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Edited Transcript of SLQT.N earnings conference call or presentation 8-Feb-21 10:00pm GMT

·54 min read

Q2 2021 SelectQuote Inc Earnings Call Feb 9, 2021 (Thomson StreetEvents) -- Edited Transcript of SelectQuote Inc earnings conference call or presentation Monday, February 8, 2021 at 10:00:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Matthew Scott Gunter SelectQuote, Inc. - President of Auto & Home Segment * Raffaele Sadun SelectQuote, Inc. - CFO * Robert Clay Grant SelectQuote, Inc. - President of Senior Segment * Timothy Robert Danker SelectQuote, Inc. - CEO & Director * William Grant SelectQuote, Inc. - COO ================================================================================ Conference Call Participants ================================================================================ * Daniel R. Grosslight Citigroup Inc., Research Division - Research Analyst * David Anthony Styblo Jefferies LLC, Research Division - Equity Analyst * Elizabeth Hammell Anderson Evercore ISI Institutional Equities, Research Division - Associate * Frank George Morgan RBC Capital Markets, Research Division - MD of Healthcare Services Equity Research & Analyst * Jailendra P. Singh Crédit Suisse AG, Research Division - Research Analyst * Jonathan Yong Barclays Bank PLC, Research Division - Research Analyst * Lauren Elizabeth Cassel Morgan Stanley, Research Division - Research Associate & Equity Analyst * Meyer Shields Keefe, Bruyette, & Woods, Inc., Research Division - MD ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Welcome to SelectQuote's Second Quarter Earnings Conference Call. (Operator Instructions) It is now my pleasure to introduce Matt Gunter, SelectQuote Investor Relations. Mr. Gunter, you may begin your conference. -------------------------------------------------------------------------------- Matthew Scott Gunter, SelectQuote, Inc. - President of Auto & Home Segment [2] -------------------------------------------------------------------------------- Thank you, and good afternoon, everyone. Welcome to SelectQuote's Fiscal Second Quarter Earnings Call. Before we begin our call, I'd 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 Chief Financial Officer, Raff Sadun. Following Tim and Raff's comments today, we will have a question-and-answer session. (Operator Instructions) As referenced on Slide 2, 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? -------------------------------------------------------------------------------- Timothy Robert Danker, SelectQuote, Inc. - CEO & Director [3] -------------------------------------------------------------------------------- Thank you, Matt, and thank you, as usual, to our investors and analysts. We're excited to share another very strong quarter of results for SelectQuote, driven in large part by a highly successful AEP in our Senior business. Let's start on Slide 3 with some highlights from the second quarter, which exceeded our internal expectations yet again. SelectQuote ended the second quarter with consolidated revenues of $358 million, up 103% year-over-year; and adjusted EBITDA of $130 million, up 88% over last year. As for highlights in the second quarter, our Senior business was the main event again. We're most excited by another quarter of stable and industry-leading LTVs, combined with our outsized revenue growth. Our Senior division grew rapidly on a challenging year-over-year compare with revenue up 127% and adjusted EBITDA up 98%. Let me pause on that statement for a second to call out that the 127% year-over-year growth in top line and 98% growth in EBITDA was on top of similar outsized growth we experienced last year. Specifically, we grew senior revenues by 62% and adjusted EBITDA by 51% in the second quarter of last year. I'm emphasizing to highlight not only how significant and lasting the growth opportunity is for our business but more importantly, to note the scalability of our differentiated model. There are not many businesses that can grow over 125% on top of a year of 60% growth. Even more impressive, as we dig through the details of the quarter, is we believe the profit growth could have been even better in terms of marketing efficiency, which Raff will touch on in a minute. Another highlight is our continued cash efficiency. Put simply, we are growing faster while using less cash than anticipated. I'll detail AEP in a second, but the standout achievement on our growth is the continued improvement in agent productivity, which is up 32% over last year despite a 70% increase in productive agents. In our Life business, final expense continues to be a winner with premium growing nearly 230% on a year-over-year basis, which shows the power of our technology and flex agent model and how we can monetize the deep knowledge we have about our customer base. Lastly, on February 1, we purchased certain lead distribution assets from one of our lead vendors. As we have stated in the past, similar to the Inside Response acquisition, we would be opportunistic if assets became available on the lead generation front that were synergistic to our business. These assets will allow us to continue to refine our marketing capabilities and continue to generate consistent and growing leads for our various lines of business. In total, SelectQuote continues to excel in our large and rapidly growing industry, and we are very pleased that our results continue to validate our differentiated strategy. Based on the strength of AEP and our 2Q results, we are raising our fiscal 2021 annual guidance for adjusted EBITDA to a range of $230 million to $240 million. Raff will go into more detail later, but this is the third straight quarter we have raised our guidance. Let's turn to Slide 4 and review the successful AEP we just completed. At an industry level, we continue to see strong demand for senior health products and more importantly, SelectQuote continues to grow at multiples of that trend. Some high-level comparisons first. We onboarded over 2,000 new associates this AEP, over half of which were sales agents. As a result, average productive agents increased 70% from last year. What was more impressive was our ability to replicate and, in many ways, enhance our unique training experience in the remote work-from-home environment. In addition to materially increasing the size of our agent force, we experienced better agent retention rates through all stages of our flex agent sales process. We also utilized more enrollers and customer care agents that we have in any previous AEP, which further enhanced our efficiency and service level, all that has a direct link to our volumes, LTVs and returns. The best part about each of these highlights, of course, are the outsized results that are driven by our differentiated strategy. We drove 32% higher agent productivity in our Senior division despite growing agent headcount over 70%. As a result, we grew approved MA policies by 132% and total approved policies by 117% over last year. This was our fourth consecutive quarter of revenue growth over 100%. Our MA LTVs were flat compared to a year ago at $1,268, which stands out compared to peer LTVs, which are roughly 25% lower and have exhibited more volatility than ours. Furthermore, the stability of our LTVs in a period of rapid growth is a proof point to the solid foundation we've built in our model. Lastly, as you know, our model doesn't stop at point of sale. With our expanded CCA team, we called nearly every new customer and successfully connected with approximately 85% of them, which we believe is crucial to early-stage persistency and ultimately, LTVs in our returns. Best of all, each of these strengths in our differentiated model are driving significant profitability as our adjusted EBITDA in Senior grew 98% over last year and did so in an increasingly cash efficient manner. What I'd like to do now is spend some time on our 2 most important factors why we believe SelectQuote outperforms, our agents and our technology. First, on Slide 5, we'd like to reemphasize how our unique agent model serves to continually improve efficiency and returns. First and most important is that our agent force is 100% internal, and each agent was hired through a rigorous onboarding process. Our new agents undergo an extensive 10-week training program to ensure that they are subject matter experts the day they begin speaking with customers. Our continuous education platform reinforces that training year round. Once trained, we then arm our agents with robust technology to allow for the most efficient volume throughput while maintaining