SelectQuote, Inc. Reports Second Quarter and Fiscal Year to Date 2021 Results

OVERLAND PARK, Kan.–(BUSINESS WIRE)–Feb 8, 2021– SelectQuote, Inc. (NYSE: SLQT), reported consolidated revenue for the second quarter of fiscal year 2021 of $358.3 million, which was a 103% increase over consolidated revenue for the second quarter of fiscal year 2020 of $176.3 million. Consolidated net income for the second quarter of fiscal year 2021 was $90.4 million, which was a $51.3 million increase over consolidated net income for the second quarter of fiscal year 2020 of $39.1 million. Finally, consolidated Adjusted EBITDA for the second quarter of fiscal year 2021 was $129.5 million, which was an 88% increase over consolidated Adjusted EBITDA for the second quarter of fiscal year 2020 of $69.0 million. Consolidated revenue for the six months ended December 31, 2020, was $482.4 million, a 100% increase over consolidated revenue for the six months ended December 31, 2019, of $241.5 million. Consolidated net income for the six months ended December 31, 2020, was $91.3 million, an increase of $53.9 million over consolidated net income for the six months ended December 31, 2019, of $37.4 million. Finally, consolidated Adjusted EBITDA for the six months ended December 31, 2020, was $141.6 million compared to consolidated Adjusted EBITDA of $69.8 million for the six months ended December 31, 2019, a 103% increase. Chief Executive Officer Tim Danker commented, “Our Second Quarter results again demonstrated our strong growth potential, exceeding our internal expectations. The quarter was led by a strong AEP, where our Medicare Advantage approved policies grew by 132% year-over-year. We continue to show our differentiated model delivers superior financial results driven by a 32% increase in average agent productivity despite adding 70% more agents. We continue to excel in a fast-growing industry, and we’re pleased that our results continue to validate our strategy.” Chief Financial Officer Raffaele Sadun added, “With Senior revenue growth of 127% year-over-year, this was the fourth consecutive quarter of Senior revenue growth in excess of 100%. This is especially impressive given all of our hiring, onboarding, training, and licensing was done virtually. We continue to deliver industry leading and stable LTVs, which demonstrates the soundness of our strategy. As a result of our strong results during AEP, we are raising our fiscal year 2021 guidance for the third time this year.” 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
December 31,
      Six Months Ended
December 31,
   
(in thousands) 2020   2019   % Change   2020   2019   % Change
Revenue $ 315,510     $ 138,875     127 %   $ 388,709     $ 166,458     134 %
Adjusted EBITDA* 134,555     68,110     98 %   143,457     66,170     117 %
Adjusted EBITDA Margin* 43 %   49 %       37 %   40 %    

Operating Metrics Submitted Policies Submitted policies are counted when an individual completes an application with our licensed agent and provides authorization to them to submit it to the insurance carrier partner. The applicant may have additional actions to take before the application will be reviewed by the insurance carrier, such as providing additional information. The following table shows the number of submitted policies for the periods presented:

  Three Months Ended
December 31,
      Six Months Ended
December 31,
   
  2020   2019   % Change   2020   2019   % Change
Medicare Advantage 246,548     108,223     128 %   294,539     129,074     128 %
Medicare Supplement 13,273     9,179     45 %   20,549     12,680     62 %
Dental, Vision and Hearing 43,020     23,946     80 %   63,062     33,871     86 %
Prescription Drug Plan 6,250     8,374     (25) %   8,675     9,901     (12) %
Other 3,939     1,021     286 %   5,822     1,690     244 %
Total 313,030     150,743     108 %   392,647     187,216     110 %

*See reconciliation from non-GAAP measure, Adjusted EBITDA, to net income on pages 11-13 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
December 31,
      Six Months Ended
December 31,
   
