GlobeNewswire Inc | Nov 1, 2021 04:05PM EDT

November 01, 2021

-- Revenue Increased 20% Year-Over-Year to $107.6 Million -- Recent Acquisition of PolicyFuel Closed and Successfully Integrated into DTC Agency Operations

CAMBRIDGE, Mass., Nov. 01, 2021 (GLOBE NEWSWIRE) -- EverQuote, Inc. (Nasdaq: EVER), a leading online insurance marketplace, today announced financial results for the third quarter ended September 30, 2021.

Third quarter revenue increased 20% and Variable Marketing Margin, or VMM, grew 10% year-over-year. We believe the challenges in the auto insurance market will correct as carriers adjust their pricing strategies to a new underwriting environment. Importantly, we expect our non-auto insurance verticals to be unaffected by these challenges, and we remain confident that our health insurance vertical will have a successful fourth quarter, said Jayme Mendal, CEO of EverQuote. In an effort to align our cost structure to the current auto insurance environment, we implemented an approximate 10% structural reduction in non-marketing operating expenses (excluding non-cash items). In addition, we are proactively shifting to a new organizational operating model that we believe will enable us to make faster progress towards our long-term vision. With these advantages and an organizational model that enables better, faster execution, EverQuote willbe better positioned than ever before to emerge as a powerful player in the $150 billion insurance distribution market.

Third Quarter 2021 Financial Highlights:

(All comparisons are relative to the third quarter of 2020):

-- Total revenue of $107.6 million, an increase of 20%. -- Automotive insurance vertical revenue of $89.7 million, an increase of 20%. -- Revenue from our other insurance verticals, which includes home and renters, life, health and commercial insurance, increased 18% to $17.9 million. -- Variable Marketing Margin of $32.4 million, an increase of 10%. -- GAAP net loss increased to $5.3 million, compared to GAAP net loss of $3.2 million. -- Adjusted EBITDA decreased to $2.7 million, compared to Adjusted EBITDA of $5.2 million.

Third Quarter 2021 Business Highlights:

-- Quote request growth of 21% driven by the strength of our traffic operations. -- EverQuote closed its previously announced acquisition of PolicyFuel, expanding its Direct-To-Consumer (DTC) Agency offerings into its auto insurance verticals.

Fourth Quarter and Updated Full-Year 2021 Guidance:

EverQuote anticipates Revenue, Variable Marketing Margin and Adjusted EBITDA to be in the following ranges:

Fourth quarter 2021:

-- Revenue of $93.5 - $98.5 million. -- Variable Marketing Margin of $30.5 - $33.5 million. -- Adjusted EBITDA of ($1.5) - $1.5 million.

Full year 2021:

-- Revenue of $410 - $415 million, a year-over-year increase of 19% at the mid-point and a decrease from our previous guidance of $440 - $446 million. -- Variable Marketing Margin of $127 - $130 million, a year-over-year increase of 18% at the mid-point and a decrease from our previous guidance of $138 - $141 million. -- Adjusted EBITDA of $12.5 - $15.5 million, a year-over-year decrease of 24% at the mid-point and a decrease from our previous guidance of $23 - $26 million.

With respect to the Companys expectations under "Fourth Quarter and Updated Full Year 2021 Guidance" above, the Company has not reconciled the non-GAAP measure Adjusted EBITDA to the GAAP measure net income (loss) in this press release because the Company does not provide guidance for stock-based compensation expense, depreciation and amortization expense, acquisition-related costs, interest income, and income taxes on a consistent basis as the Company is unable to quantify these amounts without unreasonable efforts, which would be required to include a reconciliation of Adjusted EBITDA to GAAP net income (loss). In addition, the Company believes such a reconciliation 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 third quarter 2021 financial results at 4:30 p.m. Eastern Time today, November 1, 2021. 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 9566654. 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 November 1, 2021, until 11:59 p.m. Eastern Time on November 8, 2021, by dialing (800) 585-8367 for the U.S. or Canada, or (416) 621-4642 for international callers, and entering passcode 9566654. 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 Companys ability to attract and retain consumers and insurance providers using the Companys marketplace; (2) the Companys ability to maintain or increase the amount providers spend per quote request; (3) the impact on the Company and the insurance industry of the COVID-19 pandemic; (4) the effectiveness of the Companys growth strategies and its ability to effectively manage growth; (5) the Companys ability to maintain and build its brand; (6) the Companys reliance on its third-party service providers; (7) the Companys ability to develop new and enhanced products and services to attract and retain consumers and insurance providers, and the Companys ability to successfully monetize them; (8) the impact of competition in the Companys industry and innovation by the Companys competitors; (9) the Companys expected use of proceeds from its initial public offering (10) developments regarding the insurance industry and the transition to online marketing; (11) the Companys ability tosuccessfully operate PolicyFuel; (12) the Companys ability to successfully remediate the material weaknesses identified in the Companys internal controls over financial reporting and (13) other factors discussed in the Risk Factors section of the Companys 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 Companys views as of the date of this press release. The Company anticipates that subsequent events and developments will cause the Companys 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 Companys views as of any date subsequent to the date of this press release.

