EVER - Earnings call 4 2023

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Operator

Thank you for standing by. My name is Eric, and I will be your conference operator today. At this time, I would like to welcome everyone to the EverQuote Fourth Quarter 2023 Earnings Call. [Operator Instructions] Thank you. I would now like to turn the call over to Brinlea Johnson, Investor Relations. ahead. go Please

Brinlea Johnson

the afternoon, Chief Full Good the to Fourth Chief is of today EverQuote's announced the Officer me Thank this Financial Officer; call XXXX and and Earnings and afternoon after issued release Year our Mendal, discussing . close. Call. Quarter With in on EverQuote's you. Jayme press welcome market Executive We'll EverQuote. results Sanborn, be Joseph

our statements that we for call, related make federal may statements our be including strategy, will industry forward-looking of and the growth the XXXX, existing plans guidance we business expectations ability the acquire investments new During the our and to customers, business, statements recovery other concerning business, and considered on execute growth insurance to statements to in auto our under quarter financial laws, key prospects. of securities the our maintain expect initiatives, our strategy our our levers plans growth regarding regarding our and our to first drive

considered of subsequent our views today as may obligation as by we law. not Forward-looking revise except believe, required such we phrases. phrases as with be words and We may, statements and and these words should we and of or These only any specifically update as our date. reflect identified to any disclaim forward-looking we statements, similar we expect, upcoming anticipate, intend, be plan, views statements

from not a actual that the are our statements guarantees could future uncertainties variety materially to to Forward-looking or and subject expectations. differ results of risks and performance promises of are cause

on to the website refer at materially and of cause report and and Factors at contained other is Investor on the to from the and our with heading quarterly the Securities material on annual on our of actual factors important discussion report our please recent SEC's risks that available most investor.everquote.com section our Exchange that Form website a in Commission XX-K under Risk file XX-Q, the Form those expectations, on could differ Relations sec.gov. results For

Finally, release during included are A issued is helpful course which to the available refer market press the investors.everquote.com. to certain was measures the turn which call, investors. today's of to will at reconciliation of the of non-GAAP Relations of non-GAAP we in Jayme. measures, financial GAAP close believe to with section website after we that, our today, it Investor on And over I'll we

Jayme Mendal

you year all XXXX Thank us for transformative EverQuote. a you, was for thank Brinlea, and today. joining

business, EBITDA carrier low to of auto managing continued maintained insurance year, a challenged and positive team demand. balance improved high We sheet Our VMM demonstrate as produced effectively strong of the revenue against record percentage through command market. a adjusted a for the our historically

the also significant completing of as digital We a marketplace, restructuring insurance our a returned capital-efficient to roots business.

a operation, in our capital insurance renters our healthy execution and which only our agency; home our and seen We extending our direct-to-consumer be streamlined core by are operational provider vertical, a on improved health expenses sheet. focused refocused marketplace. exited we grew operating efficiency, can a in we including our network, and team reduced operations P&C An XXXX consolidating insurance we accelerated balance have XX% this not marketplace. the acquisition, that our of and By we technology We within reduced example significantly headcount data but year-over-year and entered industry-leading foundation with teams, of the have advantages and P&C vertical, XXXX. expenses; customer and

carriers the expand budgets. and we auto a footprints carriers to point reactivate insurance increased have last months, our their outlook to campaigns, improving as Additionally, less profitability be seen recent appears in of for In a unfavorable signs number marketplace. several geographical

Nonetheless, discipline. heightened with operating we continue will

and sustainable falter. XXXX. recoveries carrier appears in that carrier more a broader persist we profitability, may that we We have auto possibility discount of previous volatility don't seen while the see And improving base recovery this

urgency, driven of $X and digital of that year. XX% a $XXX operating magnitude is front billion, continue billion also by the in of advertising We comprises the which of with a growing advertising per P&C us. market, opportunity excess remains at rate insurance distribution in

customer of is favoring shift carriers by consumers improving This supported online in-person their insurance the steadily shopping majority to now and funnels. digital acquisition

