SelectQuote, Inc.

Previous wording

In recent years, we have increasingly focused on expanding our healthcare services platform as a natural extension of our core Senior distribution insurance business. This expansion in offerings reflects our prioritization of synergistic high-growth opportunities in areas such as pharmacy services and chronic care management through offerings like SelectRx and SelectPatient Management (“SPM”). At the same time, we have de-emphasized production within our Auto & Home distribution insurance business, which no longer represents a core area of focus. Our strategy is focused on delivering more comprehensive and personalized healthcare solutions that meet the evolving needs of our senior customers.

Current wording

In recent years, we have increasingly focused on expanding our healthcare services platform as a natural extension of our core Senior distribution insurance business. This strategic shift reflects our prioritization of higher-growth opportunities in areas such as pharmacy services. At the same time, we have de-emphasized production within our Auto & Home distribution insurance business, which no longer represents a core area of focus. Our strategy is focused on delivering more comprehensive and personalized healthcare solutions that meet the evolving needs of our senior customers.

Previous wording

Our insurance distribution business, which has operated continuously for over 40 years, allows consumers to transparently and conveniently shop for senior health, life, and 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 policies from consumers with insurance carrier partners that best meet our clients’ needs. In return, we earn commissions from our insurance carrier partners for the policies we sell on their behalf. Our proprietary technology platform integrates artificial intelligence and data science based machine learning models to analyze and identify high-quality consumer leads from diverse online and offline channels, such as digital marketing, radio, television, and third-party partnerships. Leveraging over 40 years of accumulated data and advanced predictive analytics, our technology dynamically optimizes marketing spend in real-time. Our intelligent workflow system instantly evaluates each acquired lead, routing it efficiently to the most suitable sales agent based on consumer needs and agent expertise. Our platform then captures and utilizes our experience to further build upon the millions of data points that feed our marketing algorithms, further 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, a metric we refer to as “ lifetime value of commissions” or “LTV”, which is a key component to our overall profitability.

Current wording

Our insurance distribution business, which has operated continuously for over 40 years, allows consumers to transparently and conveniently shop for senior health, life, and 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. In return, we earn commissions from our insurance carrier partners for the policies we sell on their behalf. Our proprietary technology platform integrates artificial intelligence and data science based machine learning models to analyze and identify high-quality consumer leads from diverse online and offline channels, such as digital marketing, radio, television, and third-party partnerships. Leveraging over 40 years of accumulated data and advanced predictive analytics, our technology dynamically optimizes marketing spend in real-time. Our intelligent workflow system instantly evaluates each acquired lead, routing it efficiently to the most suitable sales agent based on consumer needs and agent expertise. Our platform then captures and utilizes our experience to further build upon the millions of data points that feed our marketing algorithms, further 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, a metric we refer to as “ lifetime value of commissions” or “LTV”, which is a key component to our overall profitability.

Previous wording

Senior 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 25 leading, nationally-recognized insurance carrier partners, including UHC, Humana, Aetna, and Wellcare. MA and MS plans accounted for 90% and 91% of our approved Senior policies for the three months ended March 31, 2026, and 2025, respectively, and 90% and 91% for the nine months ended March 31, 2026, and 2025, respectively, with other ancillary type policies accounting for the remainder.

Current wording

Senior 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 25 leading, nationally-recognized insurance carrier partners, including UHC, Humana, Aetna, and Wellcare. MA plans accounted for 86%, and 82%, of our approved Senior policies for the three months ended September 30, 2026, and 2025, respectively, with other ancillary type policies accounting for the remainder.

Previous wording

Healthcare Services, launched in 2021, offers various health-related products and services through SelectRx, Healthcare Select, and SPM. SelectRx provides patients with one cohesive pharmacy solution by combining their prescription and over-the-counter (“OTC”) medications in customized medication packaging. The solution improves adherence and drives positive health outcomes while reducing adverse drug interactions, hospital stays, and reduces waste. Through Healthcare Select, we utilize our excellent consumer engagement capabilities to capture valuable self-reported information in real-time for our insurance carrier partners by completing health risk and lifestyle assessments. We then use that data to take a real-time, proactive, and personalized approach to offer various health-related products and services to the consumer, such as our pharmacy services from SelectRx. In 2024, we launched SPM, via a $4.0 million acquisition of an existing chronic care management platform, which offers providers, payers, and Accountable Care Organizations scalable, technology-enhanced services for patients living with chronic conditions. Through consistent, trust-based patient engagement, SPM helps patients navigate the care continuum, focusing on non-clinical factors so physicians can focus on the more critical needs of their patients. We believe that offering these services enables healthcare to be more accessible, convenient, and personalized for our members.

Current wording

Healthcare Services, launched in 2021, offers various health-related products and services through SelectRx, Healthcare Select, and SPM. SelectRx offers essential prescription medications, over-the-counter (“OTC”) medications, customized medication packaging, and medication therapy management, providing long-term pharmacy care that enables patients to optimize medication adherence to drive positive health outcomes, while enabling patients managing polypharmacy and multiple chronic conditions to remain at home. Through Healthcare Select, we utilize our excellent consumer engagement capabilities to capture valuable self-reported information in real-time for our insurance carrier partners by completing health risk and lifestyle assessments. We then use that data to take a real-time, proactive, and personalized approach to offer various health-related products and services to the consumer, such as our pharmacy services from SelectRx. In 2024, we launched SPM, via a $4.0 million acquisition of an existing chronic care management platform, which offers providers, payers, and Accountable Care Organizations scalable, technology-enhanced services for patients living with chronic conditions. Through consistent, trust-based patient engagement, SPM helps patients navigate the care continuum, focusing on non-clinical factors so physicians can focus on the more critical needs of their patients. We believe that offering these services enables healthcare to be more accessible, convenient, and personalized for our members.

