EverQuote, Inc. (Nasdaq: EVER), a leading online insurance
marketplace, today announced financial results for the quarter
ended March 31, 2023.
“In the first quarter of 2023, we exceeded expectations across
our three primary financial KPIs, delivering revenue of $109.2
million, Variable Marketing Margin, or VMM, of $35.6 million and
improved adjusted EBITDA,” said Jayme Mendal, CEO of EverQuote.
“Our team is executing well, and our progress this quarter
demonstrates that when the auto insurance industry normalizes,
major carriers will resume their spending on consumer acquisition
and EverQuote will be well positioned to capitalize on the
opportunity.”
“As we have done throughout the auto insurance industry
downturn, we will continue to drive efficiency throughout our
operations by judiciously managing expenses, while investing in key
strategic areas to position the company for long-term growth.
However, the persistence of elevated claims losses for auto
insurance carriers, has introduced significant uncertainty with
regards to the outlook for industry marketing spend for the balance
of this year, and as a result, we are withdrawing our full year
guidance.”
First Quarter 2023 Financial Highlights:(All
comparisons are relative to the first quarter of 2022)
- Total revenue of $109.2 million, a decrease of 1%.
- Automotive insurance vertical revenue of $89.7 million, an
increase of 2%.
- Revenue from other insurance verticals, which includes home and
renters, life, and health insurance, decreased 15% to $19.5
million.
- Direct to consumer agency, or DTCA, revenue of $9.8 million, or
9% of total revenue.
- Variable Marketing Margin of $35.6 million, an increase of
4%.
- GAAP net loss improved to a loss of $2.5 million, compared to a
GAAP net loss of $5.7 million.
- Adjusted EBITDA increased to $5.4 million, compared to Adjusted
EBITDA of $2.4 million.
Second Quarter and Full Year 2023 Outlook:
Given the uncertainty of performance within the auto insurance
industry and the exact timing of when carriers may restore their
marketing budgets, the Company is withdrawing its previously
provided full year 2023 guidance.
For the second quarter 2023, EverQuote anticipates revenue,
Variable Marketing Margin and Adjusted EBITDA to be in the
following ranges:
- Revenue of $70 - $75 million.
- Variable Marketing Margin of $23 – $26 million.
- Adjusted EBITDA of ($4) – ($1) million.
With respect to the Company’s expectations under “Second Quarter
and Full Year 2023 Guidance” above, the Company has not reconciled
the non-GAAP measure Adjusted EBITDA to the GAAP measure net income
(loss) in this press release because the Company does not provide
guidance for stock-based compensation expense, depreciation and
amortization expense, acquisition-related costs, interest income,
and income taxes on a consistent basis as the Company is unable to
quantify these amounts without unreasonable efforts, which would be
required to include a reconciliation of Adjusted EBITDA to GAAP net
income (loss). In addition, the Company believes such a
reconciliation would imply a degree of precision that could be
confusing or misleading to investors.
Conference Call and Webcast Information
EverQuote will host a conference call and live webcast to
discuss its first quarter 2023 financial results at 4:30 p.m.
Eastern Time today, May 8, 2023. To access the conference call,
dial Toll Free: +1 (833) 470-1428 for the US, or follow this link:
https://www.netroadshow.com/events/global-numbers?confId=49490 for
international callers, and provide conference ID 176252. The live
webcast and replay will be available on the Investors section of
the Company’s website at https://investors.everquote.com.
Safe Harbor Statement
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,” “continues,” “will”
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 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 expected recovery of the auto
insurance industry; (9) developments regarding the insurance
industry and the transition to online marketing; (10) the possible
impacts of inflation; and (11) other factors discussed in the “Risk
Factors” section of the Company's most recent Annual Report on Form
10-K, 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, health, property, and future.
Our vision is to become the largest online source of insurance
policies by using data, technology, and knowledgeable advisors to
make insurance simpler, more affordable and personalized,
ultimately reducing cost and risk.
For more information, visit everquote.com and follow on Twitter
@everquotelife, Instagram @everquotepics, and LinkedIn
https://www.linkedin.com/company/everquote/.
