EverQuote, Inc. (Nasdaq: EVER), a leading online insurance
marketplace, today announced financial results for the quarter
ended June 30, 2023.
“In the second quarter, EverQuote reported revenue of $68.0
million and Variable Marketing Margin, or VMM, of $24.7 million, a
record high as a percentage of revenue,” said Jayme Mendal, CEO of
EverQuote. “During the quarter, we made a number of strategic
decisions to position EverQuote to emerge from a prolonged auto
insurance downturn in a clear leadership position. We restructured
our operations, eliminating approximately 30% of positions
company-wide, decided to exit our health insurance vertical and its
associated direct to consumer agency (DTCA), and scaled-down our
DTCA serving our auto and home insurance markets.
“While the restructuring was catalyzed by the ‘lower-for-longer
auto insurance outlook,’ the decisions we made were the result of a
deeper assessment of our operations, markets and feedback from
carrier and agent partners. As we streamline our business, we are
also investing in the most capital efficient and high ROI portions
of our operations. We are placing greater emphasis on leveraging
our most differentiated assets to accelerate our path to providing
compelling value for insurance provider partners, consumers and
shareholders,” concluded Mr. Mendal.
Subsequent to the close of the second quarter, EverQuote sold
certain assets of its health insurance vertical to MyPlanAdvocate
Insurance Solutions Inc., for $13.2 million in cash, subject to
customary post-closing adjustments, and MyPlanAdvocate’s assumption
of certain liabilities relating to the health insurance vertical.
The transaction closed on August 1, 2023. Included in the sale was
the $32.2 million commissions receivable as of June 30, 2023, which
were expected to be collected over the next seven years. We expect
to take a non-cash charge in Q3 related to the sale of these
assets.
“Our team continues to focus on what we can control by taking
decisive action to judiciously manage expenses and strengthen our
balance sheet,” said Joseph Sanborn, CFO of EverQuote. “By
streamlining our operations and adopting a relatively more
asset-light model, we believe EverQuote will be well positioned to
capitalize on our market opportunity with the normalization of the
auto insurance industry.”
Second Quarter 2023 Financial Highlights: (All
comparisons are relative to the second quarter of 2022)
- Total revenue of $68.0 million, a decrease of 33%.
- Automotive insurance vertical revenue of $49.7 million, a
decrease of 39%.
- Revenue from other insurance verticals, which includes home and
renters, life, and health insurance, decreased 11% to $18.2
million.
- Variable Marketing Margin of $24.7 million, a decrease of
26%.
- GAAP net loss increased to a loss of $13.2 million, compared to
a GAAP net loss of $3.8 million.
- Adjusted EBITDA decreased to $(2.1) million, compared to
Adjusted EBITDA of $1.4 million.
- Due to the actions taken to reduce its workforce and the exit
of its health insurance vertical the Company incurred a $3.8
million restructuring charge in the second quarter.
Third Quarter 2023 Outlook:For the third
quarter 2023, EverQuote anticipates revenue, Variable Marketing
Margin and Adjusted EBITDA to be in the following ranges:
- Revenue of $51 - $56 million.
- Variable Marketing Margin of $16 - $18 million.
- Adjusted EBITDA of $(6.0) - $(4.0) million.
With respect to the Company’s expectations under “Third Quarter
2023 Outlook” above, the Company has not reconciled the non-GAAP
measure Adjusted EBITDA to the GAAP measure net income (loss) in
this press release because the Company does not provide guidance
for stock-based compensation expense, depreciation and amortization
expense, restructuring and other charges, acquisition-related
costs, legal settlement expense, one-time severance charges,
interest income, and income taxes on a consistent basis as the
Company is unable to quantify these amounts without unreasonable
efforts, which would be required to include a reconciliation of
Adjusted EBITDA to GAAP net income (loss). In addition, the Company
believes such a reconciliation 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 2023 financial results at 4:30 p.m.
