SLQT 10-K & 10-Q changes, risk factors and insider trading

We currently depend on a small group of insurance carrier partners and their affiliates for a substantial portion of our business. If we become even more dependent on a limited number of insurance carrier partners, our business and financial condition may be adversely affected.

We derive a large portion of our revenues from a limited number of insurance carrier partners.partners and their affiliated pharmacy benefit managers. For example, carriers and other entities owned by UHC, Humana, and Aetna, accounted for 39%, 13%, and 12%, respectively, of our total revenue for the year ended June 30, 2026, carriers and other entities owned by UHC, Aetna, and Humana accounted for 37%, 15%, and 11%, respectively, of our total revenue for the year ended June 30, 2025,2025; and carriers and other entities owned by UHC, Humana and Aetna accounted for 30%, 17%, and 16%, respectively, of our total revenue for the year ended June 30, 2024; and carriers owned by UHC, and Humana accounted for 33%, and 20%, respectively, of our total revenue for the year ended June 30, 2023.2024. Our agreements with our insurance carrier partners to sell policies are typically terminable by our insurance carrier partners without cause upon 30 days’ advance notice. Should we become more dependent on even fewer insurance carrier relationships (whether as a result of the termination of insurance carrier relationships or pharmacy benefit manager relationships, insurance carrier consolidationconsolidation, or otherwise), we may become more vulnerable to adverse changes in our relationships with insurance carriers,carriers and their affiliates, particularly in states where we distribute insurance from a relatively smaller number of insurance carrier partners or where a small number of insurance carriers dominates the market, and our business, operating results, financial condition and prospects could be harmed.

We are also exposed to risks associated with the potential financial instability of our insurance carrier partners and consumers, many of whom may be adversely affected by volatile conditions in the financial markets or an economic slowdown. As a result of uncertainties with respect to financial institutions and the global credit markets and other macroeconomic challenges, including inflation, currently or potentially affecting the economy of the U.S. and other parts of the world consumers may experience serious cash flow problems and other financial difficulties, decreasing demand for the products of our insurance carrier partners. In addition, events in the U.S. or foreign markets, such as the U.K.’s exit from the European Union,markets and political and social unrest in various countries around the world, can impact the global economy and capital markets. Our insurance carrier partners may modify, delay, or cancel plans to offer new products or may make changes in the mix of products purchased that are unfavorable to us. Additionally, if our insurance carrier partners are not successful in generating sufficient revenue or are precluded from securing financing, their businesses will suffer, which may materially and adversely affect our business, operating results, financial condition and prospects.

During the year ended June 30, 2025, we recorded a $4.2 million noncash impairment charge related to our acquisition in 2020 of InsideResponse, an online lead generation business. If actual results differ from the assumptions and estimates used in our goodwill and intangible asset calculations, we could incur future impairment or amortization charges. Further, we may incur additional goodwill or other impairment charges in the future associated with other acquisitions, and we cannot accurately predict the amount and timing of any impairments of these or other assets. Should the value of goodwill or other intangible assets become impaired, there could be an adverse effect on our financial condition and results of operations. For information about the impairments we recorded during the years ended June 30, 2026, June 30, 2025 and June 30, 2023,2024, please refer to “Notes to Consolidated Financial Statements” under Item 8 below.

Further, we are required under the Senior Secured Credit Facility to maintain compliance with certain debt covenants, as discussed further below in Note 87 to the consolidated financial statements. Based on our financial projections, we believe we will remain in compliance with the debt covenants included in the Senior Secured Credit Facility through the 12 months following the date of issuance of our consolidated financial statements. Our future compliance with these covenants ismay be dependent on our ability to restructure our existing debt or secure additional financing from other sources. Failure to maintain compliance with these covenants or make payments under the Senior Secured Credit Facility could result in an event of default. If an event of default occurs and the lenders accelerate the amounts due on the Senior Secured Credit Facility, we may need to seek additional financing, which may not be available on acceptable terms, in a timely manner, or at all. In such event, we may not be able to make accelerated payments, and the lenders could seek to enforce security interests in the collateral securing such indebtedness, which includes substantially all of our assets.