Investor Relations Contact
Brinlea JohnsonThe Blueshirt Group415-489-2193
EVERQUOTE, INC.STATEMENTS OF OPERATIONS |
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
(in thousands except per share) |
|
Revenue |
|
$ |
109,220 |
|
|
$ |
110,681 |
|
Cost and operating
expenses(1): |
|
|
|
|
|
|
|
|
Cost of revenue |
|
|
5,770 |
|
|
|
5,984 |
|
Sales and marketing |
|
|
90,237 |
|
|
|
96,150 |
|
Research and development |
|
|
7,927 |
|
|
|
8,196 |
|
General and administrative |
|
|
7,830 |
|
|
|
6,941 |
|
Acquisition-related costs |
|
|
(113 |
) |
|
|
(892 |
) |
Total cost and operating expenses |
|
|
111,651 |
|
|
|
116,379 |
|
Loss from operations |
|
|
(2,431 |
) |
|
|
(5,698 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
Interest income |
|
|
187 |
|
|
|
8 |
|
Other income (expense), net |
|
|
1 |
|
|
|
(25 |
) |
Total other income (expense), net |
|
|
188 |
|
|
|
(17 |
) |
Loss before income taxes |
|
|
(2,243 |
) |
|
|
(5,715 |
) |
Income tax expense |
|
|
(286 |
) |
|
|
— |
|
Net loss |
|
$ |
(2,529 |
) |
|
$ |
(5,715 |
) |
Net loss per share, basic and
diluted |
|
$ |
(0.08 |
) |
|
$ |
(0.19 |
) |
Weighted average common shares
outstanding, basic and diluted |
|
|
32,892 |
|
|
|
30,529 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts
include stock-based compensation expense, as follows: |
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
(in thousands) |
|
Cost of revenue |
|
$ |
54 |
|
|
$ |
59 |
|
Sales and marketing |
|
|
2,273 |
|
|
|
3,210 |
|
Research and development |
|
|
2,374 |
|
|
|
2,411 |
|
General and
administrative |
|
|
1,808 |
|
|
|
1,850 |
|
|
|
$ |
6,509 |
|
|
$ |
7,530 |
|
EVERQUOTE, INC.BALANCE SHEET DATA |
|
|
March 31, |
|
|
December 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
(in thousands) |
|
Cash and cash equivalents |
|
$ |
28,753 |
|
|
$ |
30,835 |
|
Working capital |
|
|
38,606 |
|
|
|
35,567 |
|
Total assets |
|
|
160,437 |
|
|
|
156,519 |
|
Total liabilities |
|
|
48,801 |
|
|
|
49,033 |
|
Total stockholders'
equity |
|
|
111,636 |
|
|
|
107,486 |
|
EVERQUOTE, INC.STATEMENTS OF CASH FLOWS |
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
(in thousands) |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(2,529 |
) |
|
$ |
(5,715 |
) |
Adjustments to reconcile net
loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization expense |
|
|
1,407 |
|
|
|
1,511 |
|
Stock-based compensation expense |
|
|
6,509 |
|
|
|
7,530 |
|
Change in fair value of contingent consideration liabilities |
|
|
(113 |
) |
|
|
(892 |
) |
Provision for bad debt |
|
|
245 |
|
|
|
75 |
|
Unrealized foreign currency transaction losses |
|
|
9 |
|
|
|
7 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(9,827 |
) |
|
|
(10,973 |
) |
Prepaid expenses and other current assets |
|
|
1,709 |
|
|
|
(287 |
) |
Commissions receivable, current and non-current |
|
|
595 |
|
|
|
(5,381 |
) |
Operating lease right-of-use assets |
|
|
688 |
|
|
|
645 |
|
Other assets |
|
|
36 |
|
|
|
(29 |
) |
Accounts payable |
|
|
4 |
|
|
|
13,296 |
|
Accrued expenses and other current liabilities |
|
|
852 |
|
|
|
(2,857 |
) |
Deferred revenue |
|
|
80 |
|
|
|
(112 |
) |
Operating lease liabilities |
|
|
(902 |
) |
|
|
(663 |
) |
Net cash used in operating activities |
|
|
(1,237 |
) |
|
|
(3,845 |
) |
Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
Acquisition of property and
equipment, including costs capitalized for development of
internal-use software |
|
|
(1,007 |
) |
|
|
(681 |
) |
Net cash used in investing activities |
|
|
(1,007 |
) |
|
|
(681 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
Proceeds from exercise of
stock options |
|
|
287 |
|
|
|
558 |
|
Proceeds from private
placement of common stock |
|
|
— |
|
|
|
15,000 |
|
Tax withholding payments
related to net share settlement |
|
|
(130 |
) |
|
|
— |
|
Net cash provided by financing activities |
|
|
157 |
|
|
|
15,558 |
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash |
|
|
5 |
|
|
|
(5 |
) |
Net increase
(decrease) in cash, cash equivalentsand restricted
cash |
|
|
(2,082 |
) |
|
|
11,027 |
|
Cash, cash equivalents and
restricted cash at beginning of period |
|
|
30,835 |
|
|
|
35,101 |
|
