UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, ~~2022~~2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

001-39295

(Commission File Number)

SelectQuote, Inc.

(Exact name of registrant as specified in its charter)


Delaware		94-3339273
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

6800 West 115th Street	Suite 2511	66211
Overland Park	Kansas	(Zip Code)
(Address of principal executive offices)

(913) 599-9225

(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

SLQT

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes ☐ No ☒

The registrant had outstanding ~~164,401,645~~166,656,891 shares of common stock as of April 30, ~~2022.~~2023.

Table of Contents

SELECTQUOTE, INC. AND SUBSIDIARIES

FORM 10-Q

TABLE OF CONTENTS


	PART I FINANCIAL INFORMATION	PAGE
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Balance Sheets as of March 31, 3 12023 ~~, 202~~2 and June 30, ~~2021~~2022	2
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended March 31, 202 ~~2022~~3 and 202 ~~2021~~2	3
	Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Three and Nine Months Ended March 31, ~~2022~~2023 and ~~202~~12022	4
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended March 31, ~~2022~~202 3 and 202 12	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3032
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5156
Item 4.	Controls and Procedures	5156
	PART II OTHER INFORMATION
Item 1.	Legal Proceedings	5358
Item 1A.	Risk Factors	5358
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5358
Item 3.	Defaults Upon Senior Securities	5358
Item 4.	Mine Safety Disclosures	5358
Item 5.	Other Information	5358
Item 6.	Exhibits	5460
	Signatures	5561

Table of Contents

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SELECTQUOTE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)


		March 31, 2022		June 30, 2021			March 31, 2023		June 30, 2022
ASSETS	ASSETS					ASSETS
CURRENT ASSETS:	CURRENT ASSETS:					CURRENT ASSETS:
Cash and cash equivalents	Cash and cash equivalents	$	199,359	$	286,454	Cash and cash equivalents	$	92,048	$	140,997

Accounts receivable		168,735		105,298
Accounts receivable, net of allowances of $2.2 million and $0.6 million, respectively						Accounts receivable, net of allowances of $2.2 million and $0.6 million, respectively	211,686		129,748
Commissions receivable-current	Commissions receivable-current	77,158		89,120		Commissions receivable-current	68,531		116,277
Other current assets	Other current assets	13,246		4,486		Other current assets	11,504		15,751
Total current assets	Total current assets	458,498		485,358		Total current assets	383,769		402,773
COMMISSIONS RECEIVABLE		761,138		756,777
COMMISSIONS RECEIVABLE—Net						COMMISSIONS RECEIVABLE—Net	753,003		722,349
PROPERTY AND EQUIPMENT—Net	PROPERTY AND EQUIPMENT—Net	45,558		29,510		PROPERTY AND EQUIPMENT—Net	31,601		41,804
SOFTWARE—Net	SOFTWARE—Net	15,558		12,611		SOFTWARE—Net	16,127		16,301
OPERATING LEASE RIGHT-OF-USE ASSETS	OPERATING LEASE RIGHT-OF-USE ASSETS	29,018		31,414		OPERATING LEASE RIGHT-OF-USE ASSETS	26,312		28,016
INTANGIBLE ASSETS—Net	INTANGIBLE ASSETS—Net	36,022		40,670		INTANGIBLE ASSETS—Net	27,019		31,255
GOODWILL	GOODWILL	73,732		68,019		GOODWILL	29,136		29,136
OTHER ASSETS	OTHER ASSETS	15,790		1,436		OTHER ASSETS	20,989		18,418
TOTAL ASSETS	TOTAL ASSETS	$	1,435,314	$	1,425,795	TOTAL ASSETS	$	1,287,956	$	1,290,052
LIABILITIES AND SHAREHOLDERS’ EQUITY	LIABILITIES AND SHAREHOLDERS’ EQUITY					LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:	CURRENT LIABILITIES:					CURRENT LIABILITIES:
Accounts payable	Accounts payable	$	27,445	$	34,079	Accounts payable	$	31,608	$	24,766
Accrued expenses	Accrued expenses	35,593		20,676		Accrued expenses	23,162		26,002
Accrued compensation and benefits	Accrued compensation and benefits	46,229		40,909		Accrued compensation and benefits	49,087		42,150

Operating lease liabilities—current	Operating lease liabilities—current	5,181		5,289		Operating lease liabilities—current	5,958		5,261
Current portion of long-term debt	Current portion of long-term debt	7,169		2,360		Current portion of long-term debt	25,412		7,169
Contract liabilities						Contract liabilities	9,717		3,404
Other current liabilities	Other current liabilities	2,079		5,504		Other current liabilities	1,580		4,761
Total current liabilities	Total current liabilities	123,696		108,817		Total current liabilities	146,524		113,513
LONG-TERM DEBT, NET—less current portion	LONG-TERM DEBT, NET—less current portion	699,386		459,043		LONG-TERM DEBT, NET—less current portion	667,306		698,423

DEFERRED INCOME TAXES	DEFERRED INCOME TAXES	76,806		139,240		DEFERRED INCOME TAXES	49,134		50,080
OPERATING LEASE LIABILITIES	OPERATING LEASE LIABILITIES	35,301		38,392		OPERATING LEASE LIABILITIES	30,329		33,946
OTHER LIABILITIES	OTHER LIABILITIES	3,533		11,743		OTHER LIABILITIES	3,244		2,985
Total liabilities	Total liabilities	938,722		757,235		Total liabilities	896,537		898,947
COMMITMENTS AND CONTINGENCIES (Note 8)	COMMITMENTS AND CONTINGENCIES (Note 8)	0		0		COMMITMENTS AND CONTINGENCIES (Note 8)
SHAREHOLDERS’ EQUITY:	SHAREHOLDERS’ EQUITY:					SHAREHOLDERS’ EQUITY:
Common stock, $0.01 par value	Common stock, $0.01 par value	1,644		1,635		Common stock, $0.01 par value	1,667		1,644
Additional paid-in capital	Additional paid-in capital	554,045		544,771		Additional paid-in capital	564,484		554,845

Retained earnings (accumulated deficit)		(68,684)		121,925
Accumulated deficit						Accumulated deficit	(187,806)		(177,100)
Accumulated other comprehensive income	Accumulated other comprehensive income	9,587		229		Accumulated other comprehensive income	13,074		11,716
Total shareholders’ equity	Total shareholders’ equity	496,592		668,560		Total shareholders’ equity	391,419		391,105
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,435,314	$	1,425,795	TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,287,956	$	1,290,052

See accompanying notes to condensed consolidated financial statements.

Table of Contents

SELECTQUOTE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(In thousands)


		Three Months Ended March 31,				Nine Months Ended March 31,					Three Months Ended March 31,				Nine Months Ended March 31,
		2022		2021		2022		2021			2023		2022		2023		2022
REVENUE:	REVENUE:									REVENUE:
Commission	Commission	$	222,538	$	235,216	$	495,494	$	660,631	Commission	$	197,258	$	221,764	$	533,627	$	492,528
Production bonus and other		52,575		30,130		132,127		85,054

Pharmacy										Pharmacy	66,948		18,478		159,641		31,715
Other										Other	35,192		34,097		87,802		100,412
Total revenue	Total revenue	275,113		265,346		627,621		745,685		Total revenue	299,398		274,339		781,070		624,655
OPERATING COSTS AND EXPENSES:	OPERATING COSTS AND EXPENSES:									OPERATING COSTS AND EXPENSES:
Cost of revenue	Cost of revenue	119,459		71,439		359,732		206,605		Cost of revenue	79,186		96,491		235,827		319,469
Cost of goods sold—pharmacy revenue										Cost of goods sold—pharmacy revenue	62,302		19,294		154,753		34,338
Marketing and advertising	Marketing and advertising	125,082		116,690		409,005		298,696		Marketing and advertising	90,205		125,082		237,724		409,005
General and administrative		21,031		19,251		64,570		44,496
Selling, general, and administrative										Selling, general, and administrative	27,544		24,705		86,662		70,495
Technical development	Technical development	6,436		4,860		18,675		13,458		Technical development	6,434		6,436		18,860		18,675

Total operating costs and expenses	Total operating costs and expenses	272,008		212,240		851,982		563,255		Total operating costs and expenses	265,671		272,008		733,826		851,982
INCOME (LOSS) FROM OPERATIONS	INCOME (LOSS) FROM OPERATIONS	3,105		53,106		(224,361)		182,430		INCOME (LOSS) FROM OPERATIONS	33,727		2,331		47,244		(227,327)
INTEREST EXPENSE, NET	INTEREST EXPENSE, NET	(12,179)		(7,355)		(31,300)		(20,898)		INTEREST EXPENSE, NET	(21,105)		(12,179)		(58,885)		(31,300)
LOSS ON EXTINGUISHMENT OF DEBT		—		(3,315)		—		(3,315)
OTHER EXPENSE, NET		(23)		(349)		(177)		(1,545)

OTHER INCOME (EXPENSE), NET										OTHER INCOME (EXPENSE), NET	(206)		(23)		(118)		(177)
INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT)	INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT)	(9,097)		42,087		(255,838)		156,672		INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT)	12,416		(9,871)		(11,759)		(258,804)
INCOME TAX EXPENSE (BENEFIT)	INCOME TAX EXPENSE (BENEFIT)	(2,649)		6,852		(65,229)		31,846		INCOME TAX EXPENSE (BENEFIT)	3,152		(2,846)		(1,053)		(65,984)
NET INCOME (LOSS)	NET INCOME (LOSS)	$	(6,448)	$	35,235	$	(190,609)	$	124,826	NET INCOME (LOSS)	$	9,264	$	(7,025)	$	(10,706)	$	(192,820)

NET INCOME (LOSS) PER SHARE:	NET INCOME (LOSS) PER SHARE:									NET INCOME (LOSS) PER SHARE:
Basic	Basic	$	(0.04)	$	0.21	$	(1.16)	$	0.77	Basic	$	0.06	$	(0.04)	$	(0.06)	$	(1.17)
Diluted	Diluted	$	(0.04)	$	0.21	$	(1.16)	$	0.75	Diluted	$	0.06	$	(0.04)	$	(0.06)	$	(1.17)
WEIGHTED-AVERAGE COMMON STOCK OUTSTANDING USED IN PER SHARE AMOUNTS:	WEIGHTED-AVERAGE COMMON STOCK OUTSTANDING USED IN PER SHARE AMOUNTS:									WEIGHTED-AVERAGE COMMON STOCK OUTSTANDING USED IN PER SHARE AMOUNTS:
Basic	Basic	164,083		163,023		163,914		162,705		Basic	166,543		164,083		165,951		163,914
Diluted	Diluted	164,083		165,731		163,914		165,495		Diluted	167,905		164,083		165,951		163,914

OTHER COMPREHENSIVE INCOME, NET OF TAX:
Gain on cash flow hedge		7,589		1,810		9,358		1,669
OTHER COMPREHENSIVE INCOME		7,589		1,810		9,358		1,669
OTHER COMPREHENSIVE INCOME (LOSS) NET OF TAX:										OTHER COMPREHENSIVE INCOME (LOSS) NET OF TAX:
Gain (loss) on cash flow hedge										Gain (loss) on cash flow hedge	(2,661)		7,589		1,358		9,358
OTHER COMPREHENSIVE INCOME (LOSS)										OTHER COMPREHENSIVE INCOME (LOSS)	(2,661)		7,589		1,358		9,358
COMPREHENSIVE INCOME (LOSS)	COMPREHENSIVE INCOME (LOSS)	$	1,141	$	37,045	$	(181,251)	$	126,495	COMPREHENSIVE INCOME (LOSS)	$	6,603	$	564	$	(9,348)	$	(183,462)

See accompanying notes to the condensed consolidated financial statements.

Table of Contents

SELECTQUOTE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Unaudited)

(In thousands)


Three Months Ended March 31, 2022
Three Months Ended March 31, 2023																				Three Months Ended March 31, 2023
		Common Stock			Additional Paid-In Capital				Accumulated Deficit					Accumulated Other Comprehensive Income			Total Shareholders' Equity				Common Stock							Additional Paid-In Capital			Accumulated Deficit					Accumulated Other Comprehensive Income			Total Shareholders' Equity
		Shares	Amount										Total Shareholders' Equity			Shares				Amount			Additional Paid-In Capital		Accumulated Deficit								Accumulated Other Comprehensive Income
BALANCES-December 31, 2021		164,013	$	1,640			$	551,002			$	(62,236)							$	1,998	$	492,404
Net loss		—	—		—				(6,448)					—			(6,448)
Gain on cash flow hedge, net of tax		—	—		—				—					7,421			7,421
BALANCES-December 31, 2022																				BALANCES-December 31, 2022	166,511					$	1,665			$	561,435			$	(197,070)				$	15,735		$	381,765
Net income																				Net income	—			—				—			9,264							—			9,264
Loss on cash flow hedge, net of tax																				Loss on cash flow hedge, net of tax	—			—				—			—					(484)			(484)
Amount reclassified into earnings, net tax	Amount reclassified into earnings, net tax	—	—		—				—					168			168			Amount reclassified into earnings, net tax	—			—				—			—					(2,177)			(2,177)
Exercise of employee stock options, net of shares withheld for cashless exercises and to cover tax withholdings	Exercise of employee stock options, net of shares withheld for cashless exercises and to cover tax withholdings	10	—		14				—					—			14			Exercise of employee stock options, net of shares withheld for cashless exercises and to cover tax withholdings	23			—				42			—					—			42
Issuance of common stock pursuant to employee stock purchase plan	Issuance of common stock pursuant to employee stock purchase plan	376	4		889				—					—			893			Issuance of common stock pursuant to employee stock purchase plan	97			1				63			—					—			64
Vesting of restricted stock unit awards net of shares withheld to cover tax withholdings	Vesting of restricted stock unit awards net of shares withheld to cover tax withholdings	2	—		(3)				—					—			(3)			Vesting of restricted stock unit awards net of shares withheld to cover tax withholdings	26			1				(7)			—					—			(6)
Share-based compensation expense	Share-based compensation expense	—	—		2,143				—					—			2,143			Share-based compensation expense	—			—				2,951			—					—			2,951
BALANCES-March 31, 2022		164,401	$	1,644	$	554,045			$	(68,684)				$	9,587		$	496,592
BALANCES-March 31, 2023																				BALANCES-March 31, 2023	166,657			$	1,667			$	564,484		$	(187,806)				$	13,074		$	391,419

Three Months Ended March 31, 2021
Common Stock Additional
Paid-In
Capital Retained Earnings Accumulated Other Comprehensive Income/(Loss) Total
Shareholders'
Equity
Shares Amount
BALANCES-December 31, 2020 162,774 $ 1,628 $ 545,441 $ 85,296 $ (1,395) $ 630,970
Net income — — — 35,235 — 35,235
Gain on cash flow hedge, net of tax — — — — 1,675 1,675
Amount reclassified into earnings, net tax — — — — 135 135
Exercise of employee stock options, net of shares withheld for cashless exercises and to cover tax withholdings 552 5 (4,331) — — (4,326)
Issuance of common stock pursuant to employee stock purchase plan 56 1 985 — — 986
Share-based compensation expense — — 1,429 — — 1,429
BALANCES-March 31, 2021 163,382 $ 1,634 $ 543,524 $ 120,531 $ 415 $ 666,104


Three Months Ended March 31, 2022
	Common Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Total Shareholders' Equity
	Shares	Amount
BALANCES-December 31, 2021	164,013	$	1,640	$	551,002	$	(65,391)	$	1,998	$	489,249
Net loss	—	—		—		(7,025)		—		(7,025)
Gain on cash flow hedge, net of tax	—	—		—		—		7,421		7,421
Amount reclassified into earnings, net of tax	—	—		—		—		168		168
Exercise of employee stock options, net of shares withheld for cashless exercises and to cover tax withholdings	10	—		14		—		—		14
Issuance of common stock pursuant to employee stock purchase plan	376	4		889		—		—		893
Vesting of restricted stock unit awards net of shares withheld to cover tax withholdings	2	—		(3)		—		—		(3)
Share-based compensation expense	—	—		2,143		—		—		2,143
BALANCES-March 31, 2022	164,401	$	1,644	$	554,045	$	(72,416)	$	9,587	$	492,860

See accompanying notes to the condensed consolidated financial statements.

Table of Contents


Nine Months Ended March 31, 2022
Nine Months Ended March 31, 2023																					Nine Months Ended March 31, 2023
		Common Stock			Additional Paid-In Capital				Retained Earnings/(Accumulated Deficit)					Accumulated Other Comprehensive Income				Total Shareholders' Equity				Common Stock								Additional Paid-In Capital			Accumulated Deficit						Accumulated Other Comprehensive Income			Total Shareholders' Equity
		Shares	Amount										Total Shareholders' Equity			Shares					Amount				Additional Paid-In Capital		Accumulated Deficit					Accumulated Other Comprehensive Income
BALANCES-June 30, 2021		163,510	$	1,635			$	544,771			$	121,925				$	229			$	668,560
BALANCES-June 30, 2022																					BALANCES-June 30, 2022	164,452						$	1,644						$	554,845	$	(177,100)						$	11,716	$	391,105
Net loss	Net loss	—	—		—				(190,609)												(190,609)		Net loss	—				—				—			(10,706)						—			(10,706)
Gain on cash flow hedge, net of tax	Gain on cash flow hedge, net of tax	—	—		—				—					8,844				8,844			Gain on cash flow hedge, net of tax	—				—				—			—						5,895			5,895
Amount reclassified into earnings, net of tax	Amount reclassified into earnings, net of tax	—	—		—				—					514				514			Amount reclassified into earnings, net of tax	—				—				—			—						(4,537)			(4,537)
Exercise of employee stock options, net of shares withheld for cashless exercises and to cover tax withholdings	Exercise of employee stock options, net of shares withheld for cashless exercises and to cover tax withholdings	349	3		1,293				—					—				1,296			Exercise of employee stock options, net of shares withheld for cashless exercises and to cover tax withholdings	1,139				12				627			—						—			639
Issuance of common stock pursuant to employee stock purchase plan	Issuance of common stock pursuant to employee stock purchase plan	466	5		1,877				—					—				1,882			Issuance of common stock pursuant to employee stock purchase plan	877				9				539			—						—			548
Vesting of restricted stock unit awards net of shares withheld to cover tax withholdings	Vesting of restricted stock unit awards net of shares withheld to cover tax withholdings	76	1		(148)				—					—				(147)			Vesting of restricted stock unit awards net of shares withheld to cover tax withholdings	189				2				(42)			—						—			(40)
Share-based compensation expense	Share-based compensation expense	—	—		6,252				—					—				6,252			Share-based compensation expense	—				—				8,515			—						—			8,515
BALANCES-March 31, 2022		164,401	$	1,644	$	554,045			$	(68,684)				$	9,587			$	496,592
BALANCES-March 31, 2023																					BALANCES-March 31, 2023	166,657				$	1,667			$	564,484		$	(187,806)					$	13,074		$	391,419


Nine Months Ended March 31, 2021
Nine Months Ended March 31, 2022																				Nine Months Ended March 31, 2022
		Common Stock			Additional Paid-In Capital				Retained Earnings/(Accumulated Deficit)					Accumulated Other Comprehensive Income/(Loss)			Total Shareholders' Equity				Common Stock							Additional Paid-In Capital			Retained Earnings/(Accumulated Deficit)					Accumulated Other Comprehensive Income			Total Shareholders' Equity
		Shares	Amount										Total Shareholders' Equity			Shares				Amount			Additional Paid-In Capital		Retained Earnings/(Accumulated Deficit)								Accumulated Other Comprehensive Income
BALANCES-June 30, 2020		162,191	$	1,622			$	548,113			$	(4,295)							$	(1,254)	$	544,186
Net income		—	—		—				124,826					—			124,826
BALANCES-June 30, 2021																				BALANCES-June 30, 2021	163,510					$	1,635			$	544,771			$	120,404				$	229		$	667,039
Net loss																				Net loss	—			—				—			(192,820)							—			(192,820)
Gain on cash flow hedge, net of tax	Gain on cash flow hedge, net of tax	—	—		—				—					1,301			1,301			Gain on cash flow hedge, net of tax	—			—				—			—					8,844			8,844
Amount reclassified into earnings, net tax	Amount reclassified into earnings, net tax	—	—		—				—					368			368			Amount reclassified into earnings, net tax	—			—				—			—					514			514
Exercise of employee stock options, net of shares withheld for cashless exercises and to cover tax withholdings	Exercise of employee stock options, net of shares withheld for cashless exercises and to cover tax withholdings	1,135	11		(9,244)				—					—			(9,233)			Exercise of employee stock options, net of shares withheld for cashless exercises and to cover tax withholdings	349			3				1,293			—					—			1,296
Issuance of common stock pursuant to employee stock purchase plan	Issuance of common stock pursuant to employee stock purchase plan	56	1		985				—					—			986			Issuance of common stock pursuant to employee stock purchase plan	466			5				1,877			—					—			1,882
Vesting of restricted stock unit awards net of shares withheld to cover tax withholdings																				Vesting of restricted stock unit awards net of shares withheld to cover tax withholdings	76			1				(148)											(147)
Share-based compensation expense	Share-based compensation expense	—	—		3,670				—					—			3,670			Share-based compensation expense	—			—				6,252			—					—			6,252
BALANCES-March 31, 2021		163,382	$	1,634	$	543,524			$	120,531				$	415		$	666,104
BALANCES-March 31, 2022																				BALANCES-March 31, 2022	164,401			$	1,644			$	554,045		$	(72,416)				$	9,587		$	492,860

See accompanying notes to the condensed consolidated financial statements.

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SELECTQUOTE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

Nine Months Ended March 31,
2022 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (190,609) $ 124,826
Adjustments to reconcile net income (loss) to net cash and cash equivalents used in operating activities:
Depreciation and amortization 17,957 11,260
Loss on disposal of property, equipment, and software 741 261
Share-based compensation expense 6,252 3,689
Deferred income taxes (65,623) 31,702
Amortization of debt issuance costs and debt discount 4,217 2,482
Write-off of debt issuance costs — 2,570
Fair value adjustments to contingent earnout obligations — 1,487
Non-cash lease expense 3,065 2,869
Changes in operating assets and liabilities:
Accounts receivable (62,803) (49,224)
Commissions receivable 7,601 (251,188)
Other assets (8,275) 4,349
Accounts payable and accrued expenses 8,096 26,223
Operating lease liabilities (3,868) (2,631)
Other liabilities (1,113) 30,378
Net cash used in operating activities (284,362) (60,947)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (24,515) (6,520)
Purchases of software and capitalized software development costs (7,570) (5,807)
Acquisition of business (6,927) (23,879)
Investment in equity securities (1,000) —
Net cash used in investing activities (40,012) (36,206)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Revolving Credit Facility 50,000 —
Payments on Revolving Credit Facility (50,000) —
Proceeds from DDTL Facility 242,000 —
Payments on DDTL Facility (613) —
Net proceeds from Term Loans — 228,753
Payments on Term Loans (1,180) (84,118)
Payments on other debt (130) (189)
Proceeds from common stock options exercised and employee stock purchase plan 3,179 1,778
Payments of tax withholdings related to net share settlement of equity awards (148) (10,026)
Payments of debt issuance costs (328) (885)
Payments of costs incurred in connection with private placement — (1,771)
Payments of costs incurred in connection with initial public offering — (3,911)
Payment of contingent earnout liability — (32,300)
Payment of acquisition holdback (5,501) —
Net cash provided by financing activities 237,279 97,331
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (87,095) 178
CASH AND CASH EQUIVALENTS—Beginning of period 286,454 368,870
CASH AND CASH EQUIVALENTS—End of period $ 199,359 $ 369,048
SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid, net $ (27,010) $ (18,309)
Income taxes paid, net (67) (121)


	Nine Months Ended March 31,
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(10,706)	$	(192,820)
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities:
Depreciation and amortization	21,087		17,957

Loss on disposal of property, equipment, and software	390		741

Share-based compensation expense	8,525		6,252
Deferred income taxes	(1,416)		(66,378)
Amortization of debt issuance costs and debt discount	6,250		4,217
Write-off of debt issuance costs	710		—

Accrued interest payable in kind	8,450		—
Non-cash lease expense	3,115		3,065
Changes in operating assets and liabilities:
Accounts receivable, net	(62,738)		(59,837)
Commissions receivable	17,092		7,601
Other assets	3,166		(8,275)
Accounts payable and accrued expenses	6,440		8,096
Operating lease liabilities	(4,331)		(3,868)
Other liabilities	(8,869)		(1,113)
Net cash used in operating activities	(12,835)		(284,362)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(1,056)		(24,515)

Purchases of software and capitalized software development costs	(5,804)		(7,570)
Acquisition of business	—		(6,927)
Investment in equity securities	—		(1,000)
Net cash used in investing activities	(6,860)		(40,012)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Revolving Credit Facility	—		50,000
Payments on Revolving Credit Facility	—		(50,000)
Proceeds from Term Loans	—		242,000


Payments on Term Loans	(17,833)		(1,793)

Payments on other debt	(123)		(130)
Proceeds from common stock options exercised and employee stock purchase plan	1,187		3,179



Payments of tax withholdings related to net share settlement of equity awards	(40)		(148)
Payments of debt issuance costs	(10,110)		(328)




Payment of acquisition holdback	(2,335)		(5,501)
Net cash (used in) provided by financing activities	(29,254)		237,279
NET DECREASE IN CASH AND CASH EQUIVALENTS	(48,949)		(87,095)
CASH AND CASH EQUIVALENTS—Beginning of period	140,997		286,454
CASH AND CASH EQUIVALENTS—End of period	$	92,048	$	199,359






SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid, net	$	(43,309)	$	(27,010)
Income taxes paid, net	(15)		(67)

See accompanying notes to condensed consolidated financial statements.

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SELECTQUOTE, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Description of Business—SelectQuote, Inc. (together with its subsidiaries, the “Company” or “SelectQuote”) ~~contracts~~is a leading technology-enabled, direct-to-consumer distribution platform for insurance products and healthcare services. We contract with insurance carriers to sell senior health, life, and auto and home insurance policies by telephone to individuals throughout the United States through the use of multi-channel marketing and advertising campaigns. The Company obtains leads from, among other sources, InsideResponse, a wholly-owned subsidiary that provides sales leads to the consumer insurance industry. The Company also coordinates various healthcare-related services through its Population Health platform, which includes SelectRx, a closed-door, long-term care pharmacy that offers pharmacy services, including essential prescription medications, OTC medications, customized medication packaging, medication therapy management, and other consultative services under the Patient Centered Pharmacy Home (PCPH) model. SelectQuote’s Senior division (“Senior”) sells Medicare Advantage, Medicare Supplement, Medicare Part D, and other ancillary senior health insurance related ~~products, and along with Population Health and InsideResponse, is referred to as “Senior”.~~products. SelectQuote’s Life division (“Life”) sells term life, final expense, and other ancillary products, and SelectQuote’s Auto & Home division (“Auto & Home”) primarily sells non-commercial auto and home, property and casualty insurance products. ~~SelectQuote’s licensed insurance agents provide comparative rates from~~The Healthcare Services division (“Healthcare Services”) includes SelectRx and Population Health. SelectRx is a ~~variety of~~closed-door, long-term care pharmacy, which offers essential prescription medications, OTC medications, customized medication packaging, medication therapy management, and other consultative services. Population Health contracts with insurance carriers ~~relying on our technology distribution channel with a combination of proprietary and commercially available software~~ to perform ~~its quote service and sell insurance policies~~health risk assessments (“HRA”) on behalf of the insurance carriers. The Company primarily earns revenue in the form of commission payments from the insurance carriers. Commission payments are received both when the initial policy is soldpotential new members to determine how Population Health’s value-based care (“~~first year”~~VBC”) and when the underlying policyholder renews their policy in subsequent years (“renewal”). The Company also receives certain volume-based bonuses from some carriers on first-year policies sold based on attaining various predetermined target sales levels or other agreed upon objectives. These bonuses are referred to as “production bonuses” or “marketing development funds.” Additionally, the Company earns revenue from its Population Health platform, mail-order prescription revenue from SelectRx, and lead generation revenue from InsideResponse.partners can help members improve health outcomes.

Basis of Presentation—The accompanying unaudited condensed consolidated financial statements include the accounts of SelectQuote, Inc. and its wholly owned subsidiaries: SelectQuote Insurance Services, SelectQuote Auto & Home Insurance Services, LLC (“SQAH”), ChoiceMark Insurance Services, Inc., Tiburon Insurance Services, InsideResponse, LLC (“InsideResponse”), and SelectQuote Ventures, Inc. The unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and reflect all normal recurring adjustments that are necessary to present fairly the results for the interim periods presented. All intercompany accounts and transactions have been eliminated in consolidation. Certain information and disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted in accordance with those rules and regulations and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements in our A~~nnual~~Annual Report on Form 10-K for the year ended June 30, ~~2021, as amended by the Form 10-K/A~~2022, filed with the ~~SEC~~Securities and Exchange Commission on ~~February 14,~~August 29, 2022 (the ~~“2021 Annual~~“Annual Report”), and include all adjustments necessary for the fair presentation of our financial position for the periods presented. Our results for the periods presented in our financial statements are not necessarily indicative of the results to be expected for any subsequent period, including for the year ending June 30, ~~2022,~~2023, and therefore should not be relied upon as an indicator of future results. The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements for the year ended June 30, ~~2021. Certain reclassifications have been made~~2022. During the nine months ended March 31, 2023, the Company created a new liability line item on the condensed consolidated balance sheets for “Contract liabilities” which was previously included in “Other current liabilities” in the Company’s Annual Report. The Company created a new revenue line item on the condensed consolidated statements of comprehensive income for “Pharmacy revenue” which was previously included in “Other revenue” in the Company’s Annual Report. Production bonus revenue, which was previously presented separately within Revenue in the Annual Report, is now included in Other revenue. Additionally, the Company created a new operating costs and expenses line item for “Cost of goods sold-pharmacy revenue” related to ~~prior periods~~“Pharmacy revenue” which was previously included in “Cost of revenue” in the Company’s Annual Report. The Company updated its accounting policy related to the classification of SelectRx cost of goods sold which resulted in $3.7 million and $5.9 million previously included in Cost of revenue in the condensed consolidated financial statements for the three and nine months ended March 31, 2022, respectively, now included in Selling, general, and administrative expenses. Prior year financial statements and disclosures were reclassified to conform ~~with current year~~to these changes in presentation. These reclassifications had no impact on net income, shareholders’ equity or cash flows as previously reported.