friction shopping accelerate believe in new our enables may ways. and in distribution distribution technology, company, continues positioned Insurance EverQuote the points to certain And online remains to the for shift this well defines new customers believe also ripe solve shift AI, insurance including We era. is as insurance as shopping disruption. digital EverQuote insurance for which for as emerge to online, we of

competitive advantages, build do in XXXX. to traffic We set of to year, quote of matching us a with data processes these enable experience personalization continue auto, across and unique enable business, and and each assets, models so. which to from deploy renters million a sophisticated bidding nearly consumer EverQuote learning on a will that which vast to insurance machine increasingly AI to of us our and ranging through effective in unique home its will provides data XX moat requests recommendations. generated marketplace aspects amount transactions the EverQuote provider We believe

broad operationally marketplace and insurance our set more This offers relatively consumers marketplace P&C more access will make to for a providers and efficient products. of EverQuote's effective EverQuote. for

some largest of carriers EverQuote which all the others carriers network marketplace insurance P&C in industry. growth, reminder, and to agents distribute a through their agent their others a has in insurance through independent notably captive profitable the pursuit products the supports local through through As directly inclusion consumers, built agents. of different most channels,

best with we online purchase go agents to point of consumers behind many insurance. local who who advantage for believe our shop continue represent to for We invest the

using more to to personalized. online of simpler, knowledgeable data, unchanged, insurance remains vision by Our and technology become largest and source advisers insurance make affordable policies the

market for XXXX, and normalize contracted, again return carriers expect While appetite conditions market conditions acquire challenging as progress begins policyholders. new in carrier a seek goal to in made we once toward of XXXX carrier the as to this and underwriting XXXX progress

believe recent the our stage a towards progress we and entered financial is the vision. more set in operations, year performance in We our time focused we than Additionally, leaner momentum for which longer-term any and rebuild memory. year in

Our serve and industry-defining team you. Thank health Joseph. call as continue will to us strength well company. enduring financial resilience now our the our turn and an we and discipline over to relentless pursuit build I'll

Joseph Sanborn

for results exceed quarter across all the quarter year I auto metrics financial VMM, our before our fourth seeing Thank We thank are the X providing adjusted we guidance for financial of start you, and of by in our of sector an marketing total full and insurance the discussing guidance all EBITDA. XXXX Jamie, currently variable joining. on quarter the for fourth and what update for you will or first and . margin, XXXX. primary revenue, and

all at challenging operating levels. stronger showed was In from Total improvement million, most prolonged were fourth and addition, level. QX by quarter our the QX, across more adjusted seasonally X which execution in metrics, spend, XX% driven deeply teams notably what QX revenues from environment. quarter-over-quarter in These strong down EBITDA results than up were by enterprise the a $XX.X is typically by continued carrier driven

revenue was year, million. $XXX.X For the full

from XXXX late the which insurance our As in vertical Revenue quarter, $XX revenues We in in from XX% former a our in approximately from relative or which increase XXXX insurance low late QX new QX, for the reminder, XXXX. revenues revenues, our of began our third modest industry downturn in since total vertical. representing summer was saw $XX a announced million vertical million excluding represent health is of health the auto point auto June, insurance to is EverQuote $XXX.X the revenue. of a year of in auto XX% of full full million exit revenues auto insurance vertical period. Revenue year

revenue XX% June in as are a focused includes benefit million XX%, exit Beginning our and was and in million, leadership vertical, from principal we full of Revenues in in insurance which this for a QX, year year-over-year Health auto of was the the X year-over-year home result verticals: nonauto insurance, highlighting our XXXX. $X.X QX, on XXXX, during from increase of home dedicated of and renters. insurance vertical increase primary reporting renters a $XX.X

for and for the XX.X% million VMM was of full million revenue record driven for as percentage quarter year. the year, annual and quarter high quarterly of primary $XX.X X and was fourth VMM $XXX.X full XX.X% a a fourth by the for factors.

