Form 8-K EverQuote, Inc. For: Feb 25
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 25, 2019
EverQuote, Inc.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 001-38549 | 26-3101161 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) | ||
| 210 Broadway Cambridge, Massachusetts |
02139 | |||
| (Address of Principal Executive Offices) | (Zip Code) | |||
Registrant’s telephone number, including area code: (855) 522-3444
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
On February 25, 2019, EverQuote, Inc. (the “Company”) issued a press release reporting financial results for the quarter and fiscal year ended December 31, 2018. The full text of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information contained in Item 2.02 in this Current Report on Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as expressly set forth by specific reference in such a filing.
| Item 7.01 | Regulation FD Disclosure. |
On February 25, 2019, the Company posted an investor presentation to its website (www.everquote.com). A copy of the investor presentation is furnished as Exhibit 99.2 to this Current Report on Form 8-K.
The information contained in Item 7.01 in this Current Report on Form 8-K (including Exhibit 99.2) shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
EXHIBIT INDEX
| Exhibit No. |
Description | |
| 99.1 | Press release dated February 25, 2019 | |
| 99.2 | Investor presentation dated February 25, 2019 | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| EVERQUOTE, INC. | ||||||
| Date: February 25, 2019 | By: | /s/ Seth Birnbaum | ||||
| Seth Birnbaum | ||||||
| President and Chief Executive Officer | ||||||
Exhibit 99.1
EverQuote Announces Fourth Quarter and Full Year 2018 Financial Results
| • | Full Year 2018 Revenue Increased 29% Year-Over-Year to $163.3 Million |
| • | Fourth Quarter Revenue Increased 23% Year-Over-Year to $39.8 Million |
| • | Fourth Quarter Automotive Revenue Grew 15% Year-Over-Year to $33.9 Million |
| • | Fourth Quarter Home and Life Revenue Grew 99% Year-Over-Year to $5.9 Million |
CAMBRIDGE, Mass., February 25, 2019 — EverQuote, Inc. (“EverQuote” or the “Company”), a leading online insurance marketplace in the U.S., today announced financial results for the fourth quarter and full year ended December 31, 2018.
“We are pleased with our fourth quarter results as we grew total revenue 23% and increased quote requests 10%, while seeing increased spend from seven of our top 10 carrier partners over the prior year quarter,” said Seth Birnbaum, CEO and Co-Founder of EverQuote.
“We delivered another strong quarter of growth in our newer home and life insurance verticals, while investing in our consumer marketing capabilities and expanding our carrier offerings on the EverDrive platform, which are now available in five states to EverDrive users who qualify via their safe-driving score.”
“In 2018, we achieved total revenue growth of 29% year-over-year as we executed on our direct strategy with insurance providers. We successfully increased the number of insurance agents in our marketplace and, for the full year, grew total spend on our platform across all of our top 10 carriers.”
“As we look ahead to 2019, we are excited about the opportunities for EverQuote as the insurance industry continues to shift online, consistent with our expectations.”
“We remain focused on increasing provider coverage, deepening provider and consumer engagement, attracting more customers to our marketplace and launching new verticals while increasing our investment in consumer and provider experiences across EverQuote.com and EverDrive.”
“We are committed to our mission to make EverQuote THE destination for consumers to shop for insurance online,” concluded Mr. Birnbaum.
