SelectQuote, Inc.

Good day and thank you for standing by. Welcome to the Select Code Fiscal First Quarter 2022 Earnings Conference Call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. And to ask a question during the session, you will need to press star 1 on your telephone keypad. And if you require any further assistance, you may press star 0. Without a further ado, I would like to welcome your first speaker for today, Mr. Matt Gunter, SelectQuote Investor Relations. Sir, the floor is yours.

Thank you, and good afternoon, everyone. Welcome to SelectQuote's fiscal first quarter earnings call. Before we begin our call, I would like to mention that on our website, we have provided a slide presentation to help guide our discussion this afternoon. After today's call, a replay will also be available on our website. Joining me from the company, I have our Chief Executive Officer, Tim Danker, and our Chief Financial Officer, Raf Tadoon. Following Tim and Raf's comments today, we will have a question and answer session. In order to allow everyone the opportunity to participate, we do ask that you limit yourself to one question and one follow-up at a time, and then fall back into the queue for any additional questions. As referenced on slide two, during this call, we will be discussing some non-GAAP financial measures. The most directly comparable GAAP financial measures and a reconciliation of the differences between the GAAP and non-GAAP financial measures are available in our earnings release and investor presentation on our website. And finally, a reminder that certain statements made today may be forward-looking statements. These statements are made based upon management's current expectations and beliefs concerning future events impacting the company, and therefore involve a number of uncertainties and risks, including but not limited to those described in our earnings release, annual report on Form 10-K, and other filings with the SEC. Therefore, the actual results of operations or financial condition of the company could differ materially from those expressed or implied in our forward-looking statements. And with that, I'd like to turn the call over to our Chief Executive Officer, Tim Danker. Tim?

