Business Wire | Sep 9, 2020 04:05PM EDT

SelectQuote, Inc. Reports Fourth Quarter 2020 and Fiscal Year 2020 Results

Sep. 09, 2020

OVERLAND PARK, Kan.--(BUSINESS WIRE)--Sep. 09, 2020--SelectQuote, Inc. (NYSE: SLQT), reported consolidated revenue for fourth quarter 2020 of $141.4 million, which was a 90% increase over consolidated revenue for fourth quarter 2019 of $74.4 million. Consolidated net income for fourth quarter 2020 was $20.0 million, which was a 56% increase over consolidated net income for fourth quarter 2019 of $12.9 million. Finally, consolidated Adjusted EBITDA for fourth quarter 2020 was $40.1 million, which was a 106% increase over consolidated Adjusted EBITDA for fourth quarter 2019 of $19.5 million.

Consolidated revenue for the fiscal year ended June 30, 2020, was $531.5 million, an increase of $194.0 million over consolidated revenue for the fiscal year ended June 30, 2019, of $337.5 million. Consolidated net income for the 2020 fiscal year was $81.1 million, an increase of $8.5 million over consolidated net income for the 2019 fiscal year of $72.6 million. Finally, consolidated Adjusted EBITDA for the 2020 fiscal year was $154.0 million compared to consolidated Adjusted EBITDA of $105.3 million for the fiscal year 2019, an increase of $48.7 million.

Chief Executive Officer Tim Danker commented, "Our Fourth Quarter demonstrates SelectQuote's significant growth potential and we are excited to share our results following the company's successful initial public offering this past May. The power of our leading technology-enabled direct-to-consumer model paired with our 100% in-house agent-led customer service approach positions SelectQuote well to take advantage of demographic tailwinds and a large market opportunity for years to come."

Chief Financial Officer Raffaele Sadun added, "Based on our strong full-year 2020 performance, today we establish our full-year 2021 guidance with an initial forecast range of $775 million to $815 million for consolidated revenue and $200 million to $215 million for consolidated Adjusted EBITDA. We expect full-year consolidated net income to range from $115 million to $127 million for 2021."

*See reconciliation from non-GAAP measure, Adjusted EBITDA, to net income on pages 11-12

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; 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 Division

Financial Results

The following table provides the financial results for the Senior division for fourth quarter and fiscal years ended June 30:

(in thousands) 4Q 2020 4Q 2019 % FY 2020 FY 2019 % Change Change

Revenue $ 87,865 $ 33,799 160 % $ 361,673 $ 192,257 88 %

Adjusted EBITDA* 33,387 12,996 157 % 145,738 90,174 62 %

Adjusted EBITDA 38 % 38 % 40 % 47 % Margin

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 fourth quarter and fiscal years ended June 30:

4Q 2020 4Q 2019 % FY 2020 FY 2019 % Change Change

Medicare Advantage 59,276 20,746 186 % 264,546 119,562 121 %

Medicare Supplement 7,702 3,541 118 % 24,085 23,593 2 %

Dental, Vision and 17,212 11,678 47 % 70,018 36,619 91 %Hearing

Prescription Drug 2,378 1,326 79 % 13,513 12,691 6 %Plan

Other 2,278 292 680 % 5,890 5,746 3 %

Total 88,846 37,583 136 % 378,052 198,211 91 %

*See reconciliation from non-GAAP measure, Adjusted EBITDA, to net income on pages 11-12

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 fourth quarter and fiscal years ended June 30:

4Q 2020 4Q 2019 % FY 2020 FY 2019 % Change Change

Medicare Advantage 54,305 19,142 184 % 225,404 107,665 109 %

Medicare Supplement 6,362 2,538 151 % 18,102 16,593 9 %

Dental, Vision and 16,564 9,076 83 % 55,556 28,643 94 %Hearing

Prescription Drug 2,481 1,172 112 % 13,009 11,739 11 %Plan

Other 2,058 178 1056 % 4,654 4,102 13 %

Total 81,770 32,106 155 % 316,725 168,742 88 %

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 fourth quarter and fiscal years ended June 30:

(dollars per 4Q 2020 4Q 2019 % FY 2020 FY 2019 %policy): Change Change

Medicare Advantage $ 1,256 $ 1,263 (1) % $ 1,287 $ 1,279 1 %

Medicare Supplement 1,382 1,451 (5) % 1,376 1,312 5 %

Dental, Vision and 125 169 (26) % 140 152 (8) %Hearing

Prescription Drug 226 285 (21) % 229 267 (15) %Plan

Other (48) 573 (108) % 34 621 (95) %

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, renewals from policies originally sold in a prior period with insurance carrier partners whose contracts preclude us from recognizing variable consideration for estimated renewal commissions 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 June 30,

(dollars per approved policy): 2020 2019 % Change

Medicare Advantage and Medicare Supplement 243,506 124,258 96 %approved policies

Medicare Advantage and Medicare Supplement $ 1,293 $ 1,283 1 %commission per MA / MS policy

Other commission per MA/MS policy 45 81 (44) %

Other per MA / MS policy 147 183 (20) %

Total revenue per MA / MS policy 1,485 1,547 (4) %

Total operating expenses per MA / MS policy (887) (822) 8 %

Adjusted EBITDA per MA / MS policy $ 598 $ 725 (18) %

Adjusted EBITDA Margin per MA / MS policy 40 % 47 %

Revenue / CAC multiple 3.5X 4.0X

Life Division

Financial Results

The following table provides the financial results for the Life division for the fourth quarter and fiscal years ended June 30:

(in thousands) 4Q 2020 4Q 2019 % FY 2020 FY 2019 % Change Change

Revenue $ 42,423 $ 30,908 37 % $ 129,967 $ 110,493 18 %

Adjusted EBITDA* 12,258 9,100 35 % 27,812 25,821 8 %

Adjusted EBITDA 29 % 29 % 21 % 23 % Margin

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 are for term life and permanent life insurance policies, while ancillary premiums are for other 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.

The following table shows core premiums and ancillary premiums for fourth quarter and fiscal years ended June 30:

(in thousands) 4Q 2020 4Q 2019 % FY 2020 FY 2019 % Change Change

Core Premiums $ 18,965 $ 20,256 (6) % $ 75,451 $ 75,681 - %

Ancillary 19,592 5,047 288 % 37,346 14,286 161 %Premiums

*See reconciliation from non-GAAP measure, Adjusted EBITDA, to net income on pages 11-12

Auto & Home Division

Financial Results

The following table provides the financial results for the Auto & Home division for the fourth quarter and fiscal years ended June 30:

(in thousands) 4Q 2020 4Q 2019 % FY 2020 FY 2019 % Change Change

Revenue $ 12,127 $ 9,818 24 % $ 41,189 $ 35,054 18 %

Adjusted EBITDA* 3,104 2,276 36 % 8,699 7,817 11 %

Adjusted EBITDA 26 % 23 % 21 % 22 % Margin

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 fourth quarter and fiscal years ended June 30:

(in 4Q 2020 4Q 2019 % FY 2020 FY 2019 %thousands): Change Change

Premiums $ 21,162 $ 16,603 27 % $ 70,087 $ 56,719 24 %



Fiscal Year 2021 Guidance

Based on information available as of September 09, 2020, SelectQuote is providing its guidance for the full-year ending June 30, 2021. 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.

The following guidance is for the full-year ending June 30, 2021:

* Consolidated Revenue is expected to be in the range of $775 million to $815 million * Consolidated Net Income is expected to be in the range of $115 million to $127 million * Consolidated Adjusted EBITDA is expected to be in the range of $200 million to $215 million*

Review of Financial Results

SelectQuote, Inc. will host a conference call with the investment community today, Wednesday, September 9, 2020, beginning at 5 p.m. ET. Interested parties may access the conference call live over the phone by dialing (833) 350-1343 (domestic) or (236) 389-2431 (international) and using conference ID: 2669864. The event will be webcasted live via our investor relations website https://ir.selectquote.com/investor-home/default.aspx. Interested parties should register at least 10-15 minutes prior to the start of the event.

