Good afternoon. Thank you for joining us for the First Quarter 2021 EverQuote Earnings Call. With me today is Jayme Mendal, CEO of EverQuote; and John Wagner, CFO of EverQuote. During the call, we will make statements related to our business that may be considered forward-looking statements under federal securities laws, including statements concerning our financial guidance for the second quarter and full year 2021, our growth strategy, our plans to execute on our growth strategy, key initiatives, our investments in the business, the growth levers we expect to drive our business, our ability to maintain existing and acquire new customers, our recent acquisition and interest or ability to acquire other companies, our goals for integrations, and other statements regarding our plans and prospects. Forward-looking statements may be identified with words and phrases such as we expect, we believe, we intend, we anticipate, we plan, may, upcoming, and similar words and phrases. These statements reflect our views only as of today and should not be considered our views as of any other subsequent date. We specifically disclaim any obligation to update or revise these forward-looking statements, except as required by law. Forward-looking statements are not promises or guarantees of future performance and are subject to a variety of risks and uncertainties that could cause the actual results to differ materially from our expectations. For a discussion of material risks and other important factors that could affect our actual results, please refer to the material risk and other important factors and under the heading Risk Factors in our most recent annual report on Form 10-K, which is on file with the Securities and Exchange Commission and available on the Investor Relations section of our website at investor.everquote.com and on the SEC's website at sec.gov. With that, I'll turn the call over to Jayme Mendal, CEO of EverQuote.

Thank you, everyone, for joining us today. As I reflect on my first full quarter as CEO, I would first like to express my gratitude for our team who, in spite of an unexpected leadership transition and ongoing challenging circumstances due to the pandemic, has continued to execute so well. I am grateful for our late Founder and friend, Seth Birnbaum, who imparted to me a clear sense of what's possible given the enormity of the market opportunity in front of us and who prepared me to lead EverQuote's remarkable team in building what I'm increasingly confident will become an industry-changing company over the long term. EverQuote's vision is to become the largest online source of insurance policies by using data and technology to make insurance simpler, more affordable, and personalized. My confidence continues to grow in our ability to realize our vision as our team executes consistently against our long term plan. Nearly a year after drafting and several quarters into executing this plan, I am encouraged by our ability to balance consistent operational execution quarter after quarter with methodical investments in new growth platforms like our verified partner network on the consumer side of the marketplace and our direct-to-consumer agency on the distribution side. Turning to the quarter, we delivered favorable results across all key metrics in Q1. We achieved year-over-year growth in revenue and variable marketing margin, or VMM, of 28% and 32%, respectively, and generated expanding adjusted EBITDA while continuing to invest in strategic initiatives. We are proud of this performance, especially in the context of the strong first quarter of 2020. Let me provide you an update on each of our four growth levers, which include: number one, attracting more shoppers; number two, growing insurance provider coverage and budget; number three, optimizing and deepening consumer provider engagement; and number four, expanding non-auto verticals. Let me begin with our first growth lever, attracting more shoppers. As a reminder, on the traffic or consumer side of the marketplace, we have two platforms: first, our owned and operated first-party performance marketing platform; and second, our fast-growing third-party traffic platform referred to as the Verified Partner Network, or VPN, through which we provide third parties access to our insurance provider network. Investments in our traffic platforms continue to grow the volume of high intent insurance shoppers to our marketplace. In our performance marketing platform, we invested in expanding both offline and digital channels to improve our ability to target high intent insurance shoppers. In our VPN platform, we launched new products that enable third-party websites and media companies to access our extensive insurance provider network in a variety of innovative ways. Under one recently launched offering, we already have 13 verified partners who are ramping up quickly, and we have developed a robust pipeline of additional partners to be added over the balance of the year, increasing our confidence in VPN as a reliable pillar of continued traffic growth moving forward. Next, we had success in growing provider coverage and budget. We continue to add third-party marketplace providers and expand relationships with existing carriers and agents. One trend worth highlighting is the continued growth and strength of insurtech digital carriers, which have emerged as a significant segment within the marketplace. With shared DNA for using technology and data to improve the insurance shopping experience, they have been quick to adopt the full range of consumer targeting and deep integration capabilities offered by EverQuote. As a result, they are finding EverQuote to be an effective customer acquisition partner with whom to grow their business. We continue to have success growing with this segment. In Q1, digital carriers increased their spending on our platform by over 200% year-over-year. The third growth lever is optimizing and deepening consumer provider engagement. We are implementing a number of initiatives that reduce friction from the shopping experience and improve performance for providers. One key focus has been on the connection of online shoppers to local third-party agents. We are investing in new products that enable us to control the online-to-offline connection on behalf of local agents. This addresses a pain point felt by both consumers and agents. For consumers, we can deliver a more unified shopping experience and better control the outreach to them. For providers, we can deliver better performance by applying best practices and technology to optimize the process of getting a consumer quoted. In Q1, 11% of active third-party agents were enrolled in our new online-to-offline connection offering, indicating that we have significant room for growth within our existing client base. Finally, we continue to expand non-auto verticals. In Q1, our non-auto verticals continued growing fast, with revenues increasing 41% year-over-year. In our home vertical, we are seeing greater efficiency as we scale and leverage bundling opportunities, leading to a VMM percent for home that is comparable to auto insurance, our largest vertical. Within our life and health verticals, we continue to be pleased with the strong performance of Crosspointe, a health insurance agency that we acquired last fall. After delivering another strong quarter in which they exceeded their operating plan, we unified the leadership of our life and health direct-to-consumer agency operations with the Crosspointe founders, who have become integral members of our leadership team. This change will accelerate our ability to operate as a single pool of agent capacity across multiple verticals that can better respond to surges in consumer demand, such as around the open enrollment period in Q4. This change will also enable us to invest in more highly leveraged shared technology, analytics, and reporting infrastructure to drive better performance across our now unified health and life direct-to-consumer agency as it grows. Looking ahead, we remain excited about the opportunity to expand our non-auto verticals and feel confident that over time, we can grow non-auto verticals to 50% or more of our revenue. In summary, we are pleased with our Q1 performance and remain bullish on the road ahead with continued execution to our plan. Including targeted investments in our team, technology, experiences, and operational platforms, we believe that EverQuote is well positioned to become an industry-defining company as the $2 trillion insurance industry moves into the digital age. I'm energized by our progress, by the challenging work ahead, and by the privilege to pursue our vision with the amazing team that we've assembled. Thank you all again for your time. Now I'll turn the call over to John to provide more details on our financial results.

