EverQuote, Inc. (Nasdaq:EVER) (“EverQuote” or “the Company”),
a leading online insurance marketplace in the U.S. connecting
consumers with insurance providers, today announced financial
results for the second quarter ended June 30, 2018.
"We reached an important milestone for the Company in the second
quarter - completing our initial public offering,” said Seth
Birnbaum, CEO and Co-Founder of EverQuote. “We expect
proceeds from the offering to support growth throughout the
business as we further expand our market opportunities by
attracting more consumers, increasing provider coverage, launching
new verticals and deepening consumer engagement.”
“In our first quarter as a public company, we are excited to
report strong revenue growth with solid momentum in our auto
insurance vertical complemented with rapid growth in our newer home
and life insurance verticals. We also made progress enhancing
our consumer and provider experience and are focused on our mission
to make finding insurance easy and more personal, saving consumers
and insurance providers time and money.
“This quarter, we reported a 34% year-over-year increase in
revenue per quote request and a 41% increase in both revenue less
advertising expense and Variable Marketing Margin to record
levels. Our results demonstrate the strength of our unique
marketplace model and the power of our data science and analytics -
achieving improved traffic performance, more optimized yield
management and increased provider coverage and spend,” concluded
Mr. Birnbaum.
Second Quarter 2018 Financial Highlights:(All
comparisons are relative to the second quarter of 2017 unless
otherwise stated):
- Total revenue of $41.1 million, an increase of 37% driven by
strength in pricing as a result of increasing provider coverage and
demand.
- Automotive insurance vertical revenue of $35.5 million, an
increase of 23%.
- Home and life insurance vertical revenue of $5.6 million, an
increase of 420%.
- Revenue less advertising expense of $12.1 million, growth of
41%.
- Variable Marketing Margin of $12.8 million, growth of 41%.
- GAAP net loss of $1.7 million, unchanged from the prior year
period.
- Adjusted EBITDA of ($0.6) million, an improvement of 25%.
Second Quarter 2018 Business Highlights:
- EverQuote added 15 new carrier partners across auto, home and
life.
- The Company experienced continued strength in cross-selling
into new verticals and referral formats across both carrier and
agent market segments.
- 8 of the Company’s top 10 providers expanded spend in the
EverQuote marketplace.
- EverQuote completed 13 new or expanded technology integrations
with provider partners.
- The Company’s direct business increased to 90% of revenue,
mostly from existing insurance carriers and agents.
- The Company’s distribution growth and traffic optimization
initiatives led to revenue per quote request rising by 34% when
compared to the prior year.
Second Quarter 2018 Impact from EverQuote’s Initial
Public Offering
- On June 27, 2018, EverQuote priced its initial public offering
of 4,687,500 shares of Class A common stock, including 3,125,000
shares sold by the Company, at $18 per share.
- As of June 30, 2018, prior to the closing of the IPO, EverQuote
had total outstanding shares of common stock of 9.1 million.
- Upon closing of the IPO on July 2, 2018, EverQuote received
proceeds of $48.6 million, net of underwriters discount and
offering costs.
- Immediately subsequent to the IPO closing on July 2, 2018,
EverQuote had total outstanding shares of common stock of 24.9
million, including the issuance of 12.6 million shares of common
stock upon the automatic conversion of all outstanding shares of
redeemable convertible preferred stock.
- EverQuote’s second quarter net loss attributable to common
stockholders of $28.1 million includes $26.4 million of accretion
of redeemable convertible preferred stock to redemption value,
reflecting the final adjustment of the carrying value of the
preferred stock prior to its conversion to common stock.
- EverQuote’s second quarter net loss per share attributable to
common stockholders of ($3.10) includes $2.91 per share of
accretion of redeemable convertible preferred stock to redemption
value.
Third Quarter and Full-Year 2018 Guidance:
“We are focused on driving strong revenue growth as we make
targeted investments in talent and infrastructure to enhance our
marketplace’s effectiveness for our insurance providers and
consumers,” said John Wagner, Chief Financial Officer.
EverQuote anticipates Revenue, Variable Marketing Margin and
Adjusted EBITDA to be in the following ranges:
Third quarter 2018:
- Revenue of $40.4 - $41.2 million.
