[10-Q] SelectQuote, Inc. Quarterly Earnings Report
Filing Impact
Filing Sentiment
Form Type
10-Q
SelectQuote, Inc. reported results for the quarter ended September 30, 2025. Total revenue was $328.8 million, up from $292.3 million, driven by Pharmacy revenue of $218.5 million versus $152.9 million. Commissions and other services were $110.3 million versus $139.4 million.
Loss from operations widened to $(40.7) million from $(12.0) million as costs rose with volume. Net interest expense improved to $(11.8) million from $(23.0) million. A $15.0 million non‑cash gain from change in fair value of warrants reduced overall loss, resulting in net loss of $(30.5) million, compared with $(44.5) million a year ago. After $17.5 million of accumulated dividends and accretion on Senior Non‑Convertible Preferred Stock, net loss attributable to common shareholders was $(47.9) million (basic and diluted EPS $(0.26)).
Cash, cash equivalents and restricted cash ended at $15.7 million. Operating cash flow was $(21.6) million. Debt totaled $393.1 million, including Term Loans of $310.4 million and a $15.0 million revolving balance; the company was in compliance with covenants. Shares outstanding were 175,946,798 as of September 30, 2025.
Positive
- None.
Negative
- None.
Insights
Revenue grew, losses persisted; balance sheet reflects preferred dividends and leverage.
SelectQuote increased revenue to
Operating loss expanded to
Liquidity shows cash and restricted cash of
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended September 30, 2025
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
(Commission File Number)
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||||||||
| (Zip Code) | |||||||||||
| (Address of principal executive offices) | |||||||||||
(913 ) 599-9225
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | ☒ | |||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | |||||||||
| Emerging growth company | |||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes ☐ No ☒
The registrant had outstanding 175,971,744 shares of common stock as of October 31, 2025.
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SELECTQUOTE, INC. AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTS
| PART I FINANCIAL INFORMATION | PAGE | |||||||
| Item 1. | Financial Statements (unaudited) | |||||||
Condensed Consolidated Balance Sheets as of September 30, 2025 and June 30, 2025 | 2 | |||||||
Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended September 30, 2025 and 2024 | 4 | |||||||
Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended September 30, 2025 and 2024 | 5 | |||||||
Condensed Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2025 and 2024 | 6 | |||||||
Notes to Condensed Consolidated Financial Statements | 8 | |||||||
| Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 36 | ||||||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 53 | ||||||
| Item 4. | Controls and Procedures | 53 | ||||||
| PART II OTHER INFORMATION | ||||||||
| Item 1. | Legal Proceedings | 55 | ||||||
| Item 1A. | Risk Factors | 55 | ||||||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 55 | ||||||
| Item 3. | Defaults Upon Senior Securities | 55 | ||||||
| Item 4. | Mine Safety Disclosures | 55 | ||||||
| Item 5. | Other Information | 55 | ||||||
| Item 6. | Exhibits | 56 | ||||||
Signatures | 57 | |||||||
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PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SELECTQUOTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
| September 30, 2025 | June 30, 2025 | ||||||||||
| ASSETS | |||||||||||
| CURRENT ASSETS: | |||||||||||
Cash, cash equivalents, and restricted cash | $ | $ | |||||||||
Accounts receivable, net of allowances of $ | |||||||||||
| Commissions receivable-current | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| COMMISSIONS RECEIVABLE—Net | |||||||||||
| PROPERTY AND EQUIPMENT—Net | |||||||||||
| SOFTWARE—Net | |||||||||||
| OPERATING LEASE RIGHT-OF-USE ASSETS | |||||||||||
| INTANGIBLE ASSETS—Net | |||||||||||
| GOODWILL | |||||||||||
| OTHER ASSETS | |||||||||||
| TOTAL ASSETS | $ | $ | |||||||||
LIABILITIES, PREFERRED STOCK, AND SHAREHOLDERS’ EQUITY | |||||||||||
| CURRENT LIABILITIES: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued expenses | |||||||||||
| Accrued compensation and benefits | |||||||||||
| Operating lease liabilities—current | |||||||||||
| Current portion of long-term debt | |||||||||||
| Contract liabilities | |||||||||||
| Other current liabilities | |||||||||||
| Total current liabilities | |||||||||||
| LONG-TERM DEBT, NET—less current portion | |||||||||||
| DEFERRED INCOME TAXES | |||||||||||
| OPERATING LEASE LIABILITIES | |||||||||||
| OTHER LIABILITIES | |||||||||||
| Total liabilities | |||||||||||
COMMITMENTS AND CONTINGENCIES (Note 10) | |||||||||||
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| September 30, 2025 | June 30, 2025 | ||||||||||
PREFERRED STOCK: | |||||||||||
Senior Non-Convertible Preferred Stock, $ | |||||||||||
| SHAREHOLDERS’ EQUITY: | |||||||||||
Common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Total shareholders’ equity | |||||||||||
TOTAL LIABILITIES, PREFERRED STOCK, AND SHAREHOLDERS’ EQUITY | $ | $ | |||||||||
See accompanying notes to the condensed consolidated financial statements.
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SELECTQUOTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
| Three Months Ended September 30, | |||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||
| REVENUE: | |||||||||||||||||||||||||||||
| Commissions and other services | $ | $ | |||||||||||||||||||||||||||
| Pharmacy | |||||||||||||||||||||||||||||
| Total revenue | |||||||||||||||||||||||||||||
| OPERATING COSTS AND EXPENSES: | |||||||||||||||||||||||||||||
| Cost of commissions and other services revenue | |||||||||||||||||||||||||||||
| Cost of goods sold—pharmacy revenue | |||||||||||||||||||||||||||||
| Marketing and advertising | |||||||||||||||||||||||||||||
| Selling, general, and administrative | |||||||||||||||||||||||||||||
| Technical development | |||||||||||||||||||||||||||||
| Total operating costs and expenses | |||||||||||||||||||||||||||||
LOSS FROM OPERATIONS | ( | ( | |||||||||||||||||||||||||||
| INTEREST EXPENSE, NET | ( | ( | |||||||||||||||||||||||||||
CHANGE IN FAIR VALUE OF WARRANTS | |||||||||||||||||||||||||||||
| OTHER EXPENSE, NET | ( | ( | |||||||||||||||||||||||||||
LOSS BEFORE INCOME TAX EXPENSE (BENEFIT) | ( | ( | |||||||||||||||||||||||||||
| INCOME TAX EXPENSE (BENEFIT) | ( | ||||||||||||||||||||||||||||
NET LOSS | $ | ( | $ | ( | |||||||||||||||||||||||||
Senior Non-Convertible Preferred Stock accumulated dividends and accretion | ( | ||||||||||||||||||||||||||||
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | ( | $ | ( | |||||||||||||||||||||||||
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS PER SHARE: | |||||||||||||||||||||||||||||
| Basic | $ | ( | $ | ( | |||||||||||||||||||||||||
| Diluted | $ | ( | $ | ( | |||||||||||||||||||||||||
| WEIGHTED-AVERAGE COMMON STOCK OUTSTANDING USED IN PER SHARE AMOUNTS: | |||||||||||||||||||||||||||||
| Basic | |||||||||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||||||||
OTHER COMPREHENSIVE LOSS, NET OF TAX: | |||||||||||||||||||||||||||||
Unrealized loss, net of related tax benefit of $ | ( | ||||||||||||||||||||||||||||
Amount reclassified into earnings, net of related tax benefit of $ | ( | ||||||||||||||||||||||||||||
OTHER COMPREHENSIVE LOSS | ( | ||||||||||||||||||||||||||||
COMPREHENSIVE LOSS | $ | ( | $ | ( | |||||||||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
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SELECTQUOTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(In thousands, except share amounts)
| Three Months Ended September 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Retained Earnings/(Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | Total Shareholders' Equity | |||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||
BALANCES-June 30, 2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||
| Vesting of restricted stock unit awards net of shares withheld to cover tax withholdings | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||
Vesting of price vested unit awards net of shares withheld to cover tax withholdings | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Senior Non-Convertible Preferred Stock accretion | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
Senior Non-Convertible Preferred Stock accumulated dividends | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
BALANCES-September 30, 2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2024 | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Retained Earnings / (Accumulated Deficit) | Accumulated Other Comprehensive Income | Total Shareholders' Equity | |||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
| BALANCES-June 30, 2024 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||
| Gain on cash flow hedge, net of tax | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||
| Amount reclassified into earnings, net of tax | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||
| Exercise of employee stock options, net of shares withheld for cashless exercises and to cover tax withholdings | — | — | |||||||||||||||||||||||||||||||||||||||
| Vesting of restricted stock unit awards and performance stock unit awards net of shares withheld to cover tax withholdings | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
Vesting of price vested unit awards net of shares withheld to cover tax withholdings | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| BALANCES-September 30, 2024 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
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SELECTQUOTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
| Three Months Ended September 30, | |||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||||||||
Net loss | $ | ( | $ | ( | |||||||||||||
Adjustments to reconcile net loss to net cash, cash equivalents, and restricted cash used in operating activities: | |||||||||||||||||
| Depreciation and amortization | |||||||||||||||||
| Loss on disposal of property, equipment, and software | |||||||||||||||||
| Share-based compensation expense | |||||||||||||||||
| Deferred income taxes | ( | ||||||||||||||||
| Amortization of debt issuance costs and debt discount | |||||||||||||||||
| Accrued interest payable in kind | |||||||||||||||||
| Change in fair value of warrants | ( | ||||||||||||||||
| Non-cash lease expense | |||||||||||||||||
| Changes in operating assets and liabilities: | |||||||||||||||||
| Accounts receivable, net | |||||||||||||||||
| Commissions receivable | ( | ( | |||||||||||||||
| Other assets | ( | ||||||||||||||||
| Accounts payable and accrued expenses | |||||||||||||||||
| Operating lease liabilities | ( | ( | |||||||||||||||
| Other liabilities | ( | ( | |||||||||||||||
Net cash used in operating activities | ( | ( | |||||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||||||||
| Purchases of property and equipment | ( | ( | |||||||||||||||
| Purchases of software and capitalized software development costs | ( | ( | |||||||||||||||
| Net cash used in investing activities | ( | ( | |||||||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||||||||
Proceeds from revolving credit facility | |||||||||||||||||
Payments on revolving credit facility | ( | ||||||||||||||||
| Payments on Term Loans | ( | ( | |||||||||||||||
| Payments on ABS Notes | ( | ||||||||||||||||
| Payments on other debt | ( | ( | |||||||||||||||
| Proceeds from common stock options exercised and employee stock purchase plan | |||||||||||||||||
| Payments of tax withholdings related to net share settlement of equity awards | ( | ( | |||||||||||||||
| Payments of debt issuance costs | ( | ( | |||||||||||||||
| Net cash provided by (used in) financing activities | ( | ||||||||||||||||
NET DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | ( | ( | |||||||||||||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH —Beginning of period | |||||||||||||||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH —End of period | $ | $ | |||||||||||||||
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SELECTQUOTE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - (Continued)
(In thousands)
Supplemental disclosures to the condensed consolidated statements of cash flows are presented below:
| Three Months Ended September 30, | |||||||||||||||||
| 2025 | 2024 | ||||||||||||||||
| SUPPLEMENTAL CASH FLOW INFORMATION: | |||||||||||||||||
| Interest paid, net | $ | ( | $ | ( | |||||||||||||
| Payment of income taxes, net | ( | ( | |||||||||||||||
| SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES: | |||||||||||||||||
| Capital expenditures in accounts payable and accrued expenses | |||||||||||||||||
| Senior Non-Convertible Preferred Stock accretion | |||||||||||||||||
| Senior Non-Convertible Preferred Stock accumulated dividends | |||||||||||||||||
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SELECTQUOTE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1.SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
Description of Business—SelectQuote, Inc. (together with its subsidiaries, the “Company” or “SelectQuote”) is a leading technology-enabled, direct-to-consumer distribution platform for selling insurance policies and healthcare services. We contract with insurance carriers to sell senior health, life, and auto and home insurance policies by telephone to individuals throughout the United States through the use of multi-channel marketing and advertising campaigns. SelectQuote’s Senior division (“Senior”) sells Medicare Advantage, Medicare Supplement, Medicare Part D, and other ancillary senior health insurance related products, and also includes a small lead generation business. SelectQuote’s Life division (“Life”) sells term life, final expense, and other ancillary products, and SelectQuote’s Auto & Home division (“Auto & Home”) primarily sells non-commercial auto and home, property and casualty insurance products. The Healthcare Services division (“Healthcare Services”) includes SelectRx, Population Health, and SelectPatient Management (“SPM”). SelectRx is a Patient-Centered Pharmacy HomeTM (“PCPH”) accredited pharmacy, which offers essential prescription medications, OTC medications, customized medication packaging, and medication therapy management. Population Health uses data from personal Health Risk Assessments (“HRAs”) completed by our agents to connect the consumer to the relevant health-related service, like SelectRx, SPM, or one of our many health-related partners. SPM launched in 2024 from the acquisition of an existing chronic care management platform, helps patients navigate their chronic conditions and manage them using a comprehensive treatment plan.
Seasonality—Medicare-eligible individuals are permitted to change their Medicare Advantage and Medicare Part D Prescription Drug coverage for the following year during the Medicare annual enrollment period (“AEP”) in October through December and are allowed to switch plans from an existing plan during the open enrollment period (“OEP”) in January through March each year. As a result, the Senior segment’s revenue is highest in the second and third quarters.
Use of Estimates—The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets, and liabilities and disclosure of contingent assets and liabilities. The Company regularly assesses these estimates; however, actual amounts could differ from those estimates. The most significant items involving management’s estimates include estimates of revenue recognition, accounts receivable, net, commissions receivable, the provision for income taxes, share-based compensation, and valuation of intangible assets, goodwill, and liability classified warrants. The impact of changes in estimates is recorded in the period in which they become known.
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Significant Accounting Policies—There have been no material changes to the Company’s significant accounting policies as described in our Annual Report.
Cash, Cash Equivalents and Restricted Cash—The following table provides a reconciliation of cash, cash equivalents and restricted cash reported in the condensed consolidated statements of cash flows to the corresponding amounts shown in the condensed consolidated balance sheets.
(in thousands) | September 30, 2025 | June 30, 2025 | |||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash - current | |||||||||||
Total current assets | |||||||||||
Other assets: | |||||||||||
Other assets | |||||||||||
Total cash, cash equivalents and restricted cash | $ | $ | |||||||||
Recent Accounting Pronouncements Adopted—In March 2024, the FASB issued ASU No. 2024-02, Codification Improvements – Amendments to Remove References to the Concepts Statements, which removes references to non-authoritative Concepts Statements from the FASB Accounting Standards Codification. The standard is effective for public business entities for fiscal years beginning after December 15, 2024, including interim periods. The Company adopted this ASU on a prospective basis as of July 1, 2025. The adoption did not have a material impact on the Company’s condensed consolidated financial statements.
Recent Accounting Pronouncements Not Yet Adopted—In December 2023, the FASB issued ASU No. 2023-09 – Income Taxes (Topic ASC 740) Income Taxes. This ASU improves the transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. The amendments in ASU 2023-09 are effective for annual periods beginning after December 15, 2024. This change will apply on a prospective basis to annual financial statements for periods beginning after the effective date. However, retrospective application in all prior periods presented is permitted. The Company is currently evaluating the impact of this ASU on its financial statements.
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2.PROPERTY AND EQUIPMENT—NET
Property and equipment—net consisted of the following:
(in thousands) | September 30, 2025 | June 30, 2025 | |||||||||
| Computer hardware | $ | $ | |||||||||
Machinery and equipment(1) | |||||||||||
| Leasehold improvements | |||||||||||
| Furniture and fixtures | |||||||||||
| Work in progress | |||||||||||
| Total | |||||||||||
Less accumulated depreciation(2) | ( | ( | |||||||||
| Property and equipment—net | $ | $ | |||||||||
(1) Includes financing lease right-of-use assets.
(2) During the three months ended September 30, 2025, the Company disposed of less than $0.1 million of fully depreciated property and equipment.
3.SOFTWARE—NET
Software—net consisted of the following:
(in thousands) | September 30, 2025 | June 30, 2025 | |||||||||
| Software | $ | $ | |||||||||
| Work in progress | |||||||||||
| Total | |||||||||||
Less accumulated amortization(1) | ( | ( | |||||||||
| Software—net | $ | $ | |||||||||
(1) During the three months ended September 30, 2025, the Company disposed of $1.6 million of fully amortized software.
4.LEASES
The majority of the Company’s leases are operating leases related to office space for which the Company recognizes lease expense on a straight-line basis over the respective lease term. The Company leases office facilities in the United States in San Diego, CA; Centennial, CO; Overland Park, KS; Olathe, KS; Oakland, CA; Indianapolis, IN; and Monaca, PA. The Company's operating leases have remaining lease terms of less than one year up to twelve years . SelectRx leases the Monaca facility from an Executive Vice President of SelectRx. The Company expects to incur $3.6 million in total rental payments over the initial ten-year term plus an additional five-year extension option that it is reasonably certain to exercise.