well First, environment. adapting our to our continue in operations traffic teams volatile execute a to

to developing Second, processes our acquire high-intent to leverage significant technology yield continuing data our is results. consumers to investment in better proprietary and

environment. finally, actions relatively strategic to benefited and is a generating more This to realign results. operations our is evidence And from favorable take focus our we that decision advertising further

the and expenses line. to Turning operating bottom

We we leverage. to very driving We year, we in we disciplined model began a operating ended with more when period. and took be our operating efficient significantly the managing than the given incremental XXXX expenses substantial during actions operations had continue last streamline to

For quarter first million operating noncash of other excludes XXXX. quarter below or the the which context, cash $XX.X and in expenses, charges nearly onetime are certain XX% fourth

a $XX.X sale million, net the nearly actions consists for summer, significant workforce former year, workforce. health related of last net which XXX and the to million, from our year. million current $XX.X in restructuring employees, loss Our this and of $X.X GAAP approximately XX% our include loss took charge last and exit In vertical included which by fourth of the was down a we reduction GAAP was insurance time quarter,

for full addition, and the seen Adjusted operating million of the for past positive EBITDA level negative loss the year flow In million expense $X.X stock net X we fourth cash which comp is $X.X million lowest full year. over had negative quarter. in We quarter the $XX.X annual million ongoing was have years. fourth the includes $X.X for

adjusted health upfront the be growth. remaining operating to forward, adjustments. operations, normal capital we scale investment With for the requires which working cash close exit cash flow of and our will DTCA expect again subject EBITDA significant from vertical that proxy going the to a insurance down drive

the The company $XX XXXX. million and equivalents, ended of cash QX $XX.X from in at end with cash up million

have $XX of capital million working undrawn In a addition, line we credit.

facility, have no outstanding to other We debt. draw on have no the plans we and

to provide an auto I guidance, in what the seeing as turning industry update we insurance to on start want year. Before we this are

their comments carrier they made beginning have wanting insurers This the for also meaningful strong Based many indicated our to to last fall more us auto our our Many insurers new year, consumers to discussions, led that marketplace. profitability. acquiring this reiterated more with have return underwriting to towards progress of of company desired from levels on of has XXXX. partners growth-oriented in our achieving mindset return a to start to recent

careful and this could sustainable time different being considerable much with more not acquisition customer are new that around. could which auto recovery rapidly starting the do quickly their recognize, restore to as return many jeopardize too and the change by to work are carriers their to that be cautiously optimistic to year past outlook desire a over underwriting We balancing positive conditions We this are encouraged too quarters several however, will profitability.

our in posture they relative taking example, approach carrier far to to more this the For aggressive of so acquisitions largest a more is measured partner customer year, had QX XXXX.

of to manage their has significantly in the our in date interested One to as writing partners new profitability they're goals. limited captive continue Additionally, which business carrier states they

different seen have marketplace attractiveness customer test meaningfully a segments. their our of February back also January spend markets levels carrier their as from We in they in pull the and

restoring some our uncertainty ultimately to we company. their that more long-term believe will slope sustainable auto benefit recovery, will insurers timing dynamics exact a taking recovery, carrier which the of create create and spend marketing a balanced these more While approach over

we a followed regards the following return in operations committed QX, step-up expansion what a we to XXXX. to from largely adjusted we progress restructuring, by continue progress margins as be believe remain to our we by expect expanding increases, recovery annual first to which auto adjusted XXXX. to quarterly incremental benefit we half consistent, EBITDA to to operating will in drive first In XXXX flow quarter cash achieve goals. through our of EBITDA customary After operating these of June positive driven on we year, track margin expenses our this expense as plan from both discipline, maintain tight an in relative and We to leverage pre-downturn restoring

midpoint the return on guidance year, a implies margins. pre-downturn EBITDA our adjusted near Based our to QX strong start this to of

not timing year, that such, early auto encouraged be carrier performance the are considerable will recovery, we we guidance. While exact uncertainty of and full recognize year around our this remains and slope as providing we by

outlook. Turning to our

we For revenue million. expect QX million between and be to XXXX, $XX $XX

we $X adjusted VMM be between the delivered and million and In solid We fourth to million expect be the given $X $XX million. $XX between performance and quarter summary, we million, high EBITDA We to expect the recovery adjusted hold. across EverQuote that environment, guidance XXXX and our extremely benefit EBITDA. to is as strong revenue, positioned exceeding conviction eventually directly entered well with sustainable takes carrier VMM the end auto of in

in From strategic actions strong execution we continue perspective, to to focus decisive, stage what that answer in refocus an Jayme we our streamline for strengthen long-term and the P&C operations operating XXXX and the control. our I questions. your operations We set successfully core can will and will our we balance profitability. on sheet controlling our markets now future believe growth took and