Cash, cash equivalents and
restricted cash at end of period |
|
$ |
28,753 |
|
|
$ |
46,128 |
|
EVERQUOTE, INC.FINANCIAL AND OPERATING METRICS |
Revenue by
vertical: |
|
|
Three Months Ended March 31, |
|
|
Change |
|
|
|
2023 |
|
|
2022 |
|
|
% |
|
|
|
(in thousands) |
|
|
|
|
|
Automotive |
|
$ |
89,699 |
|
|
$ |
87,675 |
|
|
|
2.3 |
% |
Other |
|
|
19,521 |
|
|
|
23,006 |
|
|
|
-15.1 |
% |
Total Revenue |
|
$ |
109,220 |
|
|
$ |
110,681 |
|
|
|
-1.3 |
% |
Other financial and non-financial metrics: |
|
|
Three Months Ended March 31, |
|
|
Change |
|
|
|
2023 |
|
|
2022 |
|
|
% |
|
|
|
(in thousands) |
|
|
|
|
|
Loss from operations |
|
$ |
(2,431 |
) |
|
$ |
(5,698 |
) |
|
|
-57.3 |
% |
Net loss |
|
$ |
(2,529 |
) |
|
$ |
(5,715 |
) |
|
|
-55.7 |
% |
Variable Marketing Margin |
|
$ |
35,593 |
|
|
$ |
34,264 |
|
|
|
3.9 |
% |
Adjusted EBITDA(1) |
|
$ |
5,373 |
|
|
$ |
2,426 |
|
|
|
121.5 |
% |
(1) Adjusted EBITDA is a non-GAAP measure.
Please see “EverQuote, Inc. Reconciliation of Non-GAAP Measures to GAAP” below for
more information. |
|
To supplement the Company’s financial statements presented in
accordance with GAAP and to provide investors with additional
information regarding EverQuote’s financial results, the Company
has presented
Adjusted. EBITDA as a non-GAAP financial measure. This non-GAAP financial measure
is not based on any standardized methodology prescribed by GAAP and
is not necessarily comparable to similarly titled measures
presented by other companies.
The Company defines Adjusted EBITDA as net income (loss),
excluding the impact of stock-based compensation expense;
depreciation and amortization expense; acquisition-related
costs; interest income; and income taxes. The most directly
comparable GAAP measure is net income (loss). The Company monitors
and presents Adjusted EBITDA because it is a key measure used by
management and the board of directors to understand and evaluate
operating performance, to establish budgets and to develop
operational goals for managing EverQuote’s business. In particular,
the Company believes that excluding the impact of these items in
calculating Adjusted EBITDA can provide a useful measure
for period-to-period comparisons of EverQuote’s core
operating performance.
The Company uses Adjusted EBITDA to evaluate EverQuote’s
operating performance and trends and make planning decisions. The
Company believes that this non-GAAP financial measure
helps identify underlying trends in EverQuote’s business that could
otherwise be masked by the effect of the items that the Company
excludes in the calculations of Adjusted EBITDA. Accordingly, the
Company believes that this financial measure provides useful
information to investors and others in understanding and evaluating
EverQuote’s operating results, enhancing the overall understanding
of the Company’s past performance and future prospects.
The Company’s non-GAAP financial measures are not prepared in
accordance with GAAP and should not be considered in isolation of,
or as an alternative to, measures prepared in accordance with GAAP.
There are a number of limitations related to the use of Adjusted
EBITDA rather than net income (loss), which is the most directly
comparable financial measure calculated and presented in accordance
with GAAP. In addition, other companies may use other measures to
evaluate their performance, which could
reduce the usefulness of the Company’s non-GAAP financial measures as tools for comparison.
The following table reconciles Adjusted EBITDA to net income
(loss), the most directly comparable financial measure calculated
and presented in accordance with GAAP.
EVERQUOTE,
INC.RECONCILIATION OF NON-GAAP MEASURES TO GAAP |
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
2022 |
|
|
|
(in thousands) |
|
Net loss |
|
$ |
(2,529 |
) |
|
$ |
(5,715 |
) |
Stock-based compensation |
|
|
6,509 |
|
|
|
7,530 |
|
Depreciation and amortization |
|
|
1,407 |
|
|
|
1,511 |
|
Acquisition-related costs |
|
|
(113 |
) |
|
|
(892 |
) |
Interest income |
|
|
(187 |
) |
|
|
(8 |
) |
Income tax expense |
|
|
286 |
|
|
|
— |
|
Adjusted EBITDA |
|
$ |
5,373 |
|
|
$ |
2,426 |
|
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