  2020   2019   % Change   2020   2019   % Change
Medicare Advantage 208,714     89,920     132 %   251,187     108,399     132 %
Medicare Supplement 10,451     6,412     63 %   16,776     9,038     86 %
Dental, Vision and Hearing 33,614     15,630     115 %   49,853     22,924     117 %
Prescription Drug Plan 4,815     7,379     (35) %   7,447     8,881     (16) %
Other 3,256     779     318 %   5,080     1,197     324 %
Total 260,850     120,120     117 %   330,343     150,439     120 %

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
December 31,
      Six Months Ended
December 31,
   
(dollars per policy): 2020   2019   % Change   2020   2019   % Change
Medicare Advantage $ 1,268     $ 1,268     %   $ 1,251     $ 1,250     %
Medicare Supplement 1,233     1,367     (10) %   1,248     1,340     (7) %
Dental, Vision and Hearing 138     140     (2) %   148     140     6 %
Prescription Drug Plan 232     226     3 %   235     232     1 %
Other 127     211     (40) %   130     106     23 %

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 as 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 represent 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 which is 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
December 31,
   
(dollars per approved policy): 2020   2019   % Change
Medicare Advantage and Medicare Supplement approved policies 394,032     170,043     132 %
Medicare Advantage and Medicare Supplement commission per MA / MS policy $ 1,276     $ 1,281     %
Other commission per MA/MS policy 39     57     (32) %
Other per MA / MS policy 168     141     19 %
Total revenue per MA / MS policy 1,483     1,479     %
Total operating expenses per MA / MS policy (916)     (837)     9 %
Adjusted EBITDA per MA / MS policy* $ 567     $ 642     (12) %
Adjusted EBITDA Margin per MA / MS policy* 38 %   43 %    
Revenue / CAC multiple 3.2X   4.1X    

Life Financial Results The following table provides the financial results for the Life segment for the periods presented:

  Three Months Ended
December 31,
      Six Months Ended
December 31,
   
(in thousands) 2020   2019   % Change   2020   2019   % Change
Revenue $ 36,375     $ 28,980     26 %   $ 79,198     $ 56,587     40 %
Adjusted EBITDA* 6,414     6,240     3 %   16,891     12,059     40 %
Adjusted EBITDA Margin* 18 %   22 %       21 %   21 %    

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. Core premiums include term life and permanent life insurance policies while ancillary premiums include various smaller products. 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 non-GAAP measure, Adjusted EBITDA, to net income on pages 11-13 The following table shows core, final expense, and ancillary premiums for the periods presented:

  Three Months Ended
December 31,
      Six Months Ended
December 31,
   
(in thousands) 2020   2019   % Change   2020   2019   % Change
Core Premiums $ 18,751     $ 19,469     (4) %   $ 37,317     $ 37,849     (1) %
Final Expense Premiums 11,263     3,424     229 %   30,713     7,339     318 %
Ancillary Premiums 505     750     (33) %   1,162     1,251     (7) %

Auto & Home Financial Results The following table provides the financial results for the Auto & Home segment for the periods presented:

  Three Months Ended
December 31,
      Six Months Ended
December 31,
   
(in thousands) 2020   2019   % Change   2020   2019   % Change
Revenue $ 7,241     $ 8,566     (15) %   $ 16,779     $ 18,619     (10) %
Adjusted EBITDA* 2,150     1,517     42 %   5,767     4,007     44 %
Adjusted EBITDA Margin* 30 %   18 %       34 %   22 %    

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
December 31,
      Six Months Ended
December 31,
   
(in thousands): 2020   2019   % Change   2020   2019   % Change
Premiums $ 13,255     $ 14,716     (10) %   $ 30,155     $ 32,002     (6) %
 

Update on Fiscal Year 2021 Guidance SelectQuote is raising the guidance originally provided for the full-year ending June 30, 2021. As a reminder, these expectations are forward-looking statements and actual results may be materially different and are affected by the risk factors and uncertainties identified in this press release and in our annual and quarterly filings with the Securities and Exchange Commission. SelectQuote is raising guidance for the full-year ending June 30, 2021 as follows:

