SelectQuote, Inc. Reports Second Quarter of Fiscal Year 2022 Results
SelectQuote, Inc. (SLQT) reported a consolidated revenue of $195.0 million for Q2 FY2022, down from $357.6 million in the same quarter last year. The company faced a net loss of $137.0 million, compared to a net income of $89.9 million a year ago. Adjusted EBITDA was $(163.3) million. Full-year guidance expects revenue between $810 million to $850 million and a net loss of $255 million to $236 million. The Senior segment experienced a notable decline in revenue and profitability due to market challenges.
- Senior revenue grew 27% YoY in approved Medicare Advantage policies.
- Life segment revenue increased by 4% YoY.
- Consolidated revenue decreased by 45.5% YoY.
- Net loss of $137.0 million compared to net income of $89.9 million last year.
- Adjusted EBITDA worsened significantly to $(163.3) million.
- Senior segment revenue fell by 50% YoY.
Second Quarter of Fiscal Year 2022 - Consolidated Earnings Highlights
-
Revenue of
$195.0 million -
Net Loss of
$137.0 million -
Adjusted EBITDA* of
$(163.3) million -
Excluding the
cohort/tail adjustment, Revenue of$(145) million *$340 million -
Excluding the
cohort/tail adjustment, Adjusted EBITDA* of$(145) million $(18.3) million
-
Updating Full-Year Fiscal 2022 Revenue, Net Loss and Adjusted EBITDA Guidance:
-
Revenue expected in a range of
to$810 million $850 million -
Net Loss expected in a range of
to$255 million $236 million -
Adjusted EBITDA* expected in a range of
to$(260) million $(235) million
-
Revenue expected in a range of
Second Quarter of Fiscal Year 2022 - Segment Highlights
Senior
-
Revenue of
$158.0 million -
Adjusted EBITDA* of
$(148.6) million -
Approved Medicare Advantage policies grew
27% Year-Over-Year -
Excluding the
cohort/tail adjustment, Revenue of$(145) million *$303.0 million -
Excluding the
cohort/tail adjustment, Adjusted EBITDA* of$(145) million $(3.6) million
Life
-
Revenue of
$32.8 million -
Final expense premiums grew
82% Year-Over-Year
Auto & Home
-
Revenue of
$6.1 million -
Total Auto & Home premiums declined
20% Year-Over-Year
Chief Executive Officer
*See reconciliation from GAAP to non-GAAP measures starting on page 12.
Segment Results
We currently report on three segments: 1) Senior, 2) Life and 3) Auto & Home. The performance measures of the segments include total revenue and Adjusted EBITDA.* Costs of revenue, marketing and advertising, and technical development operating costs and expenses that are directly attributable to a segment are reported within the applicable segment. Indirect costs of revenue, marketing and advertising, and technical development operating costs and expenses are allocated to each segment based on varying metrics such as headcount. Adjusted EBITDA* is calculated as total revenue for the applicable segment less: direct and allocated costs of revenue, marketing and advertising, technical development, and general and administrative operating costs and expenses, excluding depreciation and amortization expense; gain or loss on disposal of property, equipment, and software; share-based compensation expense; restructuring expenses; and non-recurring expenses such as severance payments and transaction costs.
Senior
Financial Results
The following table provides the financial results for the Senior segment for the periods presented:
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||||||||||
(in thousands) |
2021 |
|
2020 |
|
% Change |
|
2021 |
|
2020 |
|
% Change |
||||||||||
Revenue |
$ |
157,967 |
|
|
$ |
315,510 |
|
|
(50 |
)% |
|
$ |
264,287 |
|
|
$ |
388,709 |
|
|
(32 |
)% |
Adjusted EBITDA* |
|
(148,635 |
) |
|
|
134,555 |
|
|
(210 |
)% |
|
|
(181,606 |
) |
|
|
143,457 |
|
|
(227 |
)% |
Adjusted EBITDA Margin* |
|
(94 |
)% |
|
|
43 |
% |
|
|
|
|
(69 |
)% |
|
|
37 |
% |
|
|
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, such as providing additional information, before the application will be reviewed by the insurance carrier.
