Workflow
EverQuote(EVER) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (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 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 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 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 thousand16 Condensed Consolidated Statements of Cash Flows 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 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, respectively30 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 entities737484 - 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 202477 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 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 202592 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 pricing128 Results of Operations 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 customers120 - Sales and marketing expense increased by 82.9% to $129.4 million, driven by a $59.6 million increase in advertising costs123 - General and administrative expenses increased 27.3% to $8.4 million, primarily due to higher personnel and legal costs125 - A legal settlement expense of $7.9 million was recorded in Q1 2025 related to a liability from a prior acquisition126 Liquidity and Capital Resources 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 balance129 - 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, 2025131 - Net cash provided by operating activities increased to $23.3 million in Q1 2025 from $10.4 million in Q1 2024134135 Item 3. Quantitative and Qualitative Disclosures About Market Risk 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 fluctuations143 - Exposure to foreign currency exchange rate risk is considered immaterial144 Item 4. Controls and Procedures 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 effective147 - No material changes occurred during the quarter that affected the company's internal control over financial reporting148 PART II. OTHER INFORMATION Item 1. Legal Proceedings 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 settlement15073 Item 1A. Risk Factors 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 2024151 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 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, 2025152 - The company did not purchase any of its registered equity securities during the first quarter of 2025153 Item 5. Other Information 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 claims154156 - On May 1, 2025, the company amended its loan agreement with Western Alliance Bank to consent to the sale158 - Two company officers adopted Rule 10b5-1 trading plans in March 2025 for future sales of common stock160 Item 6. Exhibits This section lists exhibits filed with the Form 10-Q, including key agreements and officer certifications