8-K
EverQuote, Inc. (EVER)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENTREPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 4, 2020
EverQuote, Inc.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 001-38549 | 26-3101161 |
|---|---|---|
| (State or Other Jurisdiction<br><br><br>of Incorporation) | (Commission<br><br><br>File Number) | (IRS Employer<br><br><br>Identification No.) |
| 210 Broadway<br><br><br>Cambridge, Massachusetts | 02139 | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code:(855) 522-3444
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17<br>CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br><br><br>Symbol(s) | Name of each exchange<br><br><br>on which registered |
|---|---|---|
| Class A Common Stock, $0.001 par value per share | EVER | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On August 4, 2020, EverQuote, Inc. (the “Company”) issued a press release reporting financial results for the fiscal quarter ended June 30, 2020. The full text of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information contained in Item 2.02 in this Current Report on Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such a filing.
| Item 7.01 | Regulation FD Disclosure. |
|---|
On August 4, 2020, the Company posted an investor presentation to its website (www.everquote.com). A copy of the investor presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K.
The information contained in Item 7.01 in this Current Report on Form 8-K (including Exhibit 99.2) shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
|---|
(d) Exhibits
EXHIBIT INDEX
| Exhibit<br><br><br>No. | Description |
|---|---|
| 99.1 | Press release dated August 4, 2020 |
| 99.2 | Investor Presentation dated August 2020 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| EVERQUOTE, INC. | ||
|---|---|---|
| Date: August 4, 2020 | By: | /s/ David Mason |
| David Mason | ||
| Secretary and General Counsel |
EX-99.1
Exhibit 99.1
EverQuote Announces Second Quarter 2020 Financial Results
| • | Revenue Increased 41% Year-Over-Year to $78.3 Million |
|---|---|
| • | Non-Auto Insurance Revenue Increased 133% Year-Over-Year to $13.7 Million<br> |
| --- | --- |
| • | Company Announces First Acquisition to Accelerate Growth in Health Vertical |
| --- | --- |
| • | Company Raises Full Year 2020 Guidance |
| --- | --- |
CAMBRIDGE, Mass., August 4, 2020 — EverQuote, Inc. (Nasdaq: EVER), a leading online insurance marketplace, today announced financial results for the second quarter ended June 30, 2020.
“We reported strong second quarter results across all of our key financial metrics – delivering revenue growth of 41% year-over-year, variable marketing margin growth of 41% year-over-year and positive Adjusted EBITDA expansion year-over-year,” said Seth Birnbaum, CEO and Co-Founder of EverQuote. “Our thoughts continue to be with all the individuals and businesses impacted around the world by the COVID-19 pandemic. Despite unprecedented times, we continued to strengthen our team and execute on our growth levers and initiatives while delivering value for our customers. During the quarter, revenue from our non-auto insurance verticals, which includes home and renters, life, health and commercial insurance, grew 133% year-over-year. I am proud of both our outstanding team and the strength of EverQuote’s business model.”
“Today, we also announced the acquisition of Crosspointe Insurance & Financial Services, a leading health insurance agency, to accelerate growth in our health vertical and our own initiatives to offer direct to consumer agency experiences. Crosspointe is a data-driven, sales and decision support contact center that connects consumers to the highest quality healthcare insurance in a customer centric environment. This accretive acquisition positions us to significantly accelerate the growth of our health vertical, with more substantial carrier distribution and monetization potential, including a greater ability to access the $130 billion commission TAM component of the overall distribution spend in insurance.”
“Our strong business model and expansion in our non-auto verticals, combined with our experienced and talented team, has enabled us to execute on our growth initiatives and scale our business. Our team is passionate about our goal to become the **** destination for insurance customers, both consumers and providers, by delivering high value experiences and broad product selection with low friction. We are benefitting from the seismic shift of insurance online and remain committed to our mission to empower insurance shoppers to better protect life’s most important assets—their family, property, and future. Looking ahead, we are raising full year 2020 guidance and are positioned for a strong second half. I am more excited than ever about our long-term journey and believe we are well positioned to capitalize on the expanding market opportunity,” concluded Mr. Birnbaum.