It is difficult or impossible to defend against every risk being posed by changing technologies as well as criminals’ intent on committing cyber-crimecyber-crime, and these measures may not be successful in preventing, detecting, or stopping attacks. The increasing sophistication and resources of cyber criminals and other non-state threat actors and increased actions by nation-state actors make keeping up with new threats difficult and could result in a breach of security. In addition, the increasing use by such actors of AI and machine learning techniques, such as generative AI-phishing, deepfake impersonations, automated vulnerability discovery, adaptive malware, and large-scale credential-stuffing campaigns, may increase the scale and frequency of cyberattacks and make them more difficult to detect, contain, and mitigate. Controls employed by our information technology department and our insurance carrier partners and third-party service providers, including cloud vendors, could prove inadequate. A breach of our security that results in unauthorized access to our data could expose us to a disruption or challenges relating to our daily operations, as well as to data loss, litigation, damages, fines and penalties, significant increases in compliance costs and reputational damage, any of which could have a material and adverse effect on our business, operating results, financial condition and prospects.

To the extent we or our systems rely on our insurance carrier partners or third-party service providers, through either a connection to, or an integration with, those third-parties’ systems, the risk of cybersecurity attacks and loss, corruption, or unauthorized publication of our information or the confidential information of consumers and employees may increase. Further, third-party service providers’ incorporation of AI-enabled tools into their products and services may increase our cybersecurity exposure and reduce our ability to directly control the confidentiality, integrity, and availability of our systems and data. Third-party risks may include lax security measures, data location uncertainty, and the possibility of data storage in inappropriate jurisdictions where laws or security measures may be inadequate.

Any failure or perceived failure by us to comply with our privacy policies, our privacy-related obligations to consumers or other third parties, or our privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of sensitive information, which could include personally identifiable information or other user data, may result in governmental investigations, enforcement actions, regulatory fines, litigation and public statements against us by consumer advocacy groups or others, and could cause consumers and insurance carriers to lose trust in us, all of which could be costly and have an adverse effect on our business. Regulatory agencies or business partners may institute more stringent data protection requirements or certifications than those which we are currently subject to and, if we cannot comply with those standards in a timely manner, we may lose the ability to sell a carrier’s products or process transactions containing payment information. Moreover, if third parties that we work with violate applicable laws or our policies, such violations also may put consumer or insurance carrier partner information at risk and could in turn harm our reputation, business, operating results, financial condition and prospects.

We currentlyincreasingly incorporate AI technology in our business operations. Our researchdevelopment and developmentimplementation of suchAI technologysystems and applications remains ongoing, and AIsuch algorithms and training methodologiestechnologies may be flawed. Leveraging AI capabilities to potentially improve our internal operations also presents further risks, costs, and challenges.challenges, including increased cybersecurity risk and risk of regulatory non-adherence, unintended exposure of confidential data, and issues related to the unauthorized or improper use of AI systems by our employees and other personnel. While we aimhave toadopted developinternal policies and procedures governing the use AIof responsibly and attempt to identify and mitigate ethical and legal issues presented by its use,AI, we may be unsuccessful in identifying or resolving issues before they arise. The AI-related legal and regulatory landscape remains uncertain and may be inconsistent from jurisdiction to jurisdiction. Our obligations to comply with the evolving legal and regulatory landscape could entail significant costs or limit our ability to incorporate certain AI capabilities into our offerings. AI-related issues, deficiencies and/or failures could damage our reputation, give rise to legal and/or regulatory action, including as a result of new applications of existing data protection, privacy, intellectual property, and other laws, or otherwise materially harm our business.

