter performance, leaving investors focused on whether SelectQuote can maintain profitability and cash generation while navigating a slower revenue environment in fiscal 2027. SelectQuote stock price

OVERLAND PARK, Kan., August 11, 2026--(BUSINESS WIRE)--SelectQuote, Inc. (NYSE: SLQT), a leading distributor of Medicare insurance policies and owner of a rapidly growing healthcare services platform, today announced it will release its fourth quarter and full year 2026 financial results before market open on Tuesday, August 25, 2026. Chief Executive Officer, Tim Danker, and Chief Financial Officer, Ryan Clement, will host a conference call on the day of the release (August 25, 2026) at 8:30 am ET to discuss the results. We encourage interested parties to access the live webcast of the event via our investor relations website https://ir.selectquote.com/investor-home/default.aspx or via this link. For those interested in dialing into the conference call, please register using this link. After registering, confirmation will be sent via email, including dial in details and unique conference call codes for entry. Registration is open through the live call, but to ensure you are connected for the full call, we suggest registering a day in advance or at least 10 minutes before the start of the call. About SelectQuote: Founded in 1985, SelectQuote (NYSE: SLQT) pioneered the model of providing unbiased comparisons from multiple, highly rated insurance companies, allowing consumers to choose the policy and terms that best meet their unique needs. Two foundational pillars underpin SelectQuote’s success: a strong force of highly trained and skilled agents who provide a consultative needs analysis for every consumer, and proprietary technology that sources and routes high-quality leads. Today, the Company operates an ecosystem offering high touchpoints for consumers across insurance, pharmacy, and virtual care. With an ecosystem offering engagement points for consumers across insurance, Medicare, pharmacy, and value-based care, the company now has three core business lines: SelectQuote Senior, SelectQuote Healthcare Services, and SelectQuote Life. SelectQuote Senior serves the needs of a demographic that sees around 10,000 people turn 65 each day with a range of Medicare Advantage and Medicare Supplement plans. SelectQuote Healthcare Services is comprised of the SelectRx Pharmacy, a Patient-Centered Pharmacy Home™ (PCPH) accredited pharmacy, SelectPatient Management, a provider of chronic care management services, and Healthcare Select, which proactively connects consumers with a wide breadth of healthcare services supporting their needs. View source version on businesswire.com: https://www.businesswire.com/news/home/20260811730430/en/ Contacts Investor Relations: Sloan [email protected] Media: Matt [email protected]

Performance was anchored by a 1% improvement in Senior agent productivity and a 14% reduction in marketing spend per policy over a two-year period, despite a volatile Medicare Advantage environment. Management attributed the $14 million positive adjustment to commissions receivable to increased visibility into policyholder retention, validating the long-term value of the $1 billion balance sheet asset. The Healthcare Services segment saw a 64% increase in prescriptions shipped over two years, driven by the maturation of the SelectRx membership base and improved utilization. Operational efficiency is being prioritized through the Olathe, Kansas distribution facility, which currently delivers 30% higher efficiency than legacy locations despite running at less than 50% capacity. The company launched 'SelectQuote Local,' a franchise model designed to expand market reach via a fee-based arrangement with minimal capital investment. Management explicitly addressed the 'dislocated' equity valuation, noting that the Medicare Advantage commissions receivable alone is nearly five times the company's current market capitalization. Fiscal 2027 is positioned as a pivot point for accelerated cash flow growth, supported by the full integration of a proprietary pharmacy management system to scale the Olathe facility. Management anticipates continued market discipline and potential disruption in the Medicare Advantage ecosystem through 2027 as carriers prioritize margin recovery over growth. The company reaffirmed its commitment to maintaining its NYSE listing and is evaluating capital market transactions, including further securitizations or potential industry consolidation. SelectRx is expected to reach a $40 million to $50 million EBITDA run rate in the near term as membership seasoning and operational leverage compound. Guidance for the remainder of fiscal 2026 remains unchanged to account for potential timing shifts in policy approvals that may have pulled forward volume from the fourth quarter. The Inflation Reduction Act (IRA) caused a sequential revenue decline in Healthcare Services due to price caps on 10 high-priced drugs, though the EBITDA impact was limited to the low single-digit millions and was fully accounted for in the company's original forecast. A $13 million refund from drug manufacturers flowed through the cost of goods sold, partially offsetting the top-line impact of the IRA price changes. The company secured a multi-year agreement with its largest PBM partner, stabilizing reimbursement rates following earlier volatility in the fiscal year. Management highlighted a 33% recapture rate over the last two disruptive Medicare seasons as a key indicator of the model's resilience against industry-wide churn. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management confirmed the reimbursement environment is now stable following the resolution of earlier rate challenges and the signing of a multi-year PBM contract. The sequential revenue drop in SelectRx was primarily a 'geography change' in accounting caused by the IRA, with drug manufacturer refunds mitigating the bottom-line impact. While medical cost trends are easing slightly, management remains cautious, expecting carriers to maintain discipline through 2027 before a potential return to targeted growth in 2028. The company views potential plan disruption as a manageable dynamic given their 15-year history of navigating Medicare cycles. Beyond operational execution, management is exploring securitization of receivables and potential M&A or consolidation opportunities. The executive team emphasized that the company's diversification and cash flow durability make it a likely 'survivor' in a consolidating market. The new proprietary pharmacy management system is currently in the testing phase with the first patients successfully processed. Transitioning volume to the Olathe facility is expected to improve margins across all locations by reducing the need for expensive late-night shifts at legacy sites. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.