The following table shows the number of submitted policies for the periods presented:
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||
|
2021 |
|
2020 |
|
% Change |
|
2021 |
|
2020 |
|
% Change |
||
Medicare Advantage |
340,317 |
|
246,548 |
|
38 |
% |
|
436,106 |
|
294,539 |
|
48 |
% |
Medicare Supplement |
3,117 |
|
13,273 |
|
(77 |
)% |
|
4,929 |
|
20,549 |
|
(76 |
)% |
Dental, Vision and Hearing |
53,432 |
|
43,020 |
|
24 |
% |
|
82,036 |
|
63,062 |
|
30 |
% |
Prescription Drug Plan |
4,241 |
|
6,250 |
|
(32 |
)% |
|
5,114 |
|
8,675 |
|
(41 |
)% |
Other |
2,967 |
|
3,939 |
|
(25 |
)% |
|
6,529 |
|
5,822 |
|
12 |
% |
Total |
404,074 |
|
313,030 |
|
29 |
% |
|
534,714 |
|
392,647 |
|
36 |
% |
*See reconciliation from GAAP to non-GAAP measures starting on page 12. |
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:
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||
|
2021 |
|
2020 |
|
% Change |
|
2021 |
|
2020 |
|
% Change |
||
Medicare Advantage |
265,538 |
|
208,714 |
|
27 |
% |
|
349,654 |
|
251,187 |
|
39 |
% |
Medicare Supplement |
2,097 |
|
10,451 |
|
(80 |
)% |
|
3,495 |
|
16,776 |
|
(79 |
) % |
Dental, Vision and Hearing |
44,542 |
|
33,614 |
|
33 |
% |
|
66,765 |
|
49,853 |
|
34 |
% |
Prescription Drug Plan |
3,352 |
|
4,815 |
|
(30 |
)% |
|
4,220 |
|
7,447 |
|
(43 |
)% |
Other |
2,483 |
|
3,256 |
|
(24 |
)% |
|
5,363 |
|
5,080 |
|
6 |
% |
Total |
318,012 |
|
260,850 |
|
22 |
% |
|
429,497 |
|
330,343 |
|
30 |
% |
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:
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||||||
(dollars per policy): |
2021 |
|
2020 |
|
% Change |
|
2021 |
|
2020 |
|
% Change |
||||||
Medicare Advantage |
$ |
922 |
|
$ |
1,268 |
|
(27 |
)% |
|
$ |
936 |
|
$ |
1,251 |
|
(25 |
)% |
Medicare Supplement |
|
1,347 |
|
|
1,233 |
|
9 |
% |
|
|
1,384 |
|
|
1,248 |
|
11 |
% |
Dental, Vision and Hearing |
|
112 |
|
|
138 |
|
(19 |
)% |
|
|
125 |
|
|
148 |
|
(16 |
)% |
Prescription Drug Plan |
|
218 |
|
|
232 |
|
(6 |
)% |
|
|
237 |
|
|
235 |
|
1 |
% |
Other |
|
9 |
|
|
127 |
|
(93 |
)% |
|
|
64 |
|
|
130 |
|
(51 |
)% |
Per Unit Economics
Per unit economics represents total Medicare Advantage and Medicare Supplement commissions, other product commissions, other revenues, and costs associated with the Senior segment, each shown per number of approved Medicare Advantage and Medicare Supplement approved 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 Medicare Advantage and Medicare Supplement commission per MA/MS policy represents the lifetime value of commissions for policies sold in the period. Other commission per MA/MS policy represents the lifetime value of commissions for other products sold in the period, including dental, vision and hearing, prescription drug plan, and other products, which management views as additional commission revenue on our agents’ core function of MA/MS policy sales. Other per MA/MS policy represents the production bonuses, lead sales revenue from InsideResponse, and updated estimates of prior period variable consideration based on actual policy renewals in the current period. Total operating expenses per MA/MS policy represents all of the operating expenses within the Senior segment. The Revenue to customer acquisition cost (“CAC”) multiple represents total revenue per MA/MS policy 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 per unit economics for the periods presented. Based on the seasonality of the Senior segment 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. These metrics are the basis on which management assesses the business:
|
Twelve Months Ended
|
|
|
|||||||
(dollars per approved policy): |
2021 |
|
2020 |
|
% Change |
|||||
Medicare Advantage and Medicare Supplement approved policies |
|
574,682 |
|
|
|
394,032 |
|
|
46 |
% |
Medicare Advantage and Medicare Supplement commission per MA/MS policy |
$ |
1,067 |
|
|
$ |
1,276 |
|
|
(16 |
)% |
Other commission per MA/MS policy |
|
33 |
|
|
|
39 |
|
|
(15 |
)% |
Other per MA/MS policy |
|
(49 |
) |
|
|
168 |
|
|
(129 |
)% |
Total revenue per MA/MS policy |
|
1,051 |
|
|
|
1,483 |
|
|
(29 |
)% |
Total operating expenses per MA/MS policy |
|
(1,193 |
) |
|
|
(916 |
) |
|
30 |
% |
Adjusted EBITDA per MA/MS policy* |
$ |
(142 |
) |
|
$ |
567 |
|
|
(125 |
)% |
Adjusted EBITDA Margin per MA/MS policy* |
|
(14 |
)% |
|
|
38 |
% |
|
(135 |
)% |
Revenue/CAC multiple |
1.9X |
|
3.2X |
|
|
Life
Financial Results
The following table provides the financial results for the Life segment for the periods presented:
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||||||||||
(in thousands) |
2021 |
|
2020 |
|
% Change |
|
2021 |
|
2020 |
|
% Change |
||||||||||
Revenue |
$ |
32,780 |
|
|
$ |
35,666 |
|
|
(8 |
)% |
|
$ |
80,211 |
|
|
$ |
77,094 |
|
|
4 |
% |
Adjusted EBITDA* |
|
1,850 |
|
|
|
5,705 |
|
|
(68 |
)% |
|
|
4,153 |
|
|
|
14,787 |
|
|
(72 |
)% |
Adjusted EBITDA Margin* |
|
6 |
% |
|
|
16 |
% |
|
|
|
|
5 |
% |
|
|
19 |
% |
|
|
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.
*See reconciliation from GAAP to non-GAAP measures starting on page 12.
The following table shows term and final expense premiums for the periods presented:
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||||||
(in thousands) |
2021 |
|
2020 |
|
% Change |
|
2021 |
|
2020 |
|
% Change |
||||||
Term Premiums |
$ |
15,548 |
|
$ |
18,888 |
|
(18 |
)% |
|
$ |
31,057 |
|
$ |
37,742 |
|
(18 |
)% |
Final Expense Premiums |
|
21,134 |
|
|
11,631 |
|
82 |
% |
|
|
55,186 |
|
|
31,450 |
|
75 |
% |
Total |
$ |
36,682 |
|
$ |
30,519 |
|
20 |
% |
|
|
86,243 |
|
|
69,192 |
|
25 |
% |
Auto & Home
Financial Results
The following table provides the financial results for the Auto & Home segment for the periods presented:
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||||||||||
(in thousands) |
2021 |
|
2020 |
|
% Change |
|
2021 |
|
2020 |
|
% Change |
||||||||||
Revenue |
$ |
6,135 |
|
|
$ |
7,241 |
|
|
(15 |
)% |
|
$ |
13,604 |
|
|
$ |
16,779 |
|
|
(19 |
)% |
Adjusted EBITDA* |
|
1,435 |
|
|
|
2,150 |
|
|
(33 |
)% |
|
|
2,808 |
|
|
|
5,767 |
|
|
(51 |
)% |
Adjusted EBITDA Margin* |
|
23 |
% |
|
|
30 |
% |
|
|
|
|
21 |
% |
|
|
34 |
% |
|
|
Operating Metrics
Auto & Home premium represents the total premium value of all new policies that were approved by our insurance carrier partners 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 Auto & Home segment.
The following table shows premiums for the periods presented:
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
||||||||||
(in thousands): |
2021 |
|
2020 |
|
% Change |
|
2021 |
|
2020 |
|
% Change |
||||||
Premiums |
$ |
10,585 |
|
$ |
13,255 |
|
(20 |
)% |
|
$ |
23,843 |
|
$ |
30,155 |
|
(21 |
)% |
Revision
The Company discovered that the first year provision for certain final expense policies offered by one of our insurance carrier partners should previously have been accrued based on a higher lapse rate. We identified approximately
*See reconciliation from GAAP to non-GAAP measures starting on page 12.