Healthcare laws and regulations are rapidly evolving and may change significantly in the future, impacting the coverage and plan designs that are or will be provided by certain insurance carriers. Health reform efforts and measures may expand the role of government-sponsored coverage, including single payer or so calledso-called “Medicare-for-All” proposals, which could have far-reaching implications for the insurance industry if enacted. We are unable to predict the full impact of healthcare reform initiatives on our operations in light of the uncertainty regarding the terms and timing of any provisions enacted and the impact of any of those provisions on various healthcare and insurance industry participants. In particular, because our DTC platform provides consumers with a venue to shop for insurance policies from a curated panel of the nation’s leading insurance carriers, the expansion of government-sponsored coverage through “Medicare-for-All” or the implementation of a single-payer system may adversely impact our business.

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 and chronic care management through offerings like SelectRx and SelectPatient Management (“SPM”).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.

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%,89%, 91%,89%, and 89%91% of our approved Senior policies for the years ended June 30, 2026, 2025, 2024, and 2023,2024, respectively, with other ancillary type policies accounting for the remainder.

Healthcare Services, launched in 2021, offers various health-related products and services through SelectRx, Healthcare Select, and most recently, 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.

Our Senior and Healthcare Services segments serve consumers predominantly in the over 65 age category. According to the United States Census Bureau, the over 65 age category grew from 13% of the total population in 2010 to 18%17% of the total population in 2023,2022, and is expected to reach 21% in 2030. Based upon a research study, in 2025, on average, 11,400 “Baby Boomers” arewere expected to turn 65 every day, or nearly 4.2 million people willwere to reach the traditional retirement age in a single year. As a result, Medicare Advantage enrollment has more than doubled since 2010 and is projected to grow from 54% of the eligible population in 20242025 to 64% by 2034. According to the Congressional Budget Office’s projections, Medicare enrollment is expected to rise from 60 million in 2023 to 74 million in 2034. Of this, Medicare Advantage plans are representing an increasing share of the Medicare market. According to the Kaiser Family Foundation, in 2024,2025, Medicare Advantage enrollment held 54% market penetration, with nearly 3334 million Medicare Advantage enrollees. Between 20232024 and 2024,2025, total Medicare Advantage enrollment grew by about 7%.4%. The Congressional Budget Office projects that the share of all Medicare beneficiaries enrolled in Medicare Advantage plans will rise to 64% by 2034. The degree to which we will realize a corresponding increase in revenue will be determined by our ability to continue to successfully place new Medicare policies for this enlarged potential consumer base.

The U.S. life insurance market is mature and has experienced annualindustry-wide new annualized premium growth of 3%10% in 2024.2025. Growth in the life insurance sector is driven by a number of macro-economic factors including population growth, general economic growth and individual wealth accumulation.

The following table shows the number of submitted policies for the yearsperiods ended June 30presented:

20242026 compared to 20232025—Total submitted policies for all products increaseddecreased 7%6% for the year ended June 30, 2024,2026, compared to the year ended June 30, 2023.2025. ThisThe decrease was drivenprimarily bydue anto 11%a increase13% decrease in overall close rates, 7%and increasea 1% decrease in the number of average productive agents, and 9% increase in productivity per agent.agents.

The following table shows the number of approved policies for the yearsperiods ended June 30presented:

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.

The following table shows the LTV per approved policy for the yearsperiods ended June 30presented:

The following table shows the total number of SelectRx members as of Junethe 30date presented:

The total number of SelectRx members increased by 1% as of June 30, 2026, compared to June 30, 2025, and 31% as of June 30, 2025, compared to June 30, 2024, and 68% as of June 30, 2024, compared to June 30, 2023, due to oura strategygrowth toin growmembership SelectRxduring membership.the AEP season.

The following table shows the average prescriptions shipped per day for the yearsperiods ended June 30presented:

The following table shows term and final expense premiums for the yearsperiods ended June 30presented:

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, InsideResponsebusiness (of which the majority is eliminated as intersegment revenue), are presented in our consolidated statements of comprehensive income (loss) as commissions and other services revenue. Pharmacy revenue on the consolidated statements of comprehensive income (loss) includes revenue from the sale of prescription and OTC medication products from SelectRx.

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 ofsatisfied our performance obligationsobligation 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.

