SelectQuote, Inc. Q4 FY2025 Earnings Call

Welcome to SelectQuote's Fourth Quarter Earnings Conference Call. It's now my pleasure to introduce Matt Gunter from SelectQuote Investor Relations. Mr. Gunter, you may begin the conference.

Thank you, and good morning, everyone. Welcome to SelectQuote's Fiscal Fourth Quarter Earnings Call. Before we begin our call, I would like to mention that on our website, we have provided a slide presentation to help guide our discussion. After today's call, a replay will also be available on our website. Joining me from the company, I have our Chief Executive Officer, Tim Danker; and Chief Financial Officer, Ryan Clement. Following Tim and Ryan's comments today, we will have a question-and-answer session. As referenced on Slide 2, during this call, we will be discussing some non-GAAP financial measures. The most directly comparable GAAP financial measures and a reconciliation of the differences between the GAAP and non-GAAP financial measures are available in our earnings release and investor presentation on our website. And finally, a reminder that certain statements made today may be forward-looking statements. These statements are made based upon management's current expectations and beliefs concerning future events impacting the company and therefore, involve a number of uncertainties and risks, including, but not limited to, those described in our earnings release, annual report on Form 10-K for the period ended June 30, 2025, and other filings with the SEC. Therefore, the actual results of operations or financial condition of the company could differ materially from those expressed or implied in our forward-looking statements. And with that, I'd like to turn the call over to our Chief Executive Officer, Tim Danker. Tim?