Previous wording

Life is one of the country’s largest and most established DTC insurance distributors for term life insurance, having sold over 2.6 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 20 leading, nationally-recognized insurance carrier partners, with many of these relationships exceeding 15 years. Term life policies accounted for 41%, and 41% of new premium within the Life segment for the three months ended March 31, 2026, and 2025, respectively, with final expense policies accounting for 59% and 59% for the three months ended March 31, 2026, and 2025, respectively. For the nine months ended March 31, 2026, and 2025, term life policies accounted for 40% and 41% of new premium within Life, respectively, with final expense policies accounting for 60% and 59%, respectively.

Current wording

Life is one of the country’s largest and most established DTC insurance distributors for term life insurance, having sold over 2.7 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 20 leading, nationally-recognized insurance carrier partners, with many of these relationships exceeding 15 years. Term life policies accounted for 48%, and 40% of new premium within the Life segment for the three months ended September 30, 2026, and 2025, respectively, with final expense policies accounting for 52%, and 60% for the three months ended September 30, 2026, and 2025, respectively.

Previous wording

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, 2026, and 2025.

Current wording

The three months ended September 30, referenced throughout the commentary below refers to the first quarter and fiscal year-to-date performance of our fiscal years ending on June 30, 2027, and 2026.

Previous wording

Total submitted policies for all products decreased 5% for the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025. The decrease was primarily due to a 14% decrease in overall close rates and a 4% decrease in the number of average productive agents.

Current wording

Total submitted policies for all products decreased 24% for the three months ended September 30, 2026, compared to the three months ended September 30, 2025. The decrease was primarily due to an 18% decrease in production per productive agent.

Previous wording

Total approved policies decreased by 1% for the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025, which correlates to the decrease in submitted policies, partially offset by increased same month approval rates during the current period.

Current wording

Total approved policies for all products decreased by 22% for the three months ended September 30, 2026, compared to the three months ended September 30, 2025, which correlates to the decrease in submitted policies, partially offset by a 2% increase in submission-to-approval rates during the current period.

Previous wording

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, which does not include marketing development funds or production bonuses, 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 significant 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; it does not include any updated estimates of prior period variable consideration based on actual policy renewals in the current period.

Current wording

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, which does not include marketing development funds or production bonuses, constrained by a persistency-adjusted 10-year renewal period based on our historical experience to estimate renewal revenue only to the extent probable that a significant 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; it does not include any updated estimates of prior period variable consideration based on actual policy renewals in the current period.

Previous wording

The LTV per MA approved policy decreased 2% for the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025, primarily due to shifts in carrier mix, along with plan terminations and changes to plan designs.

Current wording

The LTV per MA approved policy increased 16% for the three months ended September 30, 2026, compared to the three months ended September 30, 2025, primarily due to shifts in carrier mix and changes to plan designs.

Previous wording

Total term premiums increased 1% for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, due to a 1% increase in the average premium per policy sold. Final expense premiums decreased 1% for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, due to a 1% increase in the average premium per policy sold, offset by a 2% decrease in the number of policies sold.

Current wording

Total term premiums decreased 5% for the three months ended September 30, 2026, compared to the three months ended September 30, 2025, due to a 3% decrease in the number of policies sold, and a 2% decrease in the average premium per policy sold. Final expense premiums decreased 32% for the three months ended September 30, 2026, compared to the three months ended September 30, 2025, due to a 36% decrease in the number of policies sold, partially offset by a 7% increase in the average premium per policy sold.

Previous wording

We earn revenue in the form of commission payments from our insurance carrier customers, for the initial year the insurance policy is in effect (“first year”) and, where applicable, for each subsequent year the policy renews (“renewal year”), in addition to production bonuses and marketing development funds received from some insurance carriers. Production bonuses are based on attaining various predetermined target sales levels or other agreed upon objectives, whereas marketing development funds may or may not contain such predetermined targets and are used to purchase leads. These, along with other services revenue from Healthcare Services (excluding SelectRx revenue discussed below) and our lead generation business (of which the majority is eliminated as intersegment revenue), are presented in our condensed consolidated statements of comprehensive income as commissions and other services revenue. Pharmacy revenue on the condensed consolidated statements of comprehensive income includes revenue from the sale of prescription and OTC medication products from SelectRx.

Current wording

We earn revenue in the form of commission payments from our insurance carrier customers, for the initial year the insurance policy is in effect (“first year”) and, where applicable, for each subsequent year the policy renews (“renewal year”), in addition to production bonuses and marketing development funds received from some insurance carriers. Production bonuses are based on attaining various predetermined target sales levels or other agreed upon objectives, whereas marketing development funds may or may not contain such predetermined targets and are used to purchase leads. These, along with other services revenue from Healthcare Services (excluding SelectRx revenue discussed below) and our lead generation business (of which the majority is eliminated as intersegment revenue), are presented in our condensed consolidated statements of comprehensive loss as commissions and other services revenue. Pharmacy revenue on the condensed consolidated statements of comprehensive loss includes revenue from the sale of prescription and OTC medication products from SelectRx.

