Welcome to SelectQuote's Third Quarter Earnings Conference Call. All lines have been muted to minimize background noise. After the speaker's remarks, there will be a question-and-answer session. It is now my pleasure to introduce Matt Gunter from SelectQuote Investor Relations. Mr. Gunter, you may begin the conference.

Thank you, and good afternoon, everyone. Welcome to SelectQuote's fiscal third quarter earnings call. Before we start, I want to mention that we've provided a slide presentation on our website to assist with our discussion today. A replay will also be available on our website after this call. Joining me from the company are our Chief Executive Officer, Tim Danker, and Chief Financial Officer, Raff Sadun. Following Tim and Raff's comments, we will open the floor for a question-and-answer session. During this call, we will discuss some non-GAAP financial measures. You can find the most comparable GAAP financial measures and the reconciliation of differences between the GAAP and non-GAAP financial measures in our earnings release and investor presentation on our website. Lastly, I want to remind you that some statements made today could be forward-looking. These statements are based on management's current expectations and beliefs regarding future events that may impact the company, and as such, are subject to various uncertainties and risks, including those outlined in our earnings release, annual report on Form 10-K, and other SEC filings. Therefore, the actual results of operations or financial condition of the company could differ significantly from what is expressed or implied in our forward-looking statements. Now, I would like to turn the call over to our Chief Executive Officer, Tim Danker. Tim?