Thank you, Matt, and thanks to everyone on the call. Today, I will start with a review of fiscal 2025, which will be brief given the drivers of another successful year have been consistent with the recent past. I'll then provide additional color on the unique environment we saw this past quarter. I'll then spend the bulk of my time on what we're planning for the years ahead. Additionally, I'll contextualize the near-term strategic goals for SelectQuote relative to the broad market opportunity we've spoken to in the past. So with that as the outline, let me begin on Slide 3 with an overview of our performance highlights for fiscal 2025. We ended the year with consolidated revenue of $1.5 billion, which grew 16% compared to a year ago. As we've noted all year, the top line increase has been a function of the rapid growth of our Healthcare Services business and specifically, SelectRx. Full year health care services revenue grew by approximately 55% to nearly $0.75 billion. This is an incredible result in just a 4-year history for the business. Our senior Medicare Advantage business performed very well against a challenging market backdrop for the industry. With significant plan changes by carriers this season as well as new SEP parameters for beneficiary eligibility, American seniors relied on SelectQuote and our agents to advise and help find the best plans to fit their individual needs. We're most proud of how our model and agents performed under pressure, where we drove another year of record agent productivity, up 24% and ultimately drove above target EBITDA margins for the third straight year. On a consolidated basis, SelectQuote drove $126 million of adjusted EBITDA, which represents an EBITDA margin of 8%. Margins were relatively in line with last year's result despite adding $264 million in incremental revenue from our lower-margin health care services business. In short, we're very proud of what the team accomplished this year and how we are set up for the future. If we turn to Slide 4, let me put those accomplishments in more detail. We have presented these metrics in the past, and I want to highlight them one more time to emphasize the consistency we have achieved in our Senior Medicare business. As you remember, we reset our strategic priorities back in 2022. And since then, our focus on profitability and repeatability has been paramount. We're very pleased with the efficiency gains we've been able to yield in the senior business. We've become more efficient in the throughput of how policyholders are assisted via our year-round agent model and our ever-expanding use of technology. We've become more efficient in how our services are marketed, which leads we pursue in a given season or intra season. It is also important to note that these decisions are rooted in the North Star of driving profitability and cash flow. As a result, SelectQuote Senior has been able to drive near-record margins in each of the last 3 years despite wide variations in Medicare selling environments from one season to the next. And finally, SelectQuote continues to leverage our information and connectivity advantage within Health Care, which you can see in our revenue to CAC ratios. We are increasingly able to help more beneficiaries, caregivers, and payers by offering a wider set of health care solutions. Best of all, the model is well-aligned that when our stakeholders do well, SelectQuote and our shareholders do well. The revenue to CAC ratio, which includes both our Senior and Healthcare Services revenues, is how we track the reach of our model. Over the past 3 years, we've expanded our revenue to customer acquisition cost ratio from 1.7x to 6.1x. We're excited about the year ahead for Health Care Services and believe we are in the early innings of how we can leverage our information advantage, technology, and distribution to connect more services between those receiving care and those that provide it. We're immensely proud of the ways our differentiated model and approach to health care serves such a wide breadth of Americans, but we're equally excited about the implications for our company's return and cash flow. Before I get to that, on Slide 5, let's review the highlights of our year in Healthcare Services, primarily driven by SelectRx. As I've noted, it was another strong year of growth with revenue of $743 million. Most importantly, we made meaningful progress on the scale and profitability of the business despite concurrent investments in our new state-of-the-art distribution facility in Olathe, Kansas. We ended the fiscal year with adjusted EBITDA of $25 million, which is up significantly year-over-year, but still small from a margin perspective relative to what we believe is ultimately possible. The best representation of that operating leverage potential is the difference in growth between our revenues and membership in fiscal 2025. As noted, revenues grew nearly 55% over the last year, while our membership grew roughly 31%. As we mentioned last quarter, we believe this year has been a pivotal one in terms of scale of membership. To be clear, we believe there is significant growth capacity for new members on the platform, especially with the addition of our state-of-the-art Kansas distribution facility, which significantly increases our potential capacity. With that said, we expect to see increased margin and cash flow contribution in fiscal 2026 from SelectRx as scale from seasoned members continues to drive results. It is clear that a revenue base nearing $0.75 billion is a significant asset and one that we are very focused on leveraging in 2026 and beyond. If we turn to Slide 6, let me quickly review our strategic vision for SelectQuote as a broader connector within the health care ecosystem. To date, we have clearly driven scale in both our Senior Medicare Advantage and SelectRx businesses. More importantly, we have operated these businesses with a growing track record of profitability and have done so in a range of market environments for both Medicare Advantage and prescription drugs. As we've noted in the past, we believe SelectQuote's ultimate value is as a holistic solution provider across the $5 trillion U.S. health care market. While there is a significant growth and value creation opportunity for shareholders in this endeavor, we also note that our integrated model can be a solution for what has historically been a very inefficient system. The information we harness, the connectivity we create as an intermediary in the health care ecosystem is tangibly valuable in a wide number of ways. Americans get better and more tailored care based on individual needs. Payer expenses are reduced because patients have better treatment adherence, which leads to better health outcomes. And ultimately, the broader health care system