EverQuote at Oppenheimer Conference: AI and Growth Focus

Published 11/08/2025, 18:06
EverQuote at Oppenheimer Conference: AI and Growth Focus

On Monday, 11 August 2025, EverQuote (NASDAQ:EVER) presented a strategic overview at the Oppenheimer 28th Annual Technology, Internet & Communications Conference. The company highlighted significant financial improvements and strategic initiatives, while also acknowledging challenges in the second half of the year. EverQuote is leveraging AI and technology to drive efficiency and growth, focusing on the auto insurance market.

Key Takeaways

  • EverQuote expects $80-100 million in adjusted EBITDA for 2024, a significant turnaround from 2023 losses.
  • The company is focusing on AI to improve operations and customer experiences.
  • EverQuote is exploring M&A opportunities but can achieve growth targets independently.
  • The digital insurance marketplace remains underdeveloped compared to other sectors.
  • EverQuote’s stock is considered undervalued by its leadership.

Financial Results

  • 2023 saw adjusted EBITDA losses, but 2024 is expected to bring $80-100 million in adjusted EBITDA.
  • The company achieved EBITDA margins of 13.5% in Q1 2024 and 14% in Q2 2024.
  • First half of 2024 revenue growth was 50-55% year-over-year, with full-year growth estimated at high 20s to 30%.
  • Last quarter’s EBITDA was $22 million, with an operating cash flow of approximately $25 million.
  • Long-term EBITDA margin goal is set at 20%.

Operational Updates

  • EverQuote exited non-core verticals like health and life insurance in 2023 to refocus on P&C insurance.
  • The company launched Smart Campaigns for carriers, utilizing a machine learning bidding platform.
  • AI voice technology is being implemented in call center operations.
  • The home insurance vertical grew by 23% year-on-year in Q2.

Future Outlook

  • EverQuote aims for high growth (20%+) with expanding profitability.
  • The company is considering brand-building investments but is cautious about large-scale advertising like a "Super Bowl" commercial.
  • M&A opportunities are being evaluated to potentially accelerate growth.
  • EverQuote expects a normalized carrier demand profile by the end of 2025.

Q&A Highlights

  • The capital allocation strategy includes maintaining a strong balance sheet, pursuing M&A, and selective share repurchases.
  • EverQuote plans a buyback of shares from its largest shareholder, Dave Blunton.
  • The company is exploring tech-enabled access to agency-driven insurance products.
  • EverQuote believes it can grow without M&A, but will consider it to expedite growth.

For a detailed understanding, readers are encouraged to refer to the full transcript.

Full transcript - Oppenheimer 28th Annual Technology, Internet & Communications Conference:

Jed, Oppenheimer Analyst, Oppenheimer: Alright. Thanks everyone to joining us for the annual Oppenheimer TMT conference. Our pleasure to have EverQuote. I think it might be nine or ten straight years doing this conference, so so we always love having your participation. With us today is Jamie Mendel, CEO, and Joseph Sandborn, the CFO.

So thanks for joining us, guys.

Jamie Mendel, CEO, EverQuote: Good to be here.

Jed, Oppenheimer Analyst, Oppenheimer: Thank you. Alright. So so we’ll start with we’ll we’ll just start with what what what’s going on. You know, Jamie, I I would say if if we look over, you know, call it, the past twelve months where we’ve seen this upcycle, I would say relative to the peers when we look at revenue and more importantly, you know, VMD market very marketing dollars, EverQuote seems to be performing the best, has the most share. So can you just talk about, like, what’s been working for the company and, you know, where we where you think we are now currently in this upcycle?

Jamie Mendel, CEO, EverQuote: Sure. So I’ll start with the with the cycle. You know, the the auto insurance market, we had we had this fairly extreme hard market from 2021 to 2023. The industry started to to kinda get their rates where they needed to be things in 2024, and it’s continued into this year. And and we you know, our our assessment is that the the vast majority of carriers are now broadly profitable across most states, and we’re seeing that reflected in their participation in our marketplace.

