EverQuote, Inc. (Nasdaq: EVER), a leading online insurance
marketplace, today announced financial results for the quarter
ended September 30, 2023.
“In the third quarter, EverQuote delivered revenue of $55.0
million, Variable Marketing Margin, or VMM, of $19.4 million, and
Adjusted EBITDA of negative $1.9 million,” said Jayme Mendal, CEO
of EverQuote. “During the quarter, we restored greater focus on our
most differentiated assets so we can accelerate the rate at which
we deliver deeper value to our customers. These assets include our
P&C insurance shopping traffic scale and technology, our local
agent network, and our proprietary data and associated data science
and machine learning capabilities.
“As we work through this challenging auto insurance market, our
team’s strong execution and proven resilience give us high
confidence that we will be well positioned when the market
recovers. EverQuote’s vision remains unchanged: to become the
largest online source of insurance policies, using data,
technology, and knowledgeable advisors to make insurance simpler,
more affordable and more personalized,” concluded Mr. Mendal.
“We have continued to focus on what we can control by taking
decisive action to judiciously manage expenses and build our
balance sheet,” said Joseph Sanborn, CFO of EverQuote. “We remain
focused on streamlining our cost structure, maintaining financial
flexibility, restoring a pattern of consistent cash generation, and
driving towards profitability.”
Third Quarter 2023 Financial Highlights:(Unless
otherwise noted, all comparisons are relative to the third quarter
of 2022. EverQuote exited the health insurance vertical at the end
of the second quarter of 2023. Revenue in our health insurance
vertical was $5.1 million in the third quarter of 2022.)
- Total revenue of $55.0 million, a decrease of 47%.
- Automotive insurance vertical revenue of $43.1 million, a
decrease of 51%.
- Revenue from home and renters insurance vertical of $10.9
million, an increase of 51%.
- VMM of $19.4 million, representing 35% of revenue.
- GAAP net loss increased to a loss of $29.2 million, compared to
a GAAP net loss of $6.5 million. The net loss includes a $19.4
million charge related to the sale of our health insurance vertical
assets.
- Adjusted EBITDA decreased to $(1.9) million, compared to
Adjusted EBITDA of $2.0 million.
- Ended the quarter with $39.0 million in cash and cash
equivalents, an increase of 26% from $31.0 million at the end of
the second quarter of 2023.
Fourth Quarter 2023 Outlook:(Revenue in our
health insurance vertical was $13.1 million in the fourth quarter
of 2022.
For the fourth quarter 2023, EverQuote anticipates revenue,
Variable Marketing Margin and Adjusted EBITDA to be in the
following ranges:
- Revenue of $47.0 - $52.0 million.
- Variable Marketing Margin of $16.5 - $18.5 million.
- Adjusted EBITDA of $(4.5) - $(2.5) million.
With respect to the Company’s expectations under “Fourth 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 third quarter 2023 financial results at 4:30 p.m.
Eastern Time today, November 6, 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
This press release contains forward-looking statements, within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements other than statements of historical fact
contained in this press release, including statements regarding our
future results of operations and financial position, business
strategy and plans, and objectives of management for future
operations, are forward-looking statements. These statements
involve known and unknown risks, uncertainties, and other important
factors that may cause our actual results, performance or
achievements to be materially different from any future results,
performance, or achievements expressed or implied by the
forward-looking statements. In some cases, you can identify
forward-looking statements by terms such as “may,” “should,”
“expects,” “might,” “plans,” “anticipates,” “could,” “intends,”
“target,” “projects,” “contemplates,” “believes,” “estimates,”
“predicts,” “potential,” “seek,” “would” or “continue,” or the
