EverQuote at Raymond James Conference: Strategic Growth and Technology Focus

On Tuesday, March 4, 2025, EverQuote (NASDAQ: EVER) presented at the Raymond James & Associates’ 46th Annual Institutional Investors Conference. The company highlighted a record-breaking financial year and outlined strategic initiatives to sustain growth. Despite challenges in certain markets, EverQuote remains optimistic about leveraging technology and data to enhance its position in the property and casualty (P&C) insurance market.

Key Takeaways

• EverQuote reported $500 million in revenue, marking a 74% year-over-year increase.
• Adjusted EBITDA reached nearly $60 million, with an 11.6% margin.
• The company’s strategic focus is on technology investments and data utilization.
• Regulatory hurdles have been cleared, freeing management to focus on growth.
• EverQuote aims for a long-term EBITDA margin target of 20%.

Financial Results

• Revenue: Achieved $500 million, a 74% increase from the previous year.
• Adjusted EBITDA: Nearly $60 million, translating to an 11.6% margin, a significant improvement from last year’s negative margin.
• Net Income: Reported at $12.3 million.
• Cash Conversion: Approximately $60 million of EBITDA converted into additional cash flow.
• Cash Balance: Closed the year with $100 million in cash reserves.
• Variable Marketing Margin: Expected to be around 28-29% for Q1.
• Future Margin Targets: Aiming for a 12.5% EBITDA margin in Q1, with a long-term goal of 20%.

Operational Updates

• Regulatory Headwinds: The elimination of FCC rule-related concerns has allowed EverQuote to concentrate on growth rather than regulatory challenges.
• Geographic Footprint: The company has restored its carrier presence to 80-90% of its full geographical reach, with ongoing challenges in California, New York, and New Jersey.
• Technology Investments: Focused on enhancing bidding processes and consumer-provider matching through data-driven technology improvements.

Future Outlook

• Growth Strategy: Emphasizes organic investment in technology and potential mergers and acquisitions to deepen involvement in the P&C market.
• Financial Discipline: Committed to targeted, disciplined investments to build a robust and diversified business.
• Capital Allocation: Considering stock buybacks to enhance shareholder value while maintaining liquidity.

Q&A Highlights

• Competitive Landscape: Compared to companies like LendingTree, Media Alpha, and QuinStreet, EverQuote’s unique focus on the P&C market was emphasized.
• Technology Advantage: The use of accumulated consumer data to improve bidding and marketplace dynamics was highlighted.
• Distribution Advantage: The importance of a comprehensive product set, including digital quoting and local agent connections, was underscored.

For more details, please refer to the full transcript.

Full transcript - Raymond James & Associates’ 46th Annual Institutional Investors Conference 2025:

Greg Peters, Insurance Technology Analyst, Raymond James: I’m Greg Peters, and I am the insuranceinsurance technology analyst here at Raymond James. And we are have arrived at the last presentation spot of the day for our conference for day two. And I know the phrase saving the best for last can be a little bit overused or exaggerated. But in the case of what we see going on inside the auto insurance market and the demand for growth on the auto insurance carrier side is a perfect segue for our next company, EverQuote. EverQuote has been a participant in our conference for a number of years now.

And they are inside our coverage list uniquely positioned to capitalize on the substantial increase in appetite by the carriers to grow their policy counts in auto insurance. The conversation today for the next twenty five plus minutes is designed to be interactive with Q and A. But before we start on the Q and A, I thought I’d have Jamie and Joseph here give us a brief intro, a State of the Union, if you will, on how the results wrapped up for last year and the outlook for this year. So why don’t we start there?

Jamie, EverQuote: Sure. There? Sure. Thanks for joining. Last year was a good year for EverQuote.

In fact, it was a record year across all of our financial metrics. And we enter this year with with the business really as strong as it’s ever been. As Greg alluded to, the insurance, the auto insurance market had gone through a challenged period from 2021 to 2023. The industry started to come out of that in 2024. We are very well positioned to help the carriers get back to growth as their underwriting profitability got where they wanted to get to.