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During the three months ended September 30, 2025, the Company entered into one finance lease and added equipment to two existing finance leases, resulting in new right-of-use assets obtained in exchange for new lease liabilities of $0.4 million.
During the three months ended September 30, 2024, the Company entered into four finance leases for equipment with commencement dates August 1, 2024 and September 19, 2024, resulting in new right-of-use assets obtained in exchange for new lease liabilities of $1.3 million.
Lease Costs—The components of lease costs were as follows for the periods presented:
| Three Months Ended September 30, | |||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | |||||||||||||||||||||
Finance lease costs(1) | $ | $ | |||||||||||||||||||||
Operating lease costs(2) | |||||||||||||||||||||||
| Short-term lease costs | |||||||||||||||||||||||
Variable lease costs(3) | |||||||||||||||||||||||
| Sublease income | ( | ( | |||||||||||||||||||||
| Total net lease costs | $ | $ | |||||||||||||||||||||
(1) Primarily consists of amortization of finance lease right-of-use assets and an immaterial amount of interest on finance lease liabilities recorded in selling, general, and administrative expense and interest expense, net in the condensed consolidated statements of comprehensive loss.
(2) Recorded in selling, general, and administrative expense in the condensed consolidated statements of comprehensive loss.
(3) Variable lease costs are not included in the measurement of the lease liability or right-of-use asset as they are not based on an index or rate and primarily represents common area maintenance charges and real estate taxes recorded in operating costs and expenses in the condensed consolidated statements of comprehensive loss.
Maturities of Lease Liabilities—As of September 30, 2025, remaining maturities of lease liabilities for each of the next five fiscal years and thereafter are as follows:
| (in thousands) | Operating leases | Finance leases | Total | |||||||||||||||||
| Remainder fiscal 2026 | $ | $ | $ | |||||||||||||||||
| 2027 | ||||||||||||||||||||
| 2028 | ||||||||||||||||||||
| 2029 | ||||||||||||||||||||
| 2030 | ||||||||||||||||||||
| Thereafter | ||||||||||||||||||||
| Total undiscounted lease payments | ||||||||||||||||||||
| Less: interest | ||||||||||||||||||||
| Present value of lease liabilities | $ | $ | $ | |||||||||||||||||
Sublease income—The Company subleases portions of its office facilities in Overland Park, KS and Centennial, CO, which run through July 31, 2029, and November 30, 2026, respectively. Sublease income is recorded on a straight-line basis as a reduction of lease expense in the condensed consolidated statements of comprehensive loss. The Company may consider entering into additional sublease arrangements in the future.
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As of September 30, 2025, the future minimum fixed sublease receipts under non-cancelable operating lease agreements are as follows:
| (in thousands) | Total | |||||||
| Remainder fiscal 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Total sublease income | $ | |||||||
5.INTANGIBLE ASSETS AND GOODWILL
Intangible assets—The carrying amounts, accumulated amortization, net carrying value, and weighted average remaining life of our definite-lived amortizable intangible assets are presented below (dollars in thousands, useful life in years):
| September 30, 2025 | June 30, 2025 | |||||||||||||||||||||||||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Impairment Charges | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||||||||||||||||||||
| Customer relationships | $ | $ | ( | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||
| Trade name | ( | |||||||||||||||||||||||||||||||||||||||||||
| Proprietary software | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Non-compete agreements | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Total intangible assets | $ | $ | ( | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||
The Company's intangible assets include those long-lived intangible assets acquired as part of acquisitions. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. There were no
For the three months ended September 30, 2025 and 2024, amortization expense related to intangible assets totaled $0.3 million and $1.0 million, respectively, recorded in selling, general and administrative expense in the condensed consolidated statements of comprehensive loss. The weighted-average remaining useful life of intangible assets was 1.5 years and 1.8 years as of September 30, 2025 and June 30, 2025, respectively.
As of September 30, 2025, expected amortization expense in future fiscal periods were as follows (in thousands):
| Proprietary Software | Non-compete agreements | Customer relationships | Total | ||||||||||||||||||||||||||||||||
Remainder of 2026 | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| 2027 | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Goodwill—The Company recorded as goodwill the excess of the purchase price over the estimated fair values of identifiable assets and liabilities acquired as part of prior period acquisitions. Goodwill is assigned to reporting units that are expected to benefit from the synergies of the business combination as of the acquisition date and becomes identified with that reporting unit in its entirety. As such, the reporting unit as a whole supports the
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recovery of its goodwill. As of September 30, 2025, the Company’s goodwill balance of $29.4 million, all of which is assigned to the Healthcare Services reporting unit and reportable segment, was related to the acquisitions of Express Meds, Simple Meds, and SelectPatient Management.
The Company performs its annual goodwill impairment testing as of April 1, or more frequently if it believes that indicators of impairment exist. During the three months ended September 30, 2025 and 2024, there were no
6.DEBT
Debt consisted of the following:
| (in thousands) | September 30, 2025 | June 30, 2025 | |||||||||
| Revolving credit facility | $ | $ | |||||||||
Term Loans | |||||||||||
Class A Notes | |||||||||||
Class B Notes | |||||||||||
| Unamortized debt issuance costs and debt discount | ( | ( | |||||||||
| Total debt | |||||||||||
| Less current portion of long-term debt: | ( | ( | |||||||||
| Long-term debt | $ | $ | |||||||||
The combined aggregate amount of expected payments associated with the Notes and maturities associated with the Term Loans as of September 30, 2025 are as follows:
| (in thousands) | Remainder fiscal 2026 | 2027 | 2028 | 2029 | Total | |||||||||||||||||||||||||||
| Revolving credit facility | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
| Term Loans | ||||||||||||||||||||||||||||||||
| Class A Notes | ||||||||||||||||||||||||||||||||
| Class B Notes | ||||||||||||||||||||||||||||||||
| Total obligations | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
As of September 30, 2025, the Company was in compliance with all financial covenants pursuant to its debt obligations.
Significant changes in the Company’s debt during the three months ended September 30, 2025 were as follows:
Senior Secured Credit Facility
On November 5, 2019, the Company entered into a credit agreement (together with any subsequent amendments, the “Senior Secured Credit Facility”) with Wilmington Trust, National Association, as administrative agent, UMB Bank, N.A., as revolver agent and revolving lender, and the other lenders party thereto. The Senior Secured Credit Facility, through additional amendments in subsequent years, has provided for total proceeds from borrowings of $887.3 million (the “Term Loans”) and a revolving credit facility with $56.7 million available to borrow as of September 30, 2025 (the “Revolving Credit Facility”).
Our quarterly principal payments are 0.625 % of the principal balance as of the date of the eleventh amendment with the remaining balance due on the maturity date. The Term Loan maturity date is September 30,
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2027. The Senior Secured Credit Facility contains customary affirmative and negative covenants and events of default and financial covenants requiring the Company and certain of its subsidiaries to maintain a minimum asset coverage ratio and minimum liquidity requirements.
On July 25, 2025, the Company entered into a thirteenth amendment (the “Thirteenth Amendment”) to the Senior Secured Credit Facility. The Thirteenth Amendment, among other things, extended the revolving termination date to September 30, 2027. Pursuant to the amendment, the Company paid fees of $0.1 million to its lenders.
The Term Loans bear interest on the outstanding principal amount thereof at a rate per annum equal to the sum of (a) cash interest in the amount of either, at the Company’s option, (i) SOFR (subject to a floor of 3.00 %) plus 6.50 % or (ii) a base rate plus 5.50 %, and (b) payable in kind interest ranging from 0.00 % to 3.00 % determined based on the asset coverage ratio as of the end of the applicable test period. As of September 30, 2025, the Company’s payable in kind interest rate was 0.00 %. The effective interest rate for the Term Loans as of September 30, 2025 was 10.8 %. In accordance with the Twelfth Amendment, the interest rate may decrease prior to January 1, 2027 if the Company achieves certain repayment events. The Revolving Credit Facility accrues interest on amounts drawn at a rate per annum equal to either, at the Company’s option, (a) SOFR (subject to a floor of 1.0 %) plus 5.0 % or (b) a base rate plus 4.0 %. The effective interest rate for the Revolving Credit Facility as of September 30, 2025 was 11.25 %.
Securitization and Indenture
On October 15, 2024, the Company and certain of its subsidiaries, including SQ ABS Issuer, LLC (the “Issuer”), a special purpose entity and wholly-owned subsidiary of the Company, entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with the purchasers party thereto (the “Purchasers”). Pursuant to the Note Purchase Agreement, the Issuer issued $60.0 million of senior secured 7.80 % Class A Notes and $40.0 million of senior secured 9.65 % Class B Notes (together the “Notes”) to the Purchasers. The Notes are governed by an Indenture, dated as of October 15, 2024, with UMB Bank, N.A. as indenture trustee (the “Indenture”). The Notes have a final legal maturity of October 20, 2039 and an anticipated repayment date of September 20, 2028. The Company used the proceeds obtained from the issuance of the Notes to repay a portion of its outstanding Term Loans in conjunction with the Eleventh Amendment.
The Notes are secured by a specified pool of renewal commissions that include both accounts receivable for policy renewals as well as commissions receivable for estimated future policy renewals (collectively, the “Subject Renewal Commissions”). The Subject Renewal Commissions are associated with underlying Medicare Advantage policies effective prior to January 1, 2024 and active as of August 31, 2024. As of September 30, 2025, there were $40.8 million of Subject Renewal Commissions included on the condensed consolidated balance sheets.
Under the terms of the Indenture, the Company services the transferred Subject Renewal Commissions, and the related collections are remitted to a segregated bank account. The funds in the segregated account are used only to fund payments related to the Indenture and is considered restricted cash. The Company’s restricted cash balance totaled $4.9 million as of September 30, 2025, of which $3.7 million was included within cash, cash equivalents, and restricted cash and $1.2 million was classified as long-term and included within other assets on the Company’s condensed consolidated balance sheets.
The Notes contain covenants that, among other things, limit the ability of the Issuer to: (i) sell, transfer, or dispose of assets without the consent of a majority of the noteholders, (ii) create or permit liens on its assets (other than certain permitted liens) and (iii) incur indebtedness (other than permitted indebtedness).
The Notes issued in connection with the Indenture bear interest on the unpaid principal amount at 7.80 % and 9.65 % for Class A and Class B Notes, respectively. The Notes amortize based on a target loan-to-value calculation, and if any Notes remain outstanding after September 2028, then all available funds of the Issuer will be swept to pay down the Notes. After September 2028 and October 2030, interest will increase an additional 2.00 % and 4.00 % per annum, respectively, on any Notes outstanding. The effective interest rate for the Class A and Class B Notes as of September 30, 2025 was 9.11 % and 11.02 %, respectively.
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As the Indenture was entered into in conjunction with the Eleventh Amendment, the Company performed an analysis under ASC 470, Debt, and determined that debt modification accounting was appropriate for the Term Loans and Notes. The additional debt discount costs incurred in connection with the Eleventh Amendment and Indenture include the fair value of the Eleventh Amendment Warrants, fees paid on behalf of lenders, and original issue discount on the Notes. The Company incurred a total of $3.7 million in debt issuance costs and $2.7 million in debt discount related to the Indenture, of which none of the debt issuance costs were capitalized and $2.7 million in debt discount were deferred.
The Company incurred a total of $59.1 million in debt issuance costs and debt discounts related to the Senior Secured Credit Facility and Notes, of which $35.3 million in debt issuance costs were capitalized and $11.9 million in debt discounts were deferred. The costs associated with the Term Loans and Notes are being amortized using the effective interest method over the term of the respective debt instruments. The costs associated with the Revolving Credit Facility are being amortized on a straight-line basis over the remaining term of the Senior Secured Credit Facility. The amortization of debt issuance costs associated with the Company’s debt is included in interest expense, net in the Company’s condensed consolidated statements of comprehensive loss.
During the three months ended September 30, 2025, the Company repaid $4.5 million of the outstanding balance on the Notes.
The carrying amounts of the Company’s Term Loans Notes approximate fair value, as the Term Loans bear variable interest rates that reset based on market indices and the Notes were issued at prevailing market terms with no significant changes in the Company’s credit quality, interest rates, or credit spreads since issuance.
Variable Interest Entity
The Issuer was formed on July 24, 2023 as a bankruptcy remote and separate legal entity with its own creditors who will be entitled, prior to and upon the liquidation of the Issuer, to be satisfied out of the Issuer’s assets prior to any assets becoming available to the Company. Accordingly, the assets of the Issuer are not available to pay creditors of the Company or any of its subsidiaries.
The Issuer, as described above, meets the definition of a variable interest entity (“VIE”) for which the Company is the primary beneficiary because it has the power over the significant activities of the VIE in its capacity as the servicer of the Subject Renewal Commissions. As such, the Issuer’s assets, liabilities, and financial results of operations are consolidated in the Company’s condensed consolidated financial statements. As of September 30, 2025, the Issuer’s liabilities included in the condensed consolidated balance sheets primarily consisted of the borrowings under the Indenture of $78.9 million.
7.Senior Non-Convertible Preferred Stock
On February 10, 2025, the Company entered into the Senior Non-Convertible Preferred Stock Purchase Agreements with each of NL Monarch Holdings LLC (“Morgan Stanley”) and NL Monarch Holdings II LLC (“Bain Capital” and together with Morgan Stanley, the “Investors”), providing for an aggregate investment by the Investors of $350.0 million in the Company (collectively, the “Investment”). In exchange for the Investment, the Company issued to the Investors 350,000 shares of Senior Non-Convertible Preferred Stock of the Company, par value $0.01 per share, (the “Senior Non-Convertible Preferred Stock”), with a face value per share of $1,000 (“Original Liquidation Preference”), and agreed to issue to the Investors up to an aggregate amount of 30,833,333 warrants to purchase shares of the Company’s common stock, par value $0.01 (the “Senior Non-Convertible Preferred Stock Warrants”). Refer to Note 8 to the condensed consolidated financial statements for further detail on the Senior Non-Convertible Preferred Stock Warrants. At close, the Company reimbursed certain of the Investors’ expenses and paid to the Investors an aggregate closing fee of 3.00 % of the aggregate purchase price. The Company used the net proceeds from the Investment to repay $260.0 million of the Company’s outstanding Term Loan balance, $4.9 million of accrued Term Loan interest, $13.0 million of transaction costs incurred at issuance, $40.0 million of the Company’s outstanding Revolving Credit Facility balance, and $20.0 million of cash to fund operations. In
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connection with the Investment, the Company also entered into a Director Designation Agreement with an affiliate of each Investor pursuant to which the Company appointed a representative of each Investor to the Company’s Board of Directors at closing.
The Company evaluated the Senior Non-Convertible Preferred Stock under ASC 480 and concluded the instrument will be classified as temporary equity on the condensed consolidated balance sheet, as the Senior Non-Convertible Preferred Stock will become redeemable at the option of the Investors upon occurrence of an event that is not solely within the control of the Company. The $350.0 million in gross proceeds from the Senior Non-Convertible Preferred Stock have been allocated to the Senior Non-Convertible Preferred Stock and Senior Non-Convertible Preferred Stock Warrants using the with-and-without method based on the fair values of the Senior Non-Convertible Preferred Stock Warrants at issuance. Upon issuance, $221.0 million of the gross proceeds were allocated to the Senior Non-Convertible Preferred Stock and $129.0 million to the Senior Non-Convertible Preferred Stock Warrants, respectively. The $10.5 million closing fee and $1.7 million in fees paid on behalf of the Investors were attributed to the Senior Non-Convertible Preferred Stock, resulting in net proceeds of $337.9 million. Of the $11.4 million total issuance costs incurred, $7.1 million was allocated to the Senior Non-Convertible Preferred Stock based on a relative fair value approach and treated as a reduction in carrying value. The remainder was allocated to the Senior Non-Convertible Preferred Stock Warrants and expensed.
Dividends
Dividends on the Senior Non-Convertible Preferred Stock will accrue and accumulate quarterly at a rate of 14.5 % per annum, subject to certain increases in the event of the occurrence of certain events of default, and to a decrease to 13.5 % per annum if (a) the dividends are paid in cash, (b) liquidity is no less than $50.0 million, and (c) the outstanding balance of the Term Loans is less than or equal to $200.0 million. To the extent the Company does not pay such dividends in cash, dividends on each outstanding share of Senior Non-Convertible Preferred Stock will accrue and accumulate on a daily basis and compound quarterly at the then applicable dividend rate on the Original Liquidation Preference plus the aggregate amount of unpaid accrued dividends (the “Accreted Liquidation Preference”).
Our calculation of the expected redemption price assumes redemption on the sixth anniversary date in accordance with the Senior Non-Convertible Preferred Stock Purchase Agreements. The Company has presented the Senior Non-Convertible Preferred Stock in temporary equity and is accreting the discount using the effective interest method. The implied effective interest rate is approximately 19.0 % per annum.