So, you know, in all the engagement that we’ve had with carriers over the last few months, the conversation has really been about, you know, returning to growth, growth, growth. And we think that kind of by the end of this year, we’ll be back to a fairly kind of normalized carrier demand profile, meaning all carriers active in almost all states and there may be some laggards here and there. We know California is one of the states that’s been a little slower to recover, broadly speaking. But by and large, you know, think we’re getting into the later innings now of the recovery and expect to kind of enter next year with a relatively normalized underwriting environment.

Jed, Oppenheimer Analyst, Oppenheimer: So oh, were you going to say something?

Jamie Mendel, CEO, EverQuote: No. I was going to go move on to the other part of the question. Yeah. I’ll tell mean, I I would say in that backdrop, we’ve been we’ve been executing very well. And 2023, made a choice to exit some of our non core verticals.

So at the time we were in health, Medicare, life insurance lines, and really refocused the company on deepening our relationship with P and C insurance providers. The auto insurance market P and C is a massive market and we believe that there’s real benefit in going deeper in this market to innovate with our customers in terms how we use our data and the technology we’re building to help them grow profitably. And that has paid some real dividends. I mean, that period of time, we’ve transformed the business quite dramatically. From in 2023, we were losing money on an adjusted EBITDA basis.

We’re going to generate, call it, dollars 80,000,000 to $100,000,000 this year of adjusted EBITDA. So a massive inflection in terms of our profitability. The growth has been fairly dramatic as well. And it’s really, I’d say at its core, a result of the market recovery combined with our deeper focus and continued investments in supporting carriers and agents in P and C with their growth as they come out of their hard market.

Jed, Oppenheimer Analyst, Oppenheimer: Got it. And then are you sort of looking for I guess, are you looking forward to the market normalizing and getting out of this boom and bust cycle? Because I think you’ve historically said when you have a normalized operating environment, I think the company stated target range is closer to, like, the 20% growth rate. Yep. So, like, how how how should we view EverQuote, you know, in a more normalized environment where you are in terms of the TAM because you’re still very under penetrated?

Jamie Mendel, CEO, EverQuote: Yes. So just why don’t I kick it off and I’ll I’ll let you elaborate. Since going public, we’ve talked about ourselves as a company that that’ll be high growth as we define that 20% plus annual growth on average with expanding profitability. And if you actually look at our CAGR since our IPO in 2018, we have delivered on that promise. So we’ve grown 23% on an annualized basis over that period of time, and we’ve delivered the exact amount of profitability we have said we would, which is between one and two points of adjusted EBITDA margin per year.

So the model is really a profitable growth model, and I’ll let Joseph expand a bit more on that. Sure.

Joseph Sandborn, CFO, EverQuote: And, I mean, just to give some context as we’ve talked about, you know, top line growth we’ve been achieving, we’re sort of saying going in our medium term, obviously, averaging 20% top line growth. Some years will be a little more, some years a little less. But then on the EBITDA side, we’ve made a real point since the ’23 to really make sure as we’re driving top line growth, we’re also expanding profitability. And so to give some to remind folks some context, as Jamie said, in ’23, we were losing one in the EBITDA side. 2024, we had 11.6% EBITDA margin, obviously a dramatic change.

This year, Q1 was 13.5%, Q2 was 14% EBITDA margins. Q3 implies we’ll be sort of in that zone. So probably and then we’ve sort of said expect that to those levels to continue for this year. It means we’ll add a couple 100 basis points give or take for this year. And as we go toward that long term goal of 20%, you’ll probably add at least a 100 basis points a year, some years maybe a little more.

So you put that combination together, revenue and top line growth of expanding EBITDA margins and importantly, that EBITDA is very high cash converting. Last quarter, our EBITDA was $22,000,000 operating cash flow was actually close to 25,000,000 given the timing of payables receivables. So went nicely to the bottom line. And we think that model will continue for us. And so that’s where we feel really good about driving growth, also as we’re doing it driving profitability.

But as we do driving the profitability, we’re trying to build an enduring business And part of that is you’re seeing the investments we’ve talked about. We get to, you know, in the second half of this year, continue to build them on things around our technology stack and AI. Those are things that are trying to set up the growth in such a way that as we think about the industry evolving, we are well positioned to grow in a way that is much more durable as we scale the business.

