All right. Well, we'll get started. Good afternoon, everyone, and thank you for joining this SelectQuote fireside chat here at the Citi Healthcare Services Conference. My name is Daniel Grosslight. I'm the healthcare technology analyst here at Citi, and I'm very pleased to welcome with us today SelectQuote. We've got Tim Danker, CEO, Bob Grant, the President, Ryan Clement, the CFO. Thank you so much everyone for joining us.
Thanks for having us. Appreciate it.
Absolutely. You know, I was talking to one of your competitors this morning, and I think I'm gonna kick off this fireside chat the same way I did with them, and ask about the market. You know, it seems like we are seeing some rationality come back into the market after a pretty irrational 2021 AEP. The question is, maybe if you can give us an overview of what happened during 2021, what you learned from it, how you applied those learnings to 2022, and if a shift to more rationality is durable, in 2023.
A great question, Daniel, and I'd agree with your assessment. Certainly what we're seeing right now is a more rational environment. We're, we're certainly seeing, I think, the broader e-broker community focus around the member experience, improving the member experience, business quality, cash flow and profitability over growth. I would agree with your assessment. You know, back in 2021, I think that was difficult across the industry, both in terms of kind of the growth and competitive dynamic, combined with, at that particular year, a pretty difficult plan design, and specific to SelectQuote. You know, we had a lot of operating leverage in our model.
We took a step back, in early calendar 2022 as part of our strategic redesign that we've talked about externally, quite a bit, and I think there have been a couple tenets to that strategy that have really played out around real focus around marketing segmentation. It's a big market, but we really wanna hit the fat part of the plate, and so we've made changes to the marketing strategy to really concentrate on the most profitable segments. We've made changes with respect to our agent plan, and how we've really focused on more core tenured agents. 70% of our agents this AEP were core tenured agents versus 20% of the year prior, and we're really seeing a lot of benefit from that strategy play out overall.
I think, you know, more broadly for the industry in 2022, we saw plan design, be, you know, more attractive. I'm sure you may ask questions about things that may impact plan design in the future, but we think overall, that was an attractive, backdrop, this year with respect to plan design. I think the marketing, the broader competitive environment around marketing rationality, lead cost, quality, is all, you know, been a positive, for the industry. I think to the durability, we really feel like, the changes that we've made over the course of the last year are durable, they are sustainable. We've taken a lot of cost out, both fixed and variable.
While LTVs are, you know, at a lower point than they were previously, we've also taken a tremendous amount of cost out, such that we were able to drive significantly improved unit economics, and we think that we can continue to do that.
Yeah. That's great to hear. you know, if I just look at the market broadly, there were a lot of players in 2021 to even 2020, that were probably a little less scrupulous in terms of how they marketed, which kind of caught the ire of the CMS. I'm curious, are you seeing less of those kind of smaller, less scrupulous brokers now? Have they been washed out? Is that leading to some more of this rationality that we've seen this AEP?
Yeah. I think we applaud the broader efforts around how to improve the member experience, and the quality component of that. I think we're big proponents of that. We've always been leading edge with respect to compliance and quality. I think there was some of that, Daniel. I think that's good for the industry longer term as that gets washed away, whether it's the providers or quite frankly, smaller shops that really don't have the capital or the scale to be able to compete on a longer term basis. I think it's again creating a better backdrop and environment long term for things like persistency, LTVs, our connectivity and integration with the insurance carriers.
You mentioned that plan design changed this AEP as well to your benefit. How did it change this year? For the coming years, you know, there are some headwinds facing Medicare Advantage, like the Advance Notice, which wasn't that generous, and it's RADV and added Star Rating, re-ratings. How do you expect that will change plan design and impact you in the future?
I think as far as, you know, this year goes, the right players that do things in a really, really effective way, had really competitive plans, and that really helped, because those carriers bring a level of stability to the marketplace, and have good retention and really good customer experience. I think, you know, echoing that into the next years with the maybe scrutiny, that's coming on the back end of COVID and some of the leniency that was there during COVID, you know, that's not gonna be an equal, an equal distribution of how that's gonna affect each carrier. You know, it will affect some carriers more than it affects others.
