EverQuote, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the EverQuote Third Quarter 2020 Earnings Conference Call. At this time, all participants are in the listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to Melia Johnson of the Blue Shirt Group. Thank you. Please go ahead, ma'am.

Thank you. Good afternoon, and welcome to EverQuote's third quarter 2020 earnings call. We'll be discussing the results announced in our press release issued today after the market closed. With me on the call this afternoon is Seth Birnbaum, EverQuote's chief executive officer and co-founder, and John Wagner, chief financial officer of EverQuote. During the call, we will make statements related to our business that may be considered forward-looking statements under Federal Law Security's laws, including statements considering our financial guidance for the fourth quarter and full year 2020, our growth strategy, and our plans to execute on our growth strategy, key initiatives, our investments in the business, the course leathers we expect to drive our business, our ability to maintain existing and acquire new customers, our recent acquisition and interest or ability to acquire other companies, our goals for integration, and other statements regarding our plans and prospects. Forelooking statements may be identified with words and phrases such as we expect, we believe, we intend, We anticipate, we plan, may, upcoming, and similar words and phrases. These statements reflect our views only as of today and should not be considered our views as of any subsequent date. We specifically disclaim any obligation to update or revise these forelooking statements except as required by law. Or the statements are not promises or guarantees of future performance and are subject to a variety of risks and uncertainties that could cause the actual results to differ materially from our expectations. For the discussion of material risk and other important factors that could affect our actual results, please refer to those contained in the heading Risk Factors in our most recent quarterly report on Form 10-Q, which is on file with the Securities and Exchange Commission and available on the Investor Relations section of our website at investor.everquote.com and on the SEC's website at sec.gov. Finally, during the course of today's call, we referred to certain non-GAAP financial measures which we believe are helpful to investors. The reconciliation of GAAP to non-GAAP measures is included in the press release issued after the close of market today, which is available on the investor relations section of our website and investors.agroquote.com. With that, I'll turn the call over to Zach.

Thank you, Brindley. Good afternoon, and thank you, everyone, for joining us today. Our strategy continues to yield excellent results. Our tech and data-driven marketplace flywheel continues to drive network effects with more consumers and providers having deeper engagement across multiple insurance verticals. In Q3, we reported another strong quarter across all of our key financial metrics, delivering 34% year-on-year revenue growth and 41% year-on-year VMM growth. We also delivered positive adjusted EBITDA expansion year over year, consistent with our model, and successfully closed the acquisition of CrossPoint, accelerating and expanding our opportunity in the health insurance market. We continue to have strong momentum in the business, which is allowing us to raise our full year 2020 guidance, which John will cover in more detail. So what is the big picture that we are seeing in the market right now? First, the American consumer is further embracing the convenience and safety of shopping online for a wide range of products, including insurance. We believe that this trend will continue in insurance consumer demand as life resumes post-COVID. Second, insurance distribution dollars are migrating to digital channels as the industry begins to experience an increased level of digital spend as seen in other areas of financial services. We believe that COVID is advancing this long-term trend within the insurance industry, and we continue to see high levels of demand in the carrier and agent or provider side of our insurance marketplace. And finally, perhaps most interesting to us, the insurance industry is beginning to make products easier to buy and sell through digital channels. through integration and digitization of the actual insurance products. And this is occurring across numerous segments of the insurance industry. We're confident this is one of the key trends within insurance, where EverQuote is very well positioned to capture the market opportunity. Turning back to Q3, our strong financial performance was achieved while also continuing to invest and execute across the four growth levers we outlined in the beginning of the year. attracting more high-intent consumers to our marketplace, growing and expanding across insurance verticals, deepening consumer-provider engagement, and growing provider coverage and budget. First, attracting more high-intent consumers to our marketplace. Our traffic teams executed well this quarter and focused on delivering enhanced monetization as reflected in our variable marketing margin expanding to a record 33% of revenues. Revenue per quote request increasing 18%, over Q3 2019, and a growth in consumer quote request volume of 14% year over year. Our initiatives this quarter place greater emphasis on driving improved performance in the marketplace to maximize the volume of high-quality, high-value referrals shared with our distribution partners. Examples of these initiatives are as follows. Introducing expanded targeting options for our enterprise carriers that we see as driving better monetization for our