Thank you, Jayme, and good afternoon, everyone. I'll start by discussing our financial results for the first quarter and then provide guidance for the second quarter and updated guidance for our full year 2021. We're pleased to report solid first quarter 2021 results, with performance at the high end or above our guidance range for all our key financial metrics. Our revenue for the quarter was $103.8 million, an increase of 28% year-over-year and building on last year's strong growth in the comparable period. Revenue in our auto insurance vertical increased to $84.5 million, a growth rate of 25% year-over-year, reflecting our continued strong performance in a healthy auto insurance market. Revenue from our other insurance verticals, which includes home and renters, life, health, and commercial insurance, increased to $19.3 million, a growth rate of 41% year-over-year and representing 19% of revenue. Though still small in scale, our growth rate in the health vertical led the pack, reflecting the integration benefits of our Crosspointe direct-to-consumer agency acquisition. Overall, we continued to see strong demand from our insurance providers. As we emerge from COVID, carrier participation in the marketplace has continued without any notable reduction in advertising spend. Revenue from agents has also continued to grow, accounting for at least 35% of total revenue for the past five quarters, reflecting the growing participation of agents in the marketplace. In consumer acquisition, we focused on attracting increased volumes of high-intent consumers, which drove significant monetization expansion. Revenue per quote request increased 22%, while quote requests grew 4% year-over-year to $7.7 million. In Q1, our focus continued to be on delivering in-market consumers with a high propensity to shop and purchase insurance. Our emphasis on the quality of our referrals, which our providers reflect in their premium bids, is captured in our strong growth in revenue per quote request. We delivered first quarter variable marketing margin, or VMM, which we define as revenue less advertising expense, of $31.4 million, an increase of 32% year-over-year, which was at the high end of the guidance range provided last quarter. As a percentage of revenue, first quarter VMM expanded to 30%, up from 29% in Q1 of last year. Though we manage for VMM in absolute dollars and not as a percentage of revenue, we did benefit from favorable revenue per quote request, only partially offset by higher traffic costs as the market for insurance-related search advertising tightened. We anticipate VMM as a percentage of revenue at similar levels in the next couple of quarters before expanding in Q4 with the influence of open enrollment within our health direct-to-consumer agency. Turning to profitability, GAAP net loss was $3.8 million, a loss of $0.13 per share based on 28.4 million weighted average shares outstanding. We delivered adjusted EBITDA of $4.8 million or 4.6% of revenue for the first quarter, which was at the high end of the guidance range provided last quarter. Operating expenses were largely as forecasted and reflected the continued investment begun in 2020 in developing our direct-to-consumer agency and expanding our offerings in our Verified Partner Network. On the balance sheet, we ended the quarter with $46.9 million in cash and cash equivalents, reflecting $3.5 million of positive operating cash flow during the quarter. Turning to our outlook for Q2 and the balance of the year. We anticipate an increased revenue growth rate in Q2, and we have reflected this in our Q2 guidance as follows: we expect revenue to be between $101 million and $103 million, a year-over-year increase of 30% at the midpoint; we expect variable marketing margin to be between $31 million and $32 million, a year-over-year increase of 34% at the midpoint; and we expect adjusted EBITDA to be between $5 million and $6 million, a year-over-year improvement of 38% at the midpoint. Our first quarter performance reflects that we are executing and tracking well against our full year guidance. As a result, we are raising our full year revenue guidance and increasing the low end of our VMM and adjusted EBITDA guidance as follows: we expect revenue to be between $434 million and $442 million, a year-over-year increase of 26% at the midpoint and an increase from our prior guidance of between $430 million and $440 million; we expect variable marketing margin to be between $136 million and $140 million, a year-over-year increase of 27% at the midpoint and an increase from our prior guidance of between $135 million and $140 million; and we expect adjusted EBITDA of between $26 million and $30 million, a year-over-year increase of 52% at the midpoint and an increase from our previous guidance of between $25 million and $30 million. In summary, we delivered solid first quarter financial results and have commenced 2021 executing well against our plan. We are focused on our growth levers, and our early performance has positioned us well for continued growth in 2021. And with that, Jayme and I look forward to answering your questions.

