Okay. Hello, everyone. Thank you for joining us. Welcome to the Needham Technology, Media, and Consumer Conference. My name is Mayang Tandon. I cover fintech at Needham. I'd like to welcome the CFO of Evercoat, Joseph Sanborn. Joseph, thank you for joining us.

Thank you. Great to be here.

Thank you for the invitation. We're going to talk to Evercoat today. So it's been quite a while, right? In recent days, we were talking about that offline. But maybe to start, Joseph, I think maybe a good place to start would be just the backdrop in the insurance space. You know, what are you seeing in terms of the market? It seems like the carriers are very, very profitable, and that's obviously helping your business. But maybe we could step back and talk about the industry as a whole.

So maybe I'll start with a little EverQuote. So our mission is to help insurance carriers and agents in the property and casualty space, auto and home, help them acquire consumers in the digital age to grow their business. So that's our mission. And we've been doing this since we went public in 2018. You were part of that story. So we had a bit of a wild ride. But I think when we look to where we are right now, we're in a very good spot as a business, right? We are in an industry starting this year. We have a very healthy backdrop for our carrier environment. Our business is all about helping carriers grow their business. So when you think about what does it mean for the industry, if you're a carrier CEO, you think about two things. First, you think about getting underwriting profitability. So for the past couple of years, you've had significant rate increases by carriers trying to get underwriting profitability after this unusual period coming out of COVID where supply chains and everything was broken. So they've got a rate addict. So now they have that. The shifting to the second thing is how do you grow your business, which means growing policies in force. And so as you look about that backdrop, combined ratios, which is the measure of carrier healthiness, quite low, meaning they're quite favorable. They have a lot of room to grow to invest in digital channels, broadly invest in their business. They want to grow. They're starting the year saying we want to grow policies in force. We want to gain share. We see digital channels as a way to do it because it can be more specifically targeted. And they see this as a great partner to do it. So we think it's a great backdrop. We said that in our February call. We continue to feel that as well now.

When you look at the carriers, is the growth coming broad-based, or has it been more isolated to a few carriers that are driving the growth, and there's still maybe a catch-up for some of the other carriers?

So as you think about how this cycle has evolved, it was a view where carriers were more narrow, and it's been broadening as we progress through 25 into 26. And even in Q1 going into Q2, we're seeing a further broadening of carriers. You know, a good example, we had a top five carrier prior to the downturn, so going back, you know, prior to the hard market coming from COVID, you know, so now coming back into the marketplace in Q1 and more meaningfully in Q2. That's a carrier who's really been out of digital channels entirely. It's not unique to ever quote if they pulled back from the market. They're now engaging back in that because they have the right under-ranked profit. They also, in their case, they were also making changes in their technology stack. That's a good example of a broadening out of a pretty significant carrier. You look at other carriers that we see out there, broadly the landscape is carriers want to grow their business. And obviously they have different ways of doing that, different priorities, different customer segments. That's what makes our model work really well. We help carriers really target specifically what they're trying to do. But we have that broad base. The other question I'd say when I think about breadth of carriers, we often get this sort of concept of state footprint, which is one you and I talked about. And I'd say, broadly, most states are pretty back to normal. You know, California is probably 90%, so there's a little bit of room to go. But the way I would think about that is less about it's been progressing back through the course of 25 and 26. What's interesting about that is it's less about them getting to, quote, 100% per se. It's more, I'd say, carriers are saying relative opportunity if you're a national carrier. I may be leaning in more to these states now. You know, we'll come back to those states as well. It's less about getting new rates per se. It's more about prioritizing where they're at. So I think that's another healthy dynamic as well to be broad-based.

And then, Joseph, I think you guys have talked about, I think, 20 of the top 25 carriers not being at peak spending levels. Where is that number today? What does that mean for the future?