We feel good about our positioning just because we are kind of the largest partners of the most consistent players that have really good star and have really good member experience scores, NPS, all the things that I think that's, you know, CMS is really looking for. We feel good about our position in that because we've always been a very neutral choice platform and whoever's the most competitive wins on our platform. We've also been more limited in the fact that we don't have 40 carriers, right? We've always been such a meaningful partner to those players that we don't think will be impacted and will invest a significant amount of dollars that we feel really good about our specific position in it.
Not that there won't be, you know, challenges in the space given that, scrutiny on certain carriers, we feel good about where we are.
Got it. Okay. Now let's talk about some of the changes that you implemented among the 2021 challenges. I think you introduced a four-pillar plan. Maybe if we can kinda take each of those pillars in turn. The first pillar I think is just your strategy around growth versus profitability. You really pulled back on growth to prioritize profitability and, you know, it came out, right? This AEP close rates were up 54%. Medicare per cost then or cost per Medicare approved policy down 50%. Unit economics expanded to three times revenue to CAC. Going forward, how should we think about that dynamic growth versus profitability? For calendar year 2023, you think we're gonna return to growth here?
Yeah. We're certainly proud of the metrics. Appreciate you mentioning those. It's been a lot of work and like we said, we think we can continue progress on that front. As a general orientation, we are gonna continue to prioritize profitability and unit margin improvement over growth. We think that's the prudent thing to continue to do, and that'll be the general rule of thumb. I think as far as a, you know, a 2023 outlook on growth, I mean, certainly we believe that, you know, the market rate of MA growth is certainly attainable. You know, we'll provide, you know, more clarity to that in our 2024 guide. Ryan, you wanna add anything to that?
Yeah. No, I think, obviously the organization has made tremendous progress against the strategic redesign in four consecutive quarters of significant improvements, as you alluded to. Really strong margins in this most recent quarter at 37%. If you look at our full year guide, you know, we're 18%-22%. I think the days of 30%+ on a full year basis are probably behind us, at least in the near term. I do think, you know, 20%, low 20s is attainable, achievable, and something we can work for going forward.
Got it. As a guidepost for calendar 2023 and beyond, we should be thinking, you know, getting back to growth, perhaps eventually up to the market rate of growth and on a full year in Medicare around a 20-ish, low 20%-mid 20% margin is, you know, where you're thinking.
That's right. I think continued focus on unit economics and cash generation.
Is, you know, three times is a pretty good LTM rev to CAC that you achieved. Are you kinda capped out at three times or?
No, absolutely.
Working.
Yeah, absolutely not. I mean, great progress. Again, I think a lot on the backs, right, of the operating costs per approved policy. We've taken on LTM basis over $400 of cost, which is pretty tremendous. LTV is again at a low point where we can maybe talk more about persistency and some improvements that we're seeing as the precursor to improved LTVs. I also think you've got to think, you know, more broadly across the platform with respect to what we're doing in healthcare, SelectRx. Those again are new.
Yeah.
revenue sources, primarily off of the backs of the spend that we're putting into distribution, I think on a longer term basis. That's how we're viewing the platform. We need a healthy distribution, MA distribution business, and those unit economics have to stand on their own. We certainly believe there's opportunities as we connect more broadly into healthcare, to grow that rev to CAC.
Yeah. One of your competitors spoke about their dedicated carrier relationships, what you call your pod relationships.
Yes.
The strength they've seen there. How have the pod relationships trended recently, and is that going to be a growth driver for you guys as well?
Our pod relationships are extremely strong, right. We've got some very large relationships there that we've done a very good job, and when we benchmark against others, you know, have then gotten the feedback that we continue to be really best in class, can scale the most effectively. We're very flexible with how we do those because the hours of operation can be a little bit unique sometimes, and we feel really good about that. As far as growth, right, we do anticipate some growth there. More measured, obviously, than where we were in the past, but it should, you know, hopefully follow the growth of Medicare overall. You know, we also feel good about the fact that our pod relationships are with carriers that are extremely stable, and have a really good foothold on the marketplace.
The cash flow dynamic there is a little more favorable, right? 'Cause you're not paying for the leads.
That's right. Our cash flow, generation off of that is really strong.