Jed, Oppenheimer Analyst, Oppenheimer: Got it. And then just touch it back too on the margin. I I think when I’m always talking about EverQuote, I also think it’s really helpful to look at your EBITDA as a percentage of VMM VMD, VMM margin.

Jamie Mendel, CEO, EverQuote: Yep.

Jed, Oppenheimer Analyst, Oppenheimer: Because I actually think of these businesses, your VMD is kinda like revenue. It’s just more on a net basis. Right? And and and if you look, I mean, if you look at on VMD, you’re approaching almost 50% operating or 50% margin.

Joseph Sandborn, CFO, EverQuote: Yes, we’ve got that’s right.

Jamie Mendel, CEO, EverQuote: So it’s another way to look at sort

Joseph Sandborn, CFO, EverQuote: of operating leverage as relative to VMD dollars. And I think it speaks to as we get a dollar coming down to the VMD line, you know, part of it is, you know, it’s it’s driving additional investment. Part of it’s bringing contribution to the bottom line for to drive show return in the business. And so that is a managed outcome. How we choose to invest really depends upon how we’re trying to balance those two.

What I think we have demonstrated as a team since the ’23 is we are very good at trying to do as we’re growing the top line, being very disciplined on driving continued efficiency in our core operations, while at the same time making sure we’re investing in new areas that will drive growth in future periods. And that’s been sort of the dynamic we’ve set up that I think is getting dollars to that to your point to that VMD line are important than saying what’s the efficiency that’s coming through the bottom line. And that I think it’s one of the silver linings of the downturn. We’ve the team has become much more disciplined how we think about return on investment and how we invest the dollars. And when you see discussions happening about new projects, it’s not Jamie or I asking, you know, what’s the ROI and the time horizon.

It’s members of the leadership team is reviewing things. You know, we’ve sort of changed the culture of how people think about driving results that are not just showing top line growth, but also showing how we’re driving cash flow and bottom line expansion.

Jed, Oppenheimer Analyst, Oppenheimer: And you you just mentioned, you know, using AI to drive more durable growth. Can you talk about the strategy there and how you benefit from AI? And then what what, you know, what what sort of, you know, kind of drives that durable growth?

Jamie Mendel, CEO, EverQuote: Sure. So so we’ve been I mean, I I would say we’ve we’ve been applying AI for a long time in the context of of machine learning. And, you know, I would say the the vast majority of of of the businesses operations are really powered by by ML. The example we’ve we’ve given a few times in public setting is all of our traffic bidding is, you know, the a lot of it is done through ML and these are is a bidding platform that we’ve built over the last few years, which has both automated away a lot of manual work and made us more effective at doing that. So used to be the case we’d have, you know, traffic team of fifteen, twenty people.

That equivalent team today is probably five managing more spend with greater efficiency. And, you know, we did that for ourselves. Over the last couple of years, we’ve taken that capability of traffic bidding and productized it for our carrier customers. So now we offer this product called Smart Campaigns that allows insurance carriers to, you know, use our ML bidding platform into our marketplace to drive more efficiency in their ad spend. And in doing so, you know, we we get more budget from them.

So there’s a pretty well worn pattern now, which is they adopt smart campaigns, they improve efficiency, they recycle that back into the marketplace with more budget. And we’ve gotten real critical mass of adoption on that product over the last year or so. So so that’s sort of one category of AI. Then, you know, you look at Gen AI and in the context of Gen AI, we break it into kind of two categories. Got applications that are gonna drive operational efficiency within the business, help us automate work that used to be done by humans.

And then number two would be more a customer facing applications, actually integrating the technology into our products in some way improves customer outcomes. We’ve made a lot of progress on the former. Just over the last year, we’ve got, you know, engineering using Copilots sort of regularly now to generate a good chunk of our code. We’ve got engineering teams that are actually experimenting with more of an AI first approach to software engineering from, you know, start to finish. And so I think we will start to see some meaningful improvement in the productivity of our engineering organization over time as, you know, we get broader based adoption as the tools continue to improve.