Fourth Quarter 2018 Financial Highlights
(All comparisons are relative to the fourth quarter of 2017 unless otherwise stated):
| • | Total revenue of $39.8 million, an increase of 23%. |
| • | Automotive insurance vertical revenue of $33.9 million, an increase of 15%. |
| • | Home and life insurance verticals revenue of $5.9 million, an increase of 99%. |
| • | Revenue less advertising expense of $10.2 million, an increase of 7%. |
| • | Variable marketing margin of $10.6 million, an increase of 5%. |
| • | GAAP net loss of $6.9 million, compared to a net loss of $0.7 million. |
| • | Adjusted EBITDA of ($3.5) million, compared to Adjusted EBITDA of $0.3 million. |
Fourth Quarter 2018 Business Highlights
(All comparisons are relative to the fourth quarter of 2017 unless otherwise stated):
| • | Direct revenue was 91% of revenue, an increase from 84% in the prior year. |
| • | EverQuote added 3 new provider partners across auto, home and life. |
| • | Seven of the Company’s top 10 insurance carriers increased spend over the prior year. |
| • | EverQuote completed 18 new and 40 expanded partial integrations with providers. |
| • | The Company achieved 10% growth in quote requests. |
Full Year 2018 Financial Highlights
(All comparisons are relative to the full year of 2017 unless otherwise stated):
| • | Total revenue of $163.3 million, an increase of 29%. |
| • | Automotive insurance vertical revenue of $141.2 million, an increase of 18%. |
| • | Home and life insurance verticals revenue of $22.2 million, an increase of 220%. |
| • | Revenue less advertising expense of $46.1 million, an increase of 29%. |
| • | Variable marketing margin of $48.0 million, an increase of 28%. |
| • | GAAP net loss of $13.8 million, compared to a net loss of $5.1 million. |
| • | Adjusted EBITDA of ($5.5) million, compared to Adjusted EBITDA of ($1.5) million. |
First Quarter and Full Year 2019 Guidance
EverQuote anticipates revenue, variable marketing margin and adjusted EBITDA to be in the following ranges:
First quarter 2019
| • | Revenue of $47.0 – $49.0 million. |
| • | Variable marketing margin of $12.8 – $13.8 million. |
| • | Adjusted EBITDA in the range of ($1.5) – ($2.0) million. |
Full year 2019
| • | Revenue of $189.0 – $197.0 million. |
| • | Variable marketing margin of $54.0 – $58.0 million. |
| • | Adjusted EBITDA in the range of ($2.0) – ($4.0) million. |
With respect to the Company’s expectations under “First Quarter and Full Year 2019 Guidance” above, the Company has not reconciled the non-GAAP measures of variable marketing margin and adjusted EBITDA to the GAAP measures revenue less advertising expense and net loss, respectively, in this press release because the Company does not provide guidance for advertising expense, stock-based compensation expense, depreciation and amortization expense, interest income and expense, and the provision for (benefit from) income taxes as the Company is unable to quantify these amounts without unreasonable efforts that would be required to include reconciliations to such GAAP measures. In addition, the Company believes such reconciliations 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 fourth quarter and full year 2018 financial results at 4:30 p.m. Eastern Time today, February 25, 2019. 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 6839918. 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 February 25, 2019, until 11:59 p.m. Eastern Time on March 1, 2019, by dialing (800) 585-8367 for the U.S. or Canada, or (416) 621-4642 for international callers, and entering passcode 6839918. 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 Company’s ability to attract and retain consumers and insurance providers using the Company’s marketplace; (2) the Company’s ability to maintain or increase the amount providers spend per quote request; (3) the effectiveness of the Company’s growth strategies and its ability to effectively manage growth; (4) the Company’s ability to maintain and build its brand; (5) the Company’s reliance on its third-party service providers; (6) the Company’s ability to develop new and enhanced products and services to attract and retain consumers and insurance providers, and the Company’s ability to successfully monetize them; (7) the impact of competition in the Company’s industry and innovation by the Company’s competitors; (8) the Company’s expected use of proceeds from its initial public offering; and (9) other factors discussed in the “Risk Factors” section of the Company’s 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 Company’s views as of the date of this press release. The Company anticipates that subsequent events and developments will cause the Company’s 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 Company’s views as of any date subsequent to the date of this press release.
About EverQuote
EverQuote operates a leading online insurance marketplace in the U.S., connecting consumers with insurance providers. The company’s data & technology platform matches and connects consumers seeking to purchase insurance with relevant options from the company’s broad direct network of insurance providers, saving consumers and providers time and money. EverQuote was founded with the vision of applying a scientific, data-driven approach to help consumers find the best price and coverage for their individual insurance needs.
EVERQUOTE, INC.
