SelectQuote, Inc.: Form 10-Q for the period ended Mar 31, 2026

You should read the following discussion and analysis of our financial condition and result of operations together with our condensed consolidated financial statements and footnotes included elsewhere in this Quarterly Report on Form 10-Q. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. The forward-looking statements are not historical facts, but rather are based on current expectations, estimates, assumptions, and projections about our industry, business and future financial results. Please refer to a discussion of the Company’s forward-looking statements and associated risks in “Cautionary Note Regarding Forward-Looking Statements” in our 2025 Annual Report. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors” in our 2025 Annual Report and in Part II, Item 1A hereof.

Company Overview

SelectQuote, Inc. (together with its subsidiaries, “SelectQuote”, the “Company”, “we”, “us”) is a leading technology-enabled, direct-to-consumer (“DTC”) distribution and engagement platform for selling insurance policies and healthcare services.

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 At the same time, we have de-emphasized production within our Auto & Home distribution insurance business, which no longer represents a core area of focus.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

Our insurance distribution business, which has operated continuously for over 40 years, allows consumers to transparently and conveniently shop for senior health, life, and automobile and home insurance policies from a curated panel of the nation’s leading insurance carriers. As an insurance distributor, we do not insure the consumer, but rather identify consumers looking to acquire insurance products and place these policies from consumers with insurance carrier partners that best meet our clients’ needs. In return, we earn commissions from our insurance carrier partners for the policies we sell on their behalf. Our proprietary technology platform integrates artificial intelligence and data science based machine learning models to analyze and identify high-quality consumer leads from diverse online and offline channels, such as digital marketing, radio, television, and third-party partnerships. Leveraging over 40 years of accumulated data and advanced predictive analytics, our technology dynamically optimizes marketing spend in real-time. Our intelligent workflow system instantly evaluates each acquired lead, routing it efficiently to the most suitable sales agent based on consumer needs and agent expertise. Our platform then captures and utilizes our experience to further build upon the millions of data points that feed our marketing algorithms, further enhancing our ability to deploy subsequent marketing dollars efficiently and target more high-quality consumer leads. We have built our business model to maximize commissions collected over the life of an approved policy, a metric we refer to as “ lifetime value of commissions” or “LTV”, which is a key component to our overall profitability.

Our proprietary routing and workflow system is a key competitive advantage and driver of our business performance. Our systems analyze and intelligently route consumer leads to agents and allow us to monitor, segment, and enhance our agents’ performance. This technological advantage also allows us to rapidly conduct a needs-based, tailored analysis for each consumer that maximizes sales, enhances customer retention, and ultimately maximizes LTVs. Our expertise and value add stems from the coupling of our technology with our skilled agents, which provides greater transparency in pricing and choice and an overall better consumer experience. When customers are satisfied, their propensity to switch policies decreases, thereby improving retention rates (“persistency”), increasing LTVs and, ultimately, optimizing our financial performance and shareholder value.

SelectQuote has a long history of successful DTC product distribution and consumer engagement, and we bring this same capability to healthcare services. We saw a large opportunity to leverage our existing customer base and distribution model to improve education and access to healthcare services for our senior consumers and to create value for our shareholders and insurance carrier partners. SelectQuote’s value lies in our ability to engage the consumer, capture critical self-reported information in real-time, and then take action on that information to offer each consumer personalized solutions. Our healthcare services business seeks to provide consumers with a wide breadth of products supporting their needs, such as SelectRx, our Patient-Centered Pharmacy HomeTM accredited pharmacy, which has already demonstrated SelectQuote’s ability to leverage our strong consumer engagement to drive immediate value using our existing operational infrastructure. Whether through acquisitions or new partnerships, we continue to look for more opportunities to leverage our strengths to expand our healthcare services business.