Use of Estimates—The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and

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assumptions that affect the reported amounts of revenues, expenses, assets, and liabilities and disclosure of contingent assets and liabilities. The Company regularly assesses these estimates; however, actual amounts could differ from those estimates. The most significant items involving management’s estimates include estimates of revenue recognition, accounts receivable, net, commissions receivable, the provision for income taxes, share-based

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compensation, and valuation of intangible assets and goodwill. The impact of changes in estimates is recorded in the period in which they become known.

~~Going Concern~~—The accompanying condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles applicable to a going concern, which contemplate the realization of assets and the satisfaction of liabilities in the normal course of business.

Under the Senior Secured Credit Facility, the Company is required to maintain a certain asset coverage ratio, as discussed further in Note 7 to the condensed consolidated financial statements. As of March 31, 2022, the Company is in compliance with all of its debt covenants; however, our financial projections indicate that, based on our current business plan, we will not maintain the required asset coverage ratio within one year after the date that the condensed consolidated financial statements are issued. Failure to maintain the required ratio would constitute a violation of our obligations under the Senior Secured Credit Facility and would permit our lenders to declare us in default. In the event of a default, our lenders could accelerate all amounts owing under the Senior Secured Credit Facility. We do not currently have sufficient liquidity to repay such indebtedness. We have commenced discussions of a covenant waiver or modification with our lenders; however, the Company cannot provide any assurances that it will be successful in obtaining such a waiver or modification on acceptable terms, or at all. As a result, there is substantial doubt about the Company’s ability to continue as a going concern.

The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

Seasonality—Medicare-eligible individuals are permitted to change their Medicare Advantage and Medicare Part D prescription drug coverage for the following year during the Medicare annual enrollment period (“AEP”)~~, which runs from~~ in October through December ~~each year,~~ and are allowed to switch plans from an existing plan during the open enrollment period (“OEP”)~~, which runs from~~ in January through March each year. As a result, the Company’s Senior segment’s commission revenue ~~for our Senior segment~~ is highest in the second quarter and to a lesser extent, the third quarter during OEP. ~~Most policies sold during AEP are effective as of and renew annually on January 1.~~

Significant Accounting Policies—There have been no material changes to the Company’s significant accounting policies as described in our ~~2021~~2022 Annual ~~Report.~~Report, other than the changes to the policies below as discussed above:

Cost of Revenue—Cost of revenue represents the direct costs associated with fulfilling the Company’s obligations to its customers to sell insurance policies and other healthcare services in the Senior, Life, Auto & Home, and Population Health divisions. Such costs primarily consist of compensation, benefits, and licensing for sales agents, customer success agents, fulfillment specialists, and others directly engaged in serving customers, in addition to certain facilities overhead costs such as rent, maintenance, and depreciation.

Cost of Goods Sold-Pharmacy Revenue—Cost of goods sold-pharmacy revenue represents the direct costs associated with fulfilling pharmacy patient orders for SelectRx. Such costs primarily consist of medication costs and compensation and related benefit costs for licensed pharmacists, pharmacy technicians, and other employees directly associated with fulfilling orders such as packaging and shipping clerks. It also includes shipping, supplies, other order fulfillment costs including part of the one-time customer onboarding costs, and certain facilities overhead costs such as rent, maintenance, and depreciation related to the pharmacy production process.

Recent Accounting Pronouncements ~~Not Yet~~ Adopted—In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 as if the acquirer had originated the contracts. Prior to this ASU, an acquirer generally recognizes contract assets acquired and contract liabilities assumed that arose from contracts with customers at fair value on the acquisition date. The ASU is effective for fiscal years beginning after December 15, 2022, with early adoption permitted. The ASU is to be applied prospectively to business combinations occurring on or after the effective date of the amendment (or if adopted early as of an interim period, as of the beginning of the fiscal year that includes the interim period of early application). The Company ~~will continue to evaluate the impact of~~early adopted this guidance ~~which will depend on the contract assets and liabilities acquired in future business combinations.~~

~~Recent Accounting Pronouncements Adopted—In December 2019, the FASB issued ASU No. 2019-12,~~ ~~Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which simplifies and changes the accounting for certain income tax transactions, among other minor improvements. This standard was effective for the Company on~~as of July 1, ~~2021,~~2022, and ~~did not have a material impact on~~will apply it prospectively to any business acquisitions subsequent to the ~~condensed consolidated financial statements and related disclosures.~~date of adoption.

Immaterial Correction of Prior Period Financial Statements—Subsequent to the issuance of the Company’s financial statements as of and for the year ended June 30, 2021, ~~and as previously disclosed in our Form 10-Q for the three and six months ended December 31, 2021,~~ the Company ~~discovered~~determined that the provision for first

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year commission revenue for certain final expense policies offered by ~~one~~certain of its insurance carrier partners should have been accrued based on a higher lapse rate. ~~The~~This misstatement was initially thought to be isolated to an error in the lapse rate for one of its insurance carrier partners, as disclosed in the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2021. However, during the three months ended June 30, 2022, it was determined that the lapse rate for other insurance carrier partners were also incorrect, resulting in an additional misstatement being identified. The cumulative effect of the error in the lapse rates resulted in commission ~~revenue~~revenues being misstated by ~~$6.1~~$7.8 million and ~~$2.0~~$2.2 million for the years ended June 30, 2021 and 2020, respectively, and ~~$2.4~~$3.8 million, $0.7 million, and $0.8 million for the three months ended September 30, 2021, December 31,

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2021, and March 31, 2022, respectively. Accounts receivable was misstated by ~~$8.1~~$10.0 million and ~~$2.0~~$2.2 million as of June 30, 2021 and 2020, respectively. The impact of the ~~error~~cumulative misstatements on net income for the ~~year~~years ended June 30, 2021 ~~was a decrease~~and 2020, were decreases of ~~$4.8 million.~~$6.2 million and $1.7 million, respectively. Management evaluated ~~this misstatement~~the cumulative misstatements and concluded ~~it was~~they were not material to prior periods, individually or in aggregate. However, correcting the cumulative effect of the ~~error in~~misstatements during any three month period within the ~~three and six months~~year ended ~~December 31, 2021,~~June 30, 2022, would have had a significant effect on the results of ~~operations.~~operations for these respective reporting periods. Therefore, the Company ~~elected to correct~~is correcting the relevant prior period condensed consolidated financial statements and related footnotes for this error for comparative purposes.

The following tables reflect the effects of the correction on all affected line items of the Company’s previously reported condensed consolidated financial statements presented in this Form 10-Q:

CORRECTED CONDENSED CONSOLIDATED BALANCE SHEET (unaudited)
June 30, 2021
(in thousands) As Previously Reported Adjustment As Corrected
Accounts receivable $ 113,375 $ (8,077) $ 105,298
Total current assets 493,435 (8,077) 485,358
Total assets 1,433,872 (8,077) 1,425,795
Deferred income taxes 140,988 (1,748) 139,240
Total liabilities 758,983 (1,748) 757,235
Retained earnings (accumulated deficit) 128,254 (6,329) 121,925
Total shareholders’ equity 674,889 (6,329) 668,560
Total liabilities and shareholders’ equity $ 1,433,872 $ (8,077) $ 1,425,795


CORRECTED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (unaudited)
	Three Months Ended March 31, 2022						Nine Months Ended March 31, 2022
(in thousands)	As Previously Reported		Adjustment		As Corrected		As Previously Reported		Adjustment		As Corrected
Commission revenue	$	222,538	$	(774)	$	221,764	$	495,494	$	(2,966)	$	492,528
Total revenue	275,113		(774)		274,339		627,621		(2,966)		624,655
Income (loss) from operations	3,105		(774)		2,331		(224,361)		(2,966)		(227,327)
Loss before income tax benefit	(9,097)		(774)		(9,871)		(255,838)		(2,966)		(258,804)
Income tax benefit	(2,649)		(197)		(2,846)		(65,229)		(755)		(65,984)
Net loss	(6,448)		(577)		(7,025)		(190,609)		(2,211)		(192,820)
Net loss per share:
Basic	(0.04)		—		(0.04)		(1.16)		(0.01)		(1.17)
Diluted	(0.04)		—		(0.04)		(1.16)		(0.01)		(1.17)






Comprehensive income (loss)	$	1,141	$	(577)	$	564	$	(181,251)	$	(2,211)	$	(183,462)

CORRECTED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited)
Three Months Ended March 31, 2021 Nine Months Ended March 31, 2021
(in thousands) As Previously Reported Adjustment As Corrected As Previously Reported Adjustment As Corrected
Commission revenue $ 236,793 $ (1,577) $ 235,216 $ 664,312 $ (3,681) $ 660,631
Total revenue 266,923 (1,577) 265,346 749,366 (3,681) 745,685
Income (loss) from operations 54,683 (1,577) 53,106 186,111 (3,681) 182,430
Income (loss) before income tax expense (benefit) 43,664 (1,577) 42,087 160,353 (3,681) 156,672
Income tax expense (benefit) 7,183 (331) 6,852 32,619 (773) 31,846
Net income (loss) 36,481 (1,246) 35,235 127,734 (2,908) 124,826
Net income (loss) per share:
Basic 0.22 (0.01) 0.21 0.79 (0.02) 0.77
Diluted 0.22 (0.01) 0.21 0.77 (0.02) 0.75
Comprehensive income (loss) $ 38,291 $ (1,246) $ 37,045 $ 129,403 $ (2,908) $ 126,495

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CORRECTED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)
Three Months Ended March 31, 2021
(in thousands) (Accumulated Deficit)/Retained Earnings Total
Shareholders'
Equity
As Previously Reported
BALANCES-December 31, 2020 $ 88,461 $ 634,135
Net Income 36,481 36,481
BALANCES-March 31, 2021 124,942 670,515
Adjustments
BALANCES-December 31, 2020 (3,165) (3,165)
Net Loss (1,246) (1,246)
BALANCES-March 31, 2021 (4,411) (4,411)
As Corrected
BALANCES-December 31, 2020 85,296 630,970
Net Income 35,235 35,235
BALANCES-March 31, 2021 $ 120,531 $ 666,104


CORRECTED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)
	Three Months Ended March 31, 2022
(in thousands)	Accumulated Deficit		Total Shareholders' Equity
As Previously Reported
BALANCES-December 31, 2021	$	(62,236)	$	492,404
Net loss	(6,448)		(6,448)
BALANCES-March 31, 2022	(68,684)		496,592
Adjustments
BALANCES-December 31, 2021	(3,155)		(3,155)
Net loss	(577)		(577)
BALANCES-March 31, 2022	(3,732)		(3,732)
As Corrected
BALANCES-December 31, 2021	(65,391)		489,249
Net loss	(7,025)		(7,025)
BALANCES-March 31, 2022	$	(72,416)	$	492,860

CORRECTED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)
Nine Months Ended March 31, 2021
(in thousands) (Accumulated Deficit)/Retained Earnings Total
Shareholders'
Equity
As Previously Reported
BALANCES-June 30, 2020 $ (2,792) $ 545,689
Net Income 127,734 127,734
BALANCES-March 31, 2021 124,942 670,515
Adjustments
BALANCES-June 30, 2020 (1,503) (1,503)
Net Loss (2,908) (2,908)
BALANCES-March 31, 2021 (4,411) (4,411)
As Corrected
BALANCES-June 30, 2020 (4,295) 544,186
Net Income 124,826 124,826
BALANCES-March 31, 2021 $ 120,531 $ 666,104


CORRECTED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)
	Nine Months Ended March 31, 2022
(in thousands)	Accumulated Deficit		Total Shareholders' Equity
As Previously Reported
BALANCES-June 30, 2021	$	121,925	$	668,560
Net loss	(190,609)		(190,609)
BALANCES-March 31, 2022	(68,684)		496,592
Adjustments
BALANCES-June 30, 2021	(1,521)		(1,521)
Net loss	(2,211)		(2,211)
BALANCES-March 31, 2022	(3,732)		(3,732)
As Corrected
BALANCES-June 30, 2021	120,404		667,039
Net loss	(192,820)		(192,820)
BALANCES-March 31, 2022	$	(72,416)	$	492,860

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CORRECTED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)	CORRECTED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)							CORRECTED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
		Nine Months Ended March 31, 2021							Nine Months Ended March 31, 2022
(in thousands)	(in thousands)	As Previously Reported		Adjustment		As Corrected		(in thousands)	As Previously Reported		Adjustment		As Corrected
Net income (loss)		$	127,734	$	(2,908)	$	124,826
Net loss								Net loss	$	(190,609)	$	(2,211)	$	(192,820)
Deferred income taxes	Deferred income taxes	32,475		(773)		31,702		Deferred income taxes	(65,623)		(755)		(66,378)
Accounts receivable	Accounts receivable	(52,905)		3,681		(49,224)		Accounts receivable	(62,803)		2,966		(59,837)
Net cash used in operating activities	Net cash used in operating activities	$	(60,947)	$	—	$	(60,947)	Net cash used in operating activities	$	(284,362)	$	—	$	(284,362)

2.ACQUISITIONS

In accordance with ~~ASC Topic~~Accounting Standards Codification (“ASC”) 805, Business Combinations(“ASC 805”), the Company allocates the fair value of purchase ~~price of its acquisitions~~consideration to the tangible assets, liabilities, and intangible assets acquired based on fair values. Any excess purchase price over those fair values is recorded as goodwill. The fair value assigned to intangible assets acquired is supported by valuations using estimates and assumptions provided by management. Based on the valuation inputs, the Company has recorded assets acquired and liabilities assumed according to the following fair value hierarchy:


Level 1			Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2			Unadjusted quoted prices in active markets for similar assets or liabilities; or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs other than quoted prices that are observable for the asset or liability.
Level 3			~~Unobservable~~Significant unobservable inputs for the asset or liability

~~Lead distribution company~~—On February 1, 2021, the Company acquired substantially all of the assets of a lead distribution company for an aggregate purchase price of up to $33.5 million (subject to customary adjustments), as set forth in the Asset Purchase Agreement, dated February 1, 2021 (the “Asset Purchase Agreement”). The purchase price is comprised of $30.0 million, of which $24.0 million was paid in cash at the closing of the transaction, with an additional $6.0 million of holdback for indemnification claims, net working capital adjustments, and underperformance. Additionally, the purchase price includes an earnout of up to $3.5 million. The primary purpose of the acquisition was to secure and incorporate the exclusive publisher relationships into the lead generation business of InsideResponse. The Company recorded $0.4 million of acquisition-related costs in general and administrative operating costs and expenses in the condensed consolidated statement of comprehensive income.

During calendar year 2021, the lead distribution company did not achieve the minimum earnout target as set forth in the Asset Purchase Agreement. However, the remaining holdback was earned in full, as the lead distribution company did not fall below the underperformance thresholds as set forth in the Asset Purchase Agreement. The Company settled the remaining holdback of $5.5 million, with interest, after the net working capital true-up of $0.5 million, during the three months ended March 31, 2022.

~~Under the terms of the Asset Purchase Agreement, the total consideration for the acquisition consisted of the following as of the acquisition date (in thousands):~~


~~Base purchase price~~	$	~~30,000~~
~~Net working capital true-up~~	~~(499)~~
~~Total Purchase Consideration~~	$	~~29,501~~

At the date of acquisition, the fair value of net tangible assets acquired approximated their carrying value. The non-compete agreements were valued using the income approach, and the customer relationships were valued

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~~using the multiple period excess earnings method. As such, all aforementioned intangible assets were valued using Level 3 inputs.~~

Goodwill resulting from the transaction constitutes the excess of the consideration paid over the fair values of the assets acquired and liabilities assumed and primarily represents the benefits of leveraging the exclusive publisher relationships in the business. This acquired goodwill is allocated to Senior (which is also the reporting unit), and $1.6 million will be deductible for tax purposes after adding back acquisition costs and having settled the remaining holdback.

~~The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date (in thousands):~~


~~Description~~	~~Estimated Life~~	~~Amount~~
~~Accounts receivable~~		$	~~1,301~~
~~Total tangible assets acquired~~		~~1,301~~

~~Non-compete agreements~~	~~5 years~~	~~1,000~~
~~Vendor relationships~~	~~9 years~~	~~23,700~~
~~Goodwill~~	~~Indefinite~~	~~3,500~~
~~Total intangible assets acquired~~		~~28,200~~
~~Net Assets Acquired~~		$	~~29,501~~

~~The Company will amortize the intangible assets acquired on a straight-line basis over their estimated remaining lives, ranging from~~ ~~five~~ ~~to nine years.~~

Express Med Pharmaceuticals—On April 30, 2021, the Company acquired 100% of the outstanding shares of Express Med Pharmaceuticals, Inc., ~~now~~which is included in SelectRx, aclosed-door, long term care pharmacy provider, for an aggregate purchase price of up to $24.0 million (subject to customary adjustments), as set forth in the Stock Purchase Agreement dated April 30, 2021 (the “Stock Purchase Agreement”). The aggregate purchase price of up to $24.0 million is comprised of $17.5 million in cash paid at the closing of the transaction, an additional $2.5 million of holdback for indemnification claims, if any, and an earnout of up to $4.0 million, if any. The primary purpose of the acquisition was to take advantage of the Company's technology and customer base to facilitate better patient care through coordination of strategic, value-based care partnerships. The Company recorded $0.3 million of acquisition-related costs in selling, general, and administrative operating costs and expenses in the condensed consolidated statement of comprehensive income. In addition, as a result of the acquisition, the Company has entered into an operating lease with the former President and Chief Executive Officer of Express Med Pharmaceuticals, now ~~our~~the Company’ Executive Vice President of SelectRx. Refer to Note 6 in the condensed consolidated financial statements for further details.

The earnout of up to $4.0 million is comprised of 2two separate provisions. The first provision provides for an earnout of up to $3.0 million and is contingent upon achievement of the following within the first 20 months following the acquisition: facility updates that would allow for processing a minimum of 75,000 active patients, the issuance of pharmacy licenses in all 50 states, and active patients of 15,000 or more. The second provision provides for an earnout of up to $1.0 million and is contingent upon achievement of the following within 36 months following the acquisition: construction of a new facility to accommodate the servicing of additional active patients or 75,000 or more active patients as of the last day of any month prior to the end of the second earnout provision period or as of the end of the second earnout provision period. As the earnout payment is contingent upon continued employment of certain individuals, the Company will recognize the earnout as compensation expense in selling, general, and administrative operating costs and expenses in the condensed consolidated statement of comprehensive income in the period in which it is earned. ~~As of~~During the nine months ended March 31, ~~2022,~~2023, the Company ~~has not accrued an earnout payment based on performance to date. The $2.5 million of holdback will be due upon~~paid the ~~15-month anniversary of the closing date of the acquisition.~~first and

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second earnout provisions of $3.0 million and $1.0 million, respectively, as well as the remaining holdback, net of adjustments, of $2.3 million.

Under the terms of the Stock Purchase Agreement, total consideration in the acquisition consisted of the following as of the acquisition date (in thousands):


Base purchase price	$	20,000
Net working capital true-up	(483)
Closing cash	20
Total purchase consideration	$	19,537

At the date of acquisition, the fair value of net tangible assets acquired, excluding property and equipment, approximated their carrying value. The property and equipment was valued primarily using the cost and sales comparison approach to value. For the proprietary software acquired, the replacement cost method under the cost approach was used, estimating the cost to rebuild the software. The non-compete agreement was valued using the income approach, and the customer relationships were valued using the multiple period excess earnings method. As such, all aforementioned intangible assets were valued using Level 3 inputs.

Goodwill resulting from the transaction constitutes the excess of the consideration paid over the fair values of the assets acquired and liabilities assumed and primarily represents the additional value of the synergies of combining the SelectRx business with the Company's technology and existing customer base. This acquired goodwill is allocated to ~~Senior (which~~the Healthcare Services reporting unit, which is also ~~the reporting unit),~~a reportable segment, and ~~the Company expects approximately~~ $16.3 million ~~to be~~is deductible for tax purposes after adding back acquisition costs and excluding the ~~holdback not yet paid.~~holdback.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date (in thousands):


Description	Estimated Life	Amount
Cash and cash equivalents		$	20
Accounts receivable		613
Other current assets		28
Property and equipment, net		287
Accounts payable		(280)
Accrued expenses, including compensation and benefits		(45)
Net tangible assets acquired		623

Proprietary Software	3 years	550
Non-compete agreements	5 years	100
Customer relationships	1 year	200
Goodwill	Indefinite	18,064
Total intangible assets acquired		18,914
Net assets acquired		$	19,537

The Company will amortize the intangible assets acquired on a straight-line basis over their estimated remaining lives, ranging from one to five years.

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Simple Meds—On August 31, 2021, SelectRx acquired 100% of the outstanding equity interests of Simple Meds, a full-service pharmaceutical distributor, for an aggregate purchase price of $7.0 million (subject to

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customary adjustments), as set forth in the Membership Interest Purchase Agreement dated August 31, 2021. The aggregate purchase price of $7.0 million was paid in cash at the closing of the transaction. The primary purpose of the acquisition was to accelerate the expansion of the prescription drug management business by combining the operations and existing infrastructure of Simple Meds into SelectRx.

Under the terms of the Membership Interest Purchase Agreement, total consideration in the acquisition consisted of the following as of the acquisition date (in thousands):


Base purchase price	$	7,000
Net working capital true-up	347
Closing cash	61
Total purchase consideration	$	7,408

At the date of acquisition, the fair value of net tangible assets acquired approximated their carrying value. The customer relationships were valued using the multiple period excess earnings method, and as such, were valued using Level 3 inputs.

Goodwill resulting from the transaction constitutes the excess of the consideration paid over the fair values of the assets acquired and liabilities assumed and primarily represents the additional value of the synergies of combining the Simple Meds business with the Company's technology and existing customer base. This acquired goodwill is allocated to ~~Senior (which~~the Healthcare Services reporting unit, which is also ~~the reporting unit),~~a reportable segment, and ~~the Company expects approximately~~ $5.6 million ~~to be~~is deductible for tax purposes after adding back acquisition costs.

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date (in thousands):


Description	Estimated Life	Amount
Cash and cash equivalents		$	61
Accounts receivable		634
Other current assets		474
Property and equipment, net		415
Accounts payable		(259)
Net tangible assets acquired		1,325

Customer relationships	1 year	370
Goodwill	Indefinite	5,713
Total intangible assets acquired		6,083
Net assets acquired		$	7,408

~~From the date of acquisition, August 31, 2021, through March 31, 2022, Simple Meds generated $8.6 million of pharmacy prescription revenue.~~

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3.PROPERTY AND EQUIPMENT—NET

Property and equipment—net consisted of the following:


(in thousands)	(in thousands)	March 31, 2022		June 30, 2021		(in thousands)	March 31, 2023		June 30, 2022
Computer hardware	Computer hardware	$	25,405	$	13,351	Computer hardware	$	25,433	$	23,303
Machinery and equipment(1)	Machinery and equipment(1)	8,883		2,667		Machinery and equipment(1)	14,862		15,051
Leasehold improvements	Leasehold improvements	19,276		18,525		Leasehold improvements	20,191		20,269
Furniture and fixtures	Furniture and fixtures	4,623		5,004		Furniture and fixtures	4,552		4,605
Work in progress	Work in progress	11,200		7,220		Work in progress	521		2,810
Total	Total	69,387		46,767		Total	65,559		66,038
Less accumulated depreciation	Less accumulated depreciation	(23,829)		(17,257)		Less accumulated depreciation	(33,958)		(24,234)
Property and equipment—net	Property and equipment—net	$	45,558	$	29,510	Property and equipment—net	$	31,601	$	41,804

(1) Includes financing lease right-of-use assets.

Work in progress as of March 31, ~~2022~~2023, primarily represents leasehold improvements and computer equipment ~~and machinery~~ not yet put into service and not yet being depreciated. Work in progress as of June 30, ~~2021,~~2022, primarily represents computer equipment and machinery not yet put into service and not yet being depreciated. Depreciation expense for the three months ended March 31, 2023 and 2022, ~~and 2021,~~ was ~~$3.3~~$3.7 million and ~~$2.0~~$3.3 million, respectively, and ~~$8.4~~$10.9 million and ~~$5.6~~$8.4 million for the nine months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively.

4.SOFTWARE—NET

Software—net consisted of the following:


(in thousands)	(in thousands)	March 31, 2022		June 30, 2021		(in thousands)	March 31, 2023		June 30, 2022
Software	Software	$	24,147	$	16,530	Software	$	34,701	$	26,049
Work in progress	Work in progress	3,658		3,826		Work in progress	1,030		4,162
Total	Total	27,805		20,356		Total	35,731		30,211
Less accumulated amortization	Less accumulated amortization	(12,247)		(7,745)		Less accumulated amortization	(19,604)		(13,910)
Software—net	Software—net	$	15,558	$	12,611	Software—net	$	16,127	$	16,301

Work in progress as of March 31, ~~2022~~2023 and June 30, ~~2021,~~2022, represents costs incurred for software not yet put into service and ~~are~~ not yet being amortized. For ~~each of~~ the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, the Company capitalized internal-use software and website development costs of $1.8 million and $2.2 million, respectively, and recorded amortization expense of ~~$1.6~~$2.0 million and ~~$1.0~~$1.6 million, respectively. For the nine months ended March 31, ~~2022~~2023 and ~~2021,~~2022, the Company capitalized internal-use software and website development costs of ~~$6.6~~$5.7 million and ~~$5.4~~$6.6 million, respectively, and recorded amortization expense of ~~$4.5~~$5.9 million and ~~$2.7~~$4.5 million, respectively.

5.INTANGIBLE ASSETS AND GOODWILL

Intangible assets—The carrying amounts, accumulated amortization, and net carrying value of our definite-lived intangible assets are presented in the table below (dollars in thousands):

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	March 31, 2023				June 30, 2022
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Impairment Charges (1)		Accumulated Amortization		Net Carrying Amount
Customer relationships	$	17,492	$	(8,036)	$	9,456	$	17,492	$	—	$	(6,232)	$	11,260
Trade name	2,680		(1,563)		1,117		2,680		—		(1,161)		1,519
Proprietary software	1,042		(719)		323		1,592		(336)		(816)		440
Non-compete agreements	1,292		(658)		634		1,292		—		(445)		847
Vendor relationships	20,400		(4,911)		15,489		23,700		(2,811)		(3,700)		17,189
Total intangible assets	$	42,906	$	(15,887)	$	27,019	$	46,756	$	(3,147)	$	(12,354)	$	31,255

(1) During the year ended June 30, 2022, the Company recorded impairment charges for several of its long-lived intangible assets. Refer to the consolidated financial statements in our Annual Report on Form 10-K for additional details.

The Company's intangible assets include those ~~acquired as part of the acquisitions listed in the table below (refer to Note 2 to the condensed consolidated financial statements for further details).~~long-lived intangible assets which were recognized at their estimated acquisition date fair values. The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. ~~Based on the Company’s third quarter analysis,~~There were no impairment ~~was recorded on~~triggers identified with respect to the Company’s long-lived ~~assets.~~assets during the three and nine months ended March 31, 2023 and 2022.

For the three months ended March 31, 2023 and 2022, amortization expense related to intangible assets totaled $1.4 million and $1.7 million, respectively, and $4.2 million and $5.0 million for the nine months ended March 31, 2023 and 2022, respectively, recorded in selling, general, and administrative expense in the condensed consolidated statements of comprehensive income. The weighted-average remaining useful life of intangible assets was 5.5 and 6.2 years as of March 31, 2023 and June 30, 2022, respectively.

As of March 31, 2023, expected amortization expense in future fiscal periods were as follows (in thousands):


	Trade Name		Proprietary Software		Non-Compete Agreements		Vendor Relationships		Customer relationships		Total
Remainder fiscal 2023	$	134	$	39	$	60	$	567	$	581	$	1,381
2024	536		156		220		2,267		2,319		5,498
2025	447		128		220		2,267		2,316		5,378
2026	—		—		134		2,267		2,313		4,714
2027	—		—		—		2,267		1,927		4,194
Thereafter	—		—		—		5,854		—		5,854
Total	$	1,117	$	323	$	634	$	15,489	$	9,456	$	27,019

Goodwill—The Company recorded as goodwill the excess of the purchase price over the estimated fair values of identifiable assets and liabilities acquired as part of the acquisitions ~~listed~~discussed in ~~the table below (refer to~~ Note

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2 to the condensed consolidated financial statements for further details). The Company performs its annual goodwill impairment assessment as of April 1, or more frequently if it believes that indicators of impairment exist. During each of the three and nine months ended March 31, 2022 and 2021, there were no such indicators.

statements. Goodwill is assigned to reporting units that are expected to benefit from the synergies of the business combination as of the acquisition date and becomes identified with that reporting unit in its entirety. As such, the reporting unit as a whole supports the recovery of its goodwill. ~~For~~As of March 31, 2023, the ~~following~~Company’s goodwill balance of $29.1 million was related to the acquisitions of Express Meds and Simple Meds and is all assigned to the Healthcare Services reporting ~~units to which goodwill has been assigned~~unit and ~~the associated~~ reportable ~~segments are as follows:~~

segment.