Yeah, so when you think about a broad base of carriers, so 75, our last half we said is 80% of the top 25 are not back to peak spend. And we look at that, is that in any given quarter, I'd say, first of all, not all carriers be at peak span in a given quarter. It's important to know about our models. You think about thinking, and you know this, but for those who are new, carriers go in and out of our marketplace. It's an auction environment. And sometimes there's quarters where a carrier really wants to win, but they lost out to another carrier who was more aggressive. This Q1, for example, was a quarter that was heavily driven by pricing. So when you think about a business like ours, it could be volume-driven, more consumers. It could be price-driven by more demand. Heavily driven by price. So what you had interestingly in Q1 was more carriers participating broadly. You know, we had improvement in the breadth of carriers actually winning in the auction. But there were a number of carriers who weren't winning as much because some of their other competitors were being more aggressive. And that speaks to the market cycle we're in. Carriers are shifting from rate adequacy to how do I maintain and grow policies in force. And you're seeing some being more aggressive. But that will go up and down as quarter to quarter. So I think that speaks to us as another way to think about breadth of the industry. And the other question we sort of get is, so when we think about the top carriers broadly, how do we fill it? I'd say they're all coming back, right? I'd say they're all back in varying levels. The most notable one was the one I mentioned that was a top five prior to the downturn. They're involved now. So they're all sort of back. In any given quarter, some may be more aggressive than others, but generally, they're all hungry to grow, which is to question how aggressive they're being in a given period. what's interesting about this period is carriers are broadly healthy they want to grow the question is the landscape's changing quickly where their competitors are also wanting to grow which is a great backdrop for us but for an individual carriers trying to win share in a market that quarter I didn't make my number you know what am I gonna have to do next quarter to solve it so it

sounds like market is very healthy right now it is obviously great to hear what happens in a potential downturn if we, these inflationary concerns, there will be a lot of geopolitical stuff going on. How do you view the risk on the downside if some of these conditions

start to move the other way? Sure. So when you think about our business, you know, what are the dynamics for carriers to absorb increasing costs? When you think about inflationary prices, what that would mean in the context of our business would be underwriting costs rise. The cost of repair from an accident cost of tolling a car rise. If you look at where their combined ratios are right now, they're very, very healthy. There's a lot of room to absorb increases in pricing. So that's the first thing. I'd say they have quite a room. This is very different than, say, fall of 2022. The carriers are much more teetering on underwriting profitability. And so when they had, in that case, it was a large storm. It impacted them. And they say, and that teetering over. This is very different. Now they have wide range to absorb increasing in cost. That's one piece. The other part which is interesting in our business is when you look at the dynamic around the macro environment, there's a piece around consumers, right? So consumers, one of the things that happens with consumers with gas price, which is one of the key things that's been happening right now is rising, consumers will drive less. There's a high correlation between gas prices and driving less miles, particularly when gases go over a certain threshold price, whether it's $4 in a market, $5. Different markets around the country have sort of like a line that sort of people say once across that, wow, it's really gone up, right? I spend so much to fill my tank, it's really gone up. What you see happen is actually consumers cut back on miles driven. They actually drive less. That is a benefit to carriers because there's a high correlation between miles driven and accident frequency. So as you think about the landscape, if the world becomes, they get some inflation repairs on one side, they have ability to absorb. Flip side is, you could have an environment where consumers actually drive less when inflation is being particularly driven by energy costs. The other piece that can happen too with consumers is in a belt tightening environment, do they shop more, right? So we have that dynamic. And consumer volumes were quite elevated, you know, 23, 24, and 25. They've started to moderate a bit. It's been more pricing-driven, but you certainly could see that consumer shopping dynamic kick in as well, depending on how severe belt they tighten it. So there's an interesting balance in our business that reflects the nature of insurance that a lot of that in turn benefit us, given their

model. That's a great answer. Very helpful. Joseph, maybe to back up even more on the TAM. I think we've talked about this before. I'm assuming there's been no change, but it might be helpful for investors who are newer to your story on How to think about the market as a whole and what is sort of the inherent growth rate of the market?

