SelectQuote, Inc. Reports Second Quarter of Fiscal Year 2023 Results
SelectQuote reported a strong second quarter for fiscal 2023 with consolidated revenue of $319.2 million, up from $194.2 million the previous year. The company posted a net income of $22.5 million, compared to a net loss of $137.6 million in Q2 2022. Adjusted EBITDA reached $63.6 million, a significant recovery from $(164.0 million) in the prior year. The Senior segment contributed $223.8 million in revenue, while Healthcare Services had $55.5 million despite a negative EBITDA of $(9.3 million). SelectQuote has updated its fiscal year guidance, expecting revenue between $910 million and $960 million with a net loss range of $94 million to $78 million.
- Revenue increased from $194.2 million in Q2 2022 to $319.2 million in Q2 2023.
- Net income improved significantly from a loss of $137.6 million to income of $22.5 million.
- Adjusted EBITDA rose to $63.6 million, recovering from $(164.0 million) the previous year.
- Segment revenue for Senior was $223.8 million with an Adjusted EBITDA of $83.6 million.
- Healthcare Services segment reported a revenue of $55.5 million but had an Adjusted EBITDA of $(9.3 million).
- Updated guidance includes a projected net loss between $94 million and $78 million.
Second Quarter of Fiscal Year 2023 – Consolidated Earnings Highlights
-
Revenue of
$319.2 million -
Net income of
$22.5 million -
Adjusted EBITDA* of
$63.6 million
Updating Fiscal Year 2023 Guidance Ranges:
-
Revenue now expected in a range of
$910 million $960 million -
Net loss now expected in a range of
$94 million $78 million -
Adjusted EBITDA* now expected in a range of
$5 million $25 million
Second Quarter of Fiscal Year 2023 – Segment Highlights
Senior
-
Revenue of
$223.8 million -
Adjusted EBITDA* of
$83.6 million - Approved Medicare Advantage policies of 218,837
Healthcare Services
-
Revenue of
$55.5 million -
Adjusted EBITDA* of
$(9.3) million - Over 39,000 SelectRx members
Life
-
Revenue of
$34.0 million -
Adjusted EBITDA* of
$5.8 million
Auto & Home
-
Revenue of
$7.8 million -
Adjusted EBITDA* of
$2.3 million
Chief Executive Officer
“SelectQuote is a stronger company compared to a year ago, and given the strong results to date in fiscal 2023, we raised the low end of the guided ranges introduced with our pre-announcement in January. From our original guidance given with the year-end call in August of last year, our Adjusted EBITDA range has now increased
Segment Results
We currently report on four segments: 1) Senior, 2) Healthcare Services, 3) Life, and 4) Auto & Home. The performance measures of the segments include total revenue and Adjusted EBITDA.* Costs of 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. Adjusted EBITDA is calculated as total revenue for the applicable segment less direct and allocated costs of revenue, cost of goods sold, marketing and advertising, technical development, and selling, 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; and non-recurring expenses such as severance payments and transaction costs. Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by revenue.
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) |
2022 |
|
2021 |
|
% Change |
|
2022 |
|
2021 |
|
% Change |
|||||||||||||||||
Revenue |
$ |
223,826 |
|
|
$ |
147,694 |
|
|
52 |
% |
|
$ |
301,340 |
|
|
$ |
248,299 |
|
|
21 |
% |
|||||||
Adjusted EBITDA* |
|
83,617 |
|
|
|
(140,220 |
) |
|
160 |
% |
|
|
79,766 |
|
|
|
(169,261 |
) |
|
147 |
% |
|||||||
Adjusted EBITDA Margin* |
|
37 |
% |
|
|
(95 |
) % |
|
|
|
|
26 |
% |
|
|
(68 |
) % |
|
|
|||||||||
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:
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
|||||||||||||
|
2022 |
|
|
2021 |
|
|
% Change |
|
|
2022 |
|
|
2021 |
|
|
% Change |
||||
Medicare Advantage |
251,847 |
|
340,317 |
|
(26 |
) % |
|
341,875 |
|
436,106 |
|
(22 |
) % |
|||||||
Medicare Supplement |
1,565 |
|
3,117 |
|
(50 |
) % |
|
2,230 |
|
4,929 |
|
(55 |
) % |
|||||||
Dental, Vision and Hearing |
22,004 |
|
53,432 |
|
(59 |
) % |
|
38,338 |
|
82,036 |
|
(53 |
) % |
|||||||
Prescription Drug Plan |
1,302 |
|
4,241 |
|
(69 |
) % |
|
1,666 |
|
5,114 |
|
(67 |
) % |
|||||||
Other |
1,512 |
|
2,967 |
|
(49 |
) % |
|
3,538 |
|
6,529 |
|
(46 |
) % |
|||||||
Total |
278,230 |
|
404,074 |
|
(31 |
) % |
|
387,647 |
|
534,714 |
|
(28 |
) % |
|||||||
*See “Non-GAAP Financial Measures” below.