~~Acquisition~~

~~Reporting Unit~~

~~Reportable Segment~~

~~Auto & Home-controlling interest~~

~~Auto & Home~~

~~InsideResponse~~

~~Senior~~

~~Lead distribution company~~

~~Senior~~

~~Express Med Pharmaceuticals~~

~~Senior~~

~~Simple Meds~~

~~Senior~~

The ~~carrying amounts, accumulated amortization, net carrying value, and weighted average remaining life~~Company performs its annual goodwill impairment testing as of ~~our definite-lived amortizable intangible assets as well as our goodwill are presented in the tables below (dollars in thousands, useful life in years):~~

March 31, 2022 June 30, 2021
Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Remaining Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Weighted-Average Remaining Useful Life
Total intangible assets subject to amortization
Customer relationships $ 17,492 $ (5,542) $ 11,950 $ 17,122 $ (3,448) $ 13,674
Trade name 2,680 (1,027) 1,653 2,680 (625) 2,055
Proprietary software 1,592 (719) 873 1,592 (382) 1,210
Non-compete agreements 1,292 (374) 918 1,292 (163) 1,129
Vendor relationships 23,700 (3,072) 20,628 23,700 (1,098) 22,602
Total intangible assets $ 46,756 $ (10,734) $ 36,022 6.4 $ 46,386 $ (5,716) $ 40,670 7.1
Total indefinite-lived assets
Goodwill-Auto & Home $ 5,364 $ 5,364
Goodwill-Senior 68,368 62,655
Total goodwill $ 73,732 $ 68,019

~~For~~April 1, or more frequently if it believes that indicators of impairment exist. During the three ~~months ended March 31, 2022~~ and ~~2021, amortization expense related to intangible assets totaled $1.7 million and $1.3 million, respectively, and $5.0 million and $2.9 million for the~~ nine months ended March 31, 2023 and 2022, ~~and 2021, respectively.~~there were no indicators of impairment.

~~Changes in the balance of goodwill for the nine months ended March 31, 2022, are as follows (in thousands):~~


~~Balance, June 30, 2021~~	$	~~68,019~~
~~Goodwill from the acquisition of Simple Meds~~	~~5,713~~
~~Balance, March 31, 2022~~	$	~~73,732~~

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~~As of March 31, 2022, expected amortization expense in future fiscal periods is as follows (in thousands):~~

Trade Name Proprietary Software Non-compete agreements Vendor Relationships Customer relationships Total
Remainder fiscal 2022 $ 134 $ 96 $ 71 $ 660 $ 690 $ 1,651
2023 536 339 273 2,633 2,385 6,166
2024 536 308 220 2,633 2,319 6,016
2025 447 130 220 2,633 2,316 5,746
2026 — — 134 2,633 2,313 5,080
Thereafter — — — 9,436 1,927 11,363
Total $ 1,653 $ 873 $ 918 $ 20,628 $ 11,950 $ 36,022

6.LEASES

The majority of the Company’s leases are operating leases related to office space for which the Company recognizes lease expense on a straight-line basis over the respective lease term. The Company leases office facilities in the United States in San Diego, California; Centennial, Colorado; ~~Jacksonville, Florida;~~ Overland Park, Kansas; ~~Des Moines, Iowa;~~ Oakland, California; Indianapolis, Indiana; and Monaca, Pennsylvania (note that SelectRx leases the Monaca facility from an Executive Vice President of SelectRx. The Company expects to incur $3.6 million in total rental payments over the initial ten-year term plus an additional five-year extension option that it is reasonably certain to exercise). The Company's operating leases have remaining lease terms of less than one year up to ~~fourteen~~thirteen years.

~~On February 7, 2022~~During the nine months ended March 31, 2023, operating leases commenced in San Diego, California and ~~April 6, 2022,~~Indianapolis, Indiana, resulting in new right-of-use assets obtained in exchange for new lease liabilities of $1.6 million. In addition, the Company ~~executed noncancelable subleases~~exercised an early termination option for a portion of its office facilities in Overland Park, Kansas. The former commenced March 23, 2022, while the latter commences September 2, 2022. These subleases run through the remaining term of their primary leases, which terminate July 31, 2029, and are expected to generate $11.9 million in sublease income, which will be recorded as a reduction of lease expense in the condensed consolidated statement of comprehensive income. The Company may consider entering into additional sublease arrangements in the future.

~~In addition, during the three months ended March 31, 2022, the Company exercised an early termination option for the Des Moines, Iowa office lease,~~Kansas, with a new termination date of ~~September 30, 2022,~~July 31, 2023, resulting in an early termination penalty of ~~$0.3 million, which~~$0.9 million. The early termination penalty was recorded as part of the remeasurement of the operating lease liability and ~~will result~~resulted in accelerated amortization of the right-of-use asset over the shortened remaining term of the lease.

Lease Costs—The components of lease costs were as follows for the periods presented:


		Three Months Ended March 31,				Nine Months Ended March 31,					Three Months Ended March 31,				Nine Months Ended March 31,
(in thousands)	(in thousands)	2022		2021		2022		2021		(in thousands)	2023		2022		2023		2022
Finance lease costs(1)	Finance lease costs(1)	$	48	$	69	$	132	$	194	Finance lease costs(1)	$	43	$	48	$	129	$	132
Operating lease costs(2)	Operating lease costs(2)	1,998		1,980		6,056		5,859		Operating lease costs(2)	1,953		1,998		5,998		6,056
Short-term lease costs	Short-term lease costs	40		42		69		168		Short-term lease costs	74		40		137		69
Variable lease costs(3)	Variable lease costs(3)	227		201		696		915		Variable lease costs(3)	(6)		227		404		696
Sublease income	Sublease income	(23)		(403)		(488)		(638)		Sublease income	(671)		(23)		(1,756)		(488)
Total net lease costs	Total net lease costs	$	2,290	$	1,889	$	6,465	$	6,498	Total net lease costs	$	1,393	$	2,290	$	4,912	$	6,465

(1) Primarily consists of amortization of finance lease right-of-use assets and an immaterial amount of interest on finance lease liabilities recorded in operating costs and expenses and interest expense, net in the condensed consolidated statements of comprehensive income.

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(2) Recorded in operating costs and expenses in the condensed consolidated statements of comprehensive income.

(3) Variable lease costs are not included in the measurement of the lease liability or right-of-use asset as they are not based on an index or rate and primarily represents common area maintenance charges and real estate taxes recorded in operating costs and expenses in the condensed consolidated statements of comprehensive income.

Maturities of Lease Liabilities—As of March 31, ~~2022,~~2023, remaining maturities of lease liabilities for each of the next five fiscal years and thereafter are as follows:


(in thousands)	(in thousands)	Operating leases		Finance leases		Total		(in thousands)	Operating leases		Finance leases		Total
Remainder fiscal 2022		2,212		57		2,269
2023		8,710		147		8,857
Remainder fiscal 2023								Remainder fiscal 2023	$	2,268	$	42	$	2,310
2024	2024	9,032		38		9,070		2024	9,195		140		9,335
2025	2025	9,203		38		9,241		2025	8,948		38		8,986
2026	2026	7,040		38		7,078		2026	7,412		38		7,450
2027	2027	5,666		32		5,698		2027	6,105		32		6,137
Thereafter	Thereafter	12,885		—		12,885		Thereafter	14,608		—		14,608
Total undiscounted lease payments	Total undiscounted lease payments	54,748		350		55,098		Total undiscounted lease payments	48,536		290		48,826
Less: interest	Less: interest	14,266		30		14,296		Less: interest	12,249		28		12,277
Present value of lease liabilities	Present value of lease liabilities	$	40,482	$	320	$	40,802	Present value of lease liabilities	$	36,287	$	262	$	36,549

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The Company executed noncancelable subleases for portions of its office facilities in Overland Park, Kansas and Centennial, Colorado, which commenced March 23, 2022; June 9, 2022; July 1, 2022; September 2, 2022; and March 23, 2023, and run through the remaining terms of the primary leases. Sublease income is recorded on a straight-line basis as a reduction of lease expense in the condensed consolidated statements of comprehensive income. The Company may consider entering into additional sublease arrangements in the future.

Sublease Income—As of March 31, ~~2022,~~2023, the ~~Company had $3.5 million of undiscounted~~ future ~~payments for~~minimum fixed sublease receipts under non-cancelable operating ~~leases expected to commence between the fourth quarter of fiscal 2022 and the first quarter of fiscal 2023, with~~ lease ~~terms ranging from~~ ~~seven~~ ~~to ten years. These amounts~~agreements are ~~excluded from the tables above and not yet recognized in the condensed consolidated balance sheets.~~as follows:


(in thousands)	Total
Remainder fiscal 2023	$	412
2024	2,964
2025	3,215
2026	2,616
2027	2,180
Thereafter	4,024
Total sublease income	$	15,411

7.DEBT

Debt consisted of the following:


(in thousands)	(in thousands)	March 31, 2022		June 30, 2021		(in thousands)	March 31, 2023		June 30, 2022
Term Loans		$	470,732	$	471,912
DDTL Facility		244,388		—
Unamortized debt issuance costs		(3,163)		(4,081)
Unamortized debt discount		(5,402)		(6,428)
Term Loans (effective interest rate 13.3%)						Term Loans (effective interest rate 13.3%)	$	703,944	$	713,327

Unamortized debt issuance costs and debt discount						Unamortized debt issuance costs and debt discount	(11,226)		(7,735)

Total debt	Total debt	706,555		461,403		Total debt	692,718		705,592
Less current portion of long-term debt:	Less current portion of long-term debt:	(7,169)		(2,360)		Less current portion of long-term debt:	(25,412)		(7,169)
Long-term debt	Long-term debt	$	699,386	$	459,043	Long-term debt	$	667,306	$	698,423

Senior Secured Credit Facility— On November 5, 2019, the Company entered into a credit agreement with UMB Bank N.A. (“UMB”) as a lender and revolving agent and Morgan Stanley Capital Administrators, Inc. as a lender and the administrative agent for a syndicate of lenders party to the agreement (replaced by Wilmington Trust as administrative agent effective February 24, 2022). On February 24, 2021, November 2, 2021, ~~and~~ December 23, 2021, and August 26, 2022, the Company entered into amendments to the credit agreement (individually, the “First Amendment”, “Second Amendment”, ~~and~~ “Third Amendment”, and “Fourth Amendment”, together with the original credit agreement and any subsequent amendments, the “Senior Secured Credit Facility”) with certain of its existing lenders and new lenders. The First Amendment provided for an additional $231.0 million in term loans (together with the initial $425.0 million, the “Term Loans”) and added a $145.0 million senior secured delayed draw term loan facility (the "DDTL Facility"). The Company recognized a $3.3 million loss on debt extinguishment in the condensed consolidated statement of comprehensive income for the year ended June 30, 2021, as part of the First Amendment. The Second Amendment provided for additional commitments of $25.0 million, in addition to the initial $75.0 million, for the secured

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revolving loan facility (the “Revolving Credit Facility”) and an additional $200.0 million under the DDTL Facility. The Third Amendment provided for additional commitments of $35.0 million under the Revolving Credit Facility. The Fourth Amendment (1) amended the Company’s existing financial covenant to better align with its business plan and added an additional minimum liquidity covenant, (2) terminated certain DDTL commitments and reduced the Revolving Credit Facility from $135.0 million to $100.0 million, (3) introduced a minimum asset coverage ratio for any borrowing on the Revolving Credit Facility that would result in a total revolving exposure of more than $50.0 million, and (4) provided certain lenders with the right to appoint a representative to observe meetings of the Company’s board of directors and certain of its

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committees. Note that pursuant to the Fourth Amendment, upon termination of the outstanding DDTL commitments, when referring to Term Loans, it will now include the outstanding balance of the previously defined Term Loans and also the outstanding balance of the DDTL, and “DDTL” will no longer be referenced. After giving effect to the amendments, in aggregate, the Senior Secured Credit Facility provides for (1) an aggregate principal amount of up to ~~$135.0~~$100.0 million under the Revolving Credit Facility, of which all was available to borrow as of March 31, 2023 and (2) Term Loans outstanding in an aggregate principal amount of ~~$656.0~~$703.9 million ~~of which $470.7 million is outstanding~~ as of March 31, ~~2022,~~2023.

Pursuant to the terms of the Fourth Amendment, each consenting lender received an amendment fee equal to 1.00% of the Term Loans held by such consenting lender and ~~(3) a $345.0 million DDTL Facility,~~0.50% of ~~which $244.4 million is outstanding as of March 31, 2022. As of May 5, 2022, the available borrowing capacities under~~ the Revolving Credit Facility ~~and DDTL Facility were $135.0~~commitments held by such consenting lender, in each case immediately after giving effect to the Fourth Amendment. In addition, the Fourth Amendment provides for the Company to pay a revolving credit termination fee of $0.5 million ~~and $100.0 million, respectively.~~for the ratable account of each revolving lender upon the termination of all revolving loan commitments.

~~In accordance~~Following the Fourth Amendment, the Term Loans will bear interest on the outstanding principal amount thereof at a rate per annum equal to either (a) SOFR (subject to a floor of 0.75%) plus 6.00% in cash plus 2.00% payable in kind or (b) a base rate plus 5.00% in cash plus 2.00% payable in kind, at the Company’s option.From and after October 1, 2023, the cash and paid in kind interest rate with ~~ASC 470-50-40 “Debt Modification and Extinguishments”, the Second and Third Amendments were accounted for as debt modifications, and the $3.0 million original issue discount paid~~respect to the ~~2 lenders of the DDTL Facility was capitalized~~Term Loans will rise 0.50% and is being amortized on a straight-line basis over the remaining life of the agreement through interest expense. Additionally, the Company paid $1.2 million in costs as part of the transaction that were included in general and administrative expense in the condensed consolidated statements of comprehensive income. As a result of the Third Amendment, the Company incurred $0.3 million of costs related to the new commitments, which costs were capitalized and are being amortized on a straight-line basis over the remaining life of the agreement through interest expense.

1.00% respectively. The Revolving Credit Facility ~~accrues~~will accrue interest on amounts drawn at a rate per annum equal to either (a) ~~LIBOR~~SOFR (subject to a floor of 1.0%) plus ~~4.0%~~5.0% or (b) a base rate plus ~~3.0%~~4.0%, at the Company’s option, and the Company pays an unused commitment fee of 0.15% in respect of the unutilized commitments under the Revolving Credit Facility. The Term Loans and the DDTL Facility bear interest on the outstanding principal amounts thereof at a rate per annum equal to either (a) LIBOR (subject to a floor of 0.75%) plus 5.00% or (b) a base rate plus 4.00%, at the Company’s option, and the Company pays a ticking fee based on the average daily balance of the unused amount of the aggregate DDTL Facility commitments during the preceding fiscal quarter, multiplied by 1% per annum. option.

The Senior Secured Credit Facility has a maturity date of November 5, 2024, ~~with~~and pursuant to the Fourth Amendment the Term Loans ~~becoming~~are mandatorily repayable ~~as of March 31, 2022,~~ in equal quarterly installments in an aggregate annual amount equal to 1%2.5% of the ~~original~~outstanding principal amount of the Term Loans ~~with~~as of the ~~remaining balance payable~~Fourth Amendment effective date, increasing to 4.75% on the maturity date. The DDTL Facility also became mandatorily repayable beginning March 31, 2022, in equal quarterly installments equal to 0.25% of all DDTL Facility loans that have been outstanding for a full fiscal quarter prior to each such repayment date,July 1, 2023, with the remaining balance payable on the maturity date. As of March 31, ~~2022,~~2023, the Company has made total lifetime principal payments of ~~$1.2 million and $0.6~~$205.5 million on the Term ~~Loans and DDTL Facility, respectively. The remaining $100.0 million of the DDTL Facility may be drawn from time to time, subject to certain conditions, until January 15, 2023.~~Loans.

The Senior Secured Credit Facility contains customary affirmative and negative covenants and events of default and a financial ~~covenant~~covenants requiring the Company and certain of its subsidiaries to maintain a minimum asset coverage ~~ratio.~~ratio and minimum liquidity requirements. As of March 31, ~~2022,~~2023, the Company was in compliance with all of the required covenants. The obligations of the Company are guaranteed by ~~certain of~~ the Company’s subsidiaries and secured by a security interest in all assets of the Company, subject to certain exceptions.

The Company has incurred a total of ~~$27.1~~$40.1 million in debt issuance costs and debt discounts related to the Senior Secured Credit Facility, of which ~~$22.9~~$33.0 million was ~~capitalized and is~~capitalized. The costs associated with the Revolving Credit Facility are being amortized on a straight-line basis over the remaining life of the Senior Secured Credit ~~Facility.~~Facility and the costs associated with the Term Loans are being amortized using the effective interest method over the same term. Total amortization of debt issuance costs was ~~$1.2~~$2.3 million and ~~$0.8~~$1.2 million for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively, and ~~$4.2~~$6.3 million and ~~$2.5~~$4.2 million for the nine months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively, which was included in interest expense, net in the Company’s condensed consolidated statements of comprehensive income.

On May 5, 2023, the Company entered into a Fifth Amendment to the Senior Secured Credit Facility (the “Fifth Amendment”) by and among the Company, certain of its existing lenders, and Wilmington Trust, National Association, as administrative agent. The Fifth Amendment amends the Senior Secured Credit Facility to decrease the minimum asset coverage ratio required to be maintained by the Company as of March 31, 2024.

The Company uses derivative financial instruments to hedge against its exposure to fluctuations in interest rates associated with the Term Loans. On September 30, 2022, as a result of the Fourth Amendment, the Company terminated its existing interest rate swap indexed to 1-month LIBOR and executed a new interest rate swap indexed to 1-month SOFR. In accordance with ASC 848, Reference Rate Reform, the Company did not de-designate the interest rate swap when it was amended from LIBOR to SOFR as the Company is permitted to maintain the designation as part of the transitional relief. As of March 31, ~~2022,~~2023, the ~~Company had an outstanding~~Company’s interest rate swap is a receive-variable, pay-fixed interest rate swap on the notional amount of $325.0 million of the Company’s total outstanding

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Term Loans balance with a fixed rate of ~~5.00%~~6.00% plus ~~1.03%~~0.931% (the “Amended Interest Rate Swap”), which terminates on November 5, 2024. ~~As of March 31, 2022, the~~The Amended Interest Rate Swap had a fair value of ~~$12.3~~$17.0 million and $15.2 million as of March 31, 2023 and June 30, 2022, respectively, and was recorded in other assets in the condensed consolidated balance ~~sheet.~~sheets. The Company classifies its Amended Interest Rate Swap as a Level 2 on the fair value hierarchy as the majority of the inputs used to value it primarily includes other than

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quoted prices that are observable and it uses standard calculations and models that use readily observable market data as their basis. ~~As of March 31, 2022, the~~The Company estimates that ~~$2.7~~$11.9 million will be reclassified into interest expense during the next twelve months.

8.COMMITMENTS AND CONTINGENCIES

Lease Obligations—Refer to Note 6 to the condensed consolidated financial statements for commitments related to our operating leases.

Legal Contingencies and Obligations—From time to time, the Company is subject to legal proceedings and ~~claims~~governmental inquiries in the ordinary course of business. Such matters may include insurance regulatory claims; commercial, tax, employment, or intellectual property disputes; matters relating to competition and sales practices; ~~and~~ claims for damages arising out of the use of the Company’s services. The Company may also become subject to lawsuits related to past or future acquisitions, divestitures, or other transactions, including matters related to representations and warranties, indemnities, and assumed or retained liabilities. The Company is not currently aware of any legal proceedings or claims that it believes will have, individually or in the aggregate, a material adverse effect on its business, financial condition, operating results, or cash flows; however, in the event of unexpected developments, it is possible that the ultimate resolution of certain ongoing matters, if unfavorable, could be materially adverse to our business, prospects, financial condition, liquidity, results of operation, cash flows, or capital levels.

Securities Class Actions and Stockholder Derivative Suit

~~As previously disclosed,~~On August 16, 2021, a putative securities class action lawsuit captioned Hartel v. SelectQuote, Inc., et al., Case No. 1:21-cv-06903 (“the Hartel Action”) was filed against the Company and ~~certain~~two of its executive officers in the U.S. District Court for the Southern District of New York. The complaint asserts securities fraud claims on behalf of a putative class of plaintiffs who purchased or otherwise acquired shares of the Company’s common stock between February 8, 2021 and ~~current~~May 11, 2021 (the "Hartel Relevant Period"). Specifically, the complaint alleges the defendants violated Sections 10(b) and ~~former directors have been named as defendants in two~~20(a) and Rule 10b-5 of the Exchange Act by making materially false and misleading statements and failing to disclose material adverse facts about the Company’s business, operations, and prospects, allegedly causing the Company’s common stock to trade at artificially inflated prices during the Hartel Relevant Period. The plaintiffs seek unspecified damages and reimbursement of attorneys’ fees and certain other costs.

On October 7, 2021, a putative securities class ~~actions lawsuits~~action lawsuit captioned West Palm Beach Police Pension Fund v. SelectQuote, Inc., et al., Case No. 1:21-cv-08279 (“the WPBPPF Action”), was filed in the U.S. District Court for the Southern District of New York against the Company, two of its executive officers, and six current or former members of the Company’s Board of Directors, along with the underwriters of the Company’s initial public offering of common stock (the "Offering"). The complaint asserts claims for securities law violations on behalf of a putative class of plaintiffs who purchased shares of the Company’s common stock (i) in or traceable to the Offering or (ii) between May 20, 2020 and August 1725, 2021 (the "WPB Relevant Period"). Specifically, the complaint alleges the defendants violated Sections 10(b) and ~~October 7, 2021, respectively. There have been no~~20(a) and Rule 10b-5 of the Exchange Act by making materially false and misleading statements and failing to disclose material ~~developments~~adverse facts about the Company’s financial well-being and prospects, allegedly causing the Company’s common stock to trade at artificially inflated prices during the WPB Relevant Period. The complaint also alleges the defendants violated Sections 11, 12(a)(2), and 15 of the Securities Act by making misstatements and omissions of material facts in ~~either of these matters since their disclosure~~connection with the Offering, allegedly causing a decline in the value of the Company’s ~~Quarterly Report on Form 10-Q for the three months ended September 30, 2021.~~common stock. The plaintiffs seek unspecified damages, rescission, and reimbursement of attorneys’ fees and certain other costs.

~~Stockholder Derivative Suit~~

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On October 15, 2021, a motion to consolidate the Hartel Action and the WPBPPF Action was filed. On September 2, 2022, the court entered an order consolidating the Hartel and WPBPPF Actions under the caption In re SelectQuote, Inc. Securities Litigation, Case No. 1:21-cv-06903 (the “Securities Class Action”) and appointing the West Palm Beach Police Pension Fund and City of Fort Lauderdale Police & Fire Retirement System as lead plaintiffs. On November 19, 2022, plaintiffs filed an amended complaint asserting similar allegations to those alleged in the Hartel and WPBPPF Actions in addition to new allegations regarding certain defendants’ purported violation of Section 20A of the Exchange Act. The amended complaint also added Brookside Equity Partners LLC, one of the Company’s principal stockholders, as a defendant. On January 27, 2023, the Company filed a motion to dismiss the amended complaint on behalf of itself and certain of its current and former officers and directors. Plaintiffs filed an opposition to the motion to dismiss on April 5, 2023, and the Company filed its reply to plaintiffs’ opposition on May 10, 2023. The motion to dismiss is pending before the court.

On March 25, 2022, a stockholder derivative action captioned Jadlow v. Danker, et al., Case No. 1:22-cv-00391 (“the Jadlow Action”) was filed in the U.S. District Court for the District of Delaware by an alleged stockholder of the Company, purportedly on the Company’s behalf. The lawsuit was brought against certain of the Company’s current and former directors and officers, ~~(together, the “Defendants”),~~ and against the Company, as nominal defendant. The complaint ~~captioned Jadlow v. Danker, et al., Case No. 1:22-cv-00391-RGA,~~ alleges that certain of the ~~Defendants~~defendants violated Section 14(a) of the Exchange Act by making materially false and misleading statements and failing to disclose material adverse facts about the Company’s business, operations, and prospects. The complaint also asserts claims against all ~~Defendants~~defendants for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets based on the same general underlying ~~conduct. The complaint also~~conduct and seeks contribution under Sections 10(b) and 21D of the Exchange Act and Section 11(f) of the Securities Act from the individual defendants named in the Securities Class Actions. The complaint seeks unspecified damages for the Company, restitution, reformation and improvement of its corporate governance and internal procedures regarding compliance with laws, and reimbursement of costs and attorneys’ fees. On July 25, 2022, the Jadlow action was transferred to the U.S. District Court for the Southern District of New York, where it was assigned Case No. 1:22-cv-06290 and referred to Judge Alvin K. Hellerstein as possibly related to the Hartel Action. On August 4, 2022, Judge Hellerstein accepted the Jadlow action as related to the Hartel Action and, on August 10, 2022, granted the parties’ joint stipulation to stay the Jadlow action pending the resolution of the motion to dismiss the Securities Class Action.

The Company ~~does~~currently believes that these matters will not ~~currently believe this matter will~~ have a material adverse effect on ~~our~~any of its results of operations, financial condition or liquidity; however, ~~this matter~~depending on how the matters progress, they could be costly to defend and could divert the attention of management and other resources from operations. The Company has not concluded that a loss related to these matters is probable and, therefore, has not accrued a liability related to these matters.

9.SHAREHOLDERS' EQUITY

Common Stock—As of March 31, ~~2022,~~2023, the Company has reserved the following authorized, but unissued, shares of common stock:

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Employee Stock Purchase Plan						~~877,092~~159
Stock awards outstanding under 2020 Plan						~~4,752,141~~12,719,499
Stock awards available for grant under 2020 Plan						~~9,571,645~~6,276,231
Options outstanding under 2003 Plan						~~1,701,424~~539,804

Total						~~16,902,302~~19,535,693

Share-Based Compensation Plans

The Company has awards outstanding from 2two share-based compensation plans: the 2003 Stock Incentive Plan (the “2003 Stock Plan”) and the 2020 Omnibus Incentive Plan (the “2020 Stock Plan” and, collectively with the 2003 Stock Plan, the “Stock Plans”). However, no further awards will be made under the 2003 Stock Plan. The

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Company's Board of Directors adopted, and shareholders approved, the 2020 Stock Plan in connection with the IPO, which provides for the grant of incentive stock options (“ISO's”), nonstatutory stock options (“NSO's”), stock appreciation rights, restricted stock awards, restricted stock unit awards (“RSU's”), performance-based restricted stock units (“PSU's”), price-vested restricted stock units (“PVU’s”), and other forms of equity compensation (collectively, “stock awards”). All awards (other than ISOs, which may be granted only to current employees of the Company) may be granted to employees, non-employee directors, and consultants of the Company and its subsidiaries and affiliates.

The number of shares of common stock available for issuance as of March 31, ~~2022,~~2023, pursuant to future awards under the Company's 2020 Stock Plan is ~~9,571,645.~~6,276,231. The number of shares of the Company's common stock reserved under the 2020 Stock Plan is subject to an annual increase on the first day of each fiscal year, beginning on July 1, 2021, equal to 3% of the total outstanding shares of common stock as of the last day of the immediately preceding fiscal year. The maximum number of shares of common stock that may be issued upon the exercise of ISO's will be 4,000,000. The shares of common stock covered by any award (including any award granted pursuant to the 2003 Stock Plan) that is forfeited, terminated, expired, or lapsed without being exercised or settled for cash will again become available for issuance under the 2020 Stock Plan. With respect to any award, if the exercise price and/or tax withholding obligations are satisfied by delivering shares to the Company (by actual delivery or attestation), or if the exercise price and/or tax withholding obligations are satisfied by withholding shares otherwise issuable pursuant to the award, the share reserve shall nonetheless be reduced by the gross number of shares subject to the award.

The Company accounts for its share-based compensation awards in accordance with ASC 718, Compensation—Stock Compensation (“ASC 718”) which requires all share-based compensation to be recognized in the income statement based on fair value and applies to all awards granted, modified, canceled, or repurchased after the effective date.

Total share-based compensation for stock awards included in selling, general, and administrative expense in the condensed consolidated statements of comprehensive income was as follows for the periods presented:


		Three Months Ended March 31,				Nine Months Ended March 31,					Three Months Ended March 31,				Nine Months Ended March 31,
(in thousands)	(in thousands)	2022		2021		2022		2021		(in thousands)	2023		2022		2023		2022
Share-based compensation related to:	Share-based compensation related to:									Share-based compensation related to:
Equity classified stock options	Equity classified stock options	$	805	$	451	$	2,429	$	1,269	Equity classified stock options	$	799	$	805	$	2,495	$	2,429
Equity classified RSU's	Equity classified RSU's	993		648		3,073		1,608		Equity classified RSU's	1,563		993		4,490		3,073
Equity classified PSU's	Equity classified PSU's	231		190		318		512		Equity classified PSU's	77		231		29		318
Equity classified PVU's										Equity classified PVU's	486		—		1,384		—
Total	Total	$	2,029	$	1,289	$	5,820	$	3,389	Total	$	2,925	$	2,029	$	8,398	$	5,820

Stock Options—The stock options outstanding under the 2003 Stock Plan vest as to one-third after the vesting commencement date and as to 1/24 of the remaining shares subject to the stock option monthly thereafter, subject to the award recipient’s continued employment through the applicable vesting date. Upon a termination of employment for any reason other than for “Cause” (as defined in the 2003 Stock Plan), any unvested and

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outstanding stock options would generally be forfeited for no consideration, and any vested and outstanding stock options would remain exercisable for 90 days following the date of termination (and, in the case of a termination of employment due to death or disability, for 12 months following the date of termination). Stock options expire 10 years from the date of grant. The terms for ISO's and NSO's awarded in the 2020 Stock Plan are the same as in the 2003 Stock Plan with the exception that the options generally shall vest and become exercisable in 4four equal installments on each of the first four anniversaries of the grant date, subject to the award recipient’s continued employment through the applicable vesting date. Stock options are granted with an exercise price that is no less than 100% of the fair market value of the underlying shares on the date of the grant.