Eastern Time today, August 7, 2023. To access the conference call,
dial Toll Free: +1 (800) 599-2055 for the US, or +1 (647) 362-9671
for international callers, and provide conference ID 1374717. The
live webcast and replay 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,” “continues,” “will”
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 maintain or increase the amount
providers spend per quote request; (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 develop new and enhanced products and
services to attract and retain consumers and insurance providers,
and the Company’s ability to successfully monetize them; (7) the
impact of competition in the Company’s industry and innovation by
the Company’s competitors; (8) the length of the continued downturn
in the auto insurance industry; (9) developments regarding the
insurance industry and the transition to online marketing; (10) the
possible impacts of inflation; and (11) other factors discussed in
the “Risk Factors” sections of the Company's most recent Annual
Report on Form 10-K, and Quarterly Report on Form 10-Q, each of
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,
connecting consumers with insurance providers. The company's
mission is to empower insurance shoppers to better protect life's
most important assets—their family, property, and future. Our
vision is to become the largest online source of insurance policies
by using data, technology, and knowledgeable advisors to make
insurance simpler, more affordable and personalized, ultimately
reducing cost and risk.
For more information, visit everquote.com and follow on Twitter
@everquotelife, Instagram @everquotepics, and LinkedIn
https://www.linkedin.com/company/everquote/.
Investor Relations Contact
Brinlea JohnsonThe Blueshirt Group415-489-2193
|
EVERQUOTE, INC.STATEMENTS OF OPERATIONS |
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
(in thousands except per share) |
|
Revenue |
|
$ |
67,985 |
|
|
$ |
101,915 |
|
|
$ |
177,205 |
|
|
$ |
212,596 |
|
Cost and operating expenses(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
|
5,547 |
|
|
|
6,059 |
|
|
|
11,317 |
|
|
|
12,043 |
|
Sales and marketing |
|
|
58,795 |
|
|
|
87,854 |
|
|
|
149,032 |
|
|
|
184,004 |
|
Research and development |
|
|
7,450 |
|
|
|
8,245 |
|
|
|
15,377 |
|
|
|
16,441 |
|
General and administrative |
|
|
5,768 |
|
|
|
7,357 |
|
|
|
13,598 |
|
|
|
14,298 |
|
Restructuring and other charges |
|
|
3,832 |
|
|
|
— |
|
|
|
3,832 |
|
|
|
— |
|
Acquisition-related costs |
|
|
(37 |
) |
|
|
(3,779 |
) |
|
|
(150 |
) |
|
|
(4,671 |
) |
Total cost and operating expenses |
|
|
81,355 |
|
|
|
105,736 |
|
|
|
193,006 |
|
|
|
222,115 |
|
Loss from operations |
|
|
(13,370 |
) |
|
|
(3,821 |
) |
|
|
(15,801 |
) |
|
|
(9,519 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
271 |
|
|
|
37 |
|
|
|
458 |
|
|
|
45 |
|
Other income (expense), net |
|
|
(16 |
) |
|
|
28 |
|
|
|
(15 |
) |
|
|
3 |
|
Total other income, net |
|
|
255 |
|
|
|
65 |
|
|
|
443 |
|
|
|
48 |
|
Loss before income taxes |
|
|
(13,115 |
) |
|
|
(3,756 |
) |