Okay, let's move to your second priority, and that's just how you're managing your agent force going forward. You're gonna see a trend in my questions here too. I'm gonna ask about what happened in 2021, what you changed, and kinda where this is going. Maybe if we can take your agent force, what happened in 2021? What did you change? What happened in 2022? Where is this going in 2023?
Yeah, I'll start, and maybe Bob will wanna comment as well. Certainly in 2021, back to the point of operating leverage, right? We had a business model really oriented towards growth. We were hiring. You know, thousands of agents in a pretty challenging labor market. I think as we've stepped back into 2022 as part of the redesign, we said, "Hey, we want to have, you know, a higher percentage of core tenured agents." We know that core tenured agents not only perform better from a customer acquisition efficiency standpoint, they also are better from a back-end retention. Our mix is significantly higher.
We're gonna try to run the business more on what we call kind of a year-round agent force, where we're taking, you know, less of the peaks and valleys where you hire and onboard significant number of agents and during slower periods off board. We've really concentrated in 2022 around hiring earlier, enhancing our training regiment, which we think was really good, but it can always improve. We really focused on agent retention. We've got several initiatives with respect to agent retention around how we try to leverage our agent leveling model to ensure that we protect and keep our best to hybrid sales and service models where, you know, we take advantage of off-peak periods to kind of balance or even have done things around improving work-life balance.
This is a tough job. There's opportunities during the slower periods. Our agent attrition levels are at the lowest they've been in several years, and we feel very good about the alignment with respect to the agents, and we think, you know, the strategy is playing out. 50% improvements in close rates, improvements in marketing efficiency, that has a lot to do with the way that we're managing the agent plan. Bob?
I mean, I think the only thing I would add to that is our plan, was so different than the past as far as the kind of the operating leverage that we took out of the business by having more core agents than flex agents.
The one thing we did is we went and back tested to say, "Okay, how much of the market and rationality is really contributing to us doing significantly better, and how much of it is taking the 70/ 30 mix on core agents to flex agents, and what impact do we have on the business?" What was really nice is as we ran the math, you know, we believe that over 80% of ours was in our control, and that when we back test, even in a tougher environment like 2021 was, we have a much more controlled environment when we have more core agents than flex agents.
It doesn't allow you, obviously, to maximize AEP like you probably could before with, you know, thousands of agents and seats, but it also allows you to really focus in and be very disciplined and measured in your approach.
Yeah.
We feel really, really good about that because you don't have to invest in AEP like we used to. We used to hire CPAs with some of the kind of in Q1. We used to have all these things in anticipation of AEP. We don't have to have that anymore. If you go back and look at that, we can very much weather and do well during tough years with that strategy.
That is a great point. I mean, that's part of trying to box in more of the range of outcomes.
I think the approach around agents, around marketing segmentation, there will be changes, right? Obviously from year to year, how do we put ourselves in the best position? We believe fundamentally we control a lot of those outcomes. This AEP was not a one quarter event. It's been four quarters of improved operational performance, we also understand the market demands more predictable return profiles, and we're certainly signing up to do that.
Is that 70% core tenured agent the right number, or can you go higher?
I think it, you know, it's interesting. We will probably not go higher than that.
I do think that's the right number. I think even more importantly, when we hire earlier, Daniel, we really get a very different result. The flex agents really are not flex agents at that point. We're hiring in January, February, March, April, May. We actually cut it off at that point. Historically, we went all the way to September for hiring. The other thing that we're doing is create an environment where flex gets a lot closer to core on close rates. It's not that, you know, 70% is the perfect number. We'll try to strive to be at that number, but at the same time, we'll also create consistency through hiring earlier and being very measured with that.
You'll see some of that investment in our, right, fiscal 4 Q, 1 Q, as we try to create more of that year-round force. We think it's definitely accretive on a full year-
... basis, and again, creating a more predictable model.
Right. Fair to say that we'll see a little bit more margin compression now during some of the slow periods because you're carrying more of these tenured agents a full year, but on a full year basis, it will be accretive.
He's absolutely right.
Okay. The third pillar of your strategy is just increasing touch points and expanding your relationships with carriers. We touched on the importance of the pod relationships. I'm curious, what else can you do to improve and enhance your carrier relationships?