benefits because Americans are directed to payers and caregivers that create the best and most efficient patient results. This is particularly important given the traditionally underserved communities we serve, which skew more rural, lower income, and have more chronic conditions than the general population. This alignment across patients, payers, caregivers, taxpayers, and shareholders is why we believe we are just getting started in what is ultimately a very value-enhancing opportunity in health care. Today, our challenge is not how to grow, as evidenced by the rapid adoption of our SelectRx platform, but instead, it's how we balance growth while simultaneously generating a growing stream of sustainable cash flows. This is a good problem to have. We believe our current revenue to CAC ratio of 6.1x is a compelling proof point in our ability to address the much broader health care market and arenas, including Healthcare Select and Select patient management. That brings me to Slide 7, where I'd like to provide additional detail on our evergreen work to drive operational and cash efficiency. First, I'll emphasize that SelectQuote has been using technology and computing power to automate tasks and optimize decision-making since our founding 40 years ago. That has not changed and it never will. We are highlighting it here given we see AI as critical to our goal to become a comprehensive health care services platform, and we believe SelectQuote has a significant head start versus the competition. In our view, the reasons automation and technology are so important are threefold. First, technology is foundational to SelectQuote, and we know that our customers and partners get a higher level of service quality and reliability because of it. Second, our technology is dynamic and has the flexibility to solve for different market environments. The evidence is in the stability of our financial results relative to different Medicare Advantage markets we have operated through the past 3 years. Third and most pertinent in today's SelectQuote, technology represents a fixed investment that can be scaled efficiently. Put another way, our technology has been part of SelectQuote since the beginning. It's not something that we are initiating with the advent of AI. In fact, AI will only amplify our tech-enabled model. The power of that leverage is evident in the efficiency metrics I shared for Senior as well as the metric at the bottom of this page. SelectQuote has routed over 7.5 million calls through intelligent automation and AI has powered more than 300,000 unique health care services interactions. Technology is critical in organizing and optimizing those customer touch points and to do so at a high level of customer service is a significant fee. But we are not just the volume processor. Enrollment time has improved by 25% over the past year. Our technology also makes a difference in the lives of our customers, most importantly through better health care service fit and process efficiency. Our technology has also reduced the time and our health needs assessment calls with customers by 30%. Most importantly, our technology is critical to our ongoing strategy to drive scaled revenues across the ecosystem, which results in compounding and sustainable cash flows, which brings me to Slide 8. Historically, we've talked a lot about the growth and profitability of our Senior and Healthcare Services segment separately, but we created this view to highlight an emerging attribute of our diversified platform that we believe is underappreciated. As you know, the cash flows for our Senior business are different than our Healthcare Services business. The diversity of that mix is a valuable input for how we manage the business and ultimately drive value for shareholders. Specifically, Healthcare Services revenues and EBITDA are effectively immediate from a cash perspective, whereas our Medicare Advantage revenues accrue over the life of a policy as it renews year after year. As our Healthcare Services business has continued to scale, it provides us better optionality in how we think about capital allocation from one season to the next. We believe and we've heard from shareholders that a sustainable and growing base of cash flow is important. In fiscal 2026, we believe our differentiated ability to accelerate cash flow generation through business mix is the right strategy to drive shareholder value. For context, we know that Medicare Advantage currently is and will remain in flux for fiscal 2026. This has been well documented in the results of carrier partners and others in the industry over the past few earnings cycles. As I discussed earlier, we've demonstrated our ability to deliver attractive returns in our Senior business over the past 3 years through 3 very different Medicare selling seasons. That said, the scale of our healthcare services platform now gives us strategic optionality that we didn't have before. In the year ahead, as we continue to balance cash flow production with growth, we plan for a flatter year in Medicare Advantage submissions through our Senior Distribution business. To be clear, we believe growth in MA is a choice, and we've built a nimble engine that is primed for growth at short notice. We remain highly confident in our view that 20% plus EBITDA margins are achievable for the segment, driven by our technology and agent-led model. On the last point I'll make, and Ryan will elaborate on, is that while our fiscal '26 forecast shows a dampening effect on EBITDA margins because of the higher mix of SelectRx, it is important for analysts and investors to recognize the opposite will be true with regard to cash flow generation. In fact, we expect SelectQuote to be operating cash flow generative in fiscal 2026, and much of that will be driven by our view that Healthcare Services EBITDA will grow and will exceed $50 million. As we've noted in our strategic redesign, our focus is to prioritize cash flow and profitability. We're excited about the overall business' embedded cash flow potential given our commissions receivable balance of approximately $1 billion and our growing health care services business, which is approaching $1 billion in annual recurring revenue with an improving margin profile. We believe the decision to drive incremental cash flow will pay significant dividends and how we can compound and deploy that cash flow for more profitable growth and shareholder value in the future. The range of ways that, that can unlock the value is broad from future growth in MA and new health care service offerings to continuing to lower our cost of capital. I'll turn the call over to Ryan to detail our financials, but I'll conclude by saying SelectQuote has never been better positioned to harvest the gains of our strategy than we are today.