Previous wording

Revenue is recognized at different milestones for Senior and Life and is based on the contractual enforceable rights, our historical experience, and established customer business practices. Other services revenues from our Healthcare Services segment (excluding SelectRx revenue discussed below) is recognized when the performance obligation has been met, which is at different times for our various services (e.g. the health risk and lifestyle assessments has been performed, a transfer has been made to a health-related partner, or SPM has provided care management services to a member), the transaction price is known based on volume and contractual prices, and we have no further performance obligations. 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 all of our performance obligations and control of the product has been transferred to the customer. There are no future revenue streams, or material variable consideration with respect to the implicit price concession for co-pays, as the transaction price is fixed at time of shipment, and any subsequent new order is its own performance obligation.

Current wording

Revenue is recognized at different milestones for Senior and Life and is based on the contractual enforceable rights, our historical experience, and established customer business practices. Other services revenues from our Healthcare Services segment (excluding SelectRx revenue discussed below) is recognized when the performance obligation has been met, which is at different times for our various services (e.g. the health risk and lifestyle assessments has been performed, a transfer has been made to a health-related partner, or SPM has provided care management services to a member), the transaction price is known based on volume and contractual prices, and we have no further performance obligations. 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 satisfied our performance obligation and control of the product has been transferred to the customer. There are no future revenue streams, or material variable consideration with respect to the implicit price concession for co-pays, as the transaction price is fixed at time of shipment, and any subsequent new order is its own performance obligation.

Previous wording

Three Months Ended March 31, 2026 and 2025–Commission and other services revenue increased $12.8 million, or 6%, for the three months ended March 31, 2026, primarily due to a $28.6 million increase in Senior commissions revenue, a $2.1 million increase in Life revenue, partially offset by a $15.2 million decrease in other Senior revenue, and a $2.2 million decrease in Other revenue. The increase in Senior commissions revenue, was driven by a 6% increase in approved policies. The increase in Life revenue was primarily driven by a $1.7 million increase in final expense revenue due to a 1% increase in the average premium per policy sold, offset by a 2% decrease in the number of policies sold. The decrease in other Senior revenue was primarily due to a lower volume of carrier sponsored production incentives and performance-based bonuses during the current OEP cycle. Pharmacy revenue increased $10.0 million, or 5%, primarily due to a 11% increase in members due to the continued growth of the SelectRx business, partially offset by $13.4 million of manufacturer refunds received in lieu of payer reimbursement revenue as a result of the Inflation Reduction Act. Beginning in calendar year 2026, the Company began receiving refunds from pharmaceutical manufacturers on certain drugs that are part of the Medicare Prescription Drug Inflation Rebate Program under the Inflation Reduction Act. The Company reports these refunds as a reduction to cost of goods sold—pharmacy revenue rather than as pharmacy revenue.

Current wording

Three Months Ended September 30, 2026 and 2025—Commission and other services revenue decreased $14.3 million, or 13%, for the three months ended September 30, 2026, primarily due to a $5.8 million decrease in other Senior services revenue, a $2.4 million decrease in Senior commissions revenue, a $3.8 million decrease in Life revenue, and a $1.4 million decrease in Other revenue. The decrease in other Senior services revenue was primarily due to lower volume of carrier sponsored performance-based bonuses and marketing development funds. The decrease in Senior commissions revenue was driven by a 22% decrease in approved policies. The decrease in Life revenue was primarily driven by a $5.2 million decrease in final expense revenue, partially offset by a $1.2 million increase in term revenue. The decrease in final expense revenue was due to a 36% decrease in the number of policies sold, partially offset by a 7% increase in the average premium per policy sold. Pharmacy revenue decreased $34.5 million, or 16%, primarily due to a 10% decrease in average prescriptions shipped per day, combined with a 7% decrease in total SelectRx members, and $9.5 million of manufacturer refunds received in lieu of payer reimbursement revenue as a result of the Inflation Reduction Act. Beginning in calendar year 2026, the Company began receiving refunds from pharmaceutical manufacturers on certain drugs that are part of the Medicare Prescription Drug Inflation Rebate Program under the Inflation Reduction Act. The Company reports these refunds as a reduction of cost of goods sold—pharmacy revenue rather than as pharmacy revenue.

Previous wording

Nine Months Ended March 31, 2026 and 2025–Cost of goods sold-pharmacy revenue increased $121.2 million, or 27%, for the nine months ended March 31, 2026, primarily due to a $126.3 million increase in medication costs, a $4.8 million increase in compensation costs, and a $2.2 million increase in fulfillment costs, partially offset by a $13.4 million decrease from refunds recognized as a reduction of cost of goods sold—pharmacy revenue rather than as pharmacy revenue discussed above. Medication and fulfillment costs increased largely due to a 11% increase in the number of SelectRx members over the prior year. The increase in compensation costs reflects higher staffing levels required to support growth in pharmacy order volume and member fulfillment activity.