Thank you, Matt, and thank you to our investors and analysts for joining us again. We appreciate your time, especially since we've taken a little longer than usual this quarter with our Population Health announcement last week. We will highlight that important and exciting initiative again on this call, but for those of you who missed it, we'd encourage you to check out our presentation from last week. Population Health and Value-Based Care represent a large opportunity for SelectQuote. I am pleased to report that our core business continues to excel in the third quarter. Let's begin with a review of our quarter on Slide 3. SelectQuote generated consolidated revenues of $267 million, up 80% year-over-year, and adjusted EBITDA of $65 million, up 48% over last year. Excluding the impact of a positive tail adjustment from fiscal third quarter 2020, consolidated revenue would have grown 91% and adjusted EBITDA would have grown 84%, with margins roughly flat year-over-year. As you know, the third quarter includes the open enrollment period and is the second largest quarter of the year from a contribution standpoint. Similar to last quarter, our Senior business led the way with our results. This quarter, we grew Senior revenue by 101% and adjusted EBITDA by 63% over last year. Adjusting for the one-time tail adjustment I just mentioned, revenue would have grown 119% and adjusted EBITDA would have grown 101%. This marks the fifth straight quarter of revenue growth over 100%, and similar to last quarter, this growth comes on a challenging compare, as we had already grown revenue and EBITDA by 109% and 54%, respectively, in 2020. We grew both submitted and approved Medicare Advantage policies by over 100% and did so with stability in both our LTVs and our Rev to CAC. Best of all, we are generating this growth in a much more cash-efficient way than originally anticipated. The key driver here is the consistent gains we've made in agent productivity, which were up again for the quarter, as we grew agents by 75%, but also expanded agent productivity by 17%. Put very plainly, our results continue to serve as proof points that we have built a differentiated and complete approach to the business that can scale significantly without sacrificing quality or returns. Across our model, we also had highlights beyond Senior. We are clearly excited about the huge opportunity with Value-Based Care and our Population Health platform, highlighted by our announced acquisition of Express Med Pharmaceuticals, which is now branded SelectRx, and the creation of SelectQuote Ventures, which I'll speak more about in a minute. In our Life Division, our Final Expense premiums grew 176% and 112% sequentially. As we look out over the remainder of the calendar year, we note that with the AEP and OEP completed, our flex agents will return to the Life Division, which will help further support these results. Lastly, based on our strong results in attractive capital markets, we were able to further strengthen our liquidity and reduce our overall interest rate by about 20% to 5.75% with the refinancing of our term debt, which generated an additional $292 million of committed capital to pursue the long-tailed and significant market opportunity available to SelectQuote. In summary, we are very pleased with these results and continue to build on our conviction that SelectQuote is designed to achieve high-quality growth for years to come. Best of all is with Population Health, our addressable market is bigger, and our ability to address that market has never been stronger. With that summary, let's turn to Slide 4 and review the open enrollment period. First, we had approximately 860 active senior agents, which is up 75% over last year. And as mentioned, these agents were 17% more productive compared to the same period last year. Turning to our lifetime values, our Medicare Advantage policies ended the third quarter at $1,362, which was basically flat compared to a year ago. Our Rev to CAC ratio of 3.1 also continues to be stable and attractive, especially given the type of policy growth we drove in the quarter. Finally, while so much of our discussion in AEP and OEP focuses on the initial policy sale, we would be remiss not to highlight the contribution of our customer care team. Our CCA team connected with policyholders throughout the use of their policies, conducting over 600,000 calls to customers during the quarter, representing an increase of 146% over last year. As we turn to Slide 5, let me provide a brief overview of our exciting Population Health strategy as another growth driver and significant service differentiator for SelectQuote. At the highest level, we all know that healthcare in the US is largely inefficient, complex, and really costly for patients to navigate. This is at the core of how SelectQuote's Senior business was built. In terms of the broader landscape and Population Health, we see three fundamental pillars to improving patient outcomes and reducing healthcare costs. First, helping the patient select the right low-cost and benefit-rich Medicare Advantage or Medicare supplement Plan to meet their unique healthcare needs is a key first step, and our agent and technology-driven model at SelectQuote is optimally positioned as evidenced by the policy growth we've been exhibiting since we went public. Enrolling the customer in the right plan is just the first step in that journey; as customers may choose to enroll as free members in Population Health, we will ensure they fully understand and utilize the great benefits in their MA and Med Sup plans. Our Population Health customer success agents will periodically contact customers to review Medicare plan benefits. The Population Health team will also gather and regularly update our records through healthcare literacy assessments, health risk assessments, and prescription