Core Viewpoint - EverQuote (EVER) shares have increased by 12.7% in the past four weeks, closing at $23.99, with a potential upside of 42.4% based on Wall Street analysts' mean price target of $34.17 [1] Price Targets and Estimates - The mean estimate consists of six short-term price targets with a standard deviation of $2.79, indicating variability among analysts; the lowest estimate of $30 suggests a 25.1% increase, while the highest target of $38 indicates a potential surge of 58.4% [2] - A low standard deviation among price targets suggests a high degree of agreement among analysts regarding the stock's price movement direction, which can serve as a starting point for further research [9] Earnings Estimates - Analysts are optimistic about EverQuote's earnings prospects, as indicated by a positive trend in earnings estimate revisions; the Zacks Consensus Estimate for the current year has risen by 7.4% over the past month, with four estimates increasing and no negative revisions [11][12] - The company holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimates, which further supports the potential upside for the stock [13]

Core Insights - The article emphasizes the focus on growth and momentum stocks that are reasonably priced and expected to outperform the market in the long term [1] - It highlights a significant investment opportunity, noting that the S&P 500 increased by 367% and the Nasdaq by 685% from 2009 to 2019, following a recommendation to buy at the financial crisis's bottom in March 2009 [1] Investment Strategy - The investment strategy involves long-term investment in quality stocks, with the use of options to enhance returns [1] - The goal is to assist investors in making money through investments in high-quality growth stocks [1]

PART I. FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The company's Q1 2025 financials show strong revenue growth to $166.6 million and net income of $8.0 million despite a legal settlement [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet strengthened with total assets rising to $232.1 million, driven by increased cash and stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $124,968 | $102,116 | | Accounts receivable, net | $61,803 | $61,346 | | Total current assets | $194,335 | $171,780 | | Total assets | $232,145 | $210,530 | | **Liabilities & Equity** | | | | Accounts payable | $57,286 | $59,975 | | Accrued expenses and other current liabilities | $19,867 | $9,794 | | Total liabilities | $82,645 | $75,162 | | Total stockholders' equity | $149,500 | $135,368 | [Condensed Consolidated Statements of Operations and Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Q1 2025 revenue surged 83% to $166.6 million, boosting net income to $8.0 million despite a $7.9 million legal charge Q1 2025 vs Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $166,632 | $91,065 | | Total cost and operating expenses | $158,635 | $89,299 | | *Legal settlement* | *$7,900* | *$0* | | Income from operations | $7,997 | $1,766 | | Net income | $7,990 | $1,907 | | Diluted EPS | $0.21 | $0.05 | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Stockholders' equity grew to $149.5 million, primarily driven by net income and stock-based compensation - The increase in total stockholders' equity during Q1 2025 was mainly due to **net income of $7,990 thousand** and **stock-based compensation of $5,420 thousand**[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations increased significantly to $23.3 million, driven by higher net income and working capital changes Q1 2025 vs Q1 2024 Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $23,306 | $10,440 | | Net cash used in investing activities | ($1,133) | ($770) | | Net cash provided by financing activities | $669 | $999 | | **Net increase in cash** | **$22,852** | **$10,664** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail significant customer concentration, revenue by vertical, and an $8.2 million legal settlement accrued in the quarter - The company has significant customer concentration; in Q1 2025, two customers accounted for **43% and 13% of total revenue**, respectively[30](index=30&type=chunk) Revenue by Insurance Vertical (in thousands) | Vertical | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Automotive | $152,715 | $77,538 | | Home and renters | $13,904 | $12,689 | | Other | $13 | $838 | | **Total revenue** | **$166,632** | **$91,065** | - The company recorded a **legal settlement liability of $8.2 million** related to litigation, which was settled post-quarter by selling the related entities[73](index=73&type=chunk)[74](index=74&type=chunk)[84](index=84&type=chunk) - Related-party transactions for website visitor referrals amounted to **$7.2 million in