SelectQuote Announces SelectQuote Local, Adding a New Strategic Growth Channel to Its Industry-Leading Insurance Platform

Key Terms

franchise model financial

A franchise model is a business arrangement where a company (the franchisor) lets independent operators (franchisees) use its brand, products, and operating system in exchange for fees and royalty payments. Think of it like a recipe and storefront design that others pay to copy; it lets the parent company grow faster with less capital but gives up some direct control. Investors watch this model because it influences revenue stability, profit margins, capital needs, growth speed and legal or reputational risk tied to independent operators.

royalty stream financial

A royalty stream is a steady series of payments made to the owner of an asset—such as a patent, a song, or a mineral deposit—each time that asset is used or sold. For investors, it matters because royalties act like rental income: they can provide predictable cash flow and value that help price a company or an investment, while also carrying risks tied to how popular or productive the underlying asset remains.

operating cash flow financial

Operating cash flow is the amount of money a company earns from its main business activities, like selling products or services. It shows how well the company can generate cash to pay bills, invest in growth, or return money to shareholders. This figure helps investors understand if the company’s core operations are healthy and sustainable.

credit facility financial

A credit facility is a flexible loan arrangement that allows a borrower to access funds up to a set limit whenever needed, similar to a company having an overdraft option on a bank account. It matters to investors because it indicates how easily a business can secure cash when required, affecting its ability to manage expenses, invest, or respond to financial challenges.

OVERLAND PARK, Kan.--(BUSINESS WIRE)-- SelectQuote, Inc. (NYSE: SLQT) (the “Company”), a leading distributor of Medicare insurance policies and owner of a rapidly-growing healthcare services platform, today announced an initiative to expand its reach and complement its existing, telephonic insurance distribution model.

SelectQuote Local will leverage the Company’s industry-leading marketing, technology, customer service, and carrier relationships to offer consumers its senior health and life insurance products through a franchise model offering local sales and support. SelectQuote Local provides consumers the opportunity to meet with local representatives while still offering the Company’s same affordable and simple way to quickly and easily find the type of insurance to meet their unique needs. Franchise owners will have an opportunity to purchase rights to operate their SelectQuote Local franchise in a particular geographic region, providing a compelling business opportunity for them and an exciting new growth opportunity for the Company.

“We see SelectQuote Local as a natural extension of our existing SelectQuote business. With over four decades as a pioneering insurance brokerage, we have optimized our approach to marketing, shopping, selling, and customer service. We’ve helped millions of customers find the best insurance coverage to meet their unique needs. We believe SelectQuote Local creates an opportunity to extend our reach to more consumers, namely those who wish to do business with someone in their local market," said Bill Grant, SelectQuote’s Chief Operating Officer. “It’s the perfect complement to our existing platform and, given our diversified business model that extends across senior health and healthcare services as well as term life and final expense product offerings, SelectQuote is uniquely positioned to deliver on this market opportunity. No one else can match our breadth of offerings, our capabilities, our experience, or our expertise.”

SelectQuote Chief Financial Officer Ryan Clement added, “From a financial perspective, we think SelectQuote Local provides an exciting and cash efficient opportunity to leverage our proven technology and carrier platform to drive increased scale to our insurance distribution business. We expect the SelectQuote Local model to require a low level of capital investment from the Company and, over time, to create a recurring royalty stream providing compelling cash-on-cash returns for shareholders. In addition, our highly-complementary SelectRx pharmacy and healthcare services business continues to grow more cash generative. We are already projecting meaningful operating cash flow for this fiscal year and expect cash generation to increase in the quarters and years to come. When paired with our recently finalized $415 million credit facility, SelectQuote Local, alongside our growing healthcare services business, provides a path to increasing scale and to accelerating our progress toward de-levering the business.”

To learn more about SelectQuote Franchising opportunities go to www.selectquote.com/franchise

Forward Looking Statements

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: 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, including inflation; 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 other legal proceedings or inquiries; our existing and future indebtedness; our ability to maintain compliance with our debt covenants; 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; failure to market and sell Medicare plans effectively or in compliance with laws; and other factors related to our pharmacy business, including manufacturing or supply chain disruptions, access to and demand for prescription drugs, changes in reimbursement rates under our contracts with pharmacy benefit managers, and regulatory changes or other industry developments that may affect our pharmacy operations. 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”) and subsequent periodic reports filed by us with the Securities and 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) pioneered the 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 and routes high-quality leads. Today, the Company operates an ecosystem offering high touchpoints for consumers across insurance, pharmacy, and virtual care.

With an ecosystem offering engagement points for consumers across insurance, Medicare, pharmacy, and value-based care, the company now has three core business lines: SelectQuote Senior, SelectQuote Healthcare Services, and SelectQuote Life. SelectQuote Senior serves the needs of a demographic that sees around 10,000 people turn 65 each day with a range of Medicare Advantage and Medicare Supplement plans. SelectQuote Healthcare Services is comprised of the SelectRx Pharmacy, a Patient-Centered Pharmacy Home™ (PCPH) accredited pharmacy, SelectPatient Management, a provider of chronic care management services, and Healthcare Select, which proactively connects consumers with a wide breadth of healthcare services supporting their needs.

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Investor Relations:

Sloan Bohlen

877-678-4083

investorrelations@selectquote.com

Media:

Matt Gunter

913-286-4931

matt.gunter@selectquote.com

Source: SelectQuote, Inc.