drug assessments, so that we and our partners can better facilitate care for improved patient outcomes. These regular profile updates also create new meaningful revenue streams at low incremental customer acquisition costs and feature attractive cash conversion. Second, we have realized that we can do more for both our MA and MS members and non-members to aid their healthcare journey. With Population Health, we have partnered with a network of leading Value-Based Primary Care providers. At their request, we will provide Population Health members introductions to best-in-class BDC providers available in our area while we continue to explore relationships with additional providers, including market leaders like ChenMed, Conviva, Iora Health, Oak Street Health, and others operating 430 clinics in 25 states that are rapidly expanding. Through our partnership with a leading telehealth provider, Heal, we can expand the reach of Value-Based Care offerings to much of the rest of the United States, including patients in smaller towns and rural areas. In addition to providing patient education about Value-Based Primary Care, we can offer these service providers valuable insights to target their expansion and growth. Third, we are deeply committed to reducing patient complications and worsening chronic conditions brought on by poor medication adherence and adverse drug events. We feel this power is so fundamental that we recently acquired Express Med Pharmaceuticals, a leading specialized medication management pharmacy. Express Med's Medicare members average over ten prescription drugs each, yet Express Med has been able to achieve drug adherence in excess of 95%, compared to a national average of around 50% adherence for Seniors on five or more drugs. This has led to high member retention. Through SelectRx, we will provide patients with a personalized home delivery pharmacy solution featuring customized PillPack and automatic prescription refills, along with regular Population Health CSA touchpoints to improve adherence and patient outcomes. As we noted last week, we will supplement these three foundational pillars with a growing array of complementary services to make SelectQuote and Population Health a true one-stop shop to meet patient needs. Best of all, our flexible and adaptable tech platform makes the integration and rollout of new service offerings relatively straightforward and immediate. Our goal is to turn Population Health into a complete healthcare ecosystem that can transform the health and wellness of our members all in one place. As you've heard us say in the past, we believe the TAM for SelectQuote's core senior MA business is as large as $30 billion as we consider possibilities for Population Health. We believe the combined market for Pharmaceutical and Value-Based Primary Care for Medicare Advantage could represent a $1 trillion market opportunity. We are really excited about our early progress; in about a month, over 30,000 customers have opted in to become Population Health members, representing an opt-in rate of over 80%. We've conducted nearly as many health risk assessments and health literacy assessments over that same period. Since launching our initial trial in September 2020, we have provided around 7,000 customers with introductions to Value-Based Care service providers. On Slide 6, I'd like to drill down a little more about why Population Health is important. We have a large market opportunity. We feel Population Health creates a compelling opportunity to provide even more value to the customers we serve and will reinforce our core Medicare distribution business. To put it bluntly, the initiative is so exciting because the value we provide to the in-patient is so well aligned with each of the stakeholders in the ecosystem. Patients benefit from improved healthcare literacy and better coordination, driven to improved outcomes with less inefficiency and unnecessary costs. The service providers we work with undergo accelerated customer acquisition on the proven platforms they have developed, and they benefit from a stickier customer base because of the heightened service quality our approach will provide. Our carrier partners also gain a more complete picture of the unique health challenges, chronic conditions, and prescription drug profiles of their patients, which ultimately translates to better retention, higher satisfaction rates, and lower medical loss ratios. When patients win, service providers win, and carriers win, Population Health and SelectQuote win, which will accrue to earnings growth and value for our shareholders. As I noted before, it's hard to overstate how excited we are about the opportunity Population Health presents as the natural next chapter for SelectQuote. Again, kudos to Bob Grant and his team for leading the charge on this important effort. Before I turn the call over to Raff, let me wrap up quickly on Slide 7. First, similar to last quarter's most successful AEP, this was the most successful OEP in SelectQuote history, and the fifth consecutive quarter of 100% plus growth in Senior revenues, which speaks to the strength of our model. Second, we continue to drive strong growth in productivity with our agents posting a 17% higher productivity in Q3 of 2020. Third, our disciplined, quality-focused approach to growing the business continues to deliver stable and industry-leading retention and LTVs. Fourth, as we have stated in prior quarters, we continue to grow both revenues and adjusted EBITDA faster while using less cash than contemplated prior to our IPO. Finally, it's hard to overstate our excitement for the Population Health opportunity, and most importantly, the ability to realize that potential is enabled by the way SelectQuote is uniquely built and connected to our customers. With that, let me turn the call over to Raff to detail our results.

