SelectQuote Q1 FY2027 Earnings: Lower Revenue, Narrower Adjusted EBITDA Loss

SelectQuote (NYSE: SLQT) reported Q1 FY2027 revenue of $280.0 million, down approximately 15% from $328.8 million a year earlier, while its net loss narrowed to $20.3 million from $30.5 million. For the quarter ended September 30, 2026, lower volumes affected all three segments, but adjusted EBITDA and operating cash usage improved as the company emphasized customer quality and operating efficiency.

Core Earnings Data

Revenue decreased by $48.8 million year over year, but the decline did not translate into wider losses. The GAAP net loss narrowed by $10.2 million, the adjusted EBITDA loss narrowed by $15.1 million, and cash used in operations decreased by $4.4 million.

Adjusted EBITDA is a non-GAAP measure. The results point to better cost and cash-flow control rather than top-line growth.

Business and Segment Performance

All three reporting segments recorded lower revenue but improved adjusted EBITDA. Healthcare Services and Life remained profitable on an adjusted EBITDA basis, while Senior reduced its seasonal loss.

Senior submitted policies fell 24% to 66,494, while approved policies decreased 22% to 59,410. Approved Medicare Advantage policies declined 18% to 50,976. However, the estimated lifetime value of commissions per approved Medicare Advantage policy rose 16% to $890, helping the segment narrow its adjusted EBITDA loss despite lower policy volume.

Healthcare Services ended the quarter with 99,753 SelectRx members, down 7%, while average prescriptions shipped per day fell to 28,139 from 31,378. The company attributed the membership decline primarily to more selective customer qualification focused on long-term profitability and efficiency. Profitability per SelectRx member increased 60% to $107.6, supporting the segment’s 56% adjusted EBITDA growth and margin expansion.

Life revenue declined as total term and final expense premiums fell 21% to $38.5 million. Final expense premiums decreased 32%, compared with a 5% decline in term premiums. Even with lower premium volume, Life’s adjusted EBITDA increased 31%, and its margin rose five percentage points to 17%.

Lower Volume Reduced Revenue, but Unit Economics Improved

On a separate trailing-12-month basis, the combined Senior and Healthcare Services businesses generated $2,468 of revenue per approved Medicare Advantage or Medicare Supplement policy, up 2%. Operating expenses per policy declined 1% to $2,135.

Adjusted EBITDA per approved policy consequently increased to $333 from $284, while the adjusted EBITDA margin per policy rose to 13% from 12%. The revenue-to-customer-acquisition-cost multiple also improved to 7.0 times from 6.4 times. These unit economics support the direction of the quarterly profitability improvement, even though current-quarter policy, membership, and prescription volumes were lower.

Management linked the operating leverage to process improvements, technology, its experienced agent workforce, and increased use of AI. The company also strategically reduced Senior agent headcount and continued scaling Healthcare Services while facing a revenue headwind from the Inflation Reduction Act.

Cash Flow and Balance Sheet

Although operating cash usage improved year over year, cash, cash equivalents, and restricted cash declined to $13.4 million at September 30, 2026, from $20.7 million at June 30, 2026. Current and long-term debt totaled approximately $385.8 million, up from approximately $370.2 million over the same period.

The liquidation preference of SelectQuote’s senior non-convertible preferred stock increased to $438.6 million from $423.2 million. With Q1 still producing negative operating cash flow, debt and preferred capital remain important parts of the company’s financial position to monitor.

Fiscal 2027 Guidance

SelectQuote reiterated its full-year FY2027 targets. Management described the first quarter as the company’s seasonally slowest period and maintained its outlook as the Medicare annual enrollment period began.

The guidance calls for positive full-year adjusted EBITDA and operating cash flow despite the losses and cash usage recorded in Q1, making execution during the remaining seasonal periods central to the outlook.

Risks Investors Should Monitor

• Continued volume pressure: Senior approved policies, SelectRx membership, prescriptions shipped, and Life premiums all declined. Further contraction could make it harder for unit-economics improvements to offset lower revenue.
• Full-year execution: SelectQuote maintained positive adjusted EBITDA and operating cash flow targets after a negative first quarter. The remaining quarters therefore need to provide the seasonal earnings and cash-flow improvement embedded in the guidance.
• Healthcare policy headwinds: Management identified the Inflation Reduction Act as a Healthcare Services revenue headwind. Regulatory and reimbursement changes could continue to affect pharmacy revenue and profitability.
• Capital structure and liquidity: Cash and restricted cash declined during the quarter while total debt and the preferred stock liquidation preference increased, raising the importance of delivering the projected full-year operating cash flow.

Summary

SelectQuote’s Q1 FY2027 results showed a clear trade-off between volume and profitability: revenue fell across every segment, but losses narrowed, segment margins improved, and operating cash usage decreased. Better policy and member economics supported the improvement, particularly in Healthcare Services. The next test is whether those efficiency gains can continue through the annual enrollment period and translate into the positive adjusted EBITDA and operating cash flow included in SelectQuote’s reiterated full-year guidance.