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
|
|
|
|||||||||||||
|
2022 |
|
|
2021 |
|
|
% Change |
|
|
2022 |
|
|
2021 |
|
|
% Change |
||||
Medicare Advantage |
218,837 |
|
265,538 |
|
(18 |
) % |
|
302,010 |
|
349,654 |
|
(14 |
) % |
|||||||
Medicare Supplement |
1,127 |
|
2,097 |
|
(46 |
) % |
|
1,627 |
|
3,495 |
|
(53 |
) % |
|||||||
Dental, Vision and Hearing |
18,697 |
|
44,542 |
|
(58 |
) % |
|
30,972 |
|
66,765 |
|
(54 |
) % |
|||||||
Prescription Drug Plan |
883 |
|
3,352 |
|
(74 |
) % |
|
1,273 |
|
4,220 |
|
(70 |
) % |
|||||||
Other |
1,241 |
|
2,483 |
|
(50 |
) % |
|
2,903 |
|
5,363 |
|
(46 |
) % |
|||||||
Total |
240,785 |
|
318,012 |
|
(24 |
) % |
|
338,785 |
|
429,497 |
|
(21 |
) % |
|||||||
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): |
2022 |
|
2021 |
|
% Change |
|
2022 |
|
2021 |
|
% Change |
|||||||||||||
Medicare Advantage |
$ |
870 |
|
$ |
922 |
|
(6 |
) % |
|
$ |
845 |
|
$ |
936 |
|
(10 |
) % |
|||||||
Medicare Supplement |
|
994 |
|
|
1,347 |
|
(26 |
) % |
|
|
1,037 |
|
|
1,384 |
|
(25 |
) % |
|||||||
Dental, Vision and Hearing |
|
116 |
|
|
112 |
|
4 |
% |
|
|
97 |
|
|
125 |
|
(22 |
) % |
|||||||
Prescription Drug Plan |
|
212 |
|
|
218 |
|
(3 |
) % |
|
|
219 |
|
|
237 |
|
(8 |
) % |
|||||||
Other |
|
115 |
|
|
9 |
|
1178 |
% |
|
|
91 |
|
|
64 |
|
42 |
% |
|||||||
Healthcare Services
Financial Results
The following table provides the financial results for the Healthcare Services segment for the periods presented:
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
|||||||||||||||||||||
(in thousands) |
2022 |
|
2021 |
|
% Change |
|
2022 |
|
2021 |
|
% Change |
|||||||||||||||||
Revenue |
$ |
55,480 |
|
|
$ |
11,077 |
|
|
401 |
% |
|
$ |
98,546 |
|
|
$ |
17,060 |
|
|
478 |
% |
|||||||
Adjusted EBITDA* |
|
(9,301 |
) |
|
|
(8,415 |
) |
|
(11 |
) % |
|
|
(21,089 |
) |
|
|
(12,345 |
) |
|
(71 |
) % |
|||||||
Adjusted EBITDA Margin* |
|
(17 |
) % |
|
|
(76 |
) % |
|
|
|
|
(21 |
) % |
|
|
(72 |
) % |
|
|
|||||||||
*See “Non-GAAP Financial Measures” below.