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The fair value of each option (for purposes of calculation of share-based compensation expense) is estimated using the Black-Scholes-Merton option pricing model that uses assumptions determined as of the date of the grant. Use of this option pricing model requires the input of subjective assumptions. These assumptions include estimating the length of time employees will retain their vested stock options before exercising them (“expected term”), the estimated volatility of the Company's common stock price over the expected term (“volatility”), the number of options that will ultimately not complete their vesting requirements (“assumed forfeitures”), the risk-free interest rate that reflects the interest rate at grant date on zero-coupon United States governmental bonds that have a remaining life similar to the expected term (“risk-free interest rate”), and the dividend yield assumption which is based on the Company's dividend payment history and management's expectations of future dividend payments (“dividend yield”). Changes in the subjective assumptions can materially affect the estimate of the fair value of share-based compensation and, consequently, the related amount recognized in the condensed consolidated statements of comprehensive income.

During the nine months ended March 31, 2023, there were no stock options granted. The Company used the following weighted-average assumptions for the stock options granted during the ~~periods presented below:~~nine months ended March 31, 2022:

Nine Months Ended March 31,
2022 2021
Volatility 36.0% 25.0%
Risk-free interest rate 1.4% 0.4%
Dividend yield —% —%
Assumed forfeitures —% —%
Expected term (in years) 6.25 6.24
Weighted-average fair value (per share) $3.36 $4.89


			Nine Months Ended March 31,
			2022
Volatility			36.0%
Risk-free interest rate			1.4%
Dividend yield			—%
Assumed forfeitures			—%
Expected term (in years)			6.25
Weighted-average fair value (per share)			$3.36

The following table summarizes stock option activity under the Stock Plans for the nine months ended March 31, ~~2022:~~2023:


		Number of Options	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value (in Thousands)			Number of Options	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value (in Thousands)
Outstanding—June 30, 2021		3,398,513	$	8.60
Outstanding—June 30, 2022								Outstanding—June 30, 2022	5,211,585	$	9.14
Options granted	Options granted	2,460,675	10.23					Options granted	—	—
Options exercised	Options exercised	(350,222)	3.74					Options exercised	(1,139,324)	0.56
Options forfeited/expired/cancelled	Options forfeited/expired/cancelled	(122,994)	17.81					Options forfeited/expired/cancelled	(190,935)	11.07
Outstanding—March 31, 2022		5,385,972	$	9.45	7.27	$	3,449
Vested and exercisable—March 31, 2022		2,005,527	$	3.93	3.94	$	3,140
Outstanding—March 31, 2023								Outstanding—March 31, 2023	3,881,326	$	11.57	7.70	$	280
Vested and exercisable—March 31, 2023								Vested and exercisable—March 31, 2023	1,701,215	$	10.82	6.92	$	280

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As of March 31, ~~2022,~~2023, there was ~~$10.3~~$5.8 million in unrecognized compensation cost related to unvested stock options granted, which is expected to be recognized over a weighted-average period of ~~3.01~~2.15 years.

The Company received cash of ~~$0.9~~less than $0.1 million in connection with stock options exercised in each of the three months ended March 31, 2023 and 2022, and $0.6 million and ~~$1.4~~$1.3 million in connection with stock options exercised during the ~~three months ended March 31, 2022 and 2021, respectively, and $3.2 million and $1.8 million in connection with stock options exercised, net of cashless exercises, during the~~ nine months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively.

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Restricted Stock—The Company grants RSU's to eligible employees, non-employee directors, and contractors. These awards generally vest over a period of one to four years. Fair value of the RSU's is determined based on the market price of the Company’s common stock at the grant date and share-based compensation expense is recognized over the requisite service period.

The following table summarizes restricted stock unit activity under the 2020 Stock Plan for the nine months ended March 31, ~~2022:~~2023:


		Number of Restricted Stock Units	Weighted-Average Grant Date Fair Value			Number of Restricted Stock Units	Weighted-Average Grant Date Fair Value
Unvested as of June 30, 2021		356,285	$	19.12
Unvested as of June 30, 2022					Unvested as of June 30, 2022	810,310	$	13.50
Granted	Granted	505,729	15.42		Granted	4,625,145	1.49
Vested	Vested	(84,348)	19.72		Vested	(211,025)	14.15
Forfeited	Forfeited	(37,324)	17.86		Forfeited	(224,626)	3.97
Unvested as of March 31, 2022		740,342	$	16.59
Unvested as of March 31, 2023					Unvested as of March 31, 2023	4,999,804	$	2.79

As of March 31, ~~2022,~~2023, there was ~~$9.5~~$9.8 million of unrecognized compensation cost related to unvested restricted stock units granted, which is expected to be recognized over a weighted-average period of ~~2.75~~2.07 years.

Performance Stock—The following table summarizes performance stock unit activity under the 2020 Stock Plan for the nine months ended March 31, ~~2022:~~2023:


		Number of Performance Stock Units	Weighted-Average Grant Date Fair Value			Number of Performance Stock Units	Weighted-Average Grant Date Fair Value
Unvested as of June 30, 2021(1)		132,921	$	17.97
Unvested as of June 30, 2022(1)					Unvested as of June 30, 2022(1)	13,293	$	17.97
Granted(1)	Granted(1)	196,080	17.80		Granted(1)	—	—
Vested	Vested	—	—		Vested	—	—
Forfeited	Forfeited	(1,750)	17.89		Forfeited	(5,236)	18.58
Performance adjustment(2)	Performance adjustment(2)	(163,626)			Performance adjustment(2)	1,967
Unvested as of March 31, 2022		163,625	$	17.87
Unvested as of March 31, 2023					Unvested as of March 31, 2023	10,024	$	17.96

(1) Reflects PSU’s at 100% achievement of predefined financial performance targets. If performance metrics are met, PSU’s will vest, at the end of a three-year performance period. The number of shares that could be earned for the fiscal year 2021 tranche will range from 0% to 150% of the target, and the number of shares that could be earned for the fiscal year 2022 tranche will range from 0% to 200% of the target.

(2) Represents adjustments to previously granted PSU’s to reflect changes in estimates of future financial performance against targets.

As of March 31, ~~2022,~~2023, there was ~~$1.9~~less than $0.1 million of unrecognized compensation cost related to unvested performance stock units granted, which is expected to be recognized over a weighted-average period of ~~2.07~~0.42 years.

Price-Vested Units—During the nine months ended March 31, 2023 the Company issued PVU’s for which vesting is subject to the fulfillment of both a service period and the achievement of stock price hurdles during the relevant performance period. The awards are divided into four separate tranches, each with a different price hurdle which is measured as the average trading price over 60 calendar days on a rolling daily basis, over a performance period of five years. An employee is eligible to vest in one-third of the awards in each tranche after each year of service, but subject to the achievement of the stock-price hurdle attached to each tranche. As a result, share-based compensation will be recognized on a straight-line basis across twelve tranches over each tranche’s requisite service period, which is the greater of the derived service period and the explicit service period. The number of shares

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subject to each tranche of the PVU awards, as well as the stock price hurdles, service periods, and performance periods for each tranche are as follows:


	Number of Shares per Tranche	Grant Date Fair Value (per Share)		Stock Price Hurdle (per Share)		Performance Period	Requisite Service Period
Tranche 1	1,055,674	$	1.52	$	4.00	August 1, 2022 - August 1, 2027	1.39 years - 3 years
Tranche 2	1,055,648	$	1.25	$	7.50	August 1, 2022 - August 1, 2027	2.33 years - 3 years
Tranche 3	1,055,674	$	1.11	$	10.00	August 1, 2022 - August 1, 2027	2.66 years - 3 years
Tranche 4	1,055,648	$	1.01	$	12.50	August 1, 2022 - August 1, 2027	2.90 years - 3 years

The fair value of each PVU (for purposes of calculation of share-based compensation expense) is estimated using a Monte Carlo simulation valuation model that uses assumptions determined as of the date of the grant. Use of this model requires the input of subjective assumptions and changes in the subjective assumptions can materially affect the estimate of the fair value of share-based compensation and, consequently, the related amount recognized in the condensed consolidated statements of comprehensive income.

During the nine months ended March 31, 2022, there were no PVU’s granted. The Company used the following weighted-average assumptions for the PVU’s granted during the nine months ended March 31, 2023:


						Nine Months Ended March 31,
						2023
Share price as of grant date						$1.80
Volatility						79.3%
Risk-free interest rate						2.6%
Cost of Equity						10.6%
Dividend yield						—%

The following table summarizes price-vested stock unit activity under the 2020 Stock Plan for the nine months ended March 31, 2023:


	Number of Price-Vested Units	Weighted-Average Grant Date Fair Value
Unvested as of June 30, 2022	—	$	—
Granted	4,222,644	1.22
Vested	—	—
Forfeited	(122,584)	1.22
Unvested as of March 31, 2023	4,100,060	$	1.22

As of March 31, 2023, there was $3.6 million of unrecognized compensation cost related to unvested PVU’s granted, which is expected to be recognized over a weighted-average period of 1.94 years.

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ESPP—The purpose of the Company’s employee stock purchase plan (“ESPP”) is to provide the Company's eligible employees with an opportunity to purchase shares of the Company’s common stock at a discounted price through accumulated payroll deductions. Pursuant to the terms of the ESPP, which was amended and restated effective as of April 1, 2022, participants may purchase shares on the exercise date at a price equal to 85% of the fair market value of the Company’s common stock as of either the exercise date or the first day of the relevant offering period, whichever is lesser. During the nine months ended March 31, 2023, and 2022, the Company issued 876,933 and 466,468 shares, respectively, to its

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employees, and as of March 31, ~~2022,~~2023, there are ~~877,092~~159 shares reserved for future issuance under the plan. The Company received cash of less than $0.1 million and $0.9 million in connection with ESPP purchases during the three months ended March 31, 2023 and 2022, respectively, and $0.6 million and $1.9 million in connection with ESPP purchases during the nine months ended March 31, 2023, and 2022, respectively. The Company recorded share-based compensation expense related to the ESPP of less than $0.1 million and $0.1 million for ~~each of~~ the three months ended March 31, 2023 and 2022, respectively, and ~~2021, respectively,~~recorded share-based compensation expense of $0.1 million and $0.4 million ~~and $0.3 million~~with respect to the ESPP for the nine months ended March 31, 2023 and 2022, ~~and 2021,~~ respectively.

The ESPP was suspended effective April 1, 2023.

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10.REVENUES FROM CONTRACTS WITH CUSTOMERS

Disaggregation of Revenue from Contracts with Customers—The disaggregation of revenue by segment and product is depicted for the periods presented below, and is consistent with how the Company evaluates its financial performance:


		Three Months Ended March 31,				Nine Months Ended March 31,					Three Months Ended March 31,				Nine Months Ended March 31,
(in thousands)	(in thousands)	2022		2021		2022		2021		(in thousands)	2023		2022		2023		2022
Senior:	Senior:									Senior:
Commission revenue:	Commission revenue:									Commission revenue:
Medicare advantage	Medicare advantage	$	176,603	$	181,040	$	355,949	$	493,745	Medicare advantage	$	156,014	$	176,603	$	412,850	$	355,949
Medicare supplement	Medicare supplement	912		2,981		4,849		23,716		Medicare supplement	417		912		1,588		4,849
Prescription drug plan	Prescription drug plan	393		449		1,393		2,166		Prescription drug plan	203		393		481		1,393
Dental, vision, and health	Dental, vision, and health	4,150		4,671		12,285		13,041		Dental, vision, and health	1,185		4,150		3,203		12,285
Other commission revenue	Other commission revenue	1,415		619		4,269		1,822		Other commission revenue	726		2,339		2,162		6,265
Total commission revenue	Total commission revenue	183,473		189,760		378,745		534,490		Total commission revenue	158,545		184,397		420,284		380,741
Production bonus and other revenue		49,699		25,840		118,714		69,819

Total other revenue										Total other revenue	26,655		26,576		66,257		78,531
Total Senior revenue	Total Senior revenue	233,172		215,600		497,459		604,309		Total Senior revenue	185,200		210,973		486,541		459,272
Healthcare Services:										Healthcare Services:
Total pharmacy revenue										Total pharmacy revenue	66,948		18,478		159,641		31,715
Total other revenue										Total other revenue	3,777		4,645		9,629		8,468
Total Healthcare Services revenue										Total Healthcare Services revenue	70,725		23,123		169,270		40,183
Life:	Life:									Life:
Commission revenue:	Commission revenue:									Commission revenue:
Term	Term	15,779		19,777		48,151		59,549		Term	17,678		15,779		49,371		48,151
Final expense	Final expense	19,626		20,088		55,100		46,362		Final expense	13,804		18,851		44,357		52,133
Total commission revenue	Total commission revenue	35,405		39,865		103,251		105,911		Total commission revenue	31,482		34,630		93,728		100,284
Production bonus and other revenue		3,995		4,958		16,361		16,006

Total other revenue										Total other revenue	5,468		3,995		14,052		16,361
Total Life revenue	Total Life revenue	39,400		44,823		119,612		121,917		Total Life revenue	36,950		38,625		107,780		116,645
Auto & Home:	Auto & Home:									Auto & Home:
Total commission revenue	Total commission revenue	6,539		5,910		19,187		21,014		Total commission revenue	7,895		6,539		21,940		19,187
Production bonus and other revenue		613		1,063		1,568		2,738

Total other revenue										Total other revenue	343		613		1,188		1,568
Total Auto & Home revenue	Total Auto & Home revenue	7,152		6,973		20,755		23,752		Total Auto & Home revenue	8,238		7,152		23,128		20,755
Eliminations:	Eliminations:									Eliminations:
Total commission revenue	Total commission revenue	(2,879)		(319)		(5,689)		(784)		Total commission revenue	(664)		(3,802)		(2,325)		(7,684)
Production bonus and other revenue		(1,732)		(1,731)		(4,516)		(3,509)

Total other revenue										Total other revenue	(1,051)		(1,732)		(3,324)		(4,516)
Total Elimination revenue	Total Elimination revenue	(4,611)		(2,050)		(10,205)		(4,293)		Total Elimination revenue	(1,715)		(5,534)		(5,649)		(12,200)
Total commission revenue	Total commission revenue	222,538		235,216		495,494		660,631		Total commission revenue	197,258		221,764		533,627		492,528
Total production bonus and other revenue		52,575		30,130		132,127		85,054

Total pharmacy revenue										Total pharmacy revenue	66,948		18,478		159,641		31,715
Total other revenue										Total other revenue	35,192		34,097		87,802		100,412
Total revenue	Total revenue	$	275,113	$	265,346	$	627,621	$	745,685	Total revenue	$	299,398	$	274,339	$	781,070	$	624,655

Contract Balances—~~After a~~The Company has contract assets related to commissions receivable from its insurance carrier partners, with the movement over time as the policy is sold, the Company has no material additional or recurring obligations to the policyholder or the insurance carrier. As such, there are no contract liabilities recorded in the condensed consolidated balance sheets. During the nine months ended March 31, 2021, there was no activity in therenewed between long-term and short-term

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~~contract asset balances other than the movement over time between long-term and short-term~~ commissions receivable and accounts receivable, asnet being the ~~policy is renewed, as shown on the balance sheet.~~ main activity, along with commission revenue adjustments from changes in estimates.

A roll forward of commissions receivable (current and ~~long term)~~long-term) is shown below for the ~~nine months ended March 31, 2022:~~period presented:

(in thousands)

Balance as of June 30, ~~2021~~2022

~~845,897~~838,626

Commission revenue ~~from revenue~~ recognized

~~318,399~~210,561

Net commission revenue adjustment from change in estimate

~~(157,368)~~(2,879)

Amounts recognized as accounts receivable, net

~~(168,632)~~(224,774)

Balance as of March 31, ~~2022~~2023

~~838,296~~821,534

~~The $157.4~~For the nine months ended March 31, 2023, the $2.9 million net commission revenue adjustment from change in estimate includes adjustments from the Company’s reassessment of each of its cohorts’ transaction prices. $145.0 million of the total adjustment was due to the increase in actual lapse rates for Senior MA policies during calendar year 2021 and overall lower persistency from early data received for the January 2022 renewals and was recorded during the three months ended December 31, 2021. Approximately 62%, 28%, and 8% of the adjustment from the change in estimate were from approved policies sold in fiscal years 2021, 2020, and 2019, respectively. In addition, there was a $6.1 million adjustment during the three months ended March 31, 2022, for renewal year lapses for calendar year 2022 for Senior MA policies.

~~Production Bonuses and Other—During the nine months ended March 31, 2022, the Company received advance payments of marketing development funds, which are amortized over the course of the appropriate fiscal year based~~The Company’s contract liabilities on ~~policies sold. As of March 31, 2022, there was an unamortized balance remaining of $0.4 million of fiscal year 2022 and 2023 marketing development funds recorded in other current liabilities in~~ the condensed consolidated balance ~~sheet.~~sheet represent unamortized upfront payments received as of March 31, 2023, for commission revenue of $9.7 million for which the performance obligations have not yet been met and are anticipated to be recognized over the next twelve months.

A roll forward of contract liabilities (current) is shown below for the period presented:


(in thousands)
Balance as of June 30, 2022	$	3,404

Commission revenue recognized	(38,968)
Other revenue recognized	(26,536)
Amounts recognized as contract liabilities	71,817
Balance as of March 31, 2023	$	9,717

11.INCOME TAXES

For the three months ended March 31, 2023 and 2022, the Company recognized income tax expense of $3.2 million and ~~2021, we recognized~~ income tax benefit of ~~$2.6 million and income tax expense of $6.9~~$2.8 million, respectively, representing effective tax rates of ~~29.1%~~25.4% and ~~16.3%~~28.8%, respectively. The differences from ~~our~~the federal statutory tax rate to the effective tax rate for the three months ended March 31, 2023, were primarily related to state income taxes, RSU vestings, and the recording of a valuation allowance for state tax attributes that the Company does not expect to utilize prior to expiration. The differences from the federal statutory tax rate to the effective tax rate for the three months ended March 31, 2022, were primarily related to state income taxes.

For the nine months ended March 31, 2023 and 2022, the Company recognized income tax benefits of $1.1 million and $66.0 million, respectively, representing effective tax rates of 8.9% and 25.5%, respectively. The differences from ~~our~~the federal statutory tax rate to the effective tax rate for the ~~three~~nine months ended March 31, ~~2021,~~2023, were primarily related to state income taxes, ~~partially offset by~~RSU vestings, and the recording of a valuation allowance for state tax ~~credits such as~~attributes that the ~~Kansas High Performance Incentive Program (“HPIP”) and discrete items for the period related~~Company does not expect to ~~the exercise of non-qualified stock options.~~

For the nine months ended March 31, 2022 and 2021, we recognized income tax benefit of $65.2 million and income tax expense of $31.8 million, respectively, representing effective tax rates of 25.5% and 20.3%, respectively.utilize prior to expiration. The differences from ~~our~~the federal statutory tax rate to the effective tax rate for the nine months ended March 31, 2022, were primarily related to state income taxes. The differences from our federal statutory tax rate to the effective tax rate for the nine months ended March 31, 2021, were primarily related to state income taxes, partially offset by state tax credits such as HPIP and discrete items for the period related to the exercise of non-qualified stock options.

Assessing the realizability of the Company’s deferred tax assets is dependent upon several factors, including analysis of the ~~likelihood and amount, if any,~~Company’s four sources of future taxable income in relevant jurisdictions during the periods in which those temporary differences become deductible. The Company forecasts taxable income by considering all available positive and negative evidence, including historical data and future plans and estimates. These assumptions require significant judgment about future taxable income. As a result, the amount of deferred tax assets considered realizable is subject to adjustment in future periods if estimates of future taxable income change.listed under ASC 740, Income Taxes. The Company continues to ~~recognize~~evaluate the realizability of its ~~deferred tax assets as of March 31, 2022, as it believes it is more likely than not that the~~ net deferred tax ~~assets will be realized. The Company recognizes a significant deferred tax liability due to the difference~~assets. As previously disclosed in the ~~timing of revenue recognition for financial statement and tax purposes. For financial statement~~

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~~purposes, revenue is recognized when a policy is sold, while revenue recognition~~Company’s Quarterly Report on Form 10-Q for ~~tax purposes occurs when future renewal commission payments are received. This deferred tax liability is a source of income that can be used to support~~ the ~~realizability of the Company’s deferred tax assets. As such,~~period ended December 31, 2022, the Company ~~does not believe~~recorded a valuation allowance ~~is necessary as of March 31, 2022, and will continue~~on deferred tax balances related to ~~evaluate in~~state tax attributes the ~~future as circumstances may change.~~Company determined would not be utilized prior to expiration. The Company believes all other deferred tax assets are more likely than not to be recognized.

12.NET INCOME (LOSS) PER SHARE

The Company calculates net income (loss) per share as defined by ASC ~~Topic~~ 260, “Earnings per ~~Share”~~Share (“ASC 260”). Basic net income (loss) per share (“Basic EPS”) is computed by dividing net income (loss) attributable to common shareholders by the weighted-average common stock outstanding during the respective period. Diluted net income (loss) per share (“Diluted EPS”) is computed by dividing net income (loss) attributable to common and common equivalent shareholders by the total of the weighted-average common stock outstanding and common equivalent shares outstanding during the respective period. For the purpose of calculating the Company’s Diluted EPS, common equivalent shares outstanding include common shares issuable upon the exercise of outstanding employee stock options, unvested RSU's, PSU’s assuming the performance conditions are satisfied as of the end of the reporting period, PVU’s assuming market conditions are satisfied as of the end of the reporting period, and common shares issuable upon the conclusion of each ESPP offering period. The number of common equivalent shares outstanding has been determined in accordance with the treasury stock method for employee stock options, RSU's, PSU’s, PVU’s, and common stock issuable pursuant to the ESPP to the extent they are dilutive. Under the treasury stock method, the exercise price paid by the option holder and future share-based compensation expense that the Company has not yet recognized are assumed to be used to repurchase shares.

The following table sets forth the computation of net income (loss) per share for the periods presented:


		Three Months Ended March 31,				Nine Months Ended March 31,					Three Months Ended March 31,				Nine Months Ended March 31,
(in thousands, except per share amounts)	(in thousands, except per share amounts)	2022		2021		2022		2021		(in thousands, except per share amounts)	2023		2022		2023		2022
Basic:	Basic:									Basic:
Numerator:	Numerator:									Numerator:
Net income (loss) attributable to common shareholders	Net income (loss) attributable to common shareholders	$	(6,448)	$	35,235	$	(190,609)	$	124,826	Net income (loss) attributable to common shareholders	$	9,264	$	(7,025)	$	(10,706)	$	(192,820)

Denominator:	Denominator:									Denominator:
Weighted-average common stock outstanding	Weighted-average common stock outstanding	164,083		163,023		163,914		162,705		Weighted-average common stock outstanding	166,543		164,083		165,951		163,914
Net income (loss) per share—basic:	Net income (loss) per share—basic:	$	(0.04)	$	0.21	$	(1.16)	$	0.77	Net income (loss) per share—basic:	$	0.06	$	(0.04)	$	(0.06)	$	(1.17)
Diluted:	Diluted:									Diluted:
Numerator:	Numerator:									Numerator:
Net income (loss) attributable to common and common equivalent shareholders	Net income (loss) attributable to common and common equivalent shareholders	$	(6,448)	$	35,235	$	(190,609)	$	124,826	Net income (loss) attributable to common and common equivalent shareholders	$	9,264	$	(7,025)	$	(10,706)	$	(192,820)

Denominator:	Denominator:									Denominator:
Weighted-average common stock outstanding	Weighted-average common stock outstanding	164,083		163,023		163,914		162,705		Weighted-average common stock outstanding	166,543		164,083		165,951		163,914

Stock options outstanding to purchase shares of common stock including unvested RSU's and from the ESPP~~(1)~~(2)	Stock options outstanding to purchase shares of common stock including unvested RSU's and from the ESPP~~(1)~~(2)	—		2,708		—		2,790		Stock options outstanding to purchase shares of common stock including unvested RSU's and from the ESPP~~(1)~~(2)	1,362		—		—		—

Total common and common equivalent shares outstanding	Total common and common equivalent shares outstanding	164,083		165,731		163,914		165,495		Total common and common equivalent shares outstanding	167,905		164,083		165,951		163,914
Net income (loss) per share—diluted:	Net income (loss) per share—diluted:	$	(0.04)	$	0.21	$	(1.16)	$	0.75	Net income (loss) per share—diluted:	$	0.06	$	(0.04)	$	(0.06)	$	(1.17)

(1) Excluded from the computation of net income (loss) per share-diluted for the nine months ended March 31, 2023, because the effect would have been anti-dilutive.

(2) Excluded from the computation of net income (loss) per share-diluted for the three and nine months ended March 31, 2022, because the effect would have been anti-dilutive.

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The weighted average potential shares of common stock that were excluded from the calculation of net income (loss) per share-diluted ~~for the periods presented~~ because including them would have been anti-dilutive are as follows for the periods presented:

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	Three Months Ended March 31,		Nine Months Ended March 31,
(in thousands)	2023	2022	2023	2022



Stock options outstanding to purchase shares of common stock including unvested RSU's and from the ESPP	4,181	5,393	8,338	5,069

Three Months Ended March 31, Nine Months Ended March 31,
(in thousands) 2022 2021 2022 2021
Stock options outstanding to purchase shares of common stock including unvested RSU's and from the ESPP 5,393 322 5,069 918
Shares subject to outstanding PSU's(1)
164 132 219 117
Total 5,557 454 5,288 1,035

~~(1)~~ The ~~weighted-average number~~weighted average potential shares of ~~shares~~common stock that were excluded from the ~~computation~~calculation of net income (loss) per share-diluted because the performance or market conditions associated with these awards were not ~~met.~~met are as follows for the periods presented:


	Three Months Ended March 31,		Nine Months Ended March 31,
(in thousands)	2023	2022	2023	2022




Shares subject to outstanding PVU’s	4,100	—	4,158	—
Shares subject to outstanding PSU's	10	164	7	219
Total	4,110	164	4,165	219

13.SEGMENT INFORMATION

The Company’s operating and reportable segments have been determined in accordance with ASC 280, Segment Reporting (“ASC 280”). ~~The~~Prior to the first quarter of fiscal 2023, the Company ~~currently has 3~~had reported financial results under three reportable segments: i) Senior, ii) Life, and iii) Auto & Home. ~~Senior primarily sells senior Medicare-related health insurance products~~Effective July 1, 2022, as a result of a change in strategic direction established for fiscal year 2023, the financial information available and the operating results that are regularly reviewed by the Company’s chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segments and assess its performance have also changed with the financial information related to Healthcare Services, which includes SelectRx and Population Health, now available and ~~InsideResponse.~~reviewed by our CODM separately from the remainder of the Senior reportable segment. As a result, the Company now reflects four reportable segments: i) Senior, ii) Healthcare Services, iii) Life, ~~primarily sells term life~~ and ~~final expense products, and~~iv) Auto & Home, ~~primarily sells individual automobile~~ and ~~homeowners’ insurance. In addition, the~~all prior periods have been restated to reflect four reportable segments.

The Company ~~accounts for~~includes non-operating activity, share-based compensation expense, certain intersegment eliminations, and the costs of providing corporate and other administrative services in its administrative division in Corporate & Eliminations. These services and activities are not directly identifiable with the Company’s reportable segments and are shown in the tables below to reconcile the reportable segments to the condensed consolidated financial statements. The Company has not aggregated any operating segments ~~together to represent~~into a reportable segment.

The Company reports segment information based on how its chief operating decision maker (“CODM”) regularly reviews its operating results, allocates resources, and makes decisions regarding business operations. The performance measures of the segments include total revenue and Adjusted EBITDA because management believes that such information is the most relevant in evaluating the results of the respective segments relative to other entities that operate in the same industries.

Costs of revenue, cost of goods sold-pharmacy revenue, marketing and advertising, selling, general, and administrative, and technical development operating expenses that are directly attributable to a segment are reported within the applicable segment. Indirect costs of revenue, marketing and advertising, selling, general, and administrative, and technical development operating expenses are allocated to each segment based on varying metrics such as headcount. Adjusted EBITDA is calculated as total revenue for the applicable segment less direct and allocated costs of revenue, cost of goods sold, marketing and advertising, technical development, and selling, general, and administrative operating costs and expenses, excluding depreciation and amortization expense; gain or loss on disposal of property, equipment, and software; share-based compensation expense; ~~restructuring expenses;~~ and non-recurring expenses such as severance payments and transaction costs. Our CODM does not separately evaluate assets by segment; therefore, assets by segment are not presented.