Ranking and Liquidation Preference
The Senior Non-Convertible Preferred Stock ranks senior to the common stock and each other existing or future classes or series of capital stock or common stock equivalents of the Company, including with respect to payments of dividends and distributions on, and in the liquidation, dissolution or winding up, and upon any distribution of the assets of, the Company. Upon the liquidation, dissolution, or winding up of the affairs of the Company, or upon the occurrence of certain events constituting a preferred default pursuant to the Certificate of Designation for the Senior Non-Convertible Preferred Stock (a “Liquidation Event”), the Company shall redeem all shares of Senior Non-Convertible Preferred Stock as of the date of the Liquidation Event. A redemption shall be in preference to and in priority over any distribution or other payment to a holder of any common stock, and at a price per share of Senior Non-Convertible Preferred Stock equal to the sum of the then current Accreted Liquidation Preference, plus the aggregate amount of any accrued and unpaid dividends (the “Liquidation Preference”).
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Redemption Rights
In accordance with the Senior Non-Convertible Preferred Stock Purchase Agreements, the Senior Non-Convertible Preferred Stock may be redeemed by the Investors upon the earlier of (i) the date which is six months following the latest maturity date under the Senior Secured Credit Facility (as may be extended from time to time), but only if all outstanding amounts due by the Company pursuant to the Credit Agreement are not repaid, extended or refinanced in full prior to such latest maturity date, and (ii) the sixth anniversary of issuance. The redemption date is contingent upon the occurrence or non-occurrence of Term Loan repayments, maturity extensions, or refinancing by the Company and does not embody an unconditional obligation of the Company as of issuance to redeem the Senior Non-Convertible Preferred Stock. From December 1, 2025 through December 31, 2025, the Company holds the right to redeem a maximum amount of 50,000 shares of Senior Non-Convertible Preferred Stock from the holders of the Senior Non-Convertible Preferred Stock, on a pro rata basis, for an amount per share equal to the product of (i) 1.145 multiplied by (ii) the Original Liquidation Preference (“Early Redemption Amount”). At any time on or after the sixth anniversary of the issuance date, the Company may elect to redeem all or a portion of the Senior Non-Convertible Preferred Stock for an amount equal to the then current Liquidation Preference.
8.Warrants to Purchase Shares of Common Stock
Eleventh Amendment Warrants
Concurrent with the entry into the Eleventh Amendment and Indenture on October 15, 2024, the Company issued an aggregate 5,568,360 Eleventh Amendment Warrants to the term lenders under the Senior Secured Credit Facility. Each Eleventh Amendment Warrant entitles the holder to purchase one share of Common Stock at an exercise price of $3.00 per share, payable in cash or on a cashless basis according to the formula set forth in the Eleventh Amendment Warrant agreements. The exercise price of the Eleventh Amendment Warrants and the number of shares issuable upon exercise are subject to adjustments for stock splits, combinations, stock dividends or similar events. The Eleventh Amendment Warrants vest upon the occurrence of a repayment milestone failure or, in the absence of a repayment milestone failure, in four ratable annual installments commencing on the one-year anniversary of the original issue date, whereas repayment milestone failure is defined as the failure to prepay the Term Loans in an aggregate principal amount of not less than $300.0 million. If a $350.0 million repayment event on the Term Loans occurs on or prior to December 31, 2025, and the first tranche warrant shares have not previously vested, then (i) the first tranche warrant shares shall be forfeited, and (ii) any vested first tranche warrant shares shall be cancelled. The Eleventh Amendment Warrants expire four years after the initial vesting date. As of September 30, 2025, none of the Eleventh Amendment Warrants had vested.
The Company evaluated the Eleventh Amendment Warrants under ASC 815, Derivatives and Hedging, and concluded that they do not meet the criteria to be classified in stockholders’ equity and should be classified as a derivative liability. For the Eleventh Amendment Warrants, this conclusion was reached due to the variable settlement amount of the Eleventh Amendment Warrant shares. Therefore, the freestanding Eleventh Amendment Warrants are reflected as liabilities on the condensed consolidated balance sheets at their estimated fair value. Subsequent changes in the estimated fair value are reflected in change in fair value of warrants in the accompanying condensed consolidated statements of comprehensive loss.
Senior Non-Convertible Preferred Stock Warrants
Pursuant to the Senior Non-Convertible Preferred Stock Purchase Agreements, the Company agreed to issue to the Investors warrants to purchase up to an aggregate 30,833,333 shares of the Company’s common stock. The issued Senior Non-Convertible Preferred Stock Warrants are divided into three tranches: (A) warrants to purchase 13,481,481 shares of Common Stock at an initial exercise price of $0.01 per share; (B) warrants to purchase 10,111,111 shares of Common Stock at an initial exercise price of $3.92 per share; and (C) warrants to purchase 7,240,741 shares of Common Stock at an initial exercise price of $5.50 per share. Each Investor is entitled to receive one-half of each tranche of the Senior Non-Convertible Preferred Stock Warrants, subject to the conditions described below. The exercise price of the Senior Non-Convertible Preferred Stock Warrants and the number of shares issuable upon exercise are subject to adjustments for stock splits, combinations, stock dividends or
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similar events. The Company issued 85% of the Senior Non-Convertible Preferred Stock Warrants that are allocated to each Investor on February 28, 2025. The Senior Non-Convertible Preferred Stock Warrants are fully vested and exercisable, payable in cash or on a cashless basis according to the formula set forth in the Senior Non-Convertible Preferred Stock Purchase Agreements, upon issuance. On January 2, 2026, the Company will issue the remaining 15% of the Senior Non-Convertible Preferred Stock Warrants (“Contingent Warrants”) that are allocated to each Investor, provided that, if, on or prior to December 31, 2025 the Company has paid the Early Redemption Amount or any portion thereof, then the number of Contingent Warrants to be issued to the Investors on January 2, 2026 will be reduced pro rata by a percentage equal to the Early Redemption Amount divided by $50.0 million. If the Early Redemption Amount equals $50.0 million, then the Contingent Warrants will not be issued to either of the Investors. The Senior Non-Convertible Preferred Stock Warrants expire ten years following the date of issuance. As of September 30, 2025, none of the Senior Non-Convertible Preferred Stock Warrants had been exercised.
As outlined in the Senior Preferred Stock Purchase Agreement, the Investors can require the Company to repurchase all of their outstanding Senior Non-Convertible Preferred Stock Warrants at fair value in cash based on the earlier of: (i) payment in full by the Company of all amounts due by the Company in respect of each issued and outstanding share of Preferred Stock, and (ii) the sixth anniversary of the Senior Non-Convertible Preferred Stock original issue date. If the Company makes the payment in full, there is a settlement alternative that allows for the Investors to request for the Company to purchase all of their outstanding Preferred Warrant shares at fair value in cash (“Put Right”).
Due to the Put Right, the Company evaluated the Senior Non-Convertible Preferred Stock Warrants under ASC 480 and concluded that they do not meet the criteria to be classified in stockholders’ equity and should be classified as a liability. Therefore, the freestanding Senior Non-Convertible Preferred Stock Warrants are reflected as liabilities on the condensed consolidated balance sheets at their estimated fair value. Subsequent changes in the estimated fair value are reflected in other expense in the accompanying condensed consolidated statements of comprehensive loss.
9. Fair Value Measurements
The Company determines the fair value of its financial instruments in accordance with the provisions of ASC 820, Fair Value Measurement (“ASC 820”), which establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below:
•Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities
•Level 2 - Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability
•Level 3 - Valuation is generated from model-based techniques that use significant assumptions not observable in the market. These unobservable assumptions reflect our own estimates of assumptions that market participants would use in pricing the asset or liability.
The carrying amounts of the Company’s cash, cash equivalents and restricted cash, accounts receivable, accounts payable, accrued compensation, and accrued liabilities approximate their fair values due to the short-term nature of these instruments. The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of September 30, 2025 and June 30, 2025 and indicate the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:
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As of September 30, 2025 | |||||||||||||||||||||||
| (in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
Assets: | |||||||||||||||||||||||
Cash equivalents | |||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
Other long-term liabilities | |||||||||||||||||||||||
| Warrant liability | $ | $ | $ | $ | |||||||||||||||||||
As of June 30, 2025 | |||||||||||||||||||||||
| (in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
Assets: | |||||||||||||||||||||||
Cash equivalents | |||||||||||||||||||||||
Money market funds | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
Other long-term liabilities | |||||||||||||||||||||||
| Warrant liability | $ | $ | $ | $ | |||||||||||||||||||
Money market funds—Represents short-term, highly liquid investments with maturities of three months or less at the time of purchase. Cash equivalents include a money market account primarily invested in cash and U.S. Government securities. These investments are generally classified as Level 1 fair value measurements, which represent unadjusted quoted market prices in active markets for identical assets or liabilities.
Warrant liability—The Company utilizes the Black-Scholes-Merton option pricing model for the liability classified warrants each reporting period, with changes in fair value recognized in the condensed consolidated statements of comprehensive loss. The estimated fair value of the liability classified warrants is determined using Level 3 inputs. Inherent in an option pricing model are estimates and assumptions related to expected share-price volatility, risk-free interest rate, expected dividend yield, and expected life. These estimates and assumptions could vary significantly, which could result in material differences in the fair values assigned to the assets and liabilities.
The expected life of the Eleventh Amendment Warrants is assumed to be equivalent to their remaining contractual term based upon the vesting date assumed for each tranche. The Company assumed all four tranches will vest on the four consecutive anniversaries of the original issue date. The Company estimates the expected volatility of its common stock based on the Company’s historical volatility. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the valuation date for a maturity similar to the expected remaining life of the
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Eleventh Amendment Warrants. The Company does not plan to pay a dividend during the Eleventh Amendment Warrant term, nor have they historically, thus the dividend rate will remain at zero.
The fair value of the Eleventh Amendment Warrants has been estimated with the following assumptions:
| September 30, 2025 | ||||||||||||||
Tranche 1 | Tranche 2 | Tranche 3 | Tranche 4 | |||||||||||
Stock price(1) | $ | $ | $ | $ | ||||||||||
| Exercise price | $ | $ | $ | $ | ||||||||||
Expected volatility | % | % | % | % | ||||||||||
| Risk-free interest rate | % | % | % | % | ||||||||||
Expected dividend-yield | % | % | % | % | ||||||||||
Expected life | ||||||||||||||
Fair value per warrant | $ | $ | $ | $ | ||||||||||
(1) The stock price is based on the closing stock price as of September 30, 2025.
The expected life of the Senior Non-Convertible Preferred Stock Warrants is assumed to be equivalent to their remaining contractual term. This includes the assumption that there will be no Early Redemption Amount paid and as a result the Senior Non-Convertible Preferred Stock Warrants will have an expected life equal to ten years from issuance. The exercise prices of each tranche are based upon the terms established in the Senior Non-Convertible Preferred Stock Purchase Agreements. The Company used a ten-year term matched zero-coupon interest rate and a ten-year look back term. The Company estimates the expected volatility of its common stock based on the Company’s historical volatility. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the valuation date for a maturity similar to the expected remaining life of the Senior Non-Convertible Preferred Stock Warrants. The Company does not plan to pay a dividend during the Senior Non-Convertible Preferred Stock Warrants term, nor have they historically, thus the dividend rate will remain at zero.
The fair value of the Senior Non-Convertible Preferred Stock Warrants has been estimated with the following assumptions:
| September 30, 2025 | |||||||||||
| Tranche A | Tranche B | Tranche C | |||||||||
Stock price(1) | $ | $ | $ | ||||||||
| Exercise price | $ | $ | $ | ||||||||
| Expected volatility | % | % | % | ||||||||
| Risk-free interest rate | % | % | % | ||||||||
| Expected dividend-yield | % | % | % | ||||||||
| Expected life | |||||||||||
| Fair value per warrant | $ | $ | $ | ||||||||
(1) The stock price is based on the closing stock price as of September 30, 2025.
Changes in Level 3 fair value measurements during the period ended September 30, 2025 were as follows:
| (in thousands) | Warrant Liability | ||||
Balance as of June 30, 2025 | $ | ||||
| Change in fair value | ( | ||||
Balance as of September 30, 2025 | $ | ||||
10.COMMITMENTS AND CONTINGENCIES
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Lease Obligations—Refer to Note 4 to the condensed consolidated financial statements for commitments related to our operating leases.
Purchase Commitments—The Company is party to a supply agreement that requires minimum monthly purchase commitments of approximately $12.7 million through February 28, 2027. The Company expects to meet these commitments in the normal course of business, and accordingly, no liability has been recorded in the condensed consolidated financial statements.
Legal Contingencies and Obligations—From time to time, the Company is subject to legal proceedings and governmental inquiries in the ordinary course of business. Such matters may include insurance regulatory claims; commercial, tax, employment, or intellectual property disputes; matters relating to competition and sales practices; claims for damages arising out of the use of the Company’s services. The Company may also become subject to lawsuits related to past or future acquisitions, divestitures, or other transactions, including matters related to representations and warranties, indemnities, and assumed or retained liabilities. The Company is not currently aware of any legal proceedings or claims that it believes will have, individually or in the aggregate, a material adverse effect on its business, financial condition, operating results, or cash flows; however, in the event of unexpected developments, it is possible that the ultimate resolution of certain ongoing matters, if unfavorable, could be materially adverse to our business, prospects, financial condition, liquidity, results of operation, cash flows, or capital levels.
Securities Class Actions and Stockholder Derivative Suit
On August 16, 2021, a putative securities class action lawsuit captioned Hartel v. SelectQuote, Inc., et al., Case No. 1:21-cv-06903 (“the Hartel Action”) was filed against the Company and two of its executive officers in the U.S. District Court for the Southern District of New York. The complaint asserts securities fraud claims on behalf of a putative class of plaintiffs who purchased or otherwise acquired shares of the Company’s common stock between February 8, 2021 and May 11, 2021 (the “Hartel Relevant Period”). Specifically, the complaint alleges the defendants violated Sections 10(b) and 20(a) and Rule 10b-5 of the Exchange Act by making materially false and misleading statements and failing to disclose material adverse facts about the Company’s business, operations, and prospects, allegedly causing the Company’s common stock to trade at artificially inflated prices during the Hartel Relevant Period. The plaintiffs seek unspecified damages and reimbursement of attorneys’ fees and certain other costs.
On October 7, 2021, a putative securities class action lawsuit captioned West Palm Beach Police Pension Fund v. SelectQuote, Inc., et al., Case No. 1:21-cv-08279 (the “WPBPPF Action”), was filed in the U.S. District Court for the Southern District of New York against the Company, two of its executive officers, and six current or former members of the Company’s Board of Directors, along with the underwriters of the Company’s initial public offering of common stock (the “Offering”). The complaint asserts claims for securities law violations on behalf of a putative class of plaintiffs who purchased shares of the Company’s common stock (i) in or traceable to the Offering or (ii) between May 20, 2020 and August 25, 2021 (the “WPB Relevant Period”). Specifically, the complaint alleges the defendants violated Sections 10(b) and 20(a) and Rule 10b-5 of the Exchange Act by making materially false and misleading statements and failing to disclose material adverse facts about the Company’s financial well-being and prospects, allegedly causing the Company’s common stock to trade at artificially inflated prices during the WPB Relevant Period. The complaint also alleges the defendants violated Sections 11, 12(a)(2), and 15 of the Securities Act by making misstatements and omissions of material facts in connection with the Offering, allegedly causing a decline in the value of the Company’s common stock. The plaintiffs seek unspecified damages, rescission, and reimbursement of attorneys’ fees and certain other costs.
On October 15, 2021, a motion to consolidate the Hartel Action and the WPBPPF Action was filed. On September 2, 2022, the court entered an order consolidating the Hartel and WPBPPF Actions under the caption In re SelectQuote, Inc. Securities Litigation, Case No. 1:21-cv-06903 (the “Securities Class Action”) and appointing the West Palm Beach Police Pension Fund and City of Fort Lauderdale Police & Fire Retirement System as lead plaintiffs. On November 19, 2022, plaintiffs filed an amended complaint asserting similar allegations to those
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alleged in the Hartel and WPBPPF Actions in addition to new allegations regarding certain defendants’ purported violation of Section 20A of the Exchange Act. The amended complaint also added Brookside Equity Partners LLC, one of the Company’s principal stockholders, as a defendant. On January 27, 2023, the Company filed a motion to dismiss the amended complaint on behalf of itself and certain of its current and former officers and directors. Plaintiffs filed an opposition to the motion to dismiss on April 5, 2023, and the Company filed its reply to plaintiffs’ opposition on May 10, 2023. On March 28, 2024, the court granted the Company’s motion to dismiss, with leave to amend. Plaintiffs filed their second amended complaint on May 31, 2024. On July 31, 2024, the Company filed a motion to dismiss the second amended complaint. Plaintiffs filed their opposition to the Company’s motion to dismiss on October 2, 2024, and the Company filed its reply to Plaintiffs’ opposition on November 1, 2024. On April 3, 2025, the court dismissed Plaintiffs’ second amended complaint. Plaintiffs filed a notice of appeal on May 5, 2025. On August 8, 2025, plaintiffs West Palm Beach Police Pension Fund and City of Fort Lauderdale Police & Fire Retirement System filed a brief in support of their appeal with the United States Court of Appeals for the Second Circuit (the “Second Circuit”), and on August 13, 2025, the Second Circuit granted the parties’ joint stipulation dismissing Brookside Equity Partners LLC from the appeal. Defendant-appellees’ brief is due by November 7, 2025.