Current wording

Three Months Ended September 30, 2026 and 2025—Cost of goods sold-pharmacy revenue decreased $37.5 million, or 19%, for the three months ended September 30, 2026, primarily due to a $27.0 million decrease in medication costs, a $9.5 million decrease from refunds recognized as a reduction of cost of goods sold—pharmacy revenue rather than as pharmacy revenue discussed above, a $0.8 million decrease in compensation costs, and a $0.3 million decrease in fulfillment costs, partially offset by a $0.2 million increase in depreciation and amortization. Medication costs decreased largely due to a 10% decrease in average prescriptions shipped per day, combined with 7% decrease in the number of SelectRx members over the prior year. The decrease in compensation costs was driven by a decrease in headcount for pharmacy personnel.

Previous wording

Three Months Ended March 31, 2026 and 2025–Marketing and advertising expenses decreased $0.3 million, or less than 1%, for the three months ended March 31, 2026, primarily due to a $1.7 million decrease in lead costs, partially offset by a $0.8 million increase in creative marketing costs, and a $0.5 million increase in compensation costs. The decrease in lead costs was attributable to an increase in the consumption of internal leads for the Senior division, which ultimately reduced the cost per queued call. The increase in creative marketing costs was driven by the production of new television advertising for our Life division. The increase in compensation costs were primarily driven by a 15% increase in average final expense agent headcount in Life.

Current wording

Three Months Ended September 30, 2026 and 2025—Marketing and advertising expenses decreased $15.5 million, or 25%, for the three months ended September 30, 2026, primarily due to an $14.8 million decrease in lead costs, a $1.0 million decrease in compensation cost, a $0.2 million decrease in professional services costs, partially offset by a $0.9 million increase in creative marketing costs. The decrease in lead costs was attributable to a $10.7 million decrease within the Senior division and a $3.3 million decrease within the Life division. The decrease in Senior lead costs was driven by greater utilization of leads sourced through our own direct marketing channels for the Senior division reducing the cost per queued call. The decrease in Life lead costs was driven by lower agent headcount and a strategic shift toward utilizing lower-cost internal lead transfers over external lead purchases. The decrease in compensation costs was driven by a decrease in headcount for marketing and advertising personnel. The increase in creative marketing costs was primarily driven by strategic direct marketing programs and television production spend within the Senior division.

Previous wording

Three Months Ended March 31, 2026 and 2025–Interest expense, net decreased $9.8 million, or 48%, for the three months ended March 31, 2026. The decrease was primarily due to a lower weighted-average principal balance outstanding during the three months ended March 31, 2026 following the $260.0 million principal repayment of the Previous Term Loans balance using the proceeds from the Senior Non-Convertible Preferred Stock issuance in February 2025.

Current wording

Three Months Ended September 30, 2026 and 2025—Interest expense, net decreased $0.8 million, or 7%, for the three months ended September 30, 2026. The decrease was primarily driven by a lower weighted-average total debt balance outstanding during the three months ended September 30, 2026, following scheduled principal debt repayments.

Previous wording

Three Months Ended March 31, 2026 and 2025–For the three months ended March 31, 2026, and 2025, the Company recognized an income tax expense of $3.9 million and $8.6 million, representing an effective tax rate of 8.9% and 24.8%, respectively. The differences from the federal statutory tax rate to the effective tax rate for the three months ended March 31, 2026, were primarily related to state income taxes and the recording of a valuation allowance for federal and state tax attributes that the Company does not expect to utilize prior to expiration, non-deductible warrant mark-to-market adjustment, and excess officer and stock-based compensation and general business credits. The differences from the federal statutory tax rate to the effective tax rates for the three months ended March 31, 2025, were primarily related to state income taxes and the recording of a valuation allowance for federal and state tax attributes that the Company does not expect to utilize prior to expiration, non-deductible change in fair value of warrants and excess officer compensation.

Current wording

Three Months Ended September 30, 2026 and 2025—For the three months ended September 30, 2026, and 2025, the Company recognized an income tax benefit of $6.2 million, and $7.2 million, representing an effective tax rate of 23.4% and 19.1%, respectively. The differences from the federal statutory tax rate to the effective tax rate for the three months ended September 30, 2026, and 2025, were primarily related to state income taxes and the recording of a valuation allowance for federal and state tax attributes that the Company does not expect to utilize prior to expiration, non-deductible warrant mark-to-market adjustment, and excess officer and stock-based compensation.

Previous wording

This report includes certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP 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 report Adjusted EBITDA, which, when presented on a consolidated basis, is a non-GAAP financial measure. This non-GAAP financial measure is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to any similarly titled measure presented by other companies.

Current wording

This report includes certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP 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 herein Adjusted EBITDA, which, when presented on a consolidated basis, is a non-GAAP financial measure. This non-GAAP financial measure is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to any similarly titled measure presented by other companies.

Previous wording

We define Adjusted EBITDA as net income plus interest expense, income taxes, depreciation and amortization, changes in fair value of warrant liabilities, transaction costs, and certain add-backs for non-cash or non-recurring expenses, including restructuring, impairment charges, loss on extinguishment of debt, and share-based compensation expenses. The most directly comparable GAAP measure is net income. We monitor and have presented Adjusted EBITDA herein because it is a key measure used by our management and Board of Directors to understand and evaluate our operating performance, establish budgets, and 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.

