EverQuote, Inc. (Nasdaq: EVER), a leading online insurance
marketplace, today announced financial results for the fourth
quarter and year ended December 31, 2023.
“2023 was a transformative year for EverQuote. We returned to
our roots as a capital efficient digital insurance marketplace,”
said Jayme Mendal, CEO of EverQuote. “We maintained positive
Adjusted EBITDA for the year, improved our balance sheet, and our
team managed effectively through historically low carrier
demand.”
“I am pleased with our outperformance in the fourth quarter, as
we exceeded guidance across all three of our primary financial
metrics of revenue, Variable Marketing Margin, or VMM, and Adjusted
EBITDA. We entered 2024 with positive momentum, a focused team,
streamlined operations, and recent signs of an improving auto
carrier environment,” concluded Mr. Mendal.
“In 2024, we will continue to be very disciplined in managing
expenses and driving incremental operating leverage in the
business,” said Joseph Sanborn, CFO of EverQuote. “We are on track
to achieve our goal of restoring consistent positive quarterly cash
flow from operations in the first half of this year, followed by a
return to our pre-downturn Adjusted EBITDA margins in 2024.”
Fourth Quarter 2023 Highlights:(Unless
otherwise noted, all comparisons are relative to the fourth 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 $13.1 million in the fourth quarter of 2022.)
- Total revenue of $55.7 million, a decrease of 37%.
- Automotive insurance vertical revenue of $45.0 million, a
decrease of 33%.
- Revenue from home and renters insurance vertical of $9.8
million, an increase of 48%.
- VMM of $20.7 million, representing 37% of total revenue,
compared to 33%.
- GAAP net loss improved to a loss of $6.3 million, compared to a
GAAP net loss of $8.5 million.
- Adjusted EBITDA was $(0.9) million, compared to Adjusted EBITDA
of $0.1 million.
- Ended the quarter with $38.0 million in cash and cash
equivalents, an increase of 23% from $30.8 million at the end of
the fourth quarter of 2022.
Full Year 2023 Highlights:(All comparisons are
relative to the full year of 2022, which included $38.7 million
revenue in our health insurance vertical):
- Total revenue of $287.9 million (or $272.9 million excluding
revenues from our health insurance vertical, which we exited in
June 2023), a decrease of 29%.
- Automotive insurance vertical revenue of $227.5 million, a
decrease of 30%.
- Revenue from home and renters insurance vertical of $40.9
million, an increase of 28%.
- VMM of $100.3 million, representing 35% of total revenue,
compared to 32%.
- GAAP net loss increased to $51.3 million, compared to a GAAP
net loss of $24.4 million. The net loss for 2023 includes $23.6
million of restructuring and other charges, related to the sale of
our health insurance vertical assets and workforce reduction.
- Adjusted EBITDA was $0.5 million, compared to Adjusted EBITDA
of $5.9 million.
First Quarter 2024 Outlook(Revenue in
our health insurance vertical was $8.7 million in the first quarter
of 2023):
- Revenue of $78.0 - $82.0 million.
- Variable Marketing Margin of $26.0 - $28.0 million.
- Adjusted EBITDA of $3.0 - $5.0 million.
With respect to the Company’s expectations under “First Quarter
2024 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 fourth quarter and full year 2023 financial results at
4:30 p.m. Eastern Time today, February 26, 2024. 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 our annual report on Form 10-K, our
quarterly reports on Form 10-Q and our current reports on Form 8-K
as filed with the Securities and Exchange Commission (“SEC”) from
time to time. Additional information will also be set forth in the
Company's annual report on Form 10-K for the fiscal year ended
December 31, 2023, which will be filed with the SEC. 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 dependence on revenue from the
property and casualty insurance industries, and specifically
automotive insurance, and exposure to risks related to those
industries; (2) our dependence on our relationships with insurance
providers with no long-term minimum financial commitments; (3) our
reliance on a small number of insurance providers for a significant
portion of our revenue; (4) our dependence on third-party media
sources for a significant portion of visitors to our websites and
marketplace; (5) our ability to attract consumers searching for
insurance to our websites and marketplace through Internet search
engines, display advertising, social media, content-based online
advertising and other online sources; (6) any limitations
restricting our ability to market to users or collect and use data
derived from user activities; (7) risks related to cybersecurity
incidents or other network disruptions; (8) risks related to the
use of artificial intelligence; (9) our ability to develop new and
enhanced products and services to attract and retain consumers and
insurance providers, and to successfully monetize them; (10) the
impact of competition in our industry and innovation by our
competitors; (11) our ability to hire and retain necessary
qualified employees to expand our operations; (12) our ability to
stay abreast of and comply with new or modified laws and
regulations that currently apply or become applicable to our
business, including with respect to the insurance industry,
telemarketing restrictions and data privacy requirements; (13) our
ability to protect our intellectual property rights and maintain
and build our brand; (14) 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; (15) our
ability to properly collect, process, store, share, disclose and
use consumer information and other data;; and (16) the future
trading prices of our Class A common stock.