industry-leading quality as defined by LTV. We then add our flex agent model and the utilization of licensed enrollers to drive additional volume and efficiency. In summary, we have built a highly scalable and increasingly efficient model as evidenced by the 32% increase in agent productivity this quarter. Turning to quality and returns. Our agents don't just process information efficiently where they conduct a thorough, personalized, needs-based assessment for each customer to make sure they find the right policy for them. And our customer engagement does not end at the initial sale but continues through the life of the policy with our customer care CCA team. This additional investment in care, which some of our competitors are only now trying to build, is more significant than you know, providing long-term value to consumers and our book of business. Now we believe in a market as large as ours, there are many ways to approach and interface with the customer. At a high level, we believe many models were built to focus on volume first and customer value second. SelectQuote is focused on quality first and volume second, is the major difference in our agent model as a key driver of our superior LTVs. Let's now turn to SelectQuote's second most important differentiator, our technology on Slide 6. We're clearly proud we've driven a 32% increase in agent productivity. And the natural question is how we drove that improvement on significantly higher volume, all while going the extra mile on customer service. The answer is our commitment to technology is a strategic advantage in how both we serve our customers and optimize our volumes and returns. The challenge for you, the investor and analysts, is that our technology is not something to be fully explained in a bullet or 2. It's very important to understand that our technology took years to build and hundreds of millions of dollars to develop. From a competitive standpoint, it puts a significant moat around how we approach the business compared to others, and it's not the kind of thing that can be stood up quickly. There certainly isn't time on this call to speak to each component of our technology, so let me provide one example across our marketing and lead workflow on Slide 7. At the highest level, we have built custom technology at every step of the process from the lead buying decision to how those leads are scored, enriched and routed. We begin with our wide funnel approach to aggregate leads from a variety of sources that can be toggled up and down based upon what the market environment presents us. From there, we've developed proprietary technology called SelectBid by leveraging investments in data science, SelectBid allows us to make intelligent real-time lead buying and pricing decisions by combining the lead data with our historical performance data, third-party data and custom algorithms to predict the expected LTV of a customer and prices to bid accordingly. From there, we apply similar data science to best match leads to the right agents based on close rates and service quality. When the agent enters the process, we apply just as much technology at the customer service level. We've developed robust tools to match customers and plans against the best combination of doctors, prescription drugs and their future medical needs. This happens both at the sales agent level and at the CCA level post initial sale. The final point I make here is that in addition to being difficult to replicate, our technology is built with the full knowledge that none of the variables and factors I just discussed are static from one season to the next. Things like changing plan features or customer habits and health background can influence this business significantly. And as a result, our technology has been built to interpret these factors in real-time and drive the optimal throughput and service. Again, difficult to articulate but this technology paired with our unique agent model is the difference in why we drive best-in-class LTVs on very high levels of volume. With that, let me quickly sum up on Slide 8 and review the highlights of a very successful quarter. First, this was the most successful AEP in our company's history, with Senior revenue growth of 127% following the 2020 in which we grew by 62%. We've said it a few times now, but we couldn't be more excited about the validation of our model and what it means for this company as we look to the massive growth opportunity ahead. Second, our 98% EBITDA growth in Senior and the better-than-expected cash efficiency of our growth are equally exciting and speak to our return-focused approach to growth. Third, our market-leading and stable LTVs continue to be the proof point in our differentiated agent and technology-driven model. Lastly, given how important our agents and fellow associates are to our strategy, we are very proud to have been awarded top workplaces awards, both on a regional and national basis in a number of categories. With that, let me turn the call over to Raff to detail our results. -------------------------------------------------------------------------------- Raffaele Sadun, SelectQuote, Inc. - CFO [4] -------------------------------------------------------------------------------- Thanks, Tim. I'll start on Slide 9 with our consolidated results. For the second quarter, we generated $358 million of revenue and $130 million of adjusted EBITDA. Revenue grew 103%, and adjusted EBITDA grew 88%. As we discussed last quarter, the investments we made in the first quarter in hiring and training paid off in the second quarter as we had a very successful AEP season. We'll discuss the performance of the divisions in more detail on the next few slides, but the revenue growth was driven by our Senior segments and by our investment in final expense policies within our Life segment. Our consolidated margins were down a little consistent with our stated strategy of growing faster and producing more absolute revenue and EBITDA at slightly lower margins. Turning to Slide 10 and our Senior division. As you can see, we had a very strong AEP season, generating revenue of $316 million and adjusted EBITDA of $135 million during the second quarter. This represents year-over-year revenue growth of 127% and adjusted EBITDA growth of 98%. It also represents the fourth quarter in a row that we have grown revenue over 100%. Adjusted EBITDA margins were down a little from 49% to 43%, consistent with our stated strategy of growing faster and producing more absolute revenue and EBITDA at slightly lower but still highly attractive margins. To expand on that point, for the second quarter last year, when we had margins of 49%, we grew revenue 62% year-over-year and added $23 million of adjusted EBITDA. This year, with margins at 43%, we grew revenue 127% and added $66 million of adjusted EBITDA, almost 3 times more EBITDA year-over-year. We believe this was absolutely the right tradeoff and again, consistent with what we said we were going to do with the proceeds of the IPO. Moving on to slide 11. For the second quarter, we had approximately 1,300 total average productive agents, up roughly 70% year-over-year. Average agent productivity was up 32%, with both core and flex agent productivity improving. This is really remarkable when you take into consideration that all hiring, onboarding, training, licensing and selling was done virtually. Multiple factors contributed to the improvement in agent productivity, including recruiting nationally, which, on average, allowed us to bring in higher-quality candidates with a bigger pool to select from; SelectQuote University, which allowed us to train our agents more efficiently and more consistently than before; our improvements to our doctor and drug matching and other technology changes that allowed agents to be more productive; and lastly, continued refinement of our operational workflows, both on the front end and the back end, which allowed us to increase conversion rates and speed up the overall sales process. This increased agent headcount, combined with the increase in average agent productivity, drove significant growth during the quarter. Total submitted policies were up 108% and total approved policies, 117%. The largest driver of this growth was MA policies, where we grew our MA submitted policies 128% and approved policies 132%. Moving on to LTVs. For the quarter, LTV of an MA policy was flat year-over-year, which was slightly above our internal expectations. As a reminder, we use a 36-month weighted average of persistency assumptions, and the lower persistency we experienced last year now