EverQuote, Inc. Q1 FY2025 earnings call

• EverQuote streamlined its vision to be the Number 1 growth partner to P&C insurance providers, focusing on better performing referrals, bigger traffic scale, and a broader suite of products & services.
• Leveraged AI and ML, such as the Machine Learning traffic bidding platform, to improve traffic growth and provider performance. For example, Smart Campaigns product saw wider adoption with a customer's campaign performance improving by over 40%.
• Focused on expanding customer relationships, with paid products per agency increasing 25% year-over-year in March. Maintained operational efficiency through expense discipline, technology platform simplification, and AI automation to ship new features and products quickly.
• Continued to benefit from a flywheel effect where strong performance to carriers led to more budget and higher bids, supporting traffic growth.

In Q1, EverQuote's auto insurance segment generated revenue of $152.7 million, which was a 97% year-over-year increase. The home and renters insurance segment had revenue of $13.9 million in Q1, up 10% year-over-year and 23% sequentially. The auto insurance segment contributed significantly to overall revenue, while the home and renters segment showed growth as well.

• Expected revenue for Q2 2025 to be between $155 million and $160 million, representing 34% year-over-year growth at the mid-point.
• Anticipated VMD to be between $45 million and $47 million, with 26% year-over-year growth at the midpoint.
• Projected adjusted EBITDA to be between $20 million and $22 million, with 62% year-over-year growth at the midpoint.
• Plan to increase investments in technology, data assets, and AI capabilities in the second half of 2025 to drive operational efficiency and strengthen competitive moat.

• Tariffs could place upward pressure on claims costs in the second half of 2025. However, carriers have healthy underwriting profitability margins providing a cushion.
• Broader macroeconomic conditions could impact carrier performance and thus EverQuote's business.
• Competitive dynamics in the insurance marketplace could affect market share and growth.

Q: Can you provide additional color on second half trends, especially regarding auto tariffs and carrier profitability?

A: Jayme Mendal noted carriers have broad-based healthy underwriting profitability, some overshooting targets, creating a cushion for potential loss pressures from tariffs. Joseph Sanborn added carriers are in normalized premium increase levels, guiding growth to moderate, and tariffs are being monitored but carriers remain focused on growth.

Q: How has the industry responded to the vacated FCC rule regarding one-on-one consent?

A: Jayme Mendal stated the industry has largely reverted to pre-one-to-one consent state. EverQuote had mechanisms in place from testing for one-to-one consent that remain, confirming hypotheses on improving customer quality and performance.

Q: Quantify the impact of TCPA on VMM in Q1 and the benefit of AI/ML on VMM?

A: Joseph Sanborn said VMM was 28.1% in Q1, with impact from one-to-one consent early in the quarter, improving as the quarter progressed. Jayme Mendal explained AI/ML, like the traffic bidding platform, has driven operational efficiency (reducing workforce needed) and improved traffic bidding precision, helping preserve and expand VMM.

Q: Results in the agent channel and home and renters opportunity?

A: Jayme Mendal said agent business had healthy growth (20%-30% in Q1) despite challenges, focusing on deepening relationships with agents via value-add features. On home and renters, home remains a focus, with expectations of growth as carrier combined ratios improve though impacted by wildfires in Q1.