EverQuote, Inc. (“EverQuote” or the “Company”), a leading online
insurance marketplace in the U.S., today announced financial
results for the fourth quarter and full year ended December 31,
2018.
"We are pleased with our fourth quarter results as we grew total
revenue 23% and increased quote requests 10%, while seeing
increased spend from seven of our top 10 carrier partners over the
prior year quarter,” said Seth Birnbaum, CEO and Co-Founder of
EverQuote.
“We delivered another strong quarter of growth in our newer home
and life insurance verticals, while investing in our consumer
marketing capabilities and expanding our carrier offerings on the
EverDrive platform, which are now available in five states to
EverDrive users who qualify via their safe-driving score.”
“In 2018, we achieved total revenue growth of 29% year-over-year
as we executed on our direct strategy with insurance providers. We
successfully increased the number of insurance agents in our
marketplace and, for the full year, grew total spend on our
platform across all of our top 10 carriers.”
“As we look ahead to 2019, we are excited about the
opportunities for EverQuote as the insurance industry continues to
shift online, consistent with our expectations.”
“We remain focused on increasing provider coverage, deepening
provider and consumer engagement, attracting more customers to our
marketplace and launching new verticals while increasing our
investment in consumer and provider experiences across
EverQuote.com and EverDrive.”
“We are committed to our mission to make EverQuote THE
destination for consumers to shop for insurance online,” concluded
Mr. Birnbaum.
Fourth Quarter 2018 Financial Highlights(All
comparisons are relative to the fourth quarter of 2017 unless
otherwise stated):
- Total revenue of $39.8 million, an increase of 23%.
- Automotive insurance vertical revenue of $33.9 million, an
increase of 15%.
- Home and life insurance verticals revenue of $5.9 million, an
increase of 99%.
- Revenue less advertising expense of $10.2 million, an increase
of 7%.
- Variable marketing margin of $10.6 million, an increase of
5%.
- GAAP net loss of $6.9 million, compared to a net loss of $0.7
million.
- Adjusted EBITDA of ($3.5) million, compared to Adjusted EBITDA
of $0.3 million.
Fourth Quarter 2018 Business Highlights(All
comparisons are relative to the fourth quarter of 2017 unless
otherwise stated):
- Direct revenue was 91% of revenue, an increase from 84% in the
prior year.
- EverQuote added 3 new provider partners across auto, home and
life.
- Seven of the Company’s top 10 insurance carriers increased
spend over the prior year.
- EverQuote completed 18 new and 40 expanded partial integrations
with providers.
- The Company achieved 10% growth in quote requests.
Full Year 2018 Financial Highlights(All
comparisons are relative to the full year of 2017 unless otherwise
stated):
- Total revenue of $163.3 million, an increase of 29%.
- Automotive insurance vertical revenue of $141.2 million, an
increase of 18%.
- Home and life insurance verticals revenue of $22.2 million, an
increase of 220%.
- Revenue less advertising expense of $46.1 million, an increase
of 29%.
- Variable marketing margin of $48.0 million, an increase of
28%.
- GAAP net loss of $13.8 million, compared to a net loss of $5.1
million.
- Adjusted EBITDA of ($5.5) million, compared to Adjusted EBITDA
of ($1.5) million.
First Quarter and Full Year 2019 Guidance
EverQuote anticipates revenue, variable marketing margin and
adjusted EBITDA to be in the following ranges:
First quarter 2019
- Revenue of $47.0 – $49.0 million.
- Variable marketing margin of $12.8 – $13.8 million.
- Adjusted EBITDA in the range of ($1.5) – ($2.0) million.
Full year 2019
- Revenue of $189.0 – $197.0 million.
- Variable marketing margin of $54.0 – $58.0 million.
- Adjusted EBITDA in the range of ($2.0) – ($4.0) million.