Image source: The Motley Fool. Tuesday, May 5, 2026 at 8:30 a.m. ET Chief Executive Officer — Timothy Danker Chief Financial Officer — Ryan Clement Timothy Danker: Thank you, Matt, and appreciate everyone joining us this morning. We're pleased to report another quarter of strong financial results across each of our segments. We reaffirm our outlook for fiscal 2026 and continue to execute our goal to drive profitability and cash flow. We're especially proud of the results given the headwinds our industry has faced over the past year plus. This is a testament to our people and strategy. SelectQuote continued to advance our goal to expand cash flow, and the company is very well positioned to accelerate that effort in fiscal 2027. To summarize, SelectQuote generated $431 million in revenue, driven by solid results across each of our segments. Adjusted EBITDA totaled $45 million, growth of 18% year-over-year. In Senior, we grew revenue by 8% year-over-year to $183 million. Growth was driven by healthier OEP, strong agent productivity and customer retention, as well as a positive change to our commissions receivables that Ryan will detail. As we have mentioned before, we firmly believe the SelectQuote's strategy and our agents make the difference. This now marks 4 consecutive years of strong operating performance in Senior, despite widely varying Medicare Advantage backdrops each year. To say it lightly, we're very proud of the results and our differentiated model. Senior adjusted EBITDA totaled $59 million, which includes the positive $14 million adjustment I just mentioned. It is important to note that the adjustment reaffirms the value of the commissions receivable on our balance sheet and the approximate $1 billion in assets we expect to receive in the quarters and years ahead. When we offer bespoke advice to American seniors and do so year-in and year-out, they get the best care, and we and our carrier partners benefit through strong retention. That said, excluding and normalizing the adjustment for comparison purposes, SelectQuote's model once again drove strong Senior margins of 26% and a Medicare Advantage backdrop that was mixed this season. Turning to Healthcare Services, revenue grew 5% compared to a year ago, totaling $199 million. Our revenue and profitability in SelectRx was impacted by both carrier-specific actions on reimbursement, which we detailed earlier this year, and the implementation of the Inflation Reduction Act. Ryan will provide detail on that impact shortly. Those headwinds notwithstanding, our adjusted EBITDA improved sequentially to $5 million, and we maintain our view that Healthcare Services will be a significant driver of profitable cash flow growth in fiscal 2027 and beyond. Overall, including our Life Insurance segment, we expect to exit fiscal 2026 on very strong footing in spite of what was a challenging environment. Looking ahead to 2027, we are encouraged by increasing visibility within the Medicare Advantage ecosystem. We're excited about SelectQuote's ability to compound cash flow growth in the near future and see significant value for shareholders as a result, especially at what we believe is a wildly dislocated valuation for our company. To that end, let me be clear that we will take all necessary action to maintain our listing on the New York Stock Exchange. We remain confident our stock will continue to be traded on the NYSE for years to come. Lastly, I'd like to take a minute to highlight a new and important initiative called SelectQuote Local. As you know, we have longed and proud of our company's ability to help underserved Americans. SelectQuote Local is a natural extension of our model and allows local community healthcare and life insurance participants to leverage our information and market advantages to help more people in need. The business offers our leading marketing, technology, products and customer service platform through a franchise model with local sales and service. Put another way, we're offering local providers the information engine of SelectQuote on a fee-based arrangement, and we can do so with minimal capital investment. Similar to the expansion of our revenue to CAC metric with the growth of Healthcare Services, we see SelectQuote Local as another extension of how our model can help more Americans with the same scale dollar of investment. SelectQuote Local won't be a meaningful revenue driver in the near term, but strategically, it broadens our reach and addressable market. Now let's flip to Slide 4, and let's take a look at the KPIs from our very strong quarter. We've shown these before, primarily for our Senior business, but we've also included additional detail on SelectRx. Starting with Senior on the left, we drove another strong quarter measured by agent productivity and OEP. Agent service and productivity are an evergreen goal of ours, but I'd remind you that this is all the more impressive considering the very strong compares in the previous 2 years. Specifically, we drove a 1% improvement in policies per agent over this timeframe despite historically wide swings in the environment from one season to the next. Moving down the page, we saw even better results on marketing efficiency, spending 14% less per approved policy compared to 2 years ago. Ryan will speak to elevated approval rates this season, but even excluding that unique impact, we saw a strong return on marketing spend beyond just policy booking. Senior engagement was high across the full range of our channels. We're underscoring our Senior division efficiency performance here, because we oftentimes find investors and analysts overlook the progress we've made on cash conversion in this segment. Moving to the right side of the page, we highlight the significant progress we've made with onboarding of SelectRx members. As you can see, we have driven a 64% increase in prescriptions shipped compared to 2 years ago relative to a commensurate 55% increase in SelectRx members. Progressive maturity and onboarding of our membership, combined with the improved operating efficiency of our Olathe, Kansas distribution facility has driven significant leverage on a relatively fixed cost base. As a result, SelectQuote generated a global revenue to CAC multiple of 6.7x. Only SelectQuote offers this unique combination of capabilities to help patients in multiple ways. This increases the value we bring to consumers and drives additional profitability with each senior we engage with. For products and services that are inherently recurring, especially when done at our level of care, the cash flow streams from our customers drive very compelling returns on invested capital. As we've noted, there is a wide disconnect between the value we see in our platform and cash flow streams and the valuation