|
|
(15,358 |
) |
|
|
(9,471 |
) |
Income tax expense |
|
|
(78 |
) |
|
|
— |
|
|
|
(364 |
) |
|
|
— |
|
Net loss |
|
$ |
(13,193 |
) |
|
$ |
(3,756 |
) |
|
$ |
(15,722 |
) |
|
$ |
(9,471 |
) |
Net loss per share, basic and diluted |
|
$ |
(0.40 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.48 |
) |
|
$ |
(0.31 |
) |
Weighted average common shares outstanding, basic and
diluted |
|
|
33,129 |
|
|
|
31,519 |
|
|
|
32,942 |
|
|
|
31,027 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts
include stock-based compensation expense, as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
(in thousands) |
|
Cost of revenue |
|
$ |
59 |
|
|
$ |
95 |
|
|
$ |
113 |
|
|
$ |
154 |
|
Sales and marketing |
|
|
2,272 |
|
|
|
2,964 |
|
|
|
4,545 |
|
|
|
6,174 |
|
Research and development |
|
|
2,285 |
|
|
|
2,650 |
|
|
|
4,659 |
|
|
|
5,061 |
|
General and
administrative |
|
|
1,391 |
|
|
|
1,891 |
|
|
|
3,199 |
|
|
|
3,741 |
|
Restructuring and other
charges |
|
|
1,123 |
|
|
|
— |
|
|
|
1,123 |
|
|
|
— |
|
|
|
$ |
7,130 |
|
|
$ |
7,600 |
|
|
$ |
13,639 |
|
|
$ |
15,130 |
|
|
EVERQUOTE, INC.BALANCE SHEET DATA |
|
|
|
June 30, |
|
|
December 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
(in thousands) |
|
Cash and cash equivalents |
|
$ |
31,048 |
|
|
$ |
30,835 |
|
Working capital |
|
|
33,154 |
|
|
|
35,567 |
|
Total assets |
|
|
145,055 |
|
|
|
156,519 |
|
Total liabilities |
|
|
39,517 |
|
|
|
49,033 |
|
Total stockholders'
equity |
|
|
105,538 |
|
|
|
107,486 |
|
|
EVERQUOTE, INC.STATEMENTS OF CASH FLOWS |
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
(in thousands) |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(13,193 |
) |
|
$ |
(3,756 |
) |
|
$ |
(15,722 |
) |
|
$ |
(9,471 |
) |
Adjustments to reconcile net
loss to net cash provided by (used in) operating
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense |
|
|
1,463 |
|
|
|
1,405 |
|
|
|
2,870 |
|
|
|
2,916 |
|
Stock-based compensation expense |
|
|
7,130 |
|
|
|
7,600 |
|
|
|
13,639 |
|
|
|
15,130 |
|
Change in fair value of contingent consideration
liabilities |
|
|
(37 |
) |
|
|
(3,780 |
) |
|
|
(150 |
) |
|
|
(4,672 |
) |
Provision for bad debt |
|
|
(21 |
) |
|
|
2 |
|
|
|
224 |
|
|
|
77 |
|
Unrealized foreign currency transaction (gains) losses |
|
|
7 |
|
|
|
(23 |
) |
|
|
16 |
|
|
|
(16 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
17,157 |
|
|
|
9,974 |
|
|
|
7,330 |
|
|
|
(999 |
) |
Prepaid expenses and other current assets |
|
|
158 |
|
|
|
240 |
|
|
|
1,867 |
|
|
|
(47 |
) |
Commissions receivable, current and non-current |
|
|
(724 |
) |
|
|
(6,044 |
) |
|
|
(129 |
) |
|
|
(11,425 |
) |
Operating lease right-of-use assets |
|
|
686 |
|
|
|
642 |
|
|
|
1,374 |
|
|
|
1,287 |
|
Other assets |
|
|
— |
|
|
|
(1 |
) |
|
|
36 |
|
|
|
(30 |
) |
Accounts payable |
|
|
(7,816 |
) |
|
|
(9,883 |
) |
|
|
(7,812 |
) |
|
|
3,413 |
|
Accrued expenses and other current liabilities |
|
|
(583 |
) |
|
|
798 |
|
|
|
269 |
|
|
|
(2,059 |
) |
Deferred revenue |
|
|
(138 |
) |
|
|
(10 |
) |
|
|
(58 |
) |
|
|
(122 |
) |
Operating lease liabilities |
