EverQuote Announces Third Quarter 2023 Financial Results
- Third Quarter Revenue of
$55.0 million - Third Quarter Variable Marketing Margin of
$19.4 million , Representing 35% of Revenue
“In the third quarter,
“As we work through this challenging auto insurance market, our team’s strong execution and proven resilience give us high confidence that we will be well positioned when the market recovers. EverQuote’s vision remains unchanged: to become the largest online source of insurance policies, using data, technology, and knowledgeable advisors to make insurance simpler, more affordable and more personalized,” concluded
“We have continued to focus on what we can control by taking decisive action to judiciously manage expenses and build our balance sheet,” said
Third Quarter 2023 Financial Highlights:
(Unless otherwise noted, all comparisons are relative to the third quarter of 2022.
- Total revenue of
$55.0 million , a decrease of 47%. - Automotive insurance vertical revenue of
$43.1 million , a decrease of 51%. - Revenue from home and renters insurance vertical of
$10.9 million , an increase of 51%. - VMM of
$19.4 million , representing 35% of revenue. - GAAP net loss increased to a loss of
$29.2 million , compared to a GAAP net loss of$6.5 million . The net loss includes a$19.4 million charge related to the sale of our health insurance vertical assets. - Adjusted EBITDA decreased to
$(1.9) million , compared to Adjusted EBITDA of$2.0 million . - Ended the quarter with
$39.0 million in cash and cash equivalents, an increase of 26% from$31.0 million at the end of the second quarter of 2023.
Fourth Quarter 2023 Outlook:
(Revenue in our health insurance vertical was
For the fourth quarter 2023,
- Revenue of
$47.0 -$52.0 million . - Variable Marketing Margin of
$16.5 -$18.5 million . - Adjusted EBITDA of
$(4.5) -$(2.5) million .
With respect to the Company’s expectations under “Fourth Quarter 2023 Outlook” 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, restructuring and other charges, acquisition-related costs, legal settlement expense, one-time severance charges, 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
Safe Harbor Statement
This press release contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact contained in this press release, including statements regarding our future results of operations and financial position, business strategy and plans, and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “should,” “expects,” “might,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “seek,” “would” or “continue,” or the negative of these terms or other similar expressions. The forward-looking statements in this press release are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition liquidity and results of operations. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. These forward-looking statements speak only as of the date of this press release and are subject to a number of risks, uncertainties and assumptions described in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended
About
For more information, visit everquote.com and follow on X (formerly Twitter) @everquotelife, Instagram @everquotepics, and LinkedIn https://www.linkedin.com/company/everquote/.
Investor Relations Contact
Brinlea Johnson
415-489-2193
STATEMENTS OF OPERATIONS | |||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
(in thousands except per share) | |||||||||||||||
Revenue | $ | 55,011 | $ | 103,223 | $ | 232,216 | $ | 315,819 | |||||||
Cost and operating expenses(1): | |||||||||||||||
Cost of revenue | 6,150 | 5,877 | 17,467 | 17,920 | |||||||||||
Sales and marketing | 46,505 | 89,098 | 195,537 | 273,102 | |||||||||||
Research and development | 6,270 | 7,832 | 21,647 | 24,273 | |||||||||||
General and administrative | 5,741 | 7,102 | 19,339 | 21,400 | |||||||||||
Restructuring and other charges | 19,757 | — | 23,589 | — | |||||||||||
Acquisition-related costs | — | (96 | ) | (150 | ) | (4,767 | ) | ||||||||
Total cost and operating expenses | 84,423 | 109,813 | 277,429 | 331,928 | |||||||||||