Thanks, Tim. On Slide 9, I'll start with our fiscal 2025 results. As Tim noted, it was another successful year across the organization with both revenue and EBITDA beating our original guidance set last September. SelectQuote grew revenue 15.5% to $1.53 billion. Our full year adjusted EBITDA totaled $126 million, which grew 8% compared to a year ago. For the full year, our adjusted EBITDA margin was relatively stable, which we view very positively considering the majority of our revenue growth was generated by our lower margin but increasingly profitable and cash-generative Healthcare Services segment. Let's shift to Slide 10 to review our Senior segment, where full year revenue totaled $600 million and adjusted EBITDA totaled $162 million. As we noted earlier in the year, our agent-led model performed extremely well in a unique season. With policy features in flux and a significant number of planned cancellations by carrier, we delivered strong results during the season with an agent force that was approximately 26% smaller than in fiscal 2024. We are most proud of the operating efficiency exhibited over the year with a smaller agent workforce. Our revenues were only 8% lower. And more importantly, we drove EBITDA margins that were about 200 basis points higher, which ultimately drove similar EBITDA dollars compared to 2024. Turning to Slide 11. Let me detail our production and LTV metrics. For the full year, approved MA policies totaled $593,000 compared to $625,000 in fiscal 2024. The 5% decline was a strategic agent staffing choice, but we drove 24% more policies per agent compared to last year. The agent efficiency, combined with lower marketing expense per policy, were the key drivers of our margin expansion for the year. In the fourth quarter, our Senior segment produced 85,000 approved MA policies, down 20% year-over-year due to the lower agent headcount and the changes to the SEP. LTV for the full year 2025 was $884 per policy, which is 3% lower compared to 2024. As we mentioned previously, the decline was primarily a function of commission mix and timing. LTV for the fourth quarter of $837 was 1% lower compared to the fourth quarter of 2024, which was in line with our expectations. On Slide 12, let's move to our Healthcare Services results. We continue to see strong demand for our SelectRx platform, where year-end members grew 31% compared to fiscal 2024. In the fourth quarter, we grew membership by an additional 2,500. As a reminder, we believe there is significant runway to broaden this important and valuable service for both our senior Medicare Advantage customers and for all Americans with the need for reliable and convenient prescription drug delivery. While the addressable market for our SelectRx is massive, our business and shareholders can also benefit through the ability to drive higher cash conversion. You can begin to see the impact of our focus on efficiency and refined member targeting in the charts on the right side of the slide. In the fourth quarter, we drove $12 million of adjusted EBITDA in Healthcare Services, which represents a margin of 5.5%, which on a year-over-year basis compares to a quarter where we effectively broke even for this segment. I'll share more on our outlook for Healthcare Services in a moment. But as Tim noted, it's an exciting time at SelectQuote to have an additional growth engine to not just drive revenue but increasingly contribute to our profit and cash flow. Moving to Slide 13. Our Life division also performed well in the year and the quarter. Revenues grew 10% for the full year to total $173 million. The fourth quarter was even stronger with growth of 14%, driven predominantly by our final expense product. As a result, the segment grew adjusted EBITDA by an impressive 32% for the year to $27 million, which represents a 15% margin or more than 250 basis points higher compared to fiscal 2024. This was particularly welcome given the attractive cash flow dynamics of this segment. On Slide 14, I'll be brief regarding our ongoing priorities to improve SelectQuote's cost of capital and leverage profile. Here, we outlined what we've accomplished over the past calendar year. While we do not have any specific update over the past quarter, we would simply reiterate that the improving cash efficiency of our model is an increasingly important driver to optimize our balance sheet. The October securitization and the February preferred equity offering significantly improved our operational flexibility and did so at a lower overall cost of capital. We believe the structure can be further improved and expect future transactions will lead to extended maturity, increased operating flexibility and a lower cost of capital. We look forward to sharing more regarding this initiative as we believe a lower cost of funding will be a more readily apparent part of SelectQuote's value creation for shareholders. Turning to Slide 15. We are excited to introduce our fiscal 2026 guidance. As we've talked about extensively, SelectQuote has built an MA engine that is primed for growth when the market allows, and we have a rapidly growing and increasingly cash-generative Health Care Services business. Overall, we are managing both businesses to drive increasing cash flow, which will generate long-term value for our shareholders. We expect revenue in the range of $1.65 billion to $1.75 billion, which represents year-over-year growth of approximately 11% at the midpoint. This range assumes relatively flat senior policy volumes for the year based on our ongoing strategy to balance current period EBITDA with cash flow generation. Similarly, our agent productivity was exceptional this past season, and our 2026 forecast assumes a reversion to a more historical average productivity level as we onboard new agents. This measured year for Senior will be offset by continued strong growth in Healthcare Services, where we expect revenue growth of around 20%. Moving to adjusted EBITDA. We expect to end the year in the range of $120 million to $150 million, which represents year-over-year growth of 7% at the midpoint. While we expect margins from our Senior segment to come down slightly from the mid-to high 20s that we've delivered over the past few years, we expect margins to remain attractive and to exceed 20%. For the first quarter specifically, we expect approximately 10% of our annual senior production to come in the quarter given the SEP dynamics that Tim discussed. This, coupled with additional AEP hiring, is expected to lead to a consolidated adjusted EBITDA loss of around $25 million to $30 million for the first quarter. In Healthcare Services, we expect to generate more than $50 million in adjusted EBITDA for fiscal 2026 as we continue to focus client acquisition on the patients that benefit most from the service and have the best unit economics. From a margin perspective, we expect relatively flat sequential margins in the first quarter as we ramp investments in preparation for AEP enrollment and then modest sequential expansion as we move through the remainder of the year. Over the last few years, you've heard us speak to the incredible long-term value we see within the health care services space. We believe the scale level of profitability we expect in 2026 for a business that will only be 5 years old demonstrates that value creation opportunity and is just the start of what we think is possible in the future. We also anticipate another strong year for our Life division, where we expect double-digit revenue and EBITDA growth with a similar margin profile to fiscal 2025. Finally, we anticipate generating positive operating cash flow in 2026. This is an important step for us, and we see a path toward meaningful cash flow generation in the years ahead. On an annual basis, we expect to be operating cash flow positive for the foreseeable future as we continue to transition to a comprehensive health care services platform. With that, I'll turn the call over to the operator for Q&A.

