Slide 1: Investor Presentation August 2020
Investor Presentation August 2020
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation contains forward-looking statements. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use o
Slide 3: Company Overview
Company Overview 3
Slide 4: SelectQuote at a Glance
SelectQuote at a Glance 30+ 100% Years in Internal WHO WE ARE Operation Agents We are a leading technology-enabled, direct-to- 2MM+ 1 Billion+ consumer (“DTC”) distribution platform Policyholders Data points Served collected ~1,000 $180Bn+ Total Addressable WHAT WE DO Licensed Agents(1) Market 50+ c
Slide 5: Key Investment Highlights
Key Investment Highlights Large and Growing End Markets Shifting to Meet Evolving Consumer Preferences Purpose-Built Technology Empowering Our Highly Skilled Internal Agent Network Self-Reinforcing Feedback Loop from Strong Carrier Relationships and Favorable Consumer Outcomes Simple and Attractive
Slide 6: Demographic Trends Are Supercharging Our Growth Trajectory
Demographic Trends Are Supercharging Our Growth Trajectory High Degree of Visibility to Accelerating Growth of Senior Population MA / MS Enrollment and Penetration Are Growing (MM) 76.7 68.4 59.9 23.3 52.5 23.7 45.5 24.2 26.4 25.5 70% 65% 60% 53.4 44% 44.7 50% 35.7 20.0 26.1 20% 2008A 2013A 2018A 20
Slide 7: Market Demands Have Evolved Dramatically
Market Demands Have Evolved Dramatically Consumers Desire Expertise, Simplicity, Specialized Service for Complex Purchasing Decisions Industry Norm What the Market Wants Face-to-face and time-intensive Over the phone, convenient and efficient Limited coverage options and agent expertise Knowledgeabl
Slide 8: We Have Addressed the Challenge with a Unique Approach
We Have Addressed the Challenge with a Unique Approach Our Foundational Pillars Our Technology Our Agents Technology optimizes our lead acquisition, intelligently matches leads Agents enhance lead conversion to agents and maximizes our return on and maximize revenue opportunity marketing spend Propr
Slide 9: Our Approach is Rooted in Sophisticated Technology
Our Approach is Rooted in Sophisticated Technology Scalable, Proprietary Technology Solutions from End-to-End Proprietary, purpose-built technology platform SelectCare Core proprietary CRM and parent system, with sales enablement / workflow optimization tools, including lead scoring, lead distributi
Slide 10: We Engage in Omni-Channel Lead Acquisition
We Engage in Omni-Channel Lead Acquisition OurPHILOSOPHY OUR Philosophy Potential Leads Acquired Leads Brand Awareness SelectBid | SelectSearch | Attribution Models Revenue / CAC TV / Radio Data Tech Buying Minimum Direct Margin SEO Lead Gen Click Networks Scoring Tiering High Potential for Close Se
Slide 11: Our Product Diversification and Flex Model Impact Retention
Our Product Diversification and Flex Model Impact Retention Agents Are Able to Flex from One Segment to Another in a Highly Seasonal Business Illustrative Senior Health Monthly Production Agent Lifecycle Management Policies Placed AEP OEP Auto & Non-AEP / OEP Life Home Senior Health Auto & Life Home
Slide 12: Business Segments
Business Segments 12
Slide 13: SelectQuote Senior Health – Overview
SelectQuote Senior Health – Overview Provides the 65+ Senior market with leading online comparison shopping and expert advice SelectQuote Business Mix by Approved Policies Skilled agents guide seniors through complex sales and Prescription Drug Other enrollment process (primarily MA and MS) Plan 1%
Slide 14: SelectQuote Life – Overview
SelectQuote Life – Overview • Leading distributor of term life insurance founded in 1985 • SelectQuote was the first term life insurance exchange platform in the U.S. SelectQuote Life Premium Mix Places policies on behalf of 15 leading, nationally recognized insurance carrier partners (primarily Ter
Slide 15: SelectQuote Auto & Home – Overview
SelectQuote Auto & Home – Overview Licensed agents providing expert advice to 30,000+ customers annually(1) Total Premium ($MM) Provides unbiased online comparison shopping platform for auto, home and specialty insurance lines 66 57 50 Frequently bundle products to deliver customer value and drive r
Slide 16: Strategic Priorities and Financial Overview
Strategic Priorities and Financial Overview 16
Slide 17: Strategic Focus and Competitive Differentiators
Strategic Focus and Competitive Differentiators • Our strategy is to maximize absolute profitability at attractive returns on invested capital • Our choice model paired with highly trained, in- house agents and dedicated customer care teams was purpose-built to ensure customers buy the right plan fo
Slide 18: What Is Policyholder Lifetime Value?