of common equity. Take one simple example. Our Medicare Advantage commissions receivable balance at the end of fiscal third quarter totaled nearly $1 billion, which compares to our market cap of under $200 million today. We have fielded questions about the LTV assumptions in our commissions accounting going all the way back to our IPO, but I'd simply note that SelectQuote has just operated in 2 of the most disruptive Medicare Advantage environments on record. Over those 2 years, we had a recapture rate of over 33%, and we're able to recognize a favorable adjustment to our receivables. The point being, we have visibility and conviction in our balance sheet asset and multiple capital markets transactions would suggest others analyzing the business closely share that conviction. Before I hand the call over to Ryan, we're very proud of the great progress we've made over the past 4 years, both operationally and on our capital structure. We continue to prioritize cash flow generation and will deliver significant year-over-year improvement in operating cash flow in fiscal '26. We expect to build upon that meaningful cash flow improvement in fiscal '27 and beyond with a stated goal to delever our balance sheet in the years to come. I'll end my comments by underscoring our commitment to remedying the disconnect in our equity value and see a very compelling opportunity in SelectQuote for investors in the future. With that, let me turn the call over to Ryan to review our third quarter. Ryan? Ryan Clement: Thanks, Tim. I'll pick it up on Slide 5 with a summary of our consolidated financial results. As Tim noted, SelectQuote had a strong quarter with revenue growth of 6% year-over-year, totaling $431 million. The growth was driven by both our Senior and Healthcare Services businesses, reflecting a strong OEP and continued demand for SelectRx. Adjusted EBITDA of $45 million was aided by the positive change in estimate to our commissions receivable that Tim noted. Excluding the favorable adjustment, our consolidated EBITDA margin for fiscal 3Q would have been 7%, which is a strong result for an OEP quarter. Overall, given the volatile backdrop, we are proud of the progress we continue to make on profitability and cash flow generation. The fiscal third quarter was strong operationally, and we are very well positioned to end fiscal 2026 on a positive note and carry momentum into 2027. Let me begin the segment overview on Slide 6 with a summary of our Senior business. As Tim noted, Senior revenue grew 8% compared to last year, totaling $183 million on 4% growth in approved MA policies and the positive change in estimate. Let's detail those 2 drivers, starting with approved policies. While growth in approved policies was strong, it's important to note that approval rates this OEP were materially higher than in previous years. While we are encouraged by these strong carrier approval rates, we will continue to monitor as it's possible some of this increase may reflect approval timing and volume that was pulled forward from 4Q, contributing to the outsized strength this quarter. Shifting to the positive adjustment, the majority of the $14 million increase in receivables was due to a change in our estimate of expected renewals driven by additional anticipated renewals from our policyholders as we continue to gain visibility to retention through this most recent renewal event. Having now operated through 15 Medicare seasons, we are proud to say we still have customers from our earliest cohorts. As a reminder, our LTV accounting assumes 10 renewal years and also assumes a 15% constraint. We think this is yet another indicator that our commissions receivables balance represents a large and perhaps not appropriately understood source of future cash flow to the business. Moving to adjusted EBITDA, Senior generated $59 million, including a favorable $14 million adjustment to our commissions receivable. Excluding that adjustment, the Senior segment produced an EBITDA margin of 26%. We have now maintained profitability of at least 25% during the AEP and OEP seasons for each of the last 4 consecutive years. Over that timeframe, the SelectQuote Senior business has averaged EBITDA margins of over 25% on a full year basis. Moving to Slide 7, our Healthcare Services business performed in line with our expectations against the pressures Tim mentioned. As we forecasted, membership growth in the quarter was strong at 11%, but moderated compared to the recent past. To be clear, demand remains very strong, but we continue to focus on driving further improvement in segment profitability. Our nearly 117,000 members drove revenue of $199 million for the fiscal third quarter. Let me take a moment to speak through the dynamic that changed booked revenue sequentially. The Inflation Reduction Act went into effect on January 1 of this year and set maximum fair prices for 10 higher-priced drugs. Essentially, all of the sequential drop in revenue was driven by that specific price change in the quarter. It's important to note that while the IRA drove a notable change to our top line, the actual impact to EBITDA was in the low single-digit millions and was fully accounted for in our original forecast. To that point, moving down the page, we drove adjusted EBITDA of $5 million despite the headwinds mentioned. As we noted last quarter, we see significant profit and cash flow in our base of SelectRx members. We are driving profit improvement through the seasoning and higher utilization of our membership base. Additionally, we continue to grow more and more optimistic about the cost efficiency of our Olathe distribution facility, which came online in April of 2025. At this time, less than 20% of our prescriptions shipped from that facility, but we are already recognizing 30% plus efficiency gains on those shipments relative to our 2 legacy locations. We have been investing in the development of a proprietary pharmacy management system to support all of our locations, and we are in the testing phase at this point. Upon successful completion of our testing, the new pharmacy management system will allow us to fulfill many more SelectRx members through the Olathe facility in the quarters to come. We currently use less than half of the facility space and run only 1 shift in that facility. So there's ample room to scale into this highly efficient operation. Flipping to Life Insurance on Slide 8, the business remains steady with cross currents between our 2 main products, Final Expense and Term Life. Final Expense continues to be a tailwind for the business with commissions up more than 8% year-over-year at highly attractive margins. We continue to see strong demand for this product and believe it will be a consistent growth driver well into the future. Strength in