Your first question comes from the line of Ben Hendrix with RBC Capital Markets.

Congratulations on the quarter. I appreciate the commentary on the Healthcare Services growth. And it seems like you've seen impressive revenue growth versus member growth this year. I just want to talk a little bit about margins and the commentary about the scaled margin as you see more seasoned SelectRx members. Maybe you can kind of talk about the path to your target margins and how you're thinking about that? And as we get to a more scaled margin, how do the fixed and variable cost dynamics work to get to kind of a target margin from a scaled member?

Thanks for the question. Bob, why don't you cover the color on the margin progression and the drivers, and then we'll hand it over to Ryan.

That sounds great, Tim. So on the margin progression, as we get larger Ben and continue to refine our business, have more tenured members, but also to the point you made later, really drive the variable cost down as we are scaled and can make more optimizations. I would expect that to continue into the future and pretty meaningfully, right? We are really, really excited about what we can do now that we're at scale from both a COGS perspective and just general buying due to the fact that we're buying so many scripts now, but then also on automation and streamlining and really taking the time to refine the operation through opening Kansas City and then ultimately retrofitting the other facilities that we have. We've got a lot of good findings. We're rolling out a lot of new technology. We are incredibly excited about what that will do. And I think you've seen the power of what it already can do given the margin progression we've had. So we are very confident that we can get the margins to what we've shared and have a meaningful kind of path ahead of us to continue to enhance the cash flow dynamics of that really powerful business.

Yes. And then I think, obviously, as we ramp our membership, especially within the Kansas facility, we do see a path to margin enhancements. And we shared on the call earlier today, we expect our first quarter to be relatively in line with what we had this most recent quarter that was 5.5%, which we're really pleased with. And then as the year progresses, we see modest margin expansion. There will be some investment as we prepare for the AEP season and onboarding new members. But ultimately, we do expect the business will produce north of $50 million in EBITDA in fiscal 2026.

Great. If I could just follow up. As we consider scaling this business and improving margins from Health Care Services, it seems like this could significantly drive the securitization program. Based on your discussions with the market and lenders, is there a specific level of EBITDA contribution or margin from this business that could truly accelerate the securitization program?