We evaluate our business using the following three reportable segments:

Senior was launched in 2010 and provides unbiased comparison shopping for Medicare Advantage (“MA”) and Medicare Supplement (“MS”) insurance plans as well as prescription drug and dental, vision, and hearing (“DVH”) plans, and critical illness products. We represent approximately 25 leading, nationally-recognized insurance carrier partners, including UHC, Humana, Aetna, and Wellcare. MA and MS plans accounted for 90% and 91% of our approved Senior policies for the three months ended March 31, 2026, and 2025, respectively, and 90% and 91% for the nine months ended March 31, 2026, and 2025, respectively, with other ancillary type policies accounting for the remainder.

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

Life is one of the country’s largest and most established DTC insurance distributors for term life insurance, having sold over 2.6 million policies nationwide since our founding in 1985. Our platform provides unbiased comparison shopping for life insurance products such as term life, final expense, and other ancillary products like critical illness, accidental death, and juvenile insurance. We represent approximately 20 leading, nationally-recognized insurance carrier partners, with many of these relationships exceeding 15 years. Term life policies accounted for 41%, and 41% of new premium within the Life segment for the three months ended March 31, 2026, and 2025, respectively, with final expense policies accounting for 59% and 59% for the three months ended March 31, 2026, and 2025, respectively. For the nine months ended March 31, 2026, and 2025, term life policies accounted for 40% and 41% of new premium within Life, respectively, with final expense policies accounting for 60% and 59%, respectively.

Our other operations which do not meet the criteria to be a separate reportable segment are consolidated and reported as “All other” which represents a shopping platform for auto, home, and specialty insurance lines.

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

Key Business and Operating Metrics by Segment

In addition to traditional financial metrics, we rely upon certain business and operating metrics to estimate and recognize revenue, evaluate our business performance, and facilitate our operations. In Senior, our primary product, Medicare Advantage, pays us flat commission rates based on the number of policies we sell on behalf of our insurance carrier partners. Therefore, we have determined that units and unit metrics are the most appropriate measures to evaluate the performance of Senior. For Healthcare Services, our primary source of revenue is pharmacy revenue from SelectRx, so the total number of SelectRx members and the prescriptions shipped per day are the most appropriate measures used to evaluate the performance of Healthcare Services as these metrics drive top-line revenue. In Life, we are typically paid a commission that is a percent of the premium that we generate for our insurance carrier partners. Therefore, we have determined that premium-based metrics are the most relevant measures to evaluate the performance of the segment. Below are the most relevant business and operating metrics for each segment:

Senior

Submitted Policies

Submitted policies are counted when an individual completes an application with our licensed agent and provides authorization to them to submit it to the insurance carrier partner. The applicant may have additional actions to take before the application will be reviewed by the insurance carrier.

The following table shows the number of submitted policies for the periods presented:

(1) Represents the submitted policies for Medicare supplement, dental, vision and hearing, prescription drug plan and other.

Total submitted policies for all products decreased 1% for the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The decrease was primarily due to a 16% decrease in overall close rates and a 2% decrease in the number of average productive agents.

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

Approved Policies

Approved policies represents the number of submitted policies that were approved by our insurance carrier partners for the identified product during the indicated period. Not all approved policies will go in force.

The following table shows the number of approved policies for the periods presented:

(1) Represents the approved policies for Medicare supplement, dental, vision and hearing, prescription drug plan and other.

In general, the relationship between submitted policies and approved policies has been steady over time. Therefore, factors impacting the number of submitted policies also impact the number of approved policies.

Total approved policies for all products increased by 6% for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily driven by higher same month approval rates during the current period.

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

Lifetime Value of Commissions per Approved Policy

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 periods presented:

(1) Represents the weighted average LTV per approved policy.

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

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

Healthcare Services

The total number of SelectRx members represents the amount of active customers to which an order has been shipped and the prescriptions per day represents the total average prescriptions shipped per business day. These two metrics are the primary drivers of revenue for Healthcare Services.

SelectRx Members

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

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

Prescriptions Per Day

The following table shows the average prescriptions shipped per day for the periods presented:

Life

Life premium represents the total premium value for all policies that were approved by the relevant insurance carrier partner and for which the policy document was sent to the policyholder and payment information was received by the relevant insurance carrier partner during the indicated period. Because our commissions are earned based on a percentage of total premium, total premium volume for a given period is the key driver of revenue for Life.

