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Share Name | Share Symbol | Market | Type |
---|---|---|---|
EverQuote Inc | NASDAQ:EVER | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.22 | 1.02% | 21.75 | 13.50 | 22.10 | 22.105 | 21.55 | 21.57 | 586,873 | 22:58:55 |
☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
26-3101161
|
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.) |
|
210 Broadway
Cambridge, Massachusetts
|
02139
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange
on which registered
|
||
Class A Common Stock, $0.001 Par
Value Per Share |
EVER
|
The Nasdaq Global Market
|
Large accelerated filer | ☐ | Accelerated filer | ☒ | |||
Non-accelerated
filer
|
☐ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
|
|
|
|
Page
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|
PART I.
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4
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Item 1.
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4
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4
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5
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6
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7
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8
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Item 2.
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20
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Item 3.
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30
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Item 4.
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30
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PART II.
|
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31
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Item 1.
|
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31
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Item 1A.
|
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31
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Item 2.
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55
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Item 6.
|
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56
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57
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|
• |
our future financial performance, including our expectations regarding our revenue, cost of revenue, variable marketing margin, operating expenses, cash flows and ability to achieve, and maintain, future profitability;
|
• |
the impact of the
COVID-19
pandemic;
|
• |
our ability to attract and retain consumers and insurance providers using our marketplace;
|
• |
our ability to develop new and enhanced products and services to attract and retain consumers and insurance providers, and our ability to successfully monetize them;
|
• |
our anticipated growth and growth strategies and our ability to effectively manage that growth;
|
• |
our ability to maintain and build our brand;
|
• |
our reliance on our third-party service providers;
|
• |
our ability to offer and sell insurance as a licensed insurance agent;
|
• |
our ability to expand internationally;
|
• |
the impact of competition in our industry and innovation by our competitors;
|
• |
our ability to hire and retain necessary qualified employees to expand our operations;
|
• |
our ability to adequately protect our intellectual property;
|
• |
our ability to stay abreast of new or modified laws and regulations that currently apply or become applicable to our business;
|
• |
the increased expenses and administrative workload associated with being a public company;
|
• |
failure to maintain an effective system of internal controls necessary to accurately report our financial results and prevent fraud;
|
• |
the future trading prices of our Class A common stock; and
|
• |
our use of proceeds from our initial public offering.
|
September 30,
2020
|
December 31,
2019
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 45,881 | $ | 46,054 | ||||
Accounts receivable
|
41,527 | 32,214 | ||||||
Prepaid expenses and other current assets
|
7,119 | 7,065 | ||||||
|
|
|
|
|||||
Total current assets
|
94,527 | 85,333 | ||||||
Property and equipment, net
|
5,871 | 5,197 | ||||||
Goodwill
|
9,618 | — | ||||||
Acquired intangible assets, net
|
3,775 | — | ||||||
Other assets
|
2,444 | 691 | ||||||
|
|
|
|
|||||
Total assets
|
$ | 116,235 | $ | 91,221 | ||||
|
|
|
|
|||||
Liabilities and Stockholders’ Equity
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$ | 33,735 | $ | 23,663 | ||||
Accrued expenses and other current liabilities
|
11,224 | 13,225 | ||||||
Deferred revenue
|
1,692 | 1,501 | ||||||
|
|
|
|
|||||
Total current liabilities
|
46,651 | 38,389 | ||||||
Other long-term liabilities
|
2,361 | 1,062 | ||||||
|
|
|
|
|||||
Total liabilities
|
49,012 | 39,451 | ||||||
|
|
|
|
|||||
Commitments and contingencies (Note 9)