Thanks, Matt, and thank you to everyone joining on the call. Today, we'll review our strong fiscal first quarter results. We'll also give a quick update on our preparation for the ongoing AEP season for our senior Medicare business. And lastly, we'll provide some color on our population health initiatives and SelectRx specifically. Then, as usual, we'll wrap up with Raf's overview of our financial results. So let's begin on slide three, and I'll start with five key takeaways as we see them. First, our results in the first quarter were strong and ahead of internal expectations. Consolidated revenues of $160 million were up 29% year-over-year, driven primarily by higher MA-approved policies and growth in final expense premium. Our adjusted EBITDA loss of $44 million was driven primarily by the seasonal investment to onboard flex agents and accompanying support roles in anticipation of AEP and OEP. Second, our full-year fiscal 22 outlook ranges remain unchanged at $1.25 to $1.4 billion in revenue and adjusted EBITDA of $255 to $285 million, which also includes an unchanged $65 million placeholder for potential tail adjustments. While our first quarter results were ahead of our internal expectations, the pacing of our revenue and EBITDA for the year has moved given the timing of hiring coming into this AP season. Both Ralph and I will speak to this during the call. Additionally, it is important to reiterate that over 70% of our annual production will come over the next two quarters, and as a result, we plan to provide updates to our outlook as we get further through the season. Third, while the timing was delayed, our strategic staffing is in place for the ongoing AP season, and we believe we are well positioned for another year of strong growth despite the tighter labor market. For our senior business, we have also implemented new tools that will enhance our core senior business and our final expense product this year. Fourth, we're thrilled by the progress we've seen in our SelectRx business. Our daily enrollment rate has ramped sharply, which continues to validate the power and synergy of our offering. In addition, we acquired SimpleMeds in the quarter, which is a medication management pharmacy. The platform will further accelerate the expansion of our SelectRx business with complementary and additive operations, capacity, and infrastructure. Also, on our broader population health strategy, we've added in-home care provider ready responders and behavioral health solution providers, ThriveWorks and BrainCheck, to our growing network of provider partners. Ready Responders provides on-demand telehealth for patients that have non-emergency health issues and have been recently discharged from an acute care facility. ThriveWorks offers leading behavioral health and medication management services, both virtually and in person, in over 300 locations. BrainCheck provides cognitive testing to its members, value-based care providers, and health plans. It is used in primary care, neurology, and geriatric practices at some of the world's most renowned medical centers. These partnerships underscore our potential to expand the population health platform into new healthcare service areas that will benefit our patients and drive new revenues to select quote. Lastly, we took advantage of the attractive debt market to raise an additional $200 million in committed capital through incremental delay draw term loans. Raph will give more color later in his remarks, but the bottom line is we are very well positioned to pursue growth across our core distribution and population health strategies. Before I turn to AEP, let me quickly put our recent results in growth in context. Over the past three years, SelectQuote has driven revenue and adjusted EBITDA CAGRs of 68% and 31% respectively, and we expect that growth will continue into fiscal 22. The key point is, Despite some persistency headwinds in some recent cohorts and the tail adjustment impact, Selectwood is delivering against our stated goal to grow aggregate EBITDA dollars at attractive and scaled unit economics. Lastly, we'd say that we still see a very long runway for growth in our core senior Medicare Advantage distribution business and are clearly excited by the potential for population health and SelectRx to augment these trends as the business scales. Turning to slide four on senior. Let me provide a brief overview of the first quarter and our strategy heading to the upcoming annual enrollment period for Medicare Advantage. The first quarter was, again, another strong, high-growth quarter. Our senior segment revenues grew at 45%, driven by a 98% year-over-year increase in approved policies. Our final expense unit continues to demonstrate its attractive growth potential with another strong quarter, driven by a 72% increase in premiums. As we are now in the heart of AEP, let me give some color on our preparation for the season. First, we'd reiterate that we believe we are well positioned to achieve the growth outlined in our full year outlook as evidenced by the fact that we've now exceeded our total flex agent hiring goal. That said, we now expect the timing and cadence of that growth will be delayed this year given some slower than expected hiring heading into the season. The beginning of this year's agent production ramp was delayed given the tighter labor market that I noted before. The key takeaway is we have the agents we need, but this will move the mix of earnings from 2Q into the third and fourth quarter. Raf will provide an update on our quarterly cadence a little later. As you know, SelectQuote constantly looks to optimize and use the latest data and technology to enhance our business. I'd like to highlight a couple of the enhancements we have made to our tools and approach for this year. First, we significantly enhanced our retention risk scoring. We have risk scored our existing base of customers and are utilizing specialized retention tactics based upon each customer's risk profile. Second, we have also significantly enhanced our enrollment and customer onboarding processes, both to drive additional efficiency and to ensure enhanced customer awareness of planned benefits and satisfaction. In summary, we are well positioned for this year's peak selling season and look forward to sharing our results in the coming quarters. Now, if we turn to slide five, I'd like to take a minute to provide an update on our exciting population health and SelectRx initiatives. Similar to the past two quarters, we continue to see strong consumer demand for these offerings, particularly for our SelectRx pharmacy solution. As you can see here, our SelectRx enrollments have ramped sharply, and we are now seeing daily enrollment volume that is about seven times the level of acquisition To put that in context, that rate was closer to three times pre-acquisition levels just last quarter. As I noted a minute ago, we continue to build in additional distribution capabilities that should further this progress, like our acquisition of SimpleMeds. In fact, we are now selling in 47 states, which is up from 11 states at launch. While we're very encouraged by these trends to date, we continue to optimize the critical member onboarding and fulfillment process including any patient fall-off that naturally occurs during the migration. It is also important to note that drug sales and the resulting revenues for SelectRx will typically lag the enrollments by about a quarter as we work through this operational process. As a reminder, population health, and SelectRx especially, are truly significant revenue and return opportunities for SelectVote with attractive cash flow dynamics. The strategy capitalizes on the best attributes of our company, and our ability to leverage information at significant value for our policyholders, as well as our carriers and caregiver partners. Best of all, the connectivity that SelectQuote provides between caregivers, payers, and patients improves health outcomes, which we are very proud of. With that, let me turn the call over to Raf to review our results. Raf? Thanks, Tim.