Current wording

We define Adjusted EBITDA as net income (loss) plus interest expense, income taxes, depreciation and amortization, changes in fair value of warrant liabilities, transaction and severance costs, and certain add-backs for non-cash or non-recurring expenses, including restructuring, and share-based compensation expenses. The most directly comparable GAAP measure is net income (loss). We monitor and have presented Adjusted EBITDA herein because it is a key measure used by our management and Board of Directors to understand and evaluate our operating performance, establish budgets, and 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.

Previous wording

The following table sets forth a reconciliation of the differences between net income and Adjusted EBITDA for the periods presented.

Current wording

The following table sets forth a reconciliation of the differences between net loss and Adjusted EBITDA for the periods presented.

Previous wording

(1) For the three and nine months ended March 31, 2026, these expenses primarily consist of financing transaction costs ($0.0 million and $0.5 million) and non-restructuring severance expenses ($0.6 million and $1.0 million). For the three and nine months ended March 31, 2025, these expenses primarily consist of financing transaction costs ($5.8 million and $12.8 million) and non-restructuring severance expenses ($0.0 million and $0.6 million).

Current wording

(1) For the three months ended September 30, 2026, these expenses primarily consist of restructuring severance expenses ($3.8 million). For the three months ended September 30, 2025, these expenses primarily consist of financing transaction costs ($0.1 million), and non-restructuring severance expenses (less than $0.1 million).

Previous wording

The Company’s operating segments have been determined in accordance with ASC 280. We currently have three reportable segments: i) Senior, ii) Healthcare Services, and iii) Life. Senior primarily sells senior Medicare-related health insurance products. Healthcare Services includes SelectRx, Healthcare Select, and SPM. Healthcare Services provides products and services to our Medicare policyholders, which are focused on improving patient health outcomes. Life primarily sells term life and final expense products. The All Other category is reflective of the revenue generated from selling individual automobile and homeowners’ insurance. Additionally, the Company accounts for non-operating activity, share-based compensation expense, depreciation and amortization, goodwill, impairment charges, certain intersegment eliminations, and the costs of providing corporate and other administrative services in our administrative division, Corporate & Eliminations. We have not aggregated any operating segments together to represent a reportable segment.

Current wording

The Company’s operating segments have been determined in accordance with ASC 280. We currently have three reportable segments: i) Senior, ii) Healthcare Services, and iii) Life. Senior primarily sells senior Medicare-related health insurance products. Healthcare Services includes SelectRx, Healthcare Select, and SPM. Healthcare Services provides products and services to our Medicare policyholders, which are focused on improving patient health outcomes. Life primarily sells term life and final expense products. The All Other category is reflective of the revenue generated from selling individual automobile and homeowners’ insurance. Additionally, the Company accounts for non-operating activity, share-based compensation expense, depreciation and amortization, goodwill, impairment charges, certain intersegment eliminations, and the costs of providing corporate and other administrative services in our administrative division, Corporate & Eliminations.

Previous wording

Our segment disclosure includes intersegment revenues, which consist of affiliate marketing fees for services provided by our Senior segment to our Healthcare Services and Life segments as well as services provided by Life to other segments. These intersegment transactions are recorded by each segment at amounts that we believe approximate fair value as if the transactions were between third parties and, therefore, impact segment performance. However, the revenue and corresponding expense are eliminated in consolidation. The elimination of such intersegment transactions is included within the “Eliminations of intersegment revenues” in the tables below. Apart from these intersegment transactions, the accounting policies of the reportable segments are the same as the Company’s described Note 1 of the Company’s 2025 Annual Report.

Current wording

Our segment disclosure includes intersegment revenues, which consist of affiliate marketing fees for services provided by our Senior segment to our Healthcare Services and Life segments as well as services provided by Life to other segments. These intersegment transactions are recorded by each segment at amounts that we believe approximate fair value as if the transactions were between third parties and, therefore, impact segment performance. However, the revenue and corresponding expense are eliminated in consolidation. The elimination of such intersegment transactions is included within the “Eliminations of intersegment revenues” in the tables below. Apart from these intersegment transactions, the accounting policies of the reportable segments are the same as those described in Note 1 of the condensed consolidated financial statements.

Previous wording

(5) Corporate is not an operating segment and consists primarily of unallocated corporate overhead costs, such as payroll and related benefits ($16.6 million), professional services ($3.8 million), and facilities ($1.4 million).

Current wording

(5) Corporate is not an operating segment and consists primarily of unallocated corporate overhead costs, such as payroll and related benefits ($17.8 million), professional services ($4.1 million), and facilities ($1.4 million).

Previous wording

(6) These expenses primarily consist of financing transaction costs ($0.5 million) and non-restructuring severance expenses ($1.0 million).

Current wording

(6) These expenses primarily consist of financing transaction costs ($0.1 million) and non-restructuring severance expenses (less than $0.1 million).