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The following table presents information about the reportable segments for the three months ended March 31, 2023:


(in thousands)	Senior		Healthcare Services		Life		Auto & Home		Corp & Elims			Consolidated
Revenue	$	185,200	$	70,725	$	36,950	$	8,238	$	(1,715)	(1)	$	299,398
Operating expenses	(126,034)		(74,091)		(31,446)		(5,648)		(17,947)		(2)	(255,166)
Other income (expense), net	—		—		(201)		1		(6)			(206)
Adjusted EBITDA	$	59,166	$	(3,366)	$	5,303	$	2,591	$	(19,668)		44,026
Share-based compensation expense												(2,959)
Non-recurring expenses (3)												(433)


Depreciation and amortization												(7,098)
Loss on disposal of property, equipment, and software												(15)
Interest expense, net												(21,105)

Income tax expense												(3,152)
Net income												$	9,264

(1) Revenue in the Corp & Elims division represents intercompany revenue eliminated between segments, including for lead generation referrals from InsideResponse (within Senior) and referrals between the other segments.

(2) Operating expenses in the Corp & Elims division primarily include $12.6 million in salaries and benefits for certain general, administrative, and IT related departments and $4.6 million in professional services fees.

(3) These expenses consist of costs related to the Senior Secured Credit Facility and non-restructuring severance expenses.

The following table presents information about the reportable segments for the three months ended March 31, 2022:


(in thousands)	Senior		Healthcare Services		Life		Auto & Home		Corp & Elims			Consolidated
Revenue	$	210,973	$	23,123	$	38,625	$	7,152	$	(5,534)	(1)	$	274,339
Operating expenses	(171,023)		(30,891)		(41,287)		(6,002)		(12,896)		(2)	(262,099)
Other expenses, net	—		—		—		—		(23)			(23)
Adjusted EBITDA	$	39,950	$	(7,768)	$	(2,662)	$	1,150	$	(18,453)		12,217
Share-based compensation expense												(2,143)
Non-recurring expenses (3)												(703)


Depreciation and amortization												(6,679)
Loss on disposal of property, equipment, and software												(384)
Interest expense, net												(12,179)

Income tax benefit												2,846
Net loss												$	(7,025)

~~Table of Contents~~(1) Revenue in the Corp & Elims division represents intercompany revenue eliminated between segments primarily for referrals from Senior to the other segments.

(in thousands) Senior Life Auto & Home Corp & Elims Consolidated
Revenue $ 233,172 $ 39,400 $ 7,152 $ (4,611) $ 275,113
Operating expenses (200,990) (41,288) (6,002) (13,819) (1) (262,099)
Other expenses, net — — — (23) (23)
Adjusted EBITDA $ 32,182 $ (1,888) $ 1,150 $ (18,453) 12,991
Share-based compensation expense (2,143)
Non-recurring expenses (2)
(703)
Depreciation and amortization (6,679)
Loss on disposal of property, equipment, and software, net (384)
Interest expense, net (12,179)
Income tax benefit 2,649
Net loss $ (6,448)

~~(1)~~(2) Operating expenses in the Corp & Elims division primarily include $12.0 million in salaries and benefits for certain general, administrative, and IT related departments and $4.1 million in professional services fees.

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~~(2)~~(3) These expenses primarily consist of costs related to the change in administrative agent with respect to the Senior Secured Credit Facility and severance expenses.

The following table presents information about the reportable segments for the ~~three~~nine months ended March 31, ~~2021:~~2023:

(in thousands) Senior Life Auto & Home Corp & Elims Consolidated
Revenue $ 215,600 $ 44,823 $ 6,973 $ (2,050) $ 265,346
Operating expenses (140,111) (43,225) (5,877) (12,507) (1) (201,720)
Other expenses, net — — — (15) (15)
Adjusted EBITDA $ 75,489 $ 1,598 $ 1,096 $ (14,572) 63,611
Share-based compensation expense (1,429)
Non-recurring expenses (2)
(4,667)
Fair value adjustments to contingent earnout obligations (334)
Depreciation and amortization (4,323)
Loss on disposal of property, equipment, and software (101)
Interest expense, net (7,355)
Loss on extinguishment of debt (3,315)
Income tax expense (6,852)
Net income $ 35,235


(in thousands)	Senior		Healthcare Services		Life		Auto & Home		Corp & Elims			Consolidated
Revenue	$	486,541	$	169,270	$	107,780	$	23,128	$	(5,649)	(1)	$	781,070
Operating expenses	(347,608)		(193,726)		(91,409)		(15,812)		(52,270)		(2)	(700,825)
Other expenses, net	—		—		—		(1)		(117)			(118)
Adjusted EBITDA	$	138,933	$	(24,456)	$	16,371	$	7,315	$	(58,036)		80,127
Share-based compensation expense												(8,525)
Transaction costs(3)												(3,003)


Depreciation and amortization												(21,087)
Loss on disposal of property, equipment, and software												(386)
Interest expense, net												(58,885)

Income tax benefit												1,053
Net loss												$	(10,706)

(2) Operating expenses in the Corp & Elims division primarily include ~~$9.8~~$36.8 million in salaries and benefits for certain general, administrative, and IT related departments and ~~$3.2~~$13.8 million in professional services fees.

~~(2)~~(3) These expenses primarily consist of costs ~~incurred for~~related to the ~~First~~Fourth Amendment to the ~~acquisition of a lead distribution company, re-designation of the hedge,~~Senior Secured Credit Facility and ~~the Secondary Offering.~~non-restructuring severance expenses.

The following table presents information about the reportable segments for the nine months ended March 31, 2022:


(in thousands)	Senior		Healthcare Services		Life		Auto & Home		Corp & Elims			Consolidated
Revenue	$	459,272	$	40,183	$	116,645	$	20,755	$	(12,200)	(1)	$	624,655
Operating expenses	(588,583)		(60,296)		(117,346)		(16,798)		(41,154)		(2)	(824,177)
Other expenses, net	—		—		—		—		(177)			(177)
Adjusted EBITDA	$	(129,311)	$	(20,113)	$	(701)	$	3,957	$	(53,531)		(199,699)
Share-based compensation expense												(6,252)
Non-recurring expenses (3)												(2,857)


Depreciation and amortization												(17,957)
Loss on disposal of property, equipment, and software												(739)
Interest expense, net												(31,300)

Income tax benefit												65,984
Net loss												$	(192,820)

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(in thousands) Senior Life Auto & Home Corp & Elims Consolidated
Revenue $ 497,459 $ 119,612 $ 20,755 $ (10,205) $ 627,621
Operating expenses (646,883) (117,347) (16,798) (43,149) (1) (824,177)
Other expenses, net — — — (177) (177)
Adjusted EBITDA $ (149,424) $ 2,265 $ 3,957 $ (53,531) (196,733)
Share-based compensation expense (6,252)
Non-recurring expenses (2)
(2,857)
Depreciation and amortization (17,957)
Loss on disposal of property, equipment, and software, net (739)
Interest expense, net (31,300)
Income tax benefit 65,229
Net loss $ (190,609)
1) Revenue in the Corp & Elims division represents intercompany revenue eliminated between segments primarily for lead generation referrals from InsideResponse (within Senior) to the other segments.

~~(1)~~(2) Operating expenses in the Corp & Elims division primarily include $33.6 million in salaries and benefits for certain general, administrative, and IT related departments, and $13.1 million in professional services fees.

~~(2)~~(3) These expenses primarily consist of costs incurred for the Second Amendment, costs related to the acquisitions of Express Med Pharmaceuticals and Simple Meds, costs related to the change in administrative agent with respect to the Senior Secured Credit Facility, and severance expenses.

~~The following table presents information about the reportable segments for the nine months ended March 31, 2021:~~

(in thousands) Senior Life Auto & Home Corp & Elims Consolidated
Revenue $ 604,309 $ 121,917 $ 23,752 $ (4,293) $ 745,685
Operating expenses (385,363) (105,532) (16,889) (34,771) (1) (542,555)
Other expenses, net — — — (58) (58)
Adjusted EBITDA $ 218,946 $ 16,385 $ 6,863 $ (39,122) 203,072
Share-based compensation expense (3,689)
Non-recurring expenses (2)
(5,490)
Fair value adjustments to contingent earnout obligations (1,487)
Depreciation and amortization (11,260)
Loss on disposal of property, equipment, and software (261)
Interest expense, net (20,898)
Loss on extinguishment of debt (3,315)
Income tax expense (31,846)
Net income $ 124,826
(1) Operating expenses in the Corp & Elims division primarily include $24.8 million in salaries and benefits for certain general, administrative, and IT related departments and $9.5 million in professional services fees.

(2) These expenses primarily consist of costs incurred for the First Amendment, the acquisition of a lead distribution company, re-designation of the hedge, and the Secondary Offering as well as non-recurring compensation to a former executive, severance expenses, and expenses related to business continuity in response to the COVID-19 pandemic.

Revenues from each of the reportable segments are earned from transactions in the United States and follow the same accounting policies used for the Company’s condensed consolidated financial statements. All of the

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Company’s long-lived assets are located in the United States. For the three months ended March 31, ~~2022,~~2023, three ~~insurance carrier~~ customers ~~from Senior~~ accounted for ~~25%~~31% (UHC), ~~23%~~24% (Humana), and ~~14%~~8% (Wellcare) of total revenue, respectively. For the three months ended March 31, ~~2021,~~2022, three ~~insurance carrier~~ customers ~~from Senior~~ accounted for 25% (Wellcare), ~~20%~~23% (UHC), and ~~15%~~14% (Humana) of total revenue, respectively. For the nine months ended March 31, 2023, three customers accounted for 31% (UHC), 21% (Humana), and 10% (Wellcare) of total revenue, respectively. For the nine months ended March 31, 2022, three ~~insurance carrier~~ customers ~~from Senior~~ accounted for 22% (UHC), 18% (Wellcare), and 13% (Humana) of total revenue, respectively. ~~For the nine months ended March 31, 2021, three insurance carrier~~Each of these customers ~~from~~listed above provided revenue to both Senior ~~accounted for 26%, 20%,~~ and ~~15% of total revenue, respectively.~~Healthcare Services.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and result of operations together with our condensed consolidated financial statements and footnotes included elsewhere in this Quarterly Report on Form 10-Q. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions, and projections about our industry, business and future financial results. Please refer to a discussion of the Company’s forward-looking statements and associated risks in “Cautionary Note Regarding Forward-Looking Statements” in our ~~2021~~2022 Annual Report. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors” in our ~~2021~~2022 Annual Report and in Part II, Item 1A hereof.

Correction of Previously Issued Condensed Consolidated Financial Statements

Subsequent to the issuance of the Company’s financial statements as of and for the year ended June 30, 2021, the Company determined that the provision for first year ~~provision~~commission revenue for certain final expense policies offered by ~~one~~certain of its insurance carrier partners should have been accrued based on a higher lapse rate.This misstatement was initially thought to be isolated to an error in the lapse rate for one of its insurance carrier partners, as disclosed in the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2021. However, during the three months ended June 30, 2022, it was determined that the lapse rate for other insurance carrier partners were also incorrect, resulting in an additional misstatement being identified. See Note 1 to the condensed consolidated financial statements for additional information related to the correction, including descriptions of the misstatements and the impacts to our condensed consolidated financial statements. In addition, we have corrected certain previously reported financial information for the three and nine months ended March 31, ~~2021,~~2022, in this Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Company Overview

~~COVID-19.~~ While the ongoing pandemic has caused disruptions to the economy both domestically and globally, including limitations on various businesses and activities that could have an indirect effect on our business, travel restrictions, and the extended shutdown of certain industries in various countries, due to the nature of our products and technology-enabled business model, these disruptions have not had a material adverse impact on our business on a consolidated basis. We will continue to evaluate the potential impacts and closely monitor developments as they arise.

Our Business. We are a leading technology-enabled, direct-to-consumer (“DTC”) distribution platform ~~that~~for insurance products and healthcare services. Our insurance distribution business, which has operated continuously for over 35 years, provides consumers with a transparent and convenient venue to shop for complex senior health, life, and ~~auto &~~automobile and home insurance policies from a curated panel of the nation’s leading insurance carriers. As an insurance distributor, we do not insure the consumer, but rather identify consumers looking to acquire insurance products and place these consumers with insurance carrier partners that provide these ~~products and, in~~products. In return, we earn commissions from our insurance carrier partners for the policies we sell on their behalf. ~~Because we are not the issuer of the insurance policy to the consumer, we bear no underwriting risks.~~ Our proprietary technology

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allows us to take a broad funnel approach to marketing by analyzing and identifying ~~high quality~~high-quality consumer leads sourced from a wide variety of online and offline marketing ~~channels. Our primary sources of leads include~~channels including search ~~engine marketing,~~engines, radio, television, and third-party marketing partners. We monitor our acquisition costs to dynamically allocate our marketing spend to the most attractive ~~channel,~~channels, benefiting from over thirty years of data accumulated through our proprietary, purpose-built technologies. Our advanced workflow processing system scores each acquired lead in ~~real-time,~~real time, matching it with ana sales agent whom we determine is best suited to meet the consumer’s need. Our platform

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then captures and utilizes our experience to further build upon the millions of data points that feed our marketing algorithms, ~~which~~ further ~~enhances~~enhancing our ability to deploy subsequent marketing dollars efficiently and target more high-quality consumer leads. We have built our business model to maximize commissions collected over the life of an approved policy less the cost of acquiring the business, a metric we refer to as policyholder lifetime value and which is a key component to our overall profitability. ~~Recently~~

Our unique platform has enabled us to expand our distribution business in recent years to include additional products beyond insurance policies. In interacting with thousands of consumers over the years, we identified a large opportunity to leverage our existing database and distribution model to improve access to healthcare services for our consumers. In addition to improving consumers’ health outcomes, this service creates deeper relationships with our insurance carrier partners by increasing policy persistency and, in turn, reducing their overall costs. Additionally, we offer pharmacy services through ~~acquisitions, we've begun expanding into lead generation sales,~~our closed-door, long-term care pharmacy, which offers essential prescription ~~pharmacies,~~medications, OTC medications, customized medication packaging, medication therapy management, and ~~overall health services through our Population Health platform.~~other consultative services.

We evaluate our business using the following ~~three~~four segments:

Senior ~~our fastest growing and largest segment,~~ was launched in 2010 and provides unbiased comparison shopping for Medicare Advantage (“MA”) and Medicare Supplement (“MS”) insurance plans as well as prescription drug and dental, vision, and hearing (“DVH”) plans, and critical illness products. We represent approximately 2021 leading, nationally-recognized insurance carrier partners, including UnitedHealthcare ~~Wellcare,~~(“UHC”), Humana, and ~~Humana.~~Wellcare. MA and MS plans accounted for ~~83%~~90% and ~~77%~~83% of our approved Senior policies for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively, and ~~83%~~90% and ~~80%~~83% for the nine months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively, with other ancillary type policies accounting for the remainder. ~~Additionally, InsideResponse~~

Healthcare Services, launched in 2021, includes SelectRx and Population Health, ~~(which includes SelectRx) are~~and was previously included under the Senior segment (refer to Note 13 to the condensed consolidated financial statements for further information on the change in ~~Senior~~segments). Through SelectRx, we provide simple solutions for ~~segment reporting purposes.~~prescription drug management and support with a personalized approach to streamline the process of managing multiple medications for seniors with chronic conditions. SelectRx has developed a pill pack solution that is customized to the unique needs of each patient, focusing on individual multi-dosages by day and time. SelectRx uses a high-touch, technology-driven approach to provide superior customer service and achieve improved medication adherence. Population Health contracts with insurance carriers to perform health risk assessments (“HRA”) on potential new members to determine how Population Health’s value-based care (“VBC”) partners can help members improve health outcomes. Consumers receive one-on-one assistance from our customer success agents who help patients understand the benefits available under their health plans and connect them with additional healthcare related resources. We believe that offering these services through SelectRx and Population Health to our existing MA consumers helps drive customer satisfaction and increase policy persistency, which, in turn, reduces costs for our insurance carrier partners.

Life is one of the country’s largest and most established DTC insurance distributors for term life insurance, having sold over ~~2.0~~2.1 million policies nationwide since our founding in 1985. Our platform provides unbiased comparison shopping for life insurance products such as term life, final expense, and other ancillary products like critical illness, accidental death, and juvenile insurance. We represent approximately 2022 leading, nationally-recognized insurance carrier partners, with many of these relationships exceeding 15 years. Term life policies accounted for ~~34%~~48% and ~~43%~~34% of new premium within Life for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively, with final expense policies accounting for ~~66%~~52% and ~~57%~~66% for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively. For the nine months ended March 31, ~~2022~~2023 and ~~2021,~~2022, term life policies accounted for ~~35%~~ 45%

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and ~~50%~~35% of new premium within Life, respectively, with final expense policies accounting for ~~65%~~55% and ~~50%~~65%, respectively.

Auto & Home was ~~founded~~launched in 2011 as an unbiased comparison shopping platform for auto, home, and specialty insurance lines. Our platform provides unbiased comparison shopping for insurance products such as homeowners, auto, dwelling fire, and other ancillary insurance products underwritten by approximately 3025 leading, nationally-recognized insurance carrier partners. Homeowners and 12-month auto products accounted for ~~74%~~73% and ~~80%~~74% of new premium within Auto & Home for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively, and ~~76%~~74% and ~~79%~~76% for the nine months ended March 31, ~~2022~~2023 and ~~2021,~~2022, respectively, with six-month auto, dwelling fire, and other products accounting for a majority of the remainder.

The three and nine months ended March 31 referenced throughout the commentary below refers to the third quarter and fiscal year-to-date performance of our fiscal years ending on June 30, ~~2022~~2023 and ~~2021. Note that certain reclassifications have been made to prior periods to conform with current year presentation.~~2022.

Key Business and Operating Metrics by Segment

In addition to traditional financial metrics, we rely upon certain business and operating metrics to estimate and recognize ~~commission~~ revenue, evaluate our business performance, and facilitate our operations. In Senior, our primary product, Medicare Advantage, pays us flat commission rates based on the number of policies we sell on behalf of our insurance carrier partners. Therefore, we have determined that units and unit metrics are the most appropriate measures to evaluate the performance of Senior. For Healthcare Services, our primary source of revenue is pharmacy revenue from SelectRx, so the total number of SelectRx members is the most appropriate measure used to evaluate the performance of Healthcare Services. In Life and Auto & Home, we are typically paid a commission that is a percent of the premium that we generate for our insurance carrier partners. Therefore, we have determined that premium-based metrics are the most relevant measures to evaluate the performance of these segments. Below are the most relevant business and operating metrics for each segment:

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Senior

Submitted Policies

Submitted policies are counted when an individual completes an application with our licensed agent and provides authorization to them to submit it to the insurance carrier partner. The applicant may have additional actions to take before the application will be reviewed by the insurance carrier.

The following table shows the number of submitted policies for the periods presented:


		Three Months Ended March 31,		Nine Months Ended March 31,			Three Months Ended March 31,		Nine Months Ended March 31,
		2022	2021	2022	2021		2023	2022	2023	2022
Medicare Advantage	Medicare Advantage	242,721	160,233	678,827	454,772	Medicare Advantage	196,372	242,721	538,247	678,827
Medicare Supplement	Medicare Supplement	1,389	3,738	6,318	24,287	Medicare Supplement	675	1,389	2,905	6,318
Dental, Vision, and Hearing	Dental, Vision, and Hearing	40,178	38,757	122,214	101,819	Dental, Vision, and Hearing	21,175	40,178	59,513	122,214
Prescription Drug Plan	Prescription Drug Plan	1,079	1,568	6,193	10,243	Prescription Drug Plan	416	1,079	2,082	6,193
Other	Other	4,907	6,781	11,436	12,603	Other	1,864	4,907	5,402	11,436
Total	Total	290,274	211,077	824,988	603,724	Total	220,502	290,274	608,149	824,988

Total submitted policies ~~increased by 38%~~for all products decreased 24% for the three months ended March 31, ~~2022,~~2023, compared to the three months ended March 31, ~~2021.~~2022, in line with our updated operating strategy to reduce the Senior distribution business and focus resources on Healthcare Services. The increase was driven primarily by a 51% increase in MA submitted policies and a 4% increase in DVH submitted policies, partially offset by a 63% decrease in MS submitted policies. The overall increase in submitted policies for Senior products was primarily due to increases in the number of average productive agents ~~we employ and overall close rates, which was partially driven by increased training for flex agents. During~~decreased 28% during the three months ended March 31, ~~2022, we~~2023, compared to the three months ended March 31,

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2022; however, due to a higher mix of tenured agents and an increased ~~the number of average productive agents by 72%~~focus on agent training and development, productivity per agent increased 6% and overall close rates increased 12%.

Total submitted policies ~~increased by 37%~~for all products decreased 26% for the nine months ended March 31, ~~2022,~~2023, compared to the nine months ended March 31, ~~2021.~~2022, in line with our updated operating strategy to reduce the Senior distribution business and focus resources on Healthcare Services. The increase was driven primarily by a 49% increase in MA submitted policies and a 20% increase in DVH submitted policies, partially offset by a 74% decrease in MS submitted policies. The overall increase in submitted policies for Senior products was primarily due to increases in the number of average productive agents ~~we employ, partially offset by lower agent productivity. During~~decreased 47% during the nine months ended March 31, ~~2022, we~~2023, compared to the nine months ended March 31, 2022; however, due to a higher mix of tenured agents and an increased ~~the number of average productive agents by 100%~~focus on agent training and ~~average~~development, productivity per agent ~~declined by 29%~~increased 34% and overall close rates increased 28%.

Approved Policies

Approved policies represents the number of submitted policies that were approved by our insurance carrier partners for the identified product during the indicated period. Not all approved policies will go in force.

The following table shows the number of approved policies for the periods presented:


		Three Months Ended March 31,		Nine Months Ended March 31,			Three Months Ended March 31,		Nine Months Ended March 31,
		2022	2021	2022	2021		2023	2022	2023	2022
Medicare Advantage	Medicare Advantage	196,377	132,950	546,031	384,137	Medicare Advantage	165,530	196,377	467,540	546,031
Medicare Supplement	Medicare Supplement	1,159	3,073	4,654	19,849	Medicare Supplement	557	1,159	2,184	4,654
Dental, Vision and Hearing	Dental, Vision and Hearing	34,486	34,517	101,251	84,370	Dental, Vision and Hearing	16,968	34,486	47,940	101,251
Prescription Drug Plan	Prescription Drug Plan	1,095	2,109	5,315	9,556	Prescription Drug Plan	521	1,095	1,794	5,315
Other	Other	3,836	5,129	9,199	10,209	Other	1,029	3,836	3,932	9,199
Total	Total	236,953	177,778	666,450	508,121	Total	184,605	236,953	523,390	666,450

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In general, the relationship between submitted policies and approved policies has been steady over time. Therefore, factors impacting the number of submitted policies also impact the number of approved policies.

Total approved policies ~~increased by 33%~~for all products decreased 22% for the three months ended March 31, ~~2022,~~2023, compared to the three months ended March 31, ~~2021. The increase was driven primarily by a 48% increase~~2022, in ~~MA approved policies, partially offset by a 62% decrease in MS approved policies.~~line with our updated operating strategy to reduce the Senior distribution business and focus resources on Healthcare Services. Total approved policies ~~increased~~decreased by ~~31%~~21% for the nine months ended March 31, ~~2022,~~2023, compared to the nine months ended March 31, ~~2021. The increase was driven primarily by a 42% increase in MA approved policies and a 20% increase in DVH approved policies, partially offset by a 77% decrease in MS approved policies.~~2022. Fluctuations in approved policies are normally in direct correlation to submitted policies; however, ~~this year~~due to our increased focus on agent training and development and a higher mix of tenured agents, we experienced a 2%3% and ~~5% decrease~~a 7% improvement in MAthe submitted-to-approved conversion rates for the three and nine months ended March 31, ~~2022,~~2023, compared to the three and nine months ended March 31, ~~2021, respectively, driven by higher consumer switching behavior. This resulted in MA approved policies growing at a slower rate than MA submitted policies.~~2022.

Lifetime Value of Commissions per Approved Policy

The lifetime value of commissions (the “LTV”) per approved policy represents commissions estimated to be collected over the estimated life of an approved policy based on multiple factors, including but not limited to, contracted commission rates, carrier mix, and expected policy persistency with applied constraints. The LTV per approved policy is equal to the sum of the commission revenue due upon the initial sale of a policy, and when applicable, an estimate of future renewal commissions. The estimate of the future renewal commissions is determined using contracted renewal commission rates constrained by a persistency-adjusted 10-year renewal period based on a combination of our historical experience and available insurance carrier historical experience to estimate renewal revenue only to the extent probable that a material reversal in revenue would not be expected to occur. These factors may result in varying values from period to period. The LTV per approved policy represents commissions only from policies sold during the period. That figure excludes renewals during the period from policies originally sold in a prior period with insurance carrier partners whose contracts preclude us from recognizing variable consideration for estimated renewal commissions andperiod; it does not include any updated estimates of prior period variable consideration based on actual policy renewals in the current period.

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The following table shows the LTV per approved policy for the periods presented:


		Three Months Ended March 31,				Nine Months Ended March 31,					Three Months Ended March 31,				Nine Months Ended March 31,
		2022		2021		2022		2021			2023		2022		2023		2022
Medicare Advantage	Medicare Advantage	$	933	$	1,362	$	935	$	1,290	Medicare Advantage	$	965	$	933	$	888	$	935
Medicare Supplement	Medicare Supplement	949		1,345		1,275		1,263		Medicare Supplement	871		949		994		1,275
Dental, Vision and Hearing	Dental, Vision and Hearing	120		129		123		140		Dental, Vision and Hearing	91		120		95		123
Prescription Drug Plan	Prescription Drug Plan	229		213		235		230		Prescription Drug Plan	194		229		211		235
Other	Other	95		60		77		95		Other	123		95		100		77

The LTV per MA approved policy ~~decreased 31%~~increased 3% for the three months ended March 31, ~~2022,~~2023, compared to the three months ended March 31, ~~2021. The MA LTV was negatively impacted by lower MA persistency rates, increase in constraint, the switch~~2022, primarily due to ~~policy level persistency,~~ carrier mix, and higher provision for first year and renewal year lapse rates, somewhat offset by higher commission rates. The LTV per MS approved policy decreased 29% for the three months ended March 31, 2022, compared to the three months ended March 31, 2021. The MS LTV was negatively impacted by an increase in provision for intra-year lapses and a shift in carrier mix towards carriers that pay us more upfront but less over time.mix.

The LTV per MA approved policy decreased ~~28% while the LTV per MS approved policy increased 1%~~5% for the nine months ended March 31, ~~2022,~~2023, compared to the nine months ended March 31, ~~2021.~~ 2022. The MA LTV was negatively impacted by carrier mix and lower MA persistency rates, which includes an increase in constraint ~~the switch to policy level persistency,~~

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~~carrier mix,~~ and higher provision for ~~first year and~~ renewal year lapse rates, somewhat offset by higher commission rates.

Healthcare Services

The total number of SelectRx members represents the amount of active customers to which an order has been shipped, as this is the primary key driver of revenue for Healthcare Services.

The following table shows the total number of SelectRx members as of the periods presented:


	March 31, 2023	March 31, 2022
Total SelectRx Members	44,993	16,991

The total number of SelectRx members increased by 165% as of March 31, 2023, compared to March 31, 2022, due to the strategic growth of Healthcare Services.

Combined Senior and Healthcare Services - Consumer Per Unit Economics

~~Per~~The opportunity to leverage our existing database and distribution model to improve access to healthcare services for our consumers has created a need for us to review our key metrics related to our per unit economics. As we think about the revenue and expenses for Healthcare Services, we note that they are derived from the marketing acquisition costs associated with the sale of an MA or MS policy, some of which costs are allocated directly to Healthcare Services, and therefore determined that our per unit economics measure should include components from both Senior and Healthcare Services. See details of revenue and expense items included in the calculation below.

Combined Senior and Healthcare Services consumer per unit economics represents total MA and MS ~~commissions,~~commissions; other product ~~commissions,~~commissions; other revenues, including revenues from Healthcare Services; and ~~costs~~operating expenses associated with Senior and Healthcare Services, each shown per number of approved MA and MS ~~approved~~ policies over a given time period. Management assesses the business on a per-unit basis to help ensure that the revenue opportunity associated with a successful policy sale is attractive relative to the marketing acquisition cost. Because not all acquired leads result in a successful policy sale, all per-policy metrics are based on approved policies, which is the measure that triggers revenue recognition.

The MA and MS commission per MA/MS policy represents the LTV for policies sold in the period. Other commission per MA/MS policy represents the LTV for other products sold in the period, including DVH prescription drug plan, and other products, which management views as additional commission revenue on our

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agents’ core function of MA/MS policy sales. ~~Other~~Pharmacy revenue per MA/MS policy represents ~~the~~revenue from SelectRx and other revenue per MA/MS policy represents revenue from Population Health, production bonuses, marketing development funds, lead ~~sales~~generation revenue, and adjustments from ~~InsideResponse, revenue generated through~~ the ~~Population Health platform, and updated estimates~~Company’s reassessment of ~~prior period variable consideration based on actual policy renewals in the current period.~~its cohorts’ transaction prices. Total operating expenses per MA/MS policy represents all of the operating expenses within ~~Senior.~~Senior and Healthcare Services. The ~~Revenue~~revenue to customer acquisition cost (“CAC”) multiple represents total revenue per MA/MS policy as a multiple of total marketing acquisition cost, which represents the direct costs of acquiring leads. These costs are included in marketing and advertising expense within the total operating expenses per MA/MS policy.