  • Consolidated Revenue is expected to be in the range of $920 million to $940 million
  • Consolidated Net Income is expected to be in the range of $138 million to $146 million
  • Consolidated Adjusted EBITDA is expected to be in the range of $230 million to $240 million*

*See reconciliation from non-GAAP measure, Adjusted EBITDA, to net income on pages 11-13 Review of Financial Results SelectQuote, Inc. will host a conference call with the investment community today, Monday, February 8, 2021, beginning at 5 p.m. ET. To register for this conference call, please use this link: http://www.directeventreg.com/registration/event/6593229. 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 a day in advance or, at minimum, 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 or via this link. 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 before interest expense, income tax expense, 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. 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 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; 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 claims, including IP litigation; our existing and future indebtedness; developments with respect to LIBOR; access to additional capital; 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; and failure to market and sell Medicare plans effectively or in compliance with laws. 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”) filed by us with the Securities 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) provides solutions that help consumers protect their most valuable assets: their families, health and property. The company pioneered the direct-to-consumer 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, scores, and routes high-quality sales leads. The company has three core business lines: SelectQuote Senior, SelectQuote Life and SelectQuote Auto and Home. SelectQuote Senior, the largest and fastest-growing business, serves the needs of a demographic that sees 10,000 people turn 65 each day with a range of Medicare Advantage and Medicare Supplement plans from leading, nationally-recognized carriers, as well as prescription drug plans, dental, vision and hearing plans. SELECTQUOTE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands)

  December 31, 2020   June 30, 2020
       
ASSETS      
CURRENT ASSETS:      
Cash and cash equivalents $ 209,739     $ 321,065  
Restricted cash 36,168     47,805  
Accounts receivable 146,989     83,634  
Commissions receivable-current 76,265     51,209  
Other current assets 7,383     10,121  
Total current assets 476,544     513,834  
COMMISSIONS RECEIVABLE—Net 655,828     461,752  
PROPERTY AND EQUIPMENT—Net 24,512     22,150  
SOFTWARE—Net 10,085     8,399  
OPERATING LEASE RIGHT-OF-USE ASSETS 29,182      
INTANGIBLE ASSETS—NET 18,015     19,673  
GOODWILL 46,456     46,577  
OTHER ASSETS 1,427     1,408  
TOTAL ASSETS $ 1,262,049     $ 1,073,793  
       
LIABILITIES AND SHAREHOLDERS’ EQUITY      
CURRENT LIABILITIES:      
Accounts payable $ 32,420     $ 22,891  
Accrued expenses 15,535     14,936  
Accrued compensation and benefits 35,067     22,228  
Earnout liability 31,966     30,812  
Operating lease liabilities—current 5,093      
Other current liabilities 20,938     4,944  
Total current liabilities 141,019     95,811  
DEBT 313,336     311,814  
DEFERRED INCOME TAXES 131,121     105,844  
OPERATING LEASE LIABILITIES 36,958      
OTHER LIABILITIES 5,480     14,635  
Total liabilities 627,914     528,104  
       
COMMITMENTS AND CONTINGENCIES      
       
SHAREHOLDERS’ EQUITY:      
Common stock, $.01 par value 1,628     1,622  
Additional paid-in capital 545,441     548,113  
Retained earnings (accumulated deficit) 88,461     (2,792)  
Accumulated other comprehensive loss (1,395)     (1,254)  
Total shareholders’ equity 634,135     545,689  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,262,049     $ 1,073,793  

SELECTQUOTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(In thousands)

  Three Months Ended
December 31,
  Six Months Ended
December 31,
  2020   2019   2020   2019
REVENUE:              
Commission $ 320,974     $ 158,650     $ 427,519     $ 216,472  
Production bonus and other 37,300     17,647     54,924     24,992  
Total revenue 358,274     176,297     482,443     241,464  
               