Previous wording

Adjusted EBITDA from Healthcare Services was $13.3 million for the nine months ended March 31, 2026, a $0.2 million decrease compared to Adjusted EBITDA of $13.5 million for the nine months ended March 31, 2025. The decrease was due to a $122.7 million increase in revenue as discussed above, a $0.6 million decrease in technical development, offset by a $120.6 million increase in cost of goods sold- pharmacy revenue, $2.0 million increase in cost of commissions and other services revenue, $0.7 million increase in selling, general, and administrative expenses, and a $0.2 million increase in marketing expenses. Cost of goods sold - pharmacy revenue increased primarily as a result of a $126.3 million increase in medication costs, a $4.9 million increase in compensation costs, and a $2.2 million increase in fulfillment costs, partially offset by a $13.4 million decrease from refunds recognized as a reduction of costs of goods sold-pharmacy revenue rather than as pharmacy revenue as discussed above. Costs of commissions and other services revenue increased primarily as a result of $2.3 million in compensation costs. Medication costs increased largely due to a 11% increase in the number of SelectRx members over the prior year. The increase in compensation costs reflects higher staffing levels required to support growth in pharmacy order volume and member fulfillment activity.

Current wording

Adjusted EBITDA from Healthcare Services was $11.2 million for the three months ended September 30, 2026, a $4.0 million increase compared to Adjusted EBITDA of $7.2 million for the three months ended September 30, 2025. The increase was primarily due to a $37.7 million decrease in cost of goods sold - pharmacy revenue, a $0.7 million decrease in cost of commissions and other services revenue, a $0.6 million decrease in marketing expenses, a $0.2 million decrease in technical development costs, partially offset by a $35.1 million decrease in revenue as discussed above. Cost of goods sold - pharmacy revenue decreased primarily as a result of a $27.0 million decrease in medication costs, a $9.5 million decrease from refunds recognized as a reduction of costs of goods sold-pharmacy revenue rather than as pharmacy revenue as discussed above, combined with a $0.8 million decrease in compensation costs, and a $0.3 million decrease in fulfillment costs. Cost of commissions and other services revenue decreased due to a $0.6 million decrease in compensation costs. Marketing expenses decreased due to a $0.5 million decrease in lead costs. Technical development costs decreased due to a $0.2 million decrease in compensation costs. Medication costs decreased largely due to a 10% decrease in average prescriptions shipped per day, combined with 7% decrease in the number of SelectRx members. The decrease in compensation costs reflects a decline in pharmacy headcount.

Previous wording

Significant changes and activity related to our long-term debt during the nine months ended March 31, 2026, are discussed below. Refer to Note 6 to the condensed consolidated financial statements for further discussion on our debt agreements and activity. Based on our financial projections, we believe we will remain in compliance with the debt covenants for the 12 months following the date of issuance of our condensed consolidated financial statements.

Current wording

Significant changes and activity related to our long-term debt during the three months ended September 30, 2026, are discussed below. Refer to Note 7 to the condensed consolidated financial statements for further discussion on our debt agreements and activity. Based on our financial projections, we believe we will remain in compliance with the debt covenants for the 12 months following the date of issuance of our condensed consolidated financial statements.

Previous wording

As of March 31, 2026, the Company had $325.0 million and $0.0 million in outstanding borrowings related to the Term Loan and Revolving Credit Facility, respectively.

Current wording

As of September 30, 2026, the Company had $320.9 million and $21.0 million in outstanding borrowings related to the term loan and revolving credit facility, respectively.

Previous wording

During the nine months ended March 31, 2026, the Company had outstanding borrowings of $68.4 million and repaid $15.0 million of the notes issued in connection with the Indenture. Refer to Note 6 to the condensed consolidated financial statements for further information.

Current wording

As of September 30, 2026, the Company had outstanding borrowings of $59.7 million. During the three months ended September 30, 2026, the Company repaid $4.2 million of the outstanding borrowings related to the notes issued in connection with the Indenture. Refer to Note 7 to the condensed consolidated financial statements for further information.

Previous wording

As of March 31, 2026 and June 30, 2025, the Company had total debt obligations of $375.8 million and $385.1 million, respectively. Management expects that our existing cash, cash equivalents, funds available under the Revolving Credit Facility and cash provided from operations will be sufficient to finance normal working capital needs, investments in properties, facilities and equipment and debt services.

Current wording

As of September 30, 2026 and June 30, 2026, the Company had total debt obligations of $385.8 million and $370.2 million, respectively. Management expects that our existing cash, cash equivalents, funds available under the revolving credit facility and cash provided from operations will be sufficient to finance normal working capital needs, investments in properties, facilities and equipment and debt services.

Previous wording

As of March 31, 2026 and June 30, 2025, our cash, cash equivalents, and restricted cash totaled $36.3 million and $37.1 million, respectively. Additionally, the following table presents a summary of our cash flows for the periods presented below:

Current wording

As of September 30, 2026 and June 30, 2026, our cash, cash equivalents, and restricted cash totaled $14.3 million and $21.7 million, respectively. Additionally, the following table presents a summary of our cash flows for the periods presented below:

Previous wording

Net cash provided by 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; amortization of debt issuance costs and discount; non-cash lease expenses; change in fair value of warrant liabilities; loss on extinguishment of debt; impairment of equity-method investment and the effect of changes in working capital and other activities.

Current wording

Net cash provided by operating activities primarily consists of net loss, adjusted for certain non-cash items including depreciation; amortization of intangible assets and internally developed software; loss on disposal of property, equipment and software; deferred income taxes; share-based compensation expense; amortization of debt issuance costs and discount; non-cash lease expenses; change in fair value of warrant liabilities; and the effect of changes in working capital and other activities.