*See reconciliation from non-GAAP measure, Adjusted EBITDA, to net income on pages 11-12

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.

Adjusted EBITDA is not prepared in accordance with GAAP and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of this non-GAAP financial measure rather than net income, which is the most directly comparable financial measure calculated and presented in accordance with GAAP. These limitations include the fact that Adjusted EBITDA excludes interest expense, depreciation and amortization expense, share-based compensation expense, income tax expense, and other non-recurring expenses that are one-time in nature. In addition, other companies may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison.

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 registration statement on Form S-1 (the "Prospectus") 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 force of more than 1,000 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 15 leading, nationally-recognized carriers, as well as prescription drug plan, dental, vision and hearing plans.

SELECTQUOTE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

June 30,

2020 2019

ASSETS (Unaudited)

CURRENT ASSETS:

Cash and cash equivalents $ 321,065 $ 570

Restricted cash 47,805 -

Accounts receivable 83,634 59,829

Commissions receivable-current 51,209 36,108

Other current assets 10,121 6,450

Total current assets 513,834 102,957

COMMISSIONS RECEIVABLE-Net 461,752 279,489

PROPERTY AND EQUIPMENT-Net 22,150 13,759

SOFTWARE-Net 8,399 4,895

INTANGIBLE ASSETS-NET 19,673 218

GOODWILL 46,577 5,364

OTHER ASSETS 1,408 258

TOTAL ASSETS $ 1,073,793 $ 406,940



LIABILITIES, TEMPORARY EQUITY, AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable $ 22,891 $ 7,634

Accrued expenses 14,936 6,015

Accrued compensation and benefits 22,228 12,566

Non-recourse debt-current - 3,920

Earnout liability 30,812 -

Other current liabilities 4,944 3,087

Total current liabilities 95,811 33,222

DEBT 311,814 11,032

NON-RECOURSE DEBT-Net - 10,615

DEFERRED INCOME TAXES 105,844 81,252

OTHER LIABILITIES 14,635 7,567

Total liabilities 528,104 143,688



COMMITMENTS AND CONTINGENCIES



TEMPORARY EQUITY:

Series A redeemable convertible preferred stock - 171

Series B convertible preferred stock - 501

Series C convertible preferred stock - 85

Series D convertible preferred stock - 40

Total temporary equity - 797



SHAREHOLDERS' EQUITY:

Common stock 1,622 906

Additional paid-in capital 548,113 138,378

Treasury stock - (77,275)

Retained earnings (2,792) 200,446

Accumulated other comprehensive loss (1,254) -

Total shareholders' equity 545,689 262,455

TOTAL LIABILITIES, TEMPORARY EQUITY, AND $ 1,073,793 $ 406,940 SHAREHOLDERS' EQUITY

SELECTQUOTE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands, except per share amounts)

Three months ended June Year Ended June 30, 30,

2020 2019 2020 2019

(unaudited) (unaudited) (unaudited)

REVENUE:

Commission $ 122,679 $ 64,998 $ 476,606 $ 296,000

Production bonus and 18,768 9,401 54,909 41,469 other

Total revenue 141,447 74,399 531,515 337,469



OPERATING COSTS AND EXPENSES:

Cost of revenue 40,911 24,128 167,399 104,421

Marketing and 51,911 25,838 184,157 110,265 advertising

General and 9,504 5,074 35,283 18,169 administrative

Technical development 3,259 2,094 12,347 8,326

Total operating costs 105,585 57,134 399,186 241,181 and expenses



INCOME FROM OPERATIONS 35,862 17,265 132,329 96,288



INTEREST EXPENSE, NET (9,522) (538) (25,761) (1,660)

