SelectQuote (NYSE:SLQT) reported fiscal 2026 revenue growth, improved profitability and a $44 million year-over-year increase in operating cash flow, while outlining a fiscal 2027 plan centered on cost efficiency, cash generation and lower leverage rather than top-line expansion.
For fiscal 2026, revenue totaled $1.62 billion, up 6% from the prior year and within the company’s guidance range. Adjusted EBITDA reached $109 million, exceeding SelectQuote’s prior outlook of $90 million to $100 million. Fourth-quarter revenue was $322 million, compared with $345 million a year earlier, while adjusted EBITDA rose to $12 million from $3 million.
Healthcare Services Becomes Largest Revenue Contributor
Healthcare Services, which includes the SelectRx pharmacy business, became SelectQuote’s largest revenue contributor during fiscal 2026. The segment generated $845 million in annual revenue, an increase of 14% from fiscal 2025, despite effects from the Inflation Reduction Act and a reimbursement renegotiation with a pharmacy benefit manager partner earlier in the year.
The business generated $25 million of adjusted EBITDA for the full year and exited the fourth quarter at an annualized EBITDA run rate of nearly $50 million, according to management. SelectQuote said the Inflation Reduction Act has a material impact on reported revenue but does not materially affect EBITDA because of how reimbursements are reflected in the company’s profit-and-loss statement.
Healthcare Services membership stood at 109,000 at the end of the fourth quarter. Chief Financial Officer Ryan Clement said membership is expected to moderate again in the first fiscal quarter ahead of the annual enrollment season, but is projected to finish fiscal 2027 near fiscal 2026 levels.
Management expects Healthcare Services revenue to decline 10% to 15% in fiscal 2027, primarily due to the Inflation Reduction Act. However, the company expects segment margins to approximately double, supported by greater utilization of its Olathe, Kansas, pharmacy distribution facility and prescription management system.
President Bob Grant said the Kansas facility is currently a relatively small portion of total fulfillment volume, but SelectQuote expects a “massive growth” in enrollment and member activity at the site during the coming annual enrollment period. The facility is about 30% more efficient on shipments than the company’s two legacy locations, executives said.
Over the longer term, Clement said SelectQuote targets low-double-digit adjusted EBITDA margins for Healthcare Services.
Senior Segment Maintains Mid-20% Margins
SelectQuote’s Senior business generated $576 million in fiscal 2026 revenue, down 4% from the prior year. The reduction reflected continuing volatility in the Medicare Advantage market and a change in a key carrier partner’s strategic marketing investment, the company said.
Despite the revenue decline, the Senior segment produced a 26% adjusted EBITDA margin for the year. Danker said the result marked the fourth consecutive year in which the business generated margins in the mid-20% range.
Management expects Medicare Advantage carriers to continue adjusting plan benefits, origination volumes and marketing strategies as they work toward operating-margin targets. Danker said the company has seen “green shoots” of improvement in the market, but expects carriers to remain disciplined and sees fiscal 2027 as a transition year.
As a result, SelectQuote expects Medicare Advantage approved policies to decline 10% to 15% year over year in fiscal 2027. The company said it will remain positioned to pursue growth when market conditions support responsible investment, but will prioritize profitability and cash flow in the near term.
Grant said the company’s expected policy pullback and changes in special enrollment period opportunities have concentrated leads among more experienced agents, contributing to stronger conversion rates. He added that a larger share of the agent base will consist of “core agents” who have completed at least one annual enrollment period with the company.
Life Insurance Revenue Rises 8%
SelectQuote’s Life business generated fiscal 2026 revenue of $186 million, up 8% year over year, and adjusted EBITDA of $27 million. Clement described the segment as highly cash efficient.
The company said its final-expense business continued to perform well, although management remains cautious about the competitive term-life market and customer acquisition costs.
Fiscal 2027 Outlook Focuses on Cash Flow
SelectQuote guided for fiscal 2027 consolidated revenue of $1.35 billion to $1.45 billion, representing a 14% decline at the midpoint from fiscal 2026. Adjusted EBITDA is projected at $90 million to $115 million. Although the midpoint is lower on a dollar basis than fiscal 2026, management expects consolidated adjusted EBITDA margin expansion of approximately 60 basis points.
The company introduced an operating cash-flow outlook of more than $60 million for fiscal 2027, which would approximately double fiscal 2026 operating cash flow. SelectQuote also forecast free cash flow of about $50 million.
Management identified more than $30 million of annualized run-rate expense improvements through artificial intelligence tools, workflow automation, organizational resizing, technology investments and other process improvements. Danker said AI-enabled enrollment support, sales-assist tools, automated quality assurance and pharmacy technology are intended to reduce manual work while preserving agent time for customer interactions.
SelectQuote ended fiscal 2026 with more than $1 billion in commissions receivable. Danker said debt and preferred equity total about $800 million, carrying an overall cost of approximately 12%, including roughly $45 million in annual cash interest plus preferred-equity dividends. He said every 100-basis-point reduction in the overall funding cost would result in nearly $8 million of savings for equity holders.
Clement said the company expects commissions receivable to remain relatively flat between the end of fiscal 2026 and fiscal 2027 as new policy production replaces receivables collected from prior policy sales. He said deleveraging and investments with high returns on cash generation are SelectQuote’s primary capital-allocation priorities.
About SelectQuote (NYSE:SLQT)
SelectQuote, Inc (NYSE: SLQT) is a U.S.-based insurance brokerage and lead generation company that connects consumers with a range of insurance products through proprietary technology and licensed agents. The company specializes in life insurance, supplemental health coverage and Medicare plans, leveraging its digital platform and call center operations to help individuals compare policies and find cost-effective solutions tailored to their needs.
Through a single point of contact, policy seekers can evaluate offerings from multiple carriers, including term life, whole life, accidental death, critical illness and long-term care products.