The following table shows term and final expense premiums for the periods presented:

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

Total term premiums increased 9% for the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025, due to a 6% increase in the number of policies sold, and a 3% increase in the average premium per policy sold. Final expense premiums increased 13% for the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025, due to a 14% increase in the number of policies sold. The increase in the number of final expense policies sold was driven by a 30% increase in average agent headcount, primarily attributable to new external agents and, to a lesser extent, flex agents onboarded from the Senior segment during the nine months ended March 31, 2026, both of which were less productive than our tenured agents.

Key Components of our Results of Operations

The following table sets forth our operating results and related percentage of total revenues for the periods presented:

(in thousands)

Revenue

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

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

The following table presents our revenue for the periods presented and the percentage changes from the prior year:

(dollars in thousands)

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

**Nine Months Ended March 31, 2026 and 2025–**Commission and other services revenue decreased $7.5 million, or 1%, for the nine months ended March 31, 2026, primarily due to a $19.0 million decrease in other Senior revenue, partially offset by a $13.2 million increase in Life revenue. The decrease in other Senior revenue was primarily due to a lower volume of carrier sponsored production incentives and performance-based bonuses during the current OEP cycle. The increase in Life revenue was primarily driven by a $9.4 million increase in final expense revenue due to a 14% increase in the number of policies sold. Pharmacy revenue increased $122.9 million or 24%, primarily due to the 11% increase in members due to the continued growth of the SelectRx business, partially offset by a $13.4 million reclassification of manufacturer refunds received in lieu of payer reimbursement revenue as a result of the Inflation Reduction Act. As discussed above, 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, which are reported as a reduction to cost of goods sold—pharmacy revenue.

Operating Costs and Expenses

Cost of Commissions and Other Services 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.

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

(dollars in thousands)

**Three Months Ended March 31, 2026 and 2025–**Cost of commissions and other service revenue increased $3.9 million, or 5%, for the three months ended March 31, 2026, primarily due to a $3.6 million increase in compensation costs. The $3.6 million increase in compensation costs is primarily comprised of increases in costs for sales and customer care agents of $1.2 million in both Healthcare Services and Senior, combined with a $1.1 million increase in Life.

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

Cost of Goods Sold-Pharmacy Revenue

Cost of goods sold-pharmacy revenue represents the direct costs associated with fulfilling pharmacy patient orders for SelectRx. Such costs primarily consist of medication costs and compensation costs for licensed pharmacists, pharmacy technicians, and other employees directly associated with fulfilling orders such as packaging and shipping clerks. It also includes shipping, supplies, other order fulfillment costs including part of the one-time customer onboarding costs, and certain facilities overhead costs such as rent, maintenance, and depreciation related to the pharmacy production process.

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

(dollars in thousands)

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

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

Marketing and Advertising

Marketing and advertising expenses consist primarily of the direct costs associated with marketing and advertising of our services, such as television and radio commercials and online advertising. These direct costs generally represent the vast majority of our marketing and advertising expenses. Other costs consist of compensation and other expenses related to marketing, business development, partner management, public relations, carrier relations personnel who support our offerings, and allocations for facilities, telecommunications, and software maintenance costs. Our marketing and advertising costs increase during AEP and OEP to generate more leads during these high-volume periods.

The following table presents our marketing and advertising expenses for the periods presented and the percentage changes from the prior year:

(dollars in thousands)

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

**Nine Months Ended March 31, 2026 and 2025–**Marketing and advertising expenses increased $5.2 million, or 2%, for the nine months ended March 31, 2026, primarily due to a $2.5 million increase in lead costs and a $1.8 million increase in creative marketing costs, partially offset by a $1.5 million increase in compensation costs. The increases in lead and compensation costs were primarily driven by a 30% increase in the average final expense agent headcount in Life, which fueled a 14% increase in the volume of final expense policies sold during the period.

The increase in creative marketing costs was driven by the production of new television advertising for our Life division.