negative of these terms or other similar expressions. The
forward-looking statements in this press release are only
predictions. We have based these forward-looking statements largely
on our current expectations and projections about future events and
financial trends that we believe may affect our business, financial
condition liquidity and results of operations. Although we believe
that the expectations reflected in the forward-looking statements
are reasonable, we cannot guarantee that the future results, levels
of activity, performance or events and circumstances reflected in
the forward-looking statements will be achieved or occur. These
forward-looking statements speak only as of the date of this press
release and are subject to a number of risks, uncertainties and
assumptions described in Part I, Item 1A. Risk Factors in our
Annual Report on Form 10-K for the year ended December 31, 2022, in
our subsequent periodic filings with the Securities and Exchange
Commission and in our Quarterly Reports on Form 10-Q, particularly
in Item 1A. Risk Factors. Because forward-looking statements are
inherently subject to risks and uncertainties, some of which cannot
be predicted or quantified, you should not rely on these
forward-looking statements as predictions of future events. The
events and circumstances reflected in our forward-looking
statements may not be achieved or occur and actual results could
differ materially from those projected in the forward-looking
statements. While we may elect to update these forward-looking
statements at some point in the future, whether as a result of any
new information, future events, or otherwise, we have no current
intention of doing so except to the extent required by applicable
law. Some of the key factors that could cause actual results to
differ include: (1) our future financial performance, including our
expectations regarding our revenue, cost of revenue, variable
marketing margin, operating expenses, cash flows and ability to
achieve, and maintain, future profitability; (2) our ability to
attract and retain consumers and insurance providers using our
marketplace; (3) our dependence on our relationships with insurance
providers with no long-term contracts; (4) our reliance on a small
number of insurance providers for a significant portion of our
revenue; (5) our dependence on revenue from automotive insurance
providers for a significant portion of our revenue and those
automotive insurance providers’ exposure to risks related to the
automotive insurance industry; (6) our ability to attract consumers
searching for insurance, including through search engines, display
advertising, email and social media; (7) our ability to develop new
and enhanced products and services to attract and retain consumers
and insurance providers, and our ability to successfully monetize
them; (8) our anticipated growth and growth strategies and our
ability to effectively manage that growth; (9) our ability to
maintain and build our brand; (10) our ability to properly collect,
process, store, share, disclose and use consumer information and
other data; (11) our reliance on our third-party service providers;
(12) the impact of competition in our industry and innovation by
our competitors; (13) our ability to hire and retain necessary
qualified employees to expand our operations; (14) the impact of
our recent restructuring and anticipated costs savings and
operational efficiencies; (15) our increased reliance on acquiring
quote requests from third-party sources; (16) our ability to stay
abreast of and comply with new or modified laws and regulations
that currently apply or become applicable to our business; (17)
failure to maintain an effective system of internal controls
necessary to accurately report our financial results and prevent
fraud; and (18) the future trading prices of our Class A common
stock.
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 X
(formerly 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 September 30, |
|
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
(in thousands except per share) |
|
Revenue |
$ |
55,011 |
|