Second Quarter 2020 Financial Highlights:
(All comparisons are relative to the second quarter of 2019 unless otherwise stated):
| • | Total revenue of $78.3 million, an increase of 41%. |
|---|---|
| • | Automotive insurance vertical revenue of $64.6 million, an increase of 30%. |
| --- | --- |
| • | Revenue from our other insurance verticals, which includes home and renters, life, health and commercial<br>insurance, increased 133% to $13.7 million. |
| --- | --- |
| • | Variable Marketing Margin of $23.5 million, an increase of 41%. |
| --- | --- |
| • | GAAP net loss of $2.8 million, compared to a GAAP net loss of $2.0 million. |
| --- | --- |
| • | Adjusted EBITDA of $4.0 million, compared to Adjusted EBITDA of $1.6 million. |
| --- | --- |
Second Quarter 2020 Business Highlights:
| • | The Company’s consumer traffic initiatives led to a 50% year-over-year increase in quote requests.<br> |
|---|---|
| • | More than 94% of revenue from carriers came from those who have been on our platform for more than a year.<br> |
| --- | --- |
| • | The Company obtained a deep level of integration with 66% of its carrier partners, improving the customer<br>experience. |
| --- | --- |
| • | EverQuote continues adding to its leadership team, with Thomas McDermott joining us as SVP of Health &<br>Medicare, Mike Connolly as SVP of Agency Sales and Customer Success, and Michael Aldous as VP, Insurance Data and Product Services. |
| --- | --- |
Third Quarter and Increased Full-Year 2020 Guidance:
EverQuote anticipates Revenue, Variable Marketing Margin and Adjusted EBITDA to be in the following ranges:
Third quarter 2020:
| • | Revenue of $84.0 - $86.0 million. |
|---|---|
| • | Variable Marketing Margin of $26.5 - $28.0 million. |
| --- | --- |
| • | Adjusted EBITDA in the range of $4.0 - $5.0 million. |
| --- | --- |
Full year 2020
| • | Revenue of $331.0 - $336.0 million, an increase from our previous range of $318.0 - $327.0 million<br> |
|---|---|
| • | Variable Marketing Margin of $101.0 - $104.5 million, an increase from our previous range of $96.0 -<br>$102.0 million |
| --- | --- |
| • | Adjusted EBITDA in the range of $15.0 - $17.5 million, an increase from our previous range of $12.5 -<br>$17.5 million |
| --- | --- |
With respect to the Company’s expectations under “Third Quarter and Full Year 2020 Guidance” above, the Company has not reconciled the non-GAAP measure adjusted EBITDA to the GAAP measure net loss in this press release because the Company does not provide guidance for stock-based compensation expense, depreciation and amortization expense, interest income and expense, and the provision for (benefit from) 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 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 2020 financial results at 4:30 p.m. Eastern Time today, August 4, 2020. To access the conference call, dial (877) 205-2770 for the U.S. or Canada, or (587) 502-2547 for international callers and provide conference ID 3297607. The webcast will be available live on the Investors section of the Company’s website at https://investors.everquote.com.
An audio replay of the call will also be available to investors beginning at approximately 6:30 p.m. Eastern Time on August 4, 2020, until 11:59 p.m. Eastern Time on August 11, 2020, by dialing (800) 585-8367 for the U.S. or Canada, or (416) 621-4642 for international callers, and entering passcode 3297607. In addition, an archived webcast will be available on the Investors section of the Company’s website at: https://investors.everquote.com.
SafeHarbor Statement
Any statements in this press release about future expectations, plans and prospects for EverQuote, Inc. (“EverQuote” or the “Company”), including statements about future results of operations or the future financial position of the Company, including financial targets, business strategy, plans and objectives for future operations and other statements containing the words “anticipates,” “believes,” “expects,” “plans,” and similar expressions, constitute forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: (1) the Company’s ability to attract and retain consumers and insurance providers using the Company’s marketplace; (2) the Company’s ability to maintain or increase the amount providers spend per quote request; (3) the impact on the Company and the insurance industry of the COVID-19 pandemic; (4) the effectiveness of the Company’s growth strategies and its ability to effectively manage growth; (5) the Company’s ability to maintain and build its brand; (6) the Company’s reliance on its third-party service providers; (7) 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; (8) the impact of competition in the Company’s industry and innovation by the Company’s competitors; (9) the Company’s expected use of proceeds from its initial public offering; (10) developments regarding the insurance industry and the transition to online marketing; and (11) other factors discussed in the “Risk Factors” section of the Company’s most recent Quarterly Report on Form 10-Q, 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 use data and technology to make insurance simpler, more affordable and personalized ultimately reducing cost and risk.