The following table shows combined Senior and Healthcare Services consumer per unit economics for the periods presented. Based on the seasonality of Senior and the fluctuations between quarters, we believe that the most relevant view of per unit economics is on a rolling 12-month basis. All per MA/MS policy metrics below are based on the sum of approved MA/MS policies, as both products have similar commission profiles. ~~These metrics are the basis on which management assesses the business.~~


		Twelve Months Ended March 30,						Twelve Months Ended March 31,
(dollars per approved policy):	(dollars per approved policy):	2022			2021				(dollars per approved policy):	2023			2022
Medicare Advantage and Medicare Supplement approved policies	Medicare Advantage and Medicare Supplement approved policies	636,195			464,653				Medicare Advantage and Medicare Supplement approved policies	586,238			636,195
Medicare Advantage and Medicare Supplement commission per MA/MS policy	Medicare Advantage and Medicare Supplement commission per MA/MS policy	$	963		$	1,286			Medicare Advantage and Medicare Supplement commission per MA/MS policy	$	886		$	963
Other commission per MA/MS policy	Other commission per MA/MS policy	29			38				Other commission per MA/MS policy	15			29
Other per MA/MS policy		(14)			166
Pharmacy revenue per MA/MS policy									Pharmacy revenue per MA/MS policy	320			52
Other revenue per MA/MS policy									Other revenue per MA/MS policy	66			(64)
Total revenue per MA/MS policy	Total revenue per MA/MS policy	978			1,490				Total revenue per MA/MS policy	1,287			980
Total operating expenses per MA/MS policy	Total operating expenses per MA/MS policy	(1,173)			(947)				Total operating expenses per MA/MS policy	(1,167)			(1,176)
Adjusted EBITDA per MA/MS policy (1)	Adjusted EBITDA per MA/MS policy (1)	$	(195)		$	543			Adjusted EBITDA per MA/MS policy (1)	$	120		$	(196)
Adjusted EBITDA Margin per MA/MS policy (1)	Adjusted EBITDA Margin per MA/MS policy (1)	(20)		%	36		%		Adjusted EBITDA Margin per MA/MS policy (1)	9		%	(20)		%
Revenue/CAC multiple	Revenue/CAC multiple	1.8X			3.1X				Revenue/CAC multiple	3.5X			1.8X

(1) These financial ~~metrics~~measures are not calculated in accordance with GAAP. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” for information regarding our use of these non-GAAP financial measures and a reconciliation of such measures to their nearest comparable financial measures calculated and presented in accordance with GAAP.

Total revenue per MA/MS policy ~~decreased 34%~~increased 31% for the twelve months ended March 31, ~~2022,~~2023, compared to the twelve months ended March 31, ~~2021. Approximately 50% of the decrease was~~2022, primarily due to the ~~lower LTV of MA policies. Approximately 40% of the decrease was due to the $145.0 million adjustment from a change~~increase in estimate of primarily Senior MA cohort transaction prices, discussed further below in “Key Components of our Results of Operations”, and the remainder was due to a decrease in overall MS revenue somewhat offset by higher marketing development funds receivedpharmacy revenue. Total operating expenses per ~~approved~~ MA/MS policy ~~and the addition of revenue from SelectRx. Total cost per~~

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~~policy increased 24%~~were nearly flat for the twelve months ended March 31, ~~2022,~~2023, compared to the twelve months ended March 31, ~~2021, due to higher fulfillment costs associated with scaling Population Health and SelectRx, higher sales expenses~~2022, driven by a ~~reduction in agent productivity during AEP, and an increase~~decrease in our marketing and advertising ~~expense driven~~costs, offset by ~~lower close rates during AEP.~~an increase in cost of goods sold-pharmacy revenue for Healthcare Services due to the growth of the business.

Life

Life premium represents the total premium value for all policies that were approved by the relevant insurance carrier partner and for which the policy document was sent to the policyholder and payment information was received by the relevant insurance carrier partner during the indicated period. Because our commissions are earned based on a percentage of total premium, total premium volume for a given period is the key driver of revenue for Life.

The following table shows term and final expense premiums for the periods presented:

Three Months Ended March 31, Nine Months Ended March 31,
(in thousands): 2022 2021 2022 2021
Term Premiums $ 14,933 $ 19,043 $ 45,990 $ 56,784
Final Expense Premiums 28,532 24,817 83,718 56,269
Total $ 43,465 $ 43,860 $ 129,708 $ 113,053

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	Three Months Ended March 31,				Nine Months Ended March 31,
(in thousands):	2023		2022		2023		2022
Term Premiums	$	17,512	$	14,933	$	48,433	$	45,990
Final Expense Premiums	19,308		28,532		58,766		83,718
Total	$	36,820	$	43,465	$	107,199	$	129,708

Total term premiums ~~decreased 22%~~increased 17% for the three months ended March 31, ~~2022,~~2023, compared to the three months ended March 31, ~~2021.~~2022, due to a 4% increase in the average premium per policy sold and a 13% increase in the number of policies sold. Final expense premiums decreased 32% for the three months ended March 31, 2023, compared to the three months ended March 31, 2022. The number of policies sold declined ~~30%~~39% driven by a lower average agent headcount, which was somewhat offset by a 10% increase in the average premium per policy sold.

Total term premiums increased 5% for the nine months ended March 31, 2023, compared to the nine months ended March 31, 2022, due to a 9% increase in the average premium per policy sold, somewhat offset by the 3% decrease in the number of policies sold which was driven by a lower average agent headcount. Final expense premiums decreased 30% for the nine months ended March 31, 2023, compared to the nine months ended March 31, 2022. The number of policies sold declined 38% driven by a lower average agent headcount, which was somewhat offset by a 12% increase in the average premium per policy sold. Final expense premiums increased 15% for the three months ended March 31, 2022, compared to the three months ended March 31, 2021, due to an increase in the number of agents selling final expense policies.

Total term premiums decreased 19% for the nine months ended March 31, 2022, compared to the nine months ended March 31, 2021. The number of policies sold declined 28% driven by lower agent headcount, which was somewhat offset by a 12% increase in the average premium per policy sold. Final expense premiums increased 49% for the nine months ended March 31, 2022, compared to the nine months ended March 31, 2021, due to an increase in the number of agents selling final expense policies.

Auto & Home

Auto & Home premium represents the total premium value of all new policies that were approved by our insurance carrier partners during the indicated period. Because our commissions are earned based on a percentage of total premium, total premium volume for a given period is the key driver of revenue for Auto & Home.

The following table shows premiums for the periods presented:


		Three Months Ended March 31,				Nine Months Ended March 31,					Three Months Ended March 31,				Nine Months Ended March 31,
(in thousands):	(in thousands):	2022		2021		2022		2021		(in thousands):	2023		2022		2023		2022
Premiums	Premiums	$	12,516	$	12,010	$	36,358	$	42,165	Premiums	$	12,828	$	12,516	$	36,456	$	36,358

Total premiums ~~increased 4%~~remained flat for the three months ended March 31, ~~2022,~~2023, compared to the three months ended March 31, ~~2021, as our agent force was relatively flat year over year.~~2022. The number of policies sold and the average premium per policy sold both increased by 1%.

Total premiums ~~decreased 14%~~remained flat for the nine months ended March 31, ~~2022,~~2023, compared to the nine months ended March 31, ~~2021~~2022. The number of policies sold decreased 5%, ~~primarily due to our strategy to reduce~~which was offset by a 5.9% increase in the ~~growth in Auto & Home.~~average premium per policy sold.

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Non-GAAP Financial Measures

To supplement our financial statements presented in accordance with GAAP and to provide investors with additional information regarding our GAAP financial results, we have presented in this Quarterly Report on Form 10-Q Adjusted EBITDA and Adjusted EBITDA Margin, which are non-GAAP financial measures. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly titled measures presented by other companies.

Adjusted EBITDA. We define Adjusted EBITDA as income (loss) before interest expense, income tax expense (benefit), depreciation and amortization, and certain add-backs for transaction costs and non-cash or non-recurring expenses, including restructuring, ~~and~~ share-based compensation ~~expenses.~~expenses, and any impairment charges. The most directly comparable GAAP measure is net income (loss). We monitor and have presented in this Quarterly Report on Form 10-Q Adjusted EBITDA because it is a key measure used by our management and Board of

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Directors to understand and evaluate our operating performance, to establish budgets, and to develop operational goals for managing our business. In particular, we believe that excluding the impact of these expenses in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core operating performance.

We believe that this non-GAAP financial measure helps identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude in the calculations of this non-GAAP financial measure. Accordingly, we believe that this financial measure provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects.

Adjusted EBITDA is not prepared in accordance with GAAP and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of this non-GAAP financial measure rather than net income (loss), which is the most directly comparable financial measure calculated and presented in accordance with GAAP. These limitations include the fact that Adjusted EBITDA excludes interest expense, depreciation and amortization expense, share-based compensation expense, income tax expense (benefit), and other non-recurring expenses that are one-time in nature. In addition, other companies may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison.

The following tables reconcile Adjusted EBITDA and net ~~income (loss),~~loss, the most directly comparable financial measure calculated and presented in accordance with GAAP, for the periods presented:

Three Months Ended March 31, ~~2022~~2023:


(in thousands)	(in thousands)	Senior		Life		Auto & Home		Corp & Elims		Consolidated		(in thousands)	Senior		Healthcare Services		Life		Auto & Home		Corp & Elims		Consolidated
Net loss										$	(6,448)
Net income												Net income											$	9,264
Share-based compensation expense	Share-based compensation expense									2,143		Share-based compensation expense											2,959
Non-recurring expenses (1)	Non-recurring expenses (1)									703		Non-recurring expenses (1)											433

Depreciation and amortization	Depreciation and amortization									6,679		Depreciation and amortization											7,098
Loss on disposal of property, equipment, and software, net										384
Loss on disposal of property, equipment, and software												Loss on disposal of property, equipment, and software											15
Interest expense, net	Interest expense, net									12,179		Interest expense, net											21,105

Income tax benefit										(2,649)
Income tax expense												Income tax expense											3,152
Adjusted EBITDA	Adjusted EBITDA	$	32,182	$	(1,888)	$	1,150	$	(18,453)	$	12,991	Adjusted EBITDA	$	59,166	$	(3,366)	$	5,303	$	2,591	$	(19,668)	$	44,026

(1) These expenses consist of costs related to the Senior Secured Credit Facility and non-restructuring severance expenses.

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Three Months Ended March 31, 2022:


(in thousands)	Senior		Healthcare Services		Life		Auto & Home		Corp & Elims		Consolidated
Net loss											$	(7,025)
Share-based compensation expense											2,143
Non-recurring expenses (1)											703


Depreciation and amortization											6,679
Loss on disposal of property, equipment, and software											384
Interest expense, net											12,179

Income tax benefit											(2,846)
Adjusted EBITDA	$	39,950	$	(7,768)	$	(2,662)	$	1,150	$	(18,453)	$	12,217

(1) These expenses primarily consist of costs related to the change in administrative agent with respect to the Senior Secured Credit Facility and severance expenses.

Nine Months Ended March 31, 2023:


(in thousands)	Senior		Healthcare Services		Life		Auto & Home		Corp & Elims		Consolidated
Net loss											$	(10,706)
Share-based compensation expense											8,525
Transaction costs(1)											3,003


Depreciation and amortization											21,087
Loss on disposal of property, equipment, and software											386
Interest expense, net											58,885

Income tax benefit											(1,053)
Adjusted EBITDA	$	138,933	$	(24,456)	$	16,371	$	7,315	$	(58,036)	$	80,127

(1) These expenses primarily consist of costs related to the Fourth Amendment to the Senior Secured Credit Facility and non-restructuring severance expenses.

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~~Three~~Nine Months Ended ~~March 31, 2021:~~

(in thousands) Senior Life Auto & Home Corp & Elims Consolidated
Net income $ 35,235
Share-based compensation expense 1,429
Non-recurring expenses (1)
4,667
Fair value adjustments to contingent earnout obligations 334
Depreciation and amortization 4,323
Loss on disposal of property, equipment, and software 101
Interest expense, net 7,355
Loss on extinguishment of debt 3,315
Income tax expense 6,852
Adjusted EBITDA $ 75,489 $ 1,598 $ 1,096 $ (14,572) $ 63,611
~~(1) These expenses primarily consist of costs incurred for the First Amendment, the acquisition of a lead distribution company, re-designation of the hedge, and the Secondary Offering.~~

~~Nine months ended~~ March 31, 2022:


(in thousands)	(in thousands)	Senior		Life		Auto & Home		Corp & Elims		Consolidated		(in thousands)	Senior		Healthcare Services		Life		Auto & Home		Corp & Elims		Consolidated
Net loss	Net loss									$	(190,609)	Net loss											$	(192,820)
Share-based compensation expense	Share-based compensation expense									6,252		Share-based compensation expense											6,252
Non-recurring expenses (1)	Non-recurring expenses (1)									2,857		Non-recurring expenses(1)											2,857

Depreciation and amortization	Depreciation and amortization									17,957		Depreciation and amortization											17,957
Loss on disposal of property, equipment, and software, net										739
Loss on disposal of property, equipment, and software												Loss on disposal of property, equipment, and software											739
Interest expense, net	Interest expense, net									31,300		Interest expense, net											31,300

Income tax benefit	Income tax benefit									(65,229)		Income tax benefit											(65,984)
Adjusted EBITDA	Adjusted EBITDA	$	(149,424)	$	2,265	$	3,957	$	(53,531)	$	(196,733)	Adjusted EBITDA	$	(129,311)	$	(20,113)	$	(701)	$	3,957	$	(53,531)	$	(199,699)

(1) These expenses primarily consist of costs incurred for the Second Amendment, costs related to the acquisitions of Express Med Pharmaceuticals and Simple Meds, costs related to the change in administrative agent with respect to the Senior Secured Credit Facility, and severance expenses.

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~~Nine Months Ended March 31, 2021:~~

(in thousands) Senior Life Auto & Home Corp & Elims Consolidated
Net income $ 124,826
Share-based compensation expense 3,689
Non-recurring expenses (1)
5,490
Fair value adjustments to contingent earnout obligations 1,487
Depreciation and amortization 11,260
Loss on disposal of property, equipment, and software 261
Interest expense, net 20,898
Loss on extinguishment of debt 3,315
Income tax expense 31,846
Adjusted EBITDA $ 218,946 $ 16,385 $ 6,863 $ (39,122) $ 203,072
(1) These expenses primarily consist of costs incurred for the First Amendment, the acquisition of a lead distribution company, re-designation of the hedge, and the Secondary Offering as well as non-recurring compensation to a former executive, severance expenses, and expenses related to business continuity in response to the COVID-19 pandemic.

Key Components of our Results of Operations

The following table sets forth our operating results and related percentage of total revenues for the periods presented:

Three Months Ended March 31, Nine Months Ended March 31,
(in thousands) 2022 2021 2022 2021
Revenue
Commission $ 222,538 81 % $ 235,216 89 % $ 495,494 79 % $ 660,631 89 %
Production bonus and other 52,575 19 % 30,130 11 % 132,127 21 % 85,054 11 %
Total revenue 275,113 100 % 265,346 100 % 627,621 100 % 745,685 100 %
Operating costs and expenses
Cost of revenue 119,459 43 % 71,439 27 % 359,732 57 % 206,605 28 %
Marketing and advertising 125,082 45 % 116,690 44 % 409,005 65 % 298,696 40 %
General and administrative 21,031 8 % 19,251 7 % 64,570 10 % 44,496 6 %
Technical development 6,436 2 % 4,860 2 % 18,675 3 % 13,458 2 %
Total operating costs and expenses 272,008 98 % 212,240 80 % 851,982 135 % 563,255 76 %
Income (loss) from operations 3,105 1 % 53,106 20 % (224,361) (36) % 182,430 24 %
Interest expense, net (12,179) (4) % (7,355) (3) % (31,300) (5) % (20,898) (3) %
Loss on extinguishment of debt — — % (3,315) (1) % — — % (3,315) — %
Other expense, net (23) — % (349) — % (177) — % (1,545) — %
Loss before income tax benefit (9,097) (3) % 42,087 16 % (255,838) (41) % 156,672 21 %
Income tax benefit (2,649) (1) % 6,852 3 % (65,229) (10) % 31,846 4 %
Net income (loss) $ (6,448) (2) % $ 35,235 13 % $ (190,609) (31) % $ 124,826 17 %


	Three Months Ended March 31,								Nine Months Ended March 31,
(in thousands)	2023				2022				2023				2022
Revenue
Commission	$	197,258	66	%	$	221,764	81	%	$	533,627	68	%	$	492,528	79	%

Pharmacy	66,948		22	%	18,478		7	%	159,641		20	%	31,715		5	%
Other	35,192		12	%	34,097		12	%	87,802		12	%	100,412		16	%
Total revenue	299,398		100	%	274,339		100	%	781,070		100	%	624,655		100	%
Operating costs and expenses
Cost of revenue	79,186		26	%	96,491		35	%	235,827		30	%	319,469		51	%
Cost of goods sold—pharmacy revenue	62,302		21	%	19,294		7	%	154,753		20	%	34,338		5	%
Marketing and advertising	90,205		31	%	125,082		46	%	237,724		31	%	409,005		66	%
Selling, general, and administrative	27,544		9	%	24,705		9	%	86,662		11	%	70,495		11	%
Technical development	6,434		2	%	6,436		2	%	18,860		2	%	18,675		3	%

Total operating costs and expenses	265,671		89	%	272,008		99	%	733,826		94	%	851,982		136	%
Income (loss) from operations	33,727		11	%	2,331		1	%	47,244		6	%	(227,327)		(36)	%
Interest expense, net	(21,105)		(7)	%	(12,179)		(4)	%	(58,885)		(7)	%	(31,300)		(5)	%

Other income (expense), net	(206)		—	%	(23)		—	%	(118)		—	%	(177)		—	%
Income (loss) before income tax expense (benefit)	12,416		4	%	(9,871)		(3)	%	(11,759)		(1)	%	(258,804)		(41)	%
Income tax expense (benefit)	3,152		1	%	(2,846)		(1)	%	(1,053)		—	%	(65,984)		(10)	%
Net income (loss)	$	9,264	3	%	$	(7,025)	(2)	%	$	(10,706)	(1)	%	$	(192,820)	(31)	%

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Revenue

~~Our primary source~~We earn revenue in the form of ~~revenue are the commissions earned for the sale of first year and renewal policies~~commission payments from our insurance carrier ~~partners, which are~~customers, for the initial year the policy is in effect (“first year”) and, where applicable, for each subsequent year the policy renews (“renewal year”), as presented in our condensed consolidated statements of comprehensive income as commission revenue. ~~Additionally, we earn~~We also receive certain volume-based bonuses from some carriers on ~~first-year~~first year policies sold ~~which we refer to as production bonuses and marketing development funds,~~ based on attaining various predetermined target sales levels or other agreed upon ~~objectives,~~objectives. These bonuses are referred to as ~~presented~~“production bonuses” or “marketing development funds” and are included in other revenue in the condensed consolidated statements of comprehensive ~~income as~~income. Pharmacy revenue includes revenue from the sale of prescription and OTC medications from SelectRx. Other revenue includes production ~~bonus~~bonuses and ~~other~~marketing development funds noted above, revenue ~~(“other revenue”). Furthermore, the production bonus~~from Population Health for performing HRAs and ~~other revenue also includes the~~making transfers or appointments with VBC partners, and external lead generation revenue from ~~InsideResponse and the revenue generated through the Population Health platform.~~InsideResponse.

Our commission contracts with our insurance carrier partners contain a single performance obligation satisfied at the point in time to which we allocate the total transaction price. The transaction price is identified as the first year commission due upon the initial sale of a policy as well as an estimate of future renewal commissions and ~~other~~production bonus revenue when applicable. After a policy is sold, we have no material additional or recurring obligations to the policyholder or the insurance carrier partner. Therefore, we do not incur any additional expense related to our receipt of future renewal commissions or ~~other~~production bonus revenue. All of the costs associated with

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the sale of an individual policy are incurred prior to or at the time of the initial sale of an individual policy. ~~Commission and other revenue are~~Revenue is recognized at different milestones for ~~each segment~~Senior, Life, and Auto & Home and is based on the contractual enforceable rights, our historical experience, and established customer business practices. ~~InsideResponse's lead sales~~Lead generation revenue is recognized when the generated lead is accepted by our customers, which is the point of sale, and we have no performance obligation after the delivery. Revenues generated from SelectRx are recognized upon shipment. At the time of shipment, we have performed substantially all of our performance obligations and do not experience a significant level of returns or re-shipments. There are no future revenue streams associated as patients have the option to cancel their service at any time with no further payments due. Revenue from Population Health is recognized when the HRA has been performed or the agreed-upon task has been completed for a VBC partner, the transaction price is known based on volume and contractual prices, and we have no further performance obligation.

The following table presents our ~~commission revenue, production bonus and other revenue, and total~~ revenue for the periods presented and the percentage changes from the prior year:


		Three Months Ended March 31,				Percent Change	Nine Months Ended March 31,				Percent Change		Three Months Ended March 31,				Percent Change	Nine Months Ended March 31,				Percent Change
(dollars in thousands)	(dollars in thousands)	2022		2021		2021 vs. 2020	2022		2021		2021 vs. 2020	(dollars in thousands)	2023		2022		2023 vs. 2022	2023		2022		2023 vs. 2022
Commission	Commission	$	222,538	$	235,216	(5)%	$	495,494	$	660,631	(25)%	Commission	$	197,258	$	221,764	(11)%	$	533,627	$	492,528	8%
Production bonus and other		52,575		30,130		74%	132,127		85,054		55%

Pharmacy												Pharmacy	66,948		18,478		262%	159,641		31,715		403%
Other												Other	35,192		34,097		3%	87,802		100,412		(13)%
Total revenue	Total revenue	$	275,113	$	265,346	4%	$	627,621	$	745,685	(16)%	Total revenue	$	299,398	$	274,339	9%	$	781,070	$	624,655	25%

Three Months Ended March 31, ~~2022~~2023 and ~~2021–~~2022–Commission revenue decreased ~~$12.7~~$24.5 million, or 5%11%, for the three months ended March 31, ~~2022,~~2023, and included decreases in Senior and Life commission revenue of ~~$6.3~~$25.9 million and ~~$4.5~~$3.1 million, respectively, ~~partially offset by~~and an increase in Auto & Home commission revenue of ~~$0.6~~$1.4 million. ~~For~~The decrease in Senior ~~despite a 33% increase in approved policies, the reduction in~~ revenue was driven by a ~~31% reduction~~22% decrease in approved policies offset by a 10% increase in LTV’s ~~of approved MA policies, as discussed above.~~and higher commission rates. Life’s revenue ~~decline~~decrease was primarily driven by a $5.0 million decrease in final expense revenue, offset by a $1.9 million increase in term revenue. The $48.5 million increase in pharmacy revenue was due to the increase in members from March 31, 2022, and the expansion of the SelectRx business. The $1.1 million increase in other revenue was primarily driven by a $4.0 million ~~decrease in term life revenue. The $22.4 million~~ increase in production bonus ~~and other~~ revenue, ~~was primarily driven by $18.4 million of new pharmacy prescription revenue from SelectRx and a $6.1 million increase in marketing development funds received for Senior,~~ partially offset by a ~~reduction of $4.5~~$2.7 million decrease in external lead generation revenue ~~from InsideResponse, as more~~and a decrease in Population Health revenue of ~~their leads were consumed within the Senior division than in the prior year.~~$0.8 million.

Nine Months Ended March 31, ~~2022~~2023 and ~~2021–~~2022–Commission revenue ~~decreased $165.1~~increased $41.1 million, or ~~25%~~8%, for the nine months ended March 31, ~~2022, which~~2023, and included ~~decreases~~increases in Senior ~~Life,~~ and Auto & Home commission revenue of ~~$155.7 million, $2.7~~$39.5 million and ~~$1.8~~$2.8 million, ~~respectively.~~respectively, offset by a decrease in Life commission revenue of $6.6 million. For Senior, excluding the $145.0 million cohort adjustment recorded during the nine months ended March 31, 2022, commission revenue ~~decline~~decreased $105.5 million during the nine months ended March 31, 2023, which was driven by ~~the 28%~~a 21% decrease in approved policies and a 1% reduction in LTV’s, ~~of approved MA policies and the $145.0 million downward adjustment from a change in estimate of Senior MA cohort transaction prices made during the three months ended December 31, 2021.~~partially offset by higher commission rates. Life’s revenue decline was primarily driven by ~~an $11.4~~a $7.8 million decrease in ~~term life revenue, partially offset by an $8.7 million~~

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~~increase in~~ final expense ~~revenue, which was a result of the investment we have made in agents to grow sales of these policies.~~revenue. The ~~revenue decline for Auto & Home was driven by our strategy to reduce the growth in that division. The $47.1~~$127.9 million increase in ~~production bonus~~pharmacy revenue was due to the increase in members from March 31, 2022, and the expansion of the SelectRx business. The $12.6 million decrease in other revenue was primarily driven by ~~$31.6~~an $11.5 million ~~of new pharmacy prescription revenue from SelectRx and a $21.7 million increase in marketing development funds received for Senior, partially offset by a reduction of $13.1 million~~decrease in external lead generation revenue ~~from InsideResponse, as more~~and a $2.9 million decrease in production bonus revenue, offset by an increase in Population Health revenue of ~~their leads were consumed within Senior than in the prior year.~~$1.8 million.

Operating Costs and Expenses

Cost of Revenue

Cost of revenue represents the direct costs associated with fulfilling our obligations to our ~~insurance carrier partners~~customers in the Senior, Life, Auto & Home, and Population Health divisions, primarily compensation, benefits, and licensing for ~~the sale of insurance policies. Such costs primarily consist of compensation and related benefit costs for~~sales agents, customer success agents, fulfillment specialists, and others directly engaged in ~~servicing policy holders.~~serving customers. It

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also includes ~~licensing costs for our agents and~~ allocations for facilities, telecommunications, and software maintenance costs, which are all based on headcount. Facilities costs include rent and utilities expenses and other costs to maintain our office locations. Telecommunications and software maintenance costs includes costs related to the internal phone systems and various software applications that our agents use to make sales. These costs directly correlate to the number of agents we have as we are primarily charged based on per person usage for the phone systems and software applications. ~~For SelectRx, cost of revenue represents the direct costs associated with inventory used to fulfill prescriptions for senior medication management.~~

The following table presents our cost of revenue for the periods presented and the percentage ~~changes~~change from the prior year:


		Three Months Ended March 31,				Percent Change	Nine Months Ended March 31,				Percent Change		Three Months Ended March 31,				Percent Change	Nine Months Ended March 31,				Percent Change
(dollars in thousands)	(dollars in thousands)	2022		2021		2021 vs. 2020	2022		2021		2021 vs. 2020	(dollars in thousands)	2023		2022		2023 vs. 2022	2023		2022		2023 vs. 2022
Cost of revenue	Cost of revenue	$	119,459	$	71,439	67%	$	359,732	$	206,605	74%	Cost of revenue	$	79,186	$	96,491	(18)%	$	235,827	$	319,469	(26)%

Three Months Ended March 31, ~~2022~~2023 and ~~2021–~~2022–Cost of revenue ~~increased $48.0~~decreased $17.3 million, or ~~67%~~18%, for the three months ended March 31, ~~2022,~~2023, primarily due to a ~~$29.2~~$13.3 million ~~increase~~decrease in compensation costs, ~~driven by the growth~~a $1.3 million decrease in ~~the number of employees within Senior. The increase~~licensing costs, and $2.4 million decrease in ~~headcount also drove increases in the~~ allocations ~~of $2.8 million~~ for facilities, telecommunications, and software maintenance costs, ~~and $0.7 million for licensing costs. Additionally, there was $13.6 million~~all of ~~new medication costs~~which is due to the reduction in ~~cost of revenue for SelectRx.~~our agent headcount.

Nine Months Ended March 31, ~~2022~~2023 and ~~2021–~~2022–Cost of revenue ~~increased $153.1~~decreased $83.6 million, or ~~74%~~26%, for the nine months ended March 31, ~~2022,~~2023, primarily due to a ~~$104.3~~$61.4 million ~~increase~~decrease in compensation costs, ~~driven by the growth~~an $11.9 million decrease in ~~the number of employees within Senior. The increase~~licensing costs, and a $10.3 million decrease in ~~headcount also drove increases in the~~ allocations ~~of $13.1 million~~ for facilities, telecommunications, and software maintenance costs, ~~and $7.8 million~~all of which is due to the reduction in our agent headcount.

Cost of Goods Sold-Pharmacy Revenue

Cost of goods sold-pharmacy revenue represents the direct costs associated with fulfilling pharmacy patient orders for ~~licensing costs. Additionally, there was $23.8 million~~SelectRx. Such costs primarily consist of ~~new~~ medication costs inand compensation and related benefit costs for licensed pharmacists, pharmacy technicians, and other employees directly associated with fulfilling orders such as packaging and shipping clerks. It also includes shipping, supplies, other order fulfillment costs including part of the one-time customer onboarding costs, and certain facilities overhead costs such as rent, maintenance, and depreciation related to the pharmacy production process.

The following table presents our cost of goods sold-pharmacy revenue for ~~SelectRx.~~the periods presented and the percentage change from the prior year:


	Three Months Ended March 31,				Percent Change	Nine Months Ended March 31,				Percent Change
(dollars in thousands)	2023		2022		2023 vs. 2022	2023		2022		2023 vs. 2022
Cost of goods sold—pharmacy revenue	$	62,302	$	19,294	223%	$	154,753	$	34,338	351	%

Three Months Ended March 31, 2023 and 2022–Cost of goods sold-pharmacy revenue increased $43.0 million, or 223%, for the three months ended March 31, 2023, due to a $37.2 million increase in medication costs, a $1.8 million increase in shipping and fulfillment costs, and a $2.6 million increase in compensation costs as the number of SelectRx members increased 165% over the prior year.