John, just one question around the guidance. When I look at the back half of the year, it looks like guidance decelerates into the mid-20s despite easing comps, and then it also looks like VMM margins would contract year-over-year. Can you just provide a little further color? And then, Jayme, I guess with the success with Crosspointe and some of the direct-to-consumer initiatives, does that increase your appetite for acquisitions?

With regards to what's implied in the back half of the year, we do imply the new seasonality that we've talked about in terms of the health vertical and the fact that we would see growth there. So we have reflected growth in the back end of the year. It is well above our long-term 20% or more and it's still our third open enrollment, our second with Crosspointe. So we're being judicious in how we guide for our second major open enrollment, but it is still a strong Q4. And we do reflect higher revenue per quote request as well in the back half of the year. So we are reflecting the impact of the direct-to-consumer within health, primarily in the back half of the year.

To address your second question, the short answer is yes. We're very pleased with the integration of Crosspointe. We spoke in the last call about the performance in Q4 during the open enrollment period. It continued to perform well above plan in Q1. The general sentiment is we've probably accelerated our progress in health and Medicare by a good 12, 18, maybe 24 months through the acquisition. As we think about continuing to execute against our strategy, I think we have increasing confidence that acquisitions can serve that function and acceleration of our existing strategy, and we remain active in our efforts surveilling the market for the next opportunity.

And John, just one more, just a follow-up. Just on the VMM margins and the expansion year-over-year in Q1, what's driving that? Is that being driven more by the home and life vertical, or is that being driven by execution in autos? Yes, primarily really execution in autos. We've seen the demand in autos continue to remain strong coming into Q1. We continue to see providers willing to bid, especially for high-performing traffic. So some of the dynamics that we saw in the back half of 2020 have continued into 2021. As we head into Q2, we continue to think we'll see something similar for Q2 where we see increases in quote requests and volume in Q2, but revenue per quote request is still the larger driver of revenue growth. As we move through the year, we'll see quote requests play an increased role in the back half of the year. But really, what we're seeing for revenue per quote request is just good monetization, primarily coming from autos.

Your next question is from the line of Michael Graham with Canaccord.