Final Expense was partially offset by Term Life, which remains a competitive market as consumers are shifting where and how they consume media. Overall, Life revenue grew 4% to $48 million and generated adjusted EBITDA of $6 million. While small, it's worth noting that the Life business generates sufficient cash flow similar to our Healthcare Services segment. In summary, our Life division remains a steady contributor of profitability and cash flow. Finally, on Slide 9, we are reaffirming our revenue range of $1.61 billion to $1.71 billion and adjusted EBITDA range of $90 million to $100 million. Despite realizing a positive adjustment this quarter, we believe it is prudent to maintain our guidance ranges at this time. As mentioned earlier, 3Q results were aided by approval rates in Senior that were materially higher than previous years. While we are encouraged by this approval rate increase, we want to continue to monitor whether some of this goodness may be timing related, impacting our fourth quarter approved policy levels. To echo Tim's comment, the SelectQuote model is generating visible and strengthening cash profitability, and we are highly focused on closing the disconnect between our equity market value and the real value of those cash flows. With that, let me now turn the call back to the operator to take your questions. Operator: [Operator Instructions] Your first question comes from the line of Drew Sterrett from RBC Capital. Andrew Sterrett: This is Drew Sterrett on for Ben Hendrix. You previously noted that PBM headwinds have continued for SelectRx. I mean for this quarter, it appears reimbursement came in a little ahead of our expectations. Do you have any additional commentary around this? And how should we think about the PMB (sic) [ PBM ] reimbursement environment going forward? Timothy Danker: Yes, Drew, thanks for joining. This is Tim. I'll take the first part of the call and maybe have Ryan also speak to the IRA impact. But as far as the PBM reimbursement environment, it remains very stable. As we talked about earlier this year, we faced a challenge with the change in our reimbursement rate. We have successfully resolved that issue and have seen reimbursement rates normalize in the third quarter results. So, would categorize the environment from a reimbursement rate is stable, and we're happy to have secured a multi-year agreement with our largest PBM partner. Ryan, maybe you can elaborate a little bit more on the IRA dynamic Inflation Reduction Act that impacted revenue for the quarter. Ryan Clement: Yes, happy to. As Tim noted and I mentioned on the call, the revenue sequentially declined and the biggest driver there or the driver is the Inflation Reduction Act, which when you look at it optically, revenue obviously dropping, but the bottom line impact, very different from what we see in the top line, top line is outsized. And the reason for that is we're receiving refunds from the drug manufacturers, and that's actually flowing through in the cost of goods line item. So for the quarter, we actually received $13 million in refunds. But again, there's a little bit of a geography change that's happening. And certainly, optically, it looks like there's a sequential decline, but that's really driven by the IRA impacts, which were fully accounted for in our guidance. Operator: Your next question comes from the line of George Sutton from Craig-Hallum. George Sutton: That's a new way to say, Craig-Hallum. So nice results. I wondered, Tim, if you could talk about, you mentioned in your prepared comments, you're positioned to accelerate the cash flow dynamics in 2027. Can you just give us a little picture of that? Timothy Danker: Yes, I'd be happy to, George. And I appreciate you being on, George. As far as cash flow dynamic, we feel like we're making substantial progress year-over-year. I think it's a byproduct of the positive changes that we made in the capital structure and kind of cash interest obligations. Certainly, as you've seen the results for OEP, which I think we have highlighted is there's been a lot of change over the past 2 years around the environment. So we feel really good about the OEP results and the underlying efficiency that we're driving in our Senior distribution business, both from an agent productivity as well as from a marketing efficiency standpoint. And clearly, we had a bounce back quarter in terms of SelectRx. And that's a big part of the story moving forward, really those 3 factors that would emphasize SelectRx is a significant opportunity for us to continue to improve the cash flow generation. So we highlighted the Olathe, Kansas or Metro, Kansas City facility and some of the things that we're doing there that are driving 30% plus efficiency relative to our legacy pharmacies, and we expect that to continue to compound as we exit fourth quarter this year into next year. George Sutton: Great. You also mentioned increased visibility in the Medicare Advantage ecosystem. I wondered, you've got some fairly public comments from a large carrier about their plans, which don't necessarily align with the brokers. I'm curious where you're seeing this increased visibility? Can you give us a sense of the discussions that you're having with the carriers? Timothy Danker: Yes, I'd be happy to. Great question, George. I think we are certainly seeing some positive developments relative to maybe a few quarters ago in the broader MA market recovery, if you will. But I think we would still caution at the pace of recovery. The things that we're seeing, I know that you and other analysts are covering from the payers that have reported is we're seeing some of the medical cost trends easing a bit, still expected -- forecasted to be up in high single-digit year-over-year, maybe coming in slightly favorable to that. But a reimbursement trend that's not fully sufficient to cover those costs. So that's a bit of a mixed story there, if you will. Some of the changes to the stars rating changes, we think is a positive tailwind if the payers can manage the enhanced focus on the clinical factors. And then you're seeing the payers' margin improvement recovery happening. I think when you put all that into the blender, if you will, we think there will be a continued discipline in the market for plan year 2027. We believe that there's some potential reemergence to targeted growth for plan year 2028. So we're anticipating that there could be some elevated disruption again this next year as carriers try to get to those target margin goals. But we have performed very well over the past 2 years. We certainly take the position that SelectQuote has been in this business for 15 years. Many members of this exec team have been in Medicare for 20 years. And we know these cycles don't last forever. We continue