expenses** for Q1 2025, a significant increase from $2.3 million in Q1 2024[77](index=77&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses strong revenue growth driven by the auto vertical, a lower VMM, and strong liquidity post-quarter - The company's performance is heavily dependent on the auto insurance industry, which accounted for **92% of revenue** in Q1 2025[92](index=92&type=chunk) Key Performance Metrics (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $166,632 | $91,065 | | Net Income | $7,990 | $1,907 | | Adjusted EBITDA | $22,507 | $7,588 | | Variable Marketing Dollars | $46,860 | $30,818 | | Variable Marketing Margin | 28.1% | 33.8% | - The decrease in Variable Marketing Margin (VMM) to **28.1%** in Q1 2025 from 33.8% was attributed to competitive advertising pricing[128](index=128&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Revenue grew 83% due to a $75.2 million rise in the automotive vertical, though offset by higher marketing costs and a legal charge - The **83.0% revenue increase** was primarily due to a $75.2 million increase in the automotive vertical from its two largest customers[120](index=120&type=chunk) - Sales and marketing expense increased by 82.9% to $129.4 million, driven by a **$59.6 million increase in advertising costs**[123](index=123&type=chunk) - General and administrative expenses increased 27.3% to $8.4 million, primarily due to higher personnel and legal costs[125](index=125&type=chunk) - A **legal settlement expense of $7.9 million** was recorded in Q1 2025 related to a liability from a prior acquisition[126](index=126&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with $125.0 million in cash, no debt, and robust operating cash flow - As of March 31, 2025, the company had **$125.0 million in cash** and access to a $25.0 million revolving line of credit with no outstanding balance[129](index=129&type=chunk) - The company is required to maintain a minimum Adjusted Quick Ratio of 1.10 to 1.00 and was in compliance as of March 31, 2025[131](index=131&type=chunk) - Net cash provided by operating activities increased to **$23.3 million** in Q1 2025 from $10.4 million in Q1 2024[134](index=134&type=chunk)[135](index=135&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports minimal exposure to market risks, including interest rate and foreign currency exchange rate fluctuations - The company had no outstanding borrowings as of March 31, 2025, and therefore had **no material exposure to interest rate fluctuations**[143](index=143&type=chunk) - Exposure to foreign currency exchange rate risk is considered **immaterial**[144](index=144&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal controls over financial reporting were effective - Management concluded that as of the end of the period, the company's disclosure controls and procedures were **effective**[147](index=147&type=chunk) - **No material changes** occurred during the quarter that affected the company's internal control over financial reporting[148](index=148&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) The company settled a significant civil action post-quarter and accrued an $8.2 million liability for it in Q1 2025 - Information regarding legal proceedings is detailed in Note 8, which describes litigation with former equity owners and its settlement[150](index=150&type=chunk)[73](index=73&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's 2024 Annual Report - **No material changes** have occurred in the risk factors since the filing of the Annual Report on Form 10-K for 2024[151](index=151&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not issue any unregistered equity securities or repurchase any of its own stock during the first quarter - There were **no sales of unregistered equity securities** during the three months ended March 31, 2025[152](index=152&type=chunk) - The company **did not purchase any of its registered equity securities** during the first quarter of 2025[153](index=153&type=chunk) [Item 5. Other Information](index=39&type=section&id=Item%205.%20Other%20Information) Subsequent to the quarter, the company sold the Parachute Companies to settle litigation and amended its loan agreement - On May 1, 2025, the company **sold the Parachute Companies for $0.5 million cash** to settle all litigation claims[154](index=154&type=chunk)[156](index=156&type=chunk) - On May 1, 2025, the company **amended its loan agreement** with Western Alliance Bank to consent to the sale[158](index=158&type=chunk) - Two company officers adopted **Rule 10b5-1 trading plans** in March 2025 for future sales of common stock[160](index=160&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including key agreements and officer certifications

