What drove SLQT's consistent EPS surprises in 2024?

SelectQuote's consistent EPS surprises in 2024 can be attributed to several key factors:

1. **Revenue Growth**: SelectQuote experienced significant revenue growth, driven by strong performance in its Senior Medicare Advantage and Healthcare Services segments. For the fourth quarter, revenue grew by 39% to $307 million, and for the full year, revenue expanded by 32% to $1.3 billion. This growth outpaced market expectations, contributing to the positive EPS surprises.
2. **Operational Efficiency**: The company's operational efficiency improved, as evidenced by increased adjusted EBITDA and a decrease in marketing and advertising expenses. For example, in the fourth quarter, adjusted EBITDA expanded by over $20 million, and operating costs and expenses represented 84% of total revenue, down from 86% in the previous year. This enhanced profitability contributed to higher EPS figures.
3. **Strategic Initiatives**: SelectQuote's strategic moves, such as the focus on profitability and cash efficiency over volume growth, paid off. The company's senior leadership prioritized these aspects, which led to a 10th consecutive quarter of outperformance versus internal expectations. These strategic initiatives likely led to better cost management and higher profitability, supporting the EPS surprises.
4. **Membership Growth**: There was a significant increase in membership in SelectRx, with a 68% year-over-year growth to 82,000 members. This expansion in membership contributed to higher revenues and, consequently, higher EPS.
5. **Securitization and Capital Structure**: SelectQuote's proactive approach to capital management, including the securitization of receivables and preferred equity offering, improved its capital structure and reduced costs. This financial prudence likely supported the company's operational efficiency and profitability, leading to stronger EPS results.

In summary, SelectQuote's consistent EPS surprises in 2024 were driven by robust revenue growth, enhanced operational efficiency, strategic initiatives, membership expansion, and effective capital management. These factors combined to outperform market expectations and deliver strong financial results.