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CAMBRIDGE, Mass., Aug. 06, 2018 (GLOBE NEWSWIRE) -- EverQuote, Inc. (Nasdaq:EVER) (“EverQuote” or “the Company”), a leading online insurance marketplace in the U.S. connecting consumers with insurance providers, today announced financial results for the second quarter ended June 30, 2018.
"We reached an important milestone for the Company in the second quarter - completing our initial public offering,” said Seth Birnbaum, CEO and Co-Founder of EverQuote. “We expect proceeds from the offering to support growth throughout the business as we further expand our market opportunities by attracting more consumers, increasing provider coverage, launching new verticals and deepening consumer engagement.”
“In our first quarter as a public company, we are excited to report strong revenue growth with solid momentum in our auto insurance vertical complemented with rapid growth in our newer home and life insurance verticals. We also made progress enhancing our consumer and provider experience and are focused on our mission to make finding insurance easy and more personal, saving consumers and insurance providers time and money.
“This quarter, we reported a 34% year-over-year increase in revenue per quote request and a 41% increase in both revenue less advertising expense and Variable Marketing Margin to record levels. Our results demonstrate the strength of our unique marketplace model and the power of our data science and analytics - achieving improved traffic performance, more optimized yield management and increased provider coverage and spend,” concluded Mr. Birnbaum.
Second Quarter 2018 Financial Highlights:
(All comparisons are relative to the second quarter of 2017 unless otherwise stated):
Second Quarter 2018 Business Highlights:
Second Quarter 2018 Impact from EverQuote’s Initial Public Offering
Third Quarter and Full-Year 2018 Guidance:
“We are focused on driving strong revenue growth as we make targeted investments in talent and infrastructure to enhance our marketplace’s effectiveness for our insurance providers and consumers,” said John Wagner, Chief Financial Officer.
EverQuote anticipates Revenue, Variable Marketing Margin and Adjusted EBITDA to be in the following ranges:
Third quarter 2018:
With respect to the Company’s expectations under "Third Quarter and Full-Year 2018 Guidance" above, the Company has not reconciled Variable Marketing Margin and Adjusted EBITDA to 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 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 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 second quarter 2018 financial results at 4:30 p.m. Eastern Time today, August 6, 2018. To access the conference call, dial (866) 393-4306 for the U.S. or Canada, or (734) 385-2616 for international callers and provide conference ID 2878838. 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 August 6, 2018, until 11:59 p.m. Eastern Time on August 13, 2018, by dialing (855) 859-2056 for the U.S. or Canada, or (404) 537-3406 for international callers, and entering passcode 2878838. In addition, an archived webcast will be available on the Investors section of the Company's website at:
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 develop new and enhanced products and services to attract and retain consumers and insurance providers, and the Company’s ability to successfully monetize them; (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 expand internationally; (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 (8) other factors discussed in the “Risk Factors” section of the final prospectus for the Company’s initial public offering, 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.
EverQuote operates a leading online insurance marketplace in the U.S., connecting consumers with insurance providers. The company's proprietary 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, reshaping the insurance shopping experience
|STATEMENTS OF OPERATIONS|
Three Months Ended
Six Months Ended
|(in thousands except per share)|
|Cost and operating expenses(1):|
|Cost of revenue||2,873||1,884||5,488||3,620|
|Sales and marketing||34,932||26,354||69,955||54,781|
|Research and development||3,181||2,100||5,795||4,231|
|General and administrative||1,733||1,259||3,446||2,268|
|Total cost and operating expenses||42,719||31,597||84,684||64,900|
|Loss from operations||(1,627||)||(1,580||)||(2,862||)||(3,131||)|
|Accretion of redeemable convertible preferred
stock to redemption value
|Net loss attributable to common stockholders||$||(28,132||)||$||(2,660||)||$||(40,473||)||$||(16,062||)|
|Net loss per share attributable to common
stockholders, basic and diluted
|Weighted average common shares
outstanding, basic and diluted
|(1) Amounts include stock-based compensation expense, as follows:|
Three Months Ended
Six Months Ended
|Cost of revenue||$||10||$||7||$||17||$||13|
|Sales and marketing||400||201||670||411|
|Research and development||168||116||292||219|
|General and administrative||145||144||311||296|
|BALANCE SHEET DATA|
|June 30, 2018||December 31, 2017|
|Working capital (deficit)||(98||)||2,634|
|Redeemable convertible preferred stock||88,352||50,937|
|Total stockholders' deficit||(89,150||)||(50,544||)|
|STATEMENTS OF CASH FLOWS|
|Six Months Ended June 30,|
|Cash flows from operating activities:|
|Adjustments to reconcile net loss to net cash used in operating activities:|
|Depreciation and amortization||612||731|
|Stock-based compensation expense||1,290||939|
|Noncash interest expense||14||10|
|Changes in operating assets and liabilities:|
|Prepaid expenses and other current assets||(1,379||)||(126||)|
|Accrued expenses and other current liabilities||863||1,008|
|Net cash used in operating activities||(999||)||(2,396||)|
|Cash flows from investing activities:|
|Acquisition of property and equipment, including costs capitalized
for development of internal-use software
|Net cash used in investing activities||(1,395||)||(648||)|
|Cash flows from financing activities:|
|Proceeds from exercise of stock options||577||383|
|Repurchase of common stock||—||(9,229||)|
|Proceeds from borrowings on line of credit||22,729||10,800|
|Repayments of borrowings on line of credit||(17,746||)||(9,300||)|
|Repayments of term loan||(2,625||)||(750||)|
|Payments of initial public offering costs||(522||)||—|
|Net cash provided by (used in) financing activities||2,413||(8,096||)|
|Net increase (decrease) in cash||19||(11,140||)|
|Cash at beginning of period||2,363||12,400|
|Cash at end of period||$||2,382||$||1,260|
|FINANCIAL AND OPERATING METRICS|
|Revenue by vertical:|
|Three Months Ended June 30,||Change|
|Home and Life||5,583||1,074||419.8||%|
|Other financial and operating metrics:|
|Three Months Ended June 30,||Change|
|Loss from operations||$||(1,627||)||$||(1,580||)||3.0||%|
|Variable Marketing Margin(1)||12,819||9,108||40.7||%|
|(1) Variable Marketing Margin and Adjusted EBITDA are non-GAAP measures. Please see "EverQuote's Reconciliation
of Non-GAAP Measures to GAAP" below for more information.
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 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 loss, excluding the impact of stock-based compensation expense; depreciation and amortization expense; interest expense; and the provision for (benefit from) income taxes. The most directly comparable GAAP measure is net income (loss). The Company monitors 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 expenses 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.
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.
RECONCILIATION OF NON-GAAP MEASURES TO GAAP
|Three Months Ended June 30,|
|Less: total advertising expense||(28,946||)||(21,429||)|
|Revenue less advertising expense||12,146||8,588|
|Add: other advertising expense (1)||673||520|
|Variable marketing margin||$||12,819||$||9,108|
(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.
Below is a reconciliation of Net loss to Adjusted EBITDA.
|Three Months Ended June 30,|
|Depreciation and amortization||318||327|
Investor Relations Contact:
The Blueshirt Group
SOURCE: EverQuote, Inc.