Operator

line [Operator Carpenter Cory of Instructions] Your JPMorgan. first the with question comes from

Cory Carpenter

than ask, to prepared the you up think wanted I carrier was sequentially. remarks in I spend enterprise more mentioned that XX%

you seeing kind then just maybe of fall you carrier of versus we've that Just saw more that -- I sustainability you from gives last the has think confidence we secondly confidence time And been the what sorry, others curious how versus giving start -- ramping. secondly are broad-based heard the this that one year. or that's kind around there's time that this was

Jayme Mendal

Cory. Thanks,

So I'll questions, start I'll maybe both hit this well, second in order. -- reverse with

a up. we to see of data starting build The I encouraging number first is, think points

underwriting industry, you we're confident feeling If is their seeing carriers states. more what across broadly in out the more in look profitability

you of carriers you're results their or publicly ratios, a the a now not in look if single that carriers. it's unique released across just some and growing set to have QX their of results, seeing It's improvements January double-digit carrier. like combined And at

reactivating that's gives states, think that improvements the increasing carrier expanding the is we've across And a But that broadly. then think issue the addressing specific -- similar confidence in the we've actions carriers. so so of a impactful. most in seen a budgets, to address we some a carriers There's some more number growing seeing been that I been and has EverQuote, way I campaigns, industry months, the had experience us done the And several underlying reentering last these budget one and are in of of the number that.

Cory Carpenter

one And if could. I more,

if Just be seeing that as of business could you're what on agency us, update Jayme, well side helpful. the you would the on

Jayme Mendal

sure. Yes, for

business we that in year, declines support. last So experienced the modest driven largely agency reduction in were carrier captive subsidy by the

where number it's are business this of expect getting As think back growth we turn corner a of the from into to a I position areas. come out this year, to that we And going we year.

existed I bit early some carriers a think be the themselves will marketing captive still the XXXX. dollars probably of little back or XXXX that slow to support in bring

subsidy penetration investing But working also our our the segment, in its which local increasing less we've with our on growth. the extending meantime, product offering and agent agents. been is captive been of dependent for on independent We've carrier support in enhancing

be And so pricing and we've getting worked through packaging to that market. with some seems that traction

see to the growth this segment, direct do we as the is lead But direct kind business I'd So agency well. business say year the overall, of the likely recovery. to carrier returning

Operator

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

Michael Graham

momentum to here. the great it's see

medium-term here costs And improved throughout I be feels the better And So just how in you margin that, revenue that. you're related to of give how about if wanted congrats job that's you're structurally higher back EBITDA how sort it to long levels the for profitability, possible? business like could like ask, just could bit thinking on XXXX take sort of could structure. you of little color this get to did great And a possibility it wonder I thinking managing think to if auto about you of those levels. a sort downturn. like peak-ish around at

Joseph Sanborn

Sure.

Mike. thanks, So

-- give I'll your me both you take of questions. Let

add think Jayme can I So on.

ability auto get we in with first, regards excuse, the and think back I 'XX QX -- of to to what and to 'XX. saw QX of

was around peak in our So auto. million $XX

see in certainly revenue. path and to million we $XX back in So getting a to auto some

So I that think on piece. I'd just touch

the the starting into not in guide messaging giving won't and for good some their the coming year. the -- year. there are timing, seeing. the are I very dealing feeling in back about We're we're the terms the and they're time, the of plans how how we year, quarter. We with we're guiding for on In it. We're carriers engaging variability still get for specificity specifics At a same giving feel

getting over good I'm feel we So for at about there this exact but time, call timing the going to this not year point.