Sure, so when you think about our business, right? We serve this massive industry called property and casualty insurance carriers, right? And when they think about their spend, I'll sort of take it the most narrow view and then I'll expand from there. So the most narrow view is sort of digital advertising spent. That's roughly an eight billion dollar market. If you look, you know, the studies on this are wide range, but $8 billion is sort of, you know, pretty conservative view of that market. And that $8 billion market, you know, if you look at various views out there, how that's going to grow over the next three to five years, it's somewhere between low double digits to mid-teens. So this is a broad market. What is driving that is that that $8 billion is in the context of sort of broader advertising, which is like $17, $18 billion, something like that, which directly means that digital advertising is well below 50% of total advertising. If you look at most industries out there broader financial services travel they're much higher percentage They're you know 60 70 plus percent that speaks to a tailwind that has existed since you covered us Which is insurance has been a laggard going online and it's like insurance is standing still there They're moving along but the world is moving along right so that's a tailwind that's quite strong for us That's one piece the other piece that's interesting is we we talk about not just the advertising component But we talk about the broader distribution spend which is really agent commissions and that's like a a hundred and ten million dollar roughly number is you look about and that's and you think about that hundred and ten billion as the amount the carriers currently spend Giving to agents to acquire new consumers So look your local agents your captive agent your your independent agent they give to those agents to acquire consumers and also service One thing that's been evolving in this industry over time is if you have carriers emerge or direct to consumer carriers They effectively are taking that agency that 10 to 15 percent of premium spend that equals 110 billion Bringing it in-house and so they're doing more cost-effectively the servicing and the sales And so they have more money to spend of the pie on acquiring consumers, and if you look at some of the leading digital Direct-to-consumer carriers that are digital they're very much engaged in digital The appeal is still very attractive, but they figured out how to make efficiency in these other areas So that's another tailwind to our business as well when you think of the market size And so those are the two I think about the TAM when I think sort of more near a term about growth dynamics I'd probably highlight two for you. One is when this what's referred to as a soft market cycle, right and insurance I don't know how they pick these terms, but soft market cycle is actually a positive thing What it means is they have rate adequacy and now they want to grow policies in force It typically comes up it typically lasts, you know, four or five years or probably a year or so into it There's no magic demarcation of when it begins and ends. It's like they all All the carriers have a call and say, we're in the soft market cycle. But you sort of see this trend, and it's categorized by rate adequacy, and we've had that over a couple years of getting significant rate increases. That soft market cycle lends to an environment where carriers are focused on growth, and that's where we fit in really well. So that's a benefit to us sort of in the nearer term, more narrow than the TAM, but I would say sort of a nearer term driver. And then the last one I touched on was we have this large carrier that's come back, and we think they'll be a benefit to us. And then you overlay that against broadly healthy. So that's probably for the biggest view of the TAM down to sort of nearer-term drivers.

And does it matter if the growth comes from the carriers versus the agents in terms of the way it drives your business and also the profitability on that?

So we get this question a lot, like, do you care about enterprise versus... We call it the enterprise, which is more the clicks business, online to online. Online to offline is more the... We call it a lead to an agent. We're indifferent in the sense that We want to help carriers grow successfully over time. Some carriers are actually in both channels now It used to be a world where some carriers were direct some were captive some were in the regional carriers They all in their own buck these lines and insurance have blurred so you see some of the previously purely Captive agents or captive carriers with captive agents saying how do I look at digital and some of them have really done that same way And in any given quarter they may lean one way or the other What drives it could be hey we are true? Remember this is 50 markets they run so they go this quarter We really want to focus on this part of the country and this part of the country We have an amazing agent network well-developed well in this part of the country next we want to grow in this area Maybe it's not as well developed we and then maybe or we see this based on our studies of the market direct-to-consumer Which would be more effective so we we help them work on both for us One of the opportunities which is interesting to our model is because we have both no one else out there has both of those We've built that agent business over years represents roughly a third of insurance distribution Really hard to build as you might imagine because you have to get the good housekeeping seal of approval from the big carriers Then you've got to sell to local agents 6,000 local agents not many companies have a go-to-market muscle of enterprise Consultative sales and small business sales there. They're two different things. We've been successful in doing because we've done it for a long time And that's sort of the piece that helps us think it as well

got it great answer but Joseph so when I tie all this that you talked about the growth the industry backdrop etc how do we tie that back to your billion dollar revenue target I know you've said two to three years and sure we can sort of handicap that in terms of your growth rate so we'd love to sort of hear sure