With respect to the Company’s expectations under "First Quarter
and Full Year 2019 Guidance" above, the Company has not reconciled
the non-GAAP measures of variable marketing margin and adjusted
EBITDA to the GAAP measures revenue less advertising expense and
net loss, respectively, in this press release because the Company
does not provide guidance for advertising expense, stock-based
compensation expense, depreciation and amortization expense,
interest income and expense, and the provision for (benefit
from) income taxes as the Company is unable to quantify these
amounts without unreasonable efforts that would be required to
include reconciliations to such GAAP measures. In addition, the
Company believes such reconciliations 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 fourth quarter and full year 2018 financial results at
4:30 p.m. Eastern Time today, February 25, 2019. To access the
conference call, dial (877) 273-5005 for the U.S. or Canada, or
(647) 689-5410 for international callers and provide conference ID
6839918. The webcast will be available live on the Investors
section of the Company's website at
https://investors.everquote.com.
An audio replay of the call will also be available to investors
beginning at approximately 6:30 p.m. Eastern Time on February 25,
2019, until 11:59 p.m. Eastern Time on March 1, 2019, by dialing
(800) 585-8367 for the U.S. or Canada, or (416) 621-4642 for
international callers, and entering passcode 6839918. In addition,
an archived webcast 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,” 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
Company’s expected use of proceeds from its initial public
offering; and (9) other factors discussed in the “Risk Factors”
section of the Company’s most recent Quarterly Report on Form 10-Q,
which is on file with the Securities and Exchange Commission.
In addition, the forward-looking statements included in this press
release represent the Company’s views as of the date of this press
release. The Company anticipates that subsequent events and
developments will cause the Company’s views to change.
However, while the Company may elect to update these
forward-looking statements at some point in the future, the Company
specifically disclaims any obligation to do so. These
forward-looking statements should not be relied upon as
representing the Company’s views as of any date subsequent to the
date of this press release.
About EverQuote
EverQuote operates a leading online insurance marketplace in the
U.S., connecting consumers with insurance providers. The company's
data & technology platform matches and connects consumers
seeking to purchase insurance with relevant options from the
company's broad direct network of insurance providers, saving
consumers and providers time and money. EverQuote was founded with
the vision of applying a scientific, data-driven approach to help
consumers find the best price and coverage for their individual
insurance needs.
EVERQUOTE, INC. |
STATEMENTS OF OPERATIONS |
|
|
Three Months EndedDecember 31, |
|
|
Year EndedDecember 31, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands except per share) |
|
Revenue |
|
$ |
39,779 |
|
|
$ |
32,377 |
|
|
$ |
163,349 |
|
|
$ |
126,242 |
|
Cost and operating
expenses(1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue |
|
|
3,075 |
|
|
|
2,236 |
|
|
|
11,678 |
|
|
|
7,745 |
|
Sales and marketing |
|
|
35,638 |
|
|
|
27,088 |
|
|
|