Operating Metrics
Members
The total number of SelectRx members represents the amount of active customers to which an order has been shipped, as this is the primary key driver of revenue for Healthcare Services.
The following table shows the total number of SelectRx members as of the periods presented:
|
|
|
|
|
||
Total SelectRx Members |
|
39,308 |
|
7,700 |
||
Combined Senior and Healthcare Services - Consumer Per Unit Economics
The opportunity to leverage our existing database and distribution model to improve access to healthcare services for our consumers has created a need for us to review our key metrics related to our per unit economics. As we think about the revenue and expenses for Healthcare Services, we note that they are derived from the marketing acquisition costs associated with the sale of an MA or MS policy, some of which costs are allocated directly to Healthcare Services, and therefore determined that our per unit economics measure should include components from both Senior and Healthcare Services. See details of revenue and expense items included in the calculation below.
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
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.
|
Twelve Months Ended |
||||||||
(dollars per approved policy): |
2022 |
|
2021 |
||||||
Medicare Advantage and Medicare Supplement approved policies |
|
617,687 |
|
|
|
574,682 |
|
||
Medicare Advantage and Medicare Supplement commission per MA/MS policy |
$ |
880 |
|
|
$ |
1,067 |
|
||
Other commission per MA/MS policy |
|
19 |
|
|
|
33 |
|
||
Pharmacy revenue per MA/MS policy |
|
225 |
|
|
|
26 |
|
||
Other revenue per MA/MS policy |
|
62 |
|
|
|
(73 |
) |
||
Total revenue per MA/MS policy |
|
1,186 |
|
|
|
1,053 |
|
||
Total operating expenses per MA/MS policy |
|
(1,111 |
) |
|
|
(1,195 |
) |
||
Adjusted EBITDA per MA/MS policy (1) |
$ |
75 |
|
|
$ |
(142 |
) |
||
Adjusted EBITDA Margin per MA/MS policy (1) |
|
6 |
% |
|
|
(13 |
) % |
||
Revenue/CAC multiple |
3.0X |
|
1.8X |
||||||
(1) These financial measures are not calculated in accordance with GAAP. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for information regarding our use of these non-GAAP financial measures and a reconciliation of such measures to their nearest comparable financial measures calculated and presented in accordance with GAAP.
Total revenue per MA/MS policy increased
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) |
2022 |
|
2021 |
|
% Change |
|
2022 |
|
2021 |
|
% Change |
|||||||||||||||||
Revenue |
$ |
33,995 |
|
|
$ |
32,036 |
|
|
6 |
% |
|
$ |
70,830 |
|
|
$ |
78,019 |
|
|
(9 |
) % |
|||||||
Adjusted EBITDA* |
|
5,843 |
|
|
|
1,106 |
|
|
428 |
% |
|
|
11,068 |
|
|
|
1,961 |
|
|
464 |
% |
|||||||
Adjusted EBITDA Margin* |
|
17 |
% |
|
|
3 |
% |
|
|
|
|
16 |
% |
|
|
3 |
% |
|
|
|||||||||
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 “Non-GAAP Financial Measures” below.