to have an optimistic outlook, I would say, cautious optimism. George Sutton: Lastly for me, if I could. Both you and Ryan were pretty adamant about wanting to remedy the disconnect of your equity. And I'm just curious how broad you're thinking there. Obviously, execution is one factor, but I'm curious outside of that, how broadly you're thinking in terms of things like segment sale or monetizing receivables or other M&A. Just curious on that side? Timothy Danker: Yes. Fair question, George. I mean we definitely plan to remedy it, and we made the public comments about ensuring that this company will be listed on the New York Stock Exchange. But beyond that, which we will certainly accomplish, we continue to evaluate a series of options. And I think we've been on record as a company that continues to evaluate various capital markets transactions, securitization, obviously, we've accomplished one. We think the positive development of how we've worked through the past 2 years on the renewal side and this positive change in estimate gives us more conviction, even increased conviction around our back book receivables, that's certainly an option. And there's other M&A, we certainly believe that -- and we've said this before, there's -- the market is at the point where consolidation might make sense. We think there'll be a small handful of sophisticated and capability-rich players, and SelectQuote will certainly be one of those. We think the strength, the diversification, the durability of our business creates an option set for us that's quite wide. Operator: Your next question comes from the line of Steven Couche from Jefferies. Steven Couche: I'm on for Dave. Maybe we can start on SelectRx. Do you still expect to exit the year at the $40 million to $50 million EBITDA run rate that you had previously messaged? Timothy Danker: Hello, Steven, I appreciate you joining, and I'm happy to answer that. I think we are highly confident that in the very near term, this business will be at a $40 million to $50 million EBITDA run rate business. We continue to gain operational efficiencies like we've commented on in our Kansas City facility, and we expect that to continue to compound as we exit 4Q and enter fiscal '27. Steven Couche: Okay. Great. And then I actually wanted to ask about Kansas City and how you think about taking volumes out of the other 2 facilities, I believe they're in Indy and Pittsburgh and moving them into Kansas City. And I mean, does it create some sort of stranded costs or decremental margins in the other 2 facilities when you move into Kansas City? Timothy Danker: Yes. I can take that one. As far as getting volume in, we are -- we've been very open that we've been working on kind of a new pharmacy management systems and things like that. And in order to really take more volume in, we are really close, but we're working on getting that done. We've sent our first patients through that process, it's gone very, very well. So pretty soon, we will be kind of moving more patients over. It doesn't -- actually, that should help the margins in the other facilities, because it should take a little bit of a burden off of some of the later night shifts and things that we have to do. So again, that cost savings that Ryan was talking about is very real. So we feel like that will just enhance margins even more as we run more volume through there. Steven Couche: Okay. And then maybe 1 or 2 on Senior. So the $14 million positive change of estimate, did I hear you correctly when it sounded like those -- that better performance was on recent policies. I don't know if it was this most recent AEP or maybe the one before that. And I guess the underlying question is how much of that $14 million should we think about folding into the underlying EBITDA run rate? Timothy Danker: Yes. So I think with respect to -- obviously, the guide, we've kind of set that out, there is $90 million to $100 million, we weren't adjusting it. With respect to the positive tail adjustment, that's really -- we've been through another renewal event. We're sitting looking at our book of business, looking at persistency, making adjustments based off our expectations. And so through this enhanced visibility, it became clear that we would expect to collect more than what we currently have on the balance sheet, which led to the change in estimate. So I think it's less about any specific cohort and more broadly as we assess the book of business, it became clear that it made sense to go ahead and make this adjustment. But again, at this time, we're not modifying the guidance. I want to see how Q4 develops. And obviously, we've talked about the approval rates. And so just seeing how that develops, but we're very pleased with the overall business results as well as the way the book is holding up. Steven Couche: Okay. Great. And maybe I can sneak in one more here. So when we think about the LTV calculation, obviously, this last AEP was extremely disruptive, probably max disruption. And so when we think about moving forward the LTV calculation, do we just need the industry-wide enrollment disruption to be less and that would theoretically benefit the LTV calculation? Or are there other variables at play where just if the environment just stabilizes, that wouldn't necessarily result in the LTV also stabilizing or improving? Timothy Danker: Yes. So I would say there are many factors that impact the LTV, it's customer retention, carrier mix, payment structures. Obviously, we have been through 2 disruptive seasons, and that does put some pressure on persistency. We're incredibly pleased with the 34% recapture rate. We've done phenomenally well navigating the season. And I think it's worth calling out that when we do help someone with a new policy that may have a plan term, we're actually putting that policy on the books at a very low cost. All that being said, I think clearly, strong performance and the ability to navigate through a range of Medicare seasons. Your question around stability, if we do see increased stability within the system, that would be a tailwind to lifetime values. And so again, I think that's what we're hoping for in the future, but clearly been able to navigate 4 very different Medicare seasons. Operator: Your next question comes from the line of Michael Kupinski from NOBLE Capital Markets. Michael Kupinski: Congratulations on your quarter. Tough to kind of go a little bit later in asking questions. Most of my questions have been answered. I was just wondering in terms of the marketing spend by national carriers, have you seen any changes there? And then also just in trends on your Senior, I know that you've kind of touched around this. Just wondering if you can just kind of give us your thoughts in terms of the back half of the year and