Core Points - EverQuote, Inc. is a leading online insurance marketplace that connects consumers with insurance providers [3] - The company aims to become the largest online source of insurance policies by leveraging data, technology, and knowledgeable advisors [3] Upcoming Investor Conferences - EverQuote will present and host one-on-one investor meetings at the following conferences: - 20th Annual Needham Technology, Media, & Consumer 1x1 Conference on May 9th, 2025, virtually [1] - B. Riley Securities 25th Annual Investor Conference on May 21st, 2025, in Marina del Rey, CA [1] - William Blair 45th Annual Growth Stock Conference on June 4th, 2025, in Chicago, IL [2] - Wolfe Research Small and Mid-Cap Conference on June 5th, 2025, virtually [3] - 2025 BMO Insurance Summit on June 12th, 2025, in New York, NY [3] Presentation Details - The presentation at the William Blair conference will be available via live audio webcast and archived replay on EverQuote's investor relations website [2]

Core Insights - EverQuote (EVER) reported a first-quarter 2025 operating net income per share of 38 cents, exceeding the Zacks Consensus Estimate by 17.8% and showing a year-over-year increase of over sevenfold [1] - The first quarter marked the fourth consecutive quarter of record revenue and adjusted EBITDA performance, with improvements across all verticals [1] Revenue Performance - Revenues in the Automotive insurance vertical surged 97% year over year to $152.7 million, surpassing both the Zacks Consensus Estimate of $143 million and the internal estimate of $142.2 million [2] - Home and Renters insurance vertical revenues totaled $13.9 million, reflecting a 10% year-over-year increase, but fell short of the Zacks Consensus Estimate of $15.3 million [2] - Revenues in the Other insurance vertical plummeted 98.4% year over year to $13 million, significantly missing the Zacks Consensus Estimate of $24 million [3] - Total revenues reached $166.6 million, exceeding the Zacks Consensus Estimate by 5.4% and representing an 83% year-over-year increase [3] Cost and Margin Analysis - Total costs and operating expenses rose 77.6% to $158.6 million, driven by increased sales and marketing, cost of revenues, research and development, and general and administrative expenses [4] - EverQuote's variable marketing margin increased 52.3% year over year to $46.9 million, slightly above the Zacks Consensus Estimate of $45.4 million [4] - Adjusted EBITDA for the quarter was $22.5 million, marking a 196% year-over-year increase [5] Financial Position - At the end of the first quarter of 2025, EverQuote had cash and cash equivalents of $125 million, a 22% increase from the end of 2024 [6] - Total assets grew to $232.1 million, up 10.3% from the end of 2024, while total stockholders' equity increased 10.4% to $149.5 million [6] - Cash from operations was reported at $23.3 million, reflecting a 124% year-over-year increase [6] Future Guidance - For Q2 2025, EverQuote estimates revenues in the range of $155-$160 million and a variable marketing margin between $45-$47 million, with adjusted EBITDA expected to be between $20 million and $22 million [7] Market Position - EverQuote currently holds a Zacks Rank 1 (Strong Buy), indicating a favorable outlook in the market [8]

Group 1 - The investment approach during the Q1 earnings season focuses on careful single-stock selection, particularly in small and mid-cap stocks that are insulated from macroeconomic shocks [1] Group 2 - Gary Alexander has extensive experience in covering technology companies and advising seed-round startups, contributing to themes shaping the industry [2]

Core Insights - EverQuote (EVER) reported revenue of $166.63 million for the quarter ended March 2025, marking an 83% year-over-year increase and a surprise of +5.41% over the Zacks Consensus Estimate of $158.08 million [1] - The earnings per share (EPS) for the same period was $0.38, compared to $0.05 a year ago, resulting in an EPS surprise of +18.75% against the consensus estimate of $0.32 [1] Financial Performance Metrics - Variable Marketing Dollars amounted to $46.86 million, exceeding the six-analyst average estimate of $45.41 million [4] - Automotive revenue reached $152.72 million, surpassing the average estimate of $143.04 million from four analysts, representing a significant year-over-year increase of +97% [4] - Home and Renters revenue was reported at $13.90 million, slightly below the four-analyst average estimate of $15.32 million, with a year-over-year change of +9.6% [4] - Other revenue was only $0.01 million, significantly lower than the three-analyst average estimate of $0.24 million, reflecting a drastic year-over-year decline of -98.5% [4] Stock Performance - EverQuote's shares have returned +23.3% over the past month, outperforming the Zacks S&P 500 composite's +0.4% change [3] - The stock currently holds a Zacks Rank 1 (Strong Buy), indicating potential for outperformance in the near term [3]

Core Viewpoint - EverQuote (EVER) reported quarterly earnings of $0.38 per share, exceeding the Zacks Consensus Estimate of $0.32 per share, and showing significant growth from $0.05 per share a year ago, indicating strong performance in the insurance sector [1][2]. Financial Performance - The company achieved revenues of $166.63 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 5.41%, and up from $91.07 million year-over-year [2]. - Over the last four quarters, EverQuote has consistently exceeded consensus EPS estimates, demonstrating a strong earnings performance [2]. Stock Performance - EverQuote shares have increased approximately 33.6% since the beginning of the year, contrasting with a decline of -3.3% in the S&P 500 [3]. - The stock currently holds a Zacks Rank 1 (Strong Buy), indicating expectations for continued outperformance in the near future [6]. Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.29 on revenues of $150.15 million, and for the current fiscal year, it is $1.20 on revenues of $626.23 million [7]. - The insurance industry, particularly the Insurance - Multi line sector, is currently ranked in the top 25% of Zacks industries, suggesting a favorable environment for stock performance [8].

