After releasing its fiscal year 2025 second-quarter financial results, SelectQuote, Inc. (NYSE: SLQT) saw a significant increase in the value of its shares. The shares of SLQT increased 26.48% during premarket trading, hitting $5.54. Investor confidence in the company’s strong financial performance and strategic expansion ambitions is reflected in this spike.
Outstanding Financial Results
Consolidated revenue for SelectQuote was $481.1 million, a significant rise above $405.4 million during the same quarter last year. Additionally, net income increased significantly, from $19.4 million to $53.2 million. Furthermore, combined Adjusted EBITDA grew from $67.4 million to $87.5 million, indicating great profitability and operational efficiency.
Overcoming Market Challenges with a Strong Business Model
Despite facing challenges from a historically disruptive Annual Enrollment Period, SelectQuote delivered resilient financial results. The company attributed its success to its high-touch, agent-led model, which helped it navigate an unprecedented wave of plan terminations and benefit modifications affecting American seniors.
A key highlight of the quarter was the growth in Senior Adjusted EBITDA margin, which rose by approximately 750 basis points year-over-year to 39%. This performance underscores the effectiveness of SLQT’s strategic focus on high-quality customer engagement and policy volume expansion.
Expansion in Healthcare Services Fuels Growth
SelectQuote’s Healthcare Services segment, led by SelectRx, continued to demonstrate strong momentum. SLQT reported a 54% increase in membership, reaching over 96,000 members. Furthermore, the company expanded its global Revenue to Customer Acquisition Cost (CAC) ratio to 5.3X, signaling its ability to maintain strong returns as a comprehensive healthcare services provider.
Strategic Investment Strengthens Financial Position
In a significant move to enhance its capital structure, SelectQuote announced a $350 million strategic investment led by Bain Capital and Morgan Stanley Private Credit. This investment is expected to provide increased liquidity, reduce annual cash debt service, and improve operating flexibility, positioning the company for continued growth in its Senior and Healthcare Services businesses.
Additionally, SelectQuote successfully renegotiated its Senior Secured Credit Facility, securing a lower interest rate on the remaining balance. This strategic recapitalization is set to accelerate the company’s efforts to optimize its financial structure while expanding its partnerships with insurance carriers and broadening its healthcare services portfolio.