how that's trending, particularly? And I know you touched on all of this in terms of submission volumes, approval rates and average revenue. But just wondering if you can kind of give us your thoughts in terms of how things are trending as we kind of look into the next quarter? Timothy Danker: Yes, Michael, thanks for joining. Just to clarify, your first question is regarding kind of a carrier marketing investment. I just want to clarify before I respond. Michael Kupinski: Yes, the carrier marketing spend. Timothy Danker: Yes. Thank you, Michael. So the short answer to that, Michael, is no additional updates beyond what we shared on our second quarter call regarding strategic marketing investment other than to say what we had projected is what we're experiencing. So we're certainly in line there. Carriers will go through their annual planning cycles with us this summer, and we'll expect to have a clearer picture when we provide our fiscal '27 guide. But I think if you look at how we navigated this OEP, we obviously had to absorb some of the aforementioned $20 million impact, a material amount of that came through in our fiscal 3Q, and we were able to still drive, we believe, outsized results. So we think this is all certainly manageable. I think the second part of your question was additional detail on how the back half of the year is going. And I would say that, again, we just went through our second biggest quarter in OEP, we think, with flying colors, and we're really proud of the results and the efficiency and how that also builds towards oFur commissions receivable as well as 4 straight years of 25% plus full year EBITDA margins, we're quite proud of that. We now enter into the SEP period, and we are seeing -- honestly, SEP period looks a lot like last year. No substantial changes for us year-over-year. We do believe that our year-round model and the viability of our economics, inclusive of the quieter SEP periods is very unique amongst other direct-to-consumer players in our category. We're really able to make the quieter periods work economically and also enhanced by this unique asset we have called SelectRx and how our enterprise economics work even when the heartbeat might be a little slower during SEP. So everything is kind of in line, while early, and expect to finish the year strong. Operator: At this time, there are no further questions. I will now hand the conference over to CEO, Tim Danker, for closing remarks. Timothy Danker: Yes. Thank you all again for your time, and we appreciate your support of SelectQuote. As Ryan and I have both noted, the SelectQuote model continues to drive consistent and reliable value to our customers and insurance carrier partners. We know the underlying cash flows for our services are real and significant, and we look forward to convincing more and more investors of that value in our equity in the months and years ahead. We appreciate your time. Have a great day. Operator: This concludes today's call. Thank you all for attending. You may now disconnect. Before you buy stock in SelectQuote, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and SelectQuote wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. SelectQuote SLQT Q3 2026 Earnings Transcript was originally published by The Motley Fool

Third Quarter of Fiscal Year 2026 – Consolidated Earnings Highlights Revenue of $430.9 million Net income of $40.2 million Adjusted EBITDA* of $44.6 million Fiscal Year 2026 Guidance Ranges: Revenue expected in a range of $1.61 billion to $1.71 billion Adjusted EBITDA* expected in a range of $90 million to $100 million Third Quarter Fiscal Year 2026 – Segment Highlights Senior Revenue of $182.9 million Adjusted EBITDA of $58.6 million Approved Medicare Advantage policies of 175,557 Healthcare Services Revenue of $199.4 million Adjusted EBITDA of $5.3 million 116,616 SelectRx members Life Revenue of $47.9 million Adjusted EBITDA of $6.1 million OVERLAND PARK, Kan., May 05, 2026--(BUSINESS WIRE)--SelectQuote, Inc. (NYSE: SLQT) reported consolidated revenue for the third quarter of fiscal year 2026 of $430.9 million compared to consolidated revenue for the third quarter of fiscal year 2025 of $408.2 million. Consolidated net income for the third quarter of fiscal year 2026 was $40.2 million compared to consolidated net income for the third quarter of fiscal year 2025 of $26.0 million. Finally, consolidated Adjusted EBITDA* for the third quarter of fiscal year 2026 was $44.6 million compared to consolidated Adjusted EBITDA* for the third quarter of fiscal year 2025 of $37.7 million. SelectQuote Chief Executive Officer Tim Danker remarked, "SelectQuote delivered consistent profit and cash flow for another quarter, despite market shifts for both Medicare Advantage and prescription drugs. We reaffirm our financial outlook for fiscal 2026 driven by operating execution by our agents and continued leverage of our information and technology advantages. Revenue to customer acquisition cost of 6.7X represented a high water mark for the company, and more importantly, signals the value our differentiated healthcare service model provides to policyholders and prescription drug customers." Mr. Danker continued, "Our goal to drive reliable and consistent profit, and cash flow growth remains priority number one. We believe the improvement to our capital structure to date, combined with the continued maturation of our SelectRx business, positions SelectQuote to materially expand cash flow in the years ahead. We continue to grow our receivables balance, which now stands at nearly $1 billion and grew by nearly $50 million over the past year, including a $14 million positive change in estimate reflective of the durability and dependability of these future cash flows." * See "Non-GAAP Financial Measures" below. Segment Results We currently have three reportable segments: 1) Senior, 2) Healthcare Services and 3) Life. The performance measures of the segments include total revenue and adjusted EBITDA. Costs of commissions and other services revenue, cost of goods sold-pharmacy revenue, marketing and advertising, selling, general, and administrative, and technical development operating expenses that are directly attributable to a segment are reported within the applicable segment. Indirect costs of revenue, marketing and advertising, selling, general, and administrative, and technical development operating expenses are allocated to each segment based on varying metrics such as headcount. Senior Financial Results The following table provides the financial results for the Senior segment for the periods presented: Operating Metrics Submitted Policies Submitted policies are counted when an individual completes an application with our licensed agent and provides authorization to the agent to submit