|
||||||||
Stockholders’ equity:
|
||||||||
Preferred stock, $0.001 par value; 10,000,000 shares authorized;
no shares issued and outstanding |
— | — | ||||||
Class A common stock, $0.001 par value; 220,000,000 shares authorized;
20,346,926 shares and 14,635,834 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively |
20 | 15 | ||||||
Class B common stock, $0.001 par value; 30,000,000 shares authorized;
7,429,502 shares and 11,802,341 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively |
7 | 12 | ||||||
Additional
paid-in
capital
|
181,639 | 158,752 | ||||||
Accumulated deficit
|
(114,443 | ) | (107,009 | ) | ||||
|
|
|
|
|||||
Total stockholders’ equity
|
67,223 | 51,770 | ||||||
|
|
|
|
|||||
Total liabilities and stockholders’ equity
|
$ | 116,235 | $ | 91,221 | ||||
|
|
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Revenue
|
$ | 89,977 | $ | 67,112 | $ | 249,643 | $ | 175,012 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Cost and operating expenses:
|
||||||||||||||||
Cost of revenue
|
5,378 | 4,052 | 15,690 | 11,222 | ||||||||||||
Sales and marketing
|
73,598 | 53,212 | 204,663 | 143,358 | ||||||||||||
Research and development
|
8,149 | 5,596 | 21,574 | 14,685 | ||||||||||||
General and administrative
|
6,141 | 4,334 | 15,614 | 12,641 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost and operating expenses
|
93,266 | 67,194 | 257,541 | 181,906 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from operations
|
(3,289 | ) | (82 | ) | (7,898 | ) | (6,894 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Other income:
|
||||||||||||||||
Interest income
|
18 | 168 | 176 | 536 | ||||||||||||
Other income
|
87 | 87 | 288 | 175 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other income
|
105 | 255 | 464 | 711 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) and comprehensive income (loss)
|
$ | (3,184 | ) | $ | 173 | $ | (7,434 | ) | $ | (6,183 | ) | |||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss) per share:
|
||||||||||||||||
Basic
|
$ | (0.12 | ) | $ | 0.01 | $ | (0.27 | ) | $ | (0.24 | ) | |||||
|
|
|
|
|
|
|
|
|||||||||
Diluted
|
$ | (0.12 | ) | $ | 0.01 | $ | (0.27 | ) | $ | (0.24 | ) | |||||
|
|
|
|
|
|
|
|
|||||||||
Weighted average common shares outstanding:
|
||||||||||||||||
Basic
|
27,526 | 25,910 | 27,102 | 25,596 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Diluted
|
27,526 | 28,607 | 27,102 | 25,596 | ||||||||||||
|
|
|
|
|
|
|
|
Class A Common Stock
|
Class B Common Stock
|
Additional
Paid-in
|
Accumulated
|
Total
Stockholders’ |
||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Equity
|
||||||||||||||||||||||
Balances
at
December 31, 2019
|
14,635,834 | $ | 15 | 11,802,341 | $ | 12 | $ | 158,752 | $ | (107,009 | ) | $ | 51,770 | |||||||||||||||
Issuance of common stock upon exercise of stock options
|
214,179 | — | — | — | 1,364 | — | 1,364 | |||||||||||||||||||||
Vesting of restricted stock units
|
329,897 | — | — | — | — | — | — | |||||||||||||||||||||
Stock-based compensation expense
|
— | — | — | — | 4,540 | — | 4,540 | |||||||||||||||||||||
Transfer of Class B common stock to Class A common stock
|
1,388,536 | 2 | (1,388,536 | ) | (2 | ) | — | — | — | |||||||||||||||||||
Net loss
|
— | — | — | — | — | (1,442 | ) | (1,442 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balances at March 31, 2020
|
16,568,446 | 17 | 10,413,805 | 10 | 164,656 | (108,451 | ) | 56,232 | ||||||||||||||||||||
Issuance of common stock upon exercise of stock options
|
126,375 | — | — | — | 954 | — | 954 | |||||||||||||||||||||
Vesting of restricted stock units
|
254,265 | — | — | — | — | — | — | |||||||||||||||||||||
Stock-based compensation expense
|
— | — | — | — | 6,250 | — | 6,250 | |||||||||||||||||||||
Transfer of Class B common stock to Class A common stock
|
1,983,220 | 2 | (1,983,220 | ) | (2 | ) | — | — | — | |||||||||||||||||||
Net loss
|
— | — | — | — | — | (2,808 | ) | (2,808 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balances at June 30, 2020
|
18,932,306 | 19 | 8,430,585 | 8 | 171,860 | (111,259 | ) | 60,628 | ||||||||||||||||||||
Contingent consideration
to be settled
in
Class A
common stock
|
— | — | — | — | 1,335 | — | 1,335 | |||||||||||||||||||||
Issuance of common stock upon exercise of stock options
|
194,099 | — | — | — | 1,244 | — | 1,244 | |||||||||||||||||||||
Vesting of restricted stock units
|
219,438 | — | — | — | — | — | — | |||||||||||||||||||||
Stock-based compensation expense
|
— | — | — | — | 7,200 | — | 7,200 | |||||||||||||||||||||
Transfer of Class B common stock to Class A common stock
|
1,001,083 | 1 | (1,001,083 | ) | (1 | ) | — | — | — | |||||||||||||||||||
Net loss
|
— | — | — | — | — | (3,184 | ) | (3,184 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balances at September 30, 2020
|
20,346,926 | $ | 20 | 7,429,502 | $ | 7 | $ | 181,639 | $ | (114,443 | ) | $ | 67,223 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A Common Stock