|
|
(741 |
) |
|
|
(692 |
) |
|
|
(1,643 |
) |
|
|
(1,355 |
) |
Net cash provided by (used in) operating activities |
|
|
3,348 |
|
|
|
(3,528 |
) |
|
|
2,111 |
|
|
|
(7,373 |
) |
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of property and
equipment, including costs capitalized for development of
internal-use software |
|
|
(1,015 |
) |
|
|
(1,308 |
) |
|
|
(2,022 |
) |
|
|
(1,989 |
) |
Net cash used in investing activities |
|
|
(1,015 |
) |
|
|
(1,308 |
) |
|
|
(2,022 |
) |
|
|
(1,989 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from exercise of
stock options |
|
|
53 |
|
|
|
50 |
|
|
|
340 |
|
|
|
608 |
|
Proceeds from private
placement of common stock |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
15,000 |
|
Tax withholding payments
related to net share settlement |
|
|
(102 |
) |
|
|
(51 |
) |
|
|
(232 |
) |
|
|
(51 |
) |
Net cash provided by (used in) financing activities |
|
|
(49 |
) |
|
|
(1 |
) |
|
|
108 |
|
|
|
15,557 |
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash |
|
|
11 |
|
|
|
(22 |
) |
|
|
16 |
|
|
|
(27 |
) |
Net increase
(decrease) in cash, cash equivalents and
restricted cash |
|
|
2,295 |
|
|
|
(4,859 |
) |
|
|
213 |
|
|
|
6,168 |
|
Cash, cash equivalents and
restricted cash at beginning of period |
|
|
28,753 |
|
|
|
46,128 |
|
|
|
30,835 |
|
|
|
35,101 |
|
Cash, cash equivalents and
restricted cash at end of period |
|
$ |
31,048 |
|
|
$ |
41,269 |
|
|
$ |
31,048 |
|
|
$ |
41,269 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EVERQUOTE, INC.FINANCIAL AND OPERATING
METRICS
Revenue by vertical:
|
|
Three Months Ended June 30, |
|
|
Change |
|
|
|
2023 |
|
|
2022 |
|
|
% |
|
|
|
(in thousands) |
|
|
|
|
|
Automotive |
|
$ |
49,744 |
|
|
$ |
81,375 |
|
|
|
-38.9 |
% |
Other |
|
|
18,241 |
|
|
|
20,540 |
|
|
|
-11.2 |
% |
Total Revenue |
|
$ |
67,985 |
|
|
$ |
101,915 |
|
|
|
-33.3 |
% |
|
|
Six Months Ended June 30, |
|
|
Change |
|
|
|
2023 |
|
|
2022 |
|
|
% |
|
|
|
(in thousands) |
|
|
|
|
|
Automotive |
|
$ |
139,443 |
|
|
$ |
169,050 |
|
|
|
-17.5 |
% |
Other |
|
|
37,762 |
|
|
|
43,546 |
|
|
|
-13.3 |
% |
Total Revenue |
|
$ |
177,205 |
|
|
$ |
212,596 |
|
|
|
-16.6 |
% |
Other financial and non-financial metrics:
|
|
Three Months Ended June 30, |
|
|
Change |
|
|
|
2023 |
|
|
2022 |
|
|
% |
|
|
|
(in thousands) |
|
|
|
|
|
Loss from operations |
|
$ |
(13,370 |
) |
|
$ |
(3,821 |
) |
|
|
249.9 |
% |
Net loss |
|
$ |
(13,193 |
) |
|
$ |
(3,756 |
) |
|
|
251.3 |
% |
Variable Marketing Margin |
|
$ |
24,653 |
|
|
$ |
33,091 |
|
|
|
-25.5 |
% |
Adjusted EBITDA(1) |
|
$ |
(2,121 |
) |
|
$ |
1,433 |
|
|
|
-248.0 |
% |
|
|
Six Months Ended June 30, |
|
|
Change |
|
|
|
2023 |
|
|
2022 |
|
|
% |
|
|
|
(in thousands) |
|
|
|
|
|
Loss from operations |
|
$ |
(15,801 |
) |
|
$ |
(9,519 |
) |
|
|
66.0 |
% |
Net loss |
|
$ |
(15,722 |
) |
|
$ |
(9,471 |
) |
|
|
66.0 |
% |
Variable Marketing Margin |
|
$ |
60,246 |
|
|
$ |
67,355 |
|
|
|
-10.6 |
% |
Adjusted EBITDA(1) |
|
$ |
3,252 |
|
|
$ |
3,859 |
|
|
|
-15.7 |
% |
(1) |
|
Adjusted EBITDA is a non-GAAP measure.