We also are we’ve introduced AI voice into our call center operations. So we’re starting to see some real performance out of that. It’s a meaningful, you know, cost line item for us, which we believe we’ll be able to render to AI or to a large extent over over time. And so that’s got real traction now. And then we’ve got a whole body of work really thinking about how we can innovate aspects of the customer experience using, you know, generative AI that’s in the form of more conversational type shopping experiences or services for the consumer and or tools for the providers to get more, you know, value out of their digital marketing.

So it’s an exciting time. There’s a lot going on right now at EverQuote, but it’s very much kind of embedded in our in our DNA.

Jed, Oppenheimer Analyst, Oppenheimer: And insurance has always been a more complicated product for consumers to understand. Right? I mean, that’s why you usually have to have some type of human integrate you know, human human human contact. As as, like, you get as AI gets better, I assume you start getting more informed shoppers coming into the funnel. And then can you use AI to maybe get more vertical vertically integrated where, you know, you got a smarter consumer coming in that you could start to get more value on the transaction?

Just just how do you how how do you think about that that dynamic? Yeah. I mean,

Jamie Mendel, CEO, EverQuote: there there’s a lot of like there’s a lot of potential interface points between the consumer and the AI in the journey. I think what you’re describing is if you have a consumer who starts with AI’s, you know, search, we’ll say, right, they’re engaging with the AI to get some information about insurance before entering the shopping process. You know, we think that there will that behavior will, you know, will evolve over time to to there will be more and more of that. And so on the other side of that, yes, I think you’d have a more highly qualified consumer. I think the AI would be able to take the consumer further down the the shopping funnel before a handoff occurs.

And and the distribution that we provide will still be an important part of of that funnel. And the question is how do we access that that traffic that’s coming through those LLMs? And, you know, today there’s like a number of of theories in terms of where it will evolve to. Right? It could be more content based, so you just have to provide the content and you get pulled into the AI search results.

There could be more like deeper integrations that are opened up between the the the platforms and and distribution partners like ourselves. You know, it could be paid advertising in the future. And so we’re we’re closely monitoring the sort of the evolution of these platforms, but we do think that there will be a a meaningful opportunity to kind of unlock a large flow of relatively high intent traffic as they continue to mature.

Jed, Oppenheimer Analyst, Oppenheimer: Got it. And are you use are you is it too early yet to start using some of these new AI some of these new AI platforms as demand channels for EverQuote? Is there, like,

Jamie Mendel, CEO, EverQuote: There yeah. Well, there’s not a, you know, EverQuote has historically been entirely focused on paid programmatic advertising. Right? So that’s that’s where that’s where we live. That’s where we, you know, that’s where we shine.

These platforms, I’d say, so far that’s been a good thing because like the paid chain, like paid searches and insurance has been completely unaffected to date by any changes they’ve made in their organic search results. So we’re we haven’t been affected by some of the changes happening in the SEO landscape as as some others may have been. But on the flip side, the the platforms have not really opened up for paid advertising yet. And so, you know, that that’s why I’m saying it it’s I think they will. I think at least one or more of the platforms will over time.

I mean, Google will almost certainly find a way to monetize these users. But right now, you know, we’re we’re kind of just watching as the landscape evolves. And and, you know, as as it gains traction, I I think it’ll become more clear exactly how how we engage. And there is light is likely that there will be large flows of traffic that open up through them.

Jed, Oppenheimer Analyst, Oppenheimer: And and you mentioned earlier just about driving deeper value for the carriers and becoming more focused.

Jamie Mendel, CEO, EverQuote: Yep.

Jed, Oppenheimer Analyst, Oppenheimer: However, you know, I kinda look at your free cash flow. Right? I mean, you’re gonna be, you know, x the buyback or whatever. You’re gonna be close to 200,000,000,000 of cash on your balance sheet on year end. Just how do you sort of think about how you wanna deploy capital?

And, you know, I think one of your competitors said, hey. You know, we’re we gotta be aggressive in traffic acquisition cost because we wanna gain back more share with a larger carrier. So there’s always going to be a decent amount of competition. And, you know, now that you’re coming from a you know, you you probably have the best balance sheet among any of your competitors now. Probably you do.