The following table presents our revenue for the yearsperiods ended June 30presented and the percentage changes from the prior year:

2025 compared to 2024— Pharmacy revenue increased $263.9 million, or 57%, primarily due to the 31% increase in members due to the expansion of the SelectRx business. Commission and other services revenue decreased $59.1 million, or 7%, for the year ended June 30, 2025, primarily due to a $51.5 million, and $18.2 million decrease in Senior commissions revenue, and other services revenue, respectively. The decrease was partially offset by a $15.0 million increase in Life revenue. The decrease in Senior revenue, was driven by a 4% decrease in approved policies. The increase in Life revenue was primarily driven by a $14.0 million increase in final expense revenue. Pharmacy revenue increased $263.9 million, or 57%, primarily due to the 31% increase in members due to the expansion of the SelectRx business.

The following table presents our cost of commissions and other services revenue for the yearsperiods ended June 30presented and the percentage change from the prior year:

The following table presents our cost of goods sold-pharmacy revenue for the yearsperiods ended June 30presented and the percentage change from the prior year:

2025 compared to 2024—Cost of goods sold-pharmacy revenue increased $225.3 million, or 56%, in 2025 compared to 2024, primarily due to ana $200.9 million increase in medication costs as the number of SelectRx members increased 31% over the prior year as well as a $15.4 million increase in compensation costs due to an increase in the number of employees directly associated with fulfilling pharmacy orders.

The following table presents our marketing and advertising expenses for the yearsperiods ended June 30presented and the percentage changes from the prior year:

The following table presents our selling, general, and administrative expenses for the yearsperiods ended June 30presented and the percentage changes from the prior year:

20252026 compared to 20242025—Selling, general, and administrative expenses increaseddecreased $23.4$15.4 million, or 17%,9%, infor 2025the comparedyear toended 2024,June 30, 2026, primarily due to $18.2a $13.0 million increase in compensation costs, a $4.2 million increase in impairment of long-lived assets, and a $3.0 million increasedecrease in corporate development costs.costs, Theand increasea in$3.2 compensationmillion costs was primarily related the growth of SelectRx. The increasedecrease in impairment of long-lived assets wasand dueequity to the write-off of the InsideResponse customer relationship intangible asset.investments. The increasedecrease in corporate development costs is a result of additional expenses incurred in the prior period related to the securitization and Senior Non-Convertible Preferred Stock transactions. Impairment of long-lived assets and equity investments is further discussed in Notes 6 and 16 of the consolidated financial statements.

The following table presents our technical development expenses for the yearsperiods ended June 30presented and the percentage changes from the prior year:

The following table presents our interest expense, net for the yearsperiods ended June 30presented and the percentage changes from the prior year:

The following table presents our provision for income taxes for the yearsperiods ended June 30presented and the percentage changes from the prior year:

20242026 compared to 20232025—Income tax expense (benefit) increased $15.7$13.2 million, or 148%,1414%, in 20242026 compared to 2023.2025. For the year ended June 30, 2024,2026, wethe Company recognized an income tax expense of $5.1$14.1 million, representing an effective tax rate of 17.4%.18.5%. The differences from ourthe federal statutory tax rate to the effective tax rate for the year ended June 30, 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.expiration, non-deductible warrant mark-to-market adjustment, and excess officer and stock-based compensation and general business credits. For the year ended June 30, 2023,2025, wethe Company recognized an income tax benefitexpense of $10.6$0.9 million, representing an effective tax rate of 15.3%.1.9%. The differences from ourthe federal statutory tax rate to the effective tax rate for the year ended June 30, 2025, were primarily related to state income taxes, RSU vestings, executive officer compensation,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.expiration, non-deductible warrant mark-to-market adjustment, excess officer and stock-based compensation and general business credits.

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 93%,90% and 93%,91% of our approved Senior policies for the three months ended DecemberMarch 31, 2025,2026, and 2024,2025, respectively, and 91%90% and 91% for the sixnine months ended DecemberMarch 31, 2025,2026, and 2024,2025, respectively, with other ancillary type policies accounting for the remainder.