Selling, General, and Administrative

Selling, general, and administrative expenses include compensation and benefits costs for staff working in our executive, finance, accounting, recruiting, human resources, administrative, business intelligence, data science, and part of the SelectRx customer onboarding departments. These expenses also include fees paid for outside professional services, including audit, tax, and legal fees and allocations for facilities, telecommunications, and software maintenance costs.

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

(dollars in thousands)

**Three Months Ended March 31, 2026 and 2025–**Selling, general, and administrative expenses decreased $3.5 million, or 8%, for the three months ended March 31, 2026, primarily due to $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.

**Nine Months Ended March 31, 2026 and 2025–**Selling, general, and administrative expenses decreased $9.9 million, or 8%, for the nine months ended March 31, 2026, primarily due to $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.

Technical Development

Technical development expenses consist primarily of compensation and benefits costs for internal and external personnel associated with developing, maintaining and enhancing our applications, infrastructure and other IT-related functions as well as allocations for facilities, telecommunications and software maintenance costs.

The following table presents our technical development expenses for the periods presented and the percentage changes from the prior year:

(dollars in thousands)

**Three Months Ended March 31, 2026 and 2025–**Technical development expenses decreased $0.2 million, or 2%, for the three months ended March 31, 2026, primarily due to a $0.5 million increase in capitalized costs related to internal-use software and website development, partially offset by a $0.3 million increase in software and maintenance expenses. These increases were driven by the Company’s strategic focus on building new software tools, which shifted personnel efforts from routine maintenance to the development of new functional features.

**Nine Months Ended March 31, 2026 and 2025–**Technical development expenses increased $0.2 million, or 1%, for the nine months ended March 31, 2026, primarily due to a $1.1 million increase in compensation costs due to an increase in headcount for technology personnel. The increase in compensation costs were partially offset by a $0.8 million decrease in information technology related expenses, primarily driven by a $0.7 million decrease in data center costs. The decrease in data center costs was driven by a reduction in cloud infrastructure capacity to align with current demand.

Interest Expense, Net

The following table presents our interest expense, net for the periods presented and the percentage changes from the prior year:

(dollars in thousands)

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

**Nine Months Ended March 31, 2026 and 2025–**Interest expense, net decreased $33.1 million, or 49%, for the nine months ended March 31, 2026. The decrease was primarily driven by: (i) the lower 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 in October 2024.

Income Taxes

The following table presents our provision for income taxes for the periods presented and the percentage changes from the prior year:

(dollars in thousands)

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

**Nine Months Ended March 31, 2026 and 2025–**For the nine months ended March 31, 2026 and 2025, the Company recognized income tax expense of $10.4 million and $4.4 million, respectively, representing effective tax rates of 11.6% and 11.3%, respectively. The differences from the federal statutory tax rate to the effective tax rate for the nine months ended March 31, 2026, were primarily related to state income taxes and the recording of a valuation allowance for federal and state tax attributes that the Company does not expect to utilize prior to expiration, non-deductible warrant mark-to-market adjustment, and excess officer and stock-based compensation and general business credits. The differences from the federal statutory tax rate to the effective tax rate for the nine months ended March 31, 2025, were primarily related to state income taxes and the recording of a valuation allowance for federal and state tax attributes that the Company does not expect to utilize prior to expiration, non-deductible warrant mark-to-market adjustment and excess officer compensation.

Non-GAAP Financial Measures

This report includes certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. To supplement our financial statements presented in accordance with GAAP and to provide investors with additional information regarding our GAAP financial results, we have presented in this report Adjusted EBITDA, which, when presented on a consolidated basis, is a non-GAAP financial measure. This non-GAAP financial measure is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to any similarly titled measure presented by other companies.

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.

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

(in thousands)

50

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

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

Segment Information

As of July 1, 2024, the Company realigned its reportable segments. The Auto & Home business does not meet the quantitative thresholds to be required to continue to be separately disclosed as a reportable segment in accordance with ASC 280, Segment Reporting (“ASC 280”). As a result, the Auto & Home business will be included in an “All Other” category. Prior period information has been recast to conform to the current presentation.