140,743 |
|
|
|
109,473 |
|
Research and development |
|
|
4,255 |
|
|
|
2,522 |
|
|
|
14,173 |
|
|
|
9,194 |
|
General and administrative |
|
|
3,925 |
|
|
|
1,070 |
|
|
|
10,667 |
|
|
|
4,519 |
|
Total cost and operating
expenses |
|
|
46,893 |
|
|
|
32,916 |
|
|
|
177,261 |
|
|
|
130,931 |
|
Loss from operations |
|
|
(7,114 |
) |
|
|
(539 |
) |
|
|
(13,912 |
) |
|
|
(4,689 |
) |
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
— |
|
|
|
(114 |
) |
|
|
(199 |
) |
|
|
(382 |
) |
Interest income |
|
|
189 |
|
|
|
— |
|
|
|
320 |
|
|
|
— |
|
Total other income (expense),
net |
|
|
189 |
|
|
|
(114 |
) |
|
|
121 |
|
|
|
(382 |
) |
Net loss |
|
|
(6,925 |
) |
|
|
(653 |
) |
|
|
(13,791 |
) |
|
|
(5,071 |
) |
Accretion of redeemable convertible
preferred stock to redemption value |
|
|
— |
|
|
|
(1,845 |
) |
|
|
(37,415 |
) |
|
|
(14,093 |
) |
Net loss attributable to common
stockholders |
|
$ |
(6,925 |
) |
|
$ |
(2,498 |
) |
|
$ |
(51,206 |
) |
|
$ |
(19,164 |
) |
Net loss per share attributable to
common stockholders, basic and diluted |
|
$ |
(0.28 |
) |
|
$ |
(0.29 |
) |
|
$ |
(3.03 |
) |
|
$ |
(2.18 |
) |
Weighted average common
shares outstanding, basic and diluted |
|
|
25,038 |
|
|
|
8,695 |
|
|
|
16,922 |
|
|
|
8,774 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Amounts
include stock-based compensation expense, as follows: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedDecember 31, |
|
|
Year EndedDecember 31, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Cost of revenue |
|
$ |
13 |
|
|
$ |
7 |
|
|
$ |
42 |
|
|
$ |
27 |
|
Sales and marketing |
|
|
678 |
|
|
|
212 |
|
|
|
1,955 |
|
|
|
789 |
|
Research and development |
|
|
861 |
|
|
|
121 |
|
|
|
2,011 |
|
|
|
467 |
|
General and administrative |
|
|
1,693 |
|
|
|
148 |
|
|
|
3,113 |
|
|
|
577 |
|
|
|
$ |
3,245 |
|
|
$ |
488 |
|
|
$ |
7,121 |
|
|
$ |
1,860 |
|
EVERQUOTE, INC. |
BALANCE SHEET DATA |
|
|
December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Cash and cash
equivalents |
|
$ |
41,634 |
|
|
$ |
2,363 |
|
Working capital |
|
|
39,185 |
|
|
|
2,634 |
|
Total assets |
|
|
65,746 |
|
|
|
20,519 |
|
Long-term debt |
|
|
— |
|
|
|
4,611 |
|
Total liabilities |
|
|
22,562 |
|
|
|
20,126 |
|
Redeemable convertible
preferred stock |
|
|
— |
|
|
|
50,937 |
|
Total stockholders'
equity (deficit) |
|
|
43,184 |
|
|
|
(50,544 |
) |
EVERQUOTE, INC.STATEMENTS OF CASH FLOWS
|
|
Year Ended December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(13,791 |
) |
|
$ |
(5,071 |
) |
Adjustments to reconcile net loss
to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
1,341 |
|
|
|
1,360 |
|
Stock-based compensation
expense |
|
|
7,121 |
|
|
|
1,860 |
|
Noncash interest expense |
|
|
14 |
|
|
|
20 |
|
Deferred rent |
|
|
337 |
|
|
|
528 |
|
Changes in operating assets and
liabilities: |
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
(2,931 |
) |
|
|
(2,478 |
) |
Prepaid
expenses and other current assets |
|
|
(698 |
) |
|
|
(8 |
) |
Other
assets |
|
|
— |
|
|
|
(75 |
) |
Accounts
payable |
|
|
4,932 |
|
|
|
1,552 |
|
Accrued
expenses and other current liabilities |
|
|
1,324 |
|
|
|
469 |
|
Deferred revenue |
|
|
454 |
|
|
|
171 |
|
Net cash used in operating
activities |
|
|
(1,897 |
) |
|
|
(1,672 |
) |
Cash flows from investing
activities: |
|
|
|
|
|
|
|
|
Acquisition of property and
equipment, including costs capitalized for development of
internal-use software |
|
|
(3,668 |
) |
|
|
(1,185 |
) |
Net cash used in investing