On March 25, 2022, a stockholder derivative action captioned Jadlow v. Danker, et al., Case No. 1:22-cv-00391 (“the Jadlow Action”) was filed in the U.S. District Court for the District of Delaware by an alleged stockholder of the Company, purportedly on the Company’s behalf. The lawsuit was brought against certain of the Company’s current and former directors and officers, and against the Company, as nominal defendant. The complaint alleges that certain of the defendants violated Section 14(a) of the Exchange Act by making materially false and misleading statements and failing to disclose material adverse facts about the Company’s business, operations, and prospects. The complaint also asserts claims against all defendants for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets based on the same general underlying conduct and seeks contribution under Sections 10(b) and 21D of the Exchange Act and Section 11(f) of the Securities Act from the individual defendants named in the Securities Class Actions. The complaint seeks unspecified damages for the Company, restitution, reformation and improvement of its corporate governance and internal procedures regarding compliance with laws, and reimbursement of costs and attorneys’ fees. On July 25, 2022, the Jadlow action was transferred to the U.S. District Court for the Southern District of New York, where it was assigned Case No. 1:22-cv-06290 and referred to Judge Alvin K. Hellerstein as possibly related to the Hartel Action. On August 4, 2022, Judge Hellerstein accepted the Jadlow action as related to the Hartel Action and, on August 10, 2022, granted the parties’ joint stipulation to stay the Jadlow action pending the resolution of the motion to dismiss the Securities Class Action. The Jadlow action remains stayed.
Other Matters
On May 1, 2025, the Company became aware the U.S. Attorney’s Office for the District of Massachusetts had filed a complaint partially intervening in a qui tam action against the Company and certain of its competitors and carrier partners. The qui tam action, captioned United States ex rel. Shea v. eHealth, Inc., et al., Case No. 21-cv-11777 (the “DOJ Action”), was brought by a relator, a former employee of one of the Company’s direct competitors, and was filed and remained under seal until it was unsealed by order of the U.S. District Court for the District of Massachusetts dated May 1, 2025. On the same date, the Company also became aware that the relator had filed a sealed amended complaint in the qui tam action on April 29, 2025, which complaint was also unsealed by the Court’s order. The complaints allege that the Company and the other defendants named therein violated the Federal False Claims Act by engaging in various allegedly improper sales and marketing practices. The complaints seek, among other things, treble damages, civil penalties, and costs. The Company denies the allegations made in the complaints and plans to defend the suit vigorously.
On August 19, 2025, the Company and co-defendants eHealth, Inc., GoHealth, Inc., Aetna Life Insurance Company, Humana Inc., and Elevance Health, Inc., and certain of their corporate affiliates, filed a joint motion to dismiss the government’s complaint for failure to state a claim upon which relief can be granted. The Company, together with co-defendants eHealth, Inc. and GoHealth, Inc. (collectively, the “Brokers”), also filed an additional motion to dismiss on separate grounds. On October 20, 2025, the government filed motions in opposition to the joint motion to dismiss and the Brokers’ separate motion to dismiss.
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On August 11, 2025, a putative securities class action lawsuit captioned Pahlkotter v. SelectQuote, Inc., et al., Case No. 1:25-cv-06620 (the “Pahlkotter Action”), was filed in the U.S. District Court for the Southern District of New York against the Company and three of its current and former executive officers. The complaint asserts claims for securities law violations relating to the allegations set forth in the DOJ Action. The plaintiffs seek unspecified damages, rescission, and reimbursement of attorneys’ fees and certain other costs. On August 29, 2025, the court granted the parties’ joint stipulation to stay the Pahlkotter Action pending the designation of a lead plaintiff and the anticipated filing of an amended complaint.
The Company currently believes that none of the above matters will have a material adverse effect on its operations, financial condition or liquidity; however, depending on how the matters progress, they could be costly to defend and could divert the attention of management and other resources from operations. The Company has not concluded that a loss related to these matters is probable and, therefore, has not accrued a liability related to any of these matters.
11.SHAREHOLDERS’ EQUITY
Common Stock—As of September 30, 2025, the Company has reserved the following authorized, but unissued, shares of common stock:
| ESPP | ||||||||
| Stock awards outstanding under 2020 Plan | ||||||||
| Stock awards available for grant under 2020 Plan | ||||||||
| Options outstanding under 2003 Plan | ||||||||
| Total | ||||||||
Share-Based Compensation Plans
The Company has awards outstanding from two share-based compensation plans, the 2003 Stock Incentive Plan (the “2003 Stock Plan”) and the 2020 Omnibus Incentive Plan (the “2020 Stock Plan” and, together with the 2003 Stock Plan, the “Stock Plans”). The 2020 Stock Plan provides for the grant of incentive stock options (“ISOs”), nonstatutory stock options (“NSOs”), stock appreciation rights, restricted stock awards, time-based restricted stock unit awards (“RSUs”), performance-based restricted stock units (“PSUs”), price-vested restricted stock units (“PVUs”) and other forms of equity compensation (collectively, “stock awards”). All stock awards (other than ISOs, which may be granted only to current employees of the Company) may be granted to employees, non-employee directors, and consultants of the Company and its subsidiaries and affiliates. As of the effective date of the 2020 Stock Plan, which was adopted by the Company’s Board of Directors and approved by the Company’s stockholders in connection with the Company’s IPO in May 2020, no further awards may be made under the 2003 Stock Plan.
The number of shares of common stock available for issuance as of September 30, 2025, pursuant to future awards under the Company’s 2020 Stock Plan is 1,813,849 . The number of shares of the Company’s common stock reserved under the 2020 Stock Plan is subject to an annual increase on the first day of each fiscal year beginning on July 1, 2021, equal to 3 % of the total outstanding shares of common stock as of the last day of the immediately preceding fiscal year. The maximum number of shares of common stock that may be issued upon the exercise of ISOs will be 4,000,000 . The shares of common stock covered by any award that is forfeited, terminated, expired, or lapsed without being exercised or settled for cash will again become available for issuance under the 2020 Stock Plan. With respect to any award, if the exercise price and/or tax withholding obligations are satisfied by delivering shares to the Company (by actual delivery or attestation), or if the exercise price and/or tax withholding obligations are satisfied by withholding shares otherwise issuable pursuant to the award, the share reserve shall nonetheless be reduced by the gross number of shares subject to the award.
The Company accounts for its stock awards in accordance with ASC 718, Compensation—Stock Compensation, which requires all share-based compensation to be recognized in the income statement based on fair value and applies to all awards granted, modified, canceled, or repurchased after the effective date.
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Total share-based compensation for stock awards included in selling, general and administrative expense in the condensed consolidated statements of comprehensive loss was as follows for the periods presented:
| Three Months Ended September 30, | ||||||||||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||||||||||||||||||||
| Share-based compensation related to: | ||||||||||||||||||||||||||||||||
| Equity classified stock options | $ | $ | ||||||||||||||||||||||||||||||
Equity classified RSUs | ||||||||||||||||||||||||||||||||
Equity classified PVUs | ||||||||||||||||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||||||||||||||
Stock Options—The stock options outstanding under the 2003 Stock Plan vest as to one-third after the vesting commencement date and as to 1/24 of the remaining shares subject to the stock option monthly thereafter, subject to the award recipient’s continued employment through the applicable vesting date. Upon a termination of employment for any reason other than for “Cause” (as defined in the 2003 Stock Plan), any unvested and outstanding stock options would generally be forfeited for no consideration, and any vested and outstanding stock options would remain exercisable for 90 days following the date of termination (and, in the case of a termination of employment due to death or disability, for 12 months following the date of termination). Stock options expire 10 years from the date of grant. The terms for ISOs and NSOs awarded in the 2020 Stock Plan are the same as in the 2003 Stock Plan with the exception that the options generally shall vest and become exercisable in four equal installments on each of the first four anniversaries of the grant date, subject to the award recipient’s continued employment through the applicable vesting date. Stock options are granted with an exercise price that is no less than 100 % of the fair market value of the underlying shares on the date of the grant.
The fair value of each option (for purposes of calculation of share-based compensation expense) is estimated using the Black-Scholes-Merton option pricing model that uses assumptions determined as of the date of the grant. Use of this option pricing model requires the input of subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them (“expected term”), the estimated volatility of the Company's common stock price over the expected term (“volatility”), the number of options that will ultimately not complete their vesting requirements (“assumed forfeitures”), the risk-free interest rate that reflects the interest rate at grant date on zero-coupon United States governmental bonds that have a remaining life similar to the expected term (“risk-free interest rate”), and the dividend yield assumption which is based on the Company's dividend payment history and management's expectations of future dividend payments (“dividend yield”). Changes in the subjective assumptions can materially affect the estimate of the fair value of share-based compensation and, consequently, the related amount recognized in the condensed consolidated statements of comprehensive loss.
During the three months ended September 30, 2025 and 2024, there were no The following table summarizes stock option activity under the Stock Plans for the three months ended September 30, 2025:
| Number of Options | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (in Years) | Aggregate Intrinsic Value (in Thousands) | |||||||||||
Outstanding—June 30, 2025 | $ | |||||||||||||
| Options forfeited/expired/cancelled | ( | |||||||||||||
Outstanding—September 30, 2025 | $ | $ | ||||||||||||
Vested and exercisable—September 30, 2025 | $ | $ | ||||||||||||
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As of September 30, 2025, there was $0.1 million in unrecognized share-based compensation cost related to unvested stock options granted, which is expected to be recognized over a weighted-average period of 0.43 years.
During the three months ended September 30, 2025, there were no stock options exercised. The Company received less than $0.1 million of cash in connection with stock options exercised during the September 30, 2024.
Restricted Stock Units—The Company grants RSUs to eligible employees, non-employee directors, and contractors. These awards generally vest over a period of one to four years . Fair value of the RSUs is determined based on the market price of the Company’s common stock at the grant date and share-based compensation expense is recognized over the requisite service period.
The following table summarizes restricted stock unit activity under the 2020 Stock Plan for the three months ended September 30, 2025:
| Number of Restricted Stock Units | Weighted-Average Grant Date Fair Value | ||||||||||
Unvested as of June 30, 2025 | $ | ||||||||||
| Granted | |||||||||||
| Vested | ( | ||||||||||
| Forfeited | ( | ||||||||||
Unvested as of September 30, 2025 | $ | ||||||||||
As of September 30, 2025, there was $17.2 million of unrecognized share-based compensation cost related to unvested restricted stock units outstanding, which is expected to be recognized over a weighted-average period of 2.19 years.
Performance Stock Units—Based upon the terms of the PSUs granted, if certain performance metrics are met, PSUs vest at the end of a three-year performance period. The performance targets for the PSUs granted in the 2021 fiscal year, which awards vested on September 13, 2023, were achieved at 13 %, and a total of 14,477 shares were issued. The fiscal year 2022 tranche did not reach the relevant performance targets as of June 30, 2024; thus, the PSUs were forfeited, and the underlying shares were returned to the pool of shares available for issuance under the 2020 Stock Plan. As of September 30, 2025, there were no remaining PSUs outstanding; thus, there was no unrecognized compensation cost related to unvested performance stock units granted.
Price-Vested Units—During the three months ended September 30, 2025, and 2024, the Company issued PVUs for which vesting is subject to the fulfillment of both a service period and the achievement of stock price hurdles during the relevant performance period. The awards granted during the three months ended September 30, 2025, and 2024, respectively, are divided into three 60 -trading day period during the five-year performance period meets or exceeds the relevant price hurdle. An employee is eligible to vest in one-third of the awards in each tranche after each year of service, but subject to the achievement of the stock-price hurdle attached to each tranche. As a result, share-based compensation will be recognized on a straight-line basis across nine
The following table summarizes the number of shares, stock price hurdles, service periods, and performance periods for each tranche, for the PVUs granted during the three months ended September 30, 2025:
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| Number of Shares per Tranche | Grant Date Fair Value (per Share) | Stock Price Hurdle (per Share) | Performance Period | Requisite Service Period | ||||||||||||||||||||||||||||
| Tranche 1 | $ | $ | August 1, 2025 - August 1, 2030 | |||||||||||||||||||||||||||||
| Tranche 2 | $ | $ | August 1, 2025 - August 1, 2030 | |||||||||||||||||||||||||||||
| Tranche 3 | $ | $ | August 1, 2025 - August 1, 2030 | |||||||||||||||||||||||||||||
The following table summarizes the number of shares, stock price hurdles, service periods, and performance periods for each tranche, for the PVUs awarded during the three months ended September 30, 2024:
| Number of Shares per Tranche | Grant Date Fair Value (per Share) | Stock Price Hurdle (per Share) | Performance Period | Requisite Service Period | ||||||||||||||||||||||||||||
| Tranche 1 | $ | $ | August 1, 2024 - August 1, 2029 | |||||||||||||||||||||||||||||
| Tranche 2 | $ | $ | August 1, 2024 - August 1, 2029 | |||||||||||||||||||||||||||||
| Tranche 3 | $ | $ | August 1, 2024 - August 1, 2029 | |||||||||||||||||||||||||||||
The fair value of each PVU (for purposes of calculation of share-based compensation expense) is estimated using a Monte Carlo simulation valuation model that uses assumptions determined as of the date of the grant. Use of this model requires the input of subjective assumptions and changes in the subjective assumptions can materially affect the estimate of the fair value of share-based compensation recognized in the condensed consolidated statements of comprehensive loss. These assumptions include estimating the volatility of the Company's common stock price over the expected term, the risk-free interest rate that reflects the interest rate at grant date on zero-coupon United States governmental bonds that have a remaining life similar to the expected term risk-free interest rate, the cost of equity, and the dividend yield assumption which is based on the Company's dividend payment history and management's expectations of future dividend payments.
Shares Granted August 1, 2025 | Shares Granted August 1, 2024 | |||||||||||||
| Share price as of grant date | $ | $ | ||||||||||||
| Volatility | ||||||||||||||
| Risk-free interest rate | ||||||||||||||
| Cost of Equity | ||||||||||||||
| Dividend yield | ||||||||||||||
The following table summarizes price-vested stock unit activity under the 2020 Stock Plan for the three months ended September 30, 2025:
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| Number of Price-Vested Units | Weighted-Average Grant Date Fair Value | ||||||||||
Unvested as of June 30, 2025 | $ | ||||||||||
| Granted | $ | ||||||||||
| Vested | ( | $ | |||||||||
Unvested as of September 30, 2025 | $ | ||||||||||
During the year ended June 30, 2025, the $2.50 , $3.13 and $4.00 stock price hurdles were achieved. During the three months ended September 30, 2025, one-third of the awards in the first tranche of PVUs with a $2.50 price hurdle that were granted during the three months ended September 30, 2023 vested, one-third of the awards in the first tranche of PVUs with a $4.00 price hurdle that were granted during the three months ended September 30, 2022 vested, and one-third of the awards in the first tranche of PVUs with a $3.13 price hurdle that were granted during the three months ended September 30, 2024 vested.
As of September 30, 2025, there was $6.4 million of unrecognized share-based compensation cost related to unvested PVUs outstanding, which is expected to be recognized over a weighted-average period of 1.55 years.
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12.REVENUES FROM CONTRACTS WITH CUSTOMERS
Disaggregation of Revenue from Contracts with Customers—The disaggregation of revenue by segment and product is depicted for the periods presented below, and is consistent with how the Company evaluates its financial performance:
| Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands) | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Senior: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Medicare advantage commissions | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Senior commissions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other services | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Senior revenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Healthcare Services: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pharmacy | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other services | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Healthcare Services revenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Life: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Term commissions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Final expense commissions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other services | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Life revenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All other: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commissions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other services | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total All other revenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Eliminations: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commissions | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other services | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Elimination revenue | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Commissions and other services revenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Pharmacy revenue | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total Revenue | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract Balances—The Company has contract assets related to commissions receivable from its insurance carrier partners, with the movement over time as the policy is renewed between long-term and short-term commissions receivable and accounts receivable, net being the main activity, along with commission revenue adjustments from changes in estimates.