regarding to with Second, profitability. costs of managing and sort

in the comments operating is the QX of on manage up, that those costs in little guide script in a what bit building -- give QX. what my sort to the we're continue this of operating going million seeing you're and implies gave to is at And from as expenses ticking expenses So you through we've $XX is you there disciplined managing when guidance year. look sort I said in QX, progress be of we those cash -- about very to insight

And we that to will is what things. X leading see

on returning consistent to cash obviously, flow positive basis. First, a

good the feeling EBITDA about the we're had. think And adjusted is we we pre-downturn QX margins that that to in continuing. So and returning second

months If in just 'XX, look [ to QX in say put XX in you if prior downturn through that earnest you -- QX our -- in of 'XX. you we the the prior margins, months in -- the X context, to you look if QX, begin ] that the pre-downturn XX of

adjusted a of average margin X%. EBITDA was little the QX around over X.X%, 'XX And

of around our you guide guidance look that, at think the you relative -- our So midpoint is our -- X%. about those to if guide

for continue goal to I this getting to a flow and think that, committed in getting the that. from margins do we'll first pre-adjusted track to build half, we to on year. where path back we positive second So the see as cash EBITDA We're

disciplined is operating we've continuing incremental adjusted be to opportunity an of expenses, any QX, significant and we expense see $XX as in have the adding outlined, Given EBITDA out margins. we in which recovery think million to expense we'll leverage increase discipline get

Operator

Next Craig-Hallum. comes Kreyer question of from Jason with the line

Jason Kreyer

just relative the think to for where maybe recovery you to as are we at Jayme, your shape, wanted in opportunities past. different takes what share ask curious cycle the gaining market in were this points

Jayme Mendal

Thanks, Jason. Yes.

focused and the a for focus those year profitability begin restore constrained I margin go budget think last highly And as environment. greater the on largely constraints budget I has on to X think growth in and been of we'll story away, share. optimizing

One of view a enabled local this is network of distribution. network grow. continue It's and do build to us of point relatively the things we the proprietary has agent strong, that to from share well always that The have. is and we it expect to health

to us the acquisition allows be competitive that traffic And more in landscape.

agency So in landscape keys build we're of doing think as to in ability And continuing our share this we and bidding. sort and that confident to the traffic of going to then invest one stayed our our to I through monetization that be do restrictions network as into the away. flowing continue budget to is traffic

confident feel we in that. So

Jason Kreyer

for not QX, Obviously, pullback then maybe VMM of surprising. a from follow-up QX. The Joseph. for a a bit And it's little Okay. guide

curious -- more Just with stable what is like as look VMM look where Or forward? expect to a a strengthening you we in? market, do VMM settle

Joseph Sanborn

Sure.

So give some you to context.

XX% QX is year VMM performance VMM, we under and last margins -- our on with VMM XX%, pleased . of XX% margin just getting in the year, last throughout under were terms with last that obviously, in the our context of to average year. in So put guide by XX.X%. And QX about implied guide our

bit has year put of the DTCA you is the of volumes exit takes And of higher pieces low. that had half first for depressed the margin. advertising year the which XX% half VMM year X a second are into, is second relatively the one health, in in a for costs where If the that context

you at that XX-ish VMM XX% that that normalized of we year. between it's percent as of If in before. see up margins over XX-ish marketplace, then look And we'll sort we've and percent the VMM margins course the around settle said believe

-- the our starting over be piece out, under we as they arise. effectively continue we'd monetize time, bidding well strong is the see on would advertising it favorable continue see what to consumers pressure in with You well will to to expect -- high-intent acquire enduring progress as done build to and cost less and to through becomes continue I around we year us future so just very But downward periods that give relatively that data emphasize as more XX%, benefits. one perform that some and we've more investments with who margins we technology VMM carriers can of

requirement advertising the will it. again, offset But

So implied the the what's we by see guidance. that's what --

there's probably year. least at incremental So pressure in the of some downward course this