Nine Months Ended March 31, 2023 and 2022–Cost of goods sold-pharmacy revenue increased $120.4 million, or 351%, for the nine months ended March 31, 2023, due to a $96.6 million increase in medication costs, a $5.5 million increase in shipping and fulfillment costs, and a $14.4 million increase in compensation costs as the number of SelectRx members increased 165% over the prior year.

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Marketing and Advertising

Marketing and advertising expenses consist primarily of the direct costs associated with marketing and advertising of our services, such as television and radio commercials and online advertising. These direct costs generally represent the vast majority of our marketing and advertising expenses. Other costs consist of compensation and other expenses related to marketing, business development, partner management, public relations, carrier relations personnel who support our offerings, and allocations for facilities, telecommunications, and software maintenance costs. Our marketing and advertising costs increase during AEP and OEP to generate more leads during these high-volume periods.

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The following table presents our marketing and advertising expenses for the periods presented and the percentage ~~changes~~change from the prior year:


		Three Months Ended March 31,				Percent Change	Nine Months Ended March 31,				Percent Change		Three Months Ended March 31,				Percent Change	Nine Months Ended March 31,				Percent Change
(dollars in thousands)	(dollars in thousands)	2022		2021		2021 vs. 2020	2022		2021		2021 vs. 2020	(dollars in thousands)	2023		2022		2023 vs. 2022	2023		2022		2023 vs. 2022
Marketing and advertising	Marketing and advertising	$	125,082	$	116,690	7%	$	409,005	$	298,696	37%	Marketing and advertising	$	90,205	$	125,082	(28)%	$	237,724	$	409,005	(42)%

Three Months Ended March 31, ~~2022~~2023 and ~~2021–~~2022–Marketing and advertising expenses ~~increased $8.4~~decreased $34.9 million, or 7%28%, for the three months ended March 31, ~~2022, primarily~~2023, due to a ~~$6.9~~$34.1 million ~~increase~~decrease in lead costs due to the decrease in volume associated with ~~generating more leads for our larger agent base to consume and~~the Company’s updated operating strategy, as well as a ~~$0.5~~$0.8 million decrease in compensation costs. However, we’ve seen an increase in ~~compensation costs,~~marketing efficiency as ~~we increased the number of employees supporting~~ our ~~marketing organization to produce more leads. Additionally, there was a $0.7 million increase in depreciation and amortization expense~~CAC per approved policy has decreased due to ~~additional fixed assets~~improved agent close rates as a result of increased focus on agent training and ~~software in service.~~development.

Nine Months Ended March 31, ~~2022~~2023 and ~~2021–~~2022–Marketing and advertising expenses ~~increased $110.3~~decreased $171.3 million, or ~~37%~~42%, for the nine months ended March 31, ~~2022, primarily~~2023, due to a ~~$101.0~~$162.4 million ~~increase~~decrease in lead costs due to the decrease in volume associated with ~~generating more leads for~~the Company’s updated operating strategy, as well as a $8.4 million decrease in compensation and benefits. However, we’ve seen an increase in marketing efficiency as our ~~larger~~CAC per approved policy has decreased due to improved agent ~~base to consume and lower overall~~ close rates ~~which impacted our marketing efficiency~~as a result of increased focus on agent training and a $6.8 million increase in compensation costs, as we increased the number of employees supporting our marketing organization to produce more leads. Additionally, there was a $1.8 million increase in depreciation and amortization expense due to additional fixed assets and software in service.development.

Selling, General, and Administrative

~~General~~Selling, general, and administrative expenses include compensation and benefits costs for staff working in our executive, finance, accounting, recruiting, human resources, administrative, business intelligence, ~~and~~ data science, and part of the SelectRx customer onboarding departments. These expenses also include fees paid for outside professional services, including audit, tax and legal fees and allocations for facilities, telecommunications, and software maintenance costs.

The following table presents our selling, general, and administrative expenses for the periods presented and the percentage ~~changes~~change from the prior year:


		Three Months Ended March 31,				Percent Change	Nine Months Ended March 31,				Percent Change		Three Months Ended March 31,				Percent Change	Nine Months Ended March 31,				Percent Change
(dollars in thousands)	(dollars in thousands)	2022		2021		2021 vs. 2020	2022		2021		2021 vs. 2020	(dollars in thousands)	2023		2022		2023 vs. 2022	2023		2022		2023 vs. 2022
General and administrative		$	21,031	$	19,251	9%	$	64,570	$	44,496	45%
Selling, general, and administrative												Selling, general, and administrative	$	27,544	$	24,705	11%	$	86,662	$	70,495	23%

Three Months Ended March 31, ~~2022~~2023 and ~~2021–~~2022–~~General~~Selling, general, and administrative expenses increased ~~$1.8~~$2.8 million, or 9%11%, for the three months ended March 31, ~~2022,~~2023, primarily due to a ~~$3.5~~$2.7 million increase in compensation costs, ~~due to additional headcount to support the growth in the business, offset by a $4.5 million decrease in corporate development costs primarily~~mostly related to ~~one-time costs which were incurred in~~ the ~~prior year for the First Amendment to the Senior Secured Credit Facility.~~expansion of SelectRx.

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Nine Months Ended March 31, ~~2022~~2023 and ~~2021–~~2022–~~General~~Selling, general, and administrative expenses increased ~~$20.1~~$16.2 million, or ~~45%~~23%, for the nine months ended March 31, ~~2022,~~2023, primarily due to ~~increases of $13.9~~$14.6 million increase in compensation costs, due to additional headcount to support the growth in the business, $3.5 million in depreciation and amortization expenses due to additional fixed assets and software in service, and $3.2 million in professional services fees due to increases in recruiting, accounting and legal, and insurance costs. The increase was partially offset by a $2.8 million decrease in corporate development costs primarilymostly related to ~~one-time costs which were incurred in~~ the ~~prior year for the First Amendment to the Senior Secured Credit Facility.~~expansion of SelectRx.

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Technical Development

Technical development expenses consist primarily of compensation and benefits costs for internal and external personnel associated with developing, maintaining, and enhancing our applications, infrastructure and other IT-related functions as well as allocations for facilities, telecommunications and software maintenance costs.

The following table presents our technical development expenses for the periods presented and the percentage ~~changes~~change from the prior year:


		Three Months Ended March 31,				Percent Change	Nine Months Ended March 31,				Percent Change		Three Months Ended March 31,				Percent Change	Nine Months Ended March 31,				Percent Change
(dollars in thousands)	(dollars in thousands)	2022		2021		2021 vs. 2020	2022		2021		2021 vs. 2020	(dollars in thousands)	2023		2022		2023 vs. 2022	2023		2022		2023 vs. 2022
Technical development	Technical development	$	6,436	$	4,860	32%	$	18,675	$	13,458	39%	Technical development	$	6,434	$	6,436	—%	$	18,860	$	18,675	1%

Three ~~Months Ended March 31, 2022~~ and ~~2021–~~Technical development expenses increased $1.6 million, or 32%, for the three months ended March 31, 2022, primarily due to a $0.7 million increase in compensation costs related to our technology personnel as we increased the number of people in our desktop support and development efforts to support the increase in total headcount. The increase in headcount also drove increases in the allocations of $0.5 million for facilities, telecommunications, and software maintenance costs.

Nine Months Ended March 31, ~~2022~~2023 and ~~2021–~~2022–Technical development expenses ~~increased $5.2 million, or 39%,~~remained flat for the three and nine months ended March 31, 2022, primarily due to a $2.9 million increase in compensation costs related to our technology personnel noted above. The increase in headcount also drove increases in the allocations of $1.3 million for facilities, telecommunications, and software maintenance costs.2023.

Interest Expense, Net

The following table presents our interest expense, net for the periods presented and the percentage changes from the prior year:


		Three Months Ended March 31,				Percent Change	Nine Months Ended March 31,				Percent Change		Three Months Ended March 31,				Percent Change	Nine Months Ended March 31,				Percent Change
(dollars in thousands)	(dollars in thousands)	2022		2021		2021 vs. 2020	2022		2021		2021 vs. 2020	(dollars in thousands)	2023		2022		2023 vs. 2022	2023		2022		2023 vs. 2022
Interest expense, net	Interest expense, net	$	(12,179)	$	(7,355)	66%	$	(31,300)	$	(20,898)	50%	Interest expense, net	$	(21,105)	$	(12,179)	73%	$	(58,885)	$	(31,300)	88%

Three Months Ended March 31, ~~2022~~2023 and ~~2021–~~2022–Interest expense increased ~~$4.8~~$8.9 million, or ~~66%~~73%, for the three months ended March 31, 2023, primarily as a result of ~~the increase in our outstanding balances~~interest incurred on the Term Loans due to additional principal outstanding and ~~DDTL Facility,~~changes under the Fourth Amendment, as well as the amortization of additional deferred financing costs associated with the amendments to the Senior Secured Credit Facility, all of which was partially offset by interest income received from the interest rate swap and ~~the ticking fee interest assessed~~ on ~~the remaining available borrowing capacity of the DDTL Facility.~~our money market account.

Nine Months Ended March 31, ~~2022~~2023 and ~~2021–~~2022–Interest expense increased ~~$10.4~~$27.6 million, or ~~50%~~88%, for the nine months ended March 31, 2023, primarily as a result of ~~the increase in our outstanding balances~~interest incurred on the Term Loans due to additional principal outstanding and ~~DDTL Facility,~~changes under the Fourth Amendment, as well as the amortization and write-off of additional deferred financing costs associated with the amendments to the Senior Secured Credit Facility, all of which was partially offset by interest income received from the interest rate swap and ~~the ticking fee interest assessed~~ on ~~the remaining available borrowing capacity of the DDTL Facility.~~our money market account.

Income Taxes

The following table presents our provision for income taxes for the periods presented and the percentage ~~changes~~change from the prior year:

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		Three Months Ended March 31,						Percent Change	Nine Months Ended March 31,						Percent Change		Three Months Ended March 31,						Percent Change	Nine Months Ended March 31,						Percent Change
(dollars in thousands)	(dollars in thousands)	2022			2021			2021 vs. 2020	2022			2021			2021 vs. 2020	(dollars in thousands)	2023			2022			2023 vs. 2022	2023			2022			2023 vs. 2022
Income tax expense (benefit)	Income tax expense (benefit)	$	(2,649)		$	6,852		(139)%	$	(65,229)		$	31,846		(305)%	Income tax expense (benefit)	$	3,152		$	(2,846)		(211)%	$	(1,053)		$	(65,984)		(98)%
Effective tax rate	Effective tax rate	29.1		%	16.3		%		25.5		%	20.3		%		Effective tax rate	25.4		%	28.8		%		8.9		%	25.5		%

Three Months Ended March 31, ~~2022~~2023 and ~~2021–~~2022–For the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, we recognized income tax ~~benefit~~expense (benefit) of ~~$2.6~~$3.2 million and ~~income tax expense of $6.9~~$(2.8) million, respectively, representing effective tax rates of ~~29.1%~~25.4% and ~~16.3%~~28.8%, respectively. The differences from our federal statutory tax rate to the effective tax rate for the three months ended March 31, 2023, were primarily related to state income taxes, RSU vestings, and the recording of a valuation allowance for state tax attributes that the Company does not expect to utilize prior to expiration. The differences from our federal statutory tax rate to the effective tax rate for the three months ended March 31, 2022, were primarily related to state income taxes.

Nine Months Ended March 31, 2023 and 2022–For the nine months ended March 31, 2023 and 2022, we recognized income tax benefits of $1.1 million and $66.0 million, respectively, representing effective tax rates of 8.9% and 25.5%, respectively. The differences from our federal statutory tax rate to the effective tax rate for the ~~three~~nine months ended March 31, ~~2021,~~2023, were primarily related to state income taxes, ~~partially offset by~~RSU vestings, and the recording of a valuation allowance for state tax ~~credits such as HPIP and discrete items for~~attributes that the ~~period related~~Company does not expect to ~~the exercise of non-qualified stock options.~~

~~Nine Months Ended March 31, 2022 and 2021–~~For the nine months ended March 31, 2022 and 2021, we recognized income tax benefit of $65.2 million and income tax expense of $31.8 million, respectively, representing effective tax rates of 25.5% and 20.3%, respectively.utilize prior to expiration. The differences from our federal statutory tax rate to the effective tax rate for the nine months ended March 31, 2022, were primarily related to state income taxes. The differences from our federal statutory tax rate to the effective tax rate for the nine months ended March 31, 2021, were primarily related to state income taxes, partially offset by state tax credits such as HPIP and discrete items for the period related to the exercise of non-qualified stock options.

Segment Information

~~We currently have~~Prior to the first quarter of fiscal 2023, we reported financial results under three reportable segments: 1)i) Senior, 2)ii) Life, and 3)iii) Auto & Home. ~~InsideResponse~~Effective July 1, 2022, we realigned our reportable segments as a result of the change in strategic direction established for fiscal year 2023. This realignment separated the Healthcare Services business, which includes SelectRx and Population Health, ~~are also included in Senior. The performance measures~~out of the ~~segments include total revenue~~Senior reportable segment and ~~Adjusted EBITDA because management believes that such~~into its own operating and reportable segment. Our chief operating decision maker (“CODM”) reviews discrete financial information isfor Healthcare Services, separate from Senior, to make operational and financial decisions and allocate resources, consistent with this realignment. As a result, the ~~most relevant in evaluating~~Company now reflects four reportable segments: i) Senior, ii) Healthcare Services, iii) Life, and iv) Auto & Home, and all prior periods have been restated to reflect the ~~results of the respective segments relative to other entities that operate in the same industries.~~

new presentation. In addition, we account for non-operating activity, share-based compensation expense, certain intersegment eliminations, and the costs of providing corporate and other administrative services in our administrative division, Corporate & Eliminations. These services are not directly identifiable with our reportable segments and are shown in the tables below to reconcile the reportable segments to the condensed consolidated financial statements. We have not aggregated any operating segments together to represent a reportable segment.

Costs of revenue, cost of goods sold-pharmacy revenue, marketing and advertising, selling, general, and administrative,and technical development operating ~~costs and~~ expenses that are directly attributable to a segment are reported within the applicable segment. Indirect costs of revenue, marketing and advertising, selling, general, and administrative, and technical development operating ~~costs and~~ expenses are allocated to each segment based on varying metrics such as headcount. Adjusted EBITDA is calculated as total revenue for the applicable segment less direct and allocated costs of revenue, cost of goods sold, marketing and advertising, technical development, and selling, general, and administrative operating costs and expenses, excluding depreciation and amortization expense; gain or loss on disposal of property, equipment, and software; share-based compensation expense; ~~restructuring expenses;~~ and non-recurring expenses such as severance payments and transaction costs. Our CODM does not separately evaluate assets by segment; therefore, assets by segment are not presented.

The following tables present information about the reportable segments for the periods presented:

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Three Months Ended March 31, 2023:


(in thousands)	Senior		Healthcare Services		Life		Auto & Home		Corp & Elims			Consolidated
Revenue	$	185,200	$	70,725	$	36,950	$	8,238	$	(1,715)	(1)	$	299,398
Operating expenses	(126,034)		(74,091)		(31,446)		(5,648)		(17,947)		(2)	(255,166)
Other income (expense), net	—		—		(201)		1		(6)			(206)
Adjusted EBITDA	$	59,166	$	(3,366)	$	5,303	$	2,591	$	(19,668)		44,026
Share-based compensation expense												(2,959)
Non-recurring expenses (3)												(433)


Depreciation and amortization												(7,098)
Loss on disposal of property, equipment, and software												(15)
Interest expense, net												(21,105)

Income tax expense												(3,152)
Net income												$	9,264

(3) These expenses consist of costs related to the Senior Secured Credit Facility and non-restructuring severance expenses.

Three Months Ended March 31, 2022:


(in thousands)	(in thousands)	Senior		Life		Auto & Home		Corp & Elims			Consolidated		(in thousands)	Senior		Healthcare Services		Life		Auto & Home		Corp & Elims			Consolidated
Revenue	Revenue	$	233,172	$	39,400	$	7,152	$	(4,611)		$	275,113	Revenue	$	210,973	$	23,123	$	38,625	$	7,152	$	(5,534)	(1)	$	274,339
Operating expenses	Operating expenses	(200,990)		(41,288)		(6,002)		(13,819)		(1)	(262,099)		Operating expenses	(171,023)		(30,891)		(41,287)		(6,002)		(12,896)		(2)	(262,099)
Other expenses, net	Other expenses, net	—		—		—		(23)			(23)		Other expenses, net	—		—		—		—		(23)			(23)
Adjusted EBITDA	Adjusted EBITDA	$	32,182	$	(1,888)	$	1,150	$	(18,453)		12,991		Adjusted EBITDA	$	39,950	$	(7,768)	$	(2,662)	$	1,150	$	(18,453)		12,217
Share-based compensation expense	Share-based compensation expense										(2,143)		Share-based compensation expense												(2,143)
Non-recurring expenses ~~(2)~~(3)	Non-recurring expenses ~~(2)~~(3)										(703)		Non-recurring expenses ~~(2)~~(3)												(703)

Depreciation and amortization	Depreciation and amortization										(6,679)		Depreciation and amortization												(6,679)
Loss on disposal of property, equipment, and software, net											(384)
Loss on disposal of property, equipment, and software													Loss on disposal of property, equipment, and software												(384)
Interest expense, net	Interest expense, net										(12,179)		Interest expense, net												(12,179)

Income tax benefit	Income tax benefit										2,649		Income tax benefit												2,846
Net loss	Net loss										$	(6,448)	Net loss												$	(7,025)

(1) Revenue in the Corp & Elims division represents intercompany revenue eliminated between segments primarily for referrals from Senior to the other segments.

(2) Operating expenses in the Corp & Elims division primarily include $12.0 million in salaries and benefits for certain general, administrative, and IT related departments and $4.1 million in professional services fees.

~~(2)~~(3) These expenses primarily consist of costs related to the change in administrative agent with respect to the Senior Secured Credit Facility and severance expenses.

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~~Three~~Nine Months Ended March 31, ~~2021:~~2023:


(in thousands)	(in thousands)	Senior		Life		Auto & Home		Corp & Elims			Consolidated		(in thousands)	Senior		Healthcare Services		Life		Auto & Home		Corp & Elims			Consolidated
Revenue	Revenue	$	215,600	$	44,823	$	6,973	$	(2,050)		$	265,346	Revenue	$	486,541	$	169,270	$	107,780	$	23,128	$	(5,649)	(1)	$	781,070
Operating expenses	Operating expenses	(140,111)		(43,225)		(5,877)		(12,507)		(1)	(201,720)		Operating expenses	(347,608)		(193,726)		(91,409)		(15,812)		(52,270)		(2)	(700,825)
Other expenses, net		—		—		—		(15)			(15)
Other income (expense), net													Other income (expense), net	—		—		—		(1)		(117)			(118)
Adjusted EBITDA	Adjusted EBITDA	$	75,489	$	1,598	$	1,096	$	(14,572)		63,611		Adjusted EBITDA	$	138,933	$	(24,456)	$	16,371	$	7,315	$	(58,036)		80,127
Share-based compensation expense	Share-based compensation expense										(1,429)		Share-based compensation expense												(8,525)
Non-recurring expenses (2)											(4,667)
Fair value adjustments to contingent earnout obligations											(334)
Transaction costs(3)													Transaction costs(3)												(3,003)

Depreciation and amortization	Depreciation and amortization										(4,323)		Depreciation and amortization												(21,087)
Loss on disposal of property, equipment, and software	Loss on disposal of property, equipment, and software										(101)		Loss on disposal of property, equipment, and software												(386)
Interest expense, net	Interest expense, net										(7,355)		Interest expense, net												(58,885)
Loss on extinguishment of debt											(3,315)
Income tax expense											(6,852)
Net income											$	35,235

Income tax benefit													Income tax benefit												1,053
Net loss													Net loss												$	(10,706)

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Nine Months Ended March 31, 2022:


(in thousands)	(in thousands)	Senior		Life		Auto & Home		Corp & Elims			Consolidated		(in thousands)	Senior		Healthcare Services		Life		Auto & Home		Corp & Elims			Consolidated
Revenue	Revenue	$	497,459	$	119,612	$	20,755	$	(10,205)		$	627,621	Revenue	$	459,272	$	40,183	$	116,645	$	20,755	$	(12,200)	(1)	$	624,655
Operating expenses	Operating expenses	(646,883)		(117,347)		(16,798)		(43,149)		(1)	(824,177)		Operating expenses	(588,583)		(60,296)		(117,346)		(16,798)		(41,154)		(2)	(824,177)
Other expenses, net	Other expenses, net	—		—		—		(177)			(177)		Other expenses, net	—		—		—		—		(177)			(177)
Adjusted EBITDA	Adjusted EBITDA	$	(149,424)	$	2,265	$	3,957	$	(53,531)		(196,733)		Adjusted EBITDA	$	(129,311)	$	(20,113)	$	(701)	$	3,957	$	(53,531)		(199,699)
Share-based compensation expense	Share-based compensation expense										(6,252)		Share-based compensation expense												(6,252)
Non-recurring expenses ~~(2)~~(3)	Non-recurring expenses ~~(2)~~(3)										(2,857)		Non-recurring expenses ~~(2)~~(3)												(2,857)

Depreciation and amortization	Depreciation and amortization										(17,957)		Depreciation and amortization												(17,957)
Loss on disposal of property, equipment, and software, net											(739)
Loss on disposal of property, equipment, and software													Loss on disposal of property, equipment, and software												(739)
Interest expense, net	Interest expense, net										(31,300)		Interest expense, net												(31,300)

Income tax benefit	Income tax benefit										65,229		Income tax benefit												65,984
Net loss	Net loss										$	(190,609)	Net loss												$	(192,820)

(1) Revenue in the Corp & Elims division represents intercompany revenue eliminated between segments primarily for lead generation referrals from InsideResponse (within Senior) to the other segments.

(2) Operating expenses in the Corp & Elims division primarily include $33.6 million in salaries and benefits for certain general, administrative, and IT related departments and $13.1 million in professional services fees.

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~~Nine Months Ended March 31, 2021:~~

(in thousands) Senior Life Auto & Home Corp & Elims Consolidated
Revenue $ 604,309 $ 121,917 $ 23,752 $ (4,293) $ 745,685
Operating expenses (385,363) (105,532) (16,889) (34,771) (1) (542,555)
Other expenses, net — — — (58) (58)
Adjusted EBITDA $ 218,946 $ 16,385 $ 6,863 $ (39,122) 203,072
Share-based compensation expense (3,689)
Non-recurring expenses (2) (5,490)
Fair value adjustments to contingent earnout obligations (1,487)
Depreciation and amortization (11,260)
Loss on disposal of property, equipment, and software (261)
Interest expense, net (20,898)
Loss on extinguishment of debt (3,315)
Income tax expense (31,846)
Net income $ 124,826
(1) Operating expenses in the Corp & Elims division primarily include $24.8 million in salaries and benefits for certain general, administrative, and IT related departments and $9.5 million in professional services fees.

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The following table depicts the disaggregation of revenue by segment and product for the periods presented:

Three Months Ended March 31, Nine Months Ended March 31,
(dollars in thousands) 2022 2021 $ % 2022 2021 $ %
Senior:
Commission revenue:
Medicare advantage $ 176,603 $ 181,040 $ (4,437) (2) % $ 355,949 $ 493,745 $ (137,796) (28) %
Medicare supplement 912 2,981 (2,069) (69) % 4,849 23,716 (18,867) (80) %
Prescription drug plan 393 449 (56) (12) % 1,393 2,166 (773) (36) %
Dental, vision, and health 4,150 4,671 (521) (11) % 12,285 13,041 (756) (6) %
Other commission revenue 1,415 619 796 129 % 4,269 1,822 2,447 134 %
Total commission revenue 183,473 189,760 (6,287) (3) % 378,745 534,490 (155,745) (29) %
Production bonus and other revenue 49,699 25,840 23,859 92 % 118,714 69,819 48,895 70 %
Total Senior revenue 233,172 215,600 17,572 8 % 497,459 604,309 (106,850) (18) %
Life:
Commission revenue:
Term 15,779 19,777 (3,998) (20) % 48,151 59,549 (11,398) (19) %
Final expense 19,626 20,088 (462) (2) % 55,100 46,362 8,738 19 %
Total commission revenue 35,405 39,865 (4,460) (11) % 103,251 105,911 (2,660) (3) %
Production bonus and other revenue 3,995 4,958 (963) (19) % 16,361 16,006 355 2 %
Total Life revenue 39,400 44,823 (5,423) (12) % 119,612 121,917 (2,305) (2) %
Auto & Home:
Total commission revenue 6,539 5,910 629 11 % 19,187 21,014 (1,827) (9) %
Production bonus and other revenue 613 1,063 (450) (42) % 1,568 2,738 (1,170) (43) %
Total Auto & Home revenue 7,152 6,973 179 3 % 20,755 23,752 (2,997) (13) %
Eliminations:
Total commission revenue (2,879) (319) (2,560) 803 % (5,689) (784) (4,905) 626 %
Production bonus and other revenue (1,732) (1,731) (1) — % (4,516) (3,509) (1,007) 29 %
Total Elimination revenue (4,611) (2,050) (2,561) 125 % (10,205) (4,293) (5,912) 138 %
Total commission revenue 222,538 235,216 (12,678) (5) % 495,494 660,631 (165,137) (25) %
Total production bonus and other revenue 52,575 30,130 22,445 74 % 132,127 85,054 47,073 55 %
Total revenue $ 275,113 $ 265,346 $ 9,767 4 % $ 627,621 $ 745,685 $ (118,064) (16) %

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	Three Months Ended March 31,								Nine Months Ended March 31,
(dollars in thousands)	2023		2022		$		%		2023		2022		$		%
Senior:
Commission revenue:
Medicare advantage	$	156,014	$	176,603	$	(20,589)	(12)	%	$	412,850	$	355,949	$	56,901	16	%
Medicare supplement	417		912		(495)		(54)	%	1,588		4,849		(3,261)		(67)	%
Prescription drug plan	203		393		(190)		(48)	%	481		1,393		(912)		(65)	%
Dental, vision, and health	1,185		4,150		(2,965)		(71)	%	3,203		12,285		(9,082)		(74)	%
Other commission revenue	726		2,339		(1,613)		(69)	%	2,162		6,265		(4,103)		(65)	%
Total commission revenue	158,545		184,397		(25,852)		(14)	%	420,284		380,741		39,543		10	%

Total other revenue	26,655		26,576		79		—	%	66,257		78,531		(12,274)		(16)	%
Total Senior revenue	185,200		210,973		(25,773)		(12)	%	486,541		459,272		27,269		6	%
Healthcare Services:
Total pharmacy revenue	66,948		18,478		48,470		262	%	159,641		31,715		127,926		403	%
Total other revenue	3,777		4,645		(868)		(19)	%	9,629		8,468		1,161		14	%
Total Healthcare Services revenue	70,725		23,123		47,602		206	%	169,270		40,183		129,087		321	%
Life:
Commission revenue:
Term	17,678		15,779		1,899		12	%	49,371		48,151		1,220		3	%
Final expense	13,804		18,851		(5,047)		(27)	%	44,357		52,133		(7,776)		(15)	%
Total commission revenue	31,482		34,630		(3,148)		(9)	%	93,728		100,284		(6,556)		(7)	%

Total other revenue	5,468		3,995		1,473		37	%	14,052		16,361		(2,309)		(14)	%
Total Life revenue	36,950		38,625		(1,675)		(4)	%	107,780		116,645		(8,865)		(8)	%
Auto & Home:
Total commission revenue	7,895		6,539		1,356		21	%	21,940		19,187		2,753		14	%

Total other revenue	343		613		(270)		(44)	%	1,188		1,568		(380)		(24)	%
Total Auto & Home revenue	8,238		7,152		1,086		15	%	23,128		20,755		2,373		11	%
Eliminations:
Total commission revenue	(664)		(3,802)		3,138		(83)	%	(2,325)		(7,684)		5,359		(70)	%

Total other revenue	(1,051)		(1,732)		681		(39)	%	(3,324)		(4,516)		1,192		(26)	%
Total Elimination revenue	(1,715)		(5,534)		3,819		(69)	%	(5,649)		(12,200)		6,551		(54)	%
Total commission revenue	197,258		221,764		(24,506)		(11)	%	533,627		492,528		41,099		8	%

Total pharmacy revenue	66,948		18,478		48,470		262	%	159,641		31,715		127,926		403	%
Total other revenue	35,192		34,097		1,095		3	%	87,802		100,412		(12,610)		(13)	%
Total revenue	$	299,398	$	274,339	$	25,059	9	%	$	781,070	$	624,655	$	156,415	25	%

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Revenue by Segment

Three Months Ended March 31, ~~2022~~2023 and ~~2021–~~2022–Revenue from Senior was ~~$233.2~~$185.2 million for the three months ended March 31, ~~2022,~~2023, a ~~$17.6~~$25.8 million, or 8%12%, ~~increase~~decrease compared to revenue of ~~$215.6~~$211.0 million for the three months ended March 31, ~~2021. The increase was due to $18.4 million of new pharmacy prescription revenue from SelectRx and a $6.1 million increase in marketing development funds received, partially offset by a reduction of~~

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~~$4.5 million of external lead generation revenue from InsideResponse and a $4.4 million, or 2%, decrease in MA commission revenue.~~

Revenue from Life was $39.4 million for the three months ended March 31, 2022, a $5.4 million, or 12%, decrease compared to revenue of $44.8 million for the three months ended March 31, 2021. The decrease included $4.0 million from term life, $0.5 million from final expense, and $1.0 million from production bonus and other revenue.