Please see “EverQuote, Inc. Reconciliation of Non-GAAP Measures to GAAP” below for
more information. |
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 Adjusted. EBITDA as a non-GAAP financial measure.
This non-GAAP financial measure is not based on any standardized
methodology prescribed by GAAP and is not necessarily comparable to
similarly titled measures presented by other companies.
The Company defines Adjusted EBITDA as net income (loss),
excluding the impact of stock-based compensation expense;
depreciation and amortization expense; restructuring and other
charges; acquisition-related costs; legal settlement expense;
one-time severance charges; interest income; and income taxes. The
most directly comparable GAAP measure is net income (loss). The
Company monitors and presents 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
items in calculating Adjusted EBITDA can provide a useful measure
for period-to-period comparisons of EverQuote’s core operating
performance.
The Company uses Adjusted EBITDA to evaluate EverQuote’s
operating performance and trends and make planning decisions. The
Company believes
that this non-GAAP financial measure helps
identify underlying trends in EverQuote’s business that could
otherwise be masked by the effect of the items that the Company
excludes in the calculations of Adjusted EBITDA. Accordingly, the
Company believes that this financial measure provides 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
Adjusted EBITDA rather than net income (loss), which is the most
directly comparable financial measure calculated and presented in
accordance with GAAP. In addition, other companies may use other
measures to evaluate their performance, which could reduce the
usefulness of the Company’s non-GAAP financial measures as tools
for comparison.
The following table reconciles Adjusted EBITDA to net income
(loss), the most directly comparable financial measure calculated
and presented in accordance with GAAP.
|
EVERQUOTE,
INC.RECONCILIATION OF NON-GAAP MEASURES TO GAAP |
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
(in thousands) |
|
Net loss |
|
$ |
(13,193 |
) |
|
$ |
(3,756 |
) |
|
$ |
(15,722 |
) |
|
$ |
(9,471 |
) |
Stock-based compensation |
|
|
6,007 |
|
|
|
7,600 |
|
|
|
12,516 |
|
|
|
15,130 |
|
Depreciation and amortization |
|
|
1,463 |
|
|
|
1,405 |
|
|
|
2,870 |
|
|
|
2,916 |
|
Restructuring and other charges |
|
|
3,832 |
|
|
|
— |
|
|
|
3,832 |
|
|
|
— |
|
Acquisition-related costs |
|
|
(37 |
) |
|
|
(3,779 |
) |
|
|
(150 |
) |
|
|
(4,671 |
) |
Interest income |
|
|
(271 |
) |
|
|
(37 |
) |
|
|
(458 |
) |
|
|
(45 |
) |
Income tax expense |
|
|
78 |
|
|
|
— |
|
|
|
364 |
|
|
|
— |
|
Adjusted EBITDA |
|
$ |
(2,121 |
) |
|
$ |
1,433 |
|
|
$ |
3,252 |
|
|
$ |
3,859 |
|
EverQuote (NASDAQ:EVER)
Historical Stock Chart
From Aug 2024 to Sep 2024
EverQuote (NASDAQ:EVER)
Historical Stock Chart
From Sep 2023 to Sep 2024