|
$ |
103,223 |
|
|
$ |
232,216 |
|
|
$ |
315,819 |
|
Cost and operating expenses(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
6,150 |
|
|
|
5,877 |
|
|
|
17,467 |
|
|
|
17,920 |
|
Sales and marketing |
|
46,505 |
|
|
|
89,098 |
|
|
|
195,537 |
|
|
|
273,102 |
|
Research and development |
|
6,270 |
|
|
|
7,832 |
|
|
|
21,647 |
|
|
|
24,273 |
|
General and administrative |
|
5,741 |
|
|
|
7,102 |
|
|
|
19,339 |
|
|
|
21,400 |
|
Restructuring and other charges |
|
19,757 |
|
|
|
— |
|
|
|
23,589 |
|
|
|
— |
|
Acquisition-related costs |
|
— |
|
|
|
(96 |
) |
|
|
(150 |
) |
|
|
(4,767 |
) |
Total cost and operating expenses |
|
84,423 |
|
|
|
109,813 |
|
|
|
277,429 |
|
|
|
331,928 |
|
Loss from operations |
|
(29,412 |
) |
|
|
(6,590 |
) |
|
|
(45,213 |
) |
|
|
(16,109 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
411 |
|
|
|
113 |
|
|
|
869 |
|
|
|
158 |
|
Other income, net |
|
20 |
|
|
|
26 |
|
|
|
5 |
|
|
|
29 |
|
Total other income, net |
|
431 |
|
|
|
139 |
|
|
|
874 |
|
|
|
187 |
|
Loss before income taxes |
|
(28,981 |
) |
|
|
(6,451 |
) |
|
|
(44,339 |
) |
|
|
(15,922 |
) |
Income tax expense |
|
(236 |
) |
|
|
— |
|
|
|
(600 |
) |
|
|
— |
|
Net loss |
$ |
(29,217 |
) |
|
$ |
(6,451 |
) |
|
$ |
(44,939 |
) |
|
$ |
(15,922 |
) |
Net loss per share, basic and diluted |
$ |
(0.87 |
) |
|
$ |
(0.20 |
) |
|
$ |
(1.36 |
) |
|
$ |
(0.51 |
) |
Weighted average common shares outstanding, basic and diluted |
|
33,549 |
|
|
|
32,008 |
|
|
|
33,146 |
|
|
|
31,357 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts
include stock-based compensation expense, as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
(in thousands) |
|
Cost of revenue |
$ |
57 |
|
|
$ |
67 |
|
|
$ |
170 |
|
|
$ |
221 |
|
Sales and marketing |
|
2,216 |
|
|
|
2,461 |
|
|
|
6,761 |
|
|
|
8,635 |
|
Research and development |
|
1,820 |
|
|
|
2,687 |
|
|
|
6,479 |
|
|
|
7,748 |
|
General and
administrative |
|
1,386 |
|
|
|
2,018 |
|
|
|
4,585 |
|
|
|
5,759 |
|
Restructuring and other
charges |
|
165 |
|
|
|
— |
|
|
|
1,288 |
|
|
|
— |
|
|
$ |
5,644 |
|
|
$ |
7,233 |
|
|
$ |
19,283 |
|
|
$ |
22,363 |
|
EVERQUOTE, INC. |
BALANCE SHEET DATA |
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
2023 |
|
|
2022 |
|
|
(in thousands) |
|
Cash and cash equivalents |
$ |
39,049 |
|
|
$ |
30,835 |
|
Working capital |
|
38,103 |
|
|
|
35,567 |
|
Total assets |
|
113,986 |
|
|
|
156,519 |
|
Total liabilities |
|
32,115 |
|
|
|
49,033 |
|
Total stockholders'
equity |
|
81,871 |
|
|
|
107,486 |
|
EVERQUOTE, INC. |
STATEMENTS OF CASH FLOWS |
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
(in thousands) |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(29,217 |
) |
|
$ |
(6,451 |
) |
|
$ |
(44,939 |
) |
|
$ |
(15,922 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense |
|
2,251 |
|
|
|
1,410 |
|
|
|
5,121 |
|
|
|
4,326 |
|
Stock-based compensation expense |
|
5,644 |
|
|
|
7,233 |
|
|
|
19,283 |
|
|
|
22,363 |
|
Loss on sale of health assets |
|
19,388 |
|
|
|
— |
|
|
|
19,388 |
|
|
|
— |
|
Impairment of right-of-use asset |
|
384 |
|
|
|
— |
|
|
|
384 |
|
|
|
— |
|
Change in fair value of contingent consideration liabilities |
|
— |
|
|
|
(95 |
) |
|
|
(150 |
) |
|
|
(4,767 |
) |
Provision for bad debt |
|
(38 |
) |
|
|
35 |
|
|
|
186 |
|
|
|
112 |
|
Unrealized foreign currency transaction gains |
|
(17 |
) |
|
|
(18 |
) |
|
|
(1 |
) |
|
|
(34 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
(63 |
) |
|
|
(3,878 |
) |
|
|
7,267 |
|
|
|
(4,877 |
) |
Prepaid expenses and other current assets |
|
770 |
|
|
|
(319 |
) |
|
|
2,637 |
|
|
|
(366 |
) |
Commissions receivable, current and non-current |
|
2,740 |
|
|
|
(4,249 |
) |
|
|
2,611 |
|
|
|
(15,674 |
) |
Operating lease right-of-use assets |
|
632 |
|
|
|
664 |
|
|
|
2,006 |
|
|
|
1,951 |
|
Other assets |
|
— |
|
|
|
11 |
|
|
|
36 |
|
|
|
(19 |
) |
Accounts payable |
|
(2,217 |
) |
|
|
4,207 |
|
|
|
(10,029 |
) |
|
|
7,620 |
|
Accrued expenses and other current liabilities |
|
(3,791 |
) |
|
|
(1,207 |
) |
|
|
(3,522 |
) |
|
|
(3,266 |
) |
Deferred revenue |
|
92 |
|
|
|
(84 |
) |
|
|
34 |
|
|
|
(206 |
) |
