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SelectQuote, Inc. (SLQT)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 FY2025 revenue was $408.2M, diluted EPS $0.03, and Adjusted EBITDA $37.7M; consolidated EBITDA margin ~9% as mix shifted toward lower-margin Healthcare Services .
  • Versus consensus, revenue slightly missed (Actual: $408.2M vs $412.8M*) while EPS beat (Actual: $0.03 vs $0.023*)—Adjusted EBITDA strong but comparability to “EBITDA” consensus is limited given non-GAAP adjustments [*].
  • FY25 guidance maintained for revenue and Adjusted EBITDA, with net income range revised to $(1)M–$28M to reflect warrant fair value changes; management expects finishing toward the lower half due to SEP eligibility changes and near-term SelectRx facility ramp costs .
  • Segment trends: Senior delivered resilient profitability (27% Adj. EBITDA margin) despite a 26% smaller agent force; Healthcare Services scaled to ~106k SelectRx members (+41% YoY), with a strategic pivot to margin/cash flow over rapid member growth near term .
  • DOJ complaint created headline risk; company “firmly rejects” allegations and emphasizes compliance culture—investors should monitor legal developments as a potential stock narrative driver .

What Went Well and What Went Wrong

What Went Well

  • Strong execution in Senior despite a 26% smaller agent force; adjusted EBITDA margin 27% and year-to-date Senior margin 30% vs 26% last year .
  • Healthcare Services revenue up 53% YoY in Q3, SelectRx members reached 105,523 (+41% YoY); revenue-to-CAC multiple improved to 5.8x (TTM) vs 4.2x a year ago .
  • Quote: “Our agent-led model… made our platform more valuable than ever… highlighted by a 15% increase in year-over-year policy close rates” — CEO Tim Danker .

What Went Wrong

  • Senior segment revenue declined 17% YoY due to smaller hiring class and industry volatility; Senior Adj. EBITDA down 26% YoY .
  • Medicare Advantage LTV decreased 8% YoY to $915 as commission structures reverted from upfront to ratable; management expects LTV down YoY in Q4 .
  • Near-term profitability headwind from ramping the new Kansas SelectRx facility (low-single-digit millions per quarter), with Q4 EBITDA likely stepping back; management anticipates finishing FY25 in lower half of ranges .

Financial Results

Consolidated Results vs Prior Quarters

MetricQ1 FY2025Q2 FY2025Q3 FY2025
Revenue ($USD)$292.263M $481.069M $408.160M
Net Income ($USD)$(44.546)M $53.236M $26.022M
Diluted EPS ($USD)$(0.26) $0.30 $0.03
Adjusted EBITDA ($USD)$(1.683)M $87.519M $37.723M
Consolidated EBITDA Margin %N/AN/A~9%

Segment Breakdown

SegmentMetricQ1 FY2025Q2 FY2025Q3 FY2025
SeniorRevenue ($USD)$92.908M $255.578M $169.442M
SeniorAdjusted EBITDA ($USD)$7.724M $100.521M $45.701M
SeniorAdj. EBITDA Margin %8% 39% 27%
Healthcare ServicesRevenue ($USD)$155.739M $183.370M $189.569M
Healthcare ServicesAdjusted EBITDA ($USD)$4.878M $2.212M $6.445M
Healthcare ServicesAdj. EBITDA Margin %3% 1% 3%
LifeRevenue ($USD)$39.290M $39.861M $45.842M
LifeAdjusted EBITDA ($USD)$5.960M $7.423M $6.364M
LifeAdj. EBITDA Margin %15% 19% 14%

Key KPIs

KPIQ1 FY2025Q2 FY2025Q3 FY2025
MA Approved Policies (#)91,680 247,849 168,001
MA LTV ($ per approved policy)$812 $907 $915
SelectRx Members (#)86,521 96,695 105,523
Prescriptions Per Day (avg)24,998 26,846 29,015
Revenue/CAC Multiple (TTM)4.6x 5.3x 5.8x

Actuals vs S&P Global Consensus

MetricQ1 FY2025Q2 FY2025Q3 FY2025
Revenue – Actual ($USD)$292.263M $481.069M $408.160M
Revenue – Consensus ($USD)$275.801M*$446.995M*$412.833M*
Diluted EPS – Actual ($USD)$(0.26) $0.30 $0.03
Primary EPS – Consensus ($USD)$(0.1967)*$0.0967*$0.0233*
EBITDA – Actual ($USD)$(8.378)M*$74.000M*$24.984M*
EBITDA – Consensus ($USD)$(11.604)M*$54.638M*$35.966M*

Values retrieved from S&P Global*.