About EverQuote

EverQuote operates a leading online insurance marketplace, connecting consumers with insurance providers. The company's mission is to empower insurance shoppers to better protect life's most important assetstheir family, property, and future. Our vision is to become the largest online source of insurance policies by using data and technology to make insurance simpler, more affordable and personalized, ultimately reducing cost and risk.

For more information, visit everquote.com and follow on Twitter @everquotelife, Instagram @everquotepics, and LinkedIn https://www.linkedin.com/company/everquote/.

Investor Relations Contact:Brinlea JohnsonThe Blueshirt Group212-331-8424Brinlea@blueshirtgroup.com

EVERQUOTE, INC.CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 (in thousands except per share) Revenue $ 107,563 $ 89,977 $ 316,448 $ 249,643 Cost and operating expenses(1):Cost of revenue 5,994 5,378 17,758 15,690 Sales and marketing 92,545 73,598 265,724 204,663 Research and development 9,259 8,149 26,885 21,574 General and 6,731 5,661 18,527 15,134 administrativeAcquisition-related 819 480 1,005 480 Total cost and operating 115,348 93,266 329,899 257,541 expensesLoss from operations (7,785 ) (3,289 ) (13,451 ) (7,898 )Other income (expense): Interest income 9 18 33 176 Other income (expense), (6 ) 87 (46 ) 288 netTotal other income 3 105 (13 ) 464 (expense), netLoss before income taxes (7,782 ) (3,184 ) (13,464 ) (7,434 )Benefit from income 2,510 ? 2,510 ? taxesNet loss $ (5,272 ) $ (3,184 ) $ (10,954 ) $ (7,434 )Net loss per share, $ (0.18 ) $ (0.12 ) $ (0.38 ) $ (0.27 )basic and dilutedWeighted average commonshares 29,277 27,526 28,871 27,102 outstanding, basic anddiluted (1) Amounts include stock-based compensation expense, as follows: Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 (in thousands) Cost of revenue $ 108 $ 111 $ 282 $ 253 Sales and marketing 3,366 3,080 9,216 7,322 Research and development 2,692 2,228 7,340 5,366 General and 2,182 1,781 6,119 5,049 administrative $ 8,348 $ 7,200 $ 22,957 $ 17,990

EVERQUOTE, INC.CONSOLIDATED BALANCE SHEET DATA

September 30, December 31, 2021 2020 (in thousands) Cash and cash equivalents $ 41,773 $ 42,870 Working capital 47,853 50,554 Total assets 148,547 129,050 Total liabilities 62,499 58,068 Total stockholders' equity 86,048 70,982

EVERQUOTE, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 (in thousands) Cash flows from operating activities:Net loss $ (5,272 ) $ (3,184 ) $ (10,954 ) $ (7,434 )Adjustments toreconcile net loss to net cash provided byoperating activities: Depreciation and 1,298 731 3,608 2,174 amortizationStock-based 8,348 7,200 22,957 17,990 compensation expenseChange in fair value ofcontingent 425 ? 136 ? considerationDeferred taxes (2,510 ) ? (2,510 ) ? Provision for (recovery ? (2 ) (50 ) 15 of) bad debtUnrealized foreigncurrency transaction (8 ) ? 15 ? (gains) lossesChanges in operatingassets and liabilities,net of effects fromacquisitions:Accounts receivable 1,365 (5,036 ) 1,662 (9,328 )Prepaid expenses and (849 ) (1,588 ) (941 ) 2,048 other current assetsOperating lease 636 ? 2,036 ? right-of-use assetsOther assets (749 ) (165 ) (1,089 ) (222 )Accounts payable (1,499 ) 6,737 (8,622 ) 10,030 Accrued expenses andother current 2,277 925 9,815 (2,325 )liabilitiesDeferred revenue 56 59 23 191 Operating lease (731 ) ? (2,068 ) ? liabilitiesOther long-term 26 318 30 764 liabilitiesNet cash provided by 2,813 5,995 14,048 13,903 operating activitiesCash flows from investing activities:Acquisition of propertyand equipment, including costscapitalized fordevelopment of (965 ) (837 ) (2,275 ) (2,708 )internal-use softwareAcquisition of business (15,955 ) (14,930 ) (15,955 ) (14,930 )Net cash used in (16,920 ) (15,767 ) (18,230 ) (17,638 )investing activitiesCash flows from financing activities:Proceeds from exercise 1,367 1,244 3,091 3,562 of stock optionsNet cash provided by 1,367 1,244 3,091 3,562 financing activitiesEffect of exchange ratechanges on cash, cash equivalentsand restricted cash (7 ) ? (6 ) ? Net decrease in cash, cash equivalents andrestricted cash (12,747 ) (8,528 ) (1,097 ) (173 )Cash, cash equivalentsand restricted cash at beginningof period 54,770 54,659 43,120 46,304 Cash, cash equivalentsand restricted cash at $ 42,023 $ 46,131 $ 42,023 $ 46,131 end of period