STATEMENTS OF OPERATIONS
| Three Months Ended December 31, |
Year Ended December 31, |
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| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| (in thousands except per share) | ||||||||||||||||
| Revenue |
$ | 39,779 | $ | 32,377 | $ | 163,349 | $ | 126,242 | ||||||||
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| Cost and operating expenses(1): |
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| Cost of revenue |
3,075 | 2,236 | 11,678 | 7,745 | ||||||||||||
| Sales and marketing |
35,638 | 27,088 | 140,743 | 109,473 | ||||||||||||
| Research and development |
4,255 | 2,522 | 14,173 | 9,194 | ||||||||||||
| General and administrative |
3,925 | 1,070 | 10,667 | 4,519 | ||||||||||||
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| Total cost and operating expenses |
46,893 | 32,916 | 177,261 | 130,931 | ||||||||||||
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| Loss from operations |
(7,114 | ) | (539 | ) | (13,912 | ) | (4,689 | ) | ||||||||
| Other income (expense): |
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| Interest expense |
— | (114 | ) | (199 | ) | (382 | ) | |||||||||
| Interest income |
189 | — | 320 | — | ||||||||||||
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| Total other income (expense), net |
189 | (114 | ) | 121 | (382 | ) | ||||||||||
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| Net loss |
(6,925 | ) | (653 | ) | (13,791 | ) | (5,071 | ) | ||||||||
| Accretion of redeemable convertible preferred stock to redemption value |
— | (1,845 | ) | (37,415 | ) | (14,093 | ) | |||||||||
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| Net loss attributable to common stockholders |
$ | (6,925 | ) | $ | (2,498 | ) | $ | (51,206 | ) | $ | (19,164 | ) | ||||
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| Net loss per share attributable to common stockholders, basic and diluted |
$ | (0.28 | ) | $ | (0.29 | ) | $ | (3.03 | ) | $ | (2.18 | ) | ||||
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| Weighted average common shares outstanding, basic and diluted |
25,038 | 8,695 | 16,922 | 8,774 | ||||||||||||
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| (1) Amounts include stock-based compensation expense, as follows: | ||||||||||||||||
| Three Months Ended December 31, |
Year Ended December 31, |
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| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| (in thousands) | ||||||||||||||||
| Cost of revenue |
$ | 13 | $ | 7 | $ | 42 | $ | 27 | ||||||||
| Sales and marketing |
678 | 212 | 1,955 | 789 | ||||||||||||
| Research and development |
861 | 121 | 2,011 | 467 | ||||||||||||
| General and administrative |
1,693 | 148 | 3,113 | 577 | ||||||||||||
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| $ | 3,245 | $ | 488 | $ | 7,121 | $ | 1,860 | |||||||||
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| EVERQUOTE, INC. |
| BALANCE SHEET DATA |
| December 31, | ||||||||
| 2018 | 2017 | |||||||
| (in thousands) | ||||||||
| Cash and cash equivalents |
$ | 41,634 | $ | 2,363 | ||||
| Working capital |
39,185 | 2,634 | ||||||
| Total assets |
65,746 | 20,519 | ||||||
| Long-term debt |
— | 4,611 | ||||||
| Total liabilities |
22,562 | 20,126 | ||||||
| Redeemable convertible preferred stock |
— | 50,937 | ||||||
| Total stockholders’ equity (deficit) |
43,184 | (50,544 | ) | |||||
EVERQUOTE, INC.
STATEMENTS OF CASH FLOWS
| Year Ended December 31, | ||||||||
| 2018 | 2017 | |||||||
| (in thousands) | ||||||||
| Cash flows from operating activities: |
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| Net loss |
$ | (13,791 | ) | $ | (5,071 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: |
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| Depreciation and amortization |
1,341 | 1,360 | ||||||
| Stock-based compensation expense |
7,121 | 1,860 | ||||||
| Noncash interest expense |
14 | 20 | ||||||
| Deferred rent |
337 | 528 | ||||||
| Changes in operating assets and liabilities: |
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| Accounts receivable |
(2,931 | ) | (2,478 | ) | ||||
| Prepaid expenses and other current assets |
(698 | ) | (8 | ) | ||||
| Other assets |
— | (75 | ) | |||||
| Accounts payable |
4,932 | 1,552 | ||||||
| Accrued expenses and other current liabilities |
1,324 | 469 | ||||||
| Deferred revenue |
454 | 171 | ||||||
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| Net cash used in operating activities |
(1,897 | ) | (1,672 | ) | ||||
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| Cash flows from investing activities: |
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| Acquisition of property and equipment, including costs capitalized for development of internal-use software |
(3,668 | ) | (1,185 | ) | ||||
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| Net cash used in investing activities |
(3,668 | ) | (1,185 | ) | ||||
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| Cash flows from financing activities: |
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| Proceeds from initial public offering, net of underwriting discounts and commissions |
52,313 | — | ||||||
| Proceeds from exercise of stock options |
861 | 1,549 | ||||||
| Repurchase of common stock |
— | (9,229 | ) | |||||
| Proceeds from borrowings on line of credit |
22,729 | 20,300 | ||||||
| Repayments of borrowings on line of credit |
(24,729 | ) | (18,300 | ) | ||||
| Repayments of term loan |
(2,625 | ) | (1,500 | ) | ||||
| Payments of initial public offering costs |
(3,713 | ) | — | |||||
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| Net cash provided by (used in) financing activities |
44,836 | (7,180 | ) | |||||
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| Net increase (decrease) in cash, cash equivalents and restricted cash |
39,271 | (10,037 | ) | |||||
| Cash, cash equivalents and restricted cash at beginning of period |
2,613 | 12,650 | ||||||
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| Cash, cash equivalents and restricted cash at end of period |
$ | 41,884 | $ | 2,613 | ||||
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EVERQUOTE, INC.