Previous wording

Nine Months Ended March 31, 2025—Net cash provided by operating activities was $25.8 million, consisting of net income of $34.7 million, adjustments for non-cash items of $32.7 million, and cash used in operating assets and liabilities of $41.6 million. Adjustments for non-cash items primarily consisted of $15.6 million of depreciation and amortization, $13.5 million of share-based compensation expense, $13.3 million of accrued interest payable in kind on the term loans, $3.9 million of amortization of debt issuance costs and debt discount, $2.8 million of non-cash lease expense, $4.4 million in deferred income taxes, $4.2 million in bad debt expense, and $25.3 million in the change in fair value of warrant liabilities. The change in fair value of warrant liabilities is a non-cash expense resulting from the decrease in our stock price impacting the fair value measurement of the warrants. The $41.6 million cash decrease resulting from changes in net operating assets and liabilities was primarily driven by the timing of cash receipts and strategic cash management decisions. The cash inflows included a increase of $41.2 million in accounts payable and accrued expenses. The increase in accounts payable and accrued expenses was driven by management’s strategic decision to make investments for the OEP season including increased agent headcount and marketing expenditures. This strategic decision is not indicative of future operational cash flow generation and is expected to fluctuate inline with the Company’s cash availability throughout the year.

Current wording

Three Months Ended September 30, 2026—Net cash used in operating activities was $17.2 million, consisting of net loss of $20.3 million, adjustments for non-cash items of $12.7 million, and cash provided by operating assets and liabilities of $15.8 million. Adjustments for non-cash items primarily consisted of $4.5 million of depreciation and amortization, $0.1 million of loss on disposal of property, equipment and software, $2.7 million of share-based compensation expense, $1.0 million of amortization of debt issuance costs and debt discount, $1.0 million of non-cash lease expense, $9.4 million in deferred income taxes, and $12.6 million in the change in fair value of warrant liabilities. The change in fair value of warrant liabilities is a non-cash gain resulting from the decrease in our stock price impacting the fair value measurement of the warrants. The $15.8 million cash increase resulting from changes in net operating assets and liabilities was primarily driven by the timing of cash receipts and seasonal trends. The cash inflows included a $38.4 million decrease in accounts receivable, a $2.6 million increase in other liabilities, and a $2.7 million decrease in other assets. The decrease in accounts receivable is consistent with the Company’s seasonality as the majority of policies sold have January 1st effective dates, allowing the current accounts receivable balances to begin depleting as we approach the end of the calendar year. The increase in other liabilities is primarily related to a $17.6 million increase in contract liabilities, partially offset by a $14.2 million decrease in accrued compensation and benefits. The increase in contract liabilities indicates a deferral of performance obligations and the receipt of cash resulting in a new liability. Refer to Note 2 for further detail into the change in contract liabilities during the period. The decrease in accrued compensation and benefits is due to the annual long-term incentive bonus payouts during three months ended September 30, 2026. The decrease in other assets is primarily driven by the timing of prepaid expense payments, which can vary period to period.

Previous wording

These cash inflows were partially offset by cash outflows that included an $82.9 million increase in accounts receivable, an increase of $8.7 million in commissions receivable and a $3.5 million decrease in operating lease liabilities. The increase in accounts receivable is consistent with the Company’s seasonality as the policies sold during the AEP season have January 1st effective dates, allowing the current accounts receivable balances to increase at the start of the Company’s third fiscal quarter. The increase in commissions receivable is primarily driven by the high volume of revenue recognized during the AEP season. Refer to Note 12 to the condensed consolidated financial statements for further detail into the change in commissions receivable during the period. The decrease in operating lease liabilities is consistent with the principal repayments on existing lease obligations, as the Company did not enter into any material leases during the nine months ended March 31, 2026.

Current wording

These cash inflows were partially offset by cash outflows that included a $15.8 million increase in commissions receivable, a $10.9 million decrease in accounts payable and accrued expenses, and a $1.2 million decrease in operating lease liabilities. Refer to Note 2 of the condensed consolidated financial statements for further detail into the change in commissions receivable during the period. The period-over-period decrease in accounts payable and accrued expenses is primarily due to the timing of vendor disbursements. The decrease in operating lease liabilities is consistent with the principal repayments on existing lease obligations, as the Company did not enter into any material leases during the three months ended September 30, 2026.

Previous wording

Nine Months Ended March 31, 2026—Net cash provided by operating activities was $35.2 million, consisting of net income of $79.0 million, adjustments for non-cash items of $13.9 million, and cash used in operating assets and liabilities of $29.9 million. Adjustments for non-cash items primarily consisted of $13.0 million of depreciation and amortization, $11.5 million of share-based compensation expense, $3.3 million of amortization of debt issuance costs and debt discount, $3.1 million of non-cash lease expense, $7.3 million in deferred income taxes, $8.7 million in loss on extinguishment of debt, and $61.8 million in the change in fair value of warrant liabilities. The change in fair value of warrant liabilities is a non-cash expense resulting from the decrease in our stock price impacting the fair value measurement of the warrants. The $29.9 million cash decrease resulting from changes in net operating assets and liabilities was primarily driven by the timing of cash receipts and seasonal trends. The cash inflows included a $53.6 million increase in accounts payable and accrued expenses, a $10.3 million increase in other liabilities, and a $1.3 million decrease in other assets. The period-over-period increase in accounts payable and accrued expenses is consistent with seasonal trends, reflecting the ramp-up of agent incentives and marketing outreach required for the OEP cycle. Further, during the period, the Company transitioned to 30-day payment terms with its primary inventory supplier, resulting in higher outstanding balances for inventory purchases. While this change contributed to the current period’s cash inflow, it may not be indicative of future operational cash flow trends as balances are expected to fluctuate in line with inventory needs and cash availability. The increase in other liabilities is primarily related to a $9.9 million increase in accrued compensation and benefits. The decrease in other assets was due to depleting inventory balances. The decrease in inventory was primarily driven by a strategic reduction in stock levels for products impacted by anticipated regulatory pricing shifts to optimize working capital.