Thanks, Tim. I'll start on Slide 8 with our consolidated results. For the third quarter, we generated $267 million of revenue and $55 million of adjusted EBITDA. Revenue grew 80% and adjusted EBITDA grew 48%. We'll discuss the performance of the divisions in more detail on the next few slides. The revenue growth was driven by the increase in policies during OEP and our Senior segment, as well as our investment in Final Expense policies within our Life segment. Last year, our third quarter results benefited from a one-time $9 million positive tail adjustment associated with recognizing tail revenue from a MedSup carrier whose contract was amended. The amendment last year allowed us to start recognizing variable consideration for estimated renewal commissions upfront like the rest of our business and also required us to recognize a one-time catch-up of future tail revenue remaining that had not yet been recognized. Before the amendment for this carrier, we could only recognize the first-year commission revenue on a policy when it was initially sold, and then recognize renewal commission revenue on a cash basis when the policy renewed in future years. Excluding the impact of this tail adjustment from fiscal third quarter 2020, consolidated revenue would have grown 91% and adjusted EBITDA would have grown 84%. Turning to Slide 9, looking at our Senior division, as you can see, we had a very strong OEP season, generating revenue of $216 million and adjusted EBITDA of $75 million during the third quarter. This represents year-over-year revenue growth of 101% and adjusted EBITDA growth of 63%. It also represents the fifth quarter in a row that we have grown revenue over 100%. As explained earlier, normalizing for the one-time tail adjustment, revenue would have grown 119% and adjusted EBITDA would have grown 101%, with margins down about 300 basis points. Consistent with our stated strategy of growing faster and producing more absolute revenue and EBITDA at slightly lower, but still highly attractive margins. Moving on to Slide 10, for the third quarter, we had approximately 860 total average productive agents, up roughly 75% year-over-year. Average agent productivity was up 17%, representing the fourth quarter in a row that we have seen year-over-year improvement in agent productivity. As an aside, we do expect agent productivity to decline year-over-year in our fourth quarter as we don't anticipate having another special election period like we did last year. This increased agent headcount combined with the increase in average agent productivity drove significant growth during the quarter. Total submitted policies were up 107% and total approved policies 110%. The largest driver of this growth was MA policies, where we grew our MA submitted policies by 110% and approved policies by 112%. Moving onto LTVs, for the quarter, the LTV of an MA policy was down slightly 1% year-over-year, which was in line with our expectations. As in prior quarters, this was driven by lower persistency, but offset by higher rates. As we discussed last quarter, the percentage of our revenue driven by first-year commissions and production bonuses versus renewal revenue for cash will come in over time, was up again year-over-year. Last year, 33% of our third quarter Senior revenue was from year-one cash items. This year, 48% of our revenue is from year-one cash items. This improved cash flow and reduces the amount of revenue that is at risk from renewals. From a cost perspective, adjusting for the tail revenue last year, with the improvement in agent productivity, we saw our sales and fulfillment costs as a percentage of revenue become more efficient and decline about 10%. On the same basis, total marketing spend as a percentage of revenue was up 15%. However, lead-generation marketing costs were up only 2% as a percentage of revenue. The increase was driven by an increase in people-related costs for screeners, as part of the Inside Response acquisition. Please note that people-related costs roll up to the total sales and marketing line item. Lastly, during the quarter, there was a two-week period where our marketing efficiency and total production were negatively impacted by technology challenges with a third-party service provider that feeds our sales process. This issue was quickly resolved but did temporarily cause our conversion rates to decline and increased marketing costs. Our overall results for the quarter would have been higher without this issue. Lastly, I'd like to address an item that did not impact third quarter results but will impact the fourth quarter results. As we have previously discussed, we've experienced lower second-term persistency for the 2019 cohort. We anticipate having a negative cohort and tail adjustment in the fourth quarter primarily due to this cohort. This was factored into our guidance provided in February and that assumption is consistent with our updated guidance today. If we turn to slide 11, our Life division grew revenue by 50% to $46 million and adjusted EBITDA declined by 9% to $3 million. The third quarter is seasonally the lowest from a margin perspective as there is an uptick in term life activity that we begin the sales process on in the third quarter, but it doesn't go effective until the fourth quarter, so the costs are incurred in the third quarter, but some of the revenue comes in during the fourth quarter. The revenue growth was driven by growth in our final expense revenue. As a reminder, we did flex over a significant number of our LHA agents that sell Final Expense into Senior to sell during AEP and OEP. During the quarter, we hired new LHA agents, and some of the flex agents who went to Senior started returning to the Life Division. This allowed us to more than double Final Expense premiums sequentially and to grow Final Expense premiums by 176% year-over-year. The timing of the onboarding of new agents impacted margins as we incurred expenses to hire and train some of these agents, but didn't fully realize the benefit of revenue within the quarter. Adjusted EBITDA was also impacted by lower profitability in our term life business, where we continue to see headwinds due to COVID and delays in consumers completing necessary health assessments to get their policies in force. We do expect these conversion rates to trend back to normal levels at some point; however, the next several quarters may still be impacted by the lingering effects of COVID. Turning to Auto & Home, on Slide 12, revenue declined by 33% to $7 million, and adjusted EBITDA decreased by 31% to $1 million. As discussed in prior quarters, the decision to reallocate agents from our Auto & Home business to our Senior division and Final Expense efforts has had an impact on the Auto & Home revenue and adjusted EBITDA. This, by the way, is an example of what happens to cash flow when we slow down growth: it increases, proving that growth is a choice we make and that we can become cash flow positive immediately if we choose to decelerate growth. On a year-to-date basis, last year, the Auto & Home business used around $4 million of cash EBITDA. This year, with lower revenue, we generated $5 million of cash EBITDA, as first-year revenue and renewal revenue from policies sold in prior periods was more than enough to offset the cost of writing new business this year. Turning to Slide 13, we've updated these slides from our February earnings deck to show how we have been able to grow revenue and adjusted EBITDA faster than our internal expectations since the IPO while using significantly less cash. Normally, when we grow faster, it requires more capital upfront, but we've managed to operate more efficiently than our original expectations, driven by operational efficiencies, agent productivity, and growth in our final expense business. For the fourth quarter, since our IPO, we have generated 27% more revenue and 47% more adjusted EBITDA compared to internal expectations while using 35% less cash from operations. Turning to Slide 14, for the quarter specifically, we generated $42 million in cash from operations as we began collecting cash from first-year commissions associated with AEP activity. In addition, we used about $3 million in cash for general CapEx, $24 million for the purchase of certain assets from a lead distribution company, and $32 million for the earn-out of Inside Response. We ended the quarter with $369 million in cash and cash equivalents, $472 million in term loan debt, and zero drawn from our $75 million revolver. We also ended the quarter with $902 million of accounts receivable and short and long-term commissions receivable balances. Lastly, as previously announced on February 24th, given the strong performance of our business over the last 18 months, we took advantage of an opportunity to further strengthen our balance sheet while reducing our cost of capital by refinancing our term debt. We secured an additional $292 million in committed capital through an additional $147 million immediately and another $145 million in committed delayed-draw term loans that we can draw on during the next 12 months. We also lowered our overall interest rate by about 20% to 5.75% and adjusted some of our covenants to allow for more operational flexibility. We believe that having more capital puts us in a stronger position to execute on the huge market opportunity we see in front of us. Turning to guidance on Slide 15, we are not changing the revenue guidance range, keeping it at $920 million to $940 million. This implies consolidated revenue growth of between 73% and 77% year-over-year. We are adjusting our adjusted EBITDA guidance for the full fiscal year due to the incremental dollars we are investing in Population Health and SelectRx. As a reminder, during our announcement of Population Health last week, we stated we are investing to ramp up our sales of these incremental services and specifically on the SelectRX side, expanding into 50 states from 11 currently, and increasing capacity from 25,000 members to between 75,000 and 100,000 members. Based on the illustrative economics shared last week, we believe the ROI on these investments is extremely attractive. We currently expect adjusted EBITDA to be in the range of $225 million to $235 million, implying consolidated adjusted EBITDA growth of between 46% and 53% year-over-year. Lastly, we expect net income to be in the range of $130 million to $138 million. And with that, let me now turn the call back to the operator for your questions.