OPERATING COSTS AND EXPENSES:              
Cost of revenue 84,121     50,484     135,166     83,121  
Marketing and advertising 132,206     50,871     182,006     76,972  
General and administrative 13,043     13,997     25,245     19,123  
Technical development 4,750     3,510     8,598     6,223  
Total operating costs and expenses 234,120     118,862     351,015     185,439  
               
INCOME FROM OPERATIONS 124,154     57,435     131,428     56,025  
               
INTEREST EXPENSE, NET (6,782)     (6,178)     (13,543)     (6,883)  
OTHER EXPENSES, NET (416)     (3)     (1,196)     (16)  
INCOME BEFORE INCOME TAX EXPENSE 116,956     51,254     116,689     49,126  
INCOME TAX EXPENSE 26,540     12,184     25,436     11,744  
               
NET INCOME $ 90,416     $ 39,070     $ 91,253     $ 37,382  
               
NET INCOME (LOSS) PER SHARE:              
Basic $ 0.56     $ (0.56)     $ 0.56     $ (0.62)  
Diluted $ 0.55     $ (0.56)     $ 0.55     $ (0.62)  
               
WEIGHTED-AVERAGE COMMON STOCK OUTSTANDING USED IN PER SHARE AMOUNTS:              
Basic 162,645     90,374     162,546     88,945  
Diluted 165,563     90,374     165,377     88,945  
               
OTHER COMPREHENSIVE GAIN (LOSS) NET OF TAX:              
Gain (loss) on cash flow hedge 116         (141)      
OTHER COMPREHENSIVE GAIN (LOSS) 116         (141)      
COMPREHENSIVE INCOME $ 90,532     $ 39,070     $ 91,112     $ 37,382  

SELECTQUOTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)

  Six Months Ended December 31,
  2020   2019
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net income $ 91,253     $ 37,382  
Adjustments to reconcile net income to net cash, cash equivalents, and restricted cash used in operating activities:      
Depreciation and amortization 6,937     3,168  
Loss (gain) on disposal of property, equipment, and software 162     (2)  
Share-based compensation expense 2,259     9,263  
Deferred income taxes 25,321     11,759  
Amortization of debt issuance costs and debt discount 1,644     592  
Fair value adjustments to contingent earnout obligations 1,153      
Non-cash lease expense 1,887      
Changes in operating assets and liabilities:      
Accounts receivable (63,355)     (13,050)  
Commissions receivable (219,132)     (110,792)  
Other assets 1,906     856  
Accounts payable and accrued expenses 15,692     4,985  
Operating lease liabilities (1,245)      
Other liabilities 32,371     5,237  
Net cash used in operating activities (103,147)     (50,602)  
CASH FLOWS FROM INVESTING ACTIVITIES:      
Purchases of property and equipment (5,768)     (5,499)  
Proceeds from sales of property and equipment     3  
Purchases of software and capitalized software development costs (3,449)     (2,434)  
Acquisition of business 121      
Net cash used in investing activities (9,096)     (7,930)  
CASH FLOWS FROM FINANCING ACTIVITIES:      
Proceeds from revolving line of credit     83,602  
Payments on revolving line of credit     (91,778)  
Net proceeds from Term Loan     416,500  
Proceeds from other debt     8,425  
Payments on other debt (108)     (1,440)  
Proceeds from common stock option exercises 391     4,819  
Cash dividends paid     (275,000)  
Payments of tax withholdings related to net share settlement of equity awards (5,320)      
Payments of debt issuance costs     (7,694)  
Payments of costs incurred in connection with private placement (1,771)      
Payments of costs incurred in connection with initial public offering (3,911)     (1,603)  
Net cash (used in) provided by financing activities (10,719)     135,831  
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH (122,962)     77,299  
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—Beginning of period 368,869     570  
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH—End of period $ 245,907     $ 77,869  

SELECTQUOTE, INC. AND SUBSIDIARIES
Adjusted EBITDA to Net Income Reconciliation
(Unaudited)