The following table shows term and final expense premiums for the periods presented:
|
Three Months Ended
|
|
|
|
Six Months Ended
|
|
|
|||||||||||||||||
(in thousands) |
2022 |
|
|
2021 |
|
|
% Change |
|
|
2022 |
|
|
2021 |
|
|
% Change |
||||||||
Term Premiums |
$ |
15,824 |
|
$ |
15,548 |
|
2 |
% |
|
$ |
30,922 |
|
$ |
31,057 |
|
— |
% |
|||||||
Final Expense Premiums |
|
17,093 |
|
|
21,134 |
|
(19 |
) % |
|
|
39,457 |
|
|
55,186 |
|
(29 |
) % |
|||||||
Total |
$ |
32,917 |
|
$ |
36,682 |
|
(10 |
) % |
|
|
70,379 |
|
|
86,243 |
|
(18 |
) % |
|||||||
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) |
2022 |
|
|
2021 |
|
|
% Change |
|
|
2022 |
|
|
2021 |
|
|
% Change |
||||||||||||
Revenue |
$ |
7,808 |
|
|
$ |
6,135 |
|
|
27 |
% |
|
$ |
14,890 |
|
|
$ |
13,604 |
|
|
9 |
% |
|||||||
Adjusted EBITDA* |
|
2,284 |
|
|
|
1,435 |
|
|
59 |
% |
|
|
4,725 |
|
|
|
2,808 |
|
|
68 |
% |
|||||||
Adjusted EBITDA Margin* |
|
29 |
% |
|
|
23 |
% |
|
|
|
|
32 |
% |
|
|
21 |
% |
|
|
|||||||||
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): |
2022 |
|
|
2021 |
|
|
% Change |
|
|
2022 |
|
|
2021 |
|
|
% Change |
||||||||
Premiums |
$ |
12,080 |
|
$ |
10,585 |
|
14 |
% |
|
$ |
23,628 |
|
$ |
23,843 |
|
(1 |
) % |
|||||||
*See “Non-GAAP Financial Measures” below.
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 net 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 define Adjusted EBITDA Margin as Adjusted EBITDA divided by revenue. The most directly comparable GAAP measure is net income margin. We monitor and have presented in this release Adjusted EBITDA and Adjusted EBITDA Margin because they are key measures 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 these non-GAAP financial measures help identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude in the calculations of these non-GAAP financial measures. Accordingly, we believe that these financial measures provide useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects.
Reconciliations of net income (loss) to Adjusted EBITDA are presented below beginning on page 12.
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: the ultimate duration and impact of the ongoing COVID-19 pandemic and any other public health events, 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, including 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,
With an ecosystem offering high touchpoints for consumers across Insurance, Medicare, Pharmacy, and Value-Based Care, the company now has four core business lines:
|
||||||||
|
|
|
|
|||||
ASSETS |
|
|
|
|||||
CURRENT ASSETS: |
|
|
|
|||||
Cash and cash equivalents |
$ |
36,097 |
|
|
$ |
140,997 |
|
|
Accounts receivable, net of allowances of |
|
134,912 |
|
|
|
129,748 |
|
|
Commissions receivable-current |
|
219,990 |
|
|
|
116,277 |
|
|
Other current assets |
|
13,384 |
|
|
|
15,751 |
|
|
Total current assets |
|
404,383 |
|
|
|
402,773 |
|
|
COMMISSIONS RECEIVABLE—Net |
|
