EverQuote, Inc.

Good day and thank you for standing by. Welcome to the Evercloat third quarter 2021 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you'll 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 zero. I would now like to hand the conference over to your speaker today, Brinley Johnson of the Blue Shirt Group. Please go ahead.

Thank you. Good afternoon, and welcome to EverQuote's third quarter 2021 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 Jamie Mendel, EverQuote's chief executive officer, 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 the federal securities law, including statements concerning our financial guidance for the fourth quarter and full year 2021, our growth strategy and our plans to execute on our growth strategy, key initiatives, including our direct-to-consumer agency, our investments in the business, the growth levers we expect to drive our business, the impact of COVID on our business and the insurance industry, our ability to maintain existing and acquire new customers, Our recent and planned acquisitions and interest or ability to acquire other companies, our goals for integrations and other statements regarding our plans and prospects. Forward-looking 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 forward-looking statements except as required by law. Floor-looking 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 discussion of material risks and other important factors that could affect our actual results, please refer to those contained under the heading Risk Factors in our most recent quarterly report on Form 10-Q and our annual report on Form 10-K, 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 refer to certain non-GAAP financial measures, which we believe are helpful to investors. A reconciliation of GAAP to non-GAAP measures was included in the press release issued after the close of Market Today, which is available on the investor relations section of our website at investors.everquote.com. And with that, I'll turn it over to Jamie.

Thank you, Brindley, and thank you, everyone, for joining us today. On October 18, we announced preliminary results for our third quarter and addressed current challenges in the auto insurance market. Several key carrier customers experienced higher-than-expected claims losses, resulting in a sudden pullback in their marketing spend in the second half of the quarter as they attempted to restore their target levels of profitability. Based on carrier feedback, higher-than-expected claims losses were primarily attributable to a higher loss severity or cost per claim driven by two factors. First, vehicle replacement value and cost of vehicle repair rose significantly, stemming from supply chain and labor shortages. Second, liability or medical costs increased due to a larger-than-expected number of accidents with serious injuries or fatalities, as well as overall medical inflation. In addition, claims associated with extreme weather, including Hurricane Ida, placed further strains on carrier profitability. We believe these industry dynamics are isolated to our auto insurance vertical, temporary in nature, and will correct in the coming quarters as carriers adjust their pricing to a new underwriting environment before restoring higher levels of customer acquisition spend. During our decade serving auto carriers, we have seen similar challenges, from which EverQuote has re-accelerated growth following a period of pricing correction by the carriers. In an effort to align our cost structure to the current auto insurance environment, we implemented an approximate 10% structural reduction in non-marketing operating expenses, excluding non-cash items. As part of reducing operating expenses, we did an extensive review of our business, which resulted in making organizational changes to consolidate leadership and streamline decision-making, which we believe will better position EverQuote for strong growth when the auto insurance industry rebounds. We remain steadfast in building towards our long-term vision of becoming the largest online source of insurance policies by using data and technology to make insurance simpler, more affordable, and personalized. At the beginning of 2021, I outlined four levers of our growth strategy, including number one, attracting more shoppers, number two, growing insurance provider coverage and budget, number three, optimizing and deepening consumer provider engagement, and number four, expanding non-auto verticals. Here's an update on progress in the context of these growth levers. During the quarter, we reported strong traffic growth as we successfully attracted more consumers to our marketplace, resulting in a reacceleration of quote request growth to 21% year over year. This quarter, we closed our previously announced acquisition of PolicyFuel, and we are pleased with the early performance and how the team has integrated into our broader direct-to-consumer agency, or DTC agency, operations. The acquisition of PolicyFuel is consistent with the strategy we first announced last year to begin building a multi-vertical, tech and data-enabled DTC agency platform, which enables EverQuote to capture a larger portion of the economic value of each transaction, while giving us a path to directly access the lion's share of the $150 billion addressable market. And at the same time, it brings us closer to our customers, enabling us to develop more seamless buying experiences and deeper relationships with consumers. In addition to our successful integration of PolicyFuel, we continued making foundational investments in our health and Medicare DTC agency platform in Q3. We grew the team, improved many business processes, and built new technology to support a steep ramp in health and Medicare agent capacity in advance of the annual and open enrollment periods in Q4. We now have approximately three times the number of agents in our health and Medicare DTC agency compared to last year, and we remain confident that we will deliver strong Q4 performance in our health insurance vertical and further solidify this foundational pillar of future growth. On the provider side of the marketplace, our diversified distribution model benefited us in the third quarter. As carriers moved to quickly reduce their direct marketing expenses in response to higher than expected claims losses, our third-party local agent demand and DTC agency operations have experienced significantly less impact from the current headwinds in the auto insurance markets. As we continue to build EverQuote, we are guided by serving customers on both sides of our marketplace. consumers seeking a more streamlined shopping experience with personalized coverage options, and insurance providers seeking more profitable policies in the age of digital insurance shopping. We are executing on our strategy and we are increasingly well positioned to deliver on our customer promises. We believe EverQuote occupies a unique position in the industry as the only player at scale with marketplace and agency operations across major personal lines of insurance. We have assembled a distinctive combination of data, technology, and operational assets that can be leveraged to generate advantages in areas like bidding for traffic, expanding customer LTV via multi-line customer relationships, and designing innovative experiences to own and manage a customer's insurance life in ways that do not exist today. While the current auto insurance market dynamic presents a temporary setback, it is indeed temporary. I truly believe EverQuote will be better positioned than ever before to emerge as a powerful player in the $150 billion insurance distribution market. Now, I'll turn the call over to John to provide more details on our financial results.