Core Insights - The Zacks Insurance industry is positioned for growth due to improved pricing, prudent underwriting, and exposure growth [1] - The insurance industry has outperformed the Finance sector and the S&P 500 composite in year-to-date returns [2] Industry Performance - The insurance industry has returned 5.9% year-to-date, surpassing the Finance sector's growth of 4.6% and the S&P 500's appreciation of 0.8% [2] Market Trends - Global commercial insurance rates decreased by 3% in Q1 2025, marking the third consecutive quarterly decline after seven years of increases [3][8] - Despite recent pricing pressures, gross premiums are projected to grow sixfold to exceed $722 billion by 2030 [3][5][8] Catastrophe Losses - Catastrophe losses are driving policy renewal rates, with a reported 3% rise in commercial insurance rates and a 4.9% increase in personal lines in Q1 2025 [5] - Estimated insurance market losses from recent fires in Los Angeles range between $35 billion and $45 billion [4] Technological Investments - Insurers are heavily investing in technology to enhance margins, efficiency, and operational scale, with a projected $4.7 billion in annual global premiums from AI-related insurance by 2032 [11] - The use of advanced technologies like blockchain and AI is expected to significantly reduce costs and improve operational efficiencies [11] Mergers and Acquisitions - A solid capital level supports insurers in pursuing strategic mergers and acquisitions, with the insurance deals market expected to be active in 2025 [10] - Companies engaging in M&A deals valued over $100 million have outperformed the wider market by 1.5 percentage points [10] Growth Stocks - Companies like EverQuote, Horace Mann Educators, Root, and HCI Group are identified as potential growth stocks due to their solid fundamentals and growth prospects [12][14] - EverQuote is leveraging exclusive data assets and technology for long-term growth, with earnings estimates suggesting significant year-over-year growth [15][16] - Horace Mann Educators is expected to benefit from niche focus and improved product offerings, with strong earnings growth projected [17][18] - Root is positioned for growth through its direct-to-consumer model and mobile applications, with substantial revenue and earnings growth estimates [20][21] - HCI Group is engaged in diverse business activities, with strong growth projections for revenues and earnings [22][23]

Core Viewpoint - EverQuote (EVER) shares have increased by 6.4% in the past four weeks, closing at $24.61, with a potential upside indicated by Wall Street analysts' price targets suggesting a mean estimate of $34.17, representing a 38.9% increase [1] Price Targets and Analyst Estimates - The mean estimate consists of six short-term price targets with a standard deviation of $2.79, where the lowest estimate of $30 indicates a 21.9% increase, and the highest estimate suggests a 54.4% surge to $38 [2] - A low standard deviation among price targets indicates a high degree of agreement among analysts regarding the stock's price movement direction [9] Earnings Estimates and Market Sentiment - Analysts show increasing optimism about EverQuote's earnings prospects, as evidenced by a strong consensus in revising EPS estimates higher, which correlates with potential stock price increases [11] - The Zacks Consensus Estimate for the current year has risen by 2.3% over the past month, with one estimate increasing and no negative revisions [12] - EverQuote holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimates, indicating strong potential for near-term upside [13]

EverQuote Conference Call Summary Company Overview - EverQuote is a leading online insurance marketplace that connects consumers with insurance providers, primarily focusing on auto insurance, which constitutes 90% of its business, while the remaining 10% is homeowners insurance [4][5] Core Financial Performance - Q1 marked the fourth consecutive quarter of record revenue, Variable Marketing Dollars (VMD), and adjusted EBITDA [6] - The company reported a compound annual growth rate (CAGR) of 22% since its IPO, with expectations of averaging 20% top-line growth in the long term [8] - Adjusted EBITDA margins were around 13.5% in Q1, reflecting a significant increase from the previous year [54][59] Market Opportunity - The total addressable market (TAM) for insurance distribution and advertising is approximately $115 billion, with digital advertising currently at $7 billion and expected to grow over 15% annually [11][12] - The insurance industry is lagging in digital adoption compared to other sectors, with only 33-40% of advertising spend currently allocated to digital channels [12][13] Consumer and Carrier Benefits - Consumers save an average of $600 to $700 by using EverQuote, which streamlines the insurance shopping process [15] - EverQuote provides carriers with a large pool of prospective customers and allows for precise targeting based on detailed consumer data, enhancing ad spend efficiency [18][25] Industry Dynamics - The insurance industry is currently recovering from a hard market phase, with many carriers still not back to peak spending levels [23][24] - Carriers are expected to continue raising rates to achieve adequate pricing relative to risk, with California being a significant state still needing adjustments [24] Competitive Advantages - EverQuote differentiates itself through advanced data and technology that enhance consumer-provider matching, leading to higher ad spend efficiency [26][27] - The company has built the largest local insurance agent network, allowing it to connect consumers with both direct-to-consumer carriers and local agents [27][28] Impact of Tariffs - Tariffs are expected to have a limited impact on EverQuote's business, primarily affecting carrier costs related to auto parts [38][39] - Carriers are currently in a strong financial position, with combined ratios in the low to mid-eighties, allowing them to absorb potential cost increases [42] AI and Technology Integration - EverQuote is leveraging AI to improve operational efficiency and customer-facing applications, including AI voice technology for customer interactions [46][49] - The company is also developing Smart Campaigns, allowing carriers to optimize their bidding strategies in the marketplace [36][37] Long-term Financial Outlook - EverQuote aims for long-term growth averaging over 20% annually, with EBITDA margins expected to reach 20% [59] - The company is focused on incremental investments in technology to support future growth, particularly in 2026 and 2027 [58] Conclusion - EverQuote is well-positioned in the online insurance marketplace, with strong financial performance, a significant market opportunity, and a focus on technology and efficiency to drive future growth [1][2][3]

Company Overview - EverQuote (EVER) shares have increased by approximately 4.8% over the past month, underperforming the S&P 500 index [1] - The most recent earnings report is crucial for understanding the stock's performance and potential catalysts [1] Earnings Estimates - Estimates for EverQuote have trended upward in the past month, with a consensus estimate shift of 13.79% [2] VGM Scores - EverQuote has a Growth Score of A, a Momentum Score of F, and a Value Score of C, resulting in an aggregate VGM Score of B [3] Outlook - The upward trend in estimates suggests a promising outlook for EverQuote, which holds a Zacks Rank of 1 (Strong Buy) [4] - An above-average return is expected from the stock in the coming months [4] Industry Performance - EverQuote is part of the Zacks Insurance - Multi line industry, where American International Group (AIG) has seen a 3.7% gain over the past month [5] - AIG reported revenues of $6.62 billion for the last quarter, reflecting a year-over-year decline of 47% [5] - AIG's expected earnings for the current quarter are $1.67 per share, indicating a 44% increase from the previous year, with a Zacks Rank of 3 (Hold) [6]

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]