Your first question comes from the line of Jailendra Singh with Credit Suisse.

Yes, it's Jailendra Singh from Credit Suisse. Thanks and hello everyone. I want to follow up on your comments related to the second term persistency trending lower and how it impacts your fiscal Q4 expectations. Could you expand a bit more on that? What could be driving it? Is it because some seniors who signed up during SVP last year are turning more? Also, could you provide an update on your persistency for seniors who signed up last AEP?

Yes. So I think it’s important to remind everyone that we conduct our sort of cohort tail analysis once a year for our PDP products, as it is one renewal period in January. So that always happens in the fourth quarter. Consistent with what we have been saying for the last couple of quarters, that specific cohort has been underperforming. Some of these cohorts have been underperforming, and that's basically what we're seeing play out here. Some of those cohorts will probably use the constraints that we have for them, and as a result, that will lead to the cohort or tail adjustment in the fourth quarter. In terms of what’s driving that, I think we previously said that the introduction of OEP and the ability for seniors to change plans more frequently has likely impacted that. We have made some changes since then in terms of our technology and the process for better drug and doctor matching, and we're beginning to see some of that play through in some of the more recent cohorts, but that specific cohort is underperforming.

Okay. And then my follow-up. I know you're not providing formal fiscal '22 guidance at this point, but could you share high-level thoughts on various puts and takes to keep in mind for the next fiscal year? Also, can you touch upon your thought process regarding the balance between growing the topline and margin trends going forward, especially in the Senior segment?

Yes, again, we’re not going to provide specific guidance for '22 yet. We will do that on the next earnings call. I think we plan for that to strike a balance between the growth profile that we're looking at. While I wouldn’t expect, obviously, the growth we've seen this year, which exceeds 100%, we’ll balance that with the opportunity within our existing senior business, as well as these new initiatives related to Population Health and SelectRx that we are looking to scale into next year, and obviously, moving on to the other side of LHA is another key driver for next year.

Your next question comes from the line of Elizabeth Anderson with Evercore ISI.

Can you tell me how your initial plans to prepare for this year's AEP i.e., December 2021, are going and discuss the hiring and planning process so far? Have there been any changes in your approach?

Bill, do you want to start with a hiring update and then turn it over to Bob for other comments?

Yes, absolutely. We feel good about where we are. We've started hiring obviously for next AEP. Currently, the market is quite different than it was a year ago, so we have made some changes, but we are on track and feel really good about the quality of applicants we're seeing and our progress so far. All signs are positive on that front, and we feel good about where we stand.

Yes. Thanks, Bill. As you mentioned, we feel really good about our recruiting so far, and operationally we are already prepping for the necessary changes that we've made to support the growth we want to achieve. We feel really good about that too. We're actually significantly ahead of schedule on many initiatives from last AEP to prepare for the next AEP, and we continue to enhance SelectQuote University. We've seen good results from that last year, and we have made continued improvements as we integrated more core classes, which has really helped refine our training experience and quoting experience. We feel very strong about what we'll be able to accomplish with that.