EVERQUOTE, INC.FINANCIAL AND OPERATING METRICS

Revenue by vertical:

Three Months Ended September Change 30, 2021 2020 % (in thousands) Automotive $ 89,666 $ 74,779 19.9 %Other 17,897 15,198 17.8 %Total Revenue $ 107,563 $ 89,977 19.5 %

Nine Months Ended September Change 30, 2021 2020 % (in thousands) Automotive $ 260,505 $ 207,014 25.8 %Other 55,943 42,629 31.2 %Total Revenue $ 316,448 $ 249,643 26.8 %

Otherfinancialandnon-financialmetrics:

Three Months Ended September 30, Change 2021 2020 % (in thousands) Loss from operations $ (7,785 ) $ (3,289 ) 136.7 %Net loss $ (5,272 ) $ (3,184 ) 65.6 %Quote requests 7,613 6,291 21.0 %Variable Marketing Margin $ 32,401 $ 29,428 10.1 %Adjusted EBITDA(1) $ 2,674 $ 5,209 -48.7 %

Nine Months Ended September 30, Change 2021 2020 % (in thousands) Loss from operations $ (13,451 ) $ (7,898 ) 70.3 %Net loss $ (10,954 ) $ (7,434 ) 47.4 %Quote requests 22,114 20,460 8.1 %Variable Marketing Margin $ 96,669 $ 76,721 26.0 %Adjusted EBITDA(1) $ 14,073 $ 13,034 8.0 % (1) Adjusted EBITDAisanon-GAAPmeasure.Pleasesee ?EverQuote,Inc.ReconciliationofNon-GAAPMeasurestoGAAP? below for more information.

EVERQUOTE, INC.NON-GAAPFINANCIALMEASURES

To supplement the Companys financial statements presented in accordance with GAAP and to provide investors with additional information regarding EverQuotes financial results, the Company has presented Adjusted EBITDA as anon-GAAPfinancial measure. Thisnon-GAAPfinancialmeasureis not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to similarly titled measures presented by other companies.

The Company defines adjusted EBITDA as net income (loss), excluding the impact of stock-based compensation expense; depreciation and amortization expense; acquisition-related costs; interest income; and 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 EverQuotes business. In particular, the Company believes that excluding the impact of these items in calculating adjusted EBITDA can provide a usefulmeasureforperiod-to-periodcomparisonsofEverQuotes core operating performance.

The Company uses adjusted EBITDA to evaluate EverQuotes operating performance and trends and make planning decisions. The Company believesthatthisnon-GAAPfinancialmeasurehelps identify underlying trends in EverQuotes business that could otherwise be masked by the effect of the items that the Company excludes in the calculations of adjusted EBITDA. Accordingly, the Company believes that this financial measure provides useful information to investors and others in understanding and evaluating EverQuotes operating results, enhancing the overall understanding of the Companys past performance and future prospects.

TheCompanysnon-GAAPfinancialmeasuresare 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 adjusted EBITDA rather than net income (loss), which is the most directly comparable financial measure calculated and presented in accordance with GAAP. In addition, other companies may use other measures to evaluate their performance, which could reduce the usefulness oftheCompanysnon-GAAPfinancialmeasuresas tools for comparison.

The following table reconciles adjusted EBITDA to net income (loss), the most directly comparable financial measure calculated and presented in accordance with GAAP.

EVERQUOTE, INC.RECONCILIATIONOFNON-GAAPMEASURESTOGAAP Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 2021 2020 (in thousands) Net loss $ (5,272 ) $ (3,184 ) $ (10,954 ) $ (7,434 )Stock-based 8,348 7,200 22,957 17,990 compensationDepreciation and 1,298 731 3,608 2,174 amortizationAcquisition-related 819 480 1,005 480 Interest income (9 ) (18 ) (33 ) (176 )Benefit from income (2,510 ) ? (2,510 ) ? taxesAdjusted EBITDA $ 2,674 $ 5,209 $ 14,073 $ 13,034