FINANCIAL AND OPERATING METRICS
Revenue by vertical:
| Three Months Ended December 31, | Change | |||||||||||
| 2018 | 2017 | % | ||||||||||
| (in thousands) | ||||||||||||
| Automotive |
$ | 33,853 | $ | 29,395 | 15.2 | % | ||||||
| Home and Life |
5,926 | 2,982 | 98.7 | % | ||||||||
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| Total Revenue |
$ | 39,779 | $ | 32,377 | 22.9 | % | ||||||
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| Year Ended December 31, | Change | |||||||||||
| 2018 | 2017 | % | ||||||||||
| (in thousands) | ||||||||||||
| Automotive |
$ | 141,187 | $ | 119,313 | 18.3 | % | ||||||
| Home and Life |
22,162 | 6,929 | 219.8 | % | ||||||||
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| Total Revenue |
$ | 163,349 | $ | 126,242 | 29.4 | % | ||||||
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Other financial and non-financial metrics:
| Three Months Ended December 31, | Change | |||||||||||
| 2018 | 2017 | % | ||||||||||
| (in thousands) | ||||||||||||
| Loss from operations |
$ | (7,114 | ) | $ | (539 | ) | 1219.9 | % | ||||
| Net loss |
$ | (6,925 | ) | $ | (653 | ) | 960.5 | % | ||||
| Quote requests |
3,284 | 2,984 | 10.1 | % | ||||||||
| Variable marketing margin(1) |
$ | 10,603 | $ | 10,089 | 5.1 | % | ||||||
| Adjusted EBITDA(1) |
$ | (3,482 | ) | $ | 260 | -1439.2 | % | |||||
| Year Ended December 31, | Change | |||||||||||
| 2018 | 2017 | % | ||||||||||
| (in thousands) | ||||||||||||
| Loss from operations |
$ | (13,912 | ) | $ | (4,689 | ) | 196.7 | % | ||||
| Net loss |
$ | (13,791 | ) | $ | (5,071 | ) | 172.0 | % | ||||
| Quote requests |
12,803 | 12,123 | 5.6 | % | ||||||||
| Variable Marketing Margin(1) |
$ | 47,995 | $ | 37,551 | 27.8 | % | ||||||
| Adjusted EBITDA(1) |
$ | (5,450 | ) | $ | (1,469 | ) | 271.0 | % | ||||
| (1) | Variable marketing margin and adjusted EBITDA are non-GAAP measures. Please see “EverQuote, Inc. Reconciliation of Non-GAAP Measures to GAAP” below for more information. |
EVERQUOTE, INC.
NON-GAAP FINANCIAL MEASURES
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 its variable marketing margin and adjusted EBITDA as non-GAAP financial measures. These non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP and are not necessarily comparable to similarly titled measures presented by other companies.
The Company defines variable marketing margin, or VMM, as revenue as reported in the Company’s statements of operations and comprehensive loss, less online advertising costs related to attracting consumers to EverQuote’s marketplace (which are a component of total advertising
expense, which is a component of sales and marketing expense). The most directly comparable GAAP measure for VMM is revenue less advertising expense. The Company utilizes VMM to measure the financial return on EverQuote’s online advertising, specifically to measure the degree by which the revenue generated from consumer quote requests exceeds the cost to attract those consumers to EverQuote’s marketplace through online advertising. The Company also uses VMM to measure the efficiency of individual online advertising and consumer acquisition sources and to make trade-off decisions to manage the Company’s return on advertising. The Company does not utilize VMM as a measure of overall profitability. The Company presents VMM because it is used extensively by EverQuote’s management and board of directors to manage the Company’s operating performance, including evaluating operational performance against budgeted VMM and understanding the efficiency of EverQuote’s online advertising spend.
