SelectQuote, Inc.SLQT
SelectQuote, Inc. Earnings Per Share Disclosure
NET INCOME (LOSS) PER SHARE
The Company calculates net income (loss) per share as defined by ASC 260, Earnings per Share (“ASC 260”). Basic net income (loss) per share (“Basic EPS”) is computed by dividing net income (loss) attributable to common shareholders by the weighted-average common stock outstanding during the respective period. Per ASC 260, shares issuable for little to no consideration (“Penny Warrants”) should be included in the number of outstanding shares used for Basic EPS. As of June 30, 2025, the Company included the Tranche A Senior Non-
Convertible Preferred Stock Warrants (excluding the Contingent Warrants) outstanding in the denominator of Basic EPS since the exercise price was $0.01 per share thus are considered Penny Warrants.
Diluted net income (loss) per share (“Diluted EPS”) is computed by dividing net income (loss) attributable to common and common equivalent shareholders by the total of the weighted-average common stock outstanding and common equivalent shares outstanding during the respective period. For the purpose of calculating the Company’s Diluted EPS, common equivalent shares outstanding include common shares issuable upon the exercise of outstanding employee stock options, unvested RSU's, PSU’s assuming the performance conditions are satisfied as of the end of the reporting period, PVU’s assuming market conditions are satisfied as of the end of the reporting period, common shares issuable upon the conclusion of each ESPP offering period, Eleventh Amendment Warrants, and Senior Non-Convertible Preferred Stock Warrants (excluding the Penny Warrants). The number of common equivalent shares outstanding has been determined in accordance with the treasury stock method for employee stock options, RSU's, PSU’s, PVU’s, common stock issuable pursuant to the ESPP, Eleventh Amendment Warrants, and Senior Non-Convertible Preferred Stock Warrants to the extent they are dilutive. Under the treasury stock method, the exercise price paid by the option holder and future share-based compensation expense that the Company has not yet recognized are assumed to be used to repurchase shares.
The following table sets forth the computation of net income (loss) per share for the periods presented:
| Year Ended June 30, | |||||||||||||||||
(in thousands, except per share amounts) | 2025 | 2024 | 2023 | ||||||||||||||
| Numerator: | |||||||||||||||||
| Net income (loss) attributable to common shareholders, basic | $ | 25,032 | $ | (34,125) | $ | (58,544) | |||||||||||
| (22,607) | — | — | |||||||||||||||
| Net income (loss) attributable to common shareholders, diluted | 2,425 | (34,125) | (58,544) | ||||||||||||||
| Denominator: | |||||||||||||||||
| Weighted-average common stock outstanding, basic | 176,148 | 168,519 | 166,140 | ||||||||||||||
Stock options outstanding to purchase shares of common stock including unvested RSU's and from the ESPP(2) | 4,458 | — | — | ||||||||||||||
Dilutive effect of warrants to purchase common stock | 1,289 | — | — | ||||||||||||||
Weighted-average common stock outstanding, diluted | 181,895 | 168,519 | 166,140 | ||||||||||||||
| Net income (loss) per share—basic: | $ | 0.14 | $ | (0.20) | $ | (0.35) | |||||||||||
Net income (loss) per share—diluted: | $ | 0.01 | $ | (0.20) | $ | (0.35) | |||||||||||
(1) Includes the change in fair value of warrant liabilities to the extent the related warrants to purchase common stock are dilutive.
(2) Excluded from the computation of net income (loss) per share-diluted for the years ended June 30, 2024, and 2023 because the effect would have been anti-dilutive.
The weighted average potential shares of common stock that were excluded from the calculation of net income (loss) per share-diluted for the periods presented because including them would have been anti-dilutive consisted of the following:
| Year Ended June 30, | |||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
Stock options outstanding to purchase shares of common stock, unvested RSU's and shares from the ESPP | 3,799 | 12,204 | 8,456 | ||||||||||||||
The weighted average potential shares of common stock that were excluded from the calculation of net income (loss) per share-diluted because the performance or market conditions associated with these awards were not met are as follows for the periods presented:
| Year Ended June 30, | |||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Shares subject to outstanding PVU’s | 7,437 | 6,243 | 4,346 | ||||||||||||||
| Shares subject to outstanding PSU's | — | — | 9 | ||||||||||||||
| Total | 7,437 | 6,243 | 4,355 | ||||||||||||||
The weighted average potential shares of common stock that were excluded from the calculation of net income (loss) per share-diluted because the exercise price of the warrants exceeded the average market price of the Company's common stock for the periods presented:
| Year Ended June 30, | |||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Warrants to purchase shares of common stock | 8,932 | — | — | ||||||||||||||
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About Earnings Per Share Disclosures
The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.
Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.