|
Class B Common Stock
|
Additional
Paid-in
|
Accumulated
|
Total
Stockholders’ |
||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Equity
|
||||||||||||||||||||||
Balances at December 31, 2018
|
7,528,741 | $ | 8 | 17,696,414 | $ | 18 | $ | 143,050 | $ | (99,892 | ) | $ | 43,184 | |||||||||||||||
Issuance of common stock upon exercise of stock options
|
114,831 | — | — | — | 234 | — | 234 | |||||||||||||||||||||
Vesting of restricted stock units
|
99,197 | — | — | — | — | — | — | |||||||||||||||||||||
Stock-based compensation expense
|
— | — | — | — | 2,750 | — | 2,750 | |||||||||||||||||||||
Transfer of Class B common stock to Class A common stock
|
1,032,231 | 1 | (1,032,231 | ) | (1 | ) | — | — | — | |||||||||||||||||||
Net loss
|
— | — | — | — | — | (4,382 | ) | (4,382 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balances at March 31, 2019
|
8,775,000 | 9 | 16,664,183 | 17 | 146,034 | (104,274 | ) | 41,786 | ||||||||||||||||||||
Issuance of common stock upon exercise of stock options
|
132,770 | — | — | — | 649 | — | 649 | |||||||||||||||||||||
Vesting of restricted stock units
|
182,764 | — | — | — | — | — | — | |||||||||||||||||||||
Stock-based compensation expense
|
— | — | — | — | 3,238 | — | 3,238 | |||||||||||||||||||||
Transfer of Class B common stock to Class A common stock
|
1,413,336 | 2 | (1,413,336 | ) | (2 | ) | — | — | — | |||||||||||||||||||
Net loss
|
— | — | — | — | — | (1,974 | ) | (1,974 | ) | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balances at June 30, 2019
|
10,503,870 | 11 | 15,250,847 | 15 | 149,921 | (106,248 | ) | 43,699 | ||||||||||||||||||||
Issuance of common stock upon exercise of stock options
|
212,465 | 1 | — | — | 1,172 | — | 1,173 | |||||||||||||||||||||
Vesting of restricted stock units
|
130,361 | — | — | — | — | — | — | |||||||||||||||||||||
Stock-based compensation expense
|
— | — | — | — | 3,269 | — | 3,269 | |||||||||||||||||||||
Transfer of Class B common stock to Class A common stock
|
723,368 | — | (723,368 | ) | — | — | — | — | ||||||||||||||||||||
Net income
|
— | — | — | — | — | 173 | 173 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balances at September 30, 2019
|
11,570,064 | $ | 12 | 14,527,479 | $ | 15 | $ | 154,362 | $ | (106,075 | ) | $ | 48,314 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
||||||||
2020
|
2019
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$ | (7,434 | ) | $ | (6,183 | ) | ||
Adjustments to reconcile net loss to net cash provided by
operating activities: |
||||||||
Depreciation and amortization expense
|
2,174 | 1,593 | ||||||
Stock-based compensation expense
|
17,990 | 9,257 | ||||||
Provision for bad debt
|
15 | 479 | ||||||
Changes in operating assets and liabilities, net of effects from acquisition:
|
||||||||
Accounts receivable
|
(9,328 | ) | (12,927 | ) | ||||
Prepaid expenses and other current assets
|
2,048 | (1,754 | ) | |||||
Other assets
|
(222 | ) | (2 | ) | ||||
Accounts payable
|
10,030 | 6,532 | ||||||
Accrued expenses and other current liabilities
|
(2,325 | ) | 3,414 | |||||
Deferred revenue
|
191 | 127 | ||||||
Other long-term liabilities
|
764 | (79 | ) | |||||
|
|
|
|
|||||
Net cash provided by operating activities
|
13,903 | 457 | ||||||
|
|
|
|
|||||
Cash flows from investing activities:
|
||||||||
Acquisition of property and equipment, including costs capitalized
for development of
internal-use
software
|
(2,708 | ) | (2,198 | ) | ||||
Acquisition of business
|
(14,930 | ) | — | |||||
|
|
|
|
|||||
Net cash used in investing activities
|
(17,638 | ) | (2,198 | ) | ||||
|
|
|
|
|||||
Cash flows from financing activities:
|
||||||||
Proceeds from exercise of stock options
|
3,562 | 2,056 | ||||||
|
|
|
|
|||||
Net cash provided by financing activities
|
3,562 | 2,056 | ||||||
|
|
|
|
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
(173 | ) | 315 | |||||
Cash, cash equivalents and restricted cash at beginning of period
|
46,304 | 41,884 | ||||||
|
|
|
|
|||||
Cash, cash equivalents and restricted cash at end of period
|
$ | 46,131 | $ | 42,199 | ||||
|
|
|
|
|||||
Supplemental disclosure of noncash investing and financing information:
|
||||||||
Acquisition of property and equipment included in accounts payable
|
$ | 42 | $ | — | ||||
Fair value of contingent consideration in connection with
acquisition included in equity |
$ | 1,335 | $ | — | ||||
Fair value of contingent consideration in connection with acquisition
included in other long-term liabilities |
$ | 416 | $ | — | ||||
Reconciliation of cash, cash equivalents and restricted cash:
|
||||||||
Cash and cash equivalents
|
$ | 45,881 | $ | 41,949 | ||||
Restricted cash (included in other assets)
|
250 | 250 | ||||||
|
|
|
|
|||||
Total cash, cash equivalents and restricted cash shown in the statement
of cash flows |
$ | 46,131 | $ | 42,199 | ||||
|
|
|
|
|
•
|
|
Level 1—Quoted prices in active markets for identical assets or liabilities.