For more information, visit EverQuote.com and follow on Twitter @EverQuoteInsure.
EVERQUOTE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months EndedJune 30, | Six Months Ended June<br>30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |||||||||
| (in thousands except per share) | ||||||||||||
| Revenue | $ | 78,302 | $ | 55,667 | $ | 159,666 | $ | 107,900 | ||||
| Cost and operating expenses(1): | ||||||||||||
| Cost of revenue | 4,977 | 3,504 | 10,312 | 7,170 | ||||||||
| Sales and marketing | 64,561 | 45,524 | 131,065 | 90,146 | ||||||||
| Research and development | 6,966 | 4,404 | 13,425 | 9,089 | ||||||||
| General and administrative | 4,754 | 4,481 | 9,473 | 8,307 | ||||||||
| Total cost and operating expenses | 81,258 | 57,913 | 164,275 | 114,712 | ||||||||
| Loss from operations | (2,956 | ) | (2,246 | ) | (4,609 | ) | (6,812 | ) | ||||
| Other income: | ||||||||||||
| Interest income | 47 | 184 | 158 | 368 | ||||||||
| Other income | 101 | 88 | 201 | 88 | ||||||||
| Total other income | 148 | 272 | 359 | 456 | ||||||||
| Net loss | $ | (2,808 | ) | $ | (1,974 | ) | $ | (4,250 | ) | $ | (6,356 | ) |
| Net loss per share, basic and diluted | $ | (0.10 | ) | $ | (0.08 | ) | $ | (0.16 | ) | $ | (0.25 | ) |
| Weighted average common shares outstanding, basic and diluted | 27,136 | 25,579 | 26,888 | 25,437 | ||||||||
| (1) | Amounts include stock-based compensation expense, as follows: | |||||||||||
| --- | --- | |||||||||||
| Three Months EndedJune 30, | Six Months Ended June30, | |||||||||||
| --- | --- | --- | --- | --- | ||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||
| (in thousands) | ||||||||||||
| Cost of revenue | ||||||||||||
| Sales and marketing | ||||||||||||
| Research and development | ||||||||||||
| General and administrative | ||||||||||||
| 6,250 | 3,238 | 10,790 | 5,988 |
All values are in US Dollars.
EVERQUOTE, INC.
CONSOLIDATED BALANCE SHEET DATA
| June 30, | December 31, | |||
|---|---|---|---|---|
| 2020 | 2019 | |||
| (in thousands) | ||||
| Cash and cash equivalents | $ | 54,409 | $ | 46,054 |
| Working capital | 55,632 | 46,944 | ||
| Total assets | 100,831 | 91,221 | ||
| Total liabilities | 40,203 | 39,451 | ||
| Total stockholders’ equity | 60,628 | 51,770 |
EVERQUOTE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |||||||||
| (in thousands) | ||||||||||||
| Cash flows from operating activities: | ||||||||||||
| Net loss | $ | (2,808 | ) | $ | (1,974 | ) | $ | (4,250 | ) | $ | (6,356 | ) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||
| Depreciation and amortization | 594 | 524 | 1,443 | 1,005 | ||||||||
| Stock-based compensation expense | 6,250 | 3,238 | 10,790 | 5,988 | ||||||||
| Provision for (recovery of) bad debt | (4 | ) | 422 | 17 | 422 | |||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | (830 | ) | 1,287 | (4,292 | ) | (7,109 | ) | |||||
| Prepaid expenses and other current assets | 3,730 | (131 | ) | 3,636 | 27 | |||||||
| Other assets | (53 | ) | — | (57 | ) | — | ||||||
| Accounts payable | (690 | ) | (3,102 | ) | 3,293 | 1,529 | ||||||
| Accrued expenses and other current liabilities | (2,761 | ) | (687 | ) | (3,250 | ) | 353 | |||||
| Deferred revenue | 56 | 91 | 132 | 321 | ||||||||
| Other long-term liabilities | 497 | (28 | ) | 446 | (22 | ) | ||||||
| Net cash provided by (used in) operating activities | 3,981 | (360 | ) | 7,908 | (3,842 | ) | ||||||
| Cash flows from investing activities: | ||||||||||||
| Acquisition of property and equipment, including costs capitalized for development of internal-use software | (986 | ) | (885 | ) | (1,871 | ) | (1,552 | ) | ||||
| Net cash used in investing activities | (986 | ) | (885 | ) | (1,871 | ) | (1,552 | ) | ||||
| Cash flows from financing activities: | ||||||||||||
| Proceeds from exercise of stock options | 954 | 649 | 2,318 | 883 | ||||||||
| Net cash provided by financing activities | 954 | 649 | 2,318 | 883 | ||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 3,949 | (596 | ) | 8,355 | (4,511 | ) | ||||||
| Cash, cash equivalents and restricted cash at beginning of period | 50,710 | 37,969 | 46,304 | 41,884 | ||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 54,659 | $ | 37,373 | $ | 54,659 | $ | 37,373 |
EVERQUOTE, INC.