733,337 |
|
|
|
722,349 |
|
|
PROPERTY AND EQUIPMENT—Net |
|
34,786 |
|
|
|
41,804 |
|
|
SOFTWARE—Net |
|
16,099 |
|
|
|
16,301 |
|
|
OPERATING LEASE RIGHT-OF-USE ASSETS |
|
27,285 |
|
|
|
28,016 |
|
|
INTANGIBLE ASSETS—Net |
|
28,411 |
|
|
|
31,255 |
|
|
|
|
29,136 |
|
|
|
29,136 |
|
|
OTHER ASSETS |
|
24,476 |
|
|
|
18,418 |
|
|
TOTAL ASSETS |
$ |
1,297,913 |
|
|
$ |
1,290,052 |
|
|
|
|
|
|
|||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|||||
CURRENT LIABILITIES: |
|
|
|
|||||
Accounts payable |
$ |
27,356 |
|
|
$ |
24,766 |
|
|
Accrued expenses |
|
21,859 |
|
|
|
26,002 |
|
|
Accrued compensation and benefits |
|
46,065 |
|
|
|
42,150 |
|
|
Operating lease liabilities—current |
|
6,349 |
|
|
|
5,261 |
|
|
Current portion of long-term debt |
|
21,400 |
|
|
|
7,169 |
|
|
Contract liabilities |
|
38,752 |
|
|
|
3,404 |
|
|
Other current liabilities |
|
2,374 |
|
|
|
4,761 |
|
|
Total current liabilities |
|
164,155 |
|
|
|
113,513 |
|
|
LONG-TERM DEBT, NET—less current portion |
|
670,119 |
|
|
|
698,423 |
|
|
DEFERRED INCOME TAXES |
|
46,896 |
|
|
|
50,080 |
|
|
OPERATING LEASE LIABILITIES |
|
31,749 |
|
|
|
33,946 |
|
|
OTHER LIABILITIES |
|
3,229 |
|
|
|
2,985 |
|
|
Total liabilities |
|
916,148 |
|
|
|
898,947 |
|
|
|
|
|
|
|||||
COMMITMENTS AND CONTINGENCIES |
|
|
|
|||||
|
|
|
|
|||||
SHAREHOLDERS’ EQUITY: |
|
|
|
|||||
Common stock, |
|
1,665 |
|
|
|
1,644 |
|
|
Additional paid-in capital |
|
561,435 |
|
|
|
554,845 |
|
|
Accumulated deficit |
|
(197,070 |
) |
|
|
(177,100 |
) |
|
Accumulated other comprehensive income |
|
15,735 |
|
|
|
11,716 |
|
|
Total shareholders’ equity |
|
381,765 |
|
|
|
391,105 |
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
$ |
1,297,913 |
|
|
$ |
1,290,052 |
|
|
|
||||||||||||||||
|
Three Months Ended
|
|
Six Months Ended
|
|||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||||||
REVENUE: |
|
|
|
|
|
|
|
|||||||||
Commission |
$ |
230,033 |
|
|
$ |
139,957 |
|
|
$ |
336,368 |
|
|
$ |
270,764 |
|
|
Pharmacy |
|
51,601 |
|
|
|
8,770 |
|
|
|
92,694 |
|
|
|
13,237 |
|
|
Other |
|
37,554 |
|
|
|
45,510 |
|
|
|
52,610 |
|
|
|
66,315 |
|
|
Total revenue |
|
319,188 |
|
|
|
194,237 |
|
|
|
481,672 |
|
|
|
350,316 |
|
|
|
|
|
|
|
|
|
|
|||||||||
OPERATING COSTS AND EXPENSES: |
|
|
|
|
|
|
|
|||||||||
Cost of revenue |
|
91,477 |
|
|
|
136,189 |
|
|
|
156,641 |
|
|
|
222,980 |
|
|
Cost of goods sold—pharmacy revenue |
|
50,096 |
|
|
|
10,172 |
|
|
|
92,450 |
|
|
|
15,043 |
|
|
Marketing and advertising |
|
89,925 |
|
|
|
193,246 |
|
|
|
147,519 |
|
|
|
283,923 |
|
|
Selling, general, and administrative |
|
28,412 |
|
|
|
21,894 |
|
|
|
59,118 |
|
|
|
45,789 |
|
|
Technical development |
|
6,245 |
|
|
|
6,386 |
|
|
|
12,427 |
|
|
|
12,239 |
|
|
Total operating costs and expenses |
|
266,155 |
|
|
|
367,887 |
|
|
|
468,155 |
|
|
|
579,974 |
|
|
|
|
|
|
|
|
|
|
|||||||||
INCOME (LOSS) FROM OPERATIONS |
|
53,033 |
|
|
|
(173,650 |
) |
|
|
13,517 |