activities |
|
|
(3,668 |
) |
|
|
(1,185 |
) |
Cash flows from financing
activities: |
|
|
|
|
|
|
|
|
Proceeds
from initial public offering, net of underwriting discounts
and commissions |
|
|
52,313 |
|
|
|
— |
|
Proceeds from exercise of stock
options |
|
|
861 |
|
|
|
1,549 |
|
Repurchase of common stock |
|
|
— |
|
|
|
(9,229 |
) |
Proceeds from borrowings on line of
credit |
|
|
22,729 |
|
|
|
20,300 |
|
Repayments of borrowings on line of
credit |
|
|
(24,729 |
) |
|
|
(18,300 |
) |
Repayments of term loan |
|
|
(2,625 |
) |
|
|
(1,500 |
) |
Payments of initial public offering
costs |
|
|
(3,713 |
) |
|
|
— |
|
Net cash provided by (used in)
financing activities |
|
|
44,836 |
|
|
|
(7,180 |
) |
Net increase (decrease) in
cash, cash equivalents and restricted cash |
|
|
39,271 |
|
|
|
(10,037 |
) |
Cash, cash equivalents and
restricted cash at beginning of period |
|
|
2,613 |
|
|
|
12,650 |
|
Cash, cash equivalents and
restricted cash at end of period |
|
$ |
41,884 |
|
|
$ |
2,613 |
|
EVERQUOTE, INC. |
FINANCIAL AND OPERATING METRICS |
Revenue by vertical:
|
|
Three Months Ended December 31, |
|
|
Change |
|
|
|
2018 |
|
|
2017 |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
Automotive |
|
$ |
33,853 |
|
|
$ |
29,395 |
|
|
|
15.2 |
% |
Home and
Life |
|
|
5,926 |
|
|
|
2,982 |
|
|
|
98.7 |
% |
Total Revenue |
|
$ |
39,779 |
|
|
$ |
32,377 |
|
|
|
22.9 |
% |
|
|
Year Ended December 31, |
|
|
Change |
|
|
|
2018 |
|
|
2017 |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
Automotive |
|
$ |
141,187 |
|
|
$ |
119,313 |
|
|
|
18.3 |
% |
Home and Life |
|
|
22,162 |
|
|
|
6,929 |
|
|
|
219.8 |
% |
Total Revenue |
|
$ |
163,349 |
|
|
$ |
126,242 |
|
|
|
29.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other financial and non-financial metrics:
|
|
Three Months Ended December 31, |
|
|
Change |
|
|
|
2018 |
|
|
2017 |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
Loss from
operations |
|
$ |
(7,114 |
) |
|
$ |
(539 |
) |
|
|
1219.9 |
% |
Net loss |
|
$ |
(6,925 |
) |
|
$ |
(653 |
) |
|
|
960.5 |
% |
Quote requests |
|
|
3,284 |
|
|
|
2,984 |
|
|
|
10.1 |
% |
Variable marketing margin(1) |
|
$ |
10,603 |
|
|
$ |
10,089 |
|
|
|
5.1 |
% |
Adjusted EBITDA(1) |
|
$ |
(3,482 |
) |
|
$ |
260 |
|
|
|
-1439.2 |
% |
|
|
Year Ended December 31, |
|
|
Change |
|
|
|
2018 |
|
|
2017 |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
Loss from
operations |
|
$ |
(13,912 |
) |
|
$ |
(4,689 |
) |
|
|
196.7 |
% |
Net loss |
|
$ |
(13,791 |
) |
|
$ |
(5,071 |
) |
|
|
172.0 |
% |
Quote requests |
|
|
12,803 |
|
|
|
12,123 |
|
|
|
5.6 |
% |
Variable Marketing Margin(1) |
|
$ |
47,995 |
|
|
$ |
37,551 |
|
|
|
27.8 |
% |
Adjusted EBITDA(1) |
|
$ |
(5,450 |
) |
|
$ |
(1,469 |
) |
|
|
271.0 |
% |
(1) |
Variable marketing margin
and adjusted EBITDA are non-GAAP measures. Please see
“EverQuote, Inc. Reconciliation of Non-GAAP Measures to
GAAP” below for more information. |
EVERQUOTE, INC.NON-GAAP FINANCIAL MEASURES
To supplement the Company’s financial statements presented in
accordance with GAAP and to provide investors with additional
information regarding EverQuote’s financial results, the Company
has presented its variable marketing margin and adjusted EBITDA as
non-GAAP financial measures. These non-GAAP financial measures are
not based on any standardized methodology prescribed by GAAP and
are not necessarily comparable to similarly titled measures
presented by other companies.
