SelectQuote Narrows Q1 Loss Despite 15% Revenue Decline

SelectQuote Inc. (NYSE: SLQT) reported a narrower fiscal first-quarter loss as improved profitability in Healthcare Services and lower investment in its Senior business helped adjusted EBITDA increase by $15 million, despite a 15% decline in consolidated revenue.

Revenue for the first quarter of fiscal 2027 fell to $280 million from $329 million a year earlier. The company attributed the decline primarily to the Inflation Reduction Act’s impact on Healthcare Services revenue, as well as what it described as prudent investment in Senior ahead of the Medicare annual enrollment period.

The GAAP net loss narrowed to $20.3 million from $30.5 million in the prior-year quarter. Adjusted EBITDA, a non-GAAP measure, improved to a loss of $17 million from a loss of $32.1 million and came in ahead of the company’s internal forecast. SelectQuote noted that its fiscal first quarter has historically been an investment period ahead of the AEP and OEP selling seasons.

Healthcare Services profitability improves

Healthcare Services revenue declined to $186 million from $221 million, in line with the company’s expectations and primarily reflecting the Inflation Reduction Act. However, adjusted EBITDA rose 56% to $11 million from $7 million, while the segment’s adjusted EBITDA margin increased to 6% from 3%.

SelectQuote said the improvement reflected greater operating efficiency, a maturing membership base and stabilized reimbursement levels. Profitability per SelectRx member, calculated using divisional adjusted EBITDA and average membership, increased 60% to $108 from $67.

The company also said faster enrollment activity should help SelectRx onboard new members efficiently during AEP and OEP. Management identified the Olathe, Kansas, facility as a contributor to the expected ramp in SelectRx profitability and said pharmacy benefit manager stability is supported by a multi-year contract.

Senior loss narrows ahead of enrollment season

Senior segment revenue fell to $51 million from $59 million, reflecting a strategically smaller agent class entering AEP. Adjusted EBITDA improved to a loss of $12 million from a loss of $21 million, which the company attributed to operating efficiencies across the Senior sales funnel.

On a trailing-12-month basis, Senior adjusted EBITDA was $157 million, compared with $133 million in the prior-year period.

SelectQuote expects another annual enrollment period marked by beneficiary disruption as Medicare Advantage carriers continue working toward profitability targets. The company said plan-term changes and benefit reductions remain elevated. Its sales strategy emphasizes customer retention, re-shopping beneficiaries when appropriate, and growth opportunities involving health maintenance organizations, special needs plans and selected geographic markets.

The company also pointed to a strong mix of tenured agents and said it is building on customer-engagement campaigns from fiscal 2026, when it recorded a 33% recapture result.

Technology investments target efficiency

SelectQuote said its technology and artificial-intelligence investments are producing measurable efficiency gains. More than 200,000 unique calls were screened through voice AI during the quarter, while all agent calls were transcribed for real-time coaching and post-call scorecards.

In Healthcare Services, voice AI reduced enrollment call times by about 20% while producing higher enrollment rates, according to the presentation. The company said automation is being used for call screening, routing, coaching and training, with human oversight remaining part of the process. Its in-house Pharmacy Management System is also live and shipping prescriptions.

The Life segment generated revenue of $43 million, down from $47 million because of a year-over-year reduction in Final Expense agent headcount. Adjusted EBITDA increased to $7 million from $6 million, and the segment margin rose to 17% from 12%.

Fiscal 2027 cash flow outlook

SelectQuote said it remains on track to generate more than $60 million of operating cash flow in fiscal 2027, up from $32 million in fiscal 2026. Management linked the outlook to technology-enabled operating and cost efficiencies, PBM stability and higher SelectRx profitability.

The outlook remains subject to risks including SelectQuote’s reliance on a limited number of insurance carriers, changes in commissions and underwriting practices, regulatory developments, competition for customers and sales leads, and the company’s ability to convert leads into policy sales. Other uncertainties include debt and covenant compliance, access to capital, technology or cybersecurity disruptions, reimbursement changes, prescription-drug supply and demand, and the seasonal nature of the business.