unpack that type of growth rate so in November's earnings call on November first we remember last year we put out a goal an intermediate goal of being a billion-dollar business in two to three years and at the time we made that we were tracking about, you know, 650, 675, depending which models you looked at at the time. And we finished a little bit above that for 25. What we said at the time is, in two to three years, it'll be a billion dollar revenue business. If it takes three years at the time, we said it's like 14.5% growth. If it takes two years, it's like 21, 22% growth. Fast forward, we had good Q4, good Q1, we've been a guide for Q2. You know, we still feel we're in that two to three year dynamic you know if it happens now I think if it's two years it's like given what's in the rearview mirror it's probably closer to 13 and 20% and we still feel that's the right range for our business you know what I would say about our business is we are categorized by a very healthy backdrop carriers give us insight on the next quarter but what they what they don't give us is the specificity for for every quarter there they give us a feel how they're thinking but the exact playbook of how they'll execute they haven't told us because they themselves haven't decided. They generally set parameters upon how we feel about the year and the outlook, but their execution plan will vary, and what's interesting for us is, it's varying now differently than it might have, say, four or five years ago, prior to the downturn. What is different about it is they seem to be thinking in a more durable way about spend. So just because we start the year and we have really strong combined ratios, doesn't mean we go crazy and acquire consumers aggressively, you know, and then we'll sort of pull back. You think about how do we do this in a more disdisciplined way. I remember when I said discipline in our February, people go, oh, that's a terrible world. I'm like, no, discipline is actually a good word if you think about long-term sustainability. That's what we like to think about in our business. That's what they like to think about. And so that's what we're seeing. And so what that means, though, is how exactly it'll play out. They're adjusting as they go. And as they see opportunities they're leaning in, as they see where they say, geez, we could be going faster, but you also don't. The other thing with CARES is, even though you could You know, you could go faster. You think about durability. Durability means two things. One is being flexible for how you can acquire based on changes in the marketing environment. But second is your book, the quality of your underlying underwriting book. If you build your book of business too quickly, you can have what's called adverse selection in the insurance industry, right? And so carriers are very conscious. If you start the year, acquire a big book quickly and turn it over, you are likely to have underwriting challenges and have adverse selection. So they'd rather do it in a more disciplined way over time. That's another piece about durability. So we've looked at this as still the range. I'm not going to break new news to you I'm sorry in terms of how we think about our outlook for second half We're not going to give guidance. We still feel good about that range But we feel like how exactly what we also can say about that top line is how will we manage the business, right? You will see us manage and we've said Yesterday the term margin for roughly 100 basis points for this year last year was 200 year before that we went from zero to 11.6 So we said we'd grow about 100 this year. Soon we'll be closer to 100 after so much growth. If we achieve that, it'll be like 14.6, 14.7 EBIT down margins. Q1, we were higher. We were 15.3. Q2, the guide implies, is closer to 15. The back half will probably be a little lower, but the year will average out 14.6. And so when people look at it, they go, well, what are you telling me? And I'm like, actually, there's really no insights on this, which is our business is not a locomotive that goes perfectly on time at every stop. What we know over the period of time is we know we're headed. We know they want to go there How fast or a measure they do it will remain very by carrier But we feel very good about the trajectory and we know is that revenue growth happens We're also going to driving EBITDA margin and And most importantly strong year-over-year growth in EBITDA dollars like in Q1. We had 15% revenue growth We have 30% growth in EBITDA dollars and our business is really very capital efficient that you know it was nicely converting to operating cash flow as well I've had a lot of

one-on-one you set up a good schedule so obviously I have to ask you about AI sure for me not to ask you so Jamie and you share some really valuable perspective on the earnings call but maybe for the audience it might be helpful to talk about the AI initiatives that are underway at Evercode and how does that play into your growth initiatives and also from a cost side Do you see any efficiencies that could come through?