Yes, that's a great question. There isn’t a specific threshold to consider. However, the growth and generation of EBITDA are becoming quite significant, which opens up various options regarding the capital structure. Securitization remains a viable option, and as we anticipate generating more cash flow this coming year, we expect to achieve meaningful unlevered operating cash flow and positive operating cash flow for fiscal 2026. Annually, we expect to see that grow consistently in future periods. Therefore, I anticipate being cash flow positive for the foreseeable future.

Your next question comes from the line of George Sutton with Craig-Hallum.

I just wanted to go back a quarter. Your message, I think, coming out of the last quarter was you were refining the marketing. There was a notable caution, I think, in how fast you were growing SelectRx. It sounds like you're more optimistic now, maybe you have found some solutions. Can you just walk through sort of the dynamics that have changed quarter-over-quarter there?

Yes, this time we are focusing more on EBITDA growth and expansion rather than just membership and revenue growth. As we discussed last quarter, we are working on reducing variable costs and lowering the cost of goods sold to improve our margins. I expect membership growth to be at a slower pace compared to the rapid growth we experienced before. Our revenue growth will remain healthy, but it won't reach the levels we've seen in previous years as we transitioned from 0 to our current state. I want to clarify that while our EBITDA should continue to progress and grow significantly due to the opportunities we have for refinement and our strong partnerships with many of our carriers regarding the clinical services we provide, the membership growth will not be as dramatic as when we initially started.

Got you. I wonder if you could discuss the actual AEP hiring plans that you have and how significant you are using AI as part of the mechanism to serve more customers, you mentioned the 300,000-plus interactions.

Yes. George, let me start. This is Tim, and then Bob, you can comment on AI. I think just kind of macro here for the AEP season, we are expecting an elevated level of planned disruption again this year, some similarities to last year given where carriers are with respect to their kind of profitability get well plans. And so while we don't have full visibility to what those plan designs are going to look like just yet, we do expect further benefits pullbacks, plan terminations. Last year, that certainly aided our front-end customer acquisition dynamics, things like close rates and agent productivity. From a retention perspective, certainly, given the level of disruption last year, we were really pleased with the outcome. We've had good experience there. We're making incremental investments. We'll be prepared. Bob, do you want to speak to the technology and AI point?

I believe our tech team has done an excellent job supporting our agents and increasing efficiency. We have previously stated that we leverage technology and AI to expedite straightforward interactions, which ultimately saves our agents time. This approach also applies to our health care services. We will keep focusing on this, as we don't see a viable alternative to the in-depth, impactful conversations that our agents have, especially in complex cases within our health care services. However, we have made significant strides in enhancing efficiency, which is evident in the rising productivity of our agents. We are committed to continued investment in technology, as we expect this will lead to time savings for our agents, who value every minute. We have observed a 25% reduction in enrollment time specifically for our agents, and notable progress has been made with AI, as evidenced by over 300,000 interactions in health care services handled solely by Bill's team using AI.

Just one other question on Select Patient. Can you give us any details in terms of where you're headed there? What kind of contribution you expect in '26 from that segment?

Yes. We're continuing to make really, really good progress on Select Patient Management and SelectSync Medical, which is our telemedicine practice as a whole, right? There's complexity there on carrier contracts and what we're doing, but we are building that the right way. And we do think in the future, it will provide material value. In 2026, we don't think it will scale right as quickly and provide meaningful EBITDA this year. But again, it is a huge path to our future. So we're really excited about what we can do. And I think we've proven our ability to scale businesses with LHA and with SelectRx. We think that, that's another door that's a big opportunity for us, given the fact that our clients, a lot of them don't have access to quality care. They're homebound and they really need to virtually interact. And we think there's a big gap in the marketplace today where that is.

Your next question comes from the line of Pat McCann with NOBLE Capital Markets.

I just wanted to piggyback really quickly on George's question about the AI usage. I think you have the slide on that in this quarter. And I know that's something that you have been using previously trying to use technology to increase agent efficiency. But I was wondering if you could talk a little bit about to what extent there have been significant recent enhancements on that front? And if you could provide any further details on maybe some examples of what new additions you've made to the agent process in terms of added technology and AI.