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A roll forward of commissions receivable (current and long-term) is shown below for the period presented:
| (in thousands) | |||||||||||
Balance as of June 30, 2025 | $ | ||||||||||
Commission revenue from revenue recognized | |||||||||||
| Net commission revenue adjustment from change in estimate | |||||||||||
| Amounts recognized as accounts receivable, net | ( | ||||||||||
Balance as of September 30, 2025 | $ | ||||||||||
For the three months ended September 30, 2025, the $0.4 million net commission revenue adjustment from change in estimate includes adjustments related to revenue recognized in prior fiscal years, based on the Company’s reassessment of each of its cohorts’ transaction prices. It includes a positive adjustment of $0.2 million for Senior and a negative adjustment of $0.3 million for Life. The remaining positive adjustment of $0.5 million relates to the Company’s All other non-reportable segment. Refer to Note 15 to the condensed consolidated financial statements for further details on the Company’s reportable segments.
The Company’s contract liabilities on the condensed consolidated balance sheets represent unamortized upfront payments received for commission revenue for which the performance obligations have not yet been met and are anticipated to be recognized over the next twelve months.
A roll forward of contract liabilities (current and long-term) is shown below for the period presented:
| (in thousands) | |||||||||||
Balance as of June 30, 2025 | $ | ||||||||||
Commission and other services revenue recognized | ( | ||||||||||
| Amounts recognized as contract liabilities | |||||||||||
Balance as of September 30, 2025 | $ | ||||||||||
13.INCOME TAXES
For the three months ended September 30, 2025, and 2024, the Company recognized income tax benefit and expense of $7.2 million and $9.5 million, respectively, representing effective tax rates of 19.1 % and (27.2 )%, respectively. The differences from the federal statutory tax rate to the effective tax rates for the three months ended September 30, 2025, were primarily related to state income taxes and the recording of a valuation allowance for federal and state tax attributes that the Company does not expect to utilize prior to expiration, non-deductible warrant mark-to-market adjustment, excess officer and stock-based compensation, and general business credits. The differences from the federal statutory tax rate to the effective tax rates for the three months ended September 30, 2024, were primarily related to state income taxes and the recording of a valuation allowance for federal tax attributes that the Company does not expect to utilize prior to expiration, and vesting of restricted stock units.
As of September 30, 2025, the Company has a valuation allowance of $27.9 million for deferred tax assets related to certain federal and state specific net operating losses, Sec. 163(j) carryforwards, and credits, as it is more likely than not that those assets will not be realized. As the Company is currently in a three-year cumulative loss position, it cannot consider the projections of future income as part of the valuation allowance analysis and have considered the other sources of future taxable income described under ASC 740, Income Taxes when evaluating the need for a valuation allowance. Aside from the certain deferred tax assets related to federal and state credits and other attributes noted above where a valuation allowance has been established, the Company continues to recognize its deferred tax assets as of September 30, 2025 as it believes it is more likely than not that the net deferred tax assets will be realized. The Company will continue to evaluate the realizability of its deferred tax assets.
On July 4, 2025, new U.S. tax legislation H.R.1, referred to as the One Big Beautiful Bill ("OBBB"), was signed into law. OBBB contains several changes to corporate taxation including accelerated fixed asset depreciation,
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limitations on deductions of interest expense, and modifications to capitalization of research and development expenses. We have determined that the impact of OBBB on our estimated 2026 annual effective tax rate will not have a material impact on our financial statements.
14.NET LOSS PER SHARE
The Company calculates net loss per share as defined by ASC 260, Earnings per Share (“ASC 260”). Basic net loss per share (“Basic EPS”) is computed by dividing net loss attributable to common shareholders by the weighted-average common stock outstanding during the respective period. Per ASC 260, shares issuable for little to no consideration (“Penny Warrants”) should be included in the number of outstanding shares used for Basic EPS. As of September 30, 2025, the Company included the Tranche A Senior Non-Convertible Preferred Stock Warrants (excluding the Contingent Warrants) outstanding in the denominator of Basic EPS since the exercise price was $0.01 per share thus are considered Penny Warrants.
The following table sets forth the computation of net loss per share for the periods presented:
| Three Months Ended September 30, | ||||||||||||||||||||||||||
(in thousands, except per share amounts) | 2025 | 2024 | ||||||||||||||||||||||||
| Numerator: | ||||||||||||||||||||||||||
Net loss attributable to common shareholders, basic | $ | ( | $ | ( | ||||||||||||||||||||||
Change in fair value of warrants(1) | ||||||||||||||||||||||||||
Net loss attributable to common shareholders, diluted | ( | ( | ||||||||||||||||||||||||
| Denominator: | ||||||||||||||||||||||||||
| Weighted-average common stock outstanding, basic | ||||||||||||||||||||||||||
Stock options outstanding to purchase shares of common stock including unvested RSUs and from the ESPP(2) | ||||||||||||||||||||||||||
Dilutive effect of warrants to purchase common stock(2) | ||||||||||||||||||||||||||
Weighted-average common stock outstanding, diluted | ||||||||||||||||||||||||||
Net loss per share—basic: | $ | ( | $ | ( | ||||||||||||||||||||||
Net loss per share—diluted: | $ | ( | $ | ( | ||||||||||||||||||||||
(1) Includes the change in fair value of warrant liabilities to the extent the related warrants to purchase common stock are dilutive or the effect is not anti-dilutive.
(2) Excluded from the computation of net loss per share-diluted for the three months ended September 30, 2025, and 2024 because the effect would have been anti-dilutive.
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The weighted average potential shares of common stock that were excluded from the calculation of net loss per share-diluted for the periods presented because including them would have been anti-dilutive consisted of the following:
| Three Months Ended September 30, | |||||||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | |||||||||||||||||||||||||||
Stock options outstanding to purchase shares of common stock, unvested RSUs and shares from the ESPP | |||||||||||||||||||||||||||||
The weighted average potential shares of common stock that were excluded from the calculation of net loss per share-diluted because the performance or market conditions associated with these awards were not met are as follows for the periods presented:
| Three Months Ended September 30, | |||||||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | |||||||||||||||||||||||||||
Shares subject to outstanding PVUs | |||||||||||||||||||||||||||||
The weighted average potential shares of common stock that were excluded from the calculation of net loss per share-diluted because the exercise price of the warrants exceeded the average market price of the Company's common stock or the effect would have been anti-dilutive for the periods presented:
| Three Months Ended September 30, | |||||||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | |||||||||||||||||||||||||||
| Warrants to purchase shares of common stock | |||||||||||||||||||||||||||||
15.SEGMENT INFORMATION
As of July 1, 2024, the Company realigned its reportable segments for fiscal year 2025. The Auto & Home business does not meet the quantitative thresholds to be required to continue to be separately disclosed as a reportable segment in accordance with ASC 280, Segment Reporting (“ASC 280”). As a result, the Auto & Home business will be included in an “All Other” category. Prior period information has been recast to conform to the current presentation.
The Company’s operating segments and reportable segments have been determined in accordance with ASC 280. We currently have three reportable segments: i) Senior, ii) Healthcare Services, and iii) Life. Senior primarily sells senior Medicare-related health insurance products. Healthcare Services includes SelectRx, Healthcare Select, and SPM. Healthcare Services provides products and services to our Medicare policyholders, which are focused on improving patient health outcomes. Life primarily sells term life and final expense products. The All Other category is reflective of the revenue generated from selling individual automobile and homeowners’ insurance. Additionally, the Company accounts for non-operating activity, share-based compensation expense, depreciation and amortization, goodwill, long-lived asset and intangible asset impairments, certain intersegment eliminations, and the costs of providing corporate and other administrative services in our administrative division, Corporate & Eliminations.
Our operating segments are determined based on how our chief executive officer, who also serves as our chief operating decision maker (“CODM”), manages our business, regularly accesses information, and evaluates performance for operating decision-making purposes, including allocation of resources. Adjusted EBITDA is our
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segment profit measure and a key measure used by our CODM and Board of Directors to understand and evaluate the operating performance of our business and on which internal budgets and forecasts are based and approved.
Our segment disclosure includes intersegment revenues, which consist of affiliate marketing fees for services provided by our Senior segment to our Healthcare Services and Life segments as well as services provided by Life to other segments. These intersegment transactions are recorded by each segment at amounts that we believe approximate fair value as if the transactions were between third parties and, therefore, impact segment performance. However, the revenue and corresponding expense are eliminated in consolidation. The elimination of such intersegment transactions is included within the “Eliminations of intersegment revenues” in the tables below. Apart from these intersegment transactions, the accounting policies of the reportable segments are the same as the Company’s described Note 1 to the condensed consolidated financial statements.
The following tables present information about the reportable segments for the periods presented.
We do not report total assets by segment as our CODM does not use this information to evaluate operating segment performance. Accordingly, we do not regularly provide such information by segment to our CODM.
Three Months Ended September 30, 2025:
| (in thousands) | Senior | Healthcare Services | Life | Total | |||||||||||||||||||||||||||||||
| External revenue | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Intersegment revenue | |||||||||||||||||||||||||||||||||||
| Total revenue from reportable segments | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
All other revenue (1) | |||||||||||||||||||||||||||||||||||
| Eliminations of intersegment revenues | ( | ||||||||||||||||||||||||||||||||||
| Total consolidated revenue | $ | ||||||||||||||||||||||||||||||||||
(1) Represents revenue from SQAH, a non-reportable segment.
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| (in thousands) | Senior | Healthcare Services | Life | Total | |||||||||||||||||||||||||
Total revenue from reportable segments | $ | $ | $ | $ | |||||||||||||||||||||||||
Less: | |||||||||||||||||||||||||||||
Cost of commissions and other services revenue | ( | ( | ( | ||||||||||||||||||||||||||
Cost of goods sold - pharmacy revenue | ( | ||||||||||||||||||||||||||||
Marketing expense (1) | ( | ( | ( | ||||||||||||||||||||||||||
Technical development (2) | ( | ||||||||||||||||||||||||||||
Selling, general, and administrative (3) | ( | ( | ( | ||||||||||||||||||||||||||
| Adjusted Segment EBITDA | $ | ( | $ | $ | $ | ( | |||||||||||||||||||||||
Reconciliation of total segment Adjusted EBITDA | |||||||||||||||||||||||||||||
All other Adjusted EBITDA (4) | |||||||||||||||||||||||||||||
Corporate (5) | ( | ||||||||||||||||||||||||||||
| Share-based compensation expense | ( | ||||||||||||||||||||||||||||
Transaction costs (6) | ( | ||||||||||||||||||||||||||||
| Depreciation and amortization | ( | ||||||||||||||||||||||||||||
| Change in fair value of warrants | |||||||||||||||||||||||||||||
| Interest expense, net | ( | ||||||||||||||||||||||||||||
Loss before income tax expense (benefit) | $ | ( | |||||||||||||||||||||||||||
(1) Primarily consists of direct advertising and lead generation costs across various marketing channels.
(2) Primarily comprised of payroll and related benefits for dedicated Healthcare Services IT personnel.
(3) For Senior and Life, these costs are primarily comprised of allocations from corporate related to payroll and related benefits for administrative support functions and facilities. Within Healthcare Services, it primarily consists of payroll and related benefit costs for licensed pharmacists and pharmacy technicians performing one-time customer onboarding work for enrollments that don’t actually become members.
(4) Represents adjusted EBITDA from SQAH, a non-reportable segment.
(5) Corporate is not an operating segment and consists primarily of unallocated corporate overhead costs, such as payroll and related benefits ($17.8 million), professional services ($4.1 million), and facilities ($1.4 million).
(6) These expenses primarily consist of financing transaction costs ($0.1 million) and non-restructuring severance expenses (less than $0.1 million).
Three Months Ended September 30, 2024
| (in thousands) | Senior | Healthcare Services | Life | Total | |||||||||||||||||||||||||||||||
| External revenue | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Intersegment revenue | |||||||||||||||||||||||||||||||||||
| Total revenue from reportable segments | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
All other revenue (1) | |||||||||||||||||||||||||||||||||||
| Eliminations of intersegment revenues | ( | ||||||||||||||||||||||||||||||||||
| Total consolidated revenue | $ | ||||||||||||||||||||||||||||||||||
(1) Represents revenue from SQAH, a non-reportable segment.
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| (in thousands) | Senior | Healthcare Services | Life | Total | |||||||||||||||||||||||||
Total revenue from reportable segments | $ | $ | $ | $ | |||||||||||||||||||||||||
Less: | |||||||||||||||||||||||||||||
Cost of commissions and other services revenue | ( | ( | ( | ||||||||||||||||||||||||||
Cost of goods sold - pharmacy revenue | ( | ||||||||||||||||||||||||||||
Marketing expense (1) | ( | ( | ( | ||||||||||||||||||||||||||
Technical development (2) | ( | ||||||||||||||||||||||||||||
Selling, general, and administrative (3) | ( | ( | ( | ||||||||||||||||||||||||||
| Adjusted Segment EBITDA | $ | $ | $ | $ | |||||||||||||||||||||||||
| Reconciliation of total segment Adjusted EBITDA | |||||||||||||||||||||||||||||
All other Adjusted EBITDA (4) | |||||||||||||||||||||||||||||
Corporate (5) | ( | ||||||||||||||||||||||||||||
| Share-based compensation expense | ( | ||||||||||||||||||||||||||||
Transaction costs (6) | ( | ||||||||||||||||||||||||||||
| Depreciation and amortization | ( | ||||||||||||||||||||||||||||
| Loss on disposal of property, equipment, and software, net | ( | ||||||||||||||||||||||||||||
| Interest expense, net | ( | ||||||||||||||||||||||||||||
| Loss before income tax expense (benefit) | $ | ( | |||||||||||||||||||||||||||
(1) Primarily consists of direct advertising and lead generation costs across various marketing channels.
(2) Primarily comprised of payroll and related benefits for dedicated Healthcare Services IT personnel.
(3) For Senior and Life, these costs are primarily comprised of allocations from corporate related to payroll and related benefits for administrative support functions and facilities. Within Healthcare Services, it primarily consists of payroll and related benefit costs for licensed pharmacists and pharmacy technicians performing one-time customer onboarding work for enrollments that don’t actually become members.
(4) Represents adjusted EBITDA from SQAH, a non-reportable segment.
(5) Corporate is not an operating segment and consists primarily of unallocated corporate overhead costs, such as payroll and related benefits ($15.5 million), professional services ($4.9 million), and facilities ($1.4 million).
(6) These expenses primarily consist of non-restructuring severance expenses ($0.5 million) and financing transaction costs ($0.3 million).
15.RELATED-PARTY TRANSACTIONS
In accordance with ASC 850, Related-party Transactions, the Company has evaluated related-party relationships and transactions for the periods presented. There were no material related-party transactions during the three months ended September 30, 2025, and no changes in related-party arrangements from those described in our Annual Report. As of September 30, 2025, there were no outstanding balances due to or from related parties.
16.SUBSEQUENT EVENTS
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Management has evaluated subsequent events pursuant to the requirements of ASC 855, Subsequent Events, from the balance sheet date through the date the financial statements were issued and has determined that there are the following material subsequent events.
On October 15, 2025, the first tranche of the Eleventh Amendment Warrants vested in accordance with their terms. The warrants remain liability-classified and continue to be measured at fair value each reporting period. The vesting did not have a material impact on the Company’s condensed consolidated financial statements as of September 30, 2025.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following discussion and analysis of our financial condition and result of operations together with our condensed consolidated financial statements and footnotes included elsewhere in this Quarterly Report on Form 10-Q. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions, and projections about our industry, business and future financial results. Please refer to a discussion of the Company’s forward-looking statements and associated risks in “Cautionary Note Regarding Forward-Looking Statements” in our 2025 Annual Report. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors” in our 2025 Annual Report and in Part II, Item 1A hereof.
Company Overview
SelectQuote, Inc. (together with its subsidiaries, “SelectQuote”, the “Company”, “we”, “us”) is a leading technology-enabled, direct-to-consumer (“DTC”) distribution and engagement platform for selling insurance policies and healthcare services.
In recent years, we have increasingly focused on expanding our healthcare services platform as a natural extension of our core Senior distribution insurance business. This strategic shift reflects our prioritization of higher-growth opportunities in areas such as pharmacy services and chronic care management through offerings like SelectRx and SelectPatient Management (“SPM”). At the same time, we have de-emphasized production within our Auto & Home distribution insurance business, which no longer represents a core area of focus. Our strategy is focused on delivering more comprehensive and personalized healthcare solutions that meet the evolving needs of our senior customers.
Our insurance distribution business, which has operated continuously for over 40 years, allows consumers to transparently and conveniently shop for senior health, life, and automobile and home insurance policies from a curated panel of the nation’s leading insurance carriers. As an insurance distributor, we do not insure the consumer, but rather identify consumers looking to acquire insurance products and place these consumers with insurance carrier partners that provide these products. In return, we earn commissions from our insurance carrier partners for the policies we sell on their behalf. Our proprietary technology platform integrates artificial intelligence and data science based machine learning models to analyze and identify high-quality consumer leads from diverse online and offline channels, such as digital marketing, radio, television, and third-party partnerships. Leveraging over 40 years of accumulated data and advanced predictive analytics, our technology dynamically optimizes marketing spend in real-time. Our intelligent workflow system instantly evaluates each acquired lead, routing it efficiently to the most suitable sales agent based on consumer needs and agent expertise. Our platform then captures and utilizes our experience to further build upon the millions of data points that feed our marketing algorithms, further enhancing our ability to deploy subsequent marketing dollars efficiently and target more high-quality consumer leads. We have built our business model to maximize commissions collected over the life of an approved policy, a metric we refer to as “ lifetime value of commissions” or “LTV”, which is a key component to our overall profitability.