Current wording

Three Months Ended September 30, 2025—Net cash used in operating activities was $21.6 million, consisting of net loss of $30.5 million, adjustments for non-cash items of $13.4 million, and a net cash inflow from changes in operating assets and liabilities of $22.2 million. Adjustments for non-cash items primarily consisted of $4.3 million of depreciation and amortization, $4.3 million of share-based compensation expense, $1.2 million of amortization of debt issuance costs and debt discount, $1.0 million of non-cash lease expense, $9.2 million in deferred income taxes, and $15.0 million in the change in fair value of warrant liabilities. The change in fair value of warrant liabilities is a non-cash expense resulting from the decrease in our stock price impacting the fair value measurement of the warrants. The $22.2 million cash increase resulting from changes in net operating assets and liabilities was primarily driven by the timing of cash receipts and seasonal trends. The cash inflows included a $46.9 million decrease in accounts receivable, a $11.4 million increase in accounts payable and accrued expenses, and a $2.4 million decrease in other assets. The decrease in accounts receivable is consistent with the Company’s seasonality as the majority of policies sold have January 1st effective dates, allowing the current accounts receivable balances to be begin depleting as we approach the end of the calendar year. The period-over-period increase in accounts payable and accrued expenses is consistent with seasonal trends, reflecting the ramp-up of agent incentives and marketing outreach required for the AEP cycle. The decrease in other assets was due to depleting inventory balances. The decrease in inventory was primarily driven by a strategic reduction in stock levels for products impacted by anticipated regulatory pricing shifts to optimize working capital.

Previous wording

Nine Months Ended March 31, 2026—Net cash used in investing activities of $11.6 million was due to $8.5 million in purchases of software and capitalized internal-use software development costs and $3.1 million of purchases of property and equipment, primarily made up of machinery and equipment and leasehold improvements.

Current wording

Three Months Ended September 30, 2026—Net cash used in investing activities of $3.6 million was due to $3.0 million in purchases of software and capitalized internal-use software development costs and $0.6 million of purchases of property and equipment, primarily made up of machinery and equipment and leasehold improvements.

Previous wording

Nine Months Ended March 31, 2025—Net cash used in investing activities of $8.2 million was due to $6.5 million in purchases of software and capitalized internal-use software development costs and $1.7 million of purchases of property and equipment, primarily made up of machinery and equipment and leasehold improvements.

Current wording

Three Months Ended September 30, 2025—Net cash used in investing activities of $4.0 million was due to $2.9 million in purchases of software and capitalized internal-use software development costs and $1.1 million of purchases of property and equipment, primarily made up of machinery and equipment and leasehold improvements.

Previous wording

Nine Months Ended March 31, 2026—Net cash used in financing activities of $24.4 million was primarily due to $314.0 million of principal payments on the previous term loans, $270.0 million of payments on the revolving credit facility, $15.0 million of payments on the notes issued in connection with the Indenture, and $7.7 million of payments for debt issuance costs, partially offset by $315.2 million of net proceeds on the Term Loan and $270.0 million of proceeds from the revolving credit facility.

Current wording

Three Months Ended September 30, 2026—Net cash provided by financing activities of $13.5 million was primarily due to $169.0 million of proceeds from the revolving credit facility, partially offset by $148.0 million of payments on the revolving credit facility, $4.2 million of payments on the notes issued in connection with the Indenture, $2.0 million of principal payments on the term loans, $1.1 million of payments on tax withholdings related to net share settlement of equity awards, and $0.1 million of payments on other debt.

Previous wording

Nine Months Ended March 31, 2025—Net cash provided by financing activities of $25.9 million was primarily due to $384.6 million of principal payments on the previous term loans, $11.7 million of payments on the notes issued in connection with the Indenture, $166.9 million of payments on the revolving credit facility, offset by $337.9 million of proceeds from the issuance of senior non-convertible preferred stock, $99.1 million of proceeds on the notes issued in connection with the Indenture, and $166.9 million of proceeds from the revolving credit facility.

Current wording

Three Months Ended September 30, 2025—Net cash provided by financing activities of $4.2 million was primarily due to $80.0 million of proceeds from the revolving credit facility, offset by $65.0 million of payments on the revolving credit facility, $4.5 million of payments on the notes issued in connection with the Indenture, $3.6 million of principal payments on the term loans, $2.5 million of payments on tax withholdings related to net share settlement of equity awards, and $0.1 million of payments on other debt.