And as a follow-up, what should we keep in mind regarding the LTVs, either sequentially or year-over-year, in the fourth quarter?

I think generally speaking, LTV should be roughly flat, which is sort of what we've been saying historically. Sequentially, it usually declines from our third quarter, so I would kind of expect that, but year-over-year, it should be roughly flat.

Your next question comes from the line of Frank Morgan with RBC Capital Markets.

I guess my first question is a clarification. I know last quarter you mentioned that there was an impact from some Population Health spending in amounts. Could you clarify if the $5 million midpoint change in guidance is all exclusively related to Population Health, or is there anything else that has changed?

Yes, I think this is incremental spend with respect to Population Health and SelectRx, and the guidance adjustment is really 100% driven by those incremental investments. As a reminder, based on what we discussed last week, we're investing mid to high single-digit incrementally into those initiatives. The fourth quarter is typically our second softest quarter, so there’s not much time or dollars to offset items later in the year, and those investments, we think, will yield great ROI.

And then my second question is regarding the productivity improvement of 17%. That had tracked in a much higher range over the past couple of quarters. Was that just a function of bringing agents on this quarter? If so, is there a way to distinguish kind of a same-store productivity?

Yes, just initial comments, Frank, and then maybe have Bob comment. I mean, I think we're very pleased with the overall growth in agent productivity at 17% while increasing our agent force by 75%. That's just really a function of our end-to-end model and the work the operations team has done to improve sales process efficiency through technology and the investments in training and hiring. Bob, do you want to add anything?

Yes, the other thing I’d mention, Frank, is that we understood the OEP better this year. We kept more seasonal agents around for OEP this year, which inherently drove down our productivity slightly because we kept some less tenured folks. Additionally, as Tim mentioned before, we dealt with a small third-party technology hiccup that pressured close rates. It would have been higher had that not occurred, but we fixed it relatively quickly. It's a high-pressure time for us, much like AEP, so any small production issue can negatively impact those metrics.

Your next question comes from the line of Jeff Garro with Piper Sandler.

Yes, good afternoon, and thanks for taking the question. I want to ask more about the investments in Population Health and SelectRx. Specifically, can you discuss the timing around those investments? I would assume some of the investments are upfront for expanding capacity on SelectRx. Could you break that down further on upfront investment versus ongoing expenses as we look ahead?

Yes, I think a lot of these investments are upfront. Several categories exist here. One is preparing for Population Health and SelectRx; we have been hiring incremental tech development resources to build out the capabilities there. Bob mentioned on our call last week that we were able to ramp that up quickly. So, obviously, there are incremental investments in technology. There are investments regarding licensing done in various states as well as increasing the capacity of the facility, which includes both the physical facility build-out and the personnel to support that type of facility. Bob, what would you add to that?

Yes, from the operational perspective, I would add that we want to take advantage of the AEP period and right after, which puts added pressure on investment during this time. We are spending money now in preparation to take full advantage of the opportunity in Q2 and Q3, which we view as a larger opportunity than we initially anticipated. Especially regarding SelectRx, after purchasing that business, we’ve been working with our members and partners on demand for that product, and we feel strong about it.

That's very helpful. I'll follow up with a broader question on Population Health, recognizing that you work with many well-capitalized and strategic carriers. Can you elaborate on the value that those carriers see in partnering with SelectQuote to improve outcomes and retention for your mutual members and customers?

Yes, they do spend a lot of time and money figuring out who provides the best results and how to best align with partners, such as Oak Street and ChenMed. They spend a lot on solutions that provide better adherence rates and potential future savings on healthcare by being more proactive. We are working with them to enable consumers to be better educated as they onboard consumers prior to their effective date with the carrier. They have been extremely supportive of that so far, as we’re helping consumers utilize their benefits. We strive not to conflict with their existing work, but rather work in concert.

Yes, I would just add that Bob said it well. This is a natural evolution for us in terms of adding value to our carrier partners and to consumers. This is how we got here. Bob and his team, along with Bill, work closely with our carriers to become not just a distributor, but a true strategic partner. This effort in Population Health gives us the opportunity to understand consumer needs empower them better. We strongly believe the investment was the right decision, and we expect to see benefits as we provide guidance in fiscal 2022 and beyond. We're confident that we made the right decision with this investment.