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 39%,41%, and 44%41% of new premium within the Life segment for the three months ended DecemberMarch 31, 2025,2026, and 2024,2025, respectively, with final expense policies accounting for 61%,59% and 56%59% for the three months ended DecemberMarch 31, 2025,2026, and 2024,2025, respectively. For the sixnine months ended DecemberMarch 31, 2025,2026, and 2024,2025, term life policies accounted for 39%40% and 41% of new premium within Life, respectively, with final expense policies accounting for 61%60% and 59%, respectively.

The three and sixnine months ended DecemberMarch 31, referenced throughout the commentary below refers to the secondthird quarter and fiscal year-to-date performance of our fiscal years ending on June 30, 2026, and 2025.

Total submitted policies for all products decreased 6%1% for the sixthree months ended DecemberMarch 31, 2025,2026, compared to the sixthree months ended DecemberMarch 31, 2024.2025. The decrease was primarily due to a 13%16% decrease in overall close rates,rates partially offset byand a 3%2% increasedecrease in the number of average productive agents.

Total approved policies for all products increased by 4%6% for the three months ended DecemberMarch 31, 2025,2026, compared to the three months ended DecemberMarch 31, 2024,2025, whichprimarily correlatesdriven toby higher same month approval rates during the increasecurrent in submitted policies.period.

Total approved policies decreased by 5%1% for the sixnine months ended DecemberMarch 31, 2025,2026, compared to the sixnine months ended DecemberMarch 31, 2024,2025, which correlates to the decrease in submitted policies.policies, partially offset by increased same month approval rates during the current period.

The LTV per MA approved policy decreased 4%1% for the three months ended DecemberMarch 31, 2025,2026, compared to the three months ended DecemberMarch 31, 2024,2025, primarily due to shifts in carrier mix, along with plan terminations and changes to plan designs.

The LTV per MA approved policy decreased 3%2% for the sixnine months ended DecemberMarch 31, 2025,2026, compared to the sixnine months ended DecemberMarch 31, 2024,2025, primarily due to shifts in carrier mix, along with plan terminations and changes to plan designs.

The total number of SelectRx members increased by 17%11% as of DecemberMarch 31, 2025,2026, compared to DecemberMarch 31, 2024,2025, due to our continued strategy to grow SelectRx membership.

Total term premiums increased 1% for the three months ended DecemberMarch 31, 2025,2026, compared to the three months ended DecemberMarch 31, 2024,2025, due to a 4%1% increase in the number of policies sold, partially offset by a 3% decrease in the average premium per policy sold. Final expense premiums increaseddecreased 24%1% for the three months ended DecemberMarch 31, 2025,2026, compared to the three months ended DecemberMarch 31, 2024,2025, due to a 28%1% increase in the number of policies sold, partially offset by a 3% decrease in the average premium per policy sold.sold, Theoffset increaseby a 2% decrease in the number of final expense policies sold was driven by a 42% increase in average agent headcount due to the addition of new external agents onboarded during the three months ended December 31, 2025.sold.

Total term premiums increased 14%9% for the sixnine months ended DecemberMarch 31, 2025,2026, compared to the sixnine months ended DecemberMarch 31, 2024,2025, due to a 4%6% increase in the number of policies sold, and a 3% increase in the average premium per policy soldsold. andFinal expense premiums increased 13% for the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025, due to a 9%14% increase in the number of policies sold. Final expense premiums increased 22% for the six months ended December 31, 2025, compared to the six months ended December 31, 2024, due to a 23% increase in the number of policies sold, partially offset by a 1% decrease in the average premium per policy sold. The increase in the number of final expense policies sold was driven by a 39%30% increase in average agent headcountheadcount, dueprimarily attributable to new external agents and, to a lesser extent, flex agents onboarded from the Senior segment during the threenine months ended September 30, 2025 and new external agents onboarded during the three months ended DecemberMarch 31, 2025,2026, allboth of which were less productive thenthan our tenured agents.