FINANCIAL AND OPERATING METRICS
Revenue by vertical:
| Three Months Ended June 30, | Change | ||||||
|---|---|---|---|---|---|---|---|
| 2020 | 2019 | % | |||||
| (in thousands) | |||||||
| Automotive | $ | 64,594 | $ | 49,788 | 29.7 | % | |
| Other | 13,708 | 5,879 | 133.2 | % | |||
| Total Revenue | $ | 78,302 | $ | 55,667 | 40.7 | % | |
| Six Months Ended June 30, | Change | ||||||
| 2020 | 2019 | % | |||||
| (in thousands) | |||||||
| Automotive | $ | 132,235 | $ | 94,802 | 39.5 | % | |
| Other | 27,431 | 13,098 | 109.4 | % | |||
| Total Revenue | $ | 159,666 | $ | 107,900 | 48.0 | % |
Other financial and non-financial metrics:
| Three Months Ended June 30, | Change | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2020 | 2019 | % | |||||||
| (in thousands) | |||||||||
| Loss from operations | $ | (2,956 | ) | $ | (2,246 | ) | 31.6 | % | |
| Net loss | $ | (2,808 | ) | $ | (1,974 | ) | 42.2 | % | |
| Quote requests | 6,777 | 4,519 | 50.0 | % | |||||
| Variable Marketing Margin | $ | 23,478 | $ | 16,702 | 40.6 | % | |||
| Adjusted EBITDA(1) | $ | 3,989 | $ | 1,604 | NM | ||||
| Six Months Ended June 30, | Change | ||||||||
| 2020 | 2019% | ||||||||
| (in thousands) | |||||||||
| Loss from operations | $ | (4,609 | ) | $ | (6,812 | ) | -32.3 | % | |
| Net loss | $ | (4,250 | ) | $ | (6,356 | ) | -33.1 | % | |
| Quote requests | 14,169 | 8,632 | 64.1 | % | |||||
| Variable Marketing Margin | $ | 47,293 | $ | 30,568 | 54.7 | % | |||
| Adjusted EBITDA(1) | $ | 7,825 | $ | 269 | NM | ||||
| (1) | Adjusted EBITDA is a non-GAAP measure. Please see<br>“EverQuote, Inc. Reconciliation of Non-GAAP Measures to GAAP” below for more information. | ||||||||
| --- | --- |
NM—Percentage is not meaningful.
EVERQUOTE, INC.
NON-GAAP FINANCIAL MEASURES
To supplement the Company’s financial statements presented in accordance with GAAP and to provide investors with additional information regarding EverQuote’s financial results, the Company has presented 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; 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, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2020 | 2019 | 2020 | 2019 | |||||||||
| (in thousands) | ||||||||||||
| Net loss | $ | (2,808 | ) | $ | (1,974 | ) | $ | (4,250 | ) | $ | (6,356 | ) |
| Stock-based compensation | 6,250 | 3,238 | 10,790 | 5,988 | ||||||||
| Depreciation and amortization | 594 | 524 | 1,443 | 1,005 | ||||||||
| Interest income | (47 | ) | (184 | ) | (158 | ) | (368 | ) | ||||
| Adjusted EBITDA | $ | 3,989 | $ | 1,604 | $ | 7,825 | $ | 269 |
Investor Relations Contact:
Brinlea Johnson
The Blueshirt Group
212-331-8424
brinlea@blueshirtgroup.com
SOURCE: EverQuote, Inc.