Operating lease liabilities |
|
(705 |
) |
|
|
(779 |
) |
|
|
(2,348 |
) |
|
|
(2,134 |
) |
Net cash used in operating activities |
|
(4,147 |
) |
|
|
(3,520 |
) |
|
|
(2,036 |
) |
|
|
(10,893 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of property and equipment, including costs capitalized
for development of internal-use software |
|
(966 |
) |
|
|
(1,230 |
) |
|
|
(2,988 |
) |
|
|
(3,219 |
) |
Proceeds from sale of health assets |
|
13,194 |
|
|
|
— |
|
|
|
13,194 |
|
|
|
— |
|
Net cash provided by (used in) investing activities |
|
12,228 |
|
|
|
(1,230 |
) |
|
|
10,206 |
|
|
|
(3,219 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from exercise of stock options |
|
— |
|
|
|
122 |
|
|
|
340 |
|
|
|
730 |
|
Proceeds from private placement of common stock |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
15,000 |
|
Tax withholding payments related to net share settlement |
|
(67 |
) |
|
|
(28 |
) |
|
|
(299 |
) |
|
|
(79 |
) |
Net cash provided by (used in) financing activities |
|
(67 |
) |
|
|
94 |
|
|
|
41 |
|
|
|
15,651 |
|
Effect of exchange rate changes on cash, cash equivalents and
restricted cash |
|
(13 |
) |
|
|
(22 |
) |
|
|
3 |
|
|
|
(49 |
) |
Net increase (decrease) in cash, cash
equivalents and restricted cash |
|
8,001 |
|
|
|
(4,678 |
) |
|
|
8,214 |
|
|
|
1,490 |
|
Cash, cash equivalents and restricted cash at beginning of
period |
|
31,048 |
|
|
|
41,269 |
|
|
|
30,835 |
|
|
|
35,101 |
|
Cash, cash equivalents and restricted cash at end of period |
$ |
39,049 |
|
|
$ |
36,591 |
|
|
$ |
39,049 |
|
|
$ |
36,591 |
|
EVERQUOTE, INC. |
FINANCIAL AND OPERATING METRICS |
|
Revenue by
vertical: |
|
|
Three Months Ended September 30, |
|
|
Change |
|
|
2023 |
|
|
2022 |
|
|
% |
|
|
(in thousands) |
|
|
|
|
|
Automotive |
$ |
43,077 |
|
|
$ |
88,150 |
|
|
|
-51.1 |
% |
Home and Renters |
|
10,889 |
|
|
|
7,191 |
|
|
|
51.4 |
% |
Other |
|
1,045 |
|
|
|
7,882 |
|
|
|
-86.7 |
% |
Total Revenue |
$ |
55,011 |
|
|
$ |
103,223 |
|
|
|
-46.7 |
% |
|
Nine Months Ended September 30, |
|
|
Change |
|
|
2023 |
|
|
2022 |
|
|
% |
|
|
(in thousands) |
|
|
|
|
|
Automotive |
$ |
182,520 |
|
|
$ |
257,200 |
|
|
|
-29.0 |
% |
Home and Renters |
|
31,068 |
|
|
|
25,292 |
|
|
|
22.8 |
% |
Other |
|
18,628 |
|
|
|
33,327 |
|
|
|
-44.1 |
% |
Total Revenue |
$ |
232,216 |
|
|
$ |
315,819 |
|
|
|
-26.5 |
% |
Other financial and non-financial metrics:
|
Three Months Ended September 30, |
|
|
Change |
|
|
2023 |
|
|
2022 |
|
|
% |
|
|
(in thousands) |
|
|
|
|
|
Loss from operations |
$ |
(29,412 |
) |
|
$ |
(6,590 |
) |
|
|
346.3 |
% |
Net loss |
$ |
(29,217 |
) |
|
$ |
(6,451 |
) |
|
|
352.9 |
% |
Variable Marketing Margin |
$ |
19,368 |
|
|
$ |
31,844 |
|
|
|
-39.2 |
% |
Adjusted EBITDA(1) |
$ |
(1,905 |
) |
|
$ |
1,983 |
|
|
|
-196.1 |
% |
|
Nine Months Ended September 30, |
|
|
Change |
|
|
2023 |
|
|
2022 |
|
|
% |
|
|
(in thousands) |
|
|
|
|
|
Loss from operations |
$ |
(45,213 |
) |
|
$ |
(16,109 |
) |
|
|
180.7 |
% |
Net loss |
$ |
(44,939 |
) |
|
$ |
(15,922 |
) |
|
|
182.2 |
% |
Variable Marketing Margin |
$ |
79,614 |
|
|
$ |
99,199 |
|
|
|
-19.7 |
% |
Adjusted EBITDA(1) |
$ |
1,347 |
|
|
$ |
5,842 |
|
|
|
-76.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
(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; 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 September 30, |
|
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
(in thousands) |
|
Net loss |
$ |
(29,217 |
) |
|
$ |
(6,451 |
) |
|
$ |
(44,939 |
) |
|
$ |
(15,922 |
) |
Stock-based compensation |
|
5,479 |
|
|
|
7,233 |
|
|
|
17,995 |
|
|
|
22,363 |
|
Depreciation and amortization |
|
2,251 |
|
|
|
1,410 |
|
|
|
5,121 |
|
|
|
4,326 |
|
Restructuring and other charges |
|
19,757 |
|
|
|
— |
|
|
|
23,589 |
|
|
|
— |
|
Acquisition-related costs |
|
— |
|
|
|
(96 |
) |
|
|
(150 |
) |
|
|
(4,767 |
) |
Interest income |
|
(411 |
) |
|
|
(113 |
) |
|
|
(869 |
) |
|
|
(158 |
) |
Income tax expense |
|
236 |
|
|
|
— |
|
|
|
600 |
|
|
|
— |
|
Adjusted EBITDA |
$ |
(1,905 |
) |
|
$ |
1,983 |
|
|
$ |
1,347 |
|
|
$ |
5,842 |
|
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