represents around 90% of the weighted average calculation. I think one important thing to highlight is that the percent of our revenue, which is driven by first year commission and production bonus versus renewal revenue where the cash will come in over time, has gone up significantly. Last year, 34% of our second quarter Senior revenue was from year 1 cash items. This year, 45% of our revenue is from year 1 cash items. This improved cash flow and reduces the amount of revenue that is at risk from renewals. This was driven by restructured deals with our carrier partners with more emphasis on first year revenue versus renewal revenue and the advertising revenue generated by Inside Response, which is all upfront. It's too early to have concrete data on MA persistency based on the renewals that happened in January. It usually takes several months to validate policy statuses with data that we get from the carriers, in part, due to rapid disenrollments. These figures will continue to bake through the end of March. Having said that, we do have an early read based on what we know so far, and first-term persistency looked to be roughly in line with what it was last year. I will also remind you of comments we've made previously that while there can always be short-term swings in LTV, we continue to think there are more long-term tailwinds to the drivers that impact LTV than headwinds, including commission rates, carrier mix, operational improvements that can improve persistency and/or lapse rates and other fees for additional services that we can provide to carriers. Lastly, from a cost perspective, with the improvement in agent productivity, we saw our sales and fulfillment costs as a percent of revenue become more efficient with a 16% improvement. As Tim alluded to earlier, our lead gen marketing costs as a percent of revenue were up. This was expected with our strategy to lean into the growth more heavily with some higher marketing spend especially during periods where we can drive significant volume. Roughly half of this increase was driven by the fact that our exchange platform grew faster than some of our carrier direct relationships, where carriers provide us leads and then reduce our commissions when we sell a policy on their behalf. So those carrier direct relationships represented a lower mix of our volume this year. Some of the other increase was driven by marketing spend towards the end of AEP that generated leads that we didn't have enough capacity to handle and therefore, monetize through our lead gen business but at lower margin. We are always testing new ideas, and we will take some of the learnings from this year with us as we plan for next year, which also won't have an election during AEP. If we turn to Slide 12, our Life division grew revenue 26% to $36 million, while adjusted EBITDA was up slightly. Revenue was driven by growth in our final expense revenue. As a reminder, we did flex over a significant amount of our LHA agents that sell final expense into senior to sell during AEP and OEP. And halfway through the quarter, we flexed over additional agents to help with enrollment given the strength of our AEP. This impacted the sequential growth of the final expense premium, which was down sequentially but still up 229% year-over-year. It also impacted EBITDA and EBITDA margins as we incurred expense to hire and train some of these agents but didn't fully realize the benefit of revenue within our Life business for the quarter as they flexed into the Senior business. As we hire more new LHA agents and some of the flex LHA agents come back to Life at the end of OEP, we expect to significantly grow premium both sequentially and year-over-year. Adjusted EBITDA was also impacted by lower profitability on our term life business, where we continue to see headwinds due to COVID and a delay in consumers getting their blood work done and completing the process to get their policies in force. Some of the carriers have also instituted waiting periods and other restrictions around COVID, which is temporarily having a negative impact on the business. We do expect these conversion rates to trend back to normal levels. However, the next several quarters may still be impacted by the lingering effects of COVID. Turning to Auto & Home on Slide 13. Revenue declined 15% to $7 million, and adjusted EBITDA increased 42% to $2 million. As discussed in prior quarters, the decision to reallocate agents from our Auto & Home business to our Senior division and final expense efforts, has had an impact on the Auto & Home revenue. While we didn't write as much premium and revenue was down, our adjusted EBITDA was actually up again year-over-year. This was primarily driven by the fact that the agents we did have in our Auto & Home business were more tenured agents and therefore, more productive, which meant, on a relative basis, we could generate more EBITDA with fewer agents and with more efficient marketing as tenured agent close rates are also higher. Just to hammer home this point, average productive agents were down 31%, but revenue was only down 15%. Turning to Slide 14. We've updated this slide from our December investor deck that shows how we have been able to grow revenue and adjusted EBITDA faster than our internal expectations since the IPO using significantly less cash. Normally, when we grow faster, it requires more capital upfront, but we've been able to operate more efficiently than our original expectations, driven by our operational efficiencies, agent productivity and growth in our final expense business. For the 3 quarters since our IPO, we have generated 29% more revenue and 69% more adjusted EBITDA compared to internal expectations while using 25% less cash from operations. Turning to Slide 15. For the quarter specifically, we used $94 million in cash from operations as we grew our senior business 127% during AEP. In addition, we used about $5 million in cash for general CapEx. We ended the quarter with $246 million in cash and cash equivalents, $325 million of term loan debt and 0 drawn on our $75 million revolver. We also ended the quarter with $879 million of accounts receivable and short- and long-term commissions receivable balances. Lastly, as you may remember, as part of the Inside Response acquisition, there was an earn-out component that enabled them to earn up to an additional $32.3 million payment if certain metrics were met. The acquisition has exceeded our expectations, and we expect to pay the full earn-out. We had the ability to pay this earn-out 65% in cash and 35% in stock. Given where our stock has been trading, we have opted to make 100% of the payment in cash and expect that to happen this quarter. Turning to guidance on Slide 16. Given the performance of the second quarter, which was above our internal expectations, we are raising our guidance for our full fiscal year 2021. We currently expect consolidated revenue to be in the range of $920 million to $940 million. This would imply consolidated revenue growth of between 73% and 77% year-over-year. We expect adjusted EBITDA to be in the range of $230 million to $240 million, which would imply consolidated adjusted EBITDA growth of between 49% and 56% year-over-year. Lastly, we expect net income to be in the range of $138 million to $146 million. The increase in guidance is primarily driven by the outperformance of the business in our second quarter. In addition, there are several investments we are making in our fourth quarter that are embedded in our forecast. Our key investments are threefold: one, we plan to hire several classes of new core agents into our Senior business in the fourth quarter as we get ready for next year's AEP. We believe this will position us for an even better AEP next year and gives us better visibility into flex hiring needs. Two, we are ramping up some investment dollars and enhancing our offering in our value-based care initiatives, and we believe will have long-term benefits to our business, customers and carrier partners; and finally, three, we are spending more in technology development resources specifically to support the value-based care initiatives. As we think about the cadence of the rest of the year, the third quarter should represent in the high 20% of total annual fiscal year revenue with margins in the mid-20s. And the fourth quarter should represent about 20% of total annual fiscal year revenue with margins in the mid-teens. And with that, let me now turn the call back to the operator for your questions. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) Your first question comes from Elizabeth Anderson with Evercore ISI. -------------------------------------------------------------------------------- Elizabeth Hammell Anderson, Evercore ISI Institutional Equities, Research Division - Associate [2] -------------------------------------------------------------------------------- Congrats on a nice AEP season. I was wondering if you could talk a little bit more about the sales productivity because I thought that, that was pretty interesting given that you're COVID and you didn't have sort of the ability to be there with people in terms of helping the new to the process and things like that. What kind of -- could you maybe give a couple of examples of that? And then sort of what do you see sort of going forward as areas that you could future invest in additional productivity there? -------------------------------------------------------------------------------- Timothy Robert Danker, SelectQuote, Inc. - CEO & Director [3] -------------------------------------------------------------------------------- Yes. Elizabeth, this is Tim. Great question. I'll start and then maybe kick it over to Bob Grant, President of our Senior division, for more commentary. But as we talked about on the call, right, the productivity gains are really a function of our model in total. Investments we're making in marketing, our workflow, our skilled agents, technology, the back end customer care, so it's really all aspects of the business model that impacts the whole if you will. We feel very confident that the investments that we're making in the underlying operation, everything from our national hiring platform to the virtualized training that we did in a COVID environment, all the technology enhancements that drove both efficiency as well as good plan alignment and the coaching are really working well. I think we have built a model that is very fortunate to have excellent sales conversion, industry-leading LTVs. That has allowed us really to lean into the massive market opportunity with incremental investments on the marketing front. So we really saw gains both from -- there were a function of improved conversion on leads as well as agents being able to consume more leads. With that, I'll turn it over to Bob. -------------------------------------------------------------------------------- Robert Clay Grant, SelectQuote, Inc. - President of Senior Segment [4] -------------------------------------------------------------------------------- Yes. I think to Tim's point, we really focused in on making sure that we improved our technology that was available to the agents to make sure that they can take more raw material. And with that, we really improved our raw material and really focused on the quality of lead, which we talked about a lot. As we were looking at last year's opportunity, we could have taken more of our, call it, more expensive raw material that have higher close rates. We really honed in on that this year, increased our close rates. But in order to do that, we also really had to focus our training to improve our curve because if you look at the more expensive leads, right, if our close rates aren't where they need to be on our newer agents, we struggle at taking that raw material. So SelectQuote University's focus on getting people more ready and faster even in a remote environment really paid off for us, and we completely redid our training modules and actually made it feel a lot more like a smaller training environment, even though it was with a larger class. So we're really proud of what we did there, but it enabled us to have all 3 of those things really work together and add to the overall efficiency. So it's not really just one thing. It was really those 3 key tenants that allowed us to grow that quickly and have higher productivity on significantly higher headcount. -------------------------------------------------------------------------------- Elizabeth Hammell Anderson, Evercore ISI Institutional Equities, Research Division - Associate [5] -------------------------------------------------------------------------------- Perfect. That was really helpful. And can you expand on sort of how you see your offerings and value-based care initiatives and sort of over what time frame you should -- you see that unfolding? -------------------------------------------------------------------------------- Timothy Robert Danker, SelectQuote, Inc. - CEO & Director [6] -------------------------------------------------------------------------------- Sure. Just a few brief comments. I want to kick it over to Bob again. We're big proponents as we've discussed before. We think this is a great way to help consumers achieve better health outcomes. We have aligned with numerous market-leading care providers, and we're serving, right, as educator to our customers about the benefits of these innovative care models. And we've -- so we publicly announced one partnership. We've got 4 additional that are in place, and we're building out capabilities. Bob is leading this effort for the company. He's quite passionate about it. I think you should hear from him firsthand. -------------------------------------------------------------------------------- Robert Clay Grant, SelectQuote, Inc. - President of Senior Segment [7] -------------------------------------------------------------------------------- Yes. We are really focusing on health care literacy and having value-based care and other kind of heat of star rating activities as a portion of our offering. And what's unique is our contact rate on the back end and all the things that we're able to do there. We have a great relationship with our customers. Tim alluded to it. We get a hold of over 85% of our customers after sale, which we feel like is industry leading as we talk to the carriers. Their mind is almost mind blowing, how many folks we're able to get a hold of using data. And then with that, we are also just, I'd say, health care educators in general. That's how you ultimately properly align with the Medicare Advantage plan. So it's just a good further offering for us. And as Tim talked about it, we see a big growth in that space, and we think that we can help align the industry with our consumers and get them into value-based care solutions and ultimately, save them money and save our carriers money in the process while improving star ratings. And there's other activities that we're looking at that can do that as well. -------------------------------------------------------------------------------- Operator [8] -------------------------------------------------------------------------------- Your next question comes from Jailendra Singh with Crédit Suisse. -------------------------------------------------------------------------------- Jailendra P. Singh, Crédit Suisse AG, Research Division - Research Analyst [9] -------------------------------------------------------------------------------- Congratulations on a very strong quarter. I know it's a little too early for you guys to talk about fiscal '22 guidance, but looking at the strong seniors enrollment growth the company experienced during the AEP and various puts and takes, the industry is experiencing from COVID perspective and some other factors. I was wondering if you can discuss the future sustainability of some of these growth drivers and any other potential incremental growth drivers you see in future years. -------------------------------------------------------------------------------- Raffaele Sadun, SelectQuote, Inc. - CFO [10] -------------------------------------------------------------------------------- Yes. So I think with respect to '22 guidance, we're not giving specific guidance yet. I think we've said before that, the next several years, we can sort of look at the Senior business and think about a revenue CAGR of over 40% with margins in the mid-30s and on a consolidated basis, above 35% with margins in the mid-20s. And I think that's sort of consistent with our thought process at least for now. We are growing a little bit faster than that based on the current results in the last couple of quarters, but we haven't updated that view going forward. In terms of how sustainable some of these things that we're working on are, I think, from an agent perspective, we don't model in increasing agent productivity. We think that's prudent not to do. I think we've shown that we've been able to do that year in, year out, but that's not something that we necessarily model. And I do think that as we hire bigger, bigger classes, right, it does become harder, to some extent, to continue to push on some of that agent productivity. Having said that, I