Our proprietary routing and workflow system is a key competitive advantage and driver of our business performance. Our systems analyze and intelligently route consumer leads to agents and allow us to monitor, segment, and enhance our agents’ performance. This technological advantage also allows us to rapidly conduct a needs-based, tailored analysis for each consumer that maximizes sales, enhances customer retention, and ultimately maximizes LTVs. Our expertise and value add stems from the coupling of our technology with our skilled agents, which provides greater transparency in pricing and choice and an overall better consumer experience. When customers are satisfied, their propensity to switch policies decreases, thereby improving retention rates (“persistency”), increasing LTVs and, ultimately, optimizing our financial performance and shareholder value.
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SelectQuote has a long history of successful DTC product distribution and consumer engagement, and we bring this same capability to healthcare services. We saw a large opportunity to leverage our existing customer base and distribution model to improve education and access to healthcare services for our senior consumers and to create value for our shareholders and insurance carrier partners. SelectQuote’s value lies in our ability to engage the consumer, capture critical self-reported information in real-time, and then take action on that information to offer each consumer personalized solutions. Our healthcare services business seeks to provide consumers with a wide breadth of products supporting their needs, such as SelectRx, our Patient-Centered Pharmacy HomeTM accredited pharmacy, which has already demonstrated SelectQuote’s ability to leverage our strong consumer engagement to drive immediate value using our existing operational infrastructure. Whether through acquisitions or new partnerships, we continue to look for more opportunities to leverage our strengths to expand our healthcare services business.
We evaluate our business using the following three reportable segments:
Senior was launched in 2010 and provides unbiased comparison shopping for Medicare Advantage (“MA”) and Medicare Supplement (“MS”) insurance plans as well as prescription drug and dental, vision, and hearing (“DVH”) plans, and critical illness products. We represent approximately 25 leading, nationally-recognized insurance carrier partners, including UHC, Humana, Aetna, and Wellcare. MA and MS plans accounted for 82%, and 88%, of our approved Senior policies for the three months ended September 30, 2025, and 2024, respectively, with other ancillary type policies accounting for the remainder.
Healthcare Services, launched in 2021, offers various health-related products and services through SelectRx, Healthcare Select, and SPM. SelectRx offers essential prescription medications, over-the-counter (“OTC”) medications, customized medication packaging, and medication therapy management, providing long-term pharmacy care that enables patients to optimize medication adherence to drive positive health outcomes, while enabling patients managing polypharmacy and multiple chronic conditions to remain at home. Through Healthcare Select, we utilize our excellent consumer engagement capabilities to capture valuable self-reported information in real-time for our insurance carrier partners by completing health risk and lifestyle assessments. We then use that data to take a real-time, proactive, and personalized approach to offer various health-related products and services to the consumer, such as our pharmacy services from SelectRx. In 2024, we launched SPM, via a $4.0 million acquisition of an existing chronic care management platform, which offers providers, payers, and Accountable Care Organizations scalable, technology-enhanced services for patients living with chronic conditions. Through consistent, trust-based patient engagement, SPM helps patients navigate the care continuum, focusing on non-clinical factors so physicians can focus on the more critical needs of their patients. We believe that offering these services enables healthcare to be more accessible, convenient, and personalized for our members.
Life is one of the country’s largest and most established DTC insurance distributors for term life insurance, having sold over 2.6 million policies nationwide since our founding in 1985. Our platform provides unbiased comparison shopping for life insurance products such as term life, final expense, and other ancillary products like critical illness, accidental death, and juvenile insurance. We represent approximately 20 leading, nationally-recognized insurance carrier partners, with many of these relationships exceeding 15 years. Term life policies accounted for 40%, and 38% of new premium within the Life segment for the three months ended September 30, 2025 and, 2024, respectively, with final expense policies accounting for 60%, and 62% for the three months ended September 30, 2025, and 2024, respectively.
Our other operations which do not meet the criteria to be a separate reportable segment are consolidated and reported as “All other” which represents a shopping platform for auto, home, and specialty insurance lines.
The three months ended September 30, referenced throughout the commentary below refers to the first quarter and fiscal year-to-date performance of our fiscal years ending on June 30, 2026 and 2025.
Key Business and Operating Metrics by Segment
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In addition to traditional financial metrics, we rely upon certain business and operating metrics to estimate and recognize revenue, evaluate our business performance, and facilitate our operations. In Senior, our primary product, Medicare Advantage, pays us flat commission rates based on the number of policies we sell on behalf of our insurance carrier partners. Therefore, we have determined that units and unit metrics are the most appropriate measures to evaluate the performance of Senior. For Healthcare Services, our primary source of revenue is pharmacy revenue from SelectRx, so the total number of SelectRx members and the prescriptions shipped per day are the most appropriate measures used to evaluate the performance of Healthcare Services as these metrics drive top-line revenue. In Life, we are typically paid a commission that is a percent of the premium that we generate for our insurance carrier partners. Therefore, we have determined that premium-based metrics are the most relevant measures to evaluate the performance of the segment. Below are the most relevant business and operating metrics for each segment:
Senior
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.
The following table shows the number of submitted policies for the periods presented:
| Three Months Ended September 30, | ||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||
| Medicare Advantage | 70,240 | 102,281 | ||||||||||||||||||
All other (1) | 17,174 | 16,256 | ||||||||||||||||||
| Total | 87,414 | 118,537 | ||||||||||||||||||
(1) Represents the submitted policies for medicare supplement, dental, vision and hearing, prescription drug plan and other.
Total submitted policies for all products decreased 26% for the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The decrease was primarily driven by changes in regulations that limited special enrollment period eligibility and election opportunities for Medicare Advantage members outside of the standard AEP. These regulatory changes reduced the number of consumers eligible to switch or enroll in new plans during the three months ended September 30, 2025.
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 September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||
| Medicare Advantage | 62,510 | 91,680 | |||||||||||||||||||||||||||||||||||||||||||||
All other (1) | 13,876 | 12,979 | |||||||||||||||||||||||||||||||||||||||||||||
| Total | 76,386 | 104,659 | |||||||||||||||||||||||||||||||||||||||||||||
(1) Represents the approved policies for medicare supplement, dental, vision and hearing, prescription drug plan and other.
In general, the relationship between submitted policies and approved policies has been steady over time. Therefore, factors impacting the number of submitted policies also impact the number of approved policies.
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Total approved policies for all products decreased by 27% for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, which correlates to the decrease in submitted policies.
Lifetime Value of Commissions per Approved Policy
The lifetime value of commissions (the “LTV”) 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 LTV 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 estimate of the future renewal commissions is determined using contracted renewal commission rates, which does not include marketing development funds or production bonuses, constrained by a persistency-adjusted 10-year renewal period based on a combination of our historical experience and available insurance carrier historical experience to estimate renewal revenue only to the extent probable that a significant reversal in revenue would not be expected to occur. These factors may result in varying values from period to period. The LTV per approved policy represents commissions only from policies sold during the period; it does not include any updated estimates of prior period variable consideration based on actual policy renewals in the current period.
The following table shows the LTV per approved policy for the periods presented:
| Three Months Ended September 30, | ||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||
| Medicare Advantage | $ | 769 | $ | 812 | ||||||||||||||||||||||
All other (1) | 133 | 165 | ||||||||||||||||||||||||
(1) Represents the weighted average LTV per approved policy.
The LTV per MA approved policy decreased 5% for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, primarily due to carrier mix and specific carriers shifting away from upfront payment contracts, combined with deterioration in persistency due to recent plan terminations.
Healthcare Services
The total number of SelectRx members represents the amount of active customers to which an order has been shipped and the prescriptions per day represents the total average prescriptions shipped per business day. These two metrics are the primary drivers of revenue for Healthcare Services.
SelectRx Members
The following table shows the total number of SelectRx members as of the date presented:
| September 30, 2025 | September 30, 2024 | |||||||||||||||||||
| Total SelectRx Members | 106,914 | 86,521 | ||||||||||||||||||
The total number of SelectRx members increased by 24% as of September 30, 2025, compared to September 30, 2024, due to our strategy to grow SelectRx membership.
Prescriptions Per Day
The following table shows the average prescriptions shipped per day for the periods presented:
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| Three Months Ended September 30, | ||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||
Prescriptions Per Day | 31,378 | 24,998 | ||||||||||||||||||||||||
Life
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. 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 Life.
The following table shows term and final expense premiums for the periods presented:
| Three Months Ended September 30, | ||||||||||||||||||||||||||
| (in thousands): | 2025 | 2024 | ||||||||||||||||||||||||
| Term Premiums | $ | 19,443 | $ | 15,218 | ||||||||||||||||||||||
| Final Expense Premiums | 29,429 | 24,473 | ||||||||||||||||||||||||
| Total | $ | 48,872 | $ | 39,691 | ||||||||||||||||||||||
Total term premiums increased 28% for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, due to a 12% increase in the average premium per policy sold and a 13% increase in the number of policies sold. Final expense premiums increased 20% for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, due to a 1% increase in the average premium per policy sold and a 19% increase in the number of policies sold.
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Key Components of our Results of Operations
The following table sets forth our operating results and related percentage of total revenues for the periods presented:
| Three Months Ended September 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||||||||||||||||||||||||||
Commissions and other services | $ | 110,267 | 34 | % | $ | 139,380 | 48 | % | ||||||||||||||||||||||||||||||||||||||||||
| Pharmacy | 218,544 | 66 | % | 152,883 | 52 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Total revenue | 328,811 | 100 | % | 292,263 | 100 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Operating costs and expenses | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Cost of commissions and other services revenue | 69,101 | 21 | % | 65,733 | 22 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Cost of goods sold—pharmacy revenue | 192,779 | 59 | % | 129,524 | 44 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Marketing and advertising | 61,947 | 19 | % | 63,764 | 22 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Selling, general, and administrative | 35,819 | 11 | % | 36,145 | 12 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Technical development | 9,911 | 3 | % | 9,074 | 3 | % | ||||||||||||||||||||||||||||||||||||||||||||
| Total operating costs and expenses | 369,557 | 113 | % | 304,240 | 103 | % | ||||||||||||||||||||||||||||||||||||||||||||
Loss from operations | (40,746) | (12) | % | (11,977) | (4) | % | ||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | (11,808) | (4) | % | (23,031) | (8) | % | ||||||||||||||||||||||||||||||||||||||||||||
Change in fair value of warrant liabilities | 15,036 | 5 | % | — | — | % | ||||||||||||||||||||||||||||||||||||||||||||
Other expense, net | (145) | — | % | (12) | — | % | ||||||||||||||||||||||||||||||||||||||||||||
Loss before income tax expense (benefit) | (37,663) | (11) | % | (35,020) | (12) | % | ||||||||||||||||||||||||||||||||||||||||||||
Income tax expense (benefit) | (7,204) | (2) | % | 9,526 | 3 | % | ||||||||||||||||||||||||||||||||||||||||||||
Net loss | $ | (30,459) | (9) | % | $ | (44,546) | (15) | % | ||||||||||||||||||||||||||||||||||||||||||
Revenue
We earn revenue in the form of commission payments from our insurance carrier customers, for the initial year the insurance policy is in effect (“first year”) and, where applicable, for each subsequent year the policy renews (“renewal year”), in addition to production bonuses and marketing development funds received from some insurance carriers. Production bonuses are based on attaining various predetermined target sales levels or other agreed upon objectives, whereas marketing development funds may or may not contain such predetermined targets and are used to purchase leads. These, along with other services revenue from Healthcare Services (excluding SelectRx revenue discussed below) and our lead generation business (of which the majority is eliminated as intersegment revenue), are presented in our condensed consolidated statements of comprehensive loss as commissions and other services revenue. Pharmacy revenue on the condensed consolidated statements of comprehensive loss includes revenue from the sale of prescription and OTC medication products from SelectRx.
Revenue is recognized at different milestones for Senior and Life and is based on the contractual enforceable rights, our historical experience, and established customer business practices. Other services revenues from our Healthcare Services segment (excluding SelectRx revenue discussed below) is recognized when the performance obligation has been met, which is at different times for our various services (e.g. the health risk and lifestyle assessments has been performed, a transfer has been made to a health-related partner, or SPM has provided care management services to a member), the transaction price is known based on volume and contractual prices, and we have no further performance obligations. Lead generation revenue is recognized when the generated lead is accepted by our customers, which is the point of sale, and we have no performance obligation after the delivery. Revenues generated from SelectRx are recognized upon shipment. At the time of shipment, we have performed all
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of our performance obligations and control of the product has been transferred to the customer. There are no future revenue streams, or material variable consideration with respect to the implicit price concession for co-pays, as the transaction price is fixed at time of shipment, and any subsequent new order is its own performance obligation.
The following table presents our revenue for the periods presented and the percentage changes from the prior year:
| Three Months Ended September 30, | Percent Change | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 vs. 2024 | ||||||||||||||||||||||||||
Commissions and other services | $ | 110,267 | $ | 139,380 | (21)% | ||||||||||||||||||||||||
| Pharmacy | 218,544 | 152,883 | 43% | ||||||||||||||||||||||||||
| Total revenue | $ | 328,811 | $ | 292,263 | 13% | ||||||||||||||||||||||||
Three Months Ended September 30, 2025 and 2024–Pharmacy revenue increased $65.7 million, or 43%, primarily due to the 24% increase in members due to the continued growth of the SelectRx business. Commission and other services revenue decreased $29.1 million, or 21%, for the three months ended September 30, 2025, primarily due to a $26.3 million, and $2.3 million decrease in Senior commissions revenue, and other services revenue, respectively. The decrease in Senior revenue, was driven by a 27% decrease in approved policies. This decrease was partially offset by a $7.4 million increase in Life revenue. The increase in Life revenue was primarily driven by a $3.6 million increase in final expense revenue due to a 19% increase in the number of policies sold.
Operating Costs and Expenses
Cost of Commissions and Other Services Revenue
Cost of commissions and other services revenue represents the direct costs associated with fulfilling our obligations to our customers in Senior, Life, and Healthcare Services (excluding SelectRx discussed below); primarily compensation, benefits, and licensing for sales agents, customer success agents, fulfillment specialists, and others directly engaged in serving customers. It also includes allocations for facilities, telecommunications, and software maintenance costs, which are all based on headcount. Facilities costs include rent and utilities expenses and other costs to maintain our office locations. Telecommunications and software maintenance costs includes costs related to the internal phone systems and various software applications that our agents use to make sales. These costs directly correlate to the number of agents we have as we are primarily charged based on per person usage for the phone systems and software applications.
The following table presents our cost of commissions and other services revenue for the periods presented and the percentage change from the prior year:
| Three Months Ended September 30, | Percent Change | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 vs. 2024 | ||||||||||||||||||||||||||
Cost of commissions and other services revenue | $ | 69,101 | $ | 65,733 | 5% | ||||||||||||||||||||||||
Three Months Ended September 30, 2025 and 2024–Cost of commissions and other service revenue increased $3.4 million, or 5%, for the three months ended September 30, 2025, primarily due to a $3.5 million increase in compensation costs and a $0.5 million increase in licensing fees, offset by $0.4 million increase in depreciation and amortization. The $3.5 million increase in compensation costs is primarily comprised of a $2.9
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million increase in costs for sales and customer care agents in Life and a $0.2 million increase in costs for our sales and customer care agents in Senior.
Cost of Goods Sold-Pharmacy Revenue
Cost of goods sold-pharmacy revenue represents the direct costs associated with fulfilling pharmacy patient orders for SelectRx. Such costs primarily consist of medication costs and compensation costs for licensed pharmacists, pharmacy technicians, and other employees directly associated with fulfilling orders such as packaging and shipping clerks. It also includes shipping, supplies, other order fulfillment costs including part of the one-time customer onboarding costs, and certain facilities overhead costs such as rent, maintenance, and depreciation related to the pharmacy production process.
The following table presents our cost of goods sold-pharmacy revenue for the periods presented and the percentage change from the prior year:
| Three Months Ended September 30, | Percent Change | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 vs. 2024 | ||||||||||||||||||||||||||
| Cost of goods sold—pharmacy revenue | $ | 192,779 | $ | 129,524 | 49% | ||||||||||||||||||||||||
Three Months Ended September 30, 2025 and 2024–Cost of goods sold-pharmacy revenue increased $63.3 million, or 49%, for the three months ended September 30, 2025, primarily due to a $59.5 million increase in medication costs, a $1.4 million increase in fulfillment costs, and a $1.8 million increase in compensation costs. Medication and fulfillment costs increased largely due to a 24% increase in the number of SelectRx members over the prior year. The increase in compensation costs reflects higher staffing levels required to support growth in pharmacy order volume and member fulfillment activity.