Yeah, that's a really good question. I think, you know, a lot of that has to do with other services that we do on the carriers' behalf. One thing that's been really good about the last couple of years, I think as we've gotten into healthcare services and some other proof points, we've proved that we have a very strong relationship with the client. As evident by taking a pharmacy and going from 2,500 members to nearly 40,000.
We can use that as a proof point to the carriers that, "Hey, you should do more in partnership with us and use us as an extension of you." I think, you know, we've successfully gotten there, and that's why you've also seen a shift in our year one cash and kind of our payback periods because we're doing more and more for carriers. That's, you know, improving 90-day persistency. It's also improving some cash that comes to us 'cause they're paying for those services. You know, we feel really good about that, and I think we'll continue to expand that as we prove that our relationship is incredibly strong with a really difficult, you know, cohort of customers that leans, as we've talked about before, a little bit more towards low income, a little higher health needs.
Those are very important customers to carriers because they also have typically higher reimbursement rates, right? Things like that. We feel really strong about our position in there, and I think that'll continue to evolve, and you'll continue to see that, you know, get more and more a portion of our business.
Yeah. Yeah. You know, if I look at what the carriers are doing, it's kind of variable, but, you know, Humana made some noise, year and a half ago now about some of the difficulties that they saw in the third-party broker channel, but said they were gonna kind of retrench in the internal channel. Curious if you've seen more investment from the carriers in their own internal channels, or is it manifesting more in kind of these pod relationships, these direct relationships? Has there been no real big change at all in how they're looking at the distribution channels?
I think for us personally, it has not changed how they view the distribution channel. We've always been a very quality partner. While we did run into some challenges, obviously, like others in the marketplaces, I think ours were lesser. We've successfully over the last year, partnered more deeply, right, to become an extension of the carriers. I also think they're valuing those partnerships more and more than they have in the past, right? I think their goal in the past was to expand distribution externally through diversification to make sure that they weren't too reliant on a couple people. We'd heard that.
I think that that's changing, that they really wanna build strong partnerships with their key partners and invest in those partners to make sure that the customer onboarding is seamless, to make sure that we know everything about kind of their internal operations, so that we can help advise customers on what to do and where to go and things like that. That's been really, really strong results for us. No, we have not seen any changes. I do think there's been changes, you know, overall to the marketplace, who they partner with, how they expand those partnerships. You know, copying, for example, marketing funds on different measures to make sure the quality is a huge portion of that. We feel really good about that because we're in a really big pole position on those things.
Got it. You know, one of the big trends also with some of your peers has been driving more growth through non-commissioned revenue streams. Obviously, you've built out your healthcare services. You've gotten into the pharmacy business, and that's growing rapidly. Let's talk about first your non-commissionable revenues, healthcare services revenues. Why did you decide to get into the pharmacy business to begin with?
Do you wanna go?
You know, we started actually going back and started Population Health first as an extension of our business to try to understand our consumer base better. If you go back to the beginning announcement that we made, we basically started a data gathering company that partners with the carriers to get, you know, around 50 data points per customer that comes into that. We have thousands of net adds a day into that. We get hundreds of thousands of data points per day, and we can really understand a consumer's needs. We use that to go, you know, A, partner with the carriers on certain services they offer, but then B, to also say, "Hey, I think there's a gap in the marketplace on polychronic pharmacy." There's not a huge space.
We think that the TAM is really large. We also think that there's not enough connectivity from the folks that do exist to really expand that rapidly. You know, we went and bought those pharmacies with that thesis, and that's played out to be incredibly true. I mean, we've gone from 2,500 really net clients to 39,000 in about 18 months. The adoption from our customer base has been extremely strong. It's also, you know, it did $55 million in revenue last quarter, which, you know, up from when we bought it, you know, obviously tens of millions of dollars more per month than we were seeing per year. We feel really, really good about that.
I think it's also just a proof point of what connectivity we have to customers and what we can do within healthcare in partnership with the carriers, whether that's helping them offer their services or supplementing their services with things that we could be good at, like the pharmacy.
Yeah. I think it's really different than our competitors are doing some wraparound services that we're doing as well.
Yep.