About EverQuote
EverQuote operates a leading online insurance marketplace,
connecting consumers with insurance providers. 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.
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 Group(415) 489-2193
EVERQUOTE, INC. |
STATEMENTS OF OPERATIONS |
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
(in thousands except per share) |
|
Revenue |
$ |
55,705 |
|
|
$ |
88,308 |
|
|
$ |
287,921 |
|
|
$ |
404,127 |
|
Cost and operating expenses(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
4,988 |
|
|
|
6,060 |
|
|
|
22,455 |
|
|
|
23,980 |
|
Sales and marketing |
|
44,594 |
|
|
|
76,153 |
|
|
|
240,131 |
|
|
|
349,255 |
|
Research and development |
|
5,944 |
|
|
|
7,440 |
|
|
|
27,591 |
|
|
|
31,713 |
|
General and administrative |
|
6,962 |
|
|
|
6,702 |
|
|
|
26,301 |
|
|
|
28,102 |
|
Restructuring and other charges |
|
(21 |
) |
|
|
— |
|
|
|
23,568 |
|
|
|
— |
|
Acquisition-related costs |
|
— |
|
|
|
632 |
|
|
|
(150 |
) |
|
|
(4,135 |
) |
Total cost and operating expenses |
|
62,467 |
|
|
|
96,987 |
|
|
|
339,896 |
|
|
|
428,915 |
|
Loss from operations |
|
(6,762 |
) |
|
|
(8,679 |
) |
|
|
(51,975 |
) |
|
|
(24,788 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
382 |
|
|
|
191 |
|
|
|
1,251 |
|
|
|
349 |
|
Other income (expense), net |
9 |
|
|
|
(6 |
) |
|
14 |
|
|
23 |
|
Total other income, net |
391 |
|
|
185 |
|
|
1,265 |
|
|
372 |
|
Loss before income taxes |
|
(6,371 |
) |
|
|
(8,494 |
) |
|
|
(50,710 |
) |
|
|
(24,416 |
) |
Income tax (expense) benefit |
|
23 |
|
|
|
— |
|
|
|
(577 |
) |
|
|
— |
|
Net loss |
$ |
(6,348 |
) |
|
$ |
(8,494 |
) |
|
$ |
(51,287 |
) |
|
$ |
(24,416 |
) |
Net loss per share, basic and diluted |
$ |
(0.19 |
) |
|
$ |
(0.26 |
) |
|
$ |
(1.54 |
) |
|
$ |
(0.77 |
) |
Weighted average common shares outstanding, basic and diluted |
|
33,954 |
|
|
|
32,372 |
|
|
|
33,350 |
|
|
|
31,613 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts
include stock-based compensation expense, as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
(in thousands) |
|
Cost of revenue |
$ |
49 |
|
|
$ |
60 |
|
|
$ |
219 |
|
|
$ |
281 |
|
Sales and marketing |
|
1,906 |
|
|
|
2,383 |
|
|
|
8,667 |
|
|
|
11,018 |
|
Research and development |
|
1,574 |
|
|
|
2,580 |
|
|
|
8,053 |
|
|
|
10,328 |
|
General and administrative |
|
1,284 |
|
|
|
1,600 |
|
|
|
5,869 |
|
|
|
7,359 |
|
Restructuring and other
charges |
|
— |
|
|
|
— |
|
|
|
1,288 |
|
|
|
— |
|
|
$ |
4,813 |
|
|
$ |
6,623 |
|
|
$ |
24,096 |
|
|
$ |
28,986 |
|
|
EVERQUOTE, INC. |
BALANCE SHEET DATA |
|
|
December 31, |
|
|
2023 |
|
|
2022 |
|
|
(in thousands) |
|
Cash and cash equivalents |
$ |
37,956 |
|
|
$ |
30,835 |
|
Working capital |
|
39,293 |
|
|
|
35,567 |
|
Total assets |
|
110,925 |
|
|
|
156,519 |
|
Total liabilities |
|
30,018 |
|
|
|
49,033 |
|
Total stockholders' equity |