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

Our operating segments are determined based on how our chief executive officer, who also serves as our CODM, manages our business, regularly accesses information, and evaluates performance for operating decision-making purposes, including allocation of resources. Adjusted EBITDA is our segment profit measure and a key measure used by our CODM and Board of Directors to understand and evaluate the operating performance of our business and on which internal budgets and forecasts are based and approved.

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

The following tables present information about the reportable segments for the periods presented.

We do not report total assets by segment as our CODM does not use this information to evaluate operating segment performance. Accordingly, we do not regularly provide such information by segment to our CODM.

Three Months Ended March 31, 2026:

(in thousands)

(1) Represents revenue from SQAH, a non-reportable segment.

(in thousands)

(1) Primarily consists of direct advertising and lead generation costs across various marketing channels.

(2) Primarily comprised of payroll and related benefits for dedicated Healthcare Services IT personnel.

(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 do not actually become members.

(4) Represents adjusted EBITDA from SQAH, a non-reportable segment.

(5) Corporate is not an operating segment and consists primarily of unallocated corporate overhead costs, such as payroll and related benefits ($17.4 million), professional services ($5.4 million), and facilities ($1.2 million).

(6) These expenses primarily consist of non-restructuring severance expenses ($0.6 million).

Three Months Ended March 31, 2025:

(in thousands)

(1) Represents revenue from SQAH, a non-reportable segment.

(in thousands)

(1) Primarily consists of direct advertising and lead generation costs across various marketing channels.

(2) Primarily comprised of payroll and related benefits for dedicated Healthcare Services IT personnel.

(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 do not actually become members.

(4) Represents adjusted EBITDA from SQAH, a non-reportable segment.

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

(6) These expenses primarily consist of financing transaction costs ($5.8 million).

Nine Months Ended March 31, 2026:

(in thousands)

(1) Represents revenue from SQAH, a non-reportable segment.

(in thousands)

(1) Primarily consists of direct advertising and lead generation costs across various marketing channels.

(2) Primarily comprised of payroll and related benefits for dedicated Healthcare Services IT personnel.

(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 do not actually become members.

(4) Represents adjusted EBITDA from SQAH, a non-reportable segment.

(5) Corporate is not an operating segment and consists primarily of unallocated corporate overhead costs, such as payroll and related benefits ($52.6 million), professional services ($14.6 million), and facilities ($4.0 million).

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

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

Nine Months Ended March 31, 2025:

(in thousands)

(1) Represents revenue from SQAH, a non-reportable segment.

(in thousands)

(1) Primarily consists of direct advertising and lead generation costs across various marketing channels.

(2) Primarily comprised of payroll and related benefits for dedicated Healthcare Services IT personnel.

(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 do not actually become members.

(4) Represents adjusted EBITDA from SQAH, a non-reportable segment.

(5) Corporate is not an operating segment and consists primarily of unallocated corporate overhead costs, such as payroll and related benefits ($49.5 million), professional services ($12.6 million), and facilities ($4.2 million).

(6) These expenses primarily consist of non-restructuring severance expenses ($0.6 million) and financing transaction costs ($12.8 million).

The following table depicts the disaggregation of revenue by segment and product for the periods presented:

(dollars in thousands)

Revenue by Segment

**Three Months Ended March 31, 2026 and 2025–**Revenue from Senior was $182.9 million for the three months ended March 31, 2026, a $13.4 million, or 8%, increase compared to revenue of $169.4 million for the three months ended March 31, 2025. The increase was due to a $28.6 million increase in commissions revenue, partially offset by a $15.2 million decrease in other revenue. The increase in commission revenue was due to a 6% increase in approved 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 $199.4 million for the three months ended March 31, 2026, a $9.8 million, or 5%, increase compared to revenue of $189.6 million for the three months ended March 31, 2025, primarily due to a $10.0 million increase in SelectRx pharmacy revenue due to a 11% increase in members from the growth of the SelectRx business, partially offset by $13.4 million of manufacturer refunds received in lieu of payer reimbursement revenue as a result of the Inflation Reduction Act. Beginning in calendar year 2026, the Company began receiving refunds from pharmaceutical manufacturers on certain drugs that are part of the Medicare Prescription Drug Inflation Rebate Program under the Inflation Reduction Act. The Company reports these refunds as a reduction to cost of goods sold—pharmacy revenue rather than as pharmacy revenue.

