Financial Data and Key Metrics Changes - Total revenue for Q3 2023 was $55 million, towards the top end of guidance range, with variable marketing margin (VMM) of $19.4 million and adjusted EBITDA of negative $1.9 million [33][38] - Operating cash flow was negative $4.1 million, including $1.8 million in severance payments related to workforce reductions [21][42] - The company ended the quarter with $39 million in cash and cash equivalents, up approximately 26% from $31 million at the end of Q2 2023 [44] Business Line Data and Key Metrics Changes - Revenue from the auto insurance vertical was $43.1 million, reflecting substantially weakened demand from insurance carrier customers [14][15] - Revenue from non-auto insurance verticals was $11.9 million, representing 22% of total revenue, with home and renters insurance revenue at $10.7 million, a year-over-year increase of 51% [16][40] - VMM as a percentage of revenue was a near record high of 35.2% for the quarter, driven by investments in proprietary technology and a shift in revenue mix towards the local agent network [17][18] Market Data and Key Metrics Changes - The auto insurance market continues to experience volatility, with expectations for recovery not anticipated until 2024 [15][48] - Despite challenges, the home and renters insurance market has shown growth, driven by increased demand from local agents [35][87] Company Strategy and Development Direction - The company aims to become the largest online source of insurance policies, leveraging data, technology, and knowledgeable advisers to simplify and personalize insurance [36][112] - A focus on streamlining operations and strengthening the balance sheet is expected to position the company well for future recovery in the auto insurance market [5][95] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to restore consistent cash generation and profitability in 2024, despite current market challenges [12][45] - There are encouraging signs from some carriers regarding profitability improvements, although macroeconomic headwinds may delay recovery for several quarters [47][48] Other Important Information - The company sold assets of its former health insurance vertical for approximately $13.2 million, which included commissions receivable expected to be collected over the next seven quarters [19] - The company has a $25 million undrawn working capital line of credit available until July 2025, with no plans to draw on it [22] Q&A Session Summary Question: Can you provide more depth on the auto part and expectations for recovery? - Management expects a step-up in Q1 2024 and a gradual recovery trend through next year, with eight to nine of the top ten customers planning for growth [29][71] Question: How do you expect VMM margins to trend in a better demand environment? - VMM margins are expected to settle between historical levels and current high levels as competition returns in the recovery [75] Question: What investments have driven growth in the home and renters insurance market? - Growth has been driven by increased demand from local agents and a dedicated focus on building consumer traffic in that vertical [87][98] Question: How has consumer traffic trended throughout the quarter? - Consumer shopping volume has remained stable at historically high levels due to the ongoing rate cycle [106] Question: How is EverQuote positioned coming out of this down cycle? - The company feels confident about maintaining market share and has exclusive opportunities with several carriers for growth initiatives next year [109]

| --- | --- | --- | --- | |-------|-----------------------------------------------------------------------------------------------------------------------|-------|------------------------------------------------------------------------------------------------------------------------------| | | Late Summer 2021 Auto Insurance Downturn Begins | | Current Outlook | | | Cost of claims rises rapidly due to higher used car values, increased cost to repair and overall accident severity | | Auto carriers continue r ...