|
80,907 |
|
|
|
107,486 |
|
|
|
|
|
|
|
|
|
EVERQUOTE, INC. |
STATEMENTS OF CASH FLOWS |
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
(in thousands) |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(6,348 |
) |
|
$ |
(8,494 |
) |
|
$ |
(51,287 |
) |
|
$ |
(24,416 |
) |
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
1,075 |
|
|
|
1,522 |
|
|
|
6,196 |
|
|
|
5,848 |
|
Stock-based compensation expense |
|
4,813 |
|
|
|
6,623 |
|
|
|
24,096 |
|
|
|
28,986 |
|
Loss on sale of health assets |
|
— |
|
|
|
— |
|
|
|
19,388 |
|
|
|
— |
|
Impairment of right-of-use asset |
|
— |
|
|
|
— |
|
|
|
384 |
|
|
|
— |
|
Change in fair value of contingent consideration liabilities |
|
— |
|
|
|
632 |
|
|
|
(150 |
) |
|
|
(4,135 |
) |
Provision for bad debt |
|
18 |
|
|
|
581 |
|
|
|
204 |
|
|
|
693 |
|
Unrealized foreign currency transaction (gains) losses |
|
22 |
|
|
|
25 |
|
|
|
21 |
|
|
|
(9 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
952 |
|
|
|
10,239 |
|
|
|
8,219 |
|
|
|
5,362 |
|
Prepaid expenses and other current assets |
|
(1,675 |
) |
|
|
(1,745 |
) |
|
|
962 |
|
|
|
(2,111 |
) |
Commissions receivable, current and non-current |
|
1,565 |
|
|
|
(8,566 |
) |
|
|
4,176 |
|
|
|
(24,240 |
) |
Operating lease right-of-use assets |
|
491 |
|
|
|
662 |
|
|
|
2,497 |
|
|
|
2,613 |
|
Other assets |
|
385 |
|
|
|
— |
|
|
|
421 |
|
|
|
(19 |
) |
Accounts payable |
|
(3,382 |
) |
|
|
(6,496 |
) |
|
|
(13,411 |
) |
|
|
1,124 |
|
Accrued expenses and other current liabilities |
|
1,979 |
|
|
|
891 |
|
|
|
(1,543 |
) |
|
|
(2,375 |
) |
Deferred revenue |
|
(29 |
) |
|
|
(23 |
) |
|
|
5 |
|
|
|
(229 |
) |
Operating lease liabilities |
|
(658 |
) |
|
|
(749 |
) |
|
|
(3,006 |
) |
|
|
(2,883 |
) |
Net cash used in operating activities |
|
(792 |
) |
|
|
(4,898 |
) |
|
|
(2,828 |
) |
|
|
(15,791 |
) |
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of property and
equipment, including costs capitalized for development of
internal-use software |
|
(852 |
) |
|
|
(1,071 |
) |
|
|
(3,840 |
) |
|
|
(4,290 |
) |
Proceeds from sale of health
assets |
|
— |
|
|
|
— |
|
|
|
13,194 |
|
|
|
— |
|
Net cash provided by (used in) investing activities |
|
(852 |
) |
|
|
(1,071 |
) |
|
|
9,354 |
|
|
|
(4,290 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from exercise of
stock options |
|
639 |
|
|
|
212 |
|
|
|
979 |
|
|
|
942 |
|
Proceeds from private
placement of common stock |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
15,000 |
|
Tax withholding payments
related to net share settlement |
|
(103 |
) |
|
|
(21 |
) |
|
|
(402 |
) |
|
|
(100 |
) |
Net cash provided by financing activities |
|
536 |
|
|
|
191 |
|
|
|
577 |
|
|
|
15,842 |
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash |
|
15 |
|
|
|
22 |
|
|
|
18 |
|
|
|
(27 |
) |
Net increase
(decrease) in cash, cash equivalents andrestricted