And as a result, we had really just a tremendous year next year. And coming into this year, there were some concerns about among the investor community about a regulatory change that was set to go into effect in January, that as a result of the new administration, has now been struck. And so really for the first time in a long time, we’re coming into this year with the business firing on all cylinders and no sort of notable clouds hanging over our head or out in the horizon. And I think we think we’re setting up for another great year this year.

Joseph, EverQuote: Maybe I’ll give you a little financial numbers as well to see if you context. So last year, we had about $500,000,000 in revenues. That was 74% year on year growth. Our adjusted EBITDA was close to $60,000,000 in revenues. The margin is like 11.6%.

A year before it was negative. When we presented at this conference a year ago, we were starting about talking about mid single digits, you know, like 10% would be nice. So the year we ended 11.6%. So thank you for the encouragement. And we also had net income.

We had $12,300,000 net income. And I think the last thing I’d highlight is just the cash conversion. That roughly $60,000,000 of EBITDA results in about $60,000,000 of additional cash flow. We ended the year with $100,000,000 of cash. And it’s just a very different profile business from twelve months ago when we sat here with you last.

Greg Peters, Insurance Technology Analyst, Raymond James: Indeed, it really is. So sticking at a higher level, one of the companies presented inside our coverage universe that presented earlier today was Allstate. And they talked about the different states inside their business mix that were in certain states they’re growing, in other states like New York and New Jersey, they’re not growing. So maybe we can apply their appetite as it depends on state by state and how does it segue into how it affects your business?

Jamie, EverQuote: Yes. So as the carriers have been filing their rate increases, they do that at the state level. And as they get rate adequacy in a given state, their appetite to grow is restored. And so the way that we’ve seen the this recovery of the auto insurance industry unfold over the last couple of years, it’s been kind of each carrier, one state at a time, getting rate adequacy and resuming spend in our marketplace to drive growth. I would say in terms of where we are today with respect to that sort of geographical footprint, we are now at a point where most carriers are kind of back in the market in a pretty with a pretty broad geographical footprint.

There’s a couple of notable exceptions to that. There’s maybe one large carrier that has yet to really step back in the marketplace in a meaningful way. And then there’s one state that is sort of challenged across the board, that would be California. And then there’s a handful of states like the New Yorks and the New Jerseys of the world, which are lagging behind for some carriers. But I’d say we’re kind of back 80%, ninety % of the way to sort of a full footprint of carriers and states at this point.

Greg Peters, Insurance Technology Analyst, Raymond James: And just to close the loop on that area of thought, would it is it safe to say when your business mix across is geographically diversified? Or do you have a concentration of business mix in one state or the other?

Jamie, EverQuote: In terms of consumers coming online to shop for insurance, the traffic volume is roughly proportionate to population, right? So there’s no particular SKU one way or the other. But in terms of our revenue mix, it is dependent on both the volume of shopping activity and the carriers or agents willingness to pay for referral. And that’s where you’ll see disproportional monetization in states where there’s appetite and a couple of these laggard states still being relatively challenged like a California, the value of a shopper in California is less because there are just few carriers who actually want that business right now.

Greg Peters, Insurance Technology Analyst, Raymond James: Yes, makes sense. So the auto insurance market exited the fourth quarter of ’twenty four producing some of the best results that we’ve seen out of a number of carriers, not all of them, but many of them are producing great results. And when I think about and we’re seeing their advertised spend pick up. When I think about their underlying combined ratios being at very attractive levels relative to history, incrementally, their advertising dollars, their acquisition their ability to spend more on acquisition costs probably is higher. So can you talk about carrier appetite for your leads?

Is that have you seen an increase in the value of your leads you’re selling? And maybe walk us through how that’s ranged and where we are in that cycle.

Jamie, EverQuote: Yes. So we’ve certainly seen the appetite for our leads come back in a big way over the course of the last year. We’ve seen, if you take the 70 plus percent growth that we generated last year, it was sort of largely driven or heavily driven by increase in monetization, increase in carrier coverage and willingness to pay. So monetization was a big part of the growth equation over the last year. And for the direct carriers specifically, I think our carrier segment grew 200% year over year last year and exited Q4 was at 500% year over year.

So there was this really significant ramp in carrier spend and carrier willingness to pay over the course of the year last year as persisting into Q1.