|
|
|
(229,658 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
INTEREST EXPENSE, NET |
|
(21,044 |
) |
|
|
(10,587 |
) |
|
|
(37,780 |
) |
|
|
(19,122 |
) |
|
OTHER INCOME (EXPENSE), NET |
|
(70 |
) |
|
|
(51 |
) |
|
|
88 |
|
|
|
(153 |
) |
|
INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT) |
|
31,919 |
|
|
|
(184,288 |
) |
|
|
(24,175 |
) |
|
|
(248,933 |
) |
|
INCOME TAX EXPENSE (BENEFIT) |
|
9,405 |
|
|
|
(46,725 |
) |
|
|
(4,205 |
) |
|
|
(63,138 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
NET INCOME (LOSS) |
$ |
22,514 |
|
|
$ |
(137,563 |
) |
|
$ |
(19,970 |
) |
|
$ |
(185,795 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
NET INCOME (LOSS) PER SHARE: |
|
|
|
|
|
|
|
|||||||||
Basic |
$ |
0.14 |
|
|
$ |
(0.84 |
) |
|
$ |
(0.12 |
) |
|
$ |
(1.13 |
) |
|
Diluted |
$ |
0.14 |
|
|
$ |
(0.84 |
) |
|
$ |
(0.12 |
) |
|
$ |
(1.13 |
) |
|
|
|
|
|
|
|
|
|
|||||||||
WEIGHTED-AVERAGE COMMON STOCK OUTSTANDING USED IN PER SHARE AMOUNTS: |
|
|
|
|
|
|
|
|||||||||
Basic |
|
166,486 |
|
|
|
163,966 |
|
|
|
165,655 |
|
|
|
163,829 |
|
|
Diluted |
|
166,548 |
|
|
|
163,966 |
|
|
|
165,655 |
|
|
|
163,829 |
|
|
|
|
|
|
|
|
|
|
|||||||||
OTHER COMPREHENSIVE INCOME (LOSS) NET OF TAX: |
|
|
|
|
|
|
|
|||||||||
Gain (loss) on cash flow hedge |
|
(381 |
) |
|
|
1,775 |
|
|
|
4,019 |
|
|
|
1,769 |
|
|
OTHER COMPREHENSIVE INCOME (LOSS) |
|
(381 |
) |
|
|
1,775 |
|
|
|
4,019 |
|
|
|
1,769 |
|
|
COMPREHENSIVE INCOME (LOSS) |
$ |
22,133 |
|
|
$ |
(135,788 |
) |
|
$ |
(15,951 |
) |
|
$ |
(184,026 |
) |
|
|
||||||||
|
Six Months Ended |
|||||||
|
2022 |
|
2021 |
|||||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|||||
Net loss |
$ |
(19,970 |
) |
|
$ |
(185,795 |
) |
|
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities: |
|
|
|
|||||
Depreciation and amortization |
|
13,990 |
|
|
|
11,278 |
|
|
Loss on disposal of property, equipment, and software |
|
376 |
|
|
|
355 |
|
|
Share-based compensation expense |
|
5,566 |
|
|
|
4,109 |
|
|
Deferred income taxes |
|
(4,572 |
) |
|
|
(63,498 |
) |
|
Amortization of debt issuance costs and debt discount |
|
3,919 |
|
|
|
2,974 |
|
|
Write-off of debt issuance costs |
|
710 |
|
|
|
— |
|
|
Accrued interest payable in kind |
|
4,920 |
|
|
|
— |
|
|
Non-cash lease expense |
|
2,082 |
|
|
|
2,040 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|||||
Accounts receivable, net |
|
14,036 |
|
|
|
(41,237 |
) |
|
Commissions receivable |
|
(114,701 |
) |
|
|
(39,908 |
) |
|
Other assets |
|
1,578 |
|
|
|
(5,555 |
) |
|
Accounts payable and accrued expenses |
|
950 |
|
|
|
15,135 |
|
|
Operating lease liabilities |
|
(2,460 |
) |
|
|
(2,676 |
) |
|
Other liabilities |
|
18,002 |
|
|
|
(2,963 |
) |
|
Net cash used in operating activities |
|
(75,574 |
) |
|
|
(305,741 |
) |
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|||||
Purchases of property and equipment |
|
(598 |
) |
|
|
(17,904 |
) |
|