The Company defines adjusted EBITDA as net income (loss), excluding the impact of stock-based compensation expense; depreciation and amortization expense; interest income and interest expense; and the provision for (benefit from) 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 these non-GAAP financial measures to evaluate EverQuote’s operating performance and trends and make planning decisions. The Company believes that each of these non-GAAP financial measures helps identify underlying trends in EverQuote’s business that could otherwise be masked by the effect of the expenses that the Company excludes in the calculations of each non-GAAP financial measure. Accordingly, the Company believes that these financial measures provide 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 these non-GAAP financial measures rather than revenue less advertising expense and net income (loss), which are the most directly comparable financial measures calculated and presented in accordance with GAAP. In addition, other companies may use other measures to evaluate their performance, all of which could reduce the usefulness of the Company’s non-GAAP financial measures as tools for comparison.
EVERQUOTE, INC.
RECONCILIATION OF NON-GAAP MEASURES TO GAAP
The following tables reconcile VMM and adjusted EBITDA to revenue less advertising expense and net loss, respectively, the most directly comparable financial measures calculated and presented in accordance with GAAP.
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| (in thousands) | ||||||||||||||||
| Revenue |
$ | 39,779 | $ | 32,377 | $ | 163,349 | $ | 126,242 | ||||||||
| Less: total advertising expense |
29,539 | 22,838 | 117,274 | 90,471 | ||||||||||||
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| Revenue less advertising expense |
10,240 | 9,539 | 46,075 | 35,771 | ||||||||||||
| Add: other advertising expense (1) |
363 | 550 | 1,920 | 1,780 | ||||||||||||
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| Variable marketing margin |
$ | 10,603 | $ | 10,089 | $ | 47,995 | $ | 37,551 | ||||||||
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| (1) | Other advertising expenses consist of general advertising costs that are designed to promote the business, attract insurance providers or produce results other than generating online marketplace traffic, such as increasing downloads of the Company’s EverDrive safe driver app. They are not directly related to generating revenue or online marketplace traffic, and as such are excluded by management from the calculation of VMM. |
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2018 | 2017 | 2018 | 2017 | |||||||||||||
| (in thousands) | ||||||||||||||||
| Net loss |
$ | (6,925 | ) | $ | (653 | ) | $ | (13,791 | ) | $ | (5,071 | ) | ||||
| Stock-based compensation |
3,245 | 488 | 7,121 | 1,860 | ||||||||||||
| Depreciation and amortization |
387 | 311 | 1,341 | 1,360 | ||||||||||||
| Interest (income) expense, net |
(189 | ) | 114 | (121 | ) | 382 | ||||||||||
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| Adjusted EBITDA |
$ | (3,482 | ) | $ | 260 | $ | (5,450 | ) | $ | (1,469 | ) | |||||
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Investor Relations Contact:
Brinlea Johnson
The Blueshirt Group
212-331-8424
Or
Allise Furlani
The Blueshirt Group
212-331-8433
SOURCE: EverQuote, Inc.
Investor Presentation February 2019 Exhibit 99.2
Disclaimer This presentation contains forward-looking statements. All statements other than statements of historical facts contained in this presentation, including statements regarding possible or assumed future results of operations, business strategies, development plans, regulatory activities, competitive position, potential growth opportunities, and the effects of competition are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements of EverQuote, Inc. (“the Company”) 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,” “expect,” “plan,” “project,” “estimate,” or “potential” or the negative of these terms or other similar expressions. The forward-looking statements in this presentation are only predictions. The Company has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect the Company’s business, financial condition and results of operations. These forward-looking statements speak only as of the date of this presentation and are subject to a number of risks, uncertainties and assumptions, some of which cannot be predicted or quantified and some of which are beyond the Company’s control. The events and circumstances reflected in the Company’s forward-looking statements may not be achieved or occur, and actual results could differ materially from those projected in the forward-looking statements. Moreover, new risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties that the Company may face. Except as required by applicable law, the Company does not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise. The Company’s presentation also contains estimates, projections, and other information concerning the Company’s industry, the Company’s business and the markets for certain of the Company’s products and services, including data regarding the estimated size of those markets. Information that is based on estimates, forecasts, projections, market research, or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, the Company obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, from industry, general publications, and from government data and similar sources. This presentation includes certain non-GAAP financial measures, including variable marketing margin and adjusted EBITDA. Such non-GAAP financial measures are in addition to, not a substitute for or superior to, measures of financial performance prepared in accordance with U.S. GAAP. A reconciliation of these measures to the most directly comparable GAAP measure is included in the Appendix to these slides.