Financial Data and Key Metrics Changes - Total revenues in Q1 reached $166.6 million, an increase of 83% year-over-year and 13% sequentially [13] - Adjusted EBITDA for Q1 was a record $22.5 million, compared to $7.6 million in the prior year period [17] - Net income for Q1 was $8 million, which would have been $15.9 million excluding a non-cash charge related to divesting assets [16] Business Line Data and Key Metrics Changes - Revenue from the auto insurance vertical was $152.7 million in Q1, up 97% year-over-year [14] - Revenue from home and renters insurance was $13.9 million in Q1, up 10% year-over-year and 23% sequentially [14] - Variable marketing dollars (VMD) increased to $46.9 million for Q1, up 52% from the prior year [14] Market Data and Key Metrics Changes - Strong enterprise carrier spend was up over 175% from the comparable period last year [13] - Paid products per agency increased by 25% year-over-year in March [9] Company Strategy and Development Direction - The company aims to become the number one growth partner to property and casualty (P&C) insurance providers by delivering better-performing referrals, larger traffic scale, and a broader suite of products [6][10] - Investments in technology and AI capabilities are planned for the second half of 2025 to drive operational efficiency and strengthen competitive advantages [19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about carrier profitability, noting that many carriers are exceeding their profitability targets and are focused on growth [24] - The company expects revenue for Q2 to be between $155 million and $160 million, representing 34% year-over-year growth at the midpoint [18] Other Important Information - The company reported strong operating cash flow of $23.3 million for Q1, ending the quarter with no debt and cash and cash equivalents of $125 million [17] - The company is focused on expanding relationships with customers into adjacent growth areas, particularly for local insurance agents [9] Q&A Session Summary Question: Can you provide additional insights on second half trends and carrier profitability? - Management indicated that carrier profitability is favorable, with many carriers operating below their target combined ratios, which supports growth [24][25] Question: How has the industry responded to the vacated FCC rule regarding one-on-one consent? - The company continues to maintain certain mechanisms that were tested during the one-to-one consent period, even after the requirement was lifted [31][32] Question: Can you quantify the impact of TCPA on VMM and the expected benefits from AI and ML? - VMM was 28.1% in Q1, with expectations for a slight increase in Q2, and AI/ML is expected to drive operational efficiency and improve customer outcomes [36][39] Question: What are the results seen in the agent channel after the new platform rollout? - The agent business experienced healthy growth of 20-30% this quarter, with a focus on deepening relationships and expanding offerings [44][45] Question: What are the priorities for cash allocation moving forward? - The company plans to focus on organic investments in technology, potential M&A opportunities, and considering share buybacks [74][78] Question: How should operating expenses be viewed throughout the year? - Operating expenses are expected to remain relatively flat in the near term, with incremental investments planned for technology and AI capabilities in the second half [82][83]

Financial Data and Key Metrics Changes - Total revenues in Q1 reached $166.6 million, an increase of 83% year over year and up 13% sequentially [11] - Adjusted EBITDA for Q1 was a record $22.5 million compared to $7.6 million in the prior year period [14] - Net income for Q1 was $8 million, which would have been $15.9 million excluding a non-cash charge related to divesting assets [13] Business Line Data and Key Metrics Changes - Revenue from the auto insurance vertical was $152.7 million in Q1, up 97% year over year [12] - Revenue from home and renters insurance was $13.9 million in Q1, up 10% year over year and up 23% sequentially [12] - Variable marketing dollars (VMD) increased to $46.9 million for Q1, up 52% from the prior year period [12] Market Data and Key Metrics Changes - Strong enterprise carrier spend was up over 175% from the comparable period last year [11] - Paid products per agency increased by 25% year over year in March [8] Company Strategy and Development Direction - The company aims to become the number one growth partner to property and casualty (P&C) insurance providers by delivering better performing referrals, bigger traffic scale, and a broader suite of products and services [5][6] - The company is focusing on expanding relationships with customers into adjacent growth areas, such as building a one-stop growth shop for local insurance agents [8] - Investments in technology, data assets, and AI capabilities are planned for the second half of 2025 to drive operational efficiency and strengthen competitive advantages [17] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the long-term thesis of insurance advertising spend shifting to digital channels [14] - The outlook for carrier profitability is favorable, with healthy underwriting margins providing a cushion against potential inflation and claims costs [15][22] - The company expects revenue for Q2 to be between $155 million and $160 million, representing 34% year-over-year growth at the midpoint [16] Other Important Information - The company reported strong operating cash flow of $23.3 million for Q1, ending the quarter with no debt and cash and cash equivalents of $125 million [14] - The company is committed to maintaining expense discipline while investing in technology and operational efficiency [9][17] Q&A Session Summary Question: Can you provide additional insights on second half trends and carrier profitability? - Management indicated that carrier profitability is generally favorable, with many carriers overshooting their profitability targets, which supports growth [21][22] Question: How has the industry responded to the vacated FCC rule regarding one-to-one consent? - The company continues to maintain certain practices that were in place prior to the rule change, focusing on improving quality and performance for customers [28][29] Question: Can you discuss the impact of AI and ML on VMM? - Management noted that AI and ML are driving operational efficiency and improving customer outcomes, particularly through the traffic bidding technology [33][34] Question: What are the trends in the agent channel after the new platform rollout? - The agent business is healthy, with growth of 20% to 30% this quarter, and the company is focused on deepening relationships with agents [39][40] Question: What are the capital allocation priorities moving forward? - The company is considering investments in technology, potential M&A opportunities, and share buybacks as part of its capital allocation strategy [69][74]