What Is Policyholder Lifetime Value? Under ASC 606, SelectQuote Recognizes the Upfront Commission and the Estimated Value of Renewal Commissions as Revenue in the Period in Which the Policy Is Approved Policyholder Lifetime Value from a MA / MS Policy Components of Policyholder Lifetime Revenue Incl
Slide 19: How We Maximize Policyholder Lifetime Value
How We Maximize Policyholder Lifetime Value SelectQuote Seeks to Optimize all Components of Policyholder Lifetime Value Acquisition Costs Lead Close Rates Commissions Customer Retention Favorable Dedicated Multi-channel Agent leveling commission “Customer Care” lead scoring system structures team Op
Slide 20: Industry Leading Unit Economics
Industry Leading Unit Economics LTM March 31, 2020 $1,600 SLQT Peer A Peer B $1,505 Total Revenue (6) = 1.7x 1.7x 1.4x Total Cost $1,400 $1,200 $1,000 $891 $800 $614 $600 $400 $200 $0 Revenue per approved MA/MS policy(1) Cost per approved MA/MS policy(2) Adj. EBITDA per approved MA/MS policy(3) (4)
Slide 21: We Have a High-Growth, Scalable Business Model
We Have a High-Growth, Scalable Business Model(1) Revenue(2) Adj. EBITDA(3) ($MM) ($MM) Adj. EBITDA 21% 31% 29% 464 Margin(3) 39 133 8 118 337 25 35 105 8 234 110 26 33 50 98 308 9 125 23 90 192 102 37 FY 2018A FY 2019A LTM 3/31/2020A (19) (19) (24) Senior Health Life Auto & Home FY 2018A FY 2019A L
Slide 22: Predictable Cash Flow & Attractive Returns
Predictable Cash Flow & Attractive Returns Annual Customer Cohorts Added as Recently as 2018 Are Already Cash Flow Positive • All cost incurred in year 1 of customer life • Per ASC 606, anticipated lifetime revenue recognized in year 1 • On a cash basis, cohorts typically breakeven in year 2-3 • Sig
Slide 23: Our Attractive and Scalable Platform Is Growing…
Our Attractive and Scalable Platform Is Growing… Our Platform Provides Ample Support for Future Years of Growth with Minimal Ongoing Working Capital Requirements Our Drivers of Continued Growth Introduce new products Deepen consumer penetration and drive cross-sell opportunities Maximize policyholde
Slide 24: …and Can Be Leveraged to Introduce New Product Offerings
…and Can Be Leveraged to Introduce New Product Offerings SelectQuote Currently Offers Over 20 Products and Continuously Evaluates New Opportunities Features of the SelectQuote Platform: Scalable model with nimble approach Life Senior Health Auto & Home Est. 1985 Est. 2010 Est. 2011 Examples of New P
Slide 25: Appendix
Appendix 25
Slide 26: FY 2019 Reconciliation of GAAP Net Income to Adj. EBITDA
FY 2019 Reconciliation of GAAP Net Income to Adj. EBITDA ($’s in thousands) Senior Life Auto & Home Corp & Elims Consolidated Revenue $ 192,257 $ 110,493 $ 35,054 $ (335) $ 337,469 Operating expenses (102,083) (84,672) (27,237) (18,184) (232,175) Other expenses 0 0 0 (15) (15) Adjusted EBITDA 90,174
Slide 27: FY 2018 Reconciliation of GAAP Net Income to Adj. EBITDA
FY 2018 Reconciliation of GAAP Net Income to Adj. EBITDA ($’s in thousands) Senior Life Auto & Home Corp & Elims Consolidated Revenue $ 102,408 $ 98,219 $ 33,348 $ (286) $ 233,689 Operating expenses (65,720) (75,249) (24,127) (18,657) (183,752) Other expenses 0 0 0 (9) (9) Adjusted EBITDA 36,688 22,
Slide 28: LTM March 2020 Reconciliation of GAAP Net Income to Adj. EBITDA
LTM March 2020 Reconciliation of GAAP Net Income to Adj. EBITDA ($’s in thousands) Senior Life Auto & Home Corp & Elims Consolidated Revenue $ 307,608 $ 118,451 $ 38,879 $ (470) $ 464,468 Operating expenses (182,260) (93,799) (31,009) (23,967) (331,035) Other expenses 0 0 0 (27) (27) Adjusted EBITDA
Slide 29: Legal Disclaimer
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