Earnings Conference 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 and Adjusted EBITDA Margin, which are non-GAAP financial measures. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly titled measures presented by other companies. We define Adjusted EBITDA as income (loss) before interest expense, income tax expense (benefit), depreciation and amortization, 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 (loss). 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, to establish budgets and to 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.
We believe that this non-GAAP financial measure helps identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude in the calculations of this non-GAAP financial measure. Accordingly, we believe that this financial measure provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects.
Forward-Looking Statement
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: the ultimate duration and impact of the ongoing COVID-19 pandemic, 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
About
Founded in 1985,
Source:
|
||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||
(Unaudited) |
||||||
(In thousands) |
||||||
|
|
|
|
|||
ASSETS |
|
|
|
|||
CURRENT ASSETS: |
|
|
|
|||
Cash and cash equivalents |
$ |
193,357 |
|
|
$ |
286,454 |
Accounts receivable |
|
149,399 |
|
|
|
105,298 |
Commissions receivable-current |
|
202,289 |
|
|
|
89,120 |
Other current assets |
|
10,511 |
|
|
|
4,486 |
Total current assets |
|
555,556 |
|
|
|
485,358 |
COMMISSIONS RECEIVABLE |
|
683,516 |
|
|
|
756,777 |
PROPERTY AND EQUIPMENT—Net |
|
42,676 |
|
|
|
29,510 |
SOFTWARE—Net |
|
15,009 |
|
|
|
12,611 |
OPERATING LEASE RIGHT-OF-USE ASSETS |
|
30,571 |
|
|
|
31,414 |
INTANGIBLE ASSETS—Net |
|
37,727 |
|
|
|
40,670 |
|
|
73,732 |
|
|
|
68,019 |
OTHER ASSETS |
|
6,046 |
|
|
|
1,436 |
TOTAL ASSETS |
$ |
1,444,833 |
|
|
$ |
1,425,795 |
|
|
|
|
|||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|||
CURRENT LIABILITIES: |
|
|
|
|||
Accounts payable |
$ |
47,579 |
|
|
$ |
34,079 |
Accrued expenses |
|
22,904 |
|
|
|
20,676 |
Accrued compensation and benefits |
|
43,384 |
|
|
|
40,909 |
Operating lease liabilities—current |
|
5,251 |
|
|
|
5,289 |
Current portion of long-term debt |
|
7,169 |
|
|
|
2,360 |
Other current liabilities |
|
9,120 |
|
|
|
5,504 |
Total current liabilities |
|
135,407 |
|
|
|
108,817 |
LONG-TERM DEBT, NET—less current portion |
|
700,350 |
|
|
|
459,043 |
DEFERRED INCOME TAXES |
|
76,942 |
|
|
|
139,241 |
OPERATING LEASE LIABILITIES |
|
36,951 |
|
|
|
38,392 |
OTHER LIABILITIES |
|
2,779 |
|
|
|
11,743 |
Total liabilities |
|
952,429 |
|
|
|
757,236 |
|
|
|
|
|||
COMMITMENTS AND CONTINGENCIES |
|
|
|
|||
|
|
|
|
|||
SHAREHOLDERS’ EQUITY: |
|
|
|
|||
Common stock, |
|
1,640 |
|
|
|
1,635 |
Additional paid-in capital |
|
551,002 |
|
|
|
544,771 |
Retained earnings (accumulated deficit) |
|
(62,236 |
) |
|
|
121,924 |
Accumulated other comprehensive income |
|
1,998 |
|
|
|
229 |
Total shareholders’ equity |
|