EX-99.2
Investor Presentation August 2020 Exhibit 99.2
Disclaimer This presentation contains forward-looking statements. All statements other than statements of historical facts contained in this presentation, including statements regarding possible or assumed future results of operations, business strategies, development plans, regulatory activities, competitive position, potential growth opportunities, & the effects of competition are forward-looking statements. These statements involve known & unknown risks, uncertainties & other important factors that may cause actual results, performance or achievements of EverQuote, Inc. (“the Company”) 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,” “expect,” “plan,” “project,” “estimate,” or “potential” or the negative of these terms or other similar expressions. The forward-looking statements in this presentation are only predictions. The Company has based these forward-looking statements largely on its current expectations & projections about future events & financial trends that it believes may affect the Company’s business, financial condition & results of operations. These forward-looking statements speak only as of the date of this presentation & are subject to a number of risks, uncertainties & assumptions, some of which cannot be predicted or quantified & some of which are beyond the Company’s control. The events & circumstances reflected in the Company’s forward-looking statements may not be achieved or occur, & actual results could differ materially from those projected in the forward-looking statements, including as a result of: (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 Company’s expected use of proceeds from its initial public offering; and (9) developments regarding the insurance industry and the transition to online marketing; (10) the effects of the COVID-19 pandemic; and (11) as a result of the risks described in the “Risk Factors” section of the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q & the other filings that the Company makes with the Securities & Exchange Commission from time to time. Moreover, new risk factors & uncertainties may emerge from time to time, & it is not possible for management to predict all risk factors & uncertainties that the Company may face. Except as required by applicable law, the Company does not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise. The Company’s presentation also contains estimates, projections, & other information concerning the Company’s industry, the Company’s business & the markets for certain of the Company’s products & services, including data regarding the estimated size of those markets. Information that is based on estimates, forecasts, projections, market research, or similar methodologies is inherently subject to uncertainties & actual events or circumstances may differ materially from events & circumstances reflected in this information. Unless otherwise expressly stated, the Company obtained this industry, business, market & other data from reports, research surveys, studies & similar data prepared by market research firms & other third parties, from industry, general publications, & from government data & similar sources. We present adjusted EBITDA as a non-GAAP measure, which is not a substitute for or superior to, other measures of financial performance prepared in accordance with U.S. GAAP. A reconciliation of adjusted EBITDA to the most directly comparable GAAP measure is included in the Appendix to these slides.
Our mission Empower insurance shoppers to better protect life's most important assets—their family, property, and future.
Key Investment Highlights Leading online insurance marketplace providing compelling benefits for consumers & insurance providers Revenue CAGR of 32%1, strong re-occurring revenue model & operating discipline resulting in expanding adjusted EBITDA and path to profitability Insurance Marketplace $146bn in annual industry advertising & distribution spend, with spend shifting online Massive Market Opportunity Unique data assets & technology, combined with machine learning, are driving network effects & competitive moat Competitive Advantage Scalable platform enabling rapid expansion into new verticals Leveraged Model Strong Financial Profile Based on compound annual growth rate 2014 – 2019.