OTHER EXPENSES, NET (385) (7) (405) (15)

INCOME BEFORE INCOME TAX 25,955 16,720 106,163 94,613 EXPENSE

INCOME TAX EXPENSE 5,906 3,834 25,016 22,034



NET INCOME $ 20,049 $ 12,886 $ 81,147 $ 72,579



NET INCOME (LOSS) PER SHARE:

Basic $ 0.15 $ 0.11 $ (0.16) $ 0.70

Diluted $ 0.13 $ 0.09 $ (0.16) $ 0.55



WEIGHTED-AVERAGE COMMONSTOCK OUTSTANDING USED IN PER SHARE AMOUNTS:

Basic 120,018 86,581 97,496 85,378

Diluted 152,404 101,781 97,496 132,491



OTHER COMPREHENSIVE LOSS NET OF TAX:

Net unrealized losses on (1,254) - (1,254) - cash flow hedges

OTHER COMPREHENSIVE LOSS (1,254) - (1,254) -

COMPREHENSIVE INCOME $ 18,795 $ 12,886 $ 79,893 $ 72,579

SELECTQUOTE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

Three months ended June Year Ended June 30, 30,

2020 2019 2020 2019

(unaudited) (unaudited) (unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income $ 20,049 $ 12,886 $ 81,147 $ 72,579

Adjustments to reconcilenet income to net cash,cash equivalents, and restricted cash used inoperating activities:

Depreciation and 2,720 1,256 7,993 4,702 amortization

Loss on disposal ofproperty, equipment, and 125 170 360 221 software

Stock compensation 216 20 9,498 86 expense

Deferred income taxes 5,889 3,813 25,007 21,991

Amortization of debtissuance costs and debt 835 24 2,266 123 discount

Write-off of debt 237 - 237 - issuance costs

Fair value adjustmentsto contingent earnout 375 - 375 - obligations

Changes in operating assets and liabilities:

Accounts receivable 1,472 2,633 (15,585) (8,676)

Commissions receivable (54,910) (22,233) (197,364) (91,639)

Other assets (4,772) (2,143) (3,352) (3,031)

Accounts payable and 2,776 (258) 15,672 2,810 accrued expenses

Other liabilities 5,243 108 11,970 947

Net cash (used in)provided by operating (19,745) (3,724) (61,776) 113 activities

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property (3,260) (385) (9,446) (3,921) and equipment

Proceeds from sales of - - 3 - property and equipment

Purchases of softwareand capitalized software (1,663) (1,275) (6,106) (4,715) development costs

Acquisition of business, (35,821) - (35,821) - net of cash acquired

Net cash used in (40,744) (1,660) (51,370) (8,636) investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from revolving 2,014 36,042 87,989 135,621 line of credit

Payments on revolving (2,014) (34,025) (99,021) (144,341) line of credit

Net proceeds from Term - - 416,500 - Loan

Payments on Term Loan (100,000) - (100,000) -

Proceeds from 4,450 4,150 16,575 16,200 non-recourse debt

Payments on other debt (29,015) (761) (31,447) (1,395)

Proceeds from common 141 773 5,506 4,300 stock option exercises

Purchase of treasury - - - (34) stock

Cash dividends paid - (979) (275,000) (1,958)

Issuance of preferred 135,000 - 135,000 - stock

Debt issuance costs (160) - (7,854) (258)

Payments of costsincurred in connection (3,784) - (3,784) - with private placement

Payments of costsincurred in connection (1,100) - (3,218) - with initial publicoffering

Proceeds from initialpublic offering, net of 340,200 - 340,200 - underwriters' discountsand commissions

Net cash provided by 345,732 5,200 481,446 8,135 financing activities

NET INCREASE IN CASH,CASH EQUIVALENTS, AND 285,243 (184) 368,300 (388) RESTRICTED CASH

CASH, CASH EQUIVALENTS,AND RESTRICTED 83,627 754 570 958 CASH-Beginning of year

CASH, CASH EQUIVALENTS,AND RESTRICTED CASH-End $ 368,870 $ 570 $ 368,870 $ 570 of year

SELECTQUOTE, INC. AND SUBSIDIARIES

Adjusted EBITDA to Net Income Reconciliation

(Unaudited)