I just wanted to kind of go ask another question on the revenue per quote request versus the quote request volume. And just wondered if you could share, like it's clear that you're doing some great things with your consumer traffic initiatives and bringing in higher intent consumers. Just wondering if you could give us a little more depth as to kind of how you're doing that? And then really trying to get a handle on, John, you just touched on this, but like is this divergence in growth rate something that should persist for a long time, or is it really just more of a temporary situation? And then the other somewhat related question, I just wanted to get your thoughts on is, you’ve got your new verticals now growing still much more quickly than auto. You're adding strength in newer verticals. So can you just comment on how the seasonality of the business is changing? You mentioned open enrollment a couple of times. But maybe just talk about how the seasonality of the business is changing sort of this year and next year relative to what we've seen in the past?

I'll take the first part of the question around what is driving the elevated levels of revenue per quote request. If you decompose the metric, there are two things that drive it. One is the number of connections we're able to make per consumer, and we refer to that as coverage. Number two is the value of each of those connections. Taking the first one first, our coverage is driven by adding more carriers and agents and expanding their coverage in the marketplace. Over the last year, we've seen a significant expansion of appetite, especially from our carriers and specifically that segment of digital carriers that we spoke about who have increased quite a bit over the last year. Within our agent landscape, we've also seen a substantial increase in agent demand and capacity, resulting in higher levels of coverage. With respect to the value per connection, several factors can help drive that up. Number one is sending out higher Lifetime Value (LTV) referrals. Through bundling, the deep integrations we've implemented, improved provider performance, we're enabling them to pay more for those integrated referrals. Lastly, as John mentioned, we are better aligning the way carriers bid for traffic to give them more ability to target and price based on the intent level or expected bind rate of the traffic. This allows us to target and acquire more high intent traffic and pay the right price for it while minimizing low intent traffic.

Then, Michael, I can give a little more color on the guidance and what we're implying as we move through the year. For Q2, again, we think that growth is primarily driven through revenue per quote request. But we continue to have balanced growth. There will be growth in volume of quote requests as well. As you move through the year, in Q3 and Q4, there are attainable comps from Q3 and Q4 in terms of quote requests, so you should see the volume of quote requests play a larger role. In Q4, we reference a new seasonal pattern where Q4, historically a weak quarter for P&C, will actually be a strong quarter for the health vertical with our initiatives in direct-to-consumer agency around health. We expect this to play an increasing role. You can see that in the guidance if you look at how we've guided for the year and Q2. As you roll into Q4, it's both volume and the expectation of improvement in revenue per quote request since the direct-to-consumer agency approach has a higher revenue per quote request. Generally, the gains we've seen in revenue per quote requests are sustainable, specifically, you'll see that in Q2 with additional revenue per quote request growth.

Your next question is from the line of Ron Josey with JMP Securities.

I wanted to ask a little bit more about traffic overall and realizing Q1 had the hardest comps a year and we've talked a little bit about QR and RPQR. I wanted to dive a little deeper into the verified partner network. Jayme, you mentioned a strong pipeline of the network. Just can you provide a little more details on the process here, the breakdown of the contribution to traffic growth, maybe this quarter or perhaps how you're thinking about it going forward? This is a relatively new product overall. And then as a follow-up to a prior question, Jayme, on the acquisition front, when you think about the acceleration in the business that happened in home and life, when you think about other non-auto verticals in acquisition, is this more DTOCA-type acquisitions and just different verticals or something else?

To your first question, Ron, the Verified Partner Network launched in earnest in 2019. It contributed meaningful growth in 2019 and 2020. What we're describing in the script is continued expansion of the product offerings within that platform. Taking a step back, it's important to understand what it is: there are numerous publishers, media companies, and websites that have users with elevated levels of intent for insurance. For instance, a real estate website may have users shopping for homes who are in the market for home insurance. That company may want to offer a full suite of services, but they won't go and build their own insurance provider network. They would come to EverQuote, and we would provide them access to our network. The rollout of new products entails creating new ways to make those connections. We have a healthy pipeline and expect continued material contributions to traffic volume and revenue growth as we progress through the year. Does that answer your question?

It does. Yes. Regarding the M&A question, I'm curious if D2CA is the new direction and if it could help enhance your non-auto verticals further. Additionally, how are you considering M&A strategies that could significantly advance the business, specifically in the life and health sector?