Revenue from Life was $47.9 million for the three months ended March 31, 2026, a $2.1 million, or 4%, increase compared to revenue of $45.8 million for the three months ended March 31, 2025, due to a $1.7 million increase in final expense revenue, and a $0.5 million increase in term revenue. These increases were due to increases in the average premiums per policy sold.

**Nine Months Ended March 31, 2026 and 2025–**Revenue from Senior was $503.4 million for the nine months ended March 31, 2026, a $14.5 million, or 3%, decrease compared to revenue of $517.9 million for the nine months ended March 31, 2025. The decrease was primarily due to a $19.0 million decrease in other revenue, partially offset by a $4.5 million increase in commission revenue. 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 $651.4 million for the nine months ended March 31, 2026, a $122.7 million, or 23%, increase compared to revenue of $528.7 million for the nine months ended March 31, 2025, due to a $122.9 million increase in SelectRx pharmacy revenue driven by a 11% increase in members from the growth of the SelectRx business, partially offset by a $13.4 million reclassification of manufacturer refunds received in lieu of payer reimbursement revenue as a result of the Inflation Reduction Act. As discussed above, 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, which are reported as a reduction to cost of goods sold—pharmacy revenue.

Revenue from Life was $138.2 million for the nine months ended March 31, 2026, a $13.2 million, or 11%, increase compared to revenue of $125.0 million for the nine months ended March 31, 2025, due to a $9.4 million increase in final expense revenue, and a $3.2 million increase in term revenue. These increases were due to increases in the number of policies sold.

Adjusted EBITDA by Segment

**Three Months Ended March 31, 2026 and 2025–**Adjusted EBITDA from Senior was $58.6 million for the three months ended March 31, 2026, a $12.9 million increase compared to Adjusted EBITDA of $45.7 million for the three months ended March 31, 2025. The increase was primarily due to a $13.4 million increase in revenue as discussed above, partially offset by a $1.2 million increase in costs of commissions and other services revenue. The increase in costs of commissions and other services revenue was due to a $0.8 million increase in compensation costs and a $0.3 million increase in licensing fees.

Adjusted EBITDA from Healthcare Services was $5.3 million for the three months ended March 31, 2026, a $1.2 million decrease compared to Adjusted EBITDA of $6.4 million for the three months ended March 31, 2025. The decrease was primarily due to a $8.8 million increase in cost of goods sold - pharmacy revenue, a $1.5 million increase in selling, general, and administrative expenses, and a $1.2 million increase in costs of commissions and other services revenue, partially offset by a $9.8 million increase in revenue as discussed above. Cost of goods sold - pharmacy revenue increased primarily as a result of a $19.6 million increase in medication costs combined with a $1.5 million increase in compensation costs, partially offset by a $13.4 million decrease from refunds recognized as a reduction of costs of goods sold-pharmacy revenue rather than as pharmacy revenue as discussed above. Selling, general, and administrative expenses increased due to a $0.7 million increase in compensation costs. Cost of commissions and other services revenue increased due to a $1.2 million increase in compensation costs. Medication costs increased largely due to a 11% increase in the number of SelectRx members over the prior year. The increase in compensation costs reflects higher staffing levels required to support growth in pharmacy order volume and member fulfillment activity.

Adjusted EBITDA from Life was $6.1 million for the three months ended March 31, 2026, a $0.3 million decrease compared to Adjusted EBITDA of $6.4 million for the three months ended March 31, 2025. The decrease was primarily due to a $1.3 million increase in marketing expenses and a $1.1 million increase in cost of commissions and other services revenue, partially offset by a $2.1 million increase in revenue as discussed above. The increase in marketing expenses was due to a $0.9 million increase in lead costs and a $0.5 million increase in creative marketing costs. The increase in cost of commissions and other services revenue was due to a $1.1 million increase in compensation costs.

