Selectquote, Inc. · NYSE:SLQT
Selectquote — Q4 FY2020 Earnings Presentation
24 slides from Selectquote's earnings presentation, Sep 9, 2020
Slide 1: 4th Quarter and Fiscal Year 2020 Earnings Conference Call Presentation
Exhibit 99.2 4th Quarter and Fiscal Year 2020 Earnings Conference Call Presentation September 9, 2020
Slide 2: Disclaimer: Forward-Looking Statements
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: 4th Quarter Earnings Summary
4th Quarter Earnings Summary SelectQuote drove top line and profit results for 4th quarter and full-year 2020 that were ahead of internal expectations. Results were primarily driven by continued strength in the Senior and Life divisions. Consolidated revenue totaled $141 million, up 90% year-over-ye
Slide 4: SelectQuote at a Glance
SelectQuote at a Glance 35+ 1 Billion+ Years in Data Points Operation Collected 100% 2MM+ Internal Policyholders Agents Served 1,000+ $180Bn+ Licensed Total Addressable Agents(1) Market Notes: 1. As of June 30, 2020 4
Slide 5: Demographics: Accelerating Growth of Senior Population
Demographics High Degree of Visibility to Accelerating Growth of Senior Population MA / MS Enrollment and Penetration Are Growing ($MM) 76.7 68.4 23.3 59.9 23.7 52.5 24.2 70% 45.5 26.4 65% 25.5 60% 44% 50% 53.4 44.7 35.7 20.0 26.1 2008A 2013A 2018A 2023E 2028E MA / MS Other Medicare MA / MS Enrollme
Slide 6: 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 7: Our Differentiated Approach
Our Differentiated 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 Proprietary, data-driven Highly
Slide 8: Agents Able to Flex from One Segment to Another in a Highly Seasonal Business
Submitted Policies Illustrative SeniorMonthlyProduction Agents AreAbletoFlexfromOneSegmentAnotherinaHighlySeasonal Business Our ProductDiversificationandFlexModelImpact Retention Jul AEP/OEP creates seasonal upswing in business volumes with Aug ~70% of MA and MS policies written in this window Sep M
Slide 9: Strategic Focus and Competitive Differentiators
Strategic Focus and Competitive Differentiators • Our strategy is to maximize absolute profitability at attractive returns on invested capital divisions • Our choice model paired with highly trained, in- house agents and dedicated customer care teams was purpose-built to ensure customers buy the rig
Slide 10: We Have a High-Growth, Scalable Business Model
We Have a High-Growth, Scalable Business Model(1) Revenue(2) Adj. EBITDA(2)(3) ($MM) ($MM) Adj. EBITDA 21% 31% 29% Margin(3) 51% 532 CAGR: 41 154 9 130 28 76% 337 CAGR: 105 35 8 26 234 110 33 50 362 146 9 98 23 90 192 102 37 (19) (19) FY 2018 FY 2019 FY 2020 (28) Senior Life Auto & Home Corp FY 2018
Slide 11: SelectQuote – Consolidated Financial Summary
SelectQuote – Consolidated Financial Summary Revenue Adj. EBITDA* ($MM) ($MM) 532 8% 5 46% 154 337 105 90% 106% 141 40 74 20 FY 2019 FY 2020 4Q FY19 4Q FY20 FY 2019 FY 2020 4Q FY19 4Q FY20 Adj. EBITDA 29% 26% 28% Margin 31% *See reconciliations from non-GAAP measure, Adjusted EBITDA, to net income o
Slide 12: SelectQuote Senior – Financial Summary
SelectQuote Senior – Financial Summary Revenue Adj. EBITDA* ($MM) ($MM) 362 8% 8 146 2% 6 192 90 60% 1 57% 88 1 33 34 13 FY 2019 FY 2020 4Q 2019 4Q 2020 FY 2019 FY 2020 4Q 2019 4Q 2020 Adj. EBITDA Margin 47% 40% 38% 38% *See reconciliations from non-GAAP measure, Adjusted EBITDA, to net income on sl
Slide 13: SelectQuote Senior – Policies
