SelectQuote FY2024: Revenue Up, Net Loss Down, Profitability Rises

SelectQuote, Inc. Reports Fourth Quarter Fiscal Year 2024 Results

Financial Highlights of Q4 FY2024

SelectQuote, Inc. (NYSE: SLQT) reported its financial performance for the fourth quarter of fiscal year 2024. The company achieved a consolidated revenue of $307.2 million, an increase from $221.8 million in the same quarter last year. Despite a net loss of $31.0 million, this represents an improvement from the $47.8 million net loss in Q4 FY2023. Additionally, SelectQuote’s Adjusted EBITDA* reached $14.4 million, a significant recovery from the $(5.8) million in Q4 FY2023.

Fiscal Year 2024 Performance

For the fiscal year ending June 30, 2024, SelectQuote reported consolidated revenue of $1.3 billion, a 30% increase from $1.0 billion in FY2023. The net loss for FY2024 was $34.1 million, a notable improvement compared to a $58.5 million loss in FY2023. Adjusted EBITDA* reached $117.0 million, up from $74.3 million in the previous year.

Guidance for Fiscal Year 2025

Looking ahead, SelectQuote forecasts fiscal year 2025 revenue between $1.4 billion and $1.5 billion. The company expects a net loss ranging from $42 million to $6 million. Adjusted EBITDA* is expected to fall between $90 million and $120 million.

Segment Highlights of Q4 FY2024

Senior Segment Performance

The Senior segment reported $114.1 million in revenue for Q4 FY2024. This segment achieved an Adjusted EBITDA* of $27.9 million. Approved Medicare Advantage policies reached 107,272 during the quarter, showing solid performance in this core business line.

Healthcare Services Performance

The Healthcare Services segment generated $145.2 million in revenue with an Adjusted EBITDA* of $0.9 million. SelectRx, the company's specialized medication management pharmacy, served approximately 82,000 members, contributing significantly to this segment's revenue growth.

Life Insurance Segment Performance

The Life Insurance segment reported $42.1 million in revenue. This segment’s Adjusted EBITDA* reached $7.2 million for Q4 FY2024, showcasing a steady contribution to the company's overall performance.

Auto & Home Segment Performance

The Auto & Home segment generated $7.6 million in revenue, accompanied by an Adjusted EBITDA* of $2.5 million for Q4 FY2024. This segment remains a smaller contributor to the company's overall revenue.

CEO Commentary on FY2024 Results

SelectQuote CEO Tim Danker expressed satisfaction with the company's fiscal year results. He highlighted that both revenue and Adjusted EBITDA outperformed expectations, with revenue exceeding the midpoint of their forecast by 17% and Adjusted EBITDA by 26%. Danker emphasized the company’s focus on profitability and cash efficiency over volume growth. He also noted the strong performance of the Senior and Healthcare Services segments, contributing significantly to the company’s overall profitability.

Danker also mentioned that SelectQuote has signed a non-binding letter of intent to secure approximately $100 million through a commissions receivable securitization. This move will help optimize the company’s balance sheet, reduce funding costs, and extend debt maturities.

Outlook for SelectQuote

Focus on Healthcare Information Platform

SelectQuote continues to position its healthcare information platform as a key growth driver. The platform connects consumers with insurance providers based on individual healthcare needs, creating value for both parties. This unique approach enhances the company’s role in the healthcare sector.

Segment Results and Metrics

SelectQuote segments its business into Senior, Healthcare Services, Life, and Auto & Home. Each segment contributes to overall revenue and Adjusted EBITDA*. The company measures performance using various metrics such as revenue, Adjusted EBITDA, submitted policies, and approved policies.

Approved policies represent policies accepted by insurance carriers after submission. Not all approved policies result in in-force policies, but they are a key metric for revenue generation.

About SelectQuote

Founded in 1985, SelectQuote has established itself as a leading insurance distribution company. The company’s model allows consumers to compare policies from highly-rated insurers, ensuring they select the best option based on their needs. SelectQuote operates across four business lines: Senior, Healthcare Services, Life, and Auto & Home, with each focusing on providing high-quality services to their target markets.

SelectQuote Senior serves a growing Medicare population with a range of plans, while SelectQuote Healthcare Services manages SelectRx, a medication management pharmacy that improves patient outcomes. SelectQuote Life and SelectQuote Auto & Home offer tailored insurance solutions to protect families and assets.

Conclusion

SelectQuote’s fiscal year 2024 results demonstrate solid growth across its core business lines. The company’s focus on profitability, alongside its strategic initiatives, positions it well for future growth in the insurance and healthcare sectors.

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