think the changes that we made are very sustainable. And maybe I'll hand it to Bob if he has any other comments from that perspective. -------------------------------------------------------------------------------- Robert Clay Grant, SelectQuote, Inc. - President of Senior Segment [11] -------------------------------------------------------------------------------- No, I would agree with that, that the changes that we've made are very sustainable. We are going to continue to try to optimize -- increase our agents' ability to take more raw material. As Raff alluded to, we are also going to make further investments in our core group, which should really help us for next year. We still see higher productivity out of core than we do out of flex, even though we really would dramatically increase the productivity of flex this year. But really excited about the results that we see, and again, in trying to model conservatively, don't model in increases, but we see an opportunity still within our data to drive more increases. -------------------------------------------------------------------------------- Jailendra P. Singh, Crédit Suisse AG, Research Division - Research Analyst [12] -------------------------------------------------------------------------------- Okay. That's helpful. And for my follow-up, one of your peers recently flagged challenges in some of their marketing channels, particularly direct response TV. I was wondering if you could talk about your experience during the quarter with respect to some of these marketing channels. Did some particular marketing channels outperform or underperform in terms of leads or profitable leads? -------------------------------------------------------------------------------- Timothy Robert Danker, SelectQuote, Inc. - CEO & Director [13] -------------------------------------------------------------------------------- Yes. Jaile, this is Tim. I'll make some brief comments and turn it over to our COO, Bill Grant, for comments specific to marketing. So overall, you did see marketing cost per submission increase this quarter. Margins went down a little bit from 49% last year to very, we would say, highly attractive 43% EBITDA margins for Senior. In that push for marketing, we saw about half of that overall increase come from growth of our choice model growing significantly faster than our carrier pod model, where, in some instances, we don't pay for those leads. The other half of the increase in cost per sale was on the core business as we really intentionally leaned into the growth opportunity. This was a conscious decision on our part and one that was more about kind of channel mix for us than a broader cost trend. So we think, as we've talked about it before, part of our express strategy is to grow absolute EBITDA dollars while maintaining solid KPIs and margins. We certainly believe we accomplished that Senior revenue north of 127%. We added $67 million of adjusted EBITDA year-over-year; as Raff highlighted, fourth consecutive quarter of over 100% senior revenue growth. And at the end of the day, we grew AEP about 3 -- EBITDA about 3x what we did last year, all at attractive margins, rev to CAC north of 3x. So maybe we'll turn it over to Bill to answer some of the specifics of your question, but I just wanted to provide that as a backdrop around kind of the intentional nature of our strategy there. Bill? -------------------------------------------------------------------------------- William Grant, SelectQuote, Inc. - COO [14] -------------------------------------------------------------------------------- Yes, sure. Yes. Well, as Tim and Raff mentioned, I mean, we had a very intentional strategy about ramping up, I would say, our higher-quality, more efficient sources. So we knew that we were going to spend a bit more on marketing this year relative to years past because we thought we were leaving some stuff on the table. We thought we could put more through the funnel, which is exactly what we executed on. I would say the part about this AEP may be different than what we expected just a bit, would be just the constant amount of breaking news that the election had on our marketing. So as everyone knows, there was lots of surprises, I would say, is an understatement. And certainly, that did put some pressure on us during AEP, getting clearance, whatever it may be. With that said, I think we're extremely pleased that we were able to navigate through that. And on days that I would call more normal days or kind of when news died down a little bit, we feel really good about where we were with TV, in particular, and a lot of our channels. But the thing that I think we're the most proud of is during that time when there was really large breaking news and virtually no clearance on certain days. We could still make our model highly functional by being able to turn the dials with kind of our omni-channel approach and take other sources. But as it specifically relates to TV, I would say, certainly, the election had the biggest impact on TV. But I'd say we feel very good that we were able to navigate through that, still have TV be a huge source for us and feel really good about where we are when some of that dies down postelection. -------------------------------------------------------------------------------- Timothy Robert Danker, SelectQuote, Inc. - CEO & Director [15] -------------------------------------------------------------------------------- Just to accentuate, Bill -- yes, just to accentuate Bill's good points there. I would say us versus some of the competitors, right, we can make TV work because of our agent productivity and because of our LTVs, right? We have a business model that can make these channels economical for us. And you're hearing from some of our competitors challenges in that. So we feel like this is very viable for us, to Bill's point. This is, in essence, why you need a wide omni-channel approach because you can't just have dependency on a handful of channels. We like the ability, if you will, the fish in multiple ponds. -------------------------------------------------------------------------------- Operator [16] -------------------------------------------------------------------------------- Your next question comes from Frank Morgan with RBC Capital Markets. -------------------------------------------------------------------------------- Frank George Morgan, RBC Capital Markets, Research Division - MD of Healthcare Services Equity Research & Analyst [17] -------------------------------------------------------------------------------- Certainly, nice to see the improvement in the cash conversion and being ahead of schedule there. Curious, can you attribute that better result? You mentioned things like productivity and growth in final expense. But how would you sort of characterize what was really the key driver there? And then, really, any thoughts around when you -- does this make you change your view over when you think your enterprise can actually flip over to sort of a cash generation mode? That would be my first question. -------------------------------------------------------------------------------- Raffaele Sadun, SelectQuote, Inc. - CFO [18] -------------------------------------------------------------------------------- Yes. So I think in terms of using cash more efficiently, I think a couple of things that we talked about. Certainly, agent productivity is a driver of that, starting to sell more of that final expense product, where we're receiving a 1-year payback versus 4 plus in some of our other products. Those are definitely big drivers. We also -- we talked about it a little bit, we restructured some of our deals with carriers to basically have a little bit more of our cash come from sort of year 1 items. And so I think we talked about that on the call. That sort of went up to about 45% of our total revenue for the quarter, and that's another component that, just from a cash efficiency standpoint, definitely helps. Having said that, we are growing materially faster, right? And so that does require capital. And so far, we've been able to do it a little bit more efficiently. I think as we think about the business, we said we would raise enough capital to grow the business at the types of growth rates that we've talked about for the next several years. I don't think that's necessarily changed in terms of our expectations. As we work on sort of the fiscal '22 budget and our guidance for that, as we flow in some of the assumptions around final expense and value-based care and some of the investments that we're making there, I think we'll have