Loss from operations | (29,412 | ) | (6,590 | ) | (45,213 | ) | (16,109 | ) | |||||||
Other income (expense): | |||||||||||||||
Interest income | 411 | 113 | 869 | 158 | |||||||||||
Other income, net | 20 | 26 | 5 | 29 | |||||||||||
Total other income, net | 431 | 139 | 874 | 187 | |||||||||||
Loss before income taxes | (28,981 | ) | (6,451 | ) | (44,339 | ) | (15,922 | ) | |||||||
Income tax expense | (236 | ) | — | (600 | ) | — | |||||||||
Net loss | $ | (29,217 | ) | $ | (6,451 | ) | $ | (44,939 | ) | $ | (15,922 | ) | |||
Net loss per share, basic and diluted | $ | (0.87 | ) | $ | (0.20 | ) | $ | (1.36 | ) | $ | (0.51 | ) | |||
Weighted average common shares outstanding, basic and diluted | 33,549 | 32,008 | 33,146 | 31,357 | |||||||||||
(1) Amounts include stock-based compensation expense, as follows: | |||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
(in thousands) | |||||||||||||||
Cost of revenue | $ | 57 | $ | 67 | $ | 170 | $ | 221 | |||||||
Sales and marketing | 2,216 | 2,461 | 6,761 | 8,635 | |||||||||||
Research and development | 1,820 | 2,687 | 6,479 | 7,748 | |||||||||||
General and administrative | 1,386 | 2,018 | 4,585 | 5,759 | |||||||||||
Restructuring and other charges | 165 | — | 1,288 | — | |||||||||||
$ | 5,644 | $ | 7,233 | $ | 19,283 | $ | 22,363 |
BALANCE SHEET DATA | |||||||
2023 | 2022 | ||||||
(in thousands) | |||||||
Cash and cash equivalents | $ | 39,049 | $ | 30,835 | |||
Working capital | 38,103 | 35,567 | |||||
Total assets | 113,986 | 156,519 | |||||
Total liabilities | 32,115 | 49,033 | |||||
Total stockholders' equity | 81,871 | 107,486 |
STATEMENTS OF CASH FLOWS | |||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
(in thousands) | |||||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net loss | $ | (29,217 | ) | $ | (6,451 | ) | $ | (44,939 | ) | $ | (15,922 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||||||
Depreciation and amortization expense | 2,251 | 1,410 | 5,121 | 4,326 | |||||||||||
Stock-based compensation expense | 5,644 | 7,233 | 19,283 | 22,363 | |||||||||||
Loss on sale of health assets | 19,388 | — | 19,388 | — | |||||||||||
Impairment of right-of-use asset | 384 | — | 384 | — | |||||||||||
Change in fair value of contingent consideration liabilities | — | (95 | ) | (150 | ) | (4,767 | ) | ||||||||
Provision for bad debt | (38 | ) | 35 | 186 | 112 | ||||||||||
Unrealized foreign currency transaction gains | (17 | ) | (18 | ) | (1 | ) | (34 | ) | |||||||
Changes in operating assets and liabilities: | |||||||||||||||
Accounts receivable | (63 | ) | (3,878 | ) | 7,267 | (4,877 | ) | ||||||||
Prepaid expenses and other current assets | 770 | (319 | ) | 2,637 | (366 | ) | |||||||||
Commissions receivable, current and non-current | 2,740 | (4,249 | ) | 2,611 | (15,674 | ) | |||||||||
Operating lease right-of-use assets | 632 | 664 | 2,006 | 1,951 | |||||||||||
Other assets | — | 11 | 36 | (19 | ) | ||||||||||
Accounts payable | (2,217 | ) | 4,207 | (10,029 | ) | 7,620 | |||||||||
Accrued expenses and other current liabilities | (3,791 | ) | (1,207 | ) | (3,522 | ) | (3,266 | ) | |||||||
Deferred revenue | 92 | (84 | ) | 34 | (206 | ) | |||||||||
Operating lease liabilities | (705 | ) | (779 | ) | (2,348 | ) | (2,134 | ) | |||||||
Net cash used in operating activities | (4,147 | ) | (3,520 | ) | (2,036 | ) | (10,893 | ) | |||||||
Cash flows from investing activities: | |||||||||||||||
Acquisition of property and equipment, including costs capitalized for development of internal-use software | (966 | ) | (1,230 | ) | (2,988 | ) | (3,219 | ) | |||||||
Proceeds from sale of health assets | 13,194 | — | 13,194 | — | |||||||||||
Net cash provided by (used in) investing activities | 12,228 | (1,230 | ) | 10,206 | (3,219 | ) | |||||||||
Cash flows from financing activities: | |||||||||||||||
Proceeds from exercise of stock options | — | 122 | 340 | 730 | |||||||||||
Proceeds from private placement of common stock | — | — | — | 15,000 | |||||||||||
Tax withholding payments related to net share settlement | (67 | ) | (28 | ) | (299 | ) | (79 | ) | |||||||