EverQuote Company Snapshot Founded* 2011 LTM Revenue Growth 59% LTM Quote Request Growth 71% Employees 300+ IPO June 28, 2018 LTM Variable Marketing Margin Growth 69% Headquarters Cambridge, MA Auto Home & Renters Life Health Commercial Insurance Verticals * First year of revenue Last Twelve Months (”LTM”) financial information as of June 30, 2020
Large & Expanding TAM Total Digital Spending Growth: ~ 16% EVER Share: <10% Projected Annual Growth to 2024 Continued shift of consumer time spent online Continued shift of acquisition spend online Continued shift to digitization of insurance products & workflows Growth Drivers U.S. Insurance Market: Distribution & Ad Spend Total Market Growth: ~3% EVER Share: <1% Source: Stax Consulting, Inc., S&P Global Market Intelligence SNL Insurance Data, IIABA. EverQuote is not reaffirming this guidance as of the date of this presentation & makes no statement with respect this guidance other than such guidance was provided by EverQuote as of August 4, 2020. $333.5mm1 EverQuote 2020 revenue guidance midpoint $146.1bn Total Market $15.6bn Total Advertising Spend $5.6bn Total Digital Spend
2016 Digital Ad Spend by Industry (% of Total Advertising Spend) Increasing Carrier Digital Marketing Spend Source: Stax, Inc. eMarketer, Web Survey & Analysis (December 2019), comScore survey. Carriers moving to match digital spend of other industries 16+% Projected annual growth of carrier digital marketing budgets over the next 5 years 70% Percentage of carriers that expect to grow their digital marketing budgets more than 10% annually over the next five years 45%: Non-insurance average
Compelling Model Benefits Both Consumers & Providers More Efficient Acquisition for Providers Large volume of high intent consumers Target based consumer attributes tied to ROI Consumers Save Time & Money Match & connect for multiple quotes Average Savings $610 per year1 Consumers Insurance Providers Addresses the alignment challenges inherent in the fragmented insurance market Estimated average annual premium savings of $610 based on a countrywide survey between November 2018 & April 2019 of EverQuote users that reported old & new premiums.
Marketplace Consumer Journey Profile Consumer: High intent shoppers Display Email Partnerships Social SEM VPN / Other1 Gets Quotes / Buy Insurance Traffic Channels Quote Request Matched with Providers Profile Consumer: Varied Shopping Intent Arrives at the Marketplace Requests Insurance Quotes ~ 20% of Consumers that Complete a Quote Request buy Insurance Other includes organic search, direct-to-site, inbound calls, & other traffic sources. Bind-rate based on phone surveys of consumers who completed quote requests, conducted in August through December 2018 and January through April 2019.
Distribution Strength of our Marketplace 100+ carriers available via the marketplace 19 of 20 top auto insurance carriers 8,000+ agents 66% of carriers have “deep” technology integrations Based on Company data and representative of the insurance provider partners on the platform as of June 30, 2020.
Data Assets Create Significant Competitive Moat R.T.B. 300+ Acquisition Channels 182bn Cumulative Ad Impressions Served $770mm Cumulative Digital Ad Spend 80mm Cumulative Quote Requests ~2 billion Consumer Submitted Data Points Leverage proprietary machine learning & automated infrastructure Note: Cumulative figures since launch through June 30,2020 Source: Company data, Facebook, Statista, comScore & OperaMedia.
Data Science & Machine Learning Support Growth Build generalizable & scalable solutions for data problem classes across the organization Able to quickly evolve to changing market dynamics Create Operating Leverage Enhance Agility Drive Incremental VMM Design Machine Learning products to create performance lift with equal or less operational toil
Consumer Alignment Algorithms Multi-Channel Bid Automation Algorithms Optimize Conversion Rate Email Largest Multi-Provider Dataset Partnerships Data & Tech Stack Drives Growth & Leverage Minimize Cost per Acquisition Maximize Bind Rate Growth of Consumer Volume, Provider Diversity & Product Verticals
Levers Driving Future Growth Attract More Consumers Leverage Secular Shift Online Increase Provider Coverage Expand Consumer & Carrier Engagement Launch New Verticals
EverQuote to Acquire Leading Health Insurance Agency Crosspointe is a sales and decision support contact center that connects consumers to high quality health insurance in a customer-centric environment. Founded in 2008; based in Evansville, Indiana. Crosspointe has ~30 full-time employees, the majority of whom are licensed agents Scales Health Vertical Our Acquisition Rationale ** Transaction announced on August 4, 2020; expected to close in late Q3 Provides DTC Agency Experience Accelerate Organic Growth Accelerates the growth of EverQuote’s health insurance vertical with additional carrier distribution and monetization opportunities Provides Direct-to-Consumer (“DTC”) agency experience for our health vertical Complements our internally-developed DTC initiative in our life vertical Consistent with EverQuote strategy to use M&A to support and accelerate our organic growth