Note: “EBITDA” consensus refers to SPGI’s EBITDA metric; company reports Adjusted EBITDA (non-GAAP), limiting direct comparability .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD)FY2025$1.425B–$1.525B (Q1) → $1.500B–$1.575B (Q2) $1.500B–$1.575B (Q3) Raised in Q2; Maintained in Q3
Adjusted EBITDA ($USD)FY2025$100M–$130M (Q1) $115M–$140M (Q2) $115M–$140M (Q3)
Net Income (Loss) ($USD)FY2025$(59)M–$3M (Q1) $(24)M–$11M (Q2) $(1)M–$28M (Q3)
CommentaryFY2025Initial securitization; expecting AEP execution Strategic investment of $350M to strengthen liquidity Expect lower-half finish due to SEP eligibility changes and facility ramp

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Medicare Advantage environmentAEP “historically disruptive,” Senior margin +750bps YoY; strong policy volume (Q2) OEP execution strong; 27% Senior margin; agent force -26%; efficiency gains; LTV down YoY as commissions revert to ratable Operational resilience; some monetization headwinds (LTV)
SelectRx scale and economicsMembers 86k (Q1) → 96.7k (Q2); CAC multiple improved to 5.3x (TTM) Members ~106k; pivot to margin/cash flow focus; slower growth near term; Kansas facility ramp (near-term EBITDA drag) Shift from growth to margin/cash discipline
Capital structureInitial receivable securitization (Q1) ; $350M strategic investment (Q2) Exploring further optimization; Jefferies engaged; securitization a potential path Improving flexibility; optionality increases
CMS Final Rate NoticeN/ABetter-than-anticipated final rates help carriers; less disruptive market backdrop for next AEP Constructive macro tailwind for MA
Regulatory/legal (DOJ)N/ACompany “firmly rejects” allegations; highlights compliance culture; active legal matter Headline/legal risk persists

Management Commentary

  • “SelectQuote’s agent-led model paired with our technology-enabled information advantage made our platform more valuable than ever… highlighted by a 15% increase in year-over-year policy close rates.” — CEO Tim Danker .
  • “Our consolidated EBITDA of $38 million… maintain healthy overall margins despite a large shift in our mix… We believe there remains significant EBITDA opportunity in both our Senior and Healthcare Services segments.” — CEO Tim Danker .
  • “We plan to increase the mix of members that benefit most from SelectRx… primary goal will be to increase efficiency and build a more consistent margin profile… near-term headwind to profitability.” — CEO Tim Danker .
  • “We maintain our full year ranges for revenue and adjusted EBITDA… expect to finish… in or towards the lower half… due to SEP changes and Kansas facility ramp.” — CFO Ryan Clement .

Q&A Highlights

  • Senior vs SelectRx synergy: Tenured agents improved attachment rates to Healthcare Services; SelectRx growth lags Senior due to timing/seasonality .
  • Agent hiring: Hiring underway for next season, enabled by improved capital; details to come with FY26 guide .
  • Receivable securitization: Jefferies engaged; securitization remains one path among several to optimize capital structure .
  • MA LTV outlook: LTV down YoY in Q3 from commission structure shift; expected down YoY in Q4 as ratable structures resume .
  • SelectRx margins/Kansas facility: Longer-term efficiency/throughput gains expected; near-term low-single-digit million quarterly investment drag over next couple quarters .

Estimates Context

  • Q3 FY2025: Revenue slightly missed (Actual $408.2M vs $412.8M*), while EPS beat (Actual $0.03 vs $0.023*). EBITDA (SPGI definition) missed vs consensus, but Adjusted EBITDA was $37.7M (non-GAAP, not directly comparable) [*].
  • Q2 FY2025: Revenue and EPS both beat consensus materially (Actual $481.1M vs $447.0M*; $0.30 vs $0.097*), reflecting strong AEP execution [*].
  • Q1 FY2025: Revenue beat, EPS missed (Actual $292.3M vs $275.8M*; $(0.26) vs $(0.197)) [].
  • Implications: Consensus should adjust for the strategic pivot at SelectRx (margin focus, facility ramp) and the commission structure normalization impacting MA LTV and near-term Senior monetization. Values retrieved from S&P Global*.

Key Takeaways for Investors

  • Near-term: Expect choppier profitability in Q4 from SEP eligibility changes and SelectRx facility ramp; management targets lower half of FY ranges—bias estimates accordingly .
  • Medium-term: Margin/cash flow focus at SelectRx with scale (~106k members) and facility efficiencies is a credible path to EBITDA expansion beyond FY2025 .
  • Senior durability: Despite agent headcount reduction, margins remain strong; CMS final rate notice supportive for carriers and market stability into next AEP .
  • Revenue quality: Improved revenue-to-CAC (5.8x TTM) reflects marketing efficiency and cross-segment economics; monitor sustainability as growth moderates .
  • Legal overhang: DOJ complaint introduces headline risk; company asserts compliance culture and plans a vigorous defense—track developments before the next guide .
  • Capital structure optionality: Strategic investment and potential further securitization provide liquidity/flexibility; watch for updates that could lower interest burden and enhance FCF .
  • Estimates posture: Shift focus to EPS and revenue beats/misses (less noise than EBITDA definitions); consider resetting LTV/attachment rate assumptions for Senior/SelectRx dynamics .