4Q 2020

Auto & Corp &(in Senior Life Consolidatedthousands) Home Elims

Revenue $ 87,865 $ 42,423 $ 12,127 $ (968 ) $ 141,447

Operating (54,478 ) (30,165 ) (9,023 ) (7,633 ) (101,299 )expensesOther - - - (10 ) (10 )expenses, netAdjusted 33,387 12,258 3,104 (8,611 ) 40,138 EBITDAInterest (9,522 )expense, netIncome tax (5,906 )expenseDepreciation (2,720 )andamortizationNon-recurring (1,053 )expensesContingent (375 )considerationShare-based (216 )compensationexpenseLoss ondisposal of (125 )property,equipment,and softwareRestructuring (172 )expensesNet income $ 20,049

4Q 2019

Auto & Corp &(in Senior Life Consolidatedthousands) Home Elims

Revenue $ 33,799 $ 30,908 $ 9,818 $ (126 ) $ 74,399

Operating (20,803 ) (21,808 ) (7,542 ) (4,719 ) (54,872 )expensesOther - - - (7 ) (7 )expenses, netAdjusted 12,996 9,100 2,276 (4,852 ) 19,520 EBITDAIncome tax (3,834 )expenseDepreciation (1,256 )andamortizationNon-recurring (871 )expensesInterest (538 )expense, netLoss ondisposal of (170 )property,equipment,and softwareShare-based (20 )compensationexpenseRestructuring 55 expensesNet income $ 12,886

FY 2020

Auto & Corp &(in Senior Life Consolidatedthousands) Home Elims

Revenue $ 361,673 $ 129,967 $ 41,189 $ (1,314 ) $ 531,515

Operating (215,935 ) (102,155 ) (32,490 ) (26,881 ) (377,461 )expensesOther - - - (30 ) (30 )expenses, netAdjusted 145,738 27,812 8,699 (28,225 ) 154,024 EBITDAInterest (25,761 )expense, netIncome tax (25,016 )expenseShare-based (9,498 )compensationexpenseDepreciation (7,993 )andamortizationNon-recurring (3,721 )expensesContingent (375 )considerationLoss ondisposal of (360 )property,equipment,and softwareRestructuring (153 )expensesNet income $ 81,147

FY 2019

Auto & Corp &(in Senior Life Consolidatedthousands) Home Elims

Revenue $ 192,257 $ 110,493 $ 35,054 $ (335 ) $ 337,469

Operating (102,083 ) (84,672 ) (27,237 ) (18,184 ) (232,176 )expensesOther - - - (15 ) (15 )expenses, netAdjusted 90,174 25,821 7,817 (18,534 ) 105,278 EBITDAIncome tax (22,034 )expenseDepreciation (4,702 )andamortizationRestructuring (2,305 )expensesNon-recurring (1,691 )expensesInterest (1,660 )expense, netLoss ondisposal of (221 )property,equipment,and softwareShare-based (86 )compensationexpenseNet income $ 72,579

Guidance net income to Adjusted EBITDA reconciliation, year ending June 30, 2021:

(in thousands) Range

Net Income $ 115,000 $ 127,000

Income tax expense 42,000 45,000

Interest expense 26,000 26,000

Depreciation and amortization 10,000 10,000

Share-based compensation expense 4,000 4,000

Non-recurring expenses 2,000 2,000

Contingent consideration 1,000 1,000

Adjusted EBITDA $ 200,000 $ 215,000

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CONTACT: Investor Relations: Sloan Bohlen / Helen O'Donnell 877-678-4083 investorrelations@selectquote.com

CONTACT: Media: Lisa Wolford 917-846-0881 lwolford@soleburytrout.com