a better perspective of what sort of that looks like, and we'll update you over time as we provide that guidance. -------------------------------------------------------------------------------- Frank George Morgan, RBC Capital Markets, Research Division - MD of Healthcare Services Equity Research & Analyst [19] -------------------------------------------------------------------------------- Got you. And then, I guess, the follow-up, any -- obviously, you're updating your guidance. Just curious what you built into your numbers for additional core agents that you'll be adding in the fourth quarter of this year ahead of the next annual enrollment season. -------------------------------------------------------------------------------- Raffaele Sadun, SelectQuote, Inc. - CFO [20] -------------------------------------------------------------------------------- In terms of the number of agents? Or -- is that the question? Or... -------------------------------------------------------------------------------- Frank George Morgan, RBC Capital Markets, Research Division - MD of Healthcare Services Equity Research & Analyst [21] -------------------------------------------------------------------------------- Yes, yes. Like, what is built into the updated guidance with regard to the growth of those core agents that you called out in the opening? -------------------------------------------------------------------------------- Raffaele Sadun, SelectQuote, Inc. - CFO [22] -------------------------------------------------------------------------------- Yes. So I won't go into too much detail, but I mean, we have several new hiring classes that are going to be spread out over several months. Each of those hiring net classes is sort of 100 or so each. I would say that, that obviously will then feed into next year and next year's AEP. I think one of the things that we'll look at, and it'll be part of the guidance that we gave for fiscal '22 when we get there, is how much of that class next year will be core versus flex agents. And one of the things we like about being able to hire during the course of the year is that it gives us more visibility into the flex hiring need once we get to that. And so that's one of the reasons why we're doing that a little bit sooner this year. -------------------------------------------------------------------------------- Timothy Robert Danker, SelectQuote, Inc. - CEO & Director [23] -------------------------------------------------------------------------------- Yes. I'd just add -- I mean I'd just add, there's a combination, right, of additional investment into the core platform around the headcount as well as investment in value-based care, kind of the platform of the future if you will. I think that's one of the things about the company. So we've always been, what I'd say, appropriately aggressive around trying to find ways to add value to our client base. So we think we have a pretty decent track record, both senior final expense of growing new business opportunities. So we want to take it as an opportunity to reinvest, if you will, a portion of the success we're seeing into the model as we've got a lot of conviction around it. -------------------------------------------------------------------------------- Operator [24] -------------------------------------------------------------------------------- Your next question comes from David Styblo with Jefferies. -------------------------------------------------------------------------------- David Anthony Styblo, Jefferies LLC, Research Division - Equity Analyst [25] -------------------------------------------------------------------------------- I echo congratulations on the quarter as well. I wanted to ask a little bit about calendar year 2022 with the CMS rate notice now being out. Looks like commission rates will probably be up about 6% plus. Can you talk a little bit about some of the opportunities you alluded to there earlier to improve the LTV over time, having the 6% as a starting point for a tailwind going into the next calendar year as well as things along the lines of care or mix and other opportunities that you have there with the insurers? -------------------------------------------------------------------------------- Raffaele Sadun, SelectQuote, Inc. - CFO [26] -------------------------------------------------------------------------------- Yes. So I think the best way to describe that is maybe reiterate some of the comments we've made before around persistency. This quarter, the persistent -- there's a 36-month weighted average persistency, right? This quarter, 90% of that weighted average does reflect the persistency that we saw last year, which was a little bit lower. That basically has been offset by rate for the most part this quarter, which is why LTVs are flat. In terms of going forward, we don't model improving persistency. We sort of hold persistency flat. We have seen, obviously, rate increases, and there's -- there are some rate increases that we sort of assume going forward. So that -- all else being equal, that would sort of drive some of that sort of long-term LTV tailwinds that we've talked about. But just from a modeling perspective and when we set guidance, we do not assume that we're going to see some improvements in agent productivity from where we are now. -------------------------------------------------------------------------------- David Anthony Styblo, Jefferies LLC, Research Division - Equity Analyst [27] -------------------------------------------------------------------------------- Okay. Great. And then a follow-up would just be on your hiring, and I appreciate the comments there. Can you talk a little bit more about what that environment looks like with the unemployment rate steadily coming down now? Is it getting a little bit harder to find great candidates to bring in that fit the profile for what you guys are looking to versus a few months ago when there was more uncertainty, higher unemployment in the market, maybe that being offset just because you can hire across the country now with being more remote. But would love to hear the puts and takes as you're looking to bring in new talent. -------------------------------------------------------------------------------- Timothy Robert Danker, SelectQuote, Inc. - CEO & Director [28] -------------------------------------------------------------------------------- Sure. Dave, this is Tim. Good to hear from you. I'll make a few comments and turn it over to Bill, who leads up our recruiting effort. But I would underscore, this is our most successful AEP class in company history. We are -- we do not see really any headwinds there. I think our ability to move to national hiring model, we're now recruiting an over -- we've got associates in over 40 different states. We recruited a pretty big step function increase of 2,000 new associates in support of AEP. That was a 70% year-over-year lift. You've heard about the massive improvements in agent productivity, which are a testament to the model. And we're actually retaining a higher percent of our flex agents than we did in years past. So we see a lot of tailwinds. And this is a huge growth driver for us. But let me turn it over to Bill, who's really responsible for that. -------------------------------------------------------------------------------- William Grant, SelectQuote, Inc. - COO [29] -------------------------------------------------------------------------------- Yes. I mean I'd say the first thing is -- that was kind of accelerated by COVID was the work-from-home solution, how fast that became a reality for us. We thought that would be a couple of year transition, maybe even more when it related to the flex force, and we were forced to modernize very quickly there. And I think the team did a great job executing on that. But what that means for recruiting is now we're able to recruit all 50 states, all towns, little towns. As long as they have high-speed Internet, we can get them. So I feel like -- we feel like that our tailwinds in terms of recruiting there are way better than they were a year ago in terms of kind of the breadth of what we can recruit. So I'd say that, number one, I think that we feel really good about that just in terms of kind of where we can reach out to. Two, I think, success breeds success, and I think that we have great stories to talk about from all 50 states really. And what we've been able to do with a lot of those folks in terms of what Tim just mentioned, in terms of how successful they've been in our environment, winning kind of these national best places to work, all those things