SelectQuote, Inc. — First Quarter Fiscal Year 2027 Earnings Summary

Financial Performance:

• Consolidated revenue was $280.0 million, a 15% decrease from $328.8 million in the first quarter of fiscal year 2026.
• Consolidated net loss was $20.3 million, an improvement from a net loss of $30.5 million in the prior year period.
• Consolidated Adjusted EBITDA was $(17.0) million, an improvement from $(32.1) million in the prior year period.
• Operating cash flow used was $17.2 million, an improvement from $21.6 million used in the prior year period.
• Total operating costs and expenses were $308.6 million, down from $369.6 million in the prior year period.
• Loss from operations was $(28.6) million, compared to $(40.7) million in the prior year period.

Guidance and Future Outlook:

• Full-year fiscal 2027 revenue is expected to be in the range of $1.35 billion to $1.45 billion.
• Full-year fiscal 2027 Adjusted EBITDA is expected to be in the range of $90 million to $115 million.
• Full-year fiscal 2027 operating cash flow is expected to be more than $60 million.
• Management expressed high confidence in the current and long-term strategy to drive value for stakeholders and reiterated full-year financial targets.
• Management anticipates an improving Medicare Advantage environment on the horizon.

Business Segments and Product Lines:

• Senior Segment:
  • Revenue was $50.8 million, a 14% decrease from $59.0 million in the prior year period.
  • Adjusted EBITDA was $(12.3) million, improving from $(21.0) million in the prior year period.
  • Approved Medicare Advantage policies were 50,976, a decrease from 62,510 in the prior year period.
  • Submitted Medicare Advantage policies were 54,459, a 22% decrease from 70,240 in the prior year period.
  • Lifetime value of commissions per approved Medicare Advantage policy was $890, a 16% increase from $769 in the prior year period.
• Healthcare Services Segment:
  • Revenue was $186.3 million, a 16% decrease from $221.4 million in the prior year period.
  • Adjusted EBITDA was $11.2 million, a 56% increase from $7.2 million in the prior year period.
  • Adjusted EBITDA margin was 6%, up from 3% in the prior year period.
  • SelectRx members were 99,753, a 7% decrease from 106,914 as of September 30, 2025.
  • Profitability per SelectRx member increased 60% year-over-year to $107.6 from $67.1.
  • Average prescriptions shipped per day were 28,139, down from 31,378 in the prior year period.
• Life Segment:
  • Revenue was $42.8 million, an 8% decrease from $46.6 million in the prior year period.
  • Adjusted EBITDA was $7.3 million, a 31% increase from $5.6 million in the prior year period.
  • Adjusted EBITDA margin was 17%, up from 12% in the prior year period.
  • Total premiums were $38.5 million, a 21% decrease from $48.9 million in the prior year period.
  • Term premiums were $18.4 million, down 5% from $19.4 million.
  • Final expense premiums were $20.1 million, down 32% from $29.4 million.
• Combined Senior and Healthcare Services Consumer Per Unit Economics (Twelve Months Ended Sept 30, 2026 vs. 2025):
  • Total revenue per MA/MS policy increased 2% to $2,468 from $2,431.
  • Total operating expenses per MA/MS policy decreased 1% to $(2,135) from $(2,147).
  • Adjusted EBITDA per MA/MS policy increased to $333 from $284.
  • Revenue to CAC multiple increased to 7X from 6.4X.

Market and Competitive Landscape:

• The company operates in an environment impacted by the Inflation Reduction Act, which created revenue headwinds for Healthcare Services.
• Management noted the seasonally slowest quarter performance showcases the impact of their strategy to optimize profitability and cash flow.
• The company relies on a limited number of insurance carrier partners and faces competition from brokers, exclusively online brokers, and carriers selling directly to consumers.

Risks and Challenges:

• Risks include reliance on insurance carrier partners, potential termination of relationships, and changes in commission rates or underwriting practices.
• Regulatory risks include existing and future laws affecting the health insurance market and changes in reimbursement rates under contracts with pharmacy benefit managers.
• Operational risks include dependence on lead providers, failure to convert sales leads, and cybersecurity breaches.
• Financial risks include the company's existing and future indebtedness and the ability to maintain compliance with debt covenants.
• The company faces risks related to the accuracy of estimates for the constrained lifetime value of commissions per policyholder.

Management Commentary and Tone:

• CEO Tim Danker stated the company is proud of a strong quarter across Senior and Healthcare Services segments, resulting in material year-over-year improvements in adjusted EBITDA and operating cash flow.
• Management highlighted a 30% improvement in year-over-year trailing twelve-month adjusted EBITDA.
• Danker attributed confidence to growing efficiencies, process management, and the use of AI accelerating operating leverage.
• Management noted the tenured agent force is helping a highly-engaged Medicare beneficiary population find the right plans now that AEP (Annual Enrollment Period) has kicked off.
• The company strategically lowered agent headcount for Senior while continuing to scale Healthcare Services.

Other Key Points:

• The company has Senior Non-Convertible Preferred Stock with a current liquidation preference of $438.6 million as of September 30, 2026.
• Accumulated dividends and accretion on Preferred Stock were $20.2 million for the quarter.
• Net loss attributable to common shareholders was $40.5 million, or $(0.21) per share (basic and diluted).
• Cash, cash equivalents, and restricted cash were $13.4 million as of September 30, 2026, down from $20.7 million as of June 30, 2026.
• Long-term debt, net of current portion, was $364.3 million as of September 30, 2026.
• The company hosts a conference call on November 4, 2026, at 8:30 a.m. ET.
• The company utilizes a non-GAAP measure of Adjusted EBITDA, which excludes interest, taxes, depreciation, amortization, changes in fair value of warrant liabilities, and certain non-cash or non-recurring expenses.