|
|
•
|
|
Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.
|
|
•
|
|
Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.
|
|
|
Three Months Ended
September 30, |
|
|
Nine Months Ended
September 30, |
|
||||||||||
|
|
2020
|
|
|
2019
|
|
|
2020
|
|
|
2019
|
|
||||
Direct channels
|
93 | % | 95 | % | 93 | % | 94 | % | ||||||||
Indirect channels
|
7 | % | 5 | % | 7 | % | 6 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
100 | % | 100 | % | 100 | % | 100 | % | |||||||||
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Automotive
|
$ | 74,779 | $ | 57,306 | $ | 207,014 | $ | 152,108 | ||||||||
Other
|
15,198 | 9,806 | 42,629 | 22,904 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Revenue
|
$ | 89,977 | $ | 67,112 | $ | 249,643 | $ | 175,012 | ||||||||
|
|
|
|
|
|
|
|
September
30,
|
||||||||
2020
|
2019
|
|||||||
Options to purchase common stock
|
2,773,222 | 3,042,559 | ||||||
Unvested restricted stock units
|
3,646,253 | 3,056,392 | ||||||
|
|
|
|
|||||
6,419,475 | 6,098,951 | |||||||
|
|
|
|
Cash paid
|
$
|
14,930 | ||
Fair value of contingent consideration
to be settled
in stock
|
1,751 | |||
|
|
|||
Total purchase price consideration
|
$ | 16,681 | ||
|
|
|||
Assets Acquired and Liabilities Assumed:
|
||||
Commission receivable (current and long-term)
|
$ | 3,636 | ||
Customer Relationships
|
|
|
3,600
|
|
Other identifiable
intangible assets
|
270 | |||
Goodwill
|
9,618 | |||
|
|
|||
Total assets acquired
|
17,124 | |||
Accounts payable and accrued expenses (current and long-term)
|
(443 | ) | ||
|
|
|||
Total allocation of purchase price consideration
|
$ | 16,681 | ||
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
September 30, 2020
|
|
||||||||||
|
|
Weighted
Average Useful Life |
|
|
Gross
Amount |
|
|
Accumulated
Amortization |
|
|
Carrying
Value |
|
||||
|
|
(in years)
|
|
|
|
|
|
|
|
|
|
|
||||
Customer relationships
|
5 |
$
|
3,600 | $ | (85 | ) | $ | 3,515 | ||||||||
Other identifiable intangible assets
|
3.7 |
|
270 | (10 | ) | 260 | ||||||||||
|
|
|
|
|
|
|||||||||||
$
|
3,870 |
|
$ | (95 | ) | $ | 3,775 | |||||||||
|
|
|
|
|
|
Year Ending December 31,
|
||||
2020
(Remaining three months)
|
|
$
|
425 | |
2021
|
1,211 | |||
2022
|
846 | |||
2023
|
624 | |||
2024
|
450 | |||
Thereafter
|
219 | |||
|
|
|||
$ | 3,775 | |||
|
|
September 30,
|
December 31,
|
|||||||
2020
|
2019
|
|||||||
Accrued employee compensation and benefits
|
$ | 4,120 | $ | 2,388 | ||||
Accrued advertising expenses
|
4,352 | 4,119 | ||||||
Accrued legal settlement
|
— | 4,750 | ||||||
Other current liabilities
|
2,752 | 1,968 | ||||||
|
|
|
|
|||||
$ | 11,224 | $ | 13,225 | |||||
|
|
|
|
Risk-free interest rate
|
1.5 | % | ||
Expected volatility
|
49.0 | % | ||
Expected dividend yield
|
0 | % | ||
Derived service period (in years)
|
4.1 |
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Cost of revenue
|
$ | 111 | $ | 52 | $ | 253 | $ | 139 | ||||||||
Sales and marketing
|
3,080 | 991 | 7,322 | 2,676 | ||||||||||||
Research and development
|
2,228 | 1,061 | 5,366 | 2,914 | ||||||||||||
General and administrative
|
1,781 | 1,165 | 5,049 | 3,528 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 7,200 | $ | 3,269 | $ | 17,990 | $ | 9,257 | |||||||||
|
|
|
|
|
|
|
|
Year Ending December 31,
|
||||
2020 (Remaining three months)
|
$ | 750 | ||
2021
|
3,025 | |||
2022
|
2,872 | |||
2023
|
2,785 | |||
2024
|
2,099 | |||
Thereafter
|
1,003 | |||
|
|
|||
$ | 12,534 | |||
|
|
• |
In 2011, we launched the EverQuote marketplace for auto insurance.