Greg Peters, Insurance Technology Analyst, Raymond James: So then there’s monetization aspect and there’s the unit count aspect. So how talk to us about the unit count aspect. Is are you seeing increased demand for unit counts too?

Jamie, EverQuote: Yes. So increased demand for unit counts, I think the carriers, most carriers, at least in for certain segments and geographies, want as much volume as they can possibly get. And thanks to the rate cycle, everybody’s getting renewal notices, insurance is more expensive than it was before, and that triggers a lot of shopping activity. So we’ve seen historically high shopping levels. Over the last year.

We expect them it’s kind of persisted into this year. But generally speaking, the growth last year, I think, we mentioned our auto and home kind of volume, shopper volume was up, I think, 10% to 15% last year. So a good amount of the growth being driven by volume and the balance by monetization.

Greg Peters, Insurance Technology Analyst, Raymond James: Yes. Well, that’s a robust environment for you. So it’s probably over the course of the history. So as you transition, one of the things that you talked about in your opening comments and we’ve been all been tracking is the potential regulatory headwind that you’re going to face in January that’s been stalled out or killed. Can you talk to us about the expenses that you the upfront expenses that you endured to get ready for this?

Because I can’t imagine we’re going to have some

Joseph, EverQuote: regulatory change was. So there was a FCC rule that was coming in place, which was one to one consent. And in fact, what that meant was in our marketplace model, a consumer comes in, can be connected with multiple providers, it was going to go one to one. The impact of that was particularly in our agent business, about roughly 25% of the business on leads. So pretty dramatic impact.

And it was one we have been talking, if you look through our comments starting last summer, we’ve been talking a lot about how we’re preparing for it. And the result of that was going to be an environment where you we started to increase price increases for agents. There was going to be a lower volume of shoppers, but they were going to be higher quality. All of that ended, you know, the day before it was going to begin, when the new administration came in. So you look at that, what does it do to our environment right now?

We look at this, that was the largest if you think about Jamie’s comment, we’ve gone through a period of multiple years of having various storm clouds around the company. This was the last one and this one is gone. And then you look from the expense side, I guess what I’d say is, it’s less about lower expenses per se. Se. It’s a matter of the management focus being able to put on how we grow the business and not ’25 and beyond and not focusing on managing the next regulatory or other crisis in the business.

And that is a dramatic shift. Even since we’ve made the announcement less than a month ago when this change or just over a month ago, we’ve already been you can just see the our ability to sort of refocus the efforts on the team, which in the latter part of Q4 and latter part of last year, Q4, probably half of the bandwidth of the company was consumed in trying to deal with this regulatory change. So just the amount of bandwidth now focused on how do we grow, how do we help our agents and providers be more successful, dramatic shift. And I mean, that’s what’s really exciting for

Greg Peters, Insurance Technology Analyst, Raymond James: us. Yes, indeed. Maybe related to all this because of the increased demand and can you talk about the competitive landscape? Who else is in your market providing this? How do you guys consider your value proposition with some of your year?

Jamie, EverQuote: Yes. There’s no, I would say, direct pure play comp, though some of the companies that we’re often sort of compared to would be like a LendingTree, a Media Alpha, a QuinStreet. There’s differences with all their business models, whether it’s differences in their vertical sort of composition, you know, LendingTree being, for example, in many financial services, insurance being just being one of them or, you know, Mid Alpha, Quint Street not really having the local agent presence that we do, being more of just an intermediary platform between publishers and carriers. But that’d be the comp set that we’re typically compared to. I would say the thing that the decision that we have made that sets us, I believe, on just a different course than these is we’ve really made this conscious choice and we made this in 2023 to focus on the P and C market specifically.

We felt that at the time we were in health insurance, Medicare, life insurance, we’ve since exited all those markets. We’ve really doubled down on P and C with the idea being the market is plenty large for us to generate the kind of growth that we aspire to for the foreseeable future. And there’s real value in going deeper with P and C providers to solve their problems at a very sort of, like, fundamental technical level. And it’s where we have a real advantage. We have a data advantage.