Revenue from Auto & Home was $7.2 million for the three months ended March 31, 2022, a $0.2 million, or 3%, increase compared to revenue of $7.0 million for the three months ended March 31, 2021, primarily due to improvements in agent productivity.

~~Nine Months Ended March 31, 2022 and 2021–Revenue from Senior was $497.5 million for the nine months ended March 31, 2022, a $106.9 million, or 18%, decrease compared to revenue of $604.3 million for the nine months ended March 31, 2021.~~2022. The decrease was due to ~~a $137.8~~an $25.9 million, or ~~28%~~14%, decrease in ~~MA commission revenue primarily from the $145.0 million adjustment from the change in estimate of cohort transaction prices discussed above, a $18.9 million decrease in MS~~ commission revenue and a ~~reduction of $13.1~~$3.4 million decrease in ~~external~~ lead generation revenue ~~from InsideResponse,~~earned, partially offset by ~~$31.6 million of new pharmacy prescription revenue from SelectRx and~~ a ~~$21.7~~$2.9 million increase in marketing development funds received.

Revenue from Healthcare Services was $70.7 million for the three months ended March 31, 2023, a $47.6 million, or 206%, increase compared to revenue of $23.1 million for the three months ended March 31, 2022, primarily due to a $48.5 million increase in SelectRx pharmacy revenue.

Revenue from Life was ~~$119.6~~$37.0 million for the three months ended March 31, 2023, a $1.7 million, or 4%, decrease compared to revenue of $38.6 million for the three months ended March 31, 2022, in line with our updated operating strategy to stabilize our distribution business.

Revenue from Auto & Home was $8.2 million for the three months ended March 31, 2023, a $1.1 million, or 15%, increase compared to revenue of $7.2 million for the three months ended March 31, 2022, in line with our updated operating strategy to stabilize our distribution business.

Nine Months Ended March 31, 2023 and 2022–Revenue from Senior was $486.5 million for the nine months ended March 31, 2023, a $27.3 million, or 6%, increase compared to revenue of $459.3 million for the nine months ended March 31, 2022. The increase was due to a $39.5 million, or 10%, increase in commission revenue, partially offset by a $12.6 million decrease in lead generation revenue.

Revenue from Healthcare Services was $169.3 million for the nine months ended March 31, 2023, a $129.1 million, or 321%, increase compared to revenue of $40.2 million for the nine months ended March 31, 2022, primarily due to a ~~$2.3~~$127.9 million ~~or 2%, decrease compared to revenue of $121.9~~increase in SelectRx pharmacy revenue.

Revenue from Life was $107.8 million for the nine months ended March 31, ~~2021. The~~2023, a $8.9 million, or 8%, decrease ~~was primarily due~~compared to ~~an $11.4~~revenue of $116.6 million ~~decrease~~for the nine months ended March 31, 2022, in ~~term life revenue, partially offset by an $8.7 million increase in final expense revenue.~~line with our updated operating strategy to stabilize our distribution business.

Revenue from Auto & Home was $23.1 million for the nine months ended March 31, 2023, a $2.4 million, or 11%, increase compared to revenue of $20.8 million for the nine months ended March 31, 2022, ~~a $3.0 million, or 13%, decrease compared to revenue of $23.8 million for the nine months ended March 31, 2021, primarily due to o~~urin line with our updated operating strategy to ~~reduce the growth in Auto & Home.~~stabilize our distribution business.

Adjusted EBITDA by Segment

Three Months Ended March 31, ~~2022~~2023 and ~~2021–~~2022–Adjusted EBITDA from Senior was ~~$32.2~~$59.2 million for the three months ended March 31, ~~2022,~~2023, a ~~$43.3~~$19.2 million ~~decrease~~increase compared to Adjusted EBITDA of ~~$75.5~~$40.0 million for the three months ended March 31, ~~2021.~~2022. The ~~decrease in Adjusted EBITDA~~increase was due to a ~~$60.9~~$25.8 million decrease in revenue and a $45.0 million decrease in operating costs and expenses, primarily due to a $30.0 million reduction in marketing and advertising costs, a $11.4 million reduction in compensation costs, and a $1.1 million reduction in licensing fees, all of which support our updated operating strategy.

Adjusted EBITDA from Healthcare Services was $(3.4) million for the three months ended March 31, 2023, a $4.4 million increase compared to Adjusted EBITDA of $(7.8) million for the three months ended March 31, 2022. The increase was due to a $43.2 million increase in operating costs and expenses primarily ~~from~~as a ~~$18.2~~result of the $37.2 million increase in ~~personnel~~medication costs ~~associated with additional headcount, $14.3 million higher fulfillment costs associated with scaling Population Health~~ and ~~SelectRx, $13.6 million in pharmaceutical costs for SelectRx, and $11.2~~a $3.8 million increase in ~~variable marketing expenses as discussed above.~~compensation costs in support of the growth of Healthcare Services. The increase in operating costs and expenses was ~~partially~~ offset by ~~a $17.6~~the $47.6 million increase in revenue as discussed above.

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Adjusted EBITDA from Life was ~~$(1.9)~~$5.3 million for the three months ended March 31, ~~2022,~~2023, a ~~$3.5~~$8.0 million ~~decrease~~increase compared to Adjusted EBITDA of ~~$1.6~~$(2.7) million for the three months ended March 31, ~~2021.~~2022. The ~~decrease in Adjusted EBITDA~~increase was ~~primarily~~ due to ~~the $5.4 million decrease in revenue discussed above, partially offset by~~ a ~~$1.9~~$9.8 million decrease in operating costs and expenses primarily ~~attributable~~due to ~~lower headcount~~a $7.8 million reduction in marketing and ~~marketing costs.~~advertising costs, which supports our updated operating strategy. The decrease in operating costs and expenses was offset by the $1.7 million decrease in revenue as discussed above.

Adjusted EBITDA from Auto & Home was $2.6 million for the three months ended March 31, 2023, a $1.4 million, or 125%, increase compared to Adjusted EBITDA of $1.2 million for the three months ended March 31, ~~2022, a $0.1 million, or 5%, increase compared to Adjusted EBITDA of $1.1 million for the three months ended March 31, 2021.~~2022. The increase ~~in Adjusted EBITDA~~ was ~~primarily~~ due to ~~the $0.2~~a $1.1 million increase in revenue ~~discussed above~~ and a ~~reduction~~$0.4 million decrease in operating costs and expenses primarily due to ~~lower headcount.~~a $0.3 million decrease in marketing and advertising costs, which supports our updated operating strategy.

Nine Months Ended March 31, ~~2022~~2023 and ~~2021–~~2022–Adjusted EBITDA from Senior was ~~$(149.4)~~$138.9 million for the nine months ended March 31, ~~2022,~~2023, a ~~$368.4~~$268.2 million ~~decrease~~increase compared to Adjusted EBITDA of ~~$218.9~~$(129.3) million for the nine months ended March 31, ~~2021.~~2022. The increase was due to a $27.3 million increase in revenue and a $241.0 million decrease in ~~Adjusted EBITDA was~~operating costs and expenses primarily due to a ~~$261.5~~$148.6 million reduction in marketing and advertising costs, a $68.8 million reduction in compensation costs, and a $10.2 million reduction in licensing fees, all of which support our updated operating strategy.

Adjusted EBITDA from Healthcare Services was $(24.5) million for the nine months ended March 31, 2023, a $4.3 million decrease compared to Adjusted EBITDA of $(20.1) million for the nine months ended March 31, 2022. The decrease was due to a $133.4 million increase in operating costs and expenses primarily ~~from a $102.7 million increase in variable marketing~~

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expenses as discussed above, an $81.1 million increase in personnel costs associated with additional headcount, $40.5 million higher fulfillment costs associated with scaling Population Health and SelectRx, and $23.8 million in pharmaceutical costs for SelectRx. In addition, there was a $106.9 million decrease in revenue primarily as a result of the ~~$145.0~~$96.6 million ~~adjustment from a change~~increase in ~~estimate~~medication costs, $27.9 million increase in compensation costs, and $5.3 million increase in fulfillment costs in support of ~~cohort transaction prices~~the growth of Healthcare Services. The increase in operating costs and expenses was offset by the $129.1 million increase in revenue as discussed above.

Adjusted EBITDA from Life was ~~$2.3 million for the nine months ended March 31, 2022, a $14.1 million, or 86%, decrease compared to Adjusted EBITDA of~~ $16.4 million for the nine months ended March 31, ~~2021. The decrease in~~2023, a $17.1 million increase compared to Adjusted EBITDA of $(0.7) million for the nine months ended March 31, 2022. The increase was ~~primarily~~ due to a ~~$11.8~~$25.9 million ~~increase~~decrease in operating costs and expenses primarily ~~attributable~~due to ~~an increase~~a $21.3 million reduction in ~~variable~~ marketing and advertising costs and a $3.8 million reduction in compensation costs, all of which support our updated operating strategy. The decrease in operating costs and expenses ~~related to final expense.~~was offset by the $8.9 million decrease in revenue as discussed above.

Adjusted EBITDA from Auto & Home was $7.3 million for the nine months ended March 31, 2023, a $3.4 million, or 85%, increase compared to Adjusted EBITDA of $4.0 million for the nine months ended March 31, ~~2022, a $2.9 million, or 42%, decrease compared to Adjusted EBITDA of $6.9 million for the nine months ended March 31, 2021.~~2022. The ~~decrease in Adjusted EBITDA~~increase was ~~primarily~~ due to a ~~$3.0~~$2.4 million increase in revenue and a $1.0 million decrease in ~~revenue.~~operating costs and expenses due to a $1.1 million reduction in marketing and advertising costs and a $0.2 million reduction in compensation costs, partially offset by an increase in fulfillment costs of $0.4 million, all of which support our updated operating strategy.

Liquidity and Capital Resources

Our liquidity needs primarily include working capital and debt service requirements. We believe that the cash available under the Senior Secured Credit Facility will be sufficient to meet our projected operating and debt service requirements for at least the next 12 months. To the extent that our current liquidity is insufficient to fund future activities, we may need to raise additional funds. If we raise additional funds by issuing equity securities, the ownership of our existing stockholders will be diluted. The incurrence of additional debt financing would result in debt service obligations, and any future instruments governing such debt could provide for operating and financing covenants that could restrict our operations.

To date, systemic economic disruptions related to the COVID-19 pandemic have not had a substantial effect on our financial standing; however, given the unpredictable nature of the virus and its effects on the global economy, we will continue to evaluate our financial position and liquidity needs in light of the ongoing pandemic as developments arise.

~~Risks and Uncertainties Regarding Liquidity and Compliance with our Senior Secured Credit Facility Covenant~~

Under the Senior Secured Credit Facility, we are required to maintain a certain asset coverage ratio, as discussed further in Note 7 to the condensed consolidated financial statements. As of March 31, 2022, we are in compliance with all of our debt covenants; however, our financial projections indicate that, based on our current business plan, we will not maintain the required asset coverage ratio within one year after the date that the condensed consolidated financial statements are issued. Failure to maintain the required ratio would constitute a violation of our obligations under the Senior Secured Credit Facility and would permit our lenders to declare us in default. In the event of a default, our lenders could accelerate all amounts owing under the Senior Secured Credit Facility. We do not currently have sufficient liquidity to repay such indebtedness. We have commenced discussions of a covenant waiver or modification with our lenders; however, we cannot provide any assurances that we will be successful in obtaining such a waiver or modification on acceptable terms, or at all. As a result, there is substantial doubt about our ability to continue as a going concern.

Cash Flows

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As of March 31, ~~2022~~2023, and June 30, ~~2021,~~2022, our cash and cash equivalents totaled ~~$199.4~~$92.0 million and ~~$286.5~~$141.0 million, respectively. Additionally, the following table presents a summary of our cash flows for the periods presented below:

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		Nine Months Ended March 31,					Nine Months Ended March 31,
(in thousands)	(in thousands)	2022		2021		(in thousands)	2023		2022
Net cash used in operating activities	Net cash used in operating activities	$	(284,362)	$	(60,947)	Net cash used in operating activities	$	(12,835)	$	(284,362)
Net cash used in investing activities	Net cash used in investing activities	(40,012)		(36,206)		Net cash used in investing activities	(6,860)		(40,012)
Net cash provided by financing activities		237,279		97,331
Net cash (used in) provided by financing activities						Net cash (used in) provided by financing activities	(29,254)		237,279

Operating Activities

~~Cash~~Net cash used in operating activities primarily consists of net income, adjusted for certain non-cash items including depreciation; amortization of intangible assets and internally developed software; deferred income taxes; share-based compensation ~~expense~~expense; impairment charges; and the effect of changes in working capital and other activities.

Collection of commissions receivable depends upon the timing of our receipt of commission payments and associated commission statements from our insurance carrier partners. If we were to experience a delay in receiving a commission payment from an insurance carrier partner within a quarter, our operating cash flows for that quarter could be adversely impacted.

A significant portion of our marketing and advertising expenses is driven by the number of leads required to generate the insurance applications we submit to our insurance carrier partners. Our marketing and advertising costs are expensed and generally paid as incurred and since commission revenue is recognized upon approval of a policy but commission payments are paid to us over time, there are working capital requirements to fund the upfront cost of acquiring new policies. During AEP, we experience an increase in the number of submitted Senior insurance applications and marketing and advertising expenses compared to periods outside of AEP. The timing of AEP affects the positive or negative impacts of our cash flows during each quarter.

Nine Months Ended March 31, 2023—Net cash used in operating activities was $12.8 million, consisting of net loss of $10.7 million, adjustments for non-cash items of $47.1 million, and cash used in operating assets and liabilities of $49.2 million. Adjustments for non-cash items primarily consisted of $21.1 million of depreciation and amortization, $8.5 million of share-based compensation expense, $8.5 million of accrued interest payable in kind on the Term Loans, $6.3 million of amortization of debt issuance costs and debt discount as a result of amendments to the Senior Secured Credit Facility, and $3.1 million of non-cash lease expense, offset by $1.4 million in deferred income taxes. The cash decrease resulting from changes in net operating assets and liabilities primarily consisted of an increase of $62.7 million in accounts receivable, net and a decrease of $8.9 million in other liabilities, partially offset by a decrease of $17.1 million in commissions receivable and an increase of $6.4 million in accounts payable and accrued expenses.

Nine Months Ended March 31, 2022—Cash used in operating activities was $284.4 million, consisting of net loss of ~~$190.6~~$192.8 million, adjustments for non-cash items of ~~$33.4~~$34.1 million, and cash used in operating assets and liabilities of ~~$60.4~~$57.4 million. Adjustments for non-cash items primarily consisted of ~~$65.6~~$66.4 million in deferred income taxes, offset by $18.0 million of depreciation and amortization related to additional fixed assets purchases to accommodate our growth in headcount, internally developed software in service, and SelectRx infrastructure, $6.3 million of share-based compensation expense, $4.2 million of amortization of debt issuance costs and debt discount as a result of amendments to the Senior Secured Credit Facility, and $3.1 million of non-cash lease expense. The cash decrease resulting from changes in net operating assets and liabilities primarily consisted of increases of ~~$62.8~~$59.8 million in accounts receivable and $8.3 million in other assets related to an increase in inventory for SelectRx and an increase in prepaid expenses, partially offset by a decrease of $7.6 million in commissions receivable and increases of $8.1 million in accounts payable and accrued expenses, all driven by the increased marketing and personnel costs for AEP and OEP.

~~Nine Months Ended March 31, 2021~~—Cash used in operating activities was $60.9 million, consisting of net income of $124.8 million and adjustments for non-cash items of $56.3 million, offset by cash used in operating assets and liabilities of $242.1 million. Adjustments for non-cash items primarily consisted of $31.7 million in deferred income taxes as the Company defers revenue related to certain commissions receivable into following years until it is collected, $11.3 million of depreciation and amortization related to additional fixed assets purchases to accommodate our growth in headcount and internally developed software in service, $3.7 million of share-based compensation expense, and $2.9 million of non-cash lease expense. The cash decrease resulting from changes in net operating assets and liabilities primarily consisted of increases of $251.2 million in commissions receivable and $49.2 million in accounts receivable related to the increase in approved policies partially offset by increases of $26.2 million in accounts payable and accrued expenses and $30.4 million in other liabilities, which consists primarily of commission advances and accrued compensation and benefits, all driven by the increased marketing and personnel costs required to produce our increased revenue.

~~Investing Activities~~

4954

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Investing Activities

Our investing activities primarily consist of purchases of ~~furniture~~property, equipment, and ~~fixtures, computer hardware, leasehold improvements related to facilities expansion,~~software and capitalized salaries related to the development of internal-use software.

Nine Months Ended March 31, 2023—Net cash used in investing activities of $6.9 million was due to $1.1 million of purchases of property and equipment, primarily to support the growth of SelectRx infrastructure, and $5.8 million in purchases of software and capitalized internal-use software development costs.

Nine Months Ended March 31, 2022—Net cash used in investing activities of $40.0 million was due to $24.5 million of purchases of property and equipment primarily to support AEP and OEP and the growth of SelectRx infrastructure, $7.6 million in purchases of software and capitalized internal-use software, $6.9 million of net cash paid to acquire Simple Meds, and a $1.0 million non-controlling interest equity investment.

~~Nine Months Ended March 31, 2021~~—Net cash used in investing activities of $36.2 million was due to $6.5 million of purchases of property and equipment and $5.8 million in purchases of software and capitalized internal-use software spent to develop new programs and systems to efficiently accommodate our increased volumes. Additionally, we used $24.0 million of cash related to the acquisition of a lead distribution company.

Financing Activities

Our financing activities primarily consist of ~~proceeds from the issuance~~payments of debt and ~~equity~~related issuance costs and proceeds and payments related to ~~stock-based~~share-based compensation.

Nine Months Ended March 31, 2023—Net cash used in financing activities of $29.3 million was primarily due to $10.1 million of debt issuance costs related to the Fourth Amendment to the Senior Secured Credit Facility, $17.8 million of principal payments on the Term Loans, and $2.3 million of holdback remitted as part of the Express Med acquisition, partially offset by $1.2 million in proceeds from common stock options exercised and the employee stock purchase plan.

Nine Months Ended March 31, 2022—Net cash provided by financing activities of $237.3 million was primarily due to $242.0 million in net proceeds from the DDTL Facility and $3.2 million in proceeds from common stock options exercised and the employee stock purchase plan, partially offset by a holdback settlement of $5.5 million for acquisition of a lead distribution company, principal payments of ~~$1.2~~$1.8 million and ~~$0.6~~$0.0 million on the Term Loans and DDTL Facility, respectively, and $0.3 million in debt issuance costs related to the Second Amendment and Third Amendment to the Senior Secured Credit Facility.

~~Nine Months Ended March 31, 2021~~—Net cash provided by financing activities of $97.3 million was primarily due to $228.8 million in net proceeds from the Term Loans as a result of the First Amendment, partially offset by payments of $84.1 million related to the partial extinguishment of the Term Loans, $32.3 million of earnout for the InsideResponse acquisition, and $10.0 million for withholding taxes related to net share settlements of employee stock option awards.

Senior Secured Credit Facility

We entered into the Senior Secured Credit Facility to provide access to cash, in a variety of methods, when necessary to fund the operations of the business. There were no amounts outstanding under the Revolving Credit Facility as of March 31, ~~2022.~~2023. As of March 31, ~~2022,~~2023, there was ~~$470.7~~$703.9 million outstanding under the Term ~~Loans and $244.4 million outstanding under the DDTL Facility.~~Loans. Refer to Note 7 to the condensed consolidated financial statements for further details.

Our risk management strategy includes entering into interest rate swap agreements to protect against unfavorable interest rate changes relating to forecasted debt transactions. The Company's Amended Interest Rate Swap is designated as a cash flow hedge of the interest payments on $325.0 million in principal of the Term Loans. Refer to Note 7 to the condensed consolidated financial statements for further details.

Contractual Obligations

Other than the ~~discussion~~discussions in Note 8 and Note 10 to the condensed consolidated financial statements, as of March 31, ~~2022,~~2023, there have been no material changes to our contractual obligations as previously described in our ~~2021~~ Annual Report.

Off-Balance Sheet Arrangements

~~Table of Contents~~

We did not have any off-balance sheet arrangements during the period covered by this report.

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Recent Accounting Pronouncements

For a discussion of new accounting pronouncements recently adopted and not yet adopted, see the notes to our condensed consolidated financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

We are primarily exposed to the market risk associated with unfavorable movements in interest rates. The risk inherent in our market risk-sensitive instruments and positions is the potential loss or increased expense arising from adverse changes in those factors. There have been no material changes to our market risk policies or our market risk-sensitive instruments and positions as described in our ~~annual report on our 2021~~ Annual Report.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Our Disclosure Controls and Procedures

The Company completed an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), carried out by our management, with the participation of our chief executive officer (principal executive officer) ~~and our~~, chief financial officer (principal financial officer), and chief accounting officer (principal accounting officer). Based upon our management's evaluation, our chief executive officer and our chief financial officer concluded that as of the end of the period covered by this report, our disclosure controls and procedures ~~were not~~are effective ~~because of a material weakness~~to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to our management, including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure.

As previously disclosed in our Annual Report, management identified a design deficiency in internal ~~controls~~control over financial reporting ~~described below.~~that resulted in a material weakness. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. ~~Specifically,~~The Company obtains and uses relevant information from third party carriers related to final expense policyholder lapses and did not evaluate it on a timely basis to ensure the carrier and policy information utilized to determine the first year commission revenue provision was complete and accurate, which could have resulted in a material misstatement of the Company’s consolidated financial statements. The material weakness did contribute to an actual error ~~was identified during the three months ended December 31, 2021, relative~~related to ~~the~~ Life first year commission revenue provision for certain final expense ~~policies. As a result of~~policies that was not material to the error, management concluded that our controls addressing the completeness and accuracy of carrier and policy information utilized to determine the first year provision were not designed effectively. This material weakness resulted in the correction of an error in the Company’s interimconsolidated financial statements for the ~~quarters~~year ended June 30, 2021, and for the three months ended September 30, 2021, December 31, ~~2020,~~2021, and March 31, ~~2021, for which we have concluded such errors are not material to those previously reported financial statements.~~2022.

In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only a reasonable level of assurance of achieving their desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Management’s ~~Plan to Remediate~~Remediation of the Material Weakness

As a result of this material weakness, ~~identified,~~ we ~~have made significant progress on implementing~~designed, implemented, and operated new controls as part of our remediation measures including, but not limited to, obtaining complete and accurate carrier information feeds to support first year provision for final expense policies, reviewing policies as applicable to ensure additional risk mitigation, and enhancing procedures to assess the ongoing completeness and accuracy of carrier information utilized in supporting provisioning control activities. The initiatives we are implementing to remediate the material weakness are subject to continued management review supported by confirmation and testing, as well as audit committee oversight. However, we cannot be certain that the measures we have taken or may take in the future will ensure that we will establish and maintain adequate controls over our financial processes and reporting in the future.which included:

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~~Notwithstanding~~

•a control to review final expense aged receivables on a timely basis;

•a control to evaluate the ~~material weakness, our management has concluded that~~completeness and accuracy of the ~~financial statements included elsewhere~~final expense third party carrier information received, including verification of lapse status; and

•a control to evaluate the completeness and accuracy of the information used in ~~this~~the review of provision rates used to develop estimates of first year commission revenue provision.

As a result of the remediation activities and controls described above, as previously disclosed in the Company’s Quarterly Report on Form 10-Q ~~present fairly, in all~~as of December 31, 2022, we have remediated the material ~~respects,~~weakness. However, completion of remediation does not provide assurance that our remediated controls will continue to operate properly or that our financial ~~position, results of operations and cash flows in conformity with GAAP. The material weakness~~statements will ~~not~~ be considered remediated, however, until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that the Company’s controls are operating effectively.free from error.

Changes in Internal Control over Financial Reporting

Except for the remediation of the material weakness ~~noted~~and changes described above, there ~~has~~have been no ~~change~~changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

A discussion of legal proceedings to which the Company is a party is included in Part I, Item 1 hereof under “Note 8, Commitments and Contingencies – Legal Contingencies and Obligations,” which is incorporated herein by reference.

ITEM 1A. RISK FACTORS

~~Except~~Other than as ~~discussed~~set forth below, there have been no material changes to the risk factors ~~disclosed~~set forth in our ~~2021~~ Annual ~~Report.~~Report and subsequent periodic filings. Before investing in our securities, we recommend that investors carefully consider the risks described in our Annual Report, including those under the heading “Risk Factors.” Realization of any of these risks and any additional risks and uncertainties not currently known to us or that we have deemed to be immaterial could have a material adverse effect on our business, financial condition, or results of operations. ~~Additional risks and uncertainties not currently known to us or that we deem to be immaterial could also materially adversely affect our business, financial condition, or results of operations.~~

Our ~~ability~~Senior segment is subject to ~~continue as~~ a ~~going concern is dependent upon~~complex legal and regulatory framework, and non-compliance with or changes in laws and regulations governing the marketing and sale of Medicare plans and other healthcare-related products and services could harm our ~~ability to obtain a waiver or modification of certain of our debt covenants from our lenders.~~business, operating results, financial condition and prospects.

~~Pursuant~~Our Senior segment is subject to a complex legal and regulatory framework, and the laws and regulations governing the marketing and sale of Medicare plans, particularly with respect to regulations and guidance issued by CMS related to Medicare Advantage and Medicare Part D prescription drug plans, change frequently. For example, in April 2023, CMS finalized rules that could increase compliance costs and otherwise impact our business results by, among other things, requiring new disclosures that could make certain forms of marketing less practicable and potentially requiring a 48-hour waiting period between initial contact with a beneficiary and enrolling that beneficiary. These and any other changes to the ~~terms~~laws, regulations and guidelines relating to Medicare plans, their interpretation or the manner in which they are enforced could harm our business, operating results, financial condition and prospects.

In addition, changes to laws, regulations, CMS guidance or the enforcement or interpretation of CMS guidance applicable to our Senior segment could cause insurance carriers or state departments of insurance to object to or not to approve aspects of our marketing materials and processes. As a result, those authorities may determine that certain aspects of our Senior ~~Secured Credit Facility, we~~segment are ~~required to maintain a certain asset coverage ratio. Our financial projections indicate that, based on our~~not in compliance with the current ~~business plan, our asset coverage ratio will fall below~~legal and regulatory framework. Any such determinations could delay or halt the ~~required level within one year of the date of issuance~~operation of our Senior segment, which would harm our business, operating results, financial ~~statements for~~condition and prospects, particularly if such delay or halt occurred during the three months ended March 31, 2022. If we are unable to maintain the required asset coverage ratio, our lenders could declare us in default of our obligations and accelerate all amounts owing under the Senior Secured Credit Facility. We do not expect we would have sufficient liquidity to repay such indebtedness. As a result, we would not be able to continue as a going concern if we cannot obtain a waiverMedicare annual or modification of the covenant concerning our asset coverage ratio from our lenders. While we have commenced discussions with our lenders regarding such a waiver or modification, we cannot assure you we will be successful in obtaining such a waiver or modification on acceptable terms, or at all.open enrollment periods.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

~~Not applicable.~~

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On May 5, 2023, the Company entered into the Fifth Amendment to the Senior Secured Credit Facility. For further information about the Fifth Amendment, see “Senior Secured Credit Facility” under Note 7 to the condensed consolidated financial statements above.

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ITEM 6. EXHIBITS

The following documents listed below are incorporated by reference or are filed or furnished, as applicable, with this Quarterly Report on Form 10-Q.


Exhibit Number						Exhibit Description
10.1						~~SelectQuote, Inc. 2020 Employee Stock Purchase Plan (as Amended and Restated Effective~~Fifth Amendment to Credit Agreement, dated as of ~~April 1, 2022)~~May 5, 2023, by and among SelectQuote, Inc., the lenders and other parties thereto, and Wilmington Trust, National Association, as administrative agent
10.2#						Executive Employment Agreement, dated as of February 10, 2023, by and between SelectQuote Insurance Services and Ryan M. Clement*
31.1						Certification of Chief Executive Officer of SelectQuote, Inc. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2						Certification of Chief Financial Officer of SelectQuote, Inc. Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1†						Certification of Chief Executive Officer of SelectQuote, Inc. Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2†						Certification of Chief Financial Officer of SelectQuote, Inc. Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS						XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH						Inline XBRL Taxonomy Extension Schema Document
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB						Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document
104						Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

# Indicates management contract or compensatory plan.

* Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K.

† The certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form 10-Q, are not deemed filed with the SEC and are not to be incorporated by reference into any filing of SelectQuote, Inc. under the Securities Act or the Exchange Act, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			SELECTQUOTE, INC.
May ~~5, 2022~~10, 2023			By: /s/ Tim Danker
			Name: Tim Danker
			Title: Chief Executive Officer

			By: /s/ ~~Raffaele Sadun~~Ryan Clement
			Name: ~~Raffaele Sadun~~Ryan Clement
			Title: Chief Financial Officer

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Three Months Ended March 31, 2021
	Common Stock			Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income/(Loss)		Total Shareholders' Equity
	Shares	Amount
BALANCES-December 31, 2020	162,774	$	1,628	$	545,441	$	85,296	$	(1,395)	$	630,970
Net income	—	—		—		35,235		—		35,235
Gain on cash flow hedge, net of tax	—	—		—		—		1,675		1,675
Amount reclassified into earnings, net tax	—	—		—		—		135		135
Exercise of employee stock options, net of shares withheld for cashless exercises and to cover tax withholdings	552	5		(4,331)		—		—		(4,326)
Issuance of common stock pursuant to employee stock purchase plan	56	1		985		—		—		986
Share-based compensation expense	—	—		1,429		—		—		1,429
BALANCES-March 31, 2021	163,382	$	1,634	$	543,524	$	120,531	$	415	$	666,104