Three Months Ended DecemberMarch 31, 20252026 and 20242025– Commission and other services revenue increased $8.8$12.8 million, or 3%,6%, for the three months ended DecemberMarch 31, 2025,2026, primarily due to a $3.8$28.6 million increase in Senior commissions revenue, a $2.1 million increase in Life revenue, partially offset by a $3.8$15.2 million increasedecrease in other Senior revenue, and a $2.2 million decrease in Other revenue. The increase in Senior commissions revenue.revenue, was driven by a 6% increase in approved policies. The increase in Life revenue was primarily driven by a $4.1$1.7 million increase in final expense revenue due to a 28%1% increase in the average premium per policy sold, offset by a 2% decrease in the number of policies sold. The increase in number of policies sold was partially offset by a 3% decrease in the average premium per policy sold. The increase inother Senior revenue,revenue was driven by a 4% increase in approved policies. Pharmacy revenue increased $47.2 million, or 26%, primarily due to a 17%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.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.

Cost of commissions and other services revenue represents the direct costs associated with fulfilling our obligations to our customers in Senior, Life, and Healthcare Services (excluding SelectRx discussed below); primarily compensation, benefits, and licensing for sales agents, customer success agents, fulfillment specialists, and others directly engaged in serving customers. It also includes allocations for facilities, telecommunications, and software maintenance costs, which are all based on headcount. Facilities costs include rent and utilities expenses and other costs to maintain our office locations. Telecommunications and software maintenance costs includes costs related to the internal phone systems and various software applications that our agents use to make sales. These costs directly correlate to the number of agents we have as we are primarily charged based on per person usage for the phone systems and software applications.

Three Months Ended DecemberMarch 31, 20252026 and 20242025–Cost of commissions and other service revenue increased $1.9$3.9 million, or 2%,5%, for the three months ended DecemberMarch 31, 2025,2026, primarily due to a $2.1$3.6 million increase in compensation costs, partially offset by $0.2 million decrease in depreciation and amortization.costs. The $2.1$3.6 million increase in compensation costs is primarily comprised of a $2.3 million and $0.6 million increaseincreases in costs for sales and customer care agents of $1.2 million in Lifeboth Healthcare Services and HealthcareSenior, Services,combined respectively.with Thea $1.1 million increase is partially offset by a $0.9 million decrease in costs for our sales and customer care agents in Senior.Life.

SixNine Months Ended DecemberMarch 31, 20252026 and 20242025–Cost of commissions and other service revenue increased $5.3$9.1 million, or 3%,4%, for the sixnine months ended DecemberMarch 31, 2025,2026, primarily due to a $5.5$9.1 million increase in compensation costs and a $0.7$0.9 million increase in licensing fees. These increases were partially offset by $0.6$0.7 million decrease in depreciation and amortization. The $5.5$9.1 million increase in compensation costs is primarily comprised of a $5.3$6.4 million and $2.4 million increase in costs for sales and customer care agents in Life.Life and Healthcare Services, respectively.

Three Months Ended DecemberMarch 31, 20252026 and 20242025–Cost of goods sold-pharmacy revenue increased $49.0$9.0 million, or 31%,6%, for the three months ended DecemberMarch 31, 2025,2026, primarily due to a $47.2$19.6 million increase in medication costs and a $1.5 million increase in compensation costs.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 costs increased largely due to a 17%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.

SixNine Months Ended DecemberMarch 31, 20252026 and 20242025–Cost of goods sold-pharmacy revenue increased $112.2$121.2 million, or 39%,27%, for the sixnine months ended DecemberMarch 31, 2025,2026, primarily due to a $106.7$126.3 million increase in medication costs, a $3.3$4.8 million increase in compensation costs, and a $1.3$2.2 million increase in fulfillment costs.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 17%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.