Marketing and Advertising
Marketing and advertising expenses consist primarily of the direct costs associated with marketing and advertising of our services, such as television and radio commercials and online advertising. These direct costs generally represent the vast majority of our marketing and advertising expenses. Other costs consist of compensation and other expenses related to marketing, business development, partner management, public relations, carrier relations personnel who support our offerings, and allocations for facilities, telecommunications, and software maintenance costs. Our marketing and advertising costs increase during AEP and OEP to generate more leads during these high-volume periods.
The following table presents our marketing and advertising expenses for the periods presented and the percentage changes from the prior year:
| Three Months Ended September 30, | Percent Change | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 vs. 2024 | ||||||||||||||||||||||||||
| Marketing and advertising | $ | 61,947 | $ | 63,764 | (3)% | ||||||||||||||||||||||||
Three Months Ended September 30, 2025 and 2024–Marketing and advertising expenses decreased $1.8 million, or 3%, for the three months ended September 30, 2025, primarily due to a $1.5 million decrease in lead costs. The decrease in lead costs was attributable to a 26% decrease in the number of submitted policies for Senior during the period.
Selling, General, and Administrative
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Selling, general, and administrative expenses include compensation and benefits costs for staff working in our executive, finance, accounting, recruiting, human resources, administrative, business intelligence, data science, and part of the SelectRx customer onboarding departments. These expenses also include fees paid for outside professional services, including audit, tax, and legal fees and allocations for facilities, telecommunications, and software maintenance costs.
The following table presents our selling, general, and administrative expenses for the periods presented and the percentage changes from the prior year:
| Three Months Ended September 30, | Percent Change | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 vs. 2024 | ||||||||||||||||||||||||||
Selling, general, and administrative | $ | 35,819 | $ | 36,145 | (1)% | ||||||||||||||||||||||||
Three Months Ended September 30, 2025 and 2024–Selling, general, and administrative expenses decreased $0.3 million, or 1%, for the three months ended September 30, 2025, primarily due to $0.4 decrease in professional services fees. The decrease in professional services fees is a result of additional expenses incurred in the prior period related to the securitization transaction.
Technical Development
Technical development expenses consist primarily of compensation and benefits costs for internal and external personnel associated with developing, maintaining and enhancing our applications, infrastructure and other IT-related functions as well as allocations for facilities, telecommunications and software maintenance costs.
The following table presents our technical development expenses for the periods presented and the percentage changes from the prior year:
| Three Months Ended September 30, | Percent Change | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 vs. 2024 | ||||||||||||||||||||||||||
| Technical development | $ | 9,911 | $ | 9,074 | 9% | ||||||||||||||||||||||||
Three Months Ended September 30, 2025 and 2024–Technical development expenses increased $0.8 million, or 9%, for the three months ended September 30, 2025, primarily due to a $1.1 million increase in compensation costs due to an increase in headcount for technology personnel.
Interest Expense, Net
The following table presents our interest expense, net for the periods presented and the percentage changes from the prior year:
| Three Months Ended September 30, | Percent Change | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 vs. 2024 | ||||||||||||||||||||||||||
| Interest expense, net | $ | 11,808 | $ | 23,031 | (49)% | ||||||||||||||||||||||||
Three Months Ended September 30, 2025 and 2024–Interest expense decreased $11.2 million, or 49%, for the three months ended September 30, 2025. The decrease was primarily driven by the Company’s lower cost of capital following the completion of the securitization transaction and the repayment of $260.0 million of the Term Loan balance using the proceeds from the Senior Non-Convertible Preferred Stock issuance.
Income Taxes
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The following table presents our provision for income taxes for the periods presented and the percentage changes from the prior year:
| Three Months Ended September 30, | Percent Change | ||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | 2025 vs. 2024 | ||||||||||||||||||||||||||
| Income tax expense (benefit) | $ | (7,204) | $ | 9,526 | (176)% | ||||||||||||||||||||||||
| Effective tax rate | 19.1% | (27.2)% | |||||||||||||||||||||||||||
Three Months Ended September 30, 2025 and 2024–For the three months ended September 30, 2025, and 2024, the Company recognized an income tax benefit of $7.2 million and income tax expense of $9.5 million, representing an effective tax rate of 19.1% and (27.2)%, respectively. The differences from the federal statutory tax rate to the effective tax rate for the three months ended September 30, 2025, were primarily related to state income taxes and the recording of a valuation allowance for federal and state tax attributes that the Company does not expect to utilize prior to expiration, non-deductible warrant mark-to-market adjustment, and excess officer and stock-based compensation and general business credits. The differences from the federal statutory tax rate to the effective tax rates for the three months ended September 30, 2024, were primarily related to state income taxes and the recording of a valuation allowance for federal tax attributes that the Company does not expect to utilize prior to expiration, and vesting of restricted stock units.
Non-GAAP Financial Measures
This report 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 report Adjusted EBITDA, which, when presented on a consolidated basis, is a non-GAAP financial measure. This non-GAAP financial measure is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to any similarly titled measure presented by other companies.
We define Adjusted EBITDA as net income (loss) plus interest expense, income taxes, depreciation and amortization, changes in fair value of warrant liabilities, transaction costs, 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 (loss). We monitor and have presented Adjusted EBITDA herein because it is a key measure used by our management and Board of Directors to understand and evaluate our operating performance, establish budgets, and 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.
The following table sets forth a reconciliation of the differences between net income (loss) and Adjusted EBITDA for the periods presented.
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| Three Months Ended September 30, | |||||||||||||||||||||||
| (in thousands) | 2025 | 2024 | |||||||||||||||||||||
| Net loss | $ | (30,459) | $ | (44,546) | |||||||||||||||||||
| Share-based compensation expense | 4,327 | 3,846 | |||||||||||||||||||||
Transaction costs(1) | 185 | 826 | |||||||||||||||||||||
| Depreciation and amortization | 4,300 | 5,599 | |||||||||||||||||||||
| Loss on disposal of property, equipment, and software, net | — | 35 | |||||||||||||||||||||
| Change in fair value of warrants | (15,036) | — | |||||||||||||||||||||
| Interest expense, net | 11,808 | 23,031 | |||||||||||||||||||||
| Income tax expense (benefit) | (7,204) | 9,526 | |||||||||||||||||||||
| Adjusted EBITDA | $ | (32,079) | $ | (1,683) | |||||||||||||||||||
(1) For the three months ended September 30, 2025, these expenses primarily consist of financing transaction costs ($0.1 million) and non-restructuring severance expenses (less than $0.1 million). For the three months ended September 30, 2024, these expenses primarily consist of non-restructuring severance expenses ($0.5 million) and financing transaction costs ($0.3 million).
Segment Information
As of July 1, 2024, the Company realigned its reportable segments. The Auto & Home business does not meet the quantitative thresholds to be required to continue to be separately disclosed as a reportable segment in accordance with ASC 280, Segment Reporting (“ASC 280”). As a result, the Auto & Home business will be included in an “All Other” category. Prior period information has been recast to conform to the current presentation.
The Company’s operating segments have been determined in accordance with ASC 280. We currently have three reportable segments: i) Senior, ii) Healthcare Services, and iii) Life. Senior primarily sells senior Medicare-related health insurance products. Healthcare Services includes SelectRx, Healthcare Select, and SPM. Healthcare Services provides products and services to our Medicare policyholders, which are focused on improving patient health outcomes. Life primarily sells term life and final expense products. The All Other category is reflective of the revenue generated from selling individual automobile and homeowners’ insurance. Additionally, the Company accounts for non-operating activity, share-based compensation expense, depreciation and amortization, goodwill, long-lived asset and intangible asset impairments, certain intersegment eliminations, and the costs of providing corporate and other administrative services in our administrative division, Corporate & Eliminations. We have not aggregated any operating segments together to represent a reportable segment.
Our operating segments are determined based on how our chief executive officer, who also serves as our CODM, manages our business, regularly accesses information, and evaluates performance for operating decision-making purposes, including allocation of resources. Adjusted EBITDA is our segment profit measure and a key measure used by our CODM and Board of Directors to understand and evaluate the operating performance of our business and on which internal budgets and forecasts are based and approved.
Our segment disclosure includes intersegment revenues, which consist of affiliate marketing fees for services provided by our Senior segment to our Healthcare Services and Life segments as well as services provided by Life to other segments. These intersegment transactions are recorded by each segment at amounts that we believe approximate fair value as if the transactions were between third parties and, therefore, impact segment performance. However, the revenue and corresponding expense are eliminated in consolidation. The elimination of such intersegment transactions is included within the “Eliminations of intersegment revenues” in the tables below. Apart from these intersegment transactions, the accounting policies of the reportable segments are the same as the Company’s described Note 1 of the Company’s 2025 Annual Report.
The following tables present information about the reportable segments for the periods presented.
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We do not report total assets by segment as our CODM does not use this information to evaluate operating segment performance. Accordingly, we do not regularly provide such information by segment to our CODM.
Three Months Ended September 30, 2025:
| (in thousands) | Senior | Healthcare Services | Life | Total | |||||||||||||||||||||||||||||||
| External revenue | $ | 57,297 | $ | 221,238 | $ | 46,629 | $ | 325,164 | |||||||||||||||||||||||||||
Intersegment revenue | 1,699 | 113 | 18 | 1,830 | |||||||||||||||||||||||||||||||
Total revenue from reportable segments | $ | 58,996 | $ | 221,351 | $ | 46,647 | $ | 326,994 | |||||||||||||||||||||||||||
All other revenue (1) | 3,647 | ||||||||||||||||||||||||||||||||||
Eliminations of intersegment revenues | (1,830) | ||||||||||||||||||||||||||||||||||
Total consolidated revenue | $ | 328,811 | |||||||||||||||||||||||||||||||||
(1) Represents revenue from SQAH, a non-reportable segment.
| (in thousands) | Senior | Healthcare Services | Life | Total | |||||||||||||||||||||||||
Total revenue from reportable segments | $ | 58,996 | $ | 221,351 | $ | 46,647 | $ | 326,994 | |||||||||||||||||||||
Less: | |||||||||||||||||||||||||||||
Cost of commissions and other services revenue | (41,897) | (6,301) | (17,979) | ||||||||||||||||||||||||||
Cost of goods sold - pharmacy revenue | — | (191,398) | — | ||||||||||||||||||||||||||
Marketing expense (1) | (37,630) | (2,389) | (22,760) | ||||||||||||||||||||||||||
Technical development (2) | — | (438) | — | ||||||||||||||||||||||||||
Selling, general, and administrative (3) | (505) | (13,613) | (338) | ||||||||||||||||||||||||||
| Adjusted Segment EBITDA | $ | (21,036) | $ | 7,212 | $ | 5,570 | $ | (8,254) | |||||||||||||||||||||
Reconciliation of total segment Adjusted EBITDA | |||||||||||||||||||||||||||||
All other Adjusted EBITDA (4) | 1,888 | ||||||||||||||||||||||||||||
Corporate (5) | (25,713) | ||||||||||||||||||||||||||||
| Share-based compensation expense | (4,327) | ||||||||||||||||||||||||||||
Transaction costs (6) | (185) | ||||||||||||||||||||||||||||
| Depreciation and amortization | (4,300) | ||||||||||||||||||||||||||||
| Change in fair value of warrants | 15,036 | ||||||||||||||||||||||||||||
| Interest expense, net | (11,808) | ||||||||||||||||||||||||||||
Loss before income tax expense (benefit) | $ | (37,663) | |||||||||||||||||||||||||||
(1) Primarily consists of direct advertising and lead generation costs across various marketing channels.
(2) Primarily comprised of payroll and related benefits for dedicated Healthcare Services IT personnel.
(3) For Senior and Life, these costs are primarily comprised of allocations from corporate related to payroll and related benefits for administrative support functions and facilities. Within Healthcare Services, it primarily consists of payroll and related benefit costs for licensed pharmacists and pharmacy technicians performing one-time customer onboarding work for enrollments that don’t actually become members.
(4) Represents adjusted EBITDA from SQAH, a non-reportable segment.
(5) Corporate is not an operating segment and consists primarily of unallocated corporate overhead costs, such as payroll and related benefits ($17.8 million), professional services ($4.1 million), and facilities ($1.4 million).
(6) These expenses primarily consist of financing transaction costs ($0.1 million) and non-restructuring severance expenses (less than $0.1 million).
Three Months Ended September 30, 2024
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| (in thousands) | Senior | Healthcare Services | Life | Total | |||||||||||||||||||||||||||||||
| External revenue | $ | 91,364 | $ | 155,667 | $ | 39,266 | $ | 286,297 | |||||||||||||||||||||||||||
| Intersegment revenue | 1,544 | 72 | 24 | 1,640 | |||||||||||||||||||||||||||||||
| Total revenue from reportable segments | $ | 92,908 | $ | 155,739 | $ | 39,290 | $ | 287,937 | |||||||||||||||||||||||||||
All other revenue (1) | 5,966 | ||||||||||||||||||||||||||||||||||
| Eliminations of intersegment revenues | (1,640) | ||||||||||||||||||||||||||||||||||
| Total consolidated revenue | $ | 292,263 | |||||||||||||||||||||||||||||||||
(1) Represents revenue from SQAH, a non-reportable segment.
| (in thousands) | Senior | Healthcare Services | Life | Total | |||||||||||||||||||||||||
Total revenue from reportable segments | $ | 92,908 | $ | 155,739 | $ | 39,290 | $ | 287,937 | |||||||||||||||||||||
Less: | |||||||||||||||||||||||||||||
Cost of commissions and other services revenue | (41,127) | (5,879) | (14,572) | ||||||||||||||||||||||||||
Cost of goods sold - pharmacy revenue | — | (128,366) | — | ||||||||||||||||||||||||||
Marketing expense (1) | (43,378) | (2,247) | (18,496) | ||||||||||||||||||||||||||
Technical development (2) | — | (608) | — | ||||||||||||||||||||||||||
Selling, general, and administrative (3) | (679) | (13,761) | (262) | ||||||||||||||||||||||||||
| Adjusted Segment EBITDA | $ | 7,724 | $ | 4,878 | $ | 5,960 | $ | 18,562 | |||||||||||||||||||||
Reconciliation of total segment Adjusted EBITDA | |||||||||||||||||||||||||||||
All other Adjusted EBITDA (4) | 3,797 | ||||||||||||||||||||||||||||
Corporate (5) | (24,042) | ||||||||||||||||||||||||||||
| Share-based compensation expense | (3,846) | ||||||||||||||||||||||||||||
Transaction costs (6) | (826) | ||||||||||||||||||||||||||||
| Depreciation and amortization | (5,599) | ||||||||||||||||||||||||||||
| Loss on disposal of property, equipment, and software, net | (35) | ||||||||||||||||||||||||||||
Interest expense, net | (23,031) | ||||||||||||||||||||||||||||
| Loss before income tax expense (benefit) | $ | (35,020) | |||||||||||||||||||||||||||
(1) Primarily consists of direct advertising and lead generation costs across various marketing channels.
(2) Primarily comprised of payroll and related benefits for dedicated Healthcare Services IT personnel.
(3) For Senior and Life, these costs are primarily comprised of allocations from corporate related to payroll and related benefits for administrative support functions and facilities. Within Healthcare Services, it primarily consists of payroll and related benefit costs for licensed pharmacists and pharmacy technicians performing one-time customer onboarding work for enrollments that don’t actually become members.
(4) Represents adjusted EBITDA from SQAH, a non-reportable segment.
(5) Corporate is not an operating segment and consists primarily of unallocated corporate overhead costs, such as payroll and related benefits ($15.5 million), professional services ($4.9 million), and facilities ($1.4 million).
(6) These expenses primarily consist of non-restructuring severance expenses ($0.5 million) and financing transaction costs ($0.3 million).