Largest online insurance marketplace in the US Capitalizing on $120 billion in insurance distribution shifting online Data driven technology platform Opportunity for rapid expansion into new verticals Historically strong revenue growth with track record of capital efficiency Key Investment Highlights TBU bullets
The EVERQUOTE Story Eight Years of Innovation and Growth 2011 2014 2015 2016 2017 2018 Auto Marketplace Launch Carrier Platform Launch Agent Platform Launch $100M Revenue Run Rate Home & Life marketplace launch 163.6mm 2018 Revenue EverDrive Safe Driving App Launch Boston Globe Voted One of Boston's Best Places to Work Inc. 5000 Fastest Growing Companies 500K EverDrive Downloads Company IPO June 28, 2018 First EverDrive Carrier Offer
Market Opportunity & Business Model
Insurance Sellers and Buyers Struggle Online 70% of insurance consumers shop online But, 80% of policies still closed offline Source: 2015 comScore survey Consumers cite the desire to speak to an agent as top reason for not buying online EQ: Tightened words in bottom text box
Our Insurance Marketplace Helps Match Buyers and Sellers Consumers Insurance providers 20-50 consumer submitted data points Quote request Monetization at Referral CLICKS CALLS DATA Match Attract 250+ traffic sources More Efficient Acquisition Save Time and Money
Our Marketplace Helps Solve Providers’ Alignment Problem Premium 2017 BMW 20012 8K miles / year Typical coverage $500K injury Standard 2017 Nissan Leaf 90210 6K miles / year Typical coverage $100K / $300K Non-standard 2013 Honda Civic 10016 2 tickets Coverage State minimum Provider (premium) EQ: Added this slide
Powerful Data Driven Platform & Growth Opportunities
48mm Substantial Growth In Data Assets Over Time 1B consumer submitted data points 158B $512mm Cumulative Ad Impressions Served Cumulative Digital Ad Spend Cumulative Quote Requests ¹ Cumulative figure since launch through 2/20/2019 Source: Company data, Facebook, Statista, comScore & OperaMedia 250+ Acquisition Channels R.T.B.
We Have Levers To Drive Future Growth Increase provider coverage Attract more consumers Launch new verticals Deepen consumer engagement Leverage secular shift online
EverDrive: Social Safe-Driving Mobile App Uses smartphone sensors to assess driving performance Provides drivers with actionable feedback on becoming a safer driver Social features enable positive competition with family & friends
EverDrive Seamlessly Connects Drivers with Savings Users opt-in to anonymously receive safe driving offers Seamless integrations connect them to carriers for purchase Policy details & consumer relationship remain within EverDrive experience Launched with first carrier in September 2018 Carrier Partner #1 Contact Carrier #1
Strong culture of innovation Seth Birnbaum CEO and Co-Founder John Wagner CFO Darryl Auguste SVP of Analytics and Online Marketing Jayme Mendal COO Shimrit Markette SVP of People Operations Tomas Revesz CTO and Co-Founder Eugene Suzuki CIO Prior Experience Education Ryan Grimard SVP of Engineering Jesse Wolf SVP of Product and Design David Mason General Counsel
Financial Overview
29% Total Revenue CAGR 2013-2018 Track Record of Strong Growth Revenue ($mm) TO DISCUSS Take 3 bullets and move to left or top, keep left chart and add back VMM Next page is rev reacceleration both rev and vmm 2013 2015 2016 2017 2018
Direct revenue ($mm) 65% CAGR 2013-2018 Keep Direct vs. indirect distribution share Shift to Direct Has Driven Growth
Variable Marketing Margin Note: Variable Marketing Margin is a non-GAAP metric, refer to financial reconciliation for additional detail 47% CAGR 2013-2018 Variable Marketing Margin ($mm) Annual overview Historic online acquisition efficiency
Home & Life: Efficient Upside and Future Diversification Home & Life Revenue ($mm) 165% CAGR 2016-2018 99% y/y growth Significant operating leverage, having already achieved attractive economics and high growth with only a modest increase in headcount Cleaned up title Growth drivers TBU growth drivers Sales leverage: Ability to cross-sell traffic to existing customers Traffic leverage: Target advertising opportunities leveraging expertise and technology