So just how do you think about maybe using consolidation just to drive more value and maybe get to a level of earnings predictability that, know, Mike, investors might like and and might help to stop too?

Joseph Sandborn, CFO, EverQuote: Sure. So so maybe let’s I’ll start a little bit sort of think about sort of the highest levels of capital allocation. There’s probably three pieces we think about. First is making sure we sort of have fortress balance sheet. You know, we wanna make sure we have the strongest balance sheet in the space and then some, We you think that’s critical as a public company and as a to be a leader in the space.

So that’s step one. Step two is we’ve we’ve thought about our capital, I guess, Jayne, to your point, we’re generating a lot of cash flow. How we best deploy that? M and A certainly could be part of that. Over time, I think I made the call the comment to you on our call is we have over the next couple of years, it’s an industry where some consolidation could take place.

And I think there’s opportunities for them. We’ll continue to look at that for us to augment our current plans. That being said, we don’t need M and A in and of itself to achieve our growth targets. There’s averaging 20% growth, 20% EBITDA. I want be very clear, we believe we can achieve that without M and A, but M and A could be a chance to accelerate that.

And we think there’s we’ll see how that emerges, but we think we’re in a spot to take advantage of that between our balance sheet and also just the strength of our team in driving operations. And then the third piece was, is there a way to return capital to shareholders? And we announced a buyback last week’s earnings call. You saw this morning, we execute a portion of that buyback, buying back shares from our our Dave Blunton, our largest shareholder. So the very efficient way of doing it where it didn’t impact the public liquidity.

Dave also locked up some of his shares, I think it’s good for trading dynamics. So all of those are, I think, the three ways. Strong balance sheet using M and A and selectively return capital shares to repurchase. We think we can do all of the above. And obviously, when you think about a repurchase, we’ll say it’s a use of capital, although that is true.

It also helps signal what we believe in the stock, which is we believe we have we’re generating a strong cash flow that will continue. We have confidence in our trajectory. We want investors to see that, and we think that will be reflecting the stock could be also make our stock more useful for M and A as well. So that’s sort of how we think about all the pieces, Jed.

Jed, Oppenheimer Analyst, Oppenheimer: And do you ever think about, you know, the cash now? Theoretically, now you have a much long you could start to look at potential projects that might have an attractive ROI, but just a longer payback period. So can you talk about any potential projects or where you think about deploying capital where now that you have this cash cushion, it might make sense to invest in the business?

Joseph Sandborn, CFO, EverQuote: That’s a great point. So when I talk about that fortress balance sheet, it’s in contrast to where we were a couple of years ago. And at the time, a couple of years ago, we would sit down and look at investment opportunities across the company. Let’s say that’s a really good opportunity, the payback period is too long. We’re not going to do that.

Now, we’re taking a very different view, and we can think much more classic ROI. Hey, if the payback period is longer, which often is the case with large especially large technology investments, we actually can say, does that make sense to do it because they are right, and we’re making the decision to do this. So some of the investments we’re making in AI that were in broader technology in the second half of this year, Those are things that will have, yes, some some benefits, but they are longer term payoffs. They’re not gonna drive meaningful changes in ’26, you know, relative to the scale of our business, but they certainly will start impacting ’27 and beyond. That is very much the mindset of how we’re doing it.

And it comes back to now we’re in this spot where I think we’ve built a strong financial position. How do we use that to continue to build upon the strengths we have and really emerge as the leader in the space over the next few years and really pull further away from our competitors? We think that’s the opportunity we have.

Jed, Oppenheimer Analyst, Oppenheimer: And I I guess, you know, you’re you’re still about 90% auto. So is the opportunity more to invest more in auto, or is it more to sort of get back into that home insurance segment that’s still a pretty large TAM, maybe a little more complicated. Just how do you think it worked? I don’t know if you ever go back into health, but just some of the other verticals.

Joseph Sandborn, CFO, EverQuote: So we think there’s a real opportunity in the P and C marketplace. It’s broadly defined. It’s a very large market. Auto, as you point out, is our largest vertical. Home is our second largest vertical.