cash |
|
(1,093 |
) |
|
|
(5,756 |
) |
|
|
7,121 |
|
|
|
(4,266 |
) |
Cash, cash equivalents and
restricted cash at beginning of period |
|
39,049 |
|
|
|
36,591 |
|
|
|
30,835 |
|
|
|
35,101 |
|
Cash, cash equivalents and
restricted cash at end of period |
$ |
37,956 |
|
|
$ |
30,835 |
|
|
$ |
37,956 |
|
|
$ |
30,835 |
|
|
EVERQUOTE, INC. |
FINANCIAL AND OPERATING METRICS |
Revenue by
vertical: |
|
|
Three Months Ended December 31, |
|
|
Change |
|
|
2023 |
|
|
2022 |
|
|
% |
|
|
(in thousands) |
|
|
|
|
Automotive |
$ |
44,985 |
|
|
$ |
67,217 |
|
|
-33.1 |
% |
Home and Renters |
|
9,821 |
|
|
|
6,617 |
|
|
48.4 |
% |
Other |
|
899 |
|
|
|
14,474 |
|
|
-93.8 |
% |
Total Revenue |
$ |
55,705 |
|
|
$ |
88,308 |
|
|
-36.9 |
% |
|
|
Year Ended December 31, |
|
|
Change |
|
|
2023 |
|
|
2022 |
|
|
% |
|
|
(in thousands) |
|
|
|
|
Automotive |
$ |
227,505 |
|
|
$ |
324,417 |
|
|
-29.9 |
% |
Home and Renters |
|
40,889 |
|
|
|
31,909 |
|
|
28.1 |
% |
Other |
|
19,527 |
|
|
|
47,801 |
|
|
-59.1 |
% |
Total Revenue |
$ |
287,921 |
|
|
$ |
404,127 |
|
|
-28.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
Other financial and non-financial metrics:
|
Three Months Ended December 31, |
|
|
Change |
|
|
2023 |
|
|
2022 |
|
|
% |
|
|
(in thousands) |
|
|
|
|
Loss from operations |
$ |
(6,762 |
) |
|
$ |
(8,679 |
) |
|
-22.1 |
% |
Net loss |
$ |
(6,348 |
) |
|
$ |
(8,494 |
) |
|
-25.3 |
% |
Variable Marketing Margin |
$ |
20,668 |
|
|
$ |
29,059 |
|
|
-28.9 |
% |
Adjusted EBITDA(1) |
$ |
(886 |
) |
|
$ |
92 |
|
|
NM |
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
Change |
|
|
2023 |
|
|
2022 |
|
|
% |
|
|
(in thousands) |
|
|
|
|
Loss from operations |
$ |
(51,975 |
) |
|
$ |
(24,788 |
) |
|
109.7 |
% |
Net loss |
$ |
(51,287 |
) |
|
$ |
(24,416 |
) |
|
110.1 |
% |
Variable Marketing Margin |
$ |
100,282 |
|
|
$ |
128,258 |
|
|
-21.8 |
% |
Adjusted EBITDA(1) |
$ |
461 |
|
|
$ |
5,934 |
|
|
-92.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
(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 December 31, |
|
|
Year Ended December 31, |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
(in thousands) |
|
Net loss |
$ |
(6,348 |
) |
|
$ |
(8,494 |
) |
|
$ |
(51,287 |
) |
|
$ |
(24,416 |
) |
Stock-based compensation |
|
4,813 |
|
|
|
6,623 |
|
|
|
22,808 |
|
|
|
28,986 |
|
Depreciation and amortization |
|
1,075 |
|
|
|
1,522 |
|
|
|
6,196 |
|
|
|
5,848 |
|
Restructuring and other charges |
|
(21 |
) |
|
|
— |
|
|
|
23,568 |
|
|
|
— |
|
Acquisition-related costs |
|
— |
|
|
|
632 |
|
|
|
(150 |
) |
|
|
(4,135 |
) |
Interest income |
|
(382 |
) |
|
|
(191 |
) |
|
|
(1,251 |
) |
|
|
(349 |
) |
Income taxes |
|
(23 |
) |
|
|
— |
|
|
|
577 |
|
|
|
— |
|
Adjusted EBITDA |
$ |
(886 |
) |
|
$ |
92 |
|
|
$ |
461 |
|
|
$ |
5,934 |
|
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