492,404 |
|
|
|
668,559 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ |
1,444,833 |
|
|
$ |
1,425,795 |
|
|||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(In thousands) |
|||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
REVENUE: |
|
|
|
|
|
|
|
||||||||
Commission |
$ |
140,701 |
|
|
$ |
320,265 |
|
|
$ |
272,956 |
|
|
$ |
425,415 |
|
Production bonus and other |
|
54,280 |
|
|
|
37,300 |
|
|
|
79,552 |
|
|
|
54,924 |
|
Total revenue |
|
194,981 |
|
|
|
357,565 |
|
|
|
352,508 |
|
|
|
480,339 |
|
|
|
|
|
|
|
|
|
||||||||
OPERATING COSTS AND EXPENSES: |
|
|
|
|
|
|
|
||||||||
Cost of revenue |
|
148,108 |
|
|
|
84,121 |
|
|
|
240,273 |
|
|
|
135,166 |
|
Marketing and advertising |
|
193,246 |
|
|
|
132,206 |
|
|
|
283,923 |
|
|
|
182,006 |
|
General and administrative |
|
20,147 |
|
|
|
13,043 |
|
|
|
43,539 |
|
|
|
25,245 |
|
Technical development |
|
6,386 |
|
|
|
4,750 |
|
|
|
12,239 |
|
|
|
8,598 |
|
Total operating costs and expenses |
|
367,887 |
|
|
|
234,120 |
|
|
|
579,974 |
|
|
|
351,015 |
|
|
|
|
|
|
|
|
|
||||||||
INCOME (LOSS) FROM OPERATIONS |
|
(172,906 |
) |
|
|
123,445 |
|
|
|
(227,466 |
) |
|
|
129,324 |
|
|
|
|
|
|
|
|
|
||||||||
INTEREST EXPENSE, NET |
|
(10,587 |
) |
|
|
(6,782 |
) |
|
|
(19,122 |
) |
|
|
(13,543 |
) |
OTHER EXPENSE, NET |
|
(51 |
) |
|
|
(416 |
) |
|
|
(153 |
) |
|
|
(1,196 |
) |
INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT) |
|
(183,544 |
) |
|
|
116,247 |
|
|
|
(246,741 |
) |
|
|
114,585 |
|
INCOME TAX EXPENSE (BENEFIT) |
|
(46,536 |
) |
|
|
26,391 |
|
|
|
(62,580 |
) |
|
|
24,994 |
|
|
|
|
|
|
|
|
|
||||||||
NET INCOME (LOSS) |
$ |
(137,008 |
) |
|
$ |
89,856 |
|
|
$ |
(184,161 |
) |
|
$ |
89,591 |
|
|
|
|
|
|
|
|
|
||||||||
NET INCOME (LOSS) PER SHARE: |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
(0.84 |
) |
|
$ |
0.55 |
|
|
$ |
(1.12 |
) |
|
$ |
0.55 |
|
Diluted |
$ |
(0.84 |
) |
|
$ |
0.54 |
|
|
$ |
(1.12 |
) |
|
$ |
0.54 |
|
|
|
|
|
|
|
|
|
||||||||
WEIGHTED-AVERAGE COMMON STOCK OUTSTANDING USED IN PER SHARE AMOUNTS: |
|
|
|
|
|
|
|
||||||||
Basic |
|
163,966 |
|
|
|
162,645 |
|
|
|
163,829 |
|
|
|
162,546 |
|
Diluted |
|
163,966 |
|
|
|
165,563 |
|
|
|
163,829 |
|
|
|
165,377 |
|
|
|
|
|
|
|
|
|
||||||||
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX: |
|
|
|
|
|
|
|
||||||||
Gain (loss) on cash flow hedge |
|
1,775 |
|
|
|
116 |
|
|
|
1,769 |
|
|
|
(141 |
) |
OTHER COMPREHENSIVE INCOME (LOSS) |
|
1,775 |
|
|
|
116 |
|
|
|
1,769 |
|
|
|
(141 |
) |
COMPREHENSIVE INCOME (LOSS) |
$ |
(135,233 |
) |
|
$ |
89,972 |
|
|
$ |
(182,392 |
) |
|
$ |
89,450 |
|
|
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(Unaudited) |
|||||||
(In thousands) |
|||||||
|
|
||||||
|
Six Months Ended |
||||||
|
2021 |
|
2020 |
||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
||||
Net income (loss) |
$ |
(184,161 |
) |
|
$ |
89,591 |
|
Adjustments to reconcile net income (loss) to net cash, cash equivalents, and restricted cash used in operating activities: |
|
|
|
||||
Depreciation and amortization |