Home had really good growth in Q2, 23% growth year on year, twenty three percent sequentially. We think home has also had a little bit of the dynamics that auto had on COVID and dynamics around pricing. Lot of those are sort of worked through auto first. Now they’re working through home. We think that’s gonna be a good opportunity for us.

As we think about growing the business over time, we think there’s opportunities to stay within p and c. We don’t we don’t see ourselves going back into the health world, for example. But we think within PNC, we can go deeper into other PNC products. There’s areas like, you know, the the that are smaller markets, maybe have interesting dynamics around them, the proverbial toys, the boats and the motorcycles, RVs, is that opportunity. There’s also opportunities we think to go to help, again, our mission is to help carriers and agents grow.

How can we do tools to help them be more successful? So we’ve talked about some of the work we’ve done with agents and carriers to sort of go deeper in our product offerings. Jamie, if you want to add a little bit of color on those areas. That’s another way we can stay within P and C, but serve the mission of going deeper in carriers and agents and still support our growth opportunity.

Jamie Mendel, CEO, EverQuote: Yeah. I would would I would echo that. I mean, I think one of the dimensions for growth is going to be vertical expansion, but within P and C where we get real leverage with our existing distribution and traffic. But then even within auto or or home, you know, we see ample opportunities to continue growing organically. On the traffic side of the business, we’ve got channel expansion into, you know, channels where we’re relatively under penetrated right now because we had pulled back during the auto downturn.

So as we had social channels, video channels, there’s a lot of volume that that that, you know, remains to be had there. And then on the distribution side of the marketplace, with carriers, it’s all about driving more performance through smart campaign adoption and other optimization to get more budget. We’re seeing that pattern play out. And then with agents, we’re really focused on expanding our product suite for them. So expanding share of wallet with the local agent as we roll out more products and become, you know, move from from being a a lead vendor to truly their their kind of single consolidated growth partner.

And so we think that even within auto, we’ve got plenty of of levers to continue growing the business for the foreseeable future.

Jed, Oppenheimer Analyst, Oppenheimer: Got it. And, you know, you mentioned, you know, programmatic advertising has been sort of your your main traffic acquisition. Do you ever think about building up the brand and and and trying to to to to drive brand? Or is the are the payback periods too long and it just doesn’t work for what what were you trying to build?

Jamie Mendel, CEO, EverQuote: No. I I our, you know, our general approach to to traffic has been to kinda go from the bottom of funnel up. And I think as you get up above a certain point, brand becomes more important. And, you know, as we get into even some of these channels that I’m describing like display, social, TV, video, like these are channels that maybe don’t require a strong brand, but certainly are benefited by having a stronger brand. And so we’re probably approaching that point where, you know, we’re contemplating investments in brand exactly, you know, what what form that takes is, you know, is is to be determined.

I wouldn’t expect us to, you know, be airing a a Super Bowl commercial anytime soon, but I I I do think that sort of more programmatic performance oriented brand, advertising will will make its way into, you know, to EverQuote’s portfolio over the next year or two.

Jed, Oppenheimer Analyst, Oppenheimer: Got it. Got it. And sorry. And I guess just as we’re as you kinda think maybe some shorter term focus questions. As you think about the guidance for the full year, you know, you’re you’re coming up against some tougher comps, but, you know, EBITDA, you know, absolute EBITDA dollars, free cash flow looks healthy.

So can you just kinda help talk about, you know, how we should be thinking about the sec the back half of the year?

Joseph Sandborn, CFO, EverQuote: Sure. So, yeah. So as you just give some context, folks, on the growth. So in the first half of the year, we grew 50%, 55% year on year. So so very strong growth in the first part of the year.

And then as you pointed out, the 2024, the the growth over the prior year was over 150% on the prior year of 2023. So suffice to say, I think we do have some tough comps in the second half of this year. So I agree with your assessment. The way we think about it is though with the growth we have through the first half of the year, the growth we’re implying in Q3, put that together with any reasonable assumptions to Q4, you’re going to see a year that has very strong growth for this year, high 20s, 30% growth. And you’re also seeing an EBITDA margin that’s 14 ish percent or so 13%, 14%.