Net cash provided by (used in) financing activities | (67 | ) | 94 | 41 | 15,651 | ||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (13 | ) | (22 | ) | 3 | (49 | ) | ||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 8,001 | (4,678 | ) | 8,214 | 1,490 | ||||||||||
Cash, cash equivalents and restricted cash at beginning of period | 31,048 | 41,269 | 30,835 | 35,101 | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | 39,049 | $ | 36,591 | $ | 39,049 | $ | 36,591 |
FINANCIAL AND OPERATING METRICS | |||||||||||
Revenue by vertical: | |||||||||||
Three Months Ended |
Change | ||||||||||
2023 | 2022 | % | |||||||||
(in thousands) | |||||||||||
Automotive | $ | 43,077 | $ | 88,150 | -51.1 | % | |||||
Home and Renters | 10,889 | 7,191 | 51.4 | % | |||||||
Other | 1,045 | 7,882 | -86.7 | % | |||||||
Total Revenue | $ | 55,011 | $ | 103,223 | -46.7 | % |
Nine Months Ended |
Change | ||||||||||
2023 | 2022 | % | |||||||||
(in thousands) | |||||||||||
Automotive | $ | 182,520 | $ | 257,200 | -29.0 | % | |||||
Home and Renters | 31,068 | 25,292 | 22.8 | % | |||||||
Other | 18,628 | 33,327 | -44.1 | % | |||||||
Total Revenue | $ | 232,216 | $ | 315,819 | -26.5 | % |
Other financial and non-financial metrics:
Three Months Ended |
Change | ||||||||||
2023 | 2022 | % | |||||||||
(in thousands) | |||||||||||
Loss from operations | $ | (29,412 | ) | $ | (6,590 | ) | 346.3 | % | |||
Net loss | $ | (29,217 | ) | $ | (6,451 | ) | 352.9 | % | |||
Variable Marketing Margin | $ | 19,368 | $ | 31,844 | -39.2 | % | |||||
Adjusted EBITDA(1) | $ | (1,905 | ) | $ | 1,983 | -196.1 | % |
Nine Months Ended |
Change | ||||||||||
2023 | 2022 | % | |||||||||
(in thousands) | |||||||||||
Loss from operations | $ | (45,213 | ) | $ | (16,109 | ) | 180.7 | % | |||
Net loss | $ | (44,939 | ) | $ | (15,922 | ) | 182.2 | % | |||
Variable Marketing Margin | $ | 79,614 | $ | 99,199 | -19.7 | % | |||||
Adjusted EBITDA(1) | $ | 1,347 | $ | 5,842 | -76.9 | % | |||||
(1) Adjusted EBITDA is a non-GAAP measure. Please see “EverQuote, Inc. Reconciliation of Non-GAAP Measures to GAAP” below for more information. |
To supplement the Company’s financial statements presented in accordance with GAAP and to provide investors with additional information regarding EverQuote’s financial results, the Company has presented Adjusted EBITDA as a non-GAAP financial measure. This non-GAAP financial measure is 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; restructuring and other charges; 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 EverQuote’s business. In particular, the Company believes that excluding the impact of these items in calculating Adjusted EBITDA can provide a useful measure for period-to-period comparisons of EverQuote’s core operating performance.
The Company uses Adjusted EBITDA to evaluate EverQuote’s operating performance and trends and make planning decisions. The Company believes that this non-GAAP financial measure helps identify underlying trends in EverQuote’s 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 EverQuote’s operating results, enhancing the overall understanding of the Company’s past performance and future prospects.
The Company’s non-GAAP financial measures are 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 of the Company’s non-GAAP financial measures as 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.
RECONCILIATION OF NON-GAAP MEASURES TO GAAP | |||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||
(in thousands) | |||||||||||||||
Net loss | $ | (29,217 | ) | $ | (6,451 | ) | $ | (44,939 | ) | $ | (15,922 | ) | |||
Stock-based compensation | 5,479 | 7,233 | 17,995 | 22,363 | |||||||||||
Depreciation and amortization | 2,251 | 1,410 | 5,121 | 4,326 | |||||||||||
Restructuring and other charges | 19,757 | — | 23,589 | — | |||||||||||
Acquisition-related costs | — | (96 | ) | (150 | ) | (4,767 | ) | ||||||||
Interest income | (411 | ) | (113 | ) | (869 | ) | (158 | ) | |||||||
Income tax expense | 236 | — | 600 | — | |||||||||||
Adjusted EBITDA | $ | (1,905 | ) | $ | 1,983 | $ | 1,347 | $ | 5,842 |
Source:
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