|
11,278 |
|
|
|
6,937 |
|
Loss on disposal of property, equipment, and software |
|
355 |
|
|
|
162 |
|
Share-based compensation expense |
|
4,109 |
|
|
|
2,259 |
|
Deferred income taxes |
|
(62,940 |
) |
|
|
24,879 |
|
Amortization of debt issuance costs and debt discount |
|
2,974 |
|
|
|
1,644 |
|
Fair value adjustments to contingent earnout obligations |
|
— |
|
|
|
1,153 |
|
Non-cash lease expense |
|
2,040 |
|
|
|
1,887 |
|
Changes in operating assets and liabilities: |
|
|
|
||||
Accounts receivable |
|
(43,429 |
) |
|
|
(61,251 |
) |
Commissions receivable |
|
(39,908 |
) |
|
|
(219,132 |
) |
Other assets |
|
(5,555 |
) |
|
|
1,906 |
|
Accounts payable and accrued expenses |
|
15,135 |
|
|
|
15,692 |
|
Operating lease liabilities |
|
(2,676 |
) |
|
|
(1,245 |
) |
Other liabilities |
|
(2,963 |
) |
|
|
32,370 |
|
Net cash used in operating activities |
|
(305,741 |
) |
|
|
(103,148 |
) |
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
||||
Purchases of property and equipment |
|
(17,904 |
) |
|
|
(5,768 |
) |
Purchases of software and capitalized software development costs |
|
(5,231 |
) |
|
|
(3,449 |
) |
Acquisition of business |
|
(6,927 |
) |
|
|
121 |
|
Investment in equity securities |
|
(1,000 |
) |
|
|
— |
|
Net cash used in investing activities |
|
(31,062 |
) |
|
|
(9,096 |
) |
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
||||
Proceeds from revolving line of credit |
|
50,000 |
|
|
|
— |
|
Payments on revolving line of credit |
|
(50,000 |
) |
|
|
— |
|
Net proceeds from senior secured delayed draw term loan facility |
|
242,000 |
|
|
|
— |
|
Payments on other debt |
|
(93 |
) |
|
|
(108 |
) |
Proceeds from common stock options exercised and employee stock purchase plan |
|
2,271 |
|
|
|
391 |
|
Payments of tax withholdings related to net share settlement of equity awards |
|
(144 |
) |
|
|
(5,320 |
) |
Payments of debt issuance costs |
|
(328 |
) |
|
|
— |
|
Payments of costs incurred in connection with private placement |
|
— |
|
|
|
(1,771 |
) |
Payments of costs incurred in connection with initial public offering |
|
— |
|
|
|
(3,911 |
) |
Net cash provided by (used in) financing activities |
|
243,706 |
|
|
|
(10,719 |
) |
|
|
(93,097 |
) |
|
|
(122,963 |
) |
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—Beginning of period |
|
286,454 |
|
|
|
368,870 |
|
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—End of period |
$ |
193,357 |
|
|
$ |
245,907 |
|
|
|||||||||||||||||||
Adjusted EBITDA to Net Income (Loss) Reconciliation |
|||||||||||||||||||
(Unaudited) |
|||||||||||||||||||
|
|
||||||||||||||||||
|
Three Months Ended |
||||||||||||||||||
(in thousands) |
Senior |
|
Life |
|
Auto &
|
|
Corp &
|
|
Consolidated |
||||||||||
Revenue |
$ |
157,967 |
|
|
$ |
32,780 |
|
|
$ |
6,135 |
|
|
$ |
(1,901 |
) |
|
$ |
194,981 |
|
Operating expenses |
|
(306,602 |
) |
|
|
(30,930 |
) |
|
|
(4,700 |
) |
|
|
(15,979 |
) |
|
|
(358,211 |
) |
Other expenses, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(51 |
) |
|
|