So really nice rule of 40 company and then some. So we feel really good about that. Admittedly, the comps make it a little tricky, but I think when you look on year on year, you should feel very good about the progress we’re making. And as you look ahead from there into the second half of the year, say, what else what’s the wildcards? Where’s the where’s the upside potential?

Where’s the where’s the opportunity? And I think one of the wildcards is we have not guided for Q4, but what you and others have reflecting in Q4 is, hey, we have the seasonal pattern that we’ve used to describe, which typically Q4 is down from Q3. One thing we had happened in 2024 was actually Q4 was up from Q3. Three. That occurred because some carriers decided to use their budget and the remaining budget they had in the very end of q four to really put a lot into the system in the second half of q four, mid November through December.

That is unusual from a seasonal pattern perspective, but it did happen in ’24. Last time it happened before that was 2020 in COVID. And so I think one of the wild cards for this year is this q four look like an opportunity where that might happen. On the one hand, you would say we have combined ratios very very healthy for the industry, underwriting margins very healthy. As they progress through the year, you’ve seen the carriers, as they get more clarity on tariffs and they get more of the year as known than unknown, you could get into a spot where some carriers have combined ratios in the mid to high eighties.

They’re trying to get to the mid to high nineties for the year. Gives you an awful lot of room to invest in growth in q four. And the wildcard is a little bit of, you know, how does the cat environment go in the the normal cat season is between sort of, you know, mid summer starts to go into, you know, early part of q four. Plenty of room to absorb what any would be any normal cat season. But if you if that comes through with that, I think there’s an opportunity for sort of that budget, you know, the budget, you know, flood in that it could happen in the ’4.

But that’s the wildcard for us for this year. And then from the margin point of view, we’ll continue to manage the BART business well from the cost side to sort of drive those EBITDAR margins sort of adding your current levels.

Jed, Oppenheimer Analyst, Oppenheimer: Got it. And just just going back, you you do have some of your own agents operating on EverQuote. Right? Like, you do have or no. Not anymore.

Correct?

Joseph Sandborn, CFO, EverQuote: Correct. We do not have agents. Right? Not anymore. That’s right.

Jed, Oppenheimer Analyst, Oppenheimer: Do you think about sort of going back and getting I know we touched on earlier, but just getting some type of vertical integration. I mean, I know you had more of a agent strategy in 2021, ’22. Might not have worked out well. You know, the market got nuts. But do you think about now revisiting it?

I know we talked on it earlier because you do have some more cushion.

Jamie Mendel, CEO, EverQuote: Yes. Yeah. I think we learn we we we learned a lot from from our, you know, vertical integration the last time through. And and as you know, there were there was a lot going on at that time, and we we were expanding into new verticals, and we are expanding vertically downstream into selling of insurance policies across health and Medicare and P and C at the same time as the P and C market sort of imploded. So there was a lot going on there.

But but I do think that one one thing we came to have deep appreciation for was that the kind of difference in in business model and cash flow profile of at least a a more traditional type of agency. And, you know, we made a decision to get back to more of a tech, you know, efficient marketplace, and and that has served us very well. So, you know, one of the things we do think a lot about is there there’s still a number of large insurance carriers out there who will only really distribute products through an agent because they don’t have direct distribution built out. They don’t even, in some cases, have captive agent basis. So it’s about a third of the premium that, you know, that needs to get accessed through some type type of of agency type platform.

And and so we do think about, are there more tech really tech first and tech enabled ways to access some of that budget, some of those products on behalf of our customers? The answer is probably yes. And so I guess, Jed, the the sort of short answer to your question is, I think there are aspects of of the kind of agency operation of the past that we still believe have some strategic value. But the approach that we took the last time through is not the approach that we would take the next time.

Jed, Oppenheimer Analyst, Oppenheimer: Got it. Got it. And then I know I know we’re coming up here at the at the bottom of the hour. Just anything you think, given where the structure you know you know, stocks kind of been flat here. I mean, I guess, I I would say you’re you probably think you’re not getting the appropriate valuation you are, you know, for your growth and and how much free cash flow has grown over the last two years.