SelectQuote Senior – Policies Total Policies Submitted Total Policies Approved 378,052 CAGR CAGR 91% 88% 89,421 62% 65% CAGR CAGR 2% 24,085 9% 136% 316,725 155% 121% 109% 64% 102% 198,211 73,219 118% 151% 18,102 55,056 186% 184% 168,742 23,593 264,546 44,484 88,846 16,593 225,404 21,868 81,770 119,5
Slide 14: Industry Leading Unit Economics
Industry Leading Unit Economics FY June 30, 2020 $1,485 Total Revenue / SLQT Peer A Peer B Total Cost (6) 1.7x 1.7x 1.4x $887 $598 Revenue per approved MA/MS policy(1) Cost per approved MA/MS policy(2) Adj. EBITDA per approved MA/MS policy(3)(7) (4) (5) SelectQuote Peer A Peer B Notes: Source: Analy
Slide 15: SelectQuote Life – Key Operating Metrics and Financial Summary
SelectQuote Life – Key Operating Metrics and Financial Summary Life Core and Ancillary Premium Revenue ($MM) ($MM) CAGR 25% 18% 161% 130 37% 110 —% 31 42 FY 2019 FY 2020 4Q 2019 4Q 2020 CAGR 113 52% Adj. EBITDA* ($MM) 288% 90 37 14 (6)% 8% 39 76 28 76 25 26 35% 20 5 9 12 20 19 FY 2019 FY 2020 4Q 201
Slide 16: SelectQuote Auto & Home – Key Operating Metrics and Financial Summary
SelectQuote Auto & Home – Key Operating Metrics and Financial Summary Net New Effective Premium Revenue ($MM) ($MM) 18% 41 35 24% 24% 70 12 10 57 FY 2019 FY 2020 4Q 2019 4Q 2020 Adj. EBITDA* ($MM) 27% 21 11% 9 17 8 36% 2 3 FY 2019 FY 2020 4Q 2019 4Q 2020 FY 2019 FY 2020 4Q 2019 4Q 2020 Adj. EBITDA 2
Slide 17: Predictable Cash Flow & Attractive Returns
Predictable Cash Flow & Attractive Returns Annual Customer Cohorts Added as Recently as 2018 Are Already Cash Flow Positive • All costs incurred in year 1 of customer life • Per ASC 606, anticipated lifetime revenue recognized in year 1 • On a cash basis, cohorts typically breakeven in year 2-3 • Si
Slide 18: SelectQuote – FY2021 Consolidated Guidance
SelectQuote – FY2021 Consolidated Guidance ($'s in millions) Range Implied YoY Growth Revenue $775 - $815 46% - 53% Net Income $115 - $127 43% - 56% Adjusted EBITDA* $200 - $215 30% - 40% *See reconciliations from non-GAAP measure, Adjusted EBITDA, to net income on slides 21-24 18
Slide 19: Key Investment Takeaways
Key Investment Takeaways 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 B
Slide 20: Supplemental information
Supplemental information 20
Slide 21: FY 2020 and 4Q 2020 Adjusted EBITDA to Net Income Reconciliation
FY 2020 and 4Q 2020 Adjusted EBITDA to Net Income Reconciliation FY 2020 (in thousands) Senior Life Auto & Home Corp & Elims Consolidated Revenue $ 361,673 $ 129,967 $ 41,189 $ (1,314) $ 531,515 Operating expenses (215,935) (102,155) (32,490) (26,881) (377,461) Other expenses, net — — — (30) (30) Ad
Slide 22: FY 2019 and 4Q 2019 Adjusted EBITDA to Net Income Reconciliation
FY 2019 and 4Q 2019 Adjusted EBITDA to Net Income Reconciliation FY 2019 (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) (232,176) Other expenses, net — — — (15) (15) Adjus
Slide 23: FY 2018 Adjusted EBITDA to Net Income Reconciliation
FY 2018 Adjusted EBITDA to Net Income Reconciliation (in thousands) Senior Life Auto & Home Corp & Elims Consolidated Revenue $ 102,408 $ 98,218 $ 33,348 $ (286) $ 233,688 Operating expenses (65,720) (75,249) (24,127) (18,657) (183,753) Other expenses, net — — — (9) (9) Adjusted EBITDA 36,688 22,969
Slide 24: FY 2021 Guidance Adjusted EBITDA to Net Income Reconciliation
FY 2021 Guidance Adjusted EBITDA to Net Income Reconciliation (in thousands) Range Net Income $ 115,000 $ 127,000 Income tax expense 42,000 45,000 Interest expense 26,000 26,000 Depreciation and amortization 10,000 10,000 Share-based compensation expense 4,000 4,000 Non-recurring expenses 2,000 2,00