partners and our marketplace and contributing to higher margin operating point and dollars. Delivering significant workflow improvements, which led to a greater than 10% increase in conversion rate for consumers on average across our insurance verticals. successfully growing our higher monetizing and converting traffic, which resulted in enhanced efficiency in our marketplace as reflected in our variable marketing margin as a percent of revenues expanding to 33%. Next, growing and expanding across insurance verticals. In Q3, we had another strong quarter in our non-auto verticals, with revenues increasing 55% year over year with improving unit economics. These verticals continue to benefit from the network effects of our marketplace and from disciplined investments to support their growth. In our health vertical, we closed the cross-point acquisition in early September, which provided us with direct deployments with large carriers such as UnitedHealthcare, Anthem, and Humana, increasing our health carrier coverage by tenfold. Since announcing this acquisition in early August, our health vertical leadership team has been working to prepare for this year's open enrollment period, which includes substantially expanding the CrossPoint agent team. In our life vertical, our revenue per call request is over three and a half times higher for customers served through our direct-to-consumer, or DTC, agency offerings than we have experienced in our traditional life marketplace model, as the improved consumer experience leads to a greater conversion into a bound policy, as well as enhanced monetization. In our home vertical, we continue to build on our success with bundled offerings, which led to growth in the variable marketing margin and margin percentage for auto and home insurance. Our third growth lever, deepening consumer provider engagement. These initiatives center on improving customer experiences for both consumers and providers, while increasing performance is measured by enhanced monetization and retention, reduced cost per consumer, and higher LTV per customer. We are continuing our work to get the consumer one click or one call away from quotes with our focus on deep integrations with our carrier partners. We established the goal of completing deep integrations with 100% of our carriers by the end of this year, to improve consumer experience and increase provider bind rates or policy purchase rates to drive up our marketplace efficiency. At the end of our third quarter, we are deeply integrated with 72% of our carrier partners, and we continue to make steady progress. We have also prioritized integrations around larger partners, which has resulted in 92% of referrals by volume being with deeply integrated carriers by the end of Q3. Additionally, we've been able to isolate performance on integrations with some of our larger carriers, and many are seeing sizable lifts based on recent performance as they can improve both the quote and bind rate. As an example of the benefits of deep integrations, two carriers improved their bind rate in our marketplace by 69% and 82% respectively. We are also deepening consumer provider engagement through our DTC agency experiences, where we are creating a more personalized and streamlined end-to-end consumer shopping journey with enhanced product selection and less friction from arrival to policy sale. Fourth, growing provider coverage and budget. We continue to add more providers and expand our relationship with existing carriers and agents. We grew carriers on the platform by over 25% from a year ago as we expanded coverage in our non-auto verticals. Over 90% of Q3 revenue from carriers came from those who have been on our platform for more than a year. Driving efficiency for both carriers and EverQuote is our Smart Campaigns platform, where we use machine learning to automate bidding for our carriers. Year over year, our agency business grew 64% in Q3 and represented 34% of revenues this quarter. Our investments to expand agent demand via content marketing, consultative sales, top-notch service, and carrier partnerships, to name just a few, are paying off. We believe these same initiatives will benefit our direct-to-consumer agency distribution by attracting more agents and consumers to our marketplace. Finally, we are continuing to win the war for talent. During Q3, Greg O'Brien joined us as SVP of Business Development from an education tech company he had led. Greg joins our already strong leadership team, including talent from top-tier technology companies such as Amazon, Wayfair, TripAdvisor, CarGroovers, and many others who complement the entrepreneur spirit of the early team that drove our success. Together, we are challenging ourselves to think bigger and be bolder. In summary, we delivered an excellent third quarter with strong execution across our verticals. As a company, we are continuing to meet the challenges brought about by the unprecedented combination of a global health crisis and significant economic disruption while continuing to execute on our growth initiatives and commitments to our customers. Our marketplace flywheel is demonstrating progress and resilience with increasing diversity across our team, traffic, verticals, distribution, and customer experiences. including direct-to-consumer agency initiatives in life and health insurance. We continue to capitalize on the shift of insurance online, and I'm very excited about what the future holds. Our thoughts continue to be, with all the individuals and businesses impacted around the world by the COVID-19 pandemic, I would like to thank our team, customers, partners, and shareholders for believing in our vision. Now I'll turn the call over to John to provide more details on our financial results.