  Three Months Ended December 31, 2020
(in thousands) Senior   Life   Auto & Home   Corp & Elims   Consolidated
Revenue $ 315,510     $ 36,375     $ 7,241     $ (852)     $ 358,274  
Operating expenses (180,955)     (29,961)     (5,091)     (12,746)     (228,753)  
Other expenses, net             (21)     (21)  
Adjusted EBITDA 134,555     6,414     2,150     (13,619)     129,500  
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                 (26,540)  
Net income                 $ 90,416  
  Three Months Ended December 31, 2019
(in thousands) Senior   Life   Auto & Home   Corp & Elims   Consolidated
Revenue $ 138,875     $ 28,980     $ 8,566     $ (124)     $ 176,297  
Operating expenses (70,765)     (22,740)     (7,049)     (6,775)     (107,329)  
Other expenses, net             (3)     (3)  
Adjusted EBITDA 68,110     6,240     1,517     (6,902)     68,965  
Share-based compensation expense                 (9,241)  
Non-recurring expenses                 (564)  
Depreciation and amortization                 (1,728)  
Interest expense, net                 (6,178)  
Income tax expense                 (12,184)  
Net income                 $ 39,070  

SELECTQUOTE, INC. AND SUBSIDIARIES
Adjusted EBITDA to Net Income Reconciliation
(Unaudited)

  Six Months Ended December 31, 2020
(in thousands) Senior   Life   Auto & Home   Corp & Elims   Consolidated
Revenue $ 388,709     $ 79,198     $ 16,779     $ (2,243)     $ 482,443  
Operating expenses (245,252)     (62,307)     (11,012)     (22,264)     (340,835)  
Other expenses, net             (43)     (43)  
Adjusted EBITDA 143,457     16,891     5,767     (24,550)     141,565  
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                 (25,436)  
Net income                 $ 91,253  
  Six Months Ended December 31, 2019
(in thousands) Senior   Life   Auto & Home   Corp & Elims   Consolidated
Revenue $ 166,458     $ 56,587     $ 18,619     $ (200)     $ 241,464  
Operating expenses (100,288)     (44,528)     (14,612)     (12,188)     (171,616)  
Other expenses, net             (16)     (16)  
Adjusted EBITDA $ 66,170     $ 12,059     $ 4,007     $ (12,404)     69,832  
Share-based compensation expense                 (9,263)  
Non-recurring expenses                 (1,394)  
Depreciation and amortization                 (3,168)  
Gain on disposal of property, equipment, and software                 2  
Interest expense, net                 (6,883)  
Income tax expense                 (11,744)  
Net Income                 $ 37,382  

SELECTQUOTE, INC. AND SUBSIDIARIES
Adjusted EBITDA to Net Income Reconciliation
(Unaudited)
Guidance net income to Adjusted EBITDA reconciliation, year ending June 30, 2021:

(in thousands) Range
Net Income $ 138,000     $ 146,000  
Income tax expense 42,000     44,000  
Interest expense, net 28,000     28,000  
Depreciation and amortization 14,000     14,000  
Fair value adjustments to contingent earnout obligations 1,000     1,000  
Non-recurring expenses 2,000     2,000  
Share-based compensation expense 5,000     5,000  
Adjusted EBITDA $ 230,000     $ 240,000  

 
View source version on businesswire.com:https://www.businesswire.com/news/home/20210208005629/en/
CONTACT: Investor Relations:
Sloan Bohlen
877-678-4083
investorrelations@selectquote.comMedia:
Matt Gunter
913-286-4931
matt.gunter@selectquote.comKelly Hale
913-653-4375
kelly.hale@selectquote.com
KEYWORD: KANSAS UNITED STATES NORTH AMERICA
INDUSTRY KEYWORD: DATA MANAGEMENT PROFESSIONAL SERVICES TECHNOLOGY INSURANCE SOFTWARE
SOURCE: SelectQuote, Inc.
Copyright Business Wire 2021.
PUB: 02/08/2021 04:05 PM/DISC: 02/08/2021 04:06 PM
http://www.businesswire.com/news/home/20210208005629/en