Three Months Ended DecemberMarch 31, 20252026 and 20242025–Selling, general, and administrative expenses decreased $6.1$3.5 million, or 14%,8%, for the three months ended DecemberMarch 31, 2025,2026, primarily due to $6.3$5.7 million decrease in corporate development costs, partially offset by a $2.1 million increase in professional services costs. The decrease in corporate development costs is a result of additional expenses incurred in the prior period related to the securitization and Senior Non-Convertible Preferred Stock transactions. The increase in professional services costs is primarily driven by increased legal fees incurred during the period.

SixNine Months Ended DecemberMarch 31, 20252026 and 20242025–Selling, general, and administrative expenses decreased $6.4$9.9 million, or 8%, for the sixnine months ended DecemberMarch 31, 2025,2026, primarily due to $6.5$12.3 million decrease in corporate development costs, partially offset by a $3.0 million increase in professional services costs. The decrease in corporate development costs is a result of additional expenses incurred in the prior period related to the securitization and Senior Non-Convertible Preferred Stock transactions. The increase in professional services costs is primarily driven by increased legal fees incurred during the period.

SixThree Months Ended DecemberMarch 31, 20252026 and 20242025–Technical development expenses increaseddecreased $0.4$0.2 million, or 2%, for the three months ended DecemberMarch 31, 2025,2026, primarily due to a $1.0$0.5 million increase in compensationcapitalized costs duerelated to aninternal-use increasesoftware inand headcountwebsite for technology personnel. The increase in compensation costs weredevelopment, partially offset by a $0.7$0.3 million decreaseincrease in datasoftware centerand costs.maintenance Theexpenses. decreaseThese inincreases data center costs waswere driven by athe reductionCompany’s instrategic cloudfocus infrastructureon capacitybuilding new software tools, which shifted personnel efforts from routine maintenance to alignthe withdevelopment currentof demand.new functional features.

Three Months Ended DecemberMarch 31, 20252026 and 20242025–Interest expenseexpense, net decreased $12.1$9.8 million, or 51%,48%, for the three months ended DecemberMarch 31, 2025.2026. The decrease was primarily drivendue byto a lower weighted-average principal balance outstanding during the Company’sthree lowermonths costended ofMarch capital31, 2026 following the completion$260.0 million principal repayment of the securitization transaction and the repayment of $260.0 million of thePrevious Term Loans balance using the proceeds from the Senior Non-Convertible Preferred Stock issuance.issuance in February 2025.

SixNine Months Ended DecemberMarch 31, 20252026 and 20242025–Interest expenseexpense, net decreased $23.3$33.1 million, or 50%,49%, for the sixnine months ended DecemberMarch 31, 2025.2026. The decrease was primarily driven by: (i) the Company’slower weighted-average principal balance outstanding throughout the nine months ended March 31, 2026, resulting from the $260.0 million principal repayment in February 2025; and (ii) the lower cost of capital following the completion of the securitization transaction andin theOctober repayment of $260.0 million of the Term Loans balance using the proceeds from the Senior Non-Convertible Preferred Stock issuance.2024.

Three Months Ended DecemberMarch 31, 20252026 and 20242025–For the three months ended DecemberMarch 31, 2025,2026, and 2024,2025, the Company recognized an income tax expense of $13.7$3.9 million and income tax benefit of $13.7$8.6 million, representing an effective tax rate of 16.5%8.9% and (34.6)%,24.8%, respectively. The differences from the federal statutory tax rate to the effective tax rate for the three months ended DecemberMarch 31, 2025,2026, 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 DecemberMarch 31, 2024,2025, were primarily related to state income taxes,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, vestingnon-deductible change in fair value of restricted stock units,warrants and non-deductibilityexcess ofofficer warrant market adjustments.compensation.

SixNine Months Ended DecemberMarch 31, 20252026 and 20242025–For the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, the Company recognized income tax expense of $6.5$10.4 million and income tax benefit of $4.2$4.4 million, respectively, representing effective tax rates of 14.3%11.6% and (91.6)%,11.3%, respectively. The differences from the federal statutory tax rate to the effective tax rate for the sixnine months ended DecemberMarch 31, 2025,2026, 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 rate for the sixnine months ended DecemberMarch 31, 2024,2025, were primarily related to state income taxes,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, vestingnon-deductible ofwarrant restrictedmark-to-market stock units,adjustment and non-deductibilityexcess ofofficer warrant market adjustments.compensation.