- Variable Marketing Margin of $12.3 - $12.7 million.
- Adjusted EBITDA in the range of ($1.0) – ($1.3) million.
Full-year 2018:
- Revenue of $161.0 - $162.6 million.
- Variable Marketing Margin of $48.6 - $49.4 million.
- Adjusted EBITDA in the range of ($3.4) – ($4.0) million.
With respect to the Company’s expectations under "Third Quarter
and Full-Year 2018 Guidance" above, the Company has not reconciled
Variable Marketing Margin and Adjusted EBITDA to Revenue less
Advertising Expense and Net Loss, respectively, in this press
release because the Company does not provide guidance for
advertising expense, stock-based compensation
expense, depreciation and amortization expense, interest
expense, and the provision for (benefit from) income
taxes as the Company is unable to quantify these amounts
without unreasonable efforts that would be required to include such
GAAP measures. In addition, the Company believes such
reconciliations would imply a degree of precision that could be
confusing or misleading to investors.
Conference Call and Webcast Information
EverQuote will host a conference call and live webcast to
discuss its second quarter 2018 financial results at 4:30 p.m.
Eastern Time today, August 6, 2018. To access the conference call,
dial (866) 393-4306 for the U.S. or Canada, or (734) 385-2616 for
international callers and provide conference ID 2878838. The
webcast will be available live on the Investors section of the
Company's website at https://investors.everquote.com.
An audio replay of the call will also be available to investors
beginning at approximately 6:30 p.m. Eastern Time on August 6,
2018, until 11:59 p.m. Eastern Time on August 13, 2018, by dialing
(855) 859-2056 for the U.S. or Canada, or (404) 537-3406 for
international callers, and entering passcode 2878838. In addition,
an archived webcast will be available on the Investors section of
the Company's website at:
https://investors.everquote.com.
Safe Harbor Statement
Any statements in this press release about future expectations,
plans and prospects for EverQuote, Inc. (“EverQuote” or the
“Company”), including statements about future results of operations
or the future financial position of the Company, including
financial targets, business strategy, plans and objectives for
future operations and other statements containing the words
“anticipates,” “believes,” “expects,” “plans,” and similar
expressions, constitute forward-looking statements within the
meaning of The Private Securities Litigation Reform Act of
1995. Actual results may differ materially from those
indicated by such forward-looking statements as a result of various
important factors, including: (1) the Company’s ability to
attract and retain consumers and insurance providers using the
Company’s marketplace; (2) the Company’s ability to develop new and
enhanced products and services to attract and retain consumers and
insurance providers, and the Company’s ability to successfully
monetize them; (3) the effectiveness of the Company’s growth
strategies and its ability to effectively manage growth; (4) the
Company’s ability to maintain and build its brand; (5) the
Company’s reliance on its third-party service providers; (6) the
Company’s ability to expand internationally; (7) the impact of
competition in the Company’s industry and innovation by the
Company’s competitors (8) the Company’s expected use of proceeds
from its initial public offering; and (8) other factors discussed
in the “Risk Factors” section of the final prospectus for the
Company’s initial public offering, which is on file with the
Securities and Exchange Commission. In addition, the
forward-looking statements included in this press release represent
the Company’s views as of the date of this press release. The
Company anticipates that subsequent events and developments will
cause the Company’s views to change. However, while the
Company may elect to update these forward-looking statements at
some point in the future, the Company specifically disclaims any
obligation to do so. These forward-looking statements should
not be relied upon as representing the Company’s views as of any
date subsequent to the date of this press release.