Yeah, so we're very excited by AI at Everco. And partly it's because it's not new for us. At our core, we have been a tech and data company since our inception. You knew our founders. Our founders knew nothing about auto insurance. They knew nothing about insurance. They started the business because one of them moved from New York and couldn't get insurance, right? So that's how it started, right? We were all about how to use data and tech to acquire consumers online. And if you look at what we did, the early days of AI in our heritage was machine learning. Look at our traffic bidding platform. You know we've done that you look at our smart campaigns prime, which is a predictive AI tool Where carriers turn over their disposition data to us? We automate all the bidding for them today the majority of our carriers use that so we've been doing these things for a long time And when I think about the you know another example of efficiency I I I said this with a group and I I'll say it to you I probably should but I will which is something said well How do you feel about these companies saying they're gonna you know keep headcount flatter and they're not gonna go across? I'm like, we've done that for two years. In 2025, we more than doubled revenues and our OPEC stayed the same. And yes, we made lots of changes underneath the covers. So the headline, number of employees, the composition change, et cetera. We brought in more data scientists, more analysts, et cetera. But we've been doing those things to drive efficiency. Our ability to continue to drive improvements to our margin is not because we're not investing. We are very committed to growing this business over the long term. We think there's a chance to create not just a billion dollar company, a several billion dollar company over time given the size of this space. To do that you have to make the right investments and we've been doing that. So I'll talk maybe shifting a little bit to AI specifically some of the things given our heritage where are we looking. So I'll start first with some common misperceptions on the AI landscape right. So one of the views is that the insurance space is like the travel space and it's and the organic trap search has ended and we're in big trouble, right? So first thing is Evercourt had like 1% organic traffic, maybe 2% a good day. So we really didn't lose much, right, of organic traffic. The other piece I would say is these large language models as they're evolving, the question is what is the nature of the industry, right? Travel, all the data, for example, on travel is available widely out there. You know, hotel information, you know, flights, all that's widely available on the internet today. And there's no discernment if it's sold to yourself You have an opaqueness of the industry, meaning the carriers do not want to compete on price transparency directly That dynamic has always been part of every quote story It's as true today though with these large language models because this dynamic of opaqueness means that The data is not available widely to do that So that's one. Second is you have a very regulated industry. So when you think about insurance, it's actually not a nationally regulated business. It's unlike financial service. It's regulated by all 50 states individually. Why is that? Insurance agents are part of the fabric of Main Street of America, and those regulations are there to make sure the industry continues to exist because it serves those communities. So there's a dynamic around that as well on the regulated side. The other piece of this as well is that carriers are very much into targeting, very precisely. To my example, if I was trying to find an auto insurance, we all had the exact same car, we lived in the same building, say in the same house, we may have all very different histories of driving. I went to drive in Boston, I'm a little more aggressive, I may have a few more fender batteries than you do, you're much more careful. So all of those things factor into a very targeted view, and the last is, it's very dynamic, right? The carriers change their preferences based on all 50 markets at any given time for underwriting normal course of business hey we're heavy on this region where we want to go here in this region we have too many we want more Joseph's profile you know you got to bring those in because we pay a lot and premium so so you add those all in the mix and so those are all the things that make the industry very different what we think that means is that the the idea that our industry is going to radically change with search with larger is is not happening right to be clear as I am today that being said we're excited about where it's We think in the medium term we've observed what's going on in other parts of other industries, how search is changing. We think there's probably three ways it'll change for us, right, over time. One is it could become another source of advertising, performance advertising. So large language models are going to monetize their advertising. We're pretty good at performance marketing and adding new channels, so it could be that. The second is API. So as you think about the large language models having subscribers, they try to give an experience that's, you know, through APIs. We think there's an opportunity there when those discussions and the third is this idea of Will some type of curated search exist for maybe subscribers of large language models? That gives them a better shopping experience and a lot of that's been it hasn't really come into insurance today Although people will try to Google it really doesn't exist or try putting your favorite large language mall doesn't exist today Really, but will one day happen over time we think it might and what we've noticed in other verticals the thing that drives that behavior is content but different than the old days of content which were self-generated by companies the question might be what is community expertise is the way they think about it we have 6,000 local agents who are our customers we have 6,000 local agents who we offered started offering a digital marketing services program to 18 months ago you can see how those two could come together over time so we're excited about all of those ways to emerge we think it is limited how soon it will happen in the insurance But we're excited by it. If it happened faster, we'll be well prepared for it. The last thing I think it's important to note is insurance is the nature of the industry with the carriers themselves. One of the, we had the same comment going back to our business when we went public, which is, hey, the carriers just go directly to the sources, they won't need you, right? Why that has not evolved over time is that we're able to help those carriers be more precise in their targeting than they can do themselves. They're, if they're, to use the analogy, they cast a net pulling lots of fish, we're spear phishing because we get more information than the consumer. That dynamic will still exist in large language models because it will overlay our knowledge with theirs. But the other piece is, probably even more important to the carriers, is they're very careful with sharing disposition data. And the most sensitive disposition data is actually pricing data. You go all the way back and lifetime values. They have worked with us, you know, for over a decade. And over time, carriers, they'll say, when we start a new offering, like smart campaigns, where they have to give us their data. We launched that four or five years ago. People said carers will never trust you with that data, right? You know, and they have the if you go four or five years before that was Workflows data from our workflows pass through to carers little carers will never trust in place that doesn't come from their own people or their own agents They obviously 100% of carriers ultimately did that now in the smart campaigns the majority of carriers union And so we think one of the large language models what will be needed is the Carriers are gonna be very protective of this pricing information And if I would say they've always kept that in the vault They probably had an extra wall to that vault recently. So as they think about working with the large language models to acquire those consumers, you could see an opportunity for an EverQuote to merge to be that interface between the two. They trust us. We know how to work. We're tech savvy coming to know how to work with these folks. We're sort of in the orbit. And so I think that's really an opportunity for us. So we're really excited by it. And then in the efficiency side, I'll touch on the last thing in efficiency is we've done a lot. We sort of have, let's say, three parts of efficiencies. So I'd say, first, we have this idea of how do we continue to help our employees, right, you know, upskill our employees, you know, help them really become AI fluent is the term we use internally. We're doing a lot of training there. We've been bringing in folks to help us, and I bounce it off other experts and go, you guys are way ahead in trying to get every employee to use this. The second piece is we're rolling out AI agents in every function in the company. So I think with all the functions, all the GNA functions, every single one is putting forward a program for how they want to do it. And for us, it is driving efficiency. You know, people say, well, you're trying to cut employees. I said, what we're trying to do is make our employees more efficient. We have an analogy for employees. We call them goats. There's a long history with our founders of that. So we say what AI is doing is making them super goats. It's making them more effective so the more basic work is being automated so they can spend more time in the analysis and the value add. That's the next piece of it. And then the third piece is how we think about efficiency is is also How do we sort of step back and say all our processes? How do we continue to inject whether it's our traffic bidding engines our smart cam all the things? How do we continue to drive efficiency in those operations? So that's at least our thoughts on it You can tell we're pretty passionate about this topic