Do you think there’s anything that investors are misconstruing that you don’t think is fully reflected? What do you think the biggest misconception is about the digital insurance marketplace?

Jamie Mendel, CEO, EverQuote: So I Hi, Justin.

Joseph Sandborn, CFO, EverQuote: You wanna start?

Jamie Mendel, CEO, EverQuote: Yeah. Take it off.

Joseph Sandborn, CFO, EverQuote: Sure. So I mean, obviously, I think we we have a lot of opportunity to go on our stock. Right? I mean, we’re up 17% this year, so which is which is nice progress, but we think we have a long ways to go. I think for investors, I think one of the the challenge for investors with our story has been we’ve changed the business so dramatically in the past two years.

We’ve radically changed because I had a call with an investor earlier today actually and and, you know, talked about how much we’ve changed the business. And I think a lot of people are still trying to understand the new approach to EverQuote and how we’re building value. I think those investors who’ve seen it are starting to see, like, this is a very different story of not only how we’re managing this, but also how we’re trying to translate and driving. Not only helping customers succeed, but also when customers reward us with their with revenues, how we manage those revenues to and drive returns for shareholders and cash flow. I think that’s a big difference.

And I think the the world does not really understand that as well as they should. I think the other piece is just the opportunity we have. We think this is a very large TAM for us. I think we’ve gone through this once in a generation type downturn, but, ah, this is a moment in time, this can’t continue. This is and although, yes, we hope there’s not another COVID experience, we all hope that doesn’t happen.

I think it’s important to marry and what is this industry? The thesis forever, quote, prior to the industry downturn was insurance is a laggard online. Right? The proportion of advertising dollars spent on digital channels was well below average of any other sector. What’s happening in the meantime?

Other sectors actually went further ahead. Insurance still remains a laggard going online. But a difference is that the revenues for the the customers for sure have gone up by 40% or 50% with premium increases. And generally speaking, when this 40%, 50% rate increases, carriers being effectively quasi regulated entities will spend a 10% to 15% of their revenues on sales and marketing. So effectively, we had this we were a laggard going along with those really strong growth opportunity for forward growth.

That remains the case, but you also have this overlay of 40%, 50% growth. They’ve had their own business, which will translate eventually into benefiting us on the sales and marketing side. We think that’s the dynamic. And then the last piece is, you know, there’s the opportunity and then there’s our ability to take advantage of it. We think we have proven in this time not only how we’ve changed the business to, you know, really help our carriers and agents grow, but also drive shareholder value.

We have this opportunity. We think we’ve proven we can execute really well and manage through change. And I think that’s what we’re really excited about. And I think as investors start to see those pieces, like, if you believe in this space as an opportunity in the size TAM it is, we are a great way to play that opportunity.

Jed, Oppenheimer Analyst, Oppenheimer: Jamie, did you have anything to add?

Jamie Mendel, CEO, EverQuote: No. I think that was well said. Think as we what I have experienced personally is as we have really focused and gone deeper with our existing carrier partners, I do think we are emerging as the partner of choice for them. We’ve invested a lot in our data solutions, our technology solutions. We have a roadmap that I think will continue to deliver a lot more value to carriers and agents in terms of how we help support them grow.

And as Joseph said, the market is massive. And there’s a lot of secular tailwinds behind us in terms of the shift of the spend, you know, into digital channels like ours. I think we’re really, really well positioned to to, you know, be a leader and and kind of emerge as the as the dominant player in the space.

Jed, Oppenheimer Analyst, Oppenheimer: Alright. Well, thanks, Jamie and Joseph, for joining us. You know, time’s concluded. But, thanks again.

Jamie Mendel, CEO, EverQuote: Thanks, Ed.

Jed, Oppenheimer Analyst, Oppenheimer: Great job on, you know, growing you know, generating probably close to 8,000,000 of free cash flow this year is an awesome job. So congrats. Keep up the good work, and, yeah, hopefully, more investors, you know, get into the name because it’s super interesting.

Joseph Sandborn, CFO, EverQuote: Thank you, Chad. We appreciate the help. Thanks.

Jed, Oppenheimer Analyst, Oppenheimer: Thank you. Alright. Have

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