About EverQuote
EverQuote operates a leading online insurance marketplace in the
U.S., connecting consumers with insurance providers. The company's
proprietary data & technology platform matches and connects
consumers seeking to purchase insurance with relevant options from
the company's broad direct network of insurance providers, saving
consumers and providers time and money. EverQuote was founded with
the vision of applying a scientific, data-driven approach to help
consumers find the best price and coverage for their individual
insurance needs, reshaping the insurance shopping experience
EVERQUOTE, INC. |
STATEMENTS OF OPERATIONS |
|
|
Three Months EndedJune 30, |
|
|
Six Months Ended June
30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands except per share) |
|
Revenue |
|
$ |
41,092 |
|
|
$ |
30,017 |
|
|
$ |
81,822 |
|
|
$ |
61,769 |
|
Cost and
operating expenses(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue |
|
|
2,873 |
|
|
|
1,884 |
|
|
|
5,488 |
|
|
|
3,620 |
|
Sales and
marketing |
|
|
34,932 |
|
|
|
26,354 |
|
|
|
69,955 |
|
|
|
54,781 |
|
Research
and development |
|
|
3,181 |
|
|
|
2,100 |
|
|
|
5,795 |
|
|
|
4,231 |
|
General
and administrative |
|
|
1,733 |
|
|
|
1,259 |
|
|
|
3,446 |
|
|
|
2,268 |
|
Total
cost and operating expenses |
|
|
42,719 |
|
|
|
31,597 |
|
|
|
84,684 |
|
|
|
64,900 |
|
Loss from
operations |
|
|
(1,627 |
) |
|
|
(1,580 |
) |
|
|
(2,862 |
) |
|
|
(3,131 |
) |
Interest
expense |
|
|
(103 |
) |
|
|
(85 |
) |
|
|
(196 |
) |
|
|
(152 |
) |
Net
loss |
|
|
(1,730 |
) |
|
|
(1,665 |
) |
|
|
(3,058 |
) |
|
|
(3,283 |
) |
Accretion
of redeemable convertible preferred stock to redemption
value |
|
|
(26,402 |
) |
|
|
(995 |
) |
|
|
(37,415 |
) |
|
|
(12,779 |
) |
Net loss
attributable to common stockholders |
|
$ |
(28,132 |
) |
|
$ |
(2,660 |
) |
|
$ |
(40,473 |
) |
|
$ |
(16,062 |
) |
Net loss
per share attributable to common stockholders, basic and
diluted |
|
$ |
(3.10 |
) |
|
$ |
(0.31 |
) |
|
$ |
(4.55 |
) |
|
$ |
(1.81 |
) |
Weighted
average common shares outstanding, basic and diluted |
|
|
9,085 |
|
|
|
8,523 |
|
|
|
8,897 |
|
|
|
8,891 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts include stock-based compensation expense,
as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedJune 30, |
|
|
Six Months Ended June
30, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Cost of revenue |
|
$ |
10 |
|
|
$ |
7 |
|
|
$ |
17 |
|
|
$ |
13 |
|
Sales and
marketing |
|
|
400 |
|
|
|
201 |
|
|
|
670 |
|
|
|
411 |
|
Research and
development |
|
|
168 |
|
|
|
116 |
|
|
|
292 |
|
|
|
219 |
|
General and
administrative |
|
|
145 |
|
|
|
144 |
|
|
|
311 |
|
|
|
296 |
|
|
|
$ |
723 |
|
|
$ |
468 |
|
|
$ |
1,290 |
|
|
$ |
939 |
|
EVERQUOTE, INC. |
BALANCE SHEET DATA |
|
|
June 30, 2018 |
|
|
December 31, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Cash |
|
$ |
2,382 |
|
|
$ |
2,363 |
|
Working capital
(deficit) |
|
|
(98 |
) |
|
|
2,634 |
|
Total assets |
|
|
29,541 |
|
|
|
20,519 |
|
Long-term debt |
|
|
6,983 |
|
|
|
4,250 |
|
Total liabilities |
|
|
30,339 |
|
|
|
20,126 |
|
Redeemable convertible
preferred stock |
|
|
88,352 |
|
|
|
50,937 |
|
Total stockholders'
deficit |
|
|
(89,150 |
) |
|
|
(50,544 |
) |
|
|
|
|
|
|
|
|
|
|
EVERQUOTE, INC. |
STATEMENTS OF CASH FLOWS |
|
|
|
Six Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net
loss |
|
$ |
(3,058 |
) |
|