the application to the insurance carrier partner. The applicant may have additional actions to take before the application will be reviewed by the insurance carrier. The following table shows the number of submitted policies for the periods presented: Approved Policies Approved policies represents the number of submitted policies that were approved by our insurance carrier partners for the identified product during the indicated period. Not all approved policies will go in force. The following table shows the number of approved policies for the periods presented: Lifetime Value of Commissions per Approved Policy Lifetime value of commissions per approved policy represents commissions estimated to be collected over the estimated life of an approved policy based on multiple factors, including but not limited to, contracted commission rates, carrier mix and expected policy persistency with applied constraints. The lifetime value of commissions per approved policy is equal to the sum of the commission revenue due upon the initial sale of a policy, and when applicable, an estimate of future renewal commissions. The following table shows the lifetime value of commissions per approved policy for the periods presented: Healthcare Services Financial Results The following table provides the financial results for the Healthcare Services segment for the periods presented: Operating Metrics Members The total number of SelectRx members represents the amount of active customers to which an order has been shipped and the prescriptions per day represents the total average prescriptions shipped per business day. These two metrics are the primary drivers of revenue for Healthcare Services. The following table shows the total number of SelectRx members as of the periods presented: The total number of SelectRx members increased by 11% as of March 31, 2026, compared to March 31, 2025, due to our strategy to grow SelectRx membership. The following table shows the average prescriptions shipped per day for the periods presented: Combined Senior and Healthcare Services - Consumer Per Unit Economics Combined Senior and Healthcare Services consumer per unit economics represents total MA and MS commissions; other product commissions; other revenues, including revenues from Healthcare Services; and operating expenses associated with Senior and Healthcare Services, each shown per number of approved MA and MS policies over a given time period. Management assesses the business on a per-unit basis to help ensure that the revenue opportunity associated with a successful policy sale is attractive relative to the marketing acquisition cost. Because not all acquired leads result in a successful policy sale, all per-policy metrics are based on approved policies, which is the measure that triggers revenue recognition. The MA and MS commission per MA/MS policy represents the LTV for policies sold in the period. Other commission per MA/MS policy represents the LTV for other products sold in the period, including DVH prescription drug plan, and other products, which management views as additional commission revenue on our agents’ core function of MA/MS policy sales. Pharmacy revenue per MA/MS policy represents revenue from SelectRx, and other revenue per MA/MS policy represents revenue from Population Health, production bonuses, marketing development funds, lead generation revenue, and adjustments from the Company’s reassessment of its cohorts’ transaction prices. Total operating expenses per MA/MS policy represents all of the operating expenses within Senior and Healthcare Services. The revenue to customer acquisition cost ("CAC") multiple represents total revenue as a multiple of total marketing acquisition cost, which represents the direct costs of acquiring leads. These costs are included in marketing and advertising expense within the total operating expenses per MA/MS policy. The following table shows combined Senior and Healthcare Services consumer per unit economics for the periods presented. Based on the seasonality of Senior and the fluctuations between quarters, we believe that the most relevant view of per unit economics is on a rolling 12-month basis. All per MA/MS policy metrics below are based on the sum of approved MA/MS policies, as both products have similar commission profiles. Total revenue per MA/MS policy increased 21% for the twelve months ended March 31, 2026, compared to the twelve months ended March 31, 2025, primarily due to the increase in pharmacy revenue. Total operating expenses per MA/MS policy increased 22% for the twelve months ended March 31, 2026, compared to the twelve months ended March 31, 2025, driven by an increase in cost of goods sold-pharmacy revenue for Healthcare Services due to the growth of the business. Life Financial Results The following table provides the financial results for the Life segment for the periods presented: Operating Metrics Life premium represents the total premium value for all policies that were approved by the relevant insurance carrier partner and for which the policy document was sent to the policyholder and payment information was received by the relevant insurance carrier partner during the indicated period. Because our commissions are earned based on a percentage of total premium, total premium volume for a given period is the key driver of revenue for our Life segment. The following table shows term and final expense premiums for the periods presented: Earnings Conference Call SelectQuote, Inc. will host a conference call with the investment community on May 5, 2026 beginning at 8:30 a.m. ET. To register for this conference call, please use this link: https://events.q4inc.com/analyst/775360431?pwd=VqmW7XWK. After registering, a confirmation will be sent via email, including dial-in details and unique conference call codes for entry. Registration is open through the live call, but to ensure you are connected for the full call we suggest registering at least 10 minutes before the start of the call. The event will also be webcasted live via our investor relations website https://ir.selectquote.com/investor-home/default.aspx. Non-GAAP Financial Measures This release includes certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. To supplement our financial statements presented in accordance with GAAP and to provide investors with additional information regarding our GAAP financial results, we have presented in this release Adjusted EBITDA, which, when presented on a consolidated basis, is a non-GAAP financial measure. This non-GAAP financial measure is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to any similarly titled measure presented by other companies. We define Adjusted EBITDA as net income plus interest expense, income taxes, depreciation and amortization, changes