And so thank you for asking the question very helpful great perspective Joseph so the other thing I wanted to ask you about was just competition in general obviously we watched some of your You know peers or competitors out in the market Any changes that you've noticed from some of the other major players in the market when it comes to the insurance vertical?

Sure, so I'd say we have a healthy respect for all our competitors and I would say You know when we look at how we're doing I think we're doing well, right if you look at you know, it's all people ask this question Tell us about share. How are you gaining share the difficulty for investors? There's no one definitive source you can go to And say this is sure it's not like the equivalent of league tables So you can't do that, but what you can have is the carriers give feedback to us We've had examples of we get these scorecards back from them and they say, you know, we had one care tell us last quarter We became a top performer for them and the largest budget We've got examples of our competitors announcing they've lost some carriers You know, we think we've been a beneficiary of those and then we get the scorecards back about performance which is ultimately the thing that drives our success is, as we think about the long term, is how are we driving performance for our carriers and agents? The choice we made back in the summer of 23, we did this significant strategic realignment, as you know. And the choice we made is we're going to, it's supposed to be an inch deep and a mile wide, trying to do several verticals. We're going to focus. We picked the vertical. We have the most domains expertise in PNC. It also has a very large vertical. And we said, let's go deeper. And one of the things we've done over these past three years is really focus on how can we be our carriers and agents be more successful? How can we help them grow their business profitably? We've done lots of things. That mindset that was really helped us, and that in turn has allowed us to do some things we weren't doing before that I think is deepening our relationships, driving us more share, but also like creating a more value-add relationship. So like our smart campaigns. On the carrier side, more than half of our carriers are now using it. We're rolling out smart campaigns for our agents. That's early days. I think it's another example of we're trying to help them be more successful. So those are all the ways we think about share and we feel good about it, but more importantly, we're always hearing from like, how can we help you be successful? And if we get the feedback we are, that's what we feel like we're doing better and better at that. And we're thinking how to do it in a differentiated way versus trying to do the same thing as the other guy. The other thing I'll say versus competitors, which we benefit from is the focus. I think other competitors have had, there are other verticals which have had regulatory issues or have had broader challenges from a macro environment and

we are fortunate we did not have those. On the share issue is it worth asking about the penetration of the marketing budget of some of your customers is that a good proxy for growth opportunities within that customer in other words? So within a