Bob described them, right? Additional value-added services, HRAs, value-based onboarding. Those are important to improving the member experience. We're doing those. We're thinking about this a little bit more broadly with respect to building out a broader healthcare services platform. Totally agree with Bob, you know, the consumer demand has been pretty breathtaking.
It's all premised on, right, the data that we have and the conversations and the connectivity we have with the seniors. That allowed us to do some MVP type evaluation before saying, we're gonna make the step forward to hire some subscale pharmacies, and we're gonna get in that game. I think that playbook will continue to be utilized across healthcare. We're already in a big addressable market. We're now getting into a significantly larger addressable market in healthcare, and we can do it in very smart ways. back to models that are more lead generation, referral type relationships to joint venture, to owning and having owners' economics like we do in RX. That gives us some flexibility as we approach those opportunities.
We can do it in a very, again, disciplined, prudent way.
Similar to other models, I'd say wallet share while adding value is something that gets talked about a lot, right, in direct to consumer businesses. That's all we're really, you know, doing, is expanding.
The wallet share of one of the most expensive services in the U.S. while adding a ton of value and, you know, saving the carriers money through adherence and adverse drug reactions and things like that. We feel really proud about what we're doing there and think it's just scratching the surface in what we can do.
Yeah. Makes a ton of sense. You said that, this last quarter, that business should be approaching EBITDA breakeven by the end of the fiscal year. You're currently slightly gross margin positive on that business. Can you just walk us through how you get to EBITDA, near EBITDA breakeven by the end of this year?
Yeah. you know, with this business, we are building a recurring revenue and margin stream. There's kind of two things that are expanding. One is customer count, obviously going, you know, we've quintupled our customer count over the last year. Separately, you know, these customers are taking seven, eight, nine, 10+ drugs that are generating, you know, revenue, you know, from a revenue perspective, around $85. The margin per drug is 25%-27%. There's strong unit margins. As you're expanding and gathering all of those prescriptions for the customers, there's an expansion component that happens there. In total, we're expecting around $6,000 per year in revenue, you know, from each of these customers that are coming on board.
Yeah, You know, the plan is, we'll be approaching, breakeven, towards the end of this fiscal year, and we're really pleased with the results and growth. It underscores the power of the platform.
Yeah. How many members do you think you need to maintain that breakeven?
I don't think we've disclosed that at this point. We are obviously well on our way. We've been growing at a pretty healthy clip. We slowed down a little bit, we announced that in the most recent quarter, really to focus on gathering the prescriptions, and getting people a larger portion to a mature phase where we've got full boxes going out each month. That is, you know, that's the cadence. Each month, these boxes are going out. Bob, anything you would add on from an operational perspective?
I think one of the interesting things, since it is almost, you know, a SaaS revenue model, a recurring revenue model that doesn't get counted up front, right? That's one of the interesting parts. As you grow, you're really investing in growth. On a normalized basis, we feel, you know, really strong that if you were to, quote, "stop growing," which is what a lot of, you know, technology companies, things like that will talk about, that our unit margins are really, really good. We are also simultaneously preparing for growth. We're a bit overstaffed to keep supplementing that growth. Which to his point, we've pulled back a little bit, but we're still talking about, you know, growth rates that are north of pharmacy growth rates in the marketplace by a pretty wide margin.
Yeah. Yeah. Once you do reach scale in this business, where do you think margins settle at?
Yes. I think, low to mid-teens is our expectations. We really think it's an attractive market.
Yep. Makes sense. As we think about other services that you can provide, within that segment, outside of, the pharmacy, outside of some of the pop health that you guys are doing, is there anything near term that we should be watching out for?
Yeah, I mean, I think that we can do a lot of things, we are evaluating a lot of stuff. Obviously, we haven't really disclosed exactly where we're looking, but anything that is value added that supplements, you know, the tricky kind of customer base that we have, whether that's, you know, virtual care components, chronic disease management, you know, those types of things are really what we're looking at. We believe we would have a really high adoption rate within kind of each of those markets. I mean, I think we've already proven it with some of our partnerships that we've talked about before. Look at our partnership with Oak Street. We have a great partnership with Oak Street. We feel really strong about what we do together.