We have a distribution advantage with our local agent network. And so the path forward for us is one where we’re really focused on becoming the number one growth partner to all P and C insurance providers. And I think we’re well on that path. If you just look over the last couple of quarters, we’ve really invested heavily in improving sort of performance by applying new technology to how we bid for traffic, how partners bid into our marketplace. And we’re starting to see some we think we’re starting to see some share gains as a result of that, which you can start to see in the numbers in Q4 and Q1.

Greg Peters, Insurance Technology Analyst, Raymond James: Right. So the technology piece, there’s two components to your answer. One, the agent component and two, the technology component. I just want to let’s take the latter first because technology is always forefront of any conversation when it relates to financial services. Spend a minute and talk to us, expand on that comment about technology and how you’re using technology, etcetera.

Jamie, EverQuote: Yes. So we see, I’d venture to guess, more insurance shopping volume on the Internet than just about any other company out there, say for maybe a small handful of the largest carriers out there. And so it’s tens of millions of consumers shopping for insurance every year. Now that data has been accumulating over the years, and we use it for a number of different purposes. On the traffic side, we use it to automate how we bid in a performance marketing context, for all the traffic that’s flowing into the marketplace.

But then equally important, we use it to decide how we’re going to sort of match and connect the each consumer with the right subset of providers for them. And now we’re beginning to extend some of our bidding capabilities out to the providers themselves. So if you’re a carrier now, you can use a product that we call Smart Campaigns. We’ve gotten good adoption now of this product, where all the sort of the ML infrastructure that we’ve built for our own bidding, we now have sort of externalized as a product for carriers to bid into our marketplace, and we’re seeing them get a lot of increased performance out of that. And the way that these marketplaces tend to work is if you can drive more performance on a unit of traffic out to the marketplace, those providers will be willing they’ll ship budget to you.

They’ll pay more for your traffic. If you have more monetization, then you can go and source more volume of traffic from whether it’s Google or Meta or wherever the traffic originates. Higher volume of traffic means we have more data. More data means we can do a better job of optimizing performance. And so that’s the fly wheel that we are investing in each day, and it’s the technology and the data that underpins that that has allowed us to get to where we are today as the leading online insurance marketplace.

Greg Peters, Insurance Technology Analyst, Raymond James: Excellent. And then on the you also mentioned distribution is a key critical advantage. Talk about that.

Jamie, EverQuote: Yes. So we have the largest but take a step back, insurance companies in The U. S, they’ll distribute insurance to consumers either directly or through a local agent. And if we as a marketplace want to have a comprehensive set of products on the shelves, we need to be able to facilitate referrals out to a digital quoting workflow like a Progressive or GEICO or something like that. We also need to be able to facilitate connections to local agents because if you want to get State Farm, which has it’s the largest auto insurance carrier and has great product, you need to do that through a local agent.

So we have really invested in building out sort of the breadth of insurance products out there. And the most proprietary piece of that is this local agent network. We have thousands of local agents who use EverQuote to access local shoppers who go online to buy insurance. And it’s continued investment in the growth of that agent network and further supporting that agent network through now a growing suite of products and services that we feel is a real edge that we’re building.

Greg Peters, Insurance Technology Analyst, Raymond James: Excellent. Well, I remember sitting in your office maybe two years ago or so just aspirationally hoping for you to get to a 10% margin, and you cleared the 11% margin. But what was striking to me last year is that you unveiled an aspirational target of, I mean, in a higher margin. So maybe step back and give us an update on your margin through the year, through end of last year, but then also talk about the steps you need to percent -plus margin that you talked about a couple of conference calls ago.

Joseph, EverQuote: Sure. So maybe I’ll just give you some context on the model. So we see this a business that’s we’ve had extraordinary growth, right? We see growth in this business over the long term sort of high teens 20% on average. So really nice growing business.

And as you look at our EBITDA margins, I made the comment we were at 11.6% last year. That was twice what we ever achieved pre downturn. So big change, right? And it also was very high cash converting, basically 100% conversion to operating cash, which it wasn’t before. So we’ve changed the model a lot.

As you look at this year, the commentary we gave in this year when we gave guidance for Q1 and we didn’t give guidance, we gave insights in the year. Our Q1 says probably 12.5% is the midpoint, so 100 basis points up from last year. As we see through the year, we sort of said, hey, assume it’s sort of at a near those levels. Part of that dynamic is we look to the second half of this year, we are going to make some additional investments in our technology and data platform, right? And we have shown that as we manage the operating expenses really well, but we want to make sure that we are making investments to position us for growth, not for this year.