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.

(2) During the three and sixnine months ended DecemberMarch 31, 2025,2026, the Company recognized an impairment charge of $1.0 million representing a full write-off of its equity-method investment.

Three Months Ended DecemberMarch 31, 20252026:

(3) For Senior and Life, these costs are primarily comprised of allocations from corporate related to payroll and related benefits for administrative support functions and facilities. Within Healthcare Services, it primarily consists of payroll and related benefit costs for licensed pharmacists and pharmacy technicians performing one-time customer onboarding work for enrollments that don’tdo not actually become members.

(6) These expenses primarily consist of financing transaction costs ($0.3 million) and non-restructuring severance expenses ($0.3$0.6 million).

Three Months Ended DecemberMarch 31, 20242025:

(3) For Senior and Life, these costs are primarily comprised of allocations from corporate related to payroll and related benefits for administrative support functions and facilities. Within Healthcare Services, it primarily consists of payroll and related benefit costs for licensed pharmacists and pharmacy technicians performing one-time customer onboarding work for enrollments that don’tdo not actually become members.

SixNine Months Ended DecemberMarch 31, 20252026:

(3) For Senior and Life, these costs are primarily comprised of allocations from corporate related to payroll and related benefits for administrative support functions and facilities. Within Healthcare Services, it primarily consists of payroll and related benefit costs for licensed pharmacists and pharmacy technicians performing one-time customer onboarding work for enrollments that don’tdo not actually become members.

(7) During the sixnine months ended DecemberMarch 31, 2025,2026, the Company recognized an impairment charge of $1.0 million representing a full write-off of its equity-method investment.

SixNine Months Ended DecemberMarch 31, 20242025:

(3) For Senior and Life, these costs are primarily comprised of allocations from corporate related to payroll and related benefits for administrative support functions and facilities. Within Healthcare Services, it primarily consists of payroll and related benefit costs for licensed pharmacists and pharmacy technicians performing one-time customer onboarding work for enrollments that don’tdo not actually become members.

Three Months Ended DecemberMarch 31, 20252026 and 20242025–Revenue from Senior was $261.5$182.9 million for the three months ended DecemberMarch 31, 2025,2026, a $6.0$13.4 million, or 2%,8%, increase compared to revenue of $255.6$169.4 million for the three months ended DecemberMarch 31, 2024.2025. The increase was due to a $3.8 million and $2.2$28.6 million increase in other revenue and commissions revenue, respectively.partially offset by a $15.2 million decrease in other revenue. The increase in commission revenue was due to a 4%6% increase in approved policies.policies and a $14.4 million change in estimate of expected renewals driven by additional anticipated renewals from our policyholders. The decrease in other revenue was primarily due to a lower volume of carrier sponsored production incentives and performance-based bonuses during the current OEP cycle.

Revenue from Healthcare Services was $230.7$199.4 million for the three months ended DecemberMarch 31, 2025,2026, a $47.3$9.8 million, or 26%,5%, increase compared to revenue of $183.4$189.6 million for the three months ended DecemberMarch 31, 2024,2025, primarily due to a $47.2$10.0 million increase in SelectRx pharmacy revenue due to a 17%11% increase in members from the growth of the SelectRx business.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.

Revenue from Life was $90.3$47.9 million for the sixthree months ended DecemberMarch 31, 2025,2026, a $11.1$2.1 million, or 14%,4%, increase compared to revenue of $79.2$45.8 million for the sixthree months ended DecemberMarch 31, 2024,2025, due to a $7.7$1.7 million increase in final expense revenue, and a $2.7$0.5 million increase in term revenuerevenue. These increases were due to an increaseincreases in the numberaverage ofpremiums policiesper policy sold.