Operator

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

Ralph Schackart

years. mean, of share maybe et perhaps, you AI kind you your there the couple on sort Jayme, the more then them you've has capture potentially dynamic. And to going been trends perspective using the give market market that better about Obviously, cetera. of fairly data importantly, over forward, talked shifts you seen I with see your share. bidding scale, that of last technology,

Just of sort be could going would position of forward, competitive reframe if you your helpful. kind that

Jayme Mendal

sure. Yes,

think I So market X that will us to to of point share enable really which we'd in position, the drive the to gains competitive recovers. as like things the terms

the comes I from which that. network what of just that is amount and to, the agency monetization first of The alluded

terms our position a as traffic ability to traffic that we are paid compete in acquire we So and continue an network in and to agent landscape. strengthen advantaged for of acquisition

of you one. the then So years. alluded that have our the that got generation been Mike, since to, really. early would of out a number of EverQuote, And be technology second days we second bidding we've bidding thing over that's the last developing -- the rolling been technology couple But was

we competitive generate Internet year. that these moat. about shopping company, traffic million us real much referenced And there. last out a gives through nearly as processed requests. quote a of so quote we or was probably you we see It insurance unique as number that $XX transactions requests data anybody as we, So the The

effectively traffic to of data kind inference from various and that us their in use AI and bid of efficiency these decisions funnel stages consumers traffic at the values which our engine to engine, to marketplace. and to attributes much which how transactions improves route that the them, learning overall apply use better machine to how pay a in of bidding or to about acquisition allows consumer we much them for, about the for make And

And so continue the engine over it's traffic share. better build combination of better that monetization really time enable engine to acquisition and will us to a our

Operator

comes Dan Your the Day B. with Riley next question line Securities. of from

Daniel Paul Day

Just maybe a little the number you give on quote don't couple trended of request the volume, anymore. it's last how I know months.

generally since spike calendar's prices. Just seen speaking, and a turned we have have here the carriers some raised

Jayme Mendal

for Since in elevated the running been 'XX, rate with of shopping cycle relatively we've consumer levels began insurance.

was that year. different so And last no

I stepped bit XXXX. think up already from we levels elevated a in

year, is, through. to carriers continue as to continue continue take expectation see And the rates we to rate, think I levels flow will of this as elevated shopping.

request in XXXX. But would I step-up that itself that volume. and it with combined sort as out speaking, demand way remain there inducing and remain more sort more I in well. I -- so would things XXXX been lend have generally and way advertising a shopping favorable more since in They carriers elevated favorable of to think to carrier say backdrop, quote expect XXXX, incremental monetization That behavior, of

Daniel Paul Day

Okay.

paid and given search you attracting people for questions, looking radio, switch thought consumers more sorts on you marketing. like of be ads? traditional like those a Have there everquote.com lot potentially performance of just and of maybe your X to mostly of through search lot or brand consumers lot the A to marketplace. talked coming number the TV, directly things strategy just increase the a to about might rather than about advertising bidding to general on guys strategy Another

Jayme Mendal

it's a good question. The is yes. Yes, answer

brand, We which right, are channel performance-oriented in allow the more you approach, something a any of build you like so channels in that, can highly like from. a which or do some start to And performance itself we lend channels that will of OTT to compete sufficient performance to referenced, that context. but drive brand there

to on expand get channels probably drive I that's to brand before participate, more go there build you'd as there to that I awareness us the over think and where time us brand progression But continues we we you in suggest. full of think -- see opportunity for do advertising. more are which direct in traffic our be

Operator

Your of question next with Peters James. Greg the line Raymond comes from

Unknown Analyst

you Maybe is This the just seasonally vertical remarks, your curious more the the a prepared quarter for In question. weak. is seasonality any of mentioned fourth changed Greg. cleanup business? the Sid the typically on I'm health if in exit

Joseph Sanborn

comments we and home the context the dip seasonally business the of for auto [indiscernible] vertical the of auto QX terms home. being one Sid, of of that seasonality kind had then to in health typical weight and that of

spend of are home. retail P&C the In and And second a is spend but broader the continue the in for continue of quarter, was this and looking that year.. period advertising carries holidays, space, for is unusual back sort auto which -- typically so historically. lower they who spend, carriers half a is pull QX to in unusual because didn't they giving to typically QX was actually -- seasonally It in of XXXX we to some had

Operator

of comes Jed next The the with Kelly question from line Oppenheimer.