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Unaudited Q3 2023 financials reflect decreased assets and revenue, with a net loss primarily due to a restructuring charge and health vertical exit [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$114.0 million** from **$156.5 million** at year-end 2022, driven by reduced commissions receivable and leading to lower equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$113,986** | **$156,519** | | Cash and cash equivalents | $39,049 | $30,835 | | Accounts receivable, net | $22,151 | $29,604 | | Commissions receivable (current & non-current) | $13,544 | $46,940 | | **Total Liabilities** | **$32,115** | **$49,033** | | Accounts payable | $20,627 | $30,680 | | **Total Stockholders' Equity** | **$81,871** | **$107,486** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q3 2023 revenue fell **46.7%** to **$55.0 million**, resulting in a **$29.2 million** net loss, largely due to a **$19.8 million** restructuring charge Key Operating Results (in thousands, except per share amounts) | Metric | Q3 2023 | Q3 2022 | 9 Months 2023 | 9 Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $55,011 | $103,223 | $232,216 | $315,819 | | Loss from operations | $(29,412) | $(6,590) | $(45,213) | $(16,109) | | Net loss | $(29,217) | $(6,451) | $(44,939) | $(15,922) | | Net loss per share | $(0.87) | $(0.20) | $(1.36) | $(0.51) | | Restructuring and other charges | $19,757 | $— | $23,589 | $— | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations improved to **$2.0 million** for nine months ended Sep 30, 2023, with investing activities providing **$10.2 million** from asset sales Summary of Cash Flows (Nine Months Ended Sep 30, in thousands) | Cash Flow Category | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(2,036) | $(10,893) | | Net cash provided by (used in) investing activities | $10,206 | $(3,219) | | Net cash provided by financing activities | $41 | $15,651 | | **Net increase in cash** | **$8,214** | **$1,490** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's online insurance marketplace business, recent exit from the health vertical, **28%** workforce reduction, and significant customer concentration - In June 2023, the company initiated a restructuring by exiting its health insurance vertical and implementing a workforce reduction plan eliminating 175 employees (approx. **28%**)[81](index=81&type=chunk) - In August 2023, the company sold its health insurance assets (Eversurance LLC) for **$13.2 million** in cash, recognizing a loss on the sale of **$19.4 million**[81](index=81&type=chunk) Revenue by Vertical (in thousands) | Vertical | Q3 2023 | Q3 2022 | 9 Months 2023 | 9 Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Automotive | $43,077 | $88,150 | $182,520 | $257,200 | | Home and Renters | $10,889 | $7,191 | $31,068 | $25,292 | | Other | $1,045 | $7,882 | $18,628 | $33,327 | - For the nine months ended September 30, 2023, two customers represented **20%** and **11%** of total revenue, respectively, indicating significant customer concentration[31](index=31&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q3 2023 revenue declined **46.7%** due to auto insurance industry challenges and carrier spending cuts, prompting a restructuring with a **$19.8 million** charge and improved VMM percentage [Overview and Recent Developments](index=23&type=section&id=Overview%20and%20Recent%20Developments) The company, an online insurance marketplace, underwent a June 2023 restructuring, exiting the health vertical and reducing workforce by **28%** for efficiency and **15%** cost savings - The company operates an online marketplace for insurance, connecting consumers with providers, and derives revenue from consumer referrals and policy commissions[86](index=86&type=chunk)[87](index=87&type=chunk) - In June 2023, the company exited its health insurance vertical and reduced its workforce by 175 employees (**28%**) to improve efficiency and focus on core verticals[90](index=90&type=chunk) - The restructuring is expected to generate over **15%** in cost savings for non-marketing operating expenses[90](index=90&type=chunk) [Factors Affecting Our Performance](index=24&type=section&id=Factors%20Affecting%20Our%20Performance) Performance is heavily influenced by the auto insurance industry (**78%** of Q3 revenue), facing challenges from rising claims costs and reduced carrier acquisition spending - The auto insurance industry's poor underwriting performance, due to inflation and claims severity, has caused insurance carriers to reduce spending on customer acquisition, negatively impacting EverQuote's revenue[94](index=94&type=chunk) - A major insurance carrier customer, representing **10%** of Q3 revenue, reduced agent subsidies during the quarter and notified the company of a discontinuation of these payments through at least the end of 2023[95](index=95&type=chunk) - Another major carrier, which accounted for **20%** of revenue for the nine-month period, significantly reduced spending in Q2 and Q3 2023[96](index=96&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Q3 2023 revenue declined **46.7%** to **$55.0 million** due to reduced auto vertical spending, resulting in a **$29.2 million** net loss after a **$19.8 million** restructuring charge Revenue Change by Period (in thousands) | Period | 2023 | 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Q3** | $55,011 | $103,223 | $(48,212) | -46.7% | | **9 Months** | $232,216 | $315,819 | $(83,603) | -26.5% | - The decrease in automotive revenue was primarily due to a **$40.4 million** reduction in carrier spending for referrals in Q3 2023[126](index=126&type=chunk) - Restructuring charges for Q3 2023 totaled **$19.8 million**, including a **$19.4 million** loss on the sale of health assets and a **$0.4 million** asset impairment charge[138](index=138&type=chunk) Variable Marketing Margin (VMM) (in thousands) | Period | VMM 2023 | VMM 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Q3** | $19,368 | $31,844 | $(12,476) | -39.2% | | **9 Months** | $79,614 | $99,199 | $(19,585) | -19.7% | [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity as of Sep 30, 2023, includes **$39.0 million** cash and a **$25.0 million** credit facility, deemed sufficient for the next 12 months - Principal sources of liquidity as of September 30, 2023, were **$39.0 million** in cash and cash equivalents and an available **$25.0 million** revolving line of credit[144](index=144&type=chunk) - In August 2023, the company amended its loan agreement, decreasing the revolving line of credit from **$35.0 million** to **$25.0 million** and eliminating term loan availability[144](index=144&type=chunk) Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Category | 2023 | 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | $(2,036) | $(10,893) | | Net cash provided by (used in) investing activities | $10,206 | $(3,219) | | Net cash provided by financing activities | $41 | $15,651 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports immaterial exposure to market risks, with minimal interest rate risk due to no outstanding borrowings and immaterial foreign currency risk - The company has no outstanding borrowings under its revolving line of credit, resulting in no material exposure to fluctuations in interest rates[158](index=158&type=chunk) - Exposure to foreign currency exchange rate risk is considered immaterial[159](index=159&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of September 30, 2023, with no material changes in internal control over financial reporting - Based on an evaluation as of the end of the quarter, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective[161](index=161&type=chunk) - No changes occurred during the third quarter of 2023 that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[162](index=162&type=chunk) [PART II. OTHER INFORMATION](index=38&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to various legal proceedings, but management does not anticipate a material adverse effect on financial results - The company states that while it is subject to various legal proceedings from time to time, management does not believe any current matters will have a material adverse effect on its financial results[76](index=76&type=chunk)[165](index=165&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) Key risks include customer concentration, heavy reliance on the struggling auto insurance industry, and potential disruptions from the recent restructuring and workforce reduction - The company faces customer concentration risk, with State Farm (**10%** of Q3 revenue) and Progressive (**20%** of 9-month revenue) having significantly decreased their spending in 2023 State Farm has discontinued subsidies through at least the end of 2023[167](index=167&type=chunk) - The business is heavily reliant on the automotive insurance industry, which is experiencing poor performance due to inflation and rising claims costs, leading carriers to reduce marketing spend[168](index=168&type=chunk) - The recent restructuring, including a **28%** workforce reduction, carries risks that anticipated savings may not be realized, operations could be disrupted, and employee morale and retention could be negatively impacted[172](index=172&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2023, the company did not sell or issue any unregistered equity securities, nor did it repurchase any registered equity securities - There were no sales of unregistered equity securities during the third quarter of 2023[173](index=173&type=chunk) [Item 5. Other Information](index=40&type=section&id=Item%205.%20Other%20Information) The Board adopted an Executive Severance Plan on November 5, 2023, providing benefits for CEO and senior executives upon qualifying termination, with enhanced terms for Change in Control - On November 5, 2023, the company's Board adopted an Executive Severance Plan for the CEO and other senior executives[175](index=175&type=chunk) - The plan provides for severance benefits upon termination without cause or resignation for good reason, with enhanced benefits if the termination occurs within a specified period around a Change in Control[176](index=176&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists key exhibits filed with the Form 10-Q, including the health asset sale agreement, loan modifications, and the Executive Severance Plan - The report includes several key exhibits, such as the sale agreement for the health vertical assets, loan modification agreements, and the new Executive Severance Plan[182](index=182&type=chunk)

EverQuote Inc. (NASDAQ:EVER) Q2 2023 Results Conference Call August 7, 2023 4:30 PM ET Company Participants Brinlea Johnson - Investor Relations Jayme Mendal - President, Chief Executive Officer and Director Joseph Sanborn - Chief Financial Officer Conference Call Participants Michael Graham - Canaccord Ralph Schackart - William Blair Cory Carpenter - JPMorgan Dan Day - B. Riley Securities Jed Kelly - Oppenheimer Operator Ladies and gentlemen, good afternoon. My name is Abby, and I will be your conference o ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 Delaware 26-3101161 (State or other jurisdiction of incorporation or organization) 210 Broadway Cambridge, Massachusetts 02139 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (855) 522-3444 OR ☐ TRANSITION REPO ...

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Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-38549 EverQuote, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incor ...

Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered Class A Common Stock, $0.001 Par Value Per Share EVER The Nasdaq Global Market UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the ...