|
• |
In 2013, we launched EverQuote Pro, our provider portal, for carriers.
|
• |
In 2015, we launched EverQuote Pro for agents.
|
• |
In 2016, we added home and life insurance in our marketplace.
|
• |
In 2018, we exceeded 46 million cumulative quote requests since launch of our marketplace.
|
• |
In 2019, we added health and renters insurance in our marketplace.
|
• |
In 2019, we announced our partnership with Bold Penguin to add commercial insurance in our marketplace.
|
• |
In September 2020, we completed the acquisition of Crosspointe Insurance & Financial Services, LLC, or Crosspointe.
|
• |
Clicks: An
online-to-online
|
• |
Data: An
online-to-offline
follow-up.
|
• |
Calls: An
online-to-offline
offline-to-offline
|
Three Months Ended
September 30, |
Nine Months Ended
September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Automotive
|
$ | 74,779 | 57,306 | $ | 207,014 | $ | 152,108 | |||||||||
Other
|
15,198 | 9,806 | 42,629 | 22,904 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Revenue
|
$ | 89,977 | $ | 67,112 | $ | 249,643 | $ | 175,012 | ||||||||
|
|
|
|
|
|
|
|
• |
Adjusted EBITDA excludes stock-based compensation expense as it has recently been, and will continue to be for the foreseeable future, a significant
recurring non-cash expense
for our business;
|
• |
Adjusted EBITDA excludes depreciation and amortization expense and, although this is
a non-cash expense,
the assets being depreciated and amortized may have to be replaced in the future;
|
• |
Adjusted EBITDA excludes acquisition-related costs that affect cash available to us;
|
• |
Adjusted EBITDA does not reflect the cash received from interest income on our investments, which affects the cash available to us;
|
• |
Adjusted EBITDA does not reflect income tax expense (benefit) that affects cash available to us; and
|
• |
the expenses and other items that we exclude in our calculation of Adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from Adjusted EBITDA when they report their operating results.