Year. This year is set $26,000,000.27000000 dollars. We want to build the winning hand in this industry. And we think we have the backdrop to do it. And to do that, we have to make sure making the investments in technology.

But we’re going to do in a way that’s disciplined, so investors will see us also continue to contribute to that EBITDA margin. So we haven’t talked exactly how it will evolve to get to 20% in the long term model. But we had 100 basis points this year. I think you’ll see us adding every year along the way. And obviously, the wild card that we had, say, for example, in Q4, as EBITDA margins were higher than we expected because in a given quarter, if we have over performance carrier spend coming on late in the quarter, that often goes direct to the bottom line with given the leverage we have in the model because we plan although we think about spending throughout the quarter, at a certain point, you can’t spend it prudently.

So we’ll let you drop to the bottom line. So that is always sort of the dynamic in our model. But I say, assume it’s in this sort of 12.5%, all of the things equal, and we’ll see what else happens.

Greg Peters, Insurance Technology Analyst, Raymond James: And part of the margin conversation has to I’d be remiss if we didn’t talk about the variable marketing margin. So why don’t you just pivot to that and Sure.

Joseph, EverQuote: So I’ll explain, first of all, what it is. So it’s revenues less advertising dollars or variable marketing dollars and variable marketing margin is just that as a percentage of revenues, right? So if you look at variable marketing margin, the percentage, we’ve sort of talked about it as sort of being sort of in the high 20s. For this year, our guide says about 28 to 29 for Q1. Some context on that, when you look at variable marketing margin, it’s periods where it’s been higher when the advertising environment was not as dynamic as it is now, right?

If you put it in context, if you go back to sort of early entering 2023, the variable marketing margin we have with a much smaller business around 29%, right, in the auto P and C marketplace. We had a period where in the downturn we had some margins really go up into mid-30s and we said, don’t assume this is the new normal, assume this is really what it is, which is a very depressed market and we’re taking advantage of it. If you look at our commentary last year, we said, hey, we’re going to sort of see through 2024, have it go down to sort of high 20s and that’s exactly where it ended the year in Q4. And we sort of see that continuing this year. And it’s important to remember, when we manage the business on the traffic teams, they don’t manage to the percentage on a day to day basis.

They really manage to driving the dollars. And of course, we look at the margin, but think of that as a weekly review versus the daily operation, which means there’s variability is given by the advertising environment, but generally in the high 20s is where we see it. And as I gave that contrast, it was 29% going 23. We’re doing that nicely. Well, why is that not improving?

Could you give me some context? It’s a much it’s dramatically bigger business. And what is allowing us to maintain that margin despite a much more competitive advertising environment is our technology. How we’re leveraging our bid we talk about our bidding technology and that’s been a key example. So let’s give you a little context in the VMM.

Greg Peters, Insurance Technology Analyst, Raymond James: It really is, as I’m sitting here listening to you talk about the opportunity for you, really, it’s like all this hard work is what you’ve been waiting for. So it’s a unique time for you guys. We feel that way. And you talk about the free cash flow. You don’t have any debt on your balance sheet.

I guess, before I get into what can go wrong, one of the other pieces that can pop up is acquisitions or, God forbid, diversification. I feel like this focused strategy has really delivered positive results for shareholders. But is there anything going on in the M and A pipeline? Is there any targets out there that could enhance what you’re doing in the marketplace? What are you seeing out there from a capital deployment standpoint?

Yes.

Joseph, EverQuote: So maybe I’ll take it up

Jamie, EverQuote: a bit to just sort of how

Joseph, EverQuote: we think about cash. These were questions we weren’t getting a year ago at the conference.

Jamie, EverQuote: Now that we have

Joseph, EverQuote: $100,000,000 in cash and we’re cash generating business with EBITDA basically a proxy cash, we get a lot more questions what we’re going to do with cash. So these are good questions to have. I’d say first, which sort of gets glossed over by a lot of folks though, but is key to emphasize is how we think about investments today organically. So the time horizon we thought about for investments a year ago, eighteen months ago, you can imagine when you have a very thin balance sheet, your time to money is a very key criteria. So you rule out many high impact projects because the time horizon is too long.