$ |
(3,283 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
612 |
|
|
|
731 |
|
Stock-based compensation expense |
|
|
1,290 |
|
|
|
939 |
|
Noncash
interest expense |
|
|
14 |
|
|
|
10 |
|
Deferred
rent |
|
|
325 |
|
|
|
108 |
|
Changes
in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
(3,025 |
) |
|
|
(255 |
) |
Prepaid
expenses and other current assets |
|
|
(1,379 |
) |
|
|
(126 |
) |
Other
assets |
|
|
— |
|
|
|
(61 |
) |
Accounts
payable |
|
|
3,193 |
|
|
|
(1,427 |
) |
Accrued
expenses and other current liabilities |
|
|
863 |
|
|
|
1,008 |
|
Deferred
revenue |
|
|
166 |
|
|
|
(40 |
) |
Net cash
used in operating activities |
|
|
(999 |
) |
|
|
(2,396 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Acquisition of property and equipment, including costs
capitalized for development of internal-use software |
|
|
(1,395 |
) |
|
|
(648 |
) |
Net cash
used in investing activities |
|
|
(1,395 |
) |
|
|
(648 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Proceeds
from exercise of stock options |
|
|
577 |
|
|
|
383 |
|
Repurchase of common stock |
|
|
— |
|
|
|
(9,229 |
) |
Proceeds
from borrowings on line of credit |
|
|
22,729 |
|
|
|
10,800 |
|
Repayments of borrowings on line of credit |
|
|
(17,746 |
) |
|
|
(9,300 |
) |
Repayments of term loan |
|
|
(2,625 |
) |
|
|
(750 |
) |
Payments
of initial public offering costs |
|
|
(522 |
) |
|
|
— |
|
Net cash
provided by (used in) financing activities |
|
|
2,413 |
|
|
|
(8,096 |
) |
Net increase (decrease) in cash |
|
|
19 |
|
|
|
(11,140 |
) |
Cash at
beginning of period |
|
|
2,363 |
|
|
|
12,400 |
|
Cash at
end of period |
|
$ |
2,382 |
|
|
$ |
1,260 |
|
EVERQUOTE, INC. |
FINANCIAL AND OPERATING METRICS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by
vertical: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Change |
|
|
|
2018 |
|
|
2017 |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
Automotive |
|
$ |
35,509 |
|
|
$ |
28,943 |
|
|
|
22.7 |
% |
Home and
Life |
|
|
5,583 |
|
|
|
1,074 |
|
|
|
419.8 |
% |
Total Revenue |
|
$ |
41,092 |
|
|
$ |
30,017 |
|
|
|
36.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial and
operating metrics: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Change |
|
|
|
2018 |
|
|
2017 |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
Loss from
operations |
|
$ |
(1,627 |
) |
|
$ |
(1,580 |
) |
|
|
3.0 |
% |
Net loss |
|
$ |
(1,730 |
) |
|
$ |
(1,665 |
) |
|
|
3.9 |
% |
Quote requests |
|
|
3,018 |
|
|
|
2,950 |
|
|
|
2.3 |
% |
Variable Marketing
Margin(1) |
|
|
12,819 |
|
|
|
9,108 |
|
|
|
40.7 |
% |
Adjusted EBITDA(1) |
|
$ |
(586 |
) |
|
$ |
(785 |
) |
|
|
25.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Variable Marketing Margin and Adjusted EBITDA are non-GAAP
measures. Please see "EverQuote's Reconciliation of Non-GAAP
Measures to GAAP" below for more information. |
|
|
|
EVERQUOTE, INC.NON-GAAP FINANCIAL MEASURES
To supplement the Company’s financial statements presented in
accordance with GAAP and to provide investors with additional
information regarding EverQuote’s financial results, the Company
has presented its variable marketing margin and adjusted EBITDA as
non-GAAP financial measures. These non-GAAP financial measures are
not based on any standardized methodology prescribed by GAAP and
are not necessarily comparable to similarly titled measures
presented by other companies.