Proven track record of innovation & team building Our World-Class, Founder-Led Team Drawn from top universities… 150+ employees working in engineering / applied math1 Analysts, Data Scientists, Engineers working in our Engineering, Analytics, and Product & Design divisions. … & from tech & professional services powerhouses Headquartered in Cambridge, MA Seth Birnbaum CEO & Co-Founder Tomas Revesz CTO & Co-Founder
Strong performance demonstrates resiliency of our model and the insurance market Fewer auto claims as consumer stay-at-home Carriers continue to invest with a focus on high ROI, online customer acquisition Carriers Acceleration in shift to online shopping Providing an opportunity to save on non-discretionary expenses like auto insurance Consumers Agents Greater adoption by agents of digital channels Increasing demand for online consumer referrals COVID-19 is accelerating the long-term shift of insurance online Team Maintaining high productivity throughout pandemic Continuing to expand workforce, leveraging favorable market dynamics
Financial Overview
Obtained “deep” technology integrations with 66% of carriers Note: Adjusted EBITDA is a non-GAAP metric, refer to financial reconciliation for additional detail. Second Quarter 2020 Highlights Revenue increased 41% YoY to $78.3mm 41% Quote requests increased 50% YoY 50% VMM increased 41% YoY to $23.5mm 41% Achieved Adjusted EBITDA of $4.0mm Remotely onboarded several dozen employees, including 20 engineers Company raised full year guidance
Revenue ($mm) 32% CAGR 2014-2019 Track Record of Strong Growth Track Record of Strong Growth 41% Q2’20 YoY Growth
Delivering Incremental Variable Marketing Margin 44% CAGR 2014-2019 Variable Marketing Margin ($mm) Beginning in the first quarter of 2019, we revised our definition of variable marketing margin, or VMM. The VMM displayed above reflects our revised definition of VMM for all years presented. Refer to Key Metrics Definitions in the Appendix for a definition of VMM. 41% Q2’20 YoY Growth
Non-auto verticals include our home and renters, life, heath and commercial insurance verticals. Rapid Expansion into New Verticals with Scalable Model Revenue from Non-Auto Verticals ($mm) Traffic leverage: Target advertising opportunities leveraging expertise & technology Sales leverage: Ability to cross-sell traffic to existing customers 127% CAGR 2016-2019 133% YoY Growth Non-Auto Verticals Home & Renters Life Health Commercial
Driving Growth & Profitability Adjusted EBITDA ($mm) Note: Adjusted EBITDA is a non-GAAP metrics, refer to financial reconciliation for additional detail.
NASDAQ: EVER
Appendix
Key Metrics Definitions Quote Requests Quote requests are consumer-submitted website forms that contain the data required to provide an insurance quote, quote requests we receive through offline channels such as telephone calls, quote requests via our EverDrive app & quote requests submitted directly to third-party partners. As we attract more consumers to our platform & they complete quote requests, we are able to refer them to our insurance provider customers, selling more referrals while also collecting data, which we use to improve user experience, conversion rates & consumer satisfaction. Variable Marketing Margin Beginning in the first quarter of 2019, we revised our definition of variable marketing margin, or VMM, as revenue, as reported in our statements of operations & comprehensive loss, less advertising costs (a component of sales & marketing expense, as reported in our statements of operations & comprehensive loss). We use VMM to measure the efficiency of individual advertising & consumer acquisition sources & to make trade-off decisions to manage our return on advertising. Adjusted EBITDA We define adjusted EBITDA as net loss, adjusted to exclude: stock-based compensation expense, depreciation & amortization expense, legal settlement expense, and interest (income) expense, net. We monitor & present adjusted EBITDA because it is a key measure used by our management & board of directors to understand & evaluate our operating performance, to establish budgets & to develop operational goals for managing our business.
Reconciliation of Adjusted EBITDA Three Months Ended 12 Months June 30, 2020 March 31, 2020 December 31, 2019 September 30, 2019 June 30, 2019 December 31, 2019 December 31, 2018 Net income (loss) ($2,808) ($1,442) ($934) $173 ($1,974) ($7,117) ($13,791) Stock-based compensation $6,250 $4,540 $3,464 $3,269 $3,238 $12,721 $7,121 Depreciation & amortization $594 $849 $593 $588 $524 $2,186 $1,341 Legal settlement - - $1,227 - - $1,227 - Interest (income) expense, net ($47) ($111) ($133) ($168) ($184) ($669) ($121) Adjusted EBITDA $3,989 $3,836 $4,217 $3,862 $1,604 $8,348 ($5,450) ($ in Thousands)