4Q 2018 Revenue increased 23% year-over-year to $39.8 Million Revenue Less Advertising Expense increased 7% year-over year to $10.2 Million Variable Marketing Margin (VMM) increased 5% year-over-year to $10.6 Million GAAP Net Loss of $(6.9) Million Adjusted EBITDA of $(3.5) Million TBU bullets Note: Variable Marketing Margin and Adjusted EBITDA are non-GAAP metrics, refer to financial reconciliation for additional detail Fourth Quarter & Full Year 2018 Results FY 2018 Revenue increased 29% year-over-year to $163.3 Million Revenue Less Advertising Expense increased 29% year-over-year to $46.0 Million Variable Marketing Margin (VMM) increased 28% year-over-year to $48.0 Million GAAP Net Loss of $(13.8) Million Adjusted EBITDA of $(5.5) Million
Largest online insurance marketplace in the US Capitalizing on $120 billion in insurance distribution shifting online Data driven technology platform Opportunity for rapid expansion into new verticals Historically strong revenue growth with track record of capital efficiency Key Investment Highlights TBU bullets
NASDAQ: EVER
Appendix
Key Metrics Definitions Metric Definition Quote Requests Quote requests are consumer-submitted website forms that contain the data required to provide an insurance quote. As we attract more consumers to our platform and they complete quote requests, we are able to refer them to our insurance provider customers, selling more referrals while also collecting data, which we use to improve personalization, conversion rates and consumer satisfaction. Beginning in Q1 2019 we will expand the definition of Quote Requests to include consumer quote requests we receive through offline channels. Variable Marketing Margin We define variable marketing margin, or VMM, as revenue less online advertising costs related to attracting consumers to our marketplace (which are a component of total advertising expense, which is a component of sales and marketing expense). We utilize VMM to measure the financial return on our online advertising, specifically to measure the degree by which the revenue generated from consumer quote requests exceeds the cost to attract those consumers to our marketplace through online advertising. We also use VMM to measure the efficiency of individual online advertising and consumer acquisition sources and to make trade-off decisions to manage our return on advertising. We do not utilize VMM as a measure of the Company’s overall profitability. Beginning in Q1 2019 we will change the definition of Variable Marketing Margin to be Revenues less Advertising expense. Adjusted EBITDA We define adjusted EBITDA as net loss, adjusted to exclude: stock-based compensation expense, depreciation and amortization expense, interest expense and the provision for (benefit from) income taxes. We monitor and present adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our operating performance, to establish budgets and to develop operational goals for managing our business.
Reconciliation of Variable Marketing Margin Revenue Less: total advertising expense Revenue less advertising expense Add: other advertising expense (1) Variable marketing margin (VMM) $ 2013 2014 2015 2016 2017 2018 Q4 2017 Q4 2018 (in thousands) $ 45,581 $ 61,901 $ 96,798 $ 122,778 $ 126,242 $ 163,349 $ 32,377 $ 39,779 $ (38,668) $ (49,986) $ (73,414) $ (89,197) $ (90,471) $ (117,274) $ (22,838) $ (29,539) $ 6,913 $ 11,915 $ 23,384 $ 33,581 $ 35,771 $ 46,075 $ 9,539 $ 10,240 — — — $ 179 $ 1,780 $ 1,920 $ 550 $ 363 $ 6,913 $ 11,915 $ 23,384 $ 33,760 $ 37,551 $ 47,995 $ 10,089 $ 10,603 15.2% 19.2% 24.2% 27.5% 29.7% 29.4% 31.2% 26.7% (1) Other advertising expense consists of general advertising costs that are designed to promote the business, attract insurance providers or produce results other than generating online marketplace traffic, such as increasing downloads of our EverDrive safe driver app. These costs are not directly related to generating revenue or online marketplace traffic, and as such are excluded by management from the calculation of VMM. Variable marketing margin (VMM) %
Reconciliation of Adjusted EBITDA Three Months Ended December 31, Twelve Months Ended December 31, 2018 2017 2018 2017 (in thousands) (in thousands) Net loss $ (6,925) $ $ (653) $ (13,791) $ (5,071 ) Stock-based compensation 3,245 488 7,121 1,860 Depreciation and amortization 387 311 1,341 1,360 Interest (income) expense, net (189) 114 (121) 382 Adjusted EBITDA $ (3,482) $ $ 260 $ (5,450 ) $ (1,469 )