Purchases of software and capitalized software development costs |
|
(3,870 |
) |
|
|
(5,231 |
) |
|
Acquisition of business |
|
— |
|
|
|
(6,927 |
) |
|
Investment in equity securities |
|
— |
|
|
|
(1,000 |
) |
|
Net cash used in investing activities |
|
(4,468 |
) |
|
|
(31,062 |
) |
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|||||
Proceeds from Revolving Credit Facility |
|
— |
|
|
|
50,000 |
|
|
Payments on Revolving Credit Facility |
|
— |
|
|
|
(50,000 |
) |
|
Proceeds from Term Loans |
|
— |
|
|
|
242,000 |
|
|
Payments on Term Loans |
|
(13,375 |
) |
|
|
— |
|
|
Payments on other debt |
|
(83 |
) |
|
|
(93 |
) |
|
Proceeds from common stock options exercised and employee stock purchase plan |
|
1,078 |
|
|
|
2,271 |
|
|
Payments of tax withholdings related to net share settlement of equity awards |
|
(33 |
) |
|
|
(144 |
) |
|
Payments of debt issuance costs |
|
(10,110 |
) |
|
|
(328 |
) |
|
Payment of acquisition holdback |
|
(2,335 |
) |
|
|
— |
|
|
Net cash (used in) provided by financing activities |
|
(24,858 |
) |
|
|
243,706 |
|
|
|
|
(104,900 |
) |
|
|
(93,097 |
) |
|
CASH AND CASH EQUIVALENTS—Beginning of period |
|
140,997 |
|
|
|
286,454 |
|
|
CASH AND CASH EQUIVALENTS—End of period |
$ |
36,097 |
|
|
$ |
193,357 |
|
|
|
||||||||||||||||||||||||
|
Three Months Ended |
|||||||||||||||||||||||
(in thousands) |
Senior |
|
Healthcare
|
|
Life |
|
Auto &
|
|
Corp &
|
|
Consolidated |
|||||||||||||
Revenue |
$ |
223,826 |
|
|
$ |
55,480 |
|
|
$ |
33,995 |
|
|
$ |
7,808 |
|
|
$ |
(1,921 |
) |
|
$ |
319,188 |
|
|
Operating expenses |
|
(140,209 |
) |
|
|
(64,781 |
) |
|
|
(28,152 |
) |
|
|
(5,524 |
) |
|
|
(16,877 |
) |
|
|
(255,543 |
) |
|
Other income (expense), net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(70 |
) |
|
|
(70 |
) |
|
Adjusted EBITDA |
|
83,617 |
|
|
|
(9,301 |
) |
|
|
5,843 |
|
|
|
2,284 |
|
|
|
(18,868 |
) |
|
|
63,575 |
|
|
Share-based compensation expense |
|
|
|
|
|
|
|
|
|
|
|
(2,936 |
) |
|||||||||||
Transaction costs |
|
|
|
|
|
|
|
|
|
|
|
(442 |
) |
|||||||||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
(7,188 |
) |
|||||||||||
Loss on disposal of property, equipment, and software |
|
|
|
|
|
|
|
|
|
|
|
(46 |
) |
|||||||||||
Interest expense, net |
|
|
|
|
|
|
|
|
|
|
|
(21,044 |
) |
|||||||||||
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
(9,405 |
) |
|||||||||||
Net income |
|
|
|
|
|
|
|
|
|
|
$ |
22,514 |
|
|||||||||||
|
Three Months Ended |
|||||||||||||||||||||||
(in thousands) |
Senior |
|
Healthcare
|
|
Life |
|
Auto &
|
|
Corp &
|
|
Consolidated |
|||||||||||||
Revenue |
$ |
147,694 |
|
|
$ |
11,077 |
|
|
$ |
32,036 |
|
|
$ |
6,135 |
|
|
$ |
(2,705 |
) |
|
$ |
194,237 |
|
|
Operating expenses |
|
(287,914 |
) |
|
|
(19,492 |
) |
|
|
(30,930 |
) |
|
|
(4,700 |
) |
|
|
(15,175 |
) |
|
|
(358,211 |
) |
|
Other expenses, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(51 |
) |
|
|
(51 |
) |
|
Adjusted EBITDA |
|
(140,220 |
) |
|
|
