SelectQuote (NYSE:SLQT) management highlighted what it described as a “strong quarter” driven by solid execution during the Medicare Advantage annual enrollment period (AEP), continued growth in its Healthcare Services segment, and recently announced financing and pharmacy benefit manager (PBM) agreements that the company said improve visibility and capital flexibility. At the same time, executives reduced fiscal 2026 guidance to reflect two discrete headwinds tied to partner actions.
Quarter performance led by Senior segment efficiency
CEO Tim Danker said the company’s Medicare Advantage season benefitted from “strong operational execution and marketing efficiency,” helping the Senior segment produce near-record adjusted EBITDA margins of 39% on modest year-over-year growth. He credited continued technology investment that supports agent efficiency and productivity, noting the company again delivered “strong quarter for agent productivity, aiding volume, production, and profitability.”
Marketing efficiency was also a focal point. Danker said marketing cost per approved policy was $326, in line with last year and 20% lower than the company’s second quarter of fiscal 2024, reflecting continued refinement in customer targeting and more emphasis on owned and operated marketing channels.
CFO Ryan Clement reported consolidated revenue increased 12% year-over-year to $537 million. In the Senior segment, revenue was $262 million, up 2%, supported by higher approved policy volumes. Senior adjusted EBITDA was $102 million, which Clement said was in line with the prior year’s AEP quarter.
Recapture efforts and plan disruption drove engagement
Management spent time describing heightened disruption in Medicare Advantage plan design and terminations over the past two years. Danker said that in each of the last two seasons, approximately 7% of the company’s plans in force were canceled by carriers, compared with a historical average below 1%. He also said a majority of remaining beneficiaries experienced negative changes to at least one benefit, which increased consumer shopping and engagement.
In response, the company emphasized proactive outreach, using data and technology to identify policyholders with a higher likelihood of change and potential coverage gaps. Danker said the company measures success through its recapture rate, which was 33% this year, improving on the prior year. He framed recapture as important both for preserving cash flow from existing beneficiaries and supporting carrier outcomes through better fit and persistency.
Management also addressed the CMS 2027 Advance Rate Notice, with Danker saying the preliminary rates “don’t reflect rising utilization and care costs,” while noting the rates are not final and the company expects industry feedback ahead of the final notice in April.
SelectRx growth, PBM agreement, and clinical value focus
The Healthcare Services segment continued to expand, with Danker citing 26% year-over-year revenue growth. Clement said Healthcare Services revenue rose 26% to $231 million, while member count increased 17% to 113,000. He attributed faster revenue growth to recently onboarded members maturing and taking delivery of their full prescription regimens.
Executives emphasized SelectRx’s adherence-focused model and its broader clinical role. Danker said the service uses 30-day “time and date stamp” medication strips and pharmacist review to reduce confusion and waste, particularly given that prescriptions change for roughly 10% of SelectRx’s population each month. He said that in 2025 SelectRx pharmacists identified nearly 50,000 potential dosage or adverse-interaction concerns and contacted prescribing physicians to attempt remediation, resulting in changes to “tens of thousands” of prescriptions.
Danker also cited “an observed 20% reduction in beneficiary hospital days,” which he said was driven by improved medication adherence.
However, Clement noted Healthcare Services EBITDA was pressured by a PBM reimbursement headwind previously discussed last quarter. Management said the company signed a multi-year PBM agreement in January that improves visibility into reimbursement pricing, supporting its push to expand profitability and generate more predictable results. In the Q&A, executives characterized the new PBM structure as moving toward a “cost plus” type arrangement with guarantees intended to reduce the risk of unfavorable pricing updates.
Looking forward, Clement said SelectQuote expects sequential growth to be more modest in the near term as it prioritizes cash flow and profitability. He also said the company plans to optimize customer targeting to focus enrollment on patients who benefit most and generate the best economics. As a result, the company expects Healthcare Services membership to end fiscal 2026 “flat to modestly down” from 113,000, while still producing 20%+ year-over-year revenue growth.
Credit facility extends maturities and increases flexibility
SelectQuote also discussed a new $415 million credit facility announced in mid-January. Danker said the facility significantly extends debt maturities to 2031, easing constraints created by near-term maturities and improving operating flexibility, particularly for the Senior business. Clement added the new facility eliminates 2026 and 2027 maturities, increases peak-season liquidity, and provides a pathway to reduce the term facility interest rate by up to 100 basis points.
Management stressed that the broader strategic focus remains unchanged. Danker said the company will continue to prioritize profitability and cash flow over growth, while using improved flexibility to capitalize on opportunities when market conditions support them.
Guidance reduced for fiscal 2026, but cash flow outlook raised
Despite strong quarterly execution, management lowered fiscal 2026 guidance due to two partner-driven headwinds:
- PBM reimbursement change: approximately $20 million EBITDA headwind in fiscal 2026 that management said will not recur beyond the year.
- National carrier marketing pullback: approximately $20 million impact after the carrier reduced strategic marketing budgets across distribution partners to slow Medicare Advantage growth.
With the combined $40 million impact, Clement said SelectQuote revised fiscal 2026 consolidated revenue guidance to $1.61 billion to $1.71 billion and adjusted EBITDA guidance to $90 million to $100 million. Danker said the carrier action was frustrating but does not change the company’s long-term outlook, adding that management still stands by fiscal 2026 targets of 20%+ EBITDA margins in the Senior division and an annualized adjusted EBITDA exit rate of $40 million to $50 million for Healthcare Services.
Executives also emphasized improving cash generation. Danker said the company expects fiscal 2026 operating cash flow of $25 million to $35 million, which he said is up more than $40 million at the midpoint compared with the prior year. He added the company forecasts “cash EBITDA” growth of roughly 20% year-over-year, arguing that cash profitability is improving even as reported EBITDA is affected by the two discrete headwinds.
In Q&A, Danker said SelectQuote has levers to navigate carrier marketing shifts, including geographic deployment of marketing dollars and focusing on segments such as special needs plans (SNPs), and reiterated that management does not anticipate additional carrier actions “of this level of materiality.”
About SelectQuote (NYSE:SLQT)
SelectQuote, Inc (NYSE: SLQT) is a U.S.-based insurance brokerage and lead generation company that connects consumers with a range of insurance products through proprietary technology and licensed agents. The company specializes in life insurance, supplemental health coverage and Medicare plans, leveraging its digital platform and call center operations to help individuals compare policies and find cost-effective solutions tailored to their needs.
Through a single point of contact, policy seekers can evaluate offerings from multiple carriers, including term life, whole life, accidental death, critical illness and long-term care products.