We have helped educate a lot of members on the benefits of value-based care versus traditional care, especially when they express that they don't particularly love their current doctor experience. You know, if you think about that, we're doing that on a relatively small kind of referral cost basis or a really, reimbursement rate for the education that we provide. The TAM in that space is massive. Not saying we're gonna get into value-based care, but I think we've proven we can do more than just pharmacy, by the fact that we are pretty from what we heard, the largest referral base to value-based care, also pharmacy and then some other services that we currently provide.
There's lots of needs to be positive for the senior. We wanna do good, and there's a lot of opportunity there. You know, from a financial perspective, you know, I'd say paint a picture of things that are cash generative, cash creative, higher margin services businesses are things that we would attempt to target.
Yep. Yep.
Would you ever think about expanding outside of Medicare Advantage, going into the individual market, employer market, ICHRA?
Yeah, I mean, we've certainly looked at it before. There's nothing that's off the table, but we're pretty focused on, we are, again, as a reminder, a diversified multi-line broker today with a very large life insurance business, a very nice and profitable P&C business. I think between that and healthcare, that's really been the focus. There's nothing that's off the table.
Are MedSup and ancillary plans gonna become a bigger portion of your senior business moving forward?
I'd say on MedSup, you know, that depends on the competitiveness of MA, things like that. We still, you know, place MedSup. We think that it's been a tougher go, right, just given the competitiveness in MA. We anticipate that to stay there. We still do produce, you know, quite a bit of Medicare Supplement. As far as ancillary products, you know, we already produce a lot of ancillary products, especially in the dental space. We're the leader really in that space. We do anticipate that we'll find more things over time as supplemental benefits become a bigger and bigger piece. We've proven that we can cross-sell better than anybody.
You know, as new things come to market and as we find new things, I think we'll monetize those things extremely well because we've proven we can do it, you know, over the years.
About LTVs, this has been a tough issue recently. This AEP LTVs fell about 6-ish% year-over-year. As I listen to you talk about all the changes that you've made, it seems like all of these changes should improve persistency at some level. The question is, should we expect to see some uplift in near term LTVs?
Yeah. I'll let Ryan address the LTV question. Underlying around the issue, right, that's affected the sector and SelectQuote around persistency. As part of that strategic redesign, you know, we made lots of changes really focused on stabilizing and improving persistency. Most of those efforts went into place around April of last year. Again, things like the focus on marketing segmentation and really concentrating on the healthiest part of the market. We've talked extensively about agents. We've also made changes to our technology stack to help improve plan design, plan fit. We have this series of retention strategies that when someone's in market, we wanna make sure that that interaction is with SelectQuote.
We have seen, and we disclosed in our 1Q earnings deck some, I think, some good information where you can see how that 90-day persistency, which is really where most of the customer churn and action happens, has both stabilized and improved. I think that, while LTVs, you know, with a 3-year weighted average are kind of, you know, kinda lag the leading indicator of persistency we feel significantly better about, that'll take some time to kinda play through. Ryan?
Yeah. I think, you know, in Q2, we booked, lifetime buys of 870, as you alluded to, was down a little bit. We also made some strategic decisions that, you know, drove that down a little bit as well. On a full year basis, we do still expect to hit the 875 that we put out there at the beginning of the year. you know, as you mentioned, we're doing a lot internally that should improve overall persistency. We're seeing some encouraging trends. you know, all that said, we're gonna maintain our positive, posture or conservative posture with respect to, booking the 15% constraint. We think that's prudent at this time. We're definitely seeing encouraging signs.
I think, you know, the thing that's gonna be really important on the backside of all that is while we would benefit from improved lifetime values, you know, the business on the backside of taking cost out and strategic redesign, the margins are compelling. We have a great business as it is. As we see lifetime values, persistency improve, it really only, you know, it's the benefit of the business, but right now we think it's attractive in the absence of any real movement there.
Yep. Yep. We haven't really touched on marketing yet. I think, you know, that was a core piece too of your improvement as AEP. Can you just talk a little bit about how your marketing strategy evolved this AEP and how that might change in future AEPs?