Anything that fits cleanly within our strategy, we would consider as an accelerator. DTCA checks several boxes of our strategy. It helps us expand our distribution and improve consumer-provider alignment and optimize their engagement. As such, DTCA is one category of target that would be attractive to us in this effort. There are others. As you mentioned, we're eager to continue growing our non-auto verticals. Our goal is to achieve a non-auto contribution of at least 50% of our revenue by the time we cross $1 billion in revenue. If we find other companies operating in the non-auto space, we would consider those. They don't necessarily need to be an agency; they could be traffic platforms or other businesses. If they help drive our strategy, we're open to evaluating them.

Your next question is from the line of Ralph Schackart with William Blair.

Jayme, during the prepared remarks, you talked about on the carrier side, you have not seen any reduction in spend and then gave some updated stats on the agent growth, which I think is about 35% or so for the last few quarters. As we look forward as vaccines rollout and the US focuses on reopening, do you expect the carriers to continue to divert more dollars into digital channels and marketplaces? I think there's been a broader concern within very specific verticals that verticals like insurance, which were forced to move online as the world reopens, might move those dollars back to offline. We would love your overall thoughts on that.

I think there are two forces at play. One is with the onset of COVID; carriers lost access to several acquisition channels that were previously available to them, whether that's in-person agents or sponsoring sporting events. Number two, carriers have been quite profitable. As a result of lower miles driven, they've experienced high levels of profitability and have reinvested that into customer acquisition. I can share our perspective on where these two forces will go moving forward. With respect to them shifting budget into digital channels, what came along with that was some structural investment in change to get more performance out of those channels. We saw carriers integrating with us at an accelerated rate; they provided support, training, and technology to enable their agents to get better performance from online referrals. As they see performance in channels like ours, we're not getting signals that they will divert dollars back into other channels as they open up. Therefore, we feel confident that the gains we've seen are stable and will persist. Regarding profitability, the data and qualitative demand from our carriers show a continued appetite for growth. While we will keep a close eye on things as people are vaccinated and whatever the new normal brings, all signs right now point to carrier health and continued growth mindset. Even if we get back to normal levels of driving, the impact on losses remains unclear.

Maybe one more if I could. In prior calls, you talked about investments in brand advertising and testing some new channels like TV. We'd love to get any updated thoughts on how these investments are going versus your expectations?

We continue to test. We’re finding pockets of performance, particularly in driving traffic directly into our agencies. As we progress through the year, we will optimize and see performance align with what we need, and we hope to scale some of these channels as we head into the open enrollment period in Q4.

Your next question is from the line of Aaron Kessler with Raymond James.

Maybe just following up, you talked obviously a lot last year about deeper carrier integrations, and made significant progress in 2020. Can you speak about what's left to do in terms of some integration work? Then I believe, John, you mentioned the market is tightening a bit. Can you double-click on that, what you're referencing? Was it increased competition or other factors?

I'll start with the integration piece. We've completed the journey to get carriers integrated with deep prefill for all of our direct click advertisers. Our next steps focus on bifurcating the shopping journey into two paths: the online path, for consumers who want to get quotes or purchase insurance online; and the offline path, which accounts for the majority of shoppers who eventually prefer to call for questions before buying. We're planning to continue integrating deeper online and smooth out the experience for both paths. For the online path, our goal is for the majority of consumers to land fully prefilled and/or on a quote path enabling online binding when it makes sense for specific insurance products. On the offline path, we've invested significantly in connecting consumers with local agents, creating a unified process for both consumers and providers that improves connection rates.

In terms of the higher traffic costs, I referenced that we would see specifically higher costs on search in Q1. We're seeing that as well in display. It's tough to delineate exactly where this is stemming from, but it likely reflects the strength of the insurance industry, especially in autos right now. We're generally seeing a healthy advertising landscape for insurers, especially in the auto sector, indicating demand from the carriers remains robust.

Your next question is from the line of Mayank Tandon with Needham.

I wanted to actually ask you about the ability to size what percentage of the budget you've captured from your core carriers and where that number can go over time. Also, in the context of software parlance, can you think about this in terms of land and expand within your existing carrier base and the contribution from new logos over time?