Your next question comes from the line of Daniel Grosslight with Citi.

Thanks for taking the question. We're a few months out from the 2020 AEP class coming on board. Can you talk about the persistency you've seen in the 2020 class compared to the 2018 AEP class, realizing that 2019 was a bit anomalous? Additionally, given your 36-month LTV weighting, when can we expect that persistency to flow through to MA LTV?

Yes, I believe you’re looking for first-term persistency on that AEP from over a year ago. Consistent with prior quarters, as of the end of March, that first-term persistency was higher than last year. Second-term was down, and third-term was flat to up. We conduct auto lapses at the end of March to reconcile policies, and historically we end up around the same place, but it does take time for the carriers to respond, but those trends have been consistent with what we discussed before. And regarding your second part, those trends will start flowing into LTV in the first quarter of fiscal '22, but given the weight of the 36-month average, you won't see that impact immediately; it will take several quarters.

Okay, got it. As a follow-up, on SelectRx, you mentioned basically quadrupling the capacity there. Do you expect the high end to be complete in fiscal year '22, or will that continue into '23?

I think the capacity will be available in fiscal '22. Whether we are at that capacity or not will depend on the next couple of quarters.

Your next question comes from the line of Jonathan Yong with Barclays.

Thanks. Just on the enrollment trends, one of your peers mentioned more new Medicare enrollment. Did you see similar trends in your enrollment this past quarter? Are you considering a more targeted approach towards that particular market segment as we think of the educational aspect of Population Health?

I think our switchers have been increasing over the last several years. So, we’re not necessarily seeing an increase in new per se. What we're seeing is probably similar to what the overall market is experiencing. I believe that as we grow larger, these trends are going to continue. So yes, that aligns with what we've seen.

No, I think that’s consistent, Raff. A lot of it has to do with just general growth rates and trying to meet all members' needs. Naturally, as Medicare gets larger, there will be more switchers. If we decide not to grow as fast, we may choose to target more new Medicare individuals. However, we want to ensure everyone has an opportunity if they are dissatisfied with their current plan to participate in the exchange and ultimately engage in Population Health as well.

Yes, I think our strategy will trend more towards the broader market. We do actively target new customers, but I think we’ll trend more toward the overall market given our omni-channel approach. The fact that we can make different channels work uniquely positions us and we’re excited about what Population Health can do for those switchers and ultimately enhance healthcare outcomes, leading to a better experience. While we use multiple channels, I believe we’ll generally trend toward the broader market due to our unique approach.

Can you provide an update on the recapture rate? How did it trend in the quarter? Any color there?

Yes, so our recapture rate is up year-over-year, currently around 27% or so, while last year it was around 25%. It continues to increase, and I believe this reflects the strength of the CCA organization we’ve built and the effectiveness of their conversations.

And your last question comes from the line of Meyer Shields with KBW.

Good evening. Raff, is there any way to ballpark the impact of the technology hiccup and whether any of that revenue will show up in the current quarter?

So it was probably mid-single digits, which approximates our estimate. This would have been concerning both revenue and EBITDA, so it would have bolstered the bottom line significantly. Unfortunately, there is no catch-up since we couldn't close during that period.

Okay, thanks. I assume it’s all Senior?

Yes.

And then maybe a trivial question, but the tax rate came in lower than expected. Is there anything unusual behind that?

No, I don't believe so. This quarter, we had some incremental interest expense tied to the new term loan, but there is nothing extraordinary that impacted the quarter.

And there are no further questions at this time. I will now turn the call back over to Tim Danker.

Thank you again, everyone for your support and interest in SelectQuote. We’ll briefly close by re-emphasizing how excited we are to present these results. As described earlier, each quarter since our IPO has really reinforced our belief that SelectQuote is built to capitalize on the long-tailed opportunity across our core insurance markets. As you’ve heard today, we are extremely excited about Population Health and SelectRx. Our unique combination of high customer touch and technology will allow us to add value across these larger markets and, most importantly, improve outcomes for our customers. So, with that, we want to thank you all again. We look forward to sharing more with you soon. Have a great evening.

This concludes today's conference call. Thank you for participating, and you may now disconnect.