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Net income (loss)
|
$ | (3,184 | ) | $ | 173 | $ | (7,434 | ) | $ | (6,183 | ) | |||||
Stock-based compensation
|
7,200 | 3,269 | 17,990 | 9,257 | ||||||||||||
Depreciation and amortization
|
731 | 588 | 2,174 | 1,593 | ||||||||||||
Acquisition-related costs
|
480 | — | 480 | — | ||||||||||||
Interest income
|
(18 | ) | (168 | ) | (176 | ) | (536 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA
|
$ | 5,209 | $ | 3,862 | $ | 13,034 | $ | 4,131 | ||||||||
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Statement of Operations Data:
|
||||||||||||||||
Revenue(1)
|
$ | 89,977 | $ | 67,112 | $ | 249,643 | $ | 175,012 | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Cost and operating expenses(2):
|
||||||||||||||||
Cost of revenue
|
5,378 | 4,052 | 15,690 | 11,222 | ||||||||||||
Sales and marketing
|
73,598 | 53,212 | 204,663 | 143,358 | ||||||||||||
Research and development
|
8,149 | 5,596 | 21,574 | 14,685 | ||||||||||||
General and administrative
|
6,141 | 4,334 | 15,614 | 12,641 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost and operating expenses
|
93,266 | 67,194 | 257,541 | 181,906 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from operations
|
(3,289 | ) | (82 | ) | (7,898 | ) | (6,894 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Other income:
|
||||||||||||||||
Interest income
|
18 | 168 | 176 | 536 | ||||||||||||
Other income
|
87 | 87 | 288 | 175 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total other income
|
105 | 255 | 464 | 711 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net income (loss)
|
$ | (3,184 | ) | $ | 173 | $ | (7,434 | ) | $ | (6,183 | ) | |||||
|
|
|
|
|
|
|
|
|||||||||
Other Financial and Operational Data:
|
||||||||||||||||
Quote requests
|
6,291 | 5,516 | 20,460 | 14,148 | ||||||||||||
Variable marketing margin
|
$ | 29,428 | $ | 20,912 | $ | 76,721 | $ | 51,480 | ||||||||
Adjusted EBITDA(3)
|
$ | 5,209 | $ | 3,862 | $ | 13,034 | $ | 4,131 |
(1) |
Comprised of revenue from the following distribution channels:
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Direct channels
|
93 | % | 95 | % | 93 | % | 94 | % | ||||||||
Indirect channels
|
7 | % | 5 | % | 7 | % | 6 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
100 | % | 100 | % | 100 | % | 100 | % | |||||||||
|
|
|
|
|
|
|
|
(2) |
Includes stock-based compensation expense as follows:
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
(in thousands) | (in thousands) | |||||||||||||||
Cost of revenue
|
$ | 111 | $ | 52 | $ | 253 | $ | 139 | ||||||||
Sales and marketing
|
3,080 | 991 | 7,322 | 2,676 | ||||||||||||
Research and development
|
2,228 | 1,061 | 5,366 | 2,914 | ||||||||||||
General and administrative
|
1,781 | 1,165 | 5,049 | 3,528 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 7,200 | $ | 3,269 | $ | 17,990 | $ | 9,257 | |||||||||
|
|
|
|
|
|
|
|
(3) |
See “—Non-GAAP Financial
Measure” for information regarding our use of Adjusted EBITDA and a reconciliation of such measure to the comparable GAAP financial measure.
|
Three Months Ended September 30,
|
Change
|
Nine Months Ended September 30,
|
Change
|
|||||||||||||||||||||||||||||
2020
|
2019
|
Amount
|
%
|
2020
|
2019
|
Amount
|
%
|
|||||||||||||||||||||||||
(dollars in thousands) | (dollars in thousands) | |||||||||||||||||||||||||||||||
Revenue
|
$ | 89,977 | $ | 67,112 | $ | 22,865 | 34.1 | % | $ | 249,643 | $ | 175,012 | $ | 74,631 | 42.6 | % |
Three Months Ended September 30,
|
Change
|
Nine Months Ended September 30,
|
Change
|
|||||||||||||||||||||||||||||
2020
|
2019
|
Amount
|
%
|
2020
|
2019
|
Amount
|
%
|
|||||||||||||||||||||||||
(dollars in thousands) | (dollars in thousands) | |||||||||||||||||||||||||||||||
Cost of revenue
|
$ | 5,378 | $ | 4,052 | $ | 1,326 | 32.7 | % | $ | 15,690 | $ | 11,222 | $ | 4,468 | 39.8 | % | ||||||||||||||||
Percentage of revenue
|
6.0 | % | 6.0 | % | 6.3 | % | 6.4 | % |
Three Months Ended September 30,
|
Change
|
Nine Months Ended September 30,
|
Change
|
|||||||||||||||||||||||||||||
2020
|
2019
|
Amount
|
%
|
2020
|
2019
|
Amount
|
%
|
|||||||||||||||||||||||||
(dollars in thousands) | (dollars in thousands) | |||||||||||||||||||||||||||||||
Sales and marketing expense
|
$ | 73,598 | $ | 53,212 | $ | 20,386 | 38.3 | % | $ | 204,663 | $ | 143,358 | $ | 61,305 | 42.8 | % | ||||||||||||||||
Percentage of revenue
|
81.8 | % | 79.3 | % | 82.0 | % | 81.9 | % |