really make it easier and easier for us to recruit people. So I think we feel really good about where we are and where we'll be going forward. -------------------------------------------------------------------------------- Operator [30] -------------------------------------------------------------------------------- Your next question comes from Daniel Grosslight with Citi. -------------------------------------------------------------------------------- Daniel R. Grosslight, Citigroup Inc., Research Division - Research Analyst [31] -------------------------------------------------------------------------------- And I will add my congrats here. Really great to see. I just want to focus in on the pod performance this AEP. It does seem like it was a little under-indexed relative to the exchange performance vis-à-vis other years. So just curious if you're seeing any change at the carrier level on the usage of pods and if they're relying more on their internal agents and sales force there. And anything we can read into that going forward? -------------------------------------------------------------------------------- Raffaele Sadun, SelectQuote, Inc. - CFO [32] -------------------------------------------------------------------------------- In terms of its mix, it does represent a lower mix of our volume this year. I wouldn't read into that, anything in terms of carriers' interest in doing those types of relationships with us. If anything, especially this year, we had very productive conversations with our carriers, and they were looking to partners like us to help them grow. I think it's just a function of the fact that our choice platform is growing at huge multiples relative to the overall market. And so our carriers by themselves are not growing at those types of rates. And so that's basically what drives that dynamic. So it's not that it was down year-over-year. It actually grew quite a bit and probably faster than the overall market. It's just our choice platform actually grew even faster. I'm not sure, Bob, if you want to add anything in terms of the types of the discussions you've been having with carriers. -------------------------------------------------------------------------------- Robert Clay Grant, SelectQuote, Inc. - President of Senior Segment [33] -------------------------------------------------------------------------------- Yes, absolutely. We don't model in for a ton of growth there, given that if you think about the carriers themselves, they grow at about 10% a year, whereas we're growing at a significantly faster pace than that. However, we're constantly negotiating with new folks that could make that a larger growth curve year-over-year. It depends, right? If you win a new large contract with a carrier, then you may see outsized growth 1 year and then the next year, not see quite as much growth because you may have the same relationships with those carriers that are growing at that kind of steady 10% range. So we feel really good about our Pod performance. The carriers continue to give us great feedback that we are their top-performing partner by a fairly wide margin. Where we do see opportunities, though, is in our -- the way that we flex employees and the way that we staff our group, we feel like we have some opportunities to better partner with the carriers in the future in those final kind of weeks where we can bring employees in from other parts of our business and bring them into Medicare for the really big final push, as Tim alluded to, on the opening that we see a lot more marketing volume in kind of the final week or final 2 weeks and kind of help the carriers if they see the same thing we see. So we do have opportunities to grow those, but it's not going to be at the same pace that we grow our core business. -------------------------------------------------------------------------------- Daniel R. Grosslight, Citigroup Inc., Research Division - Research Analyst [34] -------------------------------------------------------------------------------- Understood. Very helpful. And then just on the cash conversion. It seems like you guys have been able to really improve that collection in year 1 from 34% to 45%. Are you kind of tapped out at 45%? Or can you grow that year 1 cash collection higher? -------------------------------------------------------------------------------- Raffaele Sadun, SelectQuote, Inc. - CFO [35] -------------------------------------------------------------------------------- There's obviously -- there is certain structural limitations on that just in terms of how commissions are structured specifically on the biggest product that we sell. MA policies where there are certain caps around first year commission versus renewals. So I don't know that 45% necessarily is the max, especially as we grow some other things that pay us sort of year 1 dollars, whether it's value-based care. It's not going to go to -- that I think will improve cash efficiency, but there are some -- ultimately, some structural limitations on that. -------------------------------------------------------------------------------- Operator [36] -------------------------------------------------------------------------------- Your next question comes from Jonathan Yong with Barclays. -------------------------------------------------------------------------------- Jonathan Yong, Barclays Bank PLC, Research Division - Research Analyst [37] -------------------------------------------------------------------------------- Congrats on a good quarter. Just on OEP, I was wondering if you could provide some color on kind of what you're seeing so far, volume how the volume is looking. That persistency, I know that you mentioned it's relatively in line with last year. But is that persistency also going to -- is that your working assumption for the rest of your fiscal year and then just the volume dynamics? -------------------------------------------------------------------------------- Raffaele Sadun, SelectQuote, Inc. - CFO [38] -------------------------------------------------------------------------------- So I guess with respect to OEP -- and we're not going to provide any commentary around OEP other than whatever we're seeing is embedded in the updated guidance that we've given. With respect to persistency, specifically, the renewal event that happened in January does give us some visibility into that, although it does take several months for that to really sort of play itself out. And so we really won't know for certain on some of those things until the end of March. And effectively, the way that, that will play into sort of LTV calculations is that, once that's locked in, that will then roll into sort of our 36-month weighted average and be applied to policies that we're selling from that point onward. So that's sort of how it gets impacted. -------------------------------------------------------------------------------- Jonathan Yong, Barclays Bank PLC, Research Division - Research Analyst [39] -------------------------------------------------------------------------------- Great. And then just on the value-based care initiatives that you're doing, if I remember correctly, I believe you've mentioned that the economics there were relatively small. I'm just curious how you guys are thinking about the investments that you're going to make in the back half of the year and whether the economics change for you or not. -------------------------------------------------------------------------------- Raffaele Sadun, SelectQuote, Inc. - CFO [40] -------------------------------------------------------------------------------- I think the more value that we can prove that we add to the carriers, the more we'll be able to share in that value. And so it is relatively small as a percent of the revenue that's coming in now. But I do think that we think there's a lot of opportunity going forward to enhance those programs. Bob? -------------------------------------------------------------------------------- Robert Clay Grant, SelectQuote, Inc. - President of Senior Segment [41] -------------------------------------------------------------------------------- Yes. The direct economic impact is what we were alluding to before on the direct payment that we get are relatively small. However, we do know through data that the indirect revenue could be higher. And the more value we provide to the consumer, the more value we provide to the carriers, the more economics there are for us, the higher our retention rates can go up, more satisfied consumers are and the more engaged we are in their kind of health care savings and better alignment