(51 |
) |
Adjusted EBITDA |
|
(148,635 |
) |
|
|
1,850 |
|
|
|
1,435 |
|
|
|
(17,931 |
) |
|
|
(163,281 |
) |
Share-based compensation expense |
|
|
|
|
|
|
|
|
|
(1,894 |
) |
||||||||
Non-recurring expenses |
|
|
|
|
|
|
|
|
|
(1,602 |
) |
||||||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
(6,175 |
) |
||||||||
Loss on disposal of property, equipment, and software |
|
|
|
|
|
|
|
|
|
(5 |
) |
||||||||
Interest expense, net |
|
|
|
|
|
|
|
|
|
(10,587 |
) |
||||||||
Income tax benefit |
|
|
|
|
|
|
|
|
|
46,536 |
|
||||||||
Net loss |
|
|
|
|
|
|
|
|
$ |
(137,008 |
) |
|
Three Months Ended |
||||||||||||||||||
(in thousands) |
Senior |
|
Life |
|
Auto &
|
|
Corp &
|
|
Consolidated |
||||||||||
Revenue |
$ |
315,510 |
|
|
$ |
35,666 |
|
|
$ |
7,241 |
|
|
$ |
(852 |
) |
|
$ |
357,565 |
|
Operating expenses |
|
(180,955 |
) |
|
|
(29,961 |
) |
|
|
(5,091 |
) |
|
|
(12,746 |
) |
|
|
(228,753 |
) |
Other expenses, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(21 |
) |
|
|
(21 |
) |
Adjusted EBITDA |
|
134,555 |
|
|
|
5,705 |
|
|
|
2,150 |
|
|
|
(13,619 |
) |
|
|
128,791 |
|
Share-based compensation expense |
|
|
|
|
|
|
|
|
|
(1,336 |
) |
||||||||
Non-recurring expenses |
|
|
|
|
|
|
|
|
|
(362 |
) |
||||||||
Fair value adjustments to contingent earnout obligations |
|
|
|
|
|
|
|
|
|
(395 |
) |
||||||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
(3,590 |
) |
||||||||
Loss on disposal of property, equipment, and software |
|
|
|
|
|
|
|
|
|
(79 |
) |
||||||||
Interest expense, net |
|
|
|
|
|
|
|
|
|
(6,782 |
) |
||||||||
Income tax expense |
|
|
|
|
|
|
|
|
|
(26,391 |
) |
||||||||
Net income |
|
|
|
|
|
|
|
|
$ |
89,856 |
|
|
|||||||||||||||||||
Adjusted EBITDA to Net Income (Loss) Reconciliation |
|||||||||||||||||||
(Unaudited) |
|||||||||||||||||||
|
|
||||||||||||||||||
|
Six Months Ended |
||||||||||||||||||
(in thousands) |
Senior |
|
Life |
|
Auto &
|
|
Corp &
|
|
Consolidated |
||||||||||
Revenue |
$ |
264,287 |
|
|
$ |
80,211 |
|
|
$ |
13,604 |
|
|
$ |
(5,594 |
) |
|
$ |
352,508 |
|
Operating expenses |
|
(445,893 |
) |
|
|
(76,058 |
) |
|
|
(10,796 |
) |
|
|
(29,330 |
) |
|
|
(562,077 |
) |
Other expenses, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(153 |
) |
|
|
(153 |
) |
Adjusted EBITDA |
|
(181,606 |
) |
|
|
4,153 |
|
|
|
2,808 |
|
|
|
(35,077 |
) |
|
|
(209,722 |
) |
Share-based compensation expense |
|
|
|
|
|
|
|
|
|
(4,109 |
) |
||||||||
Non-recurring expenses |
|
|
|
|
|
|
|
|
|
(2,155 |
) |
||||||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
(11,278 |
) |
||||||||
Loss on disposal of property, equipment, and software |
|
|
|
|
|
|
|
|
|
(355 |
) |
||||||||
Interest expense, net |
|
|
|
|
|
|
|
|
|
(19,122 |
) |
||||||||
Income tax benefit |
|
|
|
|
|
|
|
|
|
62,580 |
|
||||||||
Net loss |
|
|
|
|
|
|
|
|
$ |
(184,161 |
) |
|
Six Months Ended |
||||||||||||||||||
(in thousands) |
Senior |
|
Life |
|
Auto &
|
|
Corp &
|
|
Consolidated |
||||||||||
Revenue |
$ |
388,709 |
|
|
$ |
77,094 |
|
|
$ |
16,779 |
|
|
$ |
(2,243 |