We have made significant recent advancements. On the health care services side, this is an extension of our agents' work and these interactions are new to us. Our technology team has done an excellent job in this area. At a higher level, we utilize technology at every stage of the enrollment process to streamline tasks and offload repetitive work to AI. These improvements are crucial for us. Currently, we're saving 5 minutes per enrollment with technology, and we're aiming to increase that to 6, 7, or 8 minutes, especially for more complex enrollments, as every minute is incredibly valuable. We also focus on automating specific functions for agents, such as data collection and prescription drug information, which are significant areas for optimization. While not every initiative will succeed, most of ours have, and we take great pride in this. Additionally, I would like Bill to discuss how we are applying our technology for retention and compliance quality assurance, as this has also been a major enhancement. Bill?

Yes, certainly. In terms of specific examples, we've significantly increased our overall usage. We utilize it throughout our initial recruiting process, where our initial scoring is now based on AI to understand applicants' potential to perform for us. We apply it extensively in our training process for quality assurance and real-time coaching, allowing us to provide instant feedback through call listening rather than being reactive. It plays a crucial role in our recaptures, enabling us to analyze our block of business promptly and determine how to approach different individuals based on their plans to effectively recapture them. Additionally, we use it for plan scoring to ensure our plan rankings are as accurate as possible. The applications are numerous, and we believe it contributes significantly to the positive growth of our business.

Great question. Sorry for the long answer, but one final point. The proof is really in the results. If you look at all these things that Bob and Bill spoke to, you can see this evidence in our margins, 3 consecutive years of EBITDA margins in senior in the mid- to high 20s. You're seeing this also ramp through our Healthcare Services business and our comments on our confidence around creating a diversified cash-generative platform. We think we are finding through technology with highly skilled human agents, right? We're getting the best of both worlds, data-driven, high touch. We're doing it at scale, and we think the results speak for themselves.

I appreciate that. I have one more question about capital allocation. Could you elaborate on your priorities regarding balance sheet improvement compared to potential acquisitions or any other efforts to expand your healthcare services platform? Specifically, in terms of capital allocation, what are your main priorities, and how do you plan to balance potential expansions in healthcare services while continuing to improve the balance sheet?

Yes, great question, Pat. I'll begin and see if Ryan has further insights. The immediate focus for the business is balancing growth in the underlying market opportunity with generating strong cash flow. We understand that robust cash flow is essential for a healthier balance sheet and brings various other advantages. You've pointed out some of these, such as the flexibility we gain in capital allocation for future growth in market access and new health care services, as well as improved capital costs. In the short term, we will concentrate on executing the plan we've laid out to enhance cash flow. Bob has effectively highlighted our achievements with SelectRx and the positive trends in Select Patient Management. We recognize additional opportunities ahead, but this remains our primary focus for now. We believe we are demonstrating our ability to significantly impact health care, improving health outcomes while also benefiting our shareholders. Ryan, do you have any more comments regarding capital allocation?

No, I really think you laid it out well. The capital structure is our priority. We see many opportunities to grow the health care services business, but we also see a lot of potential to improve the capital structure, which paves the way for future actions and growth within Healthcare Services. Right now, the focus is on the capital structure, but we are making great progress and feel confident about the financial plan and the guidance we shared today. We expect to generate significant unlevered operating cash flow, which we believe sets us up for additional transactions to enhance the balance sheet.

I will now turn the call back to Tim Danker, CEO, for closing remarks.

I want to thank you all again for taking time this morning. A very big thank you to our team here at SelectQuote for a very successful fiscal 2025. We all should be very proud of what we've accomplished thus far. I'll close the call with one piece of perspective. We've spoken over the past 3 years about the operational stability we've built into SelectQuote since our strategic reset in 2022. If that was an initial stage, I believe 2026 and the years ahead represent the realization of the model we've built on that foundation. It's an exciting time for the company. We appreciate your time and support as we show you what SelectQuote can be. I want to thank you again. Have a great rest of your week.

Ladies and gentlemen, that concludes today's call. You can disconnect. Thank you, and have a great day.