given customer they will give us a scorecard about how we're doing in a given quarter. And it's interesting, they don't always give it at the same time every quarter. I wish they all would agree to do this at the same time so we could actually give a stat. So I've tried. I've not succeeded with our BD team. But they certainly will say how we're doing in terms of share of wallet. And that's where we feel quite good, that we're sort of making progress. Again, we don't think about it though in terms of a quarter. Some quarters will go up, some quarters will go down with a given carrier. Sometimes that's for perfectly valid reasons. Their competitors We're bidding more aggressively in our marketplace. And yes, the BD person who covers the carrier who bid down Who got lower budget? They may be saying well, what am I doing to help them from our overall health of the marketplace? I'm like I make we're agnostic who wins or loses right in a given quarter You know and and actually see some going up and down actually is encouraging That shows the health of the marketplace and vitality was seeing more of that, right? But certainly over time if you see a carrier pulling away over time you ask why and say and you try to say, what can we do to help them? And that's what we are fortunate. We have our enterprise account management team. We have this, what I would say, very much a consultative sale process that's led by a BD person, but it's a team coverage model. And it's quite sophisticated, all the way from, you know, Jamie, a CEO having a relationship with an executive counterpart to our analytics team and even some of our engineering team having counterparts with there. It's that kind of coverage model that is allowing us to help to go deeper with those carriers.

And then on the focus, so 90% auto today, 10% home. Yep, really home, home, yep. Wrenches is, yeah, it's really a home business. And you obviously, I'm going to use the word dabbled in health care that you pulled out. Do you think over time you can see yourself extending into other PNC areas?

So maybe I'll start with home. So home, I see, so a home vertical is roughly 10% of our revenues today, about $18.5 million business last quarter. We've been very pleased with home about a year ago. We put in place a new operating plan And we're next few against that plan has been executing. Well, we had 30% growth in Q1 Year-on-year we had 30% growth year-on-year in Q4, you know I'm not saying we're going to grow 30% year-on-year every quarter But I do think this is a market that will grow at a higher rate than auto in the medium term. Why do we think that highest level? auto premiums Roughly two to one so you know auto to home for PNC premiums It's 90-10 between 10 and 50 percent is a long way We don't think that everything will go through digital channels at home, but between 10 and 50 percent You know is it 30 percent 25 percent? There's a lot of room to go one of the things that helps us be successful there is our agent business That's an area where the agent consultative sale process can be really valuable, and that's a key piece for us So we see we're bullish about that As we look at other verticals Excuse me you line up such a meeting schedule. I can barely talk now like at the end of the day and Look at other verticals. We think there's other opportunities within PNC Maybe there's like small business commercial that really falls under personal lines You look at things like RV boats some of those areas could be interesting We think there's these various areas. We think they may be smaller markets, but the opportunity could be interesting To have a larger impact in the vertical and also perhaps use get data insights that help us and other helping carriers grow The business in other ways in some of the larger verticals. So we're excited about those

And then I think we have a little bit of time left Joseph So let's talk about the balance sheet cash flow and the capital allocation priorities. You obviously have a buyback program In terms of you know, other users of cash M&A that's something on the agenda or