(8,415 |
) |
|
|
1,106 |
|
|
|
1,435 |
|
|
|
(17,931 |
) |
|
|
(164,025 |
) |
|
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 |
|
|
|
|
|
|
|
|
|
|
|
46,725 |
|
|||||||||||
Net loss |
|
|
|
|
|
|
|
|
|
|
$ |
(137,563 |
) |
|||||||||||
|
Six Months Ended |
|||||||||||||||||||||||
(in thousands) |
Senior |
|
Healthcare
|
|
Life |
|
Auto &
|
|
Corp &
|
|
Consolidated |
|||||||||||||
Revenue |
$ |
301,340 |
|
|
$ |
98,546 |
|
|
$ |
70,830 |
|
|
$ |
14,890 |
|
|
$ |
(3,934 |
) |
|
$ |
481,672 |
|
|
Operating expenses |
|
(221,574 |
) |
|
|
(119,635 |
) |
|
|
(59,963 |
) |
|
|
(10,164 |
) |
|
|
(34,322 |
) |
|
|
(445,658 |
) |
|
Other income (expense), net |
|
— |
|
|
|
— |
|
|
|
201 |
|
|
|
(1 |
) |
|
|
(112 |
) |
|
|
88 |
|
|
Adjusted EBITDA |
|
79,766 |
|
|
|
(21,089 |
) |
|
|
11,068 |
|
|
|
4,725 |
|
|
|
(38,368 |
) |
|
|
36,102 |
|
|
Share-based compensation expense |
|
|
|
|
|
|
|
|
|
|
|
(5,566 |
) |
|||||||||||
Transaction costs |
|
|
|
|
|
|
|
|
|
|
|
(2,570 |
) |
|||||||||||
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
(13,990 |
) |
|||||||||||
Loss on disposal of property, equipment, and software |
|
|
|
|
|
|
|
|
|
|
|
(371 |
) |
|||||||||||
Interest expense, net |
|
|
|
|
|
|
|
|
|
|
|
(37,780 |
) |
|||||||||||
Income tax benefit |
|
|
|
|
|
|
|
|
|
|
|
4,205 |
|
|||||||||||
Net loss |
|
|
|
|
|
|
|
|
|
|
$ |
(19,970 |
) |
|||||||||||
|
Six Months Ended |
|||||||||||||||||||||||
(in thousands) |
Senior |
|
Healthcare
|
|
Life |
|
Auto &
|
|
Corp &
|
|
Consolidated |
|||||||||||||
Revenue |
$ |
248,299 |
|
|
$ |
17,060 |
|
|
$ |
78,019 |
|
|
$ |
13,604 |
|
|
$ |
(6,666 |
) |
|
$ |
350,316 |
|
|
Operating expenses |
|
(417,560 |
) |
|
|
(29,405 |
) |
|
|
(76,058 |
) |
|
|
(10,796 |
) |
|
|
(28,258 |
) |
|
|
(562,077 |
) |
|
Other expenses, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(153 |
) |
|
|
(153 |
) |
|
Adjusted EBITDA |
|
(169,261 |
) |
|
|
(12,345 |
) |
|
|
1,961 |
|
|
|
2,808 |
|
|
|
(35,077 |
) |
|
|
(211,914 |
) |
|
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 |
|
|
|
|
|
|
|
|
|
|
|
63,138 |
|
|||||||||||
Net loss |
|
|
|
|
|
|
|
|
|
|
$ |
(185,795 |
) |
|||||||||||
|
|||||||||||
Guidance net loss to Adjusted EBITDA reconciliation, year ending |
|||||||||||
(in thousands) |
Range |
||||||||||
Net loss |
$ |
(94,000 |
) |
|
$ |
(78,000 |
) |
||||
Income tax benefit |
|
(27,000 |
) |
|
|
(25,000 |
) |
||||
Interest expense, net |
|
74,000 |
|
|
|
74,000 |
|
||||
Depreciation and amortization |
|
24,000 |
|
|
|
24,000 |
|
||||
Share-based compensation expense |
|
12,000 |
|
|
|
12,000 |
|
||||
Transaction costs |
|
16,000 |
|
|
|
18,000 |
|
||||
Adjusted EBITDA |
$ |
5,000 |
|
|
$ |
25,000 |
|
||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20230207005336/en/
Investor Relations:
877-678-4083
investorrelations@selectquote.com
Media:
913-286-4931
matt.gunter@selectquote.com
Source:
FAQ
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