Jed Kelly

the that as And aggressive with versus that being you're some some seeing in maybe marketing seasonality you . the just just Two, performance behind think One, should competition more with if guidance. some aren't of you just reason I aggressive the competitors, the can how then talk about sense XQ? your from we terms may. just you I And to are of of not business in balance giving But guide get where give recovery? that about can a the can us then the recovery?

Joseph Sanborn

question. the Thanks, for Jeff,

I then a don't why second. in So take up and Jayme will first the one follow

So terms thought process guide and year. our in the our for of

we you reflects the to what QX. guiding March. on what for happen and pointed our we now, know to Based So in we course remainder QX. quarter out, of expect as we of high expect in are competency the the It to happen in

what given in being we think did the to and there carriers when auto would look recovery we I think we just happen how guidance confidence that cycle -- highlight. we we doing. the is factors a high the would not what variability When a said, give drive are didn't That would the year, with the have about couple

part would of if QX, the it. one, at auto the look in [indiscernible] operations obviously, where our was at health in excluding So business seasonality and home, you are again, look you guide of

us down If we've the you typically, from over typical QX volatility QX And and years over been look at X in if is of That's of Admittedly, is the QX all public. is sequentially. -- you look the down of QX QX pattern be would from up numbers. since public, the that's from QX. that sort that, being pattern past but seasonal there's

to regards question, that earlier XX% in as we environment was which costly. QX. under on see coming for to advertising through we margin, relatively is on our implies the We'd just expect progress based talked year downward With about some guide on pressure more that the pressure VMM

the So the so XX% QX last last up we had QX, QX, of about about you'd last in settle in piece, we and that marketplace expense to as the year. it step-up year $XX a in to between XX%, and -- side, think from 'XX of this we on step margin you going -- we market that said X% out expect million relative operating historically said XX% of year. see that -- would VMM Then probably we QX

function operating significant get adding is in costs. what you going implies year, the auto that adjusted look or means at. out. recovery that to of you're be of at And where you get -- impact to incremental auto some are as the operating throughout to that, recovery Seasonality, margin very the going disciplined shakes the going how the increase we amount think we're percentages that to factors expansion look EBITDA of VMM leverage in is be I you're Those the and and a Then get progressing going are expenses. -- through then in year

Jayme Mendal

start second to address I'll the your And try year. been landscape, dynamic in then, respect to I it's question. marketing Jed, competition and very performance the with mean

speaking, as seen seen in we've real in from in revenue people revenue. change. meaningful carrier by And so are our in driven significant per technology we carrier QX, and and generally growth step-up expansion. things a request have both volume and like We've literally who But quote budgets reacting time

this quarter, so And over expect to up carrier revenue step see our XXX%. we by

of the sort side marketplace. of lot the there's happening a So on monetization

course, of landscape. ad with more competitive will that, Now come

monetization And we should are do seeing quote or per VMM -- commensurate we why compression progress see so comes marketplace. improvement cost increases, and recovery. expect about positive, we're mentioned, year seeing I we lot Joseph the what net-net, say, into and request, through flowing position the good which we bit feel all through of in a volume and back, as But it's our of as is a to really our very

Jed Kelly

quarter XQ recovery? of but hard, too it guess I it's say? arc lowest just is know Or the I be early to the would So given revenue for .

Joseph Sanborn

year to the exact the what Yes. rest the Again, slope exact year. to It's to recovery we're encouraging at the the just mean I year, guided going to have victory we on We of and for in we slope very insight this high for give in given in the but for start I claim be early the of we're say, as point not the any too because QX can't have Jed. environment with QX. confidence think specificity us, confidence revenue seeing.