Three Months Ended September 30,
|
Change
|
Nine Months Ended September 30,
|
Change
|
|||||||||||||||||||||||||||||
2020
|
2019
|
Amount
|
%
|
2020
|
2019
|
Amount
|
%
|
|||||||||||||||||||||||||
(dollars in thousands) | (dollars in thousands) | |||||||||||||||||||||||||||||||
Research and development expense
|
$ | 8,149 | $ | 5,596 | $ | 2,553 | 45.6 | % | $ | 21,574 | $ | 14,685 | $ | 6,889 | 46.9 | % | ||||||||||||||||
Percentage of revenue
|
9.1 | % | 8.3 | % | 8.6 | % | 8.4 | % |
Three Months Ended September 30,
|
Change
|
Nine Months Ended September 30,
|
Change
|
|||||||||||||||||||||||||||||
2020
|
2019
|
Amount
|
%
|
2020
|
2019
|
Amount
|
%
|
|||||||||||||||||||||||||
(dollars in thousands) | (dollars in thousands) | |||||||||||||||||||||||||||||||
General and administrative expense
|
$ | 6,141 | $ | 4,334 | $ | 1,807 | 41.7 | % | $ | 15,614 | $ | 12,641 | $ | 2,973 | 23.5 | % | ||||||||||||||||
Percentage of revenue
|
6.8 | % | 6.5 | % | 6.3 | % | 7.2 | % |
Three Months Ended September 30,
|
Change
|
Nine Months Ended September 30,
|
Change
|
|||||||||||||||||||||||||||||
2020
|
2019
|
Amount
|
%
|
2020
|
2019
|
Amount
|
%
|
|||||||||||||||||||||||||
(in thousands except percentages) | (in thousands except percentages) | |||||||||||||||||||||||||||||||
Quote requests
|
6,291 | 5,516 | 775 | 14.1 | % | 20,460 | 14,148 | 6,312 | 44.6 | % |
Three Months Ended
September 30, |
Change
|
Nine Months Ended
September 30, |
Change
|
|||||||||||||||||||||||||||||
2020
|
2019
|
Amount
|
%
|
2020
|
2019
|
Amount
|
%
|
|||||||||||||||||||||||||
(dollars in thousands) | (dollars in thousands) | |||||||||||||||||||||||||||||||
Revenue
|
$ | 89,977 | $ | 67,112 | $ | 22,865 | 34.1 | % | $ | 249,643 | $ | 175,012 | $ | 74,631 | 42.6 | % | ||||||||||||||||
Less: total advertising expense (a component of sales and marketing expense)
|
60,549 | 46,200 | 172,922 | 123,532 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Variable marketing margin
|
$ | 29,428 | $ | 20,912 | $ | 8,516 | 40.7 | % | $ | 76,721 | $ | 51,480 | $ | 25,241 | 49.0 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Percentage of revenue
|
32.7 | % | 31.2 | % | 30.7 | % | 29.4 | % |
Nine Months Ended
September 30, |
||||||||
2020
|
2019
|
|||||||
(in thousands) | ||||||||
Net cash provided by operating activities
|
$ | 13,903 | $ | 457 | ||||
Net cash used in investing activities
|
(17,638 | ) | (2,198 | ) | ||||
Net cash provided by financing activities
|
3,562 | 2,056 | ||||||
|
|
|
|
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
$ | (173 | ) | $ | 315 | |||
|
|
|
|
• |
the ability of our insurance provider customers to earn an attractive return on investment from their spending with us;
|
• |
our ability to increase the number of consumers using our marketplace;
|
• |
our ability to compete effectively with other media for advertising spending; and
|
• |
our ability to keep pace with changes in technology and the practices and offerings of our competitors.
|
• |
our ability to maintain a marketplace for consumers and insurance providers that efficiently captures user intent and effectively delivers relevant quotes to each individual insurance buyer;
|
• |
our ability to continue to innovate and improve our marketplace;
|
• |
our ability to launch new vertical offerings that are effective and have a high degree of consumer and insurance provider engagement;
|
• |
our ability to maintain the compatibility of our mobile applications with operating systems, such as iOS and Android, and with popular mobile devices running such operating systems; and
|
• |
our ability to access a sufficient amount of data to enable us to provide relevant quotes to consumers.
|
• |
companies that operate, or could develop, insurance search websites;
|
• |
media sites, including websites dedicated to providing multiple quote insurance information and financial services information generally;
|
• |
internet search engines; and
|
• |
individual insurance providers, including through the operation of their own websites, physical storefront operations and broker arrangements.
|
• |
increase the number of consumers using our marketplace;
|
• |
maintain and expand the number of insurance providers that use our marketplace or our revenue per provider;
|
• |
further improve the quality of our marketplace, and introduce high-quality new products; and
|
• |
increase the number of insurance shoppers acquired by insurance providers on our marketplace.