Yeah. I'll start, Bob, maybe you wanna add to it. Yeah, that was a big change and back to focusing on changes to marketing segmentation and really the healthiest part of the market. I mean, we still subscribe to an omni-channel approach to marketing. There's no one channel that's, you know, good or bad, but you really need to concentrate within those channels on the most profitable segments. You know, we've been in your business for over 12 years now. We have a lot of data. We have a lot of intelligence around that.
We've done a lot to really work on the segmentation and try to work on, you know, reducing those that might shop or switch a lot or, you know, there's lots of stuff that's proprietary on our end, and we think that we're certainly seeing those benefits. We're also seeing, again, a broader industry environment that there's, you know, we've seen softening of costs from a marketing perspective. We think we can see from really April forward, not only, you know, the mix of customers and problematic versus good certainly improve, and then we can see it pulling through in terms of the 90-day results. Bob.
I think the only thing I would add to that is, we really made an emphasis on control and quality over the last year. Not that we didn't focus on that before, but one of that was really tightening the funnel even though we are still very omni-channel. That ended up being that we did let go of quite a few marketing partners that would not necessarily adhere to what we wanted from a focus and a targeting standpoint. You know, then we really leaned into the folks that were providing the best quality and the exact kind of targeting that we wanted. That's been a huge win for us. We are extremely well diversified now.
We've helped some folks, get larger in that space that we do rely on, but mostly we rely on ourselves now, which is great. We control over 50% of our marketing, which was not, the case in the past, and that makes us, you know, be in a really good position to continue to expand on the relationships that we control.
Got it. All right. Let's switch over to cash flow because that's been a pretty important topic recently. You've got around $36 million of cash on the balance sheet, $100 million of capacity under your revolver. You've noted that you break even on an MA policy now during the second renewal. I guess as you slow down growth, as you collect more cash here, are you confident that you'll be able to return to growth in 2023 without raising additional capital?
Yeah. You know, we prioritize unit margins. We really focused at the beginning of this year on getting to cash either break even in the fiscal year. At this point, we have clear conviction in that. As you alluded to, we had $36 million in cash at the end of the AEP season and undrawn revolver, something that candidly we actually expect to draw on as part of our plan. In January, cash comes in. At the end of January, our cash balance was approaching $100 million, and we're in a really great spot. We're well ahead of where we expected to be. You know, our goal was cash either to break even. Our next goal was operating cash flow. It is a focus.
When we roll out our fiscal year guide for 2024 in August, you know, we'll give additional insight into kind of when we see ourselves hitting operating cash flow positive. It is a priority that we, you know, we're gonna continue to focus on unit margins, cash generation. We're in a really great spot.
Yep. You do have $1 billion or so of receivables, commissions receivable. Are you looking at ways or can you look at ways to monetize some of those receivables to get liquidity out of that there?
You know, it's a great question. Obviously, you do have you know, $705 million in debt, but we do have that $1 billion in commission receivables. We certainly think that that's a part of the equation with respect to how we put ourselves in a better capital structure. You know, we'll look forward to sharing more around that in the future, but it's definitely a real asset.
Yep. Yep. I know we spent the bulk of the time talking about Medicare, but as you mentioned, you do also have life insurance and auto and home. I'm a proud customer of the life insurance.
Thank you.
Good experience. you know, my question is, because most of your investment is going towards the healthcare segment, is there a reason to keep life insurance and auto and home? Why not spin those off, sell those, and get some capital that way?
Yeah. I mean, that would certainly be an option, we believe in the value proposition and protection, right? Health and wellness is important. Protection products are important. Those are cash generative businesses. We've taken a similar playbook that we have to senior to really, you know, focus on margin enhancement. You know, in like our final expense business, we've slowed that down a bit in terms of top line. You can see in our latest results, margins improved. We think auto and home has a great value proposition as well. We think that fits into the total picture.
As we build this broader platform, you know, we've talked primarily around healthcare and how we can build upon that, but there are cross-sell opportunities, and we're concentrating on that as part of that broader, you know, kind of global customer economic view that we're taking.
Makes sense. Well, I think we're running out of time here. Really appreciate you guys making some time for us this afternoon. Very helpful.
Thank you.
Thanks, Tim.
Really appreciate it, Daniel.
All right. Thank you.
Thank you.
Thank you.
Thanks, everyone.