journey, which, again, we're working on lots of different things within that space to help consumers understand their plans better, get into better economic solutions, increase adherence for our carriers, and then ultimately, save both the carriers and consumers money through that education. We do think the transition to Medicare and the health care literacy associated with that is tricky, and it's very different than being under 65, and we want to be a part of that journey in a bigger way than we are now. So I don't want to understate the fact that there's not money there. It's just what we were talking about before is that direct dollars associated with sending somebody to a BDC solution. -------------------------------------------------------------------------------- Timothy Robert Danker, SelectQuote, Inc. - CEO & Director [42] -------------------------------------------------------------------------------- Yes. I'd just underscore it, right, the scalability of our platform, the interactions that Bob mentioned. We've got 150,000 care conversations going on every month, and that continues to grow. So this is an effort where we're making a lot more investment in, and we'll be kind of back in the market to share more in the very near future. -------------------------------------------------------------------------------- Operator [43] -------------------------------------------------------------------------------- Your next question comes from Lauren Schenk with Morgan Stanley. -------------------------------------------------------------------------------- Lauren Elizabeth Cassel, Morgan Stanley, Research Division - Research Associate & Equity Analyst [44] -------------------------------------------------------------------------------- Just a model one, f I can. Wondering if you can quantify the magnitude of the 4Q investments that you mentioned. And I guess, the impetus for the question is, is you raised the high end of your EBITDA guidance by $5 million, but the second quarter would be by around $20 million. So just wondering if that $15 million delta, if not more, is all the investments. Just any color there would be really helpful. -------------------------------------------------------------------------------- Raffaele Sadun, SelectQuote, Inc. - CFO [45] -------------------------------------------------------------------------------- So I don't want to be too specific on the level of investments, although it is in the millions of dollars. I think the best way to think about sort of the guidance and the reason why we provided a little bit more clarity with respect to sort of the third and the fourth quarter as a percent of the overall year is that the primary driver of the increase was the second quarter outperformance. Our -- nothing has really changed internally with respect to our view of the third and the fourth quarter outside of these investments. But given that we don't provide sort of quarterly guidance, we felt like it was appropriate to give a little bit more visibility into how that will come in during the course of the year. -------------------------------------------------------------------------------- Operator [46] -------------------------------------------------------------------------------- Your next question comes from Meyer Shields with Keefe, Bruyette & Woods. -------------------------------------------------------------------------------- Meyer Shields, Keefe, Bruyette, & Woods, Inc., Research Division - MD [47] -------------------------------------------------------------------------------- If I can go back again to the year 1 revenue negotiation changes, should we assume that the 45% is the right base level going forward? Is that sort of subject to volatility? -------------------------------------------------------------------------------- Raffaele Sadun, SelectQuote, Inc. - CFO [48] -------------------------------------------------------------------------------- We're always looking at ways of collecting cash sooner, right? I think that -- I don't know that we'll guarantee that it will be at that level, but that is something that we are focused on. And I wouldn't expect it to -- based on what we have in place right now, I would not expect it to drop significantly from there. -------------------------------------------------------------------------------- Meyer Shields, Keefe, Bruyette, & Woods, Inc., Research Division - MD [49] -------------------------------------------------------------------------------- Okay. Yes. That's what I was looking for. Second question, I think early in your comments you talked about monetizing some leads late in AEP. I was hoping you can just give a little color on what that means and what the opportunities are to recapture that next year. -------------------------------------------------------------------------------- Timothy Robert Danker, SelectQuote, Inc. - CEO & Director [50] -------------------------------------------------------------------------------- Bill, do you want to speak to that? -------------------------------------------------------------------------------- William Grant, SelectQuote, Inc. - COO [51] -------------------------------------------------------------------------------- Yes, sure. And I'll clarify what we mean by that this year. I think we had -- we saw some of our spending in terms of how we were marketing relative to TV or where we might be spending, I would say, kind of spike, go up or down based on what was happening with the election. So the more -- the more news was breaking, right, the more that we might not get clearance or consumers might be paralyzed and not respond. So what really happened that last week is we spent based on what we thought it would take to generate enough leads to keep us really busy and push us through, so based on what we'd seen. And then basically, that week, we didn't have as much breaking news. And if you look at kind of what occurred, we had this huge influx of leads over the last week. So I think there was a lot of pent-up demand that last week. And I think that our marketing, which bodes well for the future, our marketing was very efficient that week because that just happened to be a week where we didn't kind of see the same level of breaking news, was a little calmer, those type of things. So I think, overall, we feel really good about kind of where we are there and exactly kind of what occurred during that time and what we would expect really going forward. -------------------------------------------------------------------------------- Timothy Robert Danker, SelectQuote, Inc. - CEO & Director [52] -------------------------------------------------------------------------------- Yes. Just to piggyback on Bill's comments, right, I mean, it was an absolutely great to -- AEP season. It could have been even better, right? There were a few kind of anomalies, if you will, around the election. We talked about being overly flushed with leads towards the end of AEP. It's a great thing about our management team. We're always looking for ways to get better. We're humble. We're hungry, and we think that there's ways to make it an even better result next year. But we're very proud, and this is really a fantastic AEP for us. -------------------------------------------------------------------------------- Operator [53] -------------------------------------------------------------------------------- There are no further questions at this time. I'll now turn the call back over to Tim for closing remarks. -------------------------------------------------------------------------------- Timothy Robert Danker, SelectQuote, Inc. - CEO & Director [54] -------------------------------------------------------------------------------- Well, thank you all again for your support and interest in SelectQuote. I'll briefly close by reemphasizing how excited we are to present these results. First, it's always nice to outperform your own expectation. So hats off to the over 4,000 fellow SelectQuote associates who made that happen. Equally exciting as we think about the future is the track record we are establishing and the continued validation of our unique model. We think, given the long-tailed opportunity in our core markets, our constant focus on execution, we continue to see very bright days ahead. So thank you again for your time. We wish you all a great 2021. Thank you very much. -------------------------------------------------------------------------------- Operator [55] -------------------------------------------------------------------------------- This concludes today's conference call. You may now disconnect.