Operator

comes Needham Mayank Tandon with Your final from question the of line

Mayank Tandon

and Joseph, want comments, piggyback question. your the last Joseph, off to to I Jamie

be sort Looking back going covered of as might But at a if for we XXXX seems XXXX. last look dynamics it while, very EverQuote know XXXX I and reminiscent having you into the almost from different. of the maybe do like does the Is on trajectory could proxy you to if hold want on but the auto good that side? don't for what look a before put normal the is -- the spot, recovery that year I COVID.

Joseph Sanborn

as hard XXXX, say of I about period you a recovered did It there a versus nicely So downturn, was would this the out what's business. in one, that. last this, well right? very in yes, XXXX, When different market the think we recovery, and a coming

the been is deeper think challenge this and drawing in more I has downturn. much prolonged a comparisons --

think I more you can that I different although that, it's back carriers downturn. recovered nice that much at see be business, looking will thing here and prolonged and we've same on been would in come much happen the to what's there's hard think how said So from . And a downturn prolonged draw a -- times. because it'd the more environment, it's think be we will insight we happened different as before, back

that. believe to continue to signs, of the lacking positive start We carriers We've but still is any seen from all signs our them. of QX, specificity showing

that downturn... I But was draw that the you in year, nice it's represented can't a draw think to beyond conclusion quite the trend And so given the hard the in specific this [indiscernible] really recovery saw that comparison. to difference just conclusion I sense, that

Mayank Tandon

Got it. like it plays Well, let's that. out hope

we'll and So wait see.

the The question is customers. I on have second

just ad How increased base. of about are that? clarity. think, your the through just nuances to factors you wanted do us talked What of marketing existing within at are sort gating the spend what could around get you spend, clients? some maybe I penetration that. growing to I So If the the installed Like the And grow...? walk the drive Jamie, you of

Jayme Mendal

Sure.

So dimensions of growth I there's a number of there. think

expanding The historically, agent not penetrated just deeply, segment, we first is which market segment. the that's and a have independent into very

ours. benefit they infrastructure and form The or count independent I helps support of from one a a channel are the I an . Independent the technology mean Farm's get with standpoint. marketing harness. Allstate size the in carriers they're agents of to market say When get agent dollars that agents. agents captive lack is being And So captive, agents like agents. like the on other historically or out of equal captive and/or tend performance to agent State focused in captive we've Farmers big the captive that them agents of roughly

to them differently build with really And be we things segment so do we that have harness some of them expect and segment with scale of can the for kind help to agents. to successful before market that

of spend view, is about the them. new think new and of you gen the other And I channels, sort in the I my growing with get expanding with lead from of dimension And EverQuote. growth it installed dimension money of within to which agent's segment the door the a of one agents number this an on independent one point so And market is own base. agency, into and taking more if trying share insurance different I'm customers of is wallet

doing also that may other things, But or ancillary be helping I grow are me I'm towards buying business. oriented my like live services calls

think an consolidate one [indiscernible] to provide in into terms the into digital traffic agents I to to marketing. extend spend and that place us well acquisition our play offering that which of we these for of kind there's local opportunity strengths and

better needs the And going both It's more also consolidate so their -- their we help them new agency. to it's deeper their it growing agents expanding and relates to have existing channels. with agents into solve by as spend

Operator

to now for will closing call I remarks. turn the Mendal, CEO, Jayme back over

Jayme Mendal

our right. today. emphasis sense EverQuote joining but also effectively in All towards in thank just come, only team's in to insurance the on Well, you conclude measured of for normalcy with us of auto market not our the to all execute and an return our confidence renewed I'll months vision. a ability to

more recent time are earlier, said more in . And we streamlined any year leaner and As we focused organization. a this I memory. entered than

grown team stronger a that have We and more resilient. has

are an roots transformative well continues to debt-free focused a marketplace enduring position move these to are on Thanks we to generation. time build shopping our sheet, returning your today. have digital We online. business factors and and being All capital-efficient cash insurance to for us balance as consistent a driving of going

Operator

that gentlemen, may call. disconnect all your you and joining, and concludes today's now for lines. Ladies you Thank

EverQuote (EVER) 26 Feb 242023 Q4 Earnings call transcript