SelectQuote Lowers Full-Year Guidance Despite Q2 Revenue Growth
Summary
SelectQuote, Inc. reported Q2 FY26 results with increased revenue but lowered its full-year guidance for both revenue and Adjusted EBITDA, citing external headwinds.
Key Events
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Q2 Fiscal Year 2026 Financial Results
Consolidated revenue increased 12% year-over-year to $537.1 million, and net income rose to $69.3 million. However, consolidated Adjusted EBITDA slightly decreased to $84.7 million from $87.5 million in the prior year.
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Substantially Lowered Full-Year Guidance
The company revised its fiscal year 2026 revenue guidance to a range of $1.61 billion to $1.71 billion (down from $1.65 billion to $1.75 billion) and Adjusted EBITDA guidance to $90 million to $100 million (down from $120 million to $150 million).
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Segment Performance Highlights
The Senior segment saw 2% revenue growth and maintained 39% Adjusted EBITDA margins. Healthcare Services revenue grew 26%, but Adjusted EBITDA for the segment declined significantly to $0.8 million due to PBM reimbursement rate pressure.
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External Headwinds Cited for Guidance Cut
Management attributed the revised guidance to a national carrier's decision to reduce Medicare Advantage policy volume and previously disclosed PBM reimbursement changes, not internal operational performance.
Analysis
SelectQuote, Inc. reported mixed second-quarter fiscal year 2026 results, with consolidated revenue increasing but Adjusted EBITDA slightly declining. More significantly, the company substantially lowered its full-year fiscal 2026 guidance for both revenue and Adjusted EBITDA. This guidance reduction, attributed to external factors like a national carrier curtailing marketing spend and previously communicated PBM reimbursement changes, indicates a more challenging outlook than previously anticipated. While the Senior segment showed modest growth and strong margins, and Healthcare Services revenue grew, the decline in Healthcare Services Adjusted EBITDA and the overall guidance cut are key concerns for investors. This update follows the company's recent securing of a new $415 million credit facility on January 12, 2026, which improved its capital flexibility.
At the time of this filing, SLQT was trading at $1.43 on NYSE in the Finance sector, with a market capitalization of approximately $255.2M. The 52-week trading range was $1.33 to $6.86. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.