in fair value of warrant liabilities, loss on extinguishment of debt, and certain add-backs for non-cash or non-recurring expenses, including restructuring and share-based compensation expenses. The most directly comparable GAAP measure is net income. We monitor and have presented in this release Adjusted EBITDA because it is a key measure used by our management and Board of Directors to understand and evaluate our operating performance, establish budgets, and develop operational goals for managing our business. In particular, we believe that excluding the impact of these expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core operating performance. A reconciliation of the differences between Adjusted EBITDA and its most directly comparable GAAP measure, net income, is presented below on page 15. The Company is unable to provide a quantitative reconciliation of forward-looking Adjusted EBITDA to its most directly comparable GAAP measure without unreasonable effort because it is not possible to predict certain information included in the calculation of such GAAP measure, including the fair value of outstanding warrants to purchase shares of the Company's common stock. The unavailable information could have a significant impact on the Company’s GAAP financial results. Forward Looking Statements This release 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," "continue," "will," "anticipate," "seek," "estimate," "intend," "plan," "projection," "would" and "outlook," or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following: our reliance on a limited number of insurance carrier partners and any potential termination of those relationships or failure to develop new relationships; existing and future laws and regulations affecting the health insurance market; changes in health insurance products offered by our insurance carrier partners and the health insurance market generally; insurance carriers offering products and services directly to consumers; changes to commissions paid by insurance carriers and underwriting practices; competition with brokers, exclusively online brokers and carriers who opt to sell policies directly to consumers; competition from government-run health insurance exchanges; developments in the U.S. health insurance system; our dependence on revenue from carriers in our senior segment and downturns in the senior health as well as life, automotive and home insurance industries; our ability to develop new offerings and penetrate new vertical markets; risks from third-party products; failure to enroll individuals during the Medicare annual enrollment period; our ability to attract, integrate and retain qualified personnel; our dependence on lead providers and ability to compete for leads; failure to obtain and/or convert sales leads to actual sales of insurance policies; access to data from consumers and insurance carriers; accuracy of information provided from and to consumers during the insurance shopping process; cost-effective advertisement through internet search engines; ability to contact consumers and market products by telephone; global economic conditions, including inflation; disruption to operations as a result of future acquisitions; significant estimates and assumptions in the preparation of our financial statements; impairment of goodwill; potential litigation and other legal proceedings or inquiries; our existing and future indebtedness; our ability to maintain compliance with our debt covenants; access to additional capital; our ability to regain and maintain compliance with NYSE listing standards; failure to protect our intellectual property and our brand; fluctuations in our financial results caused by seasonality; accuracy and timeliness of commissions reports from insurance carriers; timing of insurance carriers’ approval and payment practices; factors that impact our estimate of the constrained lifetime value of commissions per policyholder; changes in accounting rules, tax legislation and other legislation; disruptions or failures of our technological infrastructure and platform; failure to maintain relationships with third-party service providers; cybersecurity breaches or other attacks involving our systems or those of our insurance carrier partners or third-party service providers; our ability to protect consumer information and other data; failure to market and sell Medicare plans effectively or in compliance with laws; and other factors related to our pharmacy business, including manufacturing or supply chain disruptions, access to and demand for prescription drugs, changes in reimbursement rates under our contracts with pharmacy benefit managers, and regulatory changes or other industry developments that may affect our pharmacy operations. For a further discussion of these and other risk factors that could impact our future results and performance, see the section entitled "Risk Factors" in the most recent Annual Report on Form 10-K (the "Annual Report") and subsequent periodic reports filed by us with the Securities and Exchange Commission. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and, except as otherwise required by law, we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. About SelectQuote: Founded in 1985, SelectQuote (NYSE: SLQT) pioneered the model of providing unbiased comparisons from multiple, highly-rated insurance companies, allowing consumers to choose the policy and terms that best meet their unique needs. Two foundational pillars underpin SelectQuote’s success: a strong force of highly-trained and skilled agents who provide a consultative needs analysis for every consumer, and proprietary technology that sources and routes high-quality leads. Today, the Company operates an ecosystem offering high touchpoints for consumers across insurance, pharmacy, and virtual care. With an ecosystem offering engagement points for consumers across insurance, Medicare, pharmacy, and value-based care, the company now has three core business lines: SelectQuote Senior, SelectQuote Healthcare Services, and SelectQuote Life. SelectQuote Senior serves the needs of a demographic that sees around 10,000 people turn 65 each day with a range of Medicare Advantage and Medicare Supplement plans. SelectQuote Healthcare Services is comprised of the SelectRx Pharmacy, a Patient-Centered Pharmacy Home™ (PCPH) accredited pharmacy, SelectPatient Management, a provider of chronic care management services, and Healthcare Select which proactively connects consumers with a wide breadth of healthcare services supporting their needs. View source version on businesswire.com: https://www.businesswire.com/news/home/20260505838568/en/ Contacts Investor Relations: Sloan Bohlen 877-678-4083 [email protected] Media: Matt Gunter 913-286-4931 [email protected]