As we think about where we are now, we are actually making investments, particularly in the second half of this year. They will not benefit this year. They may not even benefit next year, but they’re going to set us up to really benefit long term and that’s critical. Particularly on the technology side, you have to think in terms of several quarters, multiple years out and we are now able to do with it. So that’s the first one I think is probably the most important to carry away.

Second on M and A, M and A is an opportunity that will emerge for us in our sector. I think you made a comment about diversification. We’ve tried that before. We like the P and C market. It is a very, very large market.

We feel this is a place where we can make a very, very large business serving it. Then the question is, are there opportunities that allow us to go deeper within P and C, right? And those opportunities could be helping products for our agents, right? It could be how we use data with carriers, could be new traffic sources, could bring us in potentially into other related areas within P and C verticals. So I think those are all opportunities that we’ll look at organically, but maybe we accelerate or say it’s easier to buy versus build.

So we’ll look at that as a second option. And I would say we are fortunate we’re seeing a lot of things. I would say they are generally sort of tuck in type profile. And I think that’s probably the right profile for us. And I think they’re also lower risk for shareholders as well.

And you will see us look at those, but they’ll be guided by it’s got to fit the strategy, focus on P and C. It’s got to be adding value for our carrier partners and it’s got to fit our financial criteria, I. E, we like making money. So those are going to be the three things on it. So I’d say those are the two things in capital allocation.

The third that we’ll think about is, and we get a lot of questions on, so I’ll just hit it on head on is buybacks. It’s sort of a common theme and it’s something we’ll consider. I think we’re always cognizant of we’re not a large cap and we’re a small cap company and we’ve

Jamie, EverQuote: got to

Joseph, EverQuote: be conscious of flow and liquidity and all those things. But that being said, we appreciate the math that X dollars divided by a few number of shares is net positive from a per share basis. So we’ll think about that as well as another tool in the toolkit. Yes.

Greg Peters, Insurance Technology Analyst, Raymond James: Excellent. Well, I asked this Well, I asked this question of a previous company because really your company and a number of other companies operating inside my vertical seem to be like the near term outlook over the next twenty four months is very strong. And so I asked this question of this other management team, and I think it’s entirely appropriate for you too. It’s like against this backdrop that is very bullish, what is what are the issues that worry you that can go wrong, whether it’s macro, outside of control or maybe more company specific? But that because it just it seems like it’s a very strong outlook.

Jamie, EverQuote: Yes. I mean, we share your view. I mean, the overall sentiment is one of we think it’s a very strong outlook as well. And you’ve got a few sort of favorable things that are likely to occur at some point over the next twelve to eighteen months, whether that’s California coming back or there’s another big carrier stepping back into the marketplace. So a lot of that bodes well.

I think for us, number one is remaining like focused and disciplined, right? We’ve worked very hard to sort of refocus the business, implement a certain level of financial discipline, not just sort of among Joseph and myself, but like really permeate down into the organization. And now as we get back into much more of a growth mentality, we are going to be making investments, but we need to make sure that those are very targeted, very focused, and we’re very disciplined in how we do that. So I think for me, that’s certainly top of mind. Beyond that, I think to your question around diversification is like, are we going to we have exited this hard market in a position of strength.

I don’t anticipate we’ll see another hard market like the one we just saw. But, you know, everyone but at some point in the future, there will be another hard market of some form. And I think the challenge will be to make sure that we enter that hard market with a much more sort of diversified and durable business than the one we had in ’twenty one when this one hit us.

Greg Peters, Insurance Technology Analyst, Raymond James: Excellent. Well, congratulations on your success. And the outlook looks great. So good luck to you. And for everyone participating, we have hit the top of the hour, and management will be available in a breakout afterwards downstairs.

But thank you for your participation

Joseph, EverQuote: and

Greg Peters, Insurance Technology Analyst, Raymond James: thanks for

Jamie, EverQuote: letting us.

Joseph, EverQuote: We appreciate the support. Thank you.

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