The following table depicts the disaggregation of revenue by segment and product for the periods presented:
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| Three Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | 2025 | 2024 | $ | % | |||||||||||||||||||||||||||||||||||||||||||
| Senior: | |||||||||||||||||||||||||||||||||||||||||||||||
| Medicare advantage commissions | $ | 48,077 | $ | 74,471 | $ | (26,394) | (35) | % | |||||||||||||||||||||||||||||||||||||||
Other Senior commissions | 2,669 | 2,581 | 88 | 3 | % | ||||||||||||||||||||||||||||||||||||||||||
| Other services | 8,250 | 15,856 | (7,606) | (48) | % | ||||||||||||||||||||||||||||||||||||||||||
| Total Senior revenue | 58,996 | 92,908 | (33,912) | (37) | % | ||||||||||||||||||||||||||||||||||||||||||
| Healthcare Services: | |||||||||||||||||||||||||||||||||||||||||||||||
| Pharmacy | 218,544 | 152,883 | 65,661 | 43 | % | ||||||||||||||||||||||||||||||||||||||||||
| Other services | 2,807 | 2,856 | (49) | (2) | % | ||||||||||||||||||||||||||||||||||||||||||
| Total Healthcare Services revenue | 221,351 | 155,739 | 65,612 | 42 | % | ||||||||||||||||||||||||||||||||||||||||||
| Life: | |||||||||||||||||||||||||||||||||||||||||||||||
| Term commissions | 19,280 | 16,364 | 2,916 | 18 | % | ||||||||||||||||||||||||||||||||||||||||||
| Final expense commissions | 21,946 | 18,324 | 3,622 | 20 | % | ||||||||||||||||||||||||||||||||||||||||||
| Other services | 5,421 | 4,602 | 819 | 18 | % | ||||||||||||||||||||||||||||||||||||||||||
| Total Life revenue | 46,647 | 39,290 | 7,357 | 19 | % | ||||||||||||||||||||||||||||||||||||||||||
All other: | |||||||||||||||||||||||||||||||||||||||||||||||
| Commissions | 3,647 | 5,795 | (2,148) | (37) | % | ||||||||||||||||||||||||||||||||||||||||||
| Other services | — | 171 | (171) | (100) | % | ||||||||||||||||||||||||||||||||||||||||||
Total All other revenue | 3,647 | 5,966 | (2,319) | (39) | % | ||||||||||||||||||||||||||||||||||||||||||
| Eliminations: | |||||||||||||||||||||||||||||||||||||||||||||||
| Commissions | (652) | (642) | (10) | 2 | % | ||||||||||||||||||||||||||||||||||||||||||
| Other services | (1,178) | (998) | (180) | 18 | % | ||||||||||||||||||||||||||||||||||||||||||
| Total Elimination revenue | (1,830) | (1,640) | (190) | 12 | % | ||||||||||||||||||||||||||||||||||||||||||
| Total Commissions and other services revenue | 110,267 | 139,380 | (29,113) | (21) | % | ||||||||||||||||||||||||||||||||||||||||||
| Total Pharmacy revenue | 218,544 | 152,883 | 65,661 | 43 | % | ||||||||||||||||||||||||||||||||||||||||||
| Total Revenue | $ | 328,811 | $ | 292,263 | $ | 36,548 | 13 | % | |||||||||||||||||||||||||||||||||||||||
Revenue by Segment
Three Months Ended September 30, 2025 and 2024–Revenue from Senior was $59.0 million for the three months ended September 30, 2025, a $33.9 million, or 37%, decrease compared to revenue of $92.9 million for the three months ended September 30, 2024. The decrease was due to a $26.3 million decrease in commissions revenue due to a 27% decrease in approved policies, and a $7.6 million decrease in other revenue.
Revenue from Healthcare Services was $221.4 million for the three months ended September 30, 2025, a $65.6 million, or 42%, increase compared to revenue of $155.7 million for the three months ended September 30, 2024, primarily due to a $65.7 million increase in SelectRx pharmacy revenue due to a 24% increase in members from the growth of the SelectRx business.
Revenue from Life was $46.6 million for the three months ended September 30, 2025, a $7.4 million, or 19%, increase compared to revenue of $39.3 million for the three months ended September 30, 2024, due to a $3.6 million increase in final expense revenue, and a $2.9 million increase in term revenue due to an increase in the number of policies sold.
Adjusted EBITDA by Segment
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Three Months Ended September 30, 2025 and 2024–Adjusted EBITDA from Senior was $(21.0) million for the three months ended September 30, 2025, a $28.8 million decrease compared to Adjusted EBITDA of $7.7 million for the three months ended September 30, 2024. The decrease was primarily due to a $33.9 million decrease in revenue as discussed above, offset by a $5.7 million decrease in marketing expenses. The decrease in marketing expenses was primarily due to a $5.3 million decrease in lead costs.
Adjusted EBITDA from Healthcare Services was $7.2 million for the three months ended September 30, 2025, a $2.3 million increase compared to Adjusted EBITDA of $4.9 million for the three months ended September 30, 2024. The increase was due to a $65.6 million increase in revenue as discussed above, partially offset by a $63.0 million increase in cost of goods sold - pharmacy revenue. Cost of goods sold - pharmacy revenue increased primarily as a result of a $59.5 million increase in medication costs and a $2.4 million increase in compensation costs related to the increased volume.
Adjusted EBITDA from Life was $5.6 million for the three months ended September 30, 2025, a $0.4 million decrease compared to Adjusted EBITDA of $6.0 million for the three months ended September 30, 2024. The decrease was due to a $4.3 million increase in marketing expenses and a $3.4 million increase in cost of commissions and other services revenue, partially offset by a $7.4 million increase in revenue as discussed above. The increase in marketing expenses was due to a $4.0 million increase in lead costs. The increase in cost of commissions and other services revenue was due to an increase in compensation costs.
Liquidity and Capital Resources
Our liquidity needs primarily include working capital and debt service requirements. Additionally, we are required under the Senior Secured Credit Facility and Indenture to maintain compliance with certain debt covenants, as discussed further in Note 6 to the condensed consolidated financial statements. Based on our financial projections, we believe we will remain in compliance with the debt covenants through the 12 months following the date of issuance of our condensed consolidated financial statements.
Long-term Debt
Significant changes and activity related to our long-term debt during the three months ended September 30, 2025, are discussed below. Refer to Note 6 to the condensed consolidated financial statements for further discussion on our debt agreements and activity.
Securitization and Indenture
During the three months ended September 30, 2025, the Company had outstanding borrowings of $78.9 million and repaid $4.5 million of the notes issued in connection with the Indenture. Refer to Note 6 to the condensed consolidated financial statements for further information.
Senior Secured Credit Facility
During the three months ended September 30, 2025, the Company repaid $3.6 million of the outstanding term loans, and as of September 30, 2025, had outstanding borrowings of $310.4 million related to the term loans. Refer to Note 6 to the condensed consolidated financial statements for further information.
During the three months ended September 30, 2025, the Company received proceeds of $80.0 million and repaid $65.0 million related to the revolving credit facility, and as of September 30, 2025, had $15.0 million in outstanding borrowings. Refer to Note 6 to the condensed consolidated financial statements for further information.
Liquidity
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As of September 30, 2025 and June 30, 2025, the Company had total debt obligations of $393.1 million and $385.1 million, respectively, under the Senior Secured Credit Facility and the Notes. Management expects that our existing cash, cash equivalents, funds available under the revolving credit facility and cash provided from operations will be sufficient to finance normal working capital needs, investments in properties, facilities and equipment and debt services.
As of September 30, 2025 and June 30, 2025, our cash, cash equivalents, and restricted cash totaled $15.7 million and $37.1 million, respectively. Additionally, the following table presents a summary of our cash flows for the periods presented below:
| Three Months Ended September 30, | |||||||||||||||||
| (in thousands) | 2025 | 2024 | |||||||||||||||
Net cash used in operating activities | $ | (21,623) | $ | (16,610) | |||||||||||||
| Net cash used in investing activities | (3,984) | (2,574) | |||||||||||||||
| Net cash provided by (used in) financing activities | 4,240 | (13,062) | |||||||||||||||
Operating Activities
Net cash used in operating activities primarily consists of net income, adjusted for certain non-cash items including depreciation; amortization of intangible assets and internally developed software; deferred income taxes; share-based compensation expense; amortization of debt issuance costs and discount; accrued interest; non-cash lease expenses; change in fair value of warrant liabilities; and the effect of changes in working capital and other activities.
Collection of commissions receivable depends upon the timing of our receipt of commission payments and associated commission statements from our insurance carrier partners. If we were to experience a delay in receiving a commission payment from an insurance carrier partner within a quarter, our operating cash flows for that quarter could be adversely impacted.
A significant portion of our marketing and advertising expenses is driven by the number of leads required to generate the insurance applications we submit to our insurance carrier partners. Our marketing and advertising costs are expensed and generally paid as incurred and since commission revenue is recognized upon approval of a policy but commission payments are paid to us over time, there are working capital requirements to fund the upfront cost of acquiring new policies. During AEP, we experience an increase in the number of submitted Senior insurance applications and marketing and advertising expenses compared to periods outside of AEP. The timing of AEP affects the positive or negative impacts of our cash flows during each quarter.
Three Months Ended September 30, 2025—Net cash used in operating activities was $21.6 million, consisting of net loss of $30.5 million, adjustments for non-cash items of $13.4 million, and a net cash inflow from changes in operating assets and liabilities of $22.2 million. Adjustments for non-cash items primarily consisted of $4.3 million of depreciation and amortization, $4.3 million of share-based compensation expense, $1.2 million of amortization of debt issuance costs and debt discount, $1.0 million of non-cash lease expense, $9.2 million in deferred income taxes, and $15.0 million in the change in fair value of warrant liabilities. The cash increase resulting from changes in net operating assets and liabilities was primarily driven by a $46.9 million decrease in accounts receivable, a $11.4 million increase in accounts payable and accrued expenses, and a $2.4 million decrease in other assets. These inflows were partially offset by a $29.0 million increase in commissions receivable, a decrease of $8.4 million in other liabilities primarily related to a $9.0 million decrease in accrued compensation and benefits, and a $1.1 million decrease in operating lease liabilities.
Three Months Ended September 30, 2024—Net cash used in operating activities was $16.6 million, consisting of net loss of $44.5 million, adjustments for non-cash items of $26.3 million, and a net cash inflow from changes in operating assets and liabilities of $1.6 million. Adjustments for non-cash items primarily consisted of
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$5.6 million of depreciation and amortization, $3.8 million of share-based compensation expense, $5.3 million of accrued interest payable in kind on the Term Loans, $1.1 million of amortization of debt issuance costs and debt discount, $0.9 million of non-cash lease expense, and $9.5 million in deferred income taxes. The cash increase resulting from changes in net operating assets and liabilities primarily consisted of an increase of $50.5 million in accounts receivable, related to an increase in revenue, an increase of $12.8 million in accounts payable and accrued expenses, offset by a decrease of $38.5 million in commissions receivable, due to a 5% decrease in approved policies for the three months, a decrease of $18.5 million in other liabilities, primarily related to an $5.1 million decrease in our contract liability, and a $12.9 million decrease in accrued compensation and benefits, a decrease of $1.1 million in operating lease liabilities and a decrease of $3.5 million in other assets, primarily related to hedge activities.
Investing Activities
Our investing activities primarily consist of purchases of property, equipment, and software and capitalized salaries related to the development of internal-use software.
Three Months Ended September 30, 2025—Net cash used in investing activities of $4.0 million was due to $2.9 million in purchases of software and capitalized internal-use software development costs and $1.1 million of purchases of property and equipment, primarily made up of machinery and equipment and leasehold improvements.
Three Months Ended September 30, 2024—Net cash used in investing activities of $2.6 million was due to $2.1 million in purchases of software and capitalized internal-use software development costs and $0.4 million of purchases of property and equipment, primarily made up of machinery and equipment and leasehold improvements.
Financing Activities
Our financing activities primarily consist of payments on term loans, proceeds and payments related to the revolving credit facility, payments on notes issued in connection with the Indenture, payments for debt issuance costs, and proceeds and payments related to stock-based compensation.
Three Months Ended September 30, 2025—Net cash provided by financing activities of $4.2 million was primarily due to $80.0 million of proceeds from the revolving credit facility, offset by $65.0 million of payments on the revolving credit facility, $3.6 million of principal payments on the term loans, and $4.5 million of payments on the notes issued in connection with the Indenture.
Three Months Ended September 30, 2024—Net cash used in financing activities of $13.1 million was primarily due to $8.5 million of principal payments on the term loans and $3.9 million of tax payments for stock-based compensation.
Contractual Obligations
Other than the discussions in Note 6 and Note 10 to the condensed consolidated financial statements, as of September 30, 2025, there have been no material changes to our contractual obligations as previously described in our Annual Report.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements during the period covered by this report.
Recent Accounting Pronouncements
For a discussion of new accounting pronouncements recently adopted and not yet adopted, see the notes to our condensed consolidated financial statements.
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Critical Accounting Estimates
The Company’s critical accounting estimates are described in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our Annual Report on Form 10-K for the fiscal year ended June 30, 2025. These estimates include assumptions used in revenue recognition related to lifetime value (“LTV”) of commission receivables, the fair value of warrant liabilities, and goodwill impairment testing.
There were no material changes to these critical accounting estimates during the three months ended September 30, 2025.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
In the normal course of business, we are subject to market risk. Market risks represent risks of loss that may impact our financial position due to adverse changes in financial market prices and rates. There have been no material changes in our exposure to credit concentration risk from those disclosed in “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025. For the three months ended September 30, 2025, our top two insurance carrier customers accounted for 35% and 21% of total accounts and commissions receivable.
We are, however, newly providing additional disclosure regarding our exposure to interest rate risk related to our debt obligations. As of September 30, 2025, we had $325.4 million outstanding under our senior secured term loan and revolving credit facilities, which bear interest at variable rates based on SOFR plus an applicable margin. A hypothetical 100 basis point increase in market interest rates would increase annualized interest expense by approximately $3.3 million, assuming September 30, 2025 balances remain outstanding and no hedging instruments are in place.
We also had approximately $78.9 million of asset-backed notes outstanding as of September 30, 2025. These notes bear fixed interest rates and therefore are not subject to market risk from changes in interest rates.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Our Disclosure Controls and Procedures
As of September 30, 2025, an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) was carried out by our management, with the participation of our chief executive officer (principal executive officer) and our chief financial officer (principal financial and accounting officer). Based upon our management's evaluation, our chief executive officer and our chief financial officer have concluded that as of the end of the period covered by this report, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to our management, including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure.
In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only a reasonable level of assurance of achieving their desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
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Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the first quarter of fiscal 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
A discussion of legal proceedings to which the Company is a party is included in Part I, Item 1 hereof under “Note 10, Commitments and Contingencies – Legal Contingencies and Obligations,” which is incorporated herein by reference.
ITEM 1A. RISK FACTORS
Except as discussed below, there have been no material changes to the risk factors disclosed in our Annual Report. Before investing in our securities, we recommend that investors carefully consider the risks described in our Annual Report, including those under the heading “Risk Factors.” Realization of any of these risks and any additional risks and uncertainties not currently known to us or that we have deemed to be immaterial could have a material adverse effect on our business, financial condition, or results of operations.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Except as previously reported by the Company on its current reports on Form 8-K, the Company did not sell any securities during the period covered by this Form 10-Q that were not registered under the Securities Act.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None of our officers or directors adopted terminated
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ITEM 6. EXHIBITS
The following documents listed below are incorporated by reference or are filed or furnished, as applicable, with this Quarterly Report on Form 10-Q.
| Exhibit Number | Exhibit Description | |||||||
31.1 | Certification of Chief Executive Officer of SelectQuote, Inc. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||||
31.2 | Certification of Chief Financial Officer of SelectQuote, Inc. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||||
32.1† | Certification of Chief Executive Officer of SelectQuote, Inc. Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||||||
32.2† | Certification of Chief Financial Officer of SelectQuote, Inc. Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||||||
| 101.INS | XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
| 101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document | |||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) | |||||||
† The certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q, are not deemed filed with the SEC and are not to be incorporated by reference into any filing of SelectQuote, Inc. under the Securities Act or the Exchange Act, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| SELECTQUOTE, INC. | |||||
| November 6, 2025 | By: /s/ Tim Danker | ||||
| Name: Tim Danker | |||||
| Title: Chief Executive Officer | |||||
| By: /s/ Ryan Clement | |||||
| Name: Ryan Clement | |||||
| Title: Chief Financial Officer | |||||
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FAQ
How much revenue did SLQT report for the quarter ended September 30, 2025?
Total revenue was $328.8 million, up from $292.3 million in the prior-year period.
What drove SelectQuote’s revenue mix in the quarter?
The Pharmacy business generated $218.5 million, while Commissions and other services were $110.3 million.
What was SelectQuote’s net loss and EPS for the period?
Net loss was $(30.5) million. Net loss attributable to common shareholders was $(47.9) million, or $(0.26) per basic and diluted share.
How did non-cash warrant revaluation affect results?
A $15.0 million gain from change in fair value of warrants reduced the overall loss for the quarter.
What were operating cash flows and ending cash balance?
Operating cash flow was $(21.6) million, and cash, cash equivalents, and restricted cash ended at $15.7 million.
What is SLQT’s current debt profile?
Total debt was $393.1 million, including Term Loans of $310.4 million and a $15.0 million revolving credit balance; the company reported covenant compliance.
How did preferred stock impact common shareholders?
Senior Non‑Convertible Preferred Stock accrued $17.5 million in dividends and accretion, increasing the loss attributable to common shareholders.
Selectquote Inc
NYSE:SLQT
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Nov 6, 2025
[8-K] SelectQuote, Inc. Reports Material Event
Aug 21, 2025
[10-K] SelectQuote, Inc. Files Annual Report
Aug 21, 2025
[8-K] SelectQuote, Inc. Reports Material Event
SLQT Stock Data
295.49M
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11.68%
55.07%
0.97%
Insurance Brokers
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United States
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