**Nine Months Ended March 31, 2026 and 2025–**Adjusted EBITDA from Senior was $140.1 million for the nine months ended March 31, 2026, a $13.9 million decrease compared to Adjusted EBITDA of $153.9 million for the nine months ended March 31, 2025. The decrease was primarily due to a $14.5 million decrease in revenue as discussed above.

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

Adjusted EBITDA from Life was $17.2 million for the nine months ended March 31, 2026, a $2.5 million decrease compared to Adjusted EBITDA of $19.7 million for the nine months ended March 31, 2025. The decrease was due to a $8.8 million increase in marketing expenses and a $6.8 million increase in cost of commissions and other services revenue, partially offset by a $13.2 million increase in revenue, as discussed above. The increase in marketing expenses was due to a $7.7 million increase in lead costs and a $1.0 million increase in creative marketing costs. The increase in cost of commissions and other services revenue was due to a $6.8 million increase in compensation costs.

Liquidity and Capital Resources

Our liquidity needs primarily include working capital and debt service requirements. Additionally, we are required under the Credit Agreement and Indenture to maintain compliance with certain debt covenants, as discussed further in Note 6 to the condensed consolidated financial statements.

Long-term Debt

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

Credit Agreement

On January 8, 2026, the Company entered into a new Senior Secured Credit Facility that provided for (i) a senior secured term loan in the aggregate principal amount of $325.0 million and (ii) a senior secured revolving credit facility with an aggregate commitment up to $90.0 million. The proceeds were used to repay the outstanding obligations under the previous credit agreement. Refer to Note 6 to the condensed consolidated financial statements for further discussion.

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

Securitization and Indenture

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

Liquidity

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

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

(in thousands)

Operating Activities

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

Collection of commissions receivable depends upon the timing of our receipt of commission payments and associated commission statements from our insurance carrier partners. If we were to experience a delay in receiving a commission payment from an insurance carrier partner within a quarter, our operating cash flows for that quarter could be adversely impacted.

A significant portion of our marketing and advertising expenses is driven by the number of leads required to generate the insurance applications we submit to our insurance carrier partners. Our marketing and advertising costs are expensed and generally paid as incurred and since commission revenue is recognized upon approval of a policy but commission payments are paid to us over time, there are working capital requirements to fund the upfront cost of acquiring new policies. During AEP, we experience an increase in the number of submitted Senior insurance applications and marketing and advertising expenses compared to periods outside of AEP. The timing of AEP affects the positive or negative impacts of our cash flows during each quarter.

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

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

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

These inflows were partially offset by cash outflows that included an increase of $39.0 million in accounts receivable an increase of $33.8 million in commissions receivable, a decrease of $6.0 million in other liabilities, a decrease of $3.6 million in operating lease liabilities, and an increase of $0.3 million in other assets. The increase in accounts receivable is consistent with the Company’s seasonality as the majority of policies sold have January 1st effective dates, allowing the current accounts receivable balances to increase at the start of the Company’s third fiscal quarter. The increase in commissions receivable is primarily driven by the high volume of revenue recognized during the AEP season. The decrease in other liabilities is primarily related to a $7.1 million decrease in our contract liability. The decrease in contract liabilities indicates a satisfaction of performance obligations and conversion of the non-cash liability to revenue. The decrease in operating lease liabilities is consistent with the principal repayments on existing lease obligations, as the Company did not enter into any material leases during nine months ended March 31, 2025. Lastly, the increase in other assets was primarily related to the Company’s interest rate swap that expired in November 2025.

Investing Activities

Our investing activities primarily consist of purchases of property, equipment, and software and capitalized salaries related to the development of internal-use software.

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

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

Financing Activities

Our financing activities primarily consist of payments on term loans, proceeds and payments related to the revolving credit facility, payments on notes issued in connection with the Indenture, payments for debt issuance costs, and proceeds and payments related to stock-based compensation.

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

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

Contractual Obligations

Other than the discussions in Note 6 and Note 10 to the condensed consolidated financial statements, as of March 31, 2026, there have been no material changes to our contractual obligations as previously described in our Annual Report.