|
• |
diversion of management time and focus from operating our business to addressing acquisition integration challenges;
|
• |
coordination of technology, research and development, and sales and marketing functions;
|
• |
transition of the acquired company’s consumers and data to our marketplace;
|
• |
retention of employees from the acquired company;
|
• |
cultural challenges associated with integrating employees from the acquired company into our organization;
|
• |
integration of the acquired company’s accounting, management information, human resources and other administrative systems;
|
• |
the need to implement or improve controls, procedures and policies at a business that prior to the acquisition may have lacked effective controls, procedures and policies;
|
• |
potential write-offs of intangibles or other assets acquired in such transactions that may have an adverse effect on our operating results in a given period;
|
• |
potential liabilities for activities of the acquired company before the acquisition, including patent and trademark infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities; and
|
• |
litigation or other claims in connection with the acquired company, including claims from terminated employees, consumers, former stockholders or other third parties.
|
• |
requiring us to dedicate a portion of our cash resources to the payment of interest and principal, reducing money available to fund working capital, capital expenditures, product development and other general corporate purposes;
|
• |
increasing our vulnerability to adverse changes in general economic, industry and market conditions;
|
• |
subjecting us to restrictive covenants that may reduce our ability to take certain corporate actions or obtain further debt or equity financing (for example, the covenants in the loan and security agreement for our revolving line of credit include limitations on our ability to incur additional indebtedness and engage in certain fundamental business transactions, such as mergers or acquisitions of other businesses);
|
• |
limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we compete; and
|
• |
placing us at a competitive disadvantage compared to our competitors that have less debt or better debt servicing options.
|
• |
price and volume fluctuations in the overall stock market from time to time;
|
• |
volatility in the market price and trading volume of comparable companies;
|
• |
actual or anticipated changes in our earnings or fluctuations in our operating results or in the expectations of securities analysts;
|
• |
announcements of new service offerings, strategic alliances or significant agreements by us or by our competitors;
|
• |
departure of key personnel;
|
• |
litigation involving us or that may be perceived as having an adverse effect on our business;
|
• |
changes in general economic, industry and market conditions and trends;
|
• |
investors’ general perception of us;
|
• |
sales of large blocks of our stock; and
|
• |
announcements regarding industry consolidation.
|
• |
the level of demand for our product and service offerings and our ability to maintain and increase our customer base;
|
• |
the level of consumer traffic to our websites and the volume of quote requests generated by consumer traffic;
|
• |
the timing and success of new product and service introductions by us or our competitors or any other change in the competitive landscape of our market;
|
• |
bind rates by consumers;
|
• |
pricing pressure as a result of competition or otherwise;
|
• |
our ability to reduce costs;
|
• |
errors in our forecasting of the demand for our product and service offerings, which could lead to lower revenue or increased costs;
|
• |
seasonal or other variations in purchasing patterns by customers;
|
• |
increases in and timing of sales and marketing and other operating expenses that we may incur to grow and expand our operations and to remain competitive;
|
• |
adverse litigation judgments, settlements or other litigation-related costs;
|
• |
regulatory proceedings or other adverse publicity about us or our product and service offerings;
|
• |
costs related to the acquisition of businesses, talent, technologies or intellectual property, including potentially significant amortization costs and possible write-downs; and
|
• |
general economic conditions.
|
• |
a majority of the board of directors consist of independent directors;
|
• |
director nominees be selected or recommended for the board’s selection by independent directors constituting a majority of the independent directors or by a nominations committee with prescribed duties and a written charter and comprised solely of independent directors; and
|
• |
the board of directors maintain a compensation committee with prescribed duties and a written charter and comprised solely of independent directors.
|
• |
providing that directors may be removed by stockholders only for cause and only with a vote of the holders of shares representing a majority of the voting power of all shares that stockholders would be entitled to vote for the election of directors;
|
• |
limiting the ability of our stockholders to call and bring business before special meetings of stockholders and to take action by written consent in lieu of a meeting;
|
• |
requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our board of directors;
|
• |
authorizing blank check preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to our Class A common stock; and
|
• |
limiting the liability of, and providing indemnification to, our directors and officers.
|
† |
The certifications attached as Exhibits 32.1 and 32.2 that accompany this Quarterly Report on Form
10-Q,
are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of EverQuote, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form
10-Q,
irrespective of any general incorporation language contained in such filing.
|
EVERQUOTE, INC. | ||||||
Date: November 6, 2020 | By: |
/s/ Seth Birnbaum
|
||||
Seth Birnbaum
President and Chief Executive Officer
(Principal Executive Officer)
|
||||||
Date: November 6, 2020 | By: |
/s/ John Wagner
|
||||
John Wagner
Chief Financial Officer and Treasurer
(Principal Financial Officer)
|
1 Year EverQuote Chart |
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