The Company defines variable marketing margin, or VMM, as
revenue as reported in the Company’s statements of operations and
comprehensive loss, less online advertising costs related to
attracting consumers to EverQuote’s marketplace (which are a
component of total advertising expense, which is a component of
sales and marketing expense). The most directly comparable GAAP
measure for VMM is revenue less advertising expense. The Company
utilizes VMM to measure the financial return on EverQuote’s online
advertising, specifically to measure the degree by which the
revenue generated from consumer quote requests exceeds the cost to
attract those consumers to EverQuote’s marketplace through online
advertising. The Company also uses VMM to measure the efficiency of
individual online advertising and consumer acquisition sources and
to make trade-off decisions to manage the Company’s return on
advertising. The Company does not utilize VMM as a measure of
overall profitability. The Company presents VMM because it is used
extensively by EverQuote’s management and board of directors to
manage the Company’s operating performance, including evaluating
operational performance against budgeted VMM and understanding the
efficiency of EverQuote’s online advertising spend.
The Company defines adjusted EBITDA as net income (loss),
excluding the impact of stock-based compensation expense;
depreciation and amortization expense; interest income and interest
expense; and the provision for (benefit from) 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 these non-GAAP financial measures to evaluate
EverQuote’s operating performance and trends and make planning
decisions. The Company believes that each of these non-GAAP
financial measures helps identify underlying trends in EverQuote’s
business that could otherwise be masked by the effect of the
expenses that the Company excludes in the calculations of each
non-GAAP financial measure. Accordingly, the Company believes that
these financial measures provide 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 these
non-GAAP financial measures rather than revenue less advertising
expense and net income (loss), which are the most directly
comparable financial measures calculated and presented in
accordance with GAAP. In addition, other companies may use other
measures to evaluate their performance, all of which could reduce
the usefulness of the Company’s non-GAAP financial measures as
tools for comparison.
EVERQUOTE, INC.RECONCILIATION OF NON-GAAP
MEASURES TO GAAP
The following tables reconcile VMM and adjusted EBITDA to
revenue less advertising expense and net loss, respectively, the
most directly comparable financial measures calculated and
presented in accordance with GAAP.
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Revenue |
|
$ |
39,779 |
|
|
$ |
32,377 |
|
|
$ |
163,349 |
|
|
$ |
126,242 |
|
Less: total
advertising expense |
|
|
29,539 |
|
|
|
22,838 |
|
|
|
117,274 |
|
|
|
90,471 |
|
Revenue less
advertising expense |
|
|
10,240 |
|
|
|
9,539 |
|
|
|
46,075 |
|
|
|
35,771 |
|
Add: other
advertising expense (1) |
|
|
363 |
|
|
|
550 |
|
|
|
1,920 |
|
|
|
1,780 |
|
Variable marketing
margin |
|
$ |
10,603 |
|
|
$ |
10,089 |
|
|
$ |
47,995 |
|
|
$ |
37,551 |
|
(1) |
|
|
Other advertising expenses
consist of general advertising costs that are designed to promote
the business, attract insurance providers or produce results other
than generating online marketplace traffic, such as increasing
downloads of the Company’s EverDrive safe driver app. They are not
directly related to generating revenue or online marketplace
traffic, and as such are excluded by management from the
calculation of VMM. |
|
|
|
|
|
|
Three Months Ended December 31, |
|
|
Year Ended December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
|
Net loss |
|
$ |
(6,925 |
) |
|
$ |
(653 |
) |
|
$ |
(13,791 |
) |
|
$ |
(5,071 |
) |
Stock-based compensation |
|
|
3,245 |
|
|
|
488 |
|
|
|
7,121 |
|
|
|
1,860 |
|
Depreciation and amortization |
|
|
387 |
|
|
|
311 |
|
|
|
1,341 |
|
|
|
1,360 |
|
Interest
(income) expense, net |
|
|
(189 |
) |
|
|
114 |
|
|
|
(121 |
) |
|
|
382 |
|
Adjusted EBITDA |
|
$ |
(3,482 |
) |
|
$ |
260 |
|
|
$ |
(5,450 |
) |
|
$ |
(1,469 |
) |
Investor Relations Contact:
Brinlea JohnsonThe Blueshirt
Group212-331-8424Brinlea@blueshirtgroup.com
Or
Allise FurlaniThe Blueshirt
Group212-331-8433allise@blueshirtgroup.com
SOURCE: EverQuote, Inc.
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