) |
|
$ |
480,339 |
|
Operating expenses |
|
(245,252 |
) |
|
|
(62,307 |
) |
|
|
(11,012 |
) |
|
|
(22,264 |
) |
|
|
(340,835 |
) |
Other expenses, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(43 |
) |
|
|
(43 |
) |
Adjusted EBITDA |
|
143,457 |
|
|
|
14,787 |
|
|
|
5,767 |
|
|
|
(24,550 |
) |
|
|
139,461 |
|
Share-based compensation expense |
|
|
|
|
|
|
|
|
|
(2,259 |
) |
||||||||
Non-recurring expenses |
|
|
|
|
|
|
|
|
|
(822 |
) |
||||||||
Fair value adjustments to contingent earnout obligations |
|
|
|
|
|
|
|
|
|
(1,153 |
) |
||||||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
(6,937 |
) |
||||||||
Loss on disposal of property, equipment, and software |
|
|
|
|
|
|
|
|
|
(162 |
) |
||||||||
Interest expense, net |
|
|
|
|
|
|
|
|
|
(13,543 |
) |
||||||||
Income tax expense |
|
|
|
|
|
|
|
|
|
(24,994 |
) |
||||||||
Net income |
|
|
|
|
|
|
|
|
$ |
89,591 |
|
|
|||||||||||||||||||
Revenue to Adjusted EBITDA - Senior Cohort/Tail Adjustment |
|||||||||||||||||||
(Unaudited) |
|||||||||||||||||||
|
|
||||||||||||||||||
|
Three Months Ended |
||||||||||||||||||
(in thousands) |
Senior |
|
Life |
|
Auto &
|
|
Corp &
|
|
Consolidated |
||||||||||
Revenue |
$ |
157,967 |
|
|
$ |
32,780 |
|
|
$ |
6,135 |
|
|
$ |
(1,901 |
) |
|
$ |
194,981 |
|
Net commission revenue adjustment from change in estimate for Senior cohort/tail adjustment |
|
145,000 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
145,000 |
|
Revenue, excluding net commission revenue adjustment from change in estimate for Senior cohort/tail adjustment |
|
302,967 |
|
|
|
32,780 |
|
|
|
6,135 |
|
|
|
(1,901 |
) |
|
|
339,981 |
|
Operating expenses |
|
(306,602 |
) |
|
|
(30,930 |
) |
|
|
(4,700 |
) |
|
|
(15,979 |
) |
|
|
(358,211 |
) |
Other expenses, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(51 |
) |
|
|
(51 |
) |
Adjusted EBITDA |
$ |
(3,635 |
) |
|
$ |
1,850 |
|
|
$ |
1,435 |
|
|
$ |
(17,931 |
) |
|
$ |
(18,281 |
) |
|
|||||||
Net Loss to Adjusted EBITDA Reconciliation |
|||||||
(Unaudited) |
|||||||
Guidance net loss to Adjusted EBITDA reconciliation, year ending |
|||||||
(in thousands) |
Range |
||||||
Net Loss |
$ |
(255,000 |
) |
|
$ |
(236,000 |
) |
Income tax benefit |
|
(86,000 |
) |
|
|
(80,000 |
) |
Interest expense, net |
|
43,000 |
|
|
|
43,000 |
|
Depreciation and amortization |
|
22,000 |
|
|
|
22,000 |
|
Share-based compensation expense |
|
11,000 |
|
|
|
11,000 |
|
Non-recurring expenses |
|
5,000 |
|
|
|
5,000 |
|
Adjusted EBITDA |
$ |
(260,000 |
) |
|
$ |
(235,000 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220207005886/en/
Investor Relations:
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investorrelations@selectquote.com
Media:
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kelly.hale@selectquote.com
Source:
FAQ
What were SelectQuote's Q2 FY2022 earnings results?
What is SelectQuote's revenue guidance for FY2022?
How did SelectQuote's Senior segment perform in Q2 FY2022?
What caused the net loss reported by SelectQuote in Q2 FY2022?