Off-Balance Sheet Arrangements

We did not have any off-balance sheet arrangements during the period covered by this report.

Recent Accounting Pronouncements

For a discussion of new accounting pronouncements recently adopted and not yet adopted, see the notes to our condensed consolidated financial statements.

Critical Accounting Estimates

The Company’s critical accounting estimates are described in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our Annual Report on Form 10-K for the fiscal year ended June 30, 2025. These estimates include assumptions used in revenue recognition related to lifetime value (“LTV”) of commission receivables, the fair value of warrant liabilities, and goodwill impairment testing.

There were no material changes to these critical accounting estimates during the nine months ended March 31, 2026.

In the normal course of business, we are subject to market risk. Market risks represent risks of loss that may impact our financial position due to adverse changes in financial market prices and rates. There have been no material changes in our exposure to credit concentration risk from those disclosed in “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025. For the nine months ended March 31, 2026, our top two insurance carrier customers accounted for 35% and 22% of total accounts and commissions receivable.

We are, however, newly providing additional disclosure regarding our exposure to interest rate risk related to our debt obligations in fiscal year 2026. As of March 31, 2026, we had $325.0 million outstanding under our senior secured term loans and revolving credit facilities, which bear interest at variable rates based on SOFR plus an applicable margin. A hypothetical 100 basis point increase in market interest rates would increase annualized interest expense by approximately $3.3 million, assuming March 31, 2026 balances remain outstanding and no hedging instruments are in place.

We also had approximately $68.4 million of asset-backed notes outstanding as of March 31, 2026. These notes bear fixed interest rates and therefore are not subject to market risk from changes in interest rates.

Evaluation of Our Disclosure Controls and Procedures

As of March 31, 2026, an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) was carried out by our management, with the participation of our chief executive officer (principal executive officer) and our chief financial officer (principal financial and accounting officer). Based upon our management's evaluation, our chief executive officer and our chief financial officer have concluded that as of the end of the period covered by this report, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to our management, including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure.

In designing and evaluating our disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only a reasonable level of assurance of achieving their desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

Except as discussed below, there have been no material changes to the risk factors disclosed in our Annual Report. Before investing in our securities, we recommend that investors carefully consider the risks described in our Annual Report, including those under the heading “Risk Factors.” Realization of any of these risks and any additional risks and uncertainties not currently known to us or that we have deemed to be immaterial could have a material adverse effect on our business, financial condition, or results of operations.

If we are unable to regain compliance with the continued listing standards of the New York Stock Exchange (the “NYSE”), the NYSE may delist our common stock, which could have an adverse impact on the liquidity, trading volume, and market value of our common stock.

On March 19, 2026, we received a notice (the “Notice”) from the NYSE indicating that the Company is no longer in compliance with the continued listing standard set forth in Section 802.01C of the NYSE’s Listed Company Manual because the average closing price of the Company’s common stock was less than $1.00 per share over a consecutive 30 trading-day period. In accordance with Section 802.01C, there is a cure period of six months following receipt of the Notice to regain compliance with the minimum share price requirement. In the event that, upon the expiration of the six–month cure period, both a $1.00 share price and a $1.00 average share price over the preceding 30 trading days are not attained, our common stock will be subject to the NYSE’s suspension and delisting procedures. A delisting of our common stock could negatively impact us by, among other things, reducing the liquidity and market price of our common stock; reducing the number of investors willing to hold or acquire our common stock, which could negatively impact our ability to raise equity financing; limiting our ability to issue additional securities or obtain additional financing in the future; decreasing the amount of news and analyst coverage of us; and causing us reputational harm with investors, employees, and parties conducting business with us.

We are closely monitoring the closing share price of our common stock and are considering all available options for regaining compliance. Although we anticipate we will regain compliance with the minimum share price requirement within the cure period, the price of our common stock is influenced by many factors, many of which are beyond our control, and there can be no assurance that our efforts will be successful or that we will remain in compliance with this or other NYSE continued listing standards in the future.