The Company defines variable marketing margin, or VMM, as
revenue as reported in the Company statements of operations and
comprehensive loss, less online advertising costs related to
attracting consumers to EverQuote’s marketplace (which are a
component of total advertising expense, which is a component of
sales and marketing expense). The most directly comparable GAAP
measure for VMM is revenue less advertising expense. The Company
utilizes VMM to measure the financial return on EverQuote’s online
advertising, specifically to measure the degree by which the
revenue generated from consumer quote requests exceeds the cost to
attract those consumers to EverQuote’s marketplace through online
advertising. The Company also uses VMM to measure the efficiency of
individual online advertising and consumer acquisition sources and
to make trade-off decisions to manage the Company’s return on
advertising. The Company does not utilize VMM as a measure of
overall profitability. The Company presents VMM because it is used
extensively by EverQuote’s management and board of directors to
manage the Company’s operating performance, including evaluating
operational performance against budgeted VMM and understanding the
efficiency of EverQuote’s online advertising spend.
The Company defines adjusted EBITDA as net loss, excluding the
impact of stock-based compensation expense; depreciation and
amortization expense; interest expense; and the provision for
(benefit from) income taxes. The most directly comparable GAAP
measure is net income (loss). The Company monitors adjusted EBITDA
because it is a key measure used by management and the board of
directors to understand and evaluate operating performance, to
establish budgets and to develop operational goals for managing
EverQuote’s business. In particular, the Company believes that
excluding the impact of these expenses in calculating adjusted
EBITDA can provide a useful measure for period-to-period
comparisons of EverQuote’s core operating performance.
The Company uses these non-GAAP financial measures to evaluate
EverQuote’s operating performance and trends and make planning
decisions. The Company believes that each of these non-GAAP
financial measures helps identify underlying trends in EverQuote’s
business that could otherwise be masked by the effect of the
expenses that the Company excludes in the calculations of each
non-GAAP financial measure. Accordingly, the Company believes that
these financial measures provide useful information to investors
and others in understanding and evaluating EverQuote’s operating
results, enhancing the overall understanding of the Company’s past
performance and future prospects.
The Company’s non-GAAP financial measures are not prepared in
accordance with GAAP and should not be considered in isolation of,
or as an alternative to, measures prepared in accordance with GAAP.
There are a number of limitations related to the use of these
non-GAAP financial measures rather than revenue less advertising
expense and net income (loss), which are the most directly
comparable financial measures calculated and presented in
accordance with GAAP. In addition, other companies may use other
measures to evaluate their performance, all of which could reduce
the usefulness of the Company’s non-GAAP financial measures as
tools for comparison.
The following tables reconcile VMM and adjusted EBITDA to
revenue less advertising expense and net loss, respectively, the
most directly comparable financial measures calculated and
presented in accordance with GAAP.
EVERQUOTE, INC.RECONCILIATION OF NON-GAAP
MEASURES TO GAAP
|
|
Three Months Ended June 30, |
|
|
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
|
Revenue |
|
$ |
41,092 |
|
|
|
$ |
30,017 |
|
|
|
Less: total
advertising expense |
|
|
(28,946 |
) |
|
|
|
(21,429 |
) |
|
|
Revenue less
advertising expense |
|
|
12,146 |
|
|
|
|
8,588 |
|
|
|
Add: other
advertising expense (1) |
|
|
673 |
|
|
|
|
520 |
|
|
|
Variable marketing
margin |
|
$ |
12,819 |
|
|
|
$ |
9,108 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Other advertising expenses consist of general advertising
costs that are designed to promote the business, attract insurance
providers or produce results other than generating online
marketplace traffic, such as increasing downloads of the Company’s
EverDrive safe driver app. They are not directly related to
generating revenue or online marketplace traffic, and as such are
excluded by management from the calculation of VMM.
Below is a reconciliation of Net loss to Adjusted EBITDA.
|
|
Three Months Ended June 30, |
|
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Net loss |
|
$ |
(1,730 |
) |
|
$ |
(1,665 |
) |
Stock-based compensation |
|
|
723 |
|
|
|
468 |
|
Depreciation and amortization |
|
|
318 |
|
|
|
327 |
|
Interest
expense |
|
|
103 |
|
|
|
85 |
|
Adjusted EBITDA |
|
$ |
(586 |
) |
|
$ |
(785 |
) |
|
Investor Relations Contact: Brinlea Johnson The Blueshirt Group
212-331-8424 Brinlea@blueshirtgroup.com
Media Contact: Ryan Ruffing rruffing@everquote.com
(617) 206-6561
SOURCE: EverQuote, Inc.
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