SelectQuote, Inc. (NYSE: SLQT) reported consolidated revenue for the second quarter of fiscal year 2022 of $195.0 million compared to consolidated revenue for the second quarter of fiscal year 2021 of $357.6 million. Consolidated net loss for the second quarter of fiscal year 2022 was $137.0 million compared to consolidated net income for the second quarter of fiscal year 2021 of $89.9 million. Finally, consolidated Adjusted EBITDA* for the second quarter of fiscal year 2022 was $(163.3) million, compared to consolidated Adjusted EBITDA* for the second quarter of fiscal year 2021 of $128.8 million.
- Revenue of $195.0 million
- Net Loss of $137.0 million
- Adjusted EBITDA* of $(163.3) million
- Excluding the $(145) million cohort/tail adjustment, Revenue of $340 million*
- Excluding the $(145) million cohort/tail adjustment, Adjusted EBITDA* of $(18.3) million
- Updating Full-Year Fiscal 2022 Revenue, Net Loss and Adjusted EBITDA Guidance:
- Revenue expected in a range of $810 million to $850 million
- Net Loss expected in a range of $255 million to $236 million
- Adjusted EBITDA* expected in a range of $(260) million to $(235) million
Chief Executive Officer Tim Danker commented, “SelectQuote faced a series of unexpected challenges in our core Senior segment this Medicare Advantage season. Overall parity in Medicare Advantage plan features along with delayed hiring drove considerably lower close rates, which negatively impacted profitability. In addition, we recognized a $145 million downward cohort/tail adjustment based primarily on higher intra-year lapse rates and overall lower persistency from the January 2022 renewals. Based on that data, the potential risk discussed during our fourth quarter earnings call in August 2021 was accelerated.”
Mr. Danker continued, “SelectQuote is committed to our Senior distribution business and the large value opportunity it presents in tandem with our growing Population Health initiative. That said, the disappointing performance year-to-date will result in changes to our strategy, with a focus on driving efficiencies. We aim to reduce earnings volatility and downside risk through a reset of our growth and operating leverage philosophy. Moving forward, growth will be more focused on cash flow and predictability. We are confident in our ability to deliver value to shareholders despite a challenging year and look forward to proving our potential beyond fiscal 2022.”
- Revenue of $158.0 million
- Adjusted EBITDA* of $(148.6) million
- Approved Medicare Advantage policies grew 27% Year-Over-Year
- Excluding the $(145) million cohort/tail adjustment, Revenue of $303.0 million*
- Excluding the $(145) million cohort/tail adjustment, Adjusted EBITDA* of $(3.6) million
*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.
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
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.
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.