The percent of budget is a challenging question. Many of our carriers don’t express to us a defined budget. Instead, they express an 'unlimited budget' as long as we're meeting their performance targets. Therefore, it’s tough to quantify. If you consider our category in the marketplace, you might use overall revenue from various players as a proxy for these large carriers. Regarding land and expand, we’re finding that when building relationships with carriers, we have an enterprise team focused on building trust and recognizing their distribution needs, enabling us to deliver more policies that stay within profitability goals. For instance, a carrier who has success with our website traffic might want to drive more business into their call center. We would collaborate on solutions to facilitate that additional volume.

I wanted to follow up with John regarding the EBITDA goals. Could you talk about key leverage points on the OpEx line focusing on the near term? Also, what are some of the levers you have to achieve your long-term target of 20%, 25% EBITDA?

For us, profitability is a managed outcome because we can control investment levels. Our story has been one of both growth and increased profitability, where the biggest factor affecting growth is creating additional variable marketing margin dollars. With those additional dollars, we can manage how much flows to adjusted EBITDA versus operating expenses. There’s considerable leverage within our operating categories, so it boils down to balancing investment in top-line growth with maintaining profitability. When looking short and long-term, you can expect us to continue making strategic decisions about how much we invest in growth versus letting it flow to the bottom line. We aim to add 1 to 2 points of adjusted EBITDA yearly to demonstrate the path to our 20-25% long-term adjusted EBITDA target, and you’ve seen that progress reflected in our guidance.

Your next question is from the line of Doug Anmuth from JPMorgan.

This is Dae Lee on for Doug. First one I have is on the quote request growth. Is there a way to parse that between autos and non-autos? Just wondering how that's been growing from a vertical perspective? And secondly, you talked about non-autos becoming more than 50% of revenue over time. Given that you've seen success in life and health, what kind of growth do you envision within other non-auto verticals to reach the 50% plus levels?

We don't parse out the growth between autos and non-autos in quote requests. However, we are seeing growth in both, and you can expect this to be more pronounced as we approach the back half of the year with non-autos.

With respect to what's driving the growth of non-autos, you asked about specific verticals. In health and life, we expect them to support very robust growth for the long-term. We believe home will continue to grow as well. Currently, we're seeing that as we scale in home, we're hitting marginal improvements, and bundling opportunities are leading to growth patterns resembling auto insurance profitability. While we hadn’t discussed small business commercial in some time, we still see abundant opportunities. However, due to the challenges presented by COVID, our investment in that vertical hasn’t ramped up yet. We're focusing primarily on health, life, and home for future aggressive growth.

Your next question is from the line of Ben Rose with Battle Road.

Question for Jayme regarding other verticals. I think you've mentioned in the past that you believe commission fees from other verticals could exceed 50% of revenue by the end of the year. Is that currently your thinking?

I would slightly characterize that differently. I think it is possible that commission revenues could comprise the majority, surpassing 50%, within the respective verticals they exist in life and health, especially in Q4 during open enrollment. However, I'd refrain from setting a firm timeline for that.

Given the comments you've made around the home vertical, would it be correct to conclude that it's the likely next DTC marketplace you would enter?

We don't exactly think about it that way. The DTC agency addresses a specific customer need, where we lack sufficient marketplace distribution, local agents, or carriers to deliver on our customer promise. The DTCA is one tool we can use to fill those coverage gaps. In health and life, where we lacked robust distribution, that was our logical starting point. In auto and home, our third-party marketplace distribution is stronger, but there are still specific market pockets where we need coverage. Thus, we consider layering on DTCA capabilities in those segments, instead of viewing it solely through the vertical lens.

I would now like to turn the call back over to management for closing remarks.

Thank you. Thank you all again for joining us today. We’re pleased with our Q1 performance and remain optimistic regarding our outlook for the remainder of 2021 and beyond. We are at the early stages of shifting $150 billion in insurance distribution spend online. With that perspective, EverQuote is laser-focused on our vision to become the largest online source of insurance policies by using data and technology to simplify, make insurance more affordable, and personalize it. I am increasingly optimistic about our ability to consistently execute while investing methodically in new growth platforms. I am confident that with our continued execution, our team's strength, and our strategic focus, EverQuote will evolve into an industry-defining company as the $2 trillion insurance industry transitions into the digital age. Thank you all once again, and have a great evening.

That does conclude today's conference. Thank you for participating. You may now disconnect.