Sure sure so better how many million dollars in cash at the end of less than that and the end is to be in good place Yeah, but very different than we talked three years ago. We're worried. Are you gonna have enough cash to survive? So we've really changed the business and I think it speaks to We have fundamentally changed this business to be a very clear cash generating business and we feel very confident about generating year and year Meaningful growth and adjusted EBITDA and high cash conversion. That's the backdrop. That means our cash position is building Really? I love these questions because before people said you're not gonna have any cash So that's so I think first as we think about capital allocation, there's three pieces First and foremost is a fortress balance sheet. We think that is really important And the reason we think that's really important is a couple things for first I would say as you think about our business, you know in the environment We're in a fortune spot relative to a lot of our competitors who don't have that position as a public company Partners want to work with people who are financially secure. They can you know That's an important piece and we are going to be there We're trying to create a business that's here to be the winner in this space long term We've got to keep part to it. The other part is just an orientation as a company I think back to 2023 when our cash was missing is there a decimal place was slightly over was over one at least Is we had opportunities to make significant investments? Where the ROI was compelling but the payback period was too long We have to be thinking as we're trying to build from a billion dollar business really thinking like what's two billion business? What's 3 billion? What are the investments we have to make to build that? Those are multi-year bets, right? We have to have can we have to have the confidence in our balance sheet to think about multi-year time rise and returns And we can do that with a strong balance. That's one second is buybacks. We did our first buyback program We announced last August We did 23 million a little over 20 million Q3 of last year and we bought some back from our Larger shareholder which was done very efficiently. We did it great price We also didn't impact the flow to the stock q1 of this year. We did open market purchases, but another 20 million. We've and we're continuing to buy into q2 You know if you look at all that we've probably back above most of that plan that plan will be done this quarter You know faster than we thought we'd have to be a one-year plan. It's what's happened a little faster We took advantage of what we saw is very very attractive prices What's important to note about that addition to the confidence we have in our business and the ability to generate cash flow is the shares How is it offsetting dilution? So we're probably offsetting eight eight and a half percent dilution with the shares We bought back that nicely offsets issuance last year and this year for employees Which I think is you know a healthy way to build a business as you go from being an IPO centric company where dilution is a little more Not as conscious of discipline We've become more disciplined in all aspects of our business about to make sure we're aligning with shareholders And that's a key one is that and so buybacks will continue to be a tool in the toolbox for us to allocate capital back to Charles. And the third is M&A. As we think about M&A, I want to start with saying we don't need it to path to a billion. We feel very confident we'll get there from organic. But we do see opportunities out there in the landscape. And if anything, those opportunities have increased over the past year. I think you know I've been. It was an M&A banker here before for a couple decades. And I look at the landscape, which is there are more private companies who are going to struggle to get opportunities. Some cases very good products very good teams, but capital structures I Dynamics for exit are not there that I think the dynamic is improving those public company valuations are coming into private company So I think about where we could grow it could be we get more products for agents and carriers help grow their business, right? And we want to be the one-stop shop for agents. Maybe products fit in there. I look at the Verticals we talked about other verticals. Maybe that's through M&A and of course is also our core business Maybe there's a new source of data that can make us some more robust that help us think about Helping carriers grow more profitably. Maybe it gets us deeper into the value chain And of course some of that is bringing in talent talent and talent is you know, we are we are very thoughtful how we recruit We have a really strong recruiting effort, but sometimes M&A can be a way to bring additional talent So those are all the ways we think about it. So capital allocation will continue across those three But I look forward to share more as we progress

very thorough I think we have a few minutes here any questions from the audience before we wrap up I think we covered a lot of ground Joseph anything I missed that you want to highlight the tail end of our fireside or yeah I guess

what I'd say is we were feeling very good about the position we have like you look at this backdrop healthy industry they want to grow digital channels are a way to do it to be targeted we're well positioned to do that when we think about our business for an investor viewpoint today we are willfully undervalued. I typically don't talk about valuation on these fireside chats, but multiple versus cash flow is quite low. And so I think I can say it and not with a straight face. And for us, I would say is what should investors take away, which is we have a model that balances top-line growth and expanding profitability. We think that is a winning combination. It's an evergreen demand for that. We're doing it against a large TAM, which I think is key. And I think The other piece I'd say is we have as a business we have evolved over this past several quarters since our changes in the summer 23 What have we done? We focused on how we're gonna help our carers and agents grow More successfully and do that in a different way from competitors How do we build a competitive open two things that add more value to help them be successful? We think that's working Second piece is as we get paid for that, you know, how do we manage it? How do we drive return to the bottom line? How do we in turn make investment function? I think we're doing that while you're seeing it in the numbers, we're seeing it in the investments, we're talking about our AI efforts, that's working.

And then how do we align interest with shareholders, right?

You know, I think I told you a story when we first made changes to our outlook, we started talking about EBITDA in the summer of 20th, most of the company didn't think that way. We were really smart folks who had grown up, whatever, quote, except here the executive team, where people weren't thinking about, everyone knows what cash flow is now, because, you know, our leadership team comp plans are tied to it. So again, we're aligning interest for shareholders. So we look at this as a value creation cycle which is big opportunity, you know, we're helping carriers need to be successful We do that. Well, we're going to drive results and we're in turn aligning our interest with the shareholders

I think that's an exciting time for us. A great way to summarize it. On that positive note, Joseph, thank you so much. Thank you You're hosting you. Thank you. Appreciate it. Pleasure. Thank you