EverQuote, Inc.

Good afternoon. Thank you for attending today's EverQuote First Quarter 2022 Earnings Call. My name is Tania, and I will be your moderator for today's call. Online, you will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star 1 on your telephone keypad. I would now like to pass the conference over to our host, Brinley Johnson with Blue Shirt Group. Please go ahead.

Thank you. Good afternoon, and welcome to EverQuote's first quarter 2022 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 federal securities laws, including statements concerning our financial guidance for the second quarter and full year 2022, 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, our ability to maintain existing and acquire new customers, our expectations regarding recovery of the auto insurance industry, our recent acquisitions, 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. Forward-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 cause our actual results please refer to those contained under this heading, Brisk Factors, in our most recent 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 will 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 we 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 all for joining us today. In the first quarter, we exceeded expectations across our three primary financial KPIs, despite continued headwinds in the auto insurance industry, demonstrating the benefits of progress in channel and vertical diversification. We delivered revenue of $110.7 million in and variable marketing margin, or VMM, of $34.3 million, representing year-over-year growth of 7% and 9%, respectively. We also generated adjusted EBITDA of $2.4 million. In Q1, our marketplace exhibited strength in customer acquisition and in our local agent distribution channel. On the consumer side of the marketplace, we grew volume by double-digit levels. On the provider side of our marketplace, we increased local agent budgets by over 20% year over year. We applied new data science models to drive better performance for local agents, which is extending our competitive mode in this valuable channel. And multiple large agent-based carriers have indicated that EverQuote has become their agent's largest and highest performing partner. Our direct-to-consumer agency, or DTCA, a core strategic area of investment for the company, continued to perform well in Q1 and represented over 13% of revenues in the period, exceeding our internal plans. After two acquisitions and many quarters of integration work, we now sell policies across major lines of insurance, including P&C, health, and life. This represents the very early stages of the next phase of the company's evolution to provide a rich customer experience built upon our unique position. which we believe is the only marketplace and DPCA hybrid model operating at scale across major lines of insurance. The direct carrier channel, which has historically been our largest, continues to face significant challenges. While early in the quarter we saw an uptick in carrier auto demand from December lows, we encountered further pullback in March, which was amplified in April. as carriers continue to exit unprofitable states and segments with little advance notice. In the past week, for example, one of our large carrier partners unexpectedly informed us that due to, quote, immense profitability pressures this year, end quote, they are dramatically reducing their Q2 and Q3 customer acquisition budgets. As this carrier continues to increase rates to address these pressures, We anticipate they will reverse course and restore higher budgets once they are able to better align their rates to the current loss environment. As a result, we remain substantially below the levels of carrier demand in our auto vertical that we saw in August 2021, which we believe to be the level to which we will normalize upon the market's recovery. In Q2, we expect continued strong headwinds from auto carriers. We also expect to experience lower health demand in Q2 of 2022, reflecting seasonality entering the Medicare lock-in period that follows the Q1 open enrollment period. Let me touch on what everyone wants to know. When will auto carrier demand return and why? To derive expectations about the timing of the recovery in auto carrier demand, we solicit direct input from our carrier partners and we closely monitor their publicly recorded profitability trends. The latest collection of data suggests that Q2 demand will likely remain significantly depressed, but that some rebound is indicated to begin by the end of the year with an expectation for full recovery in the first half of 2023. Early data points that support this projection include, number one, direct feedback from a large partner that they plan to reactivate by July, states which were previously paused. Number two, Publicly reported loss ratios improving in recent months for large customers compared to late 2021. And three, rate increases continuing to be filed and approved. As carriers increase rates to reflect the current underwriting environment, we expect they will return to normalized levels of customer acquisition spend while driving more insurance shopping as consumers react to higher renewal rates. In closing, in spite of the challenging auto insurance market, We continue to make progress towards our long-term vision to become the largest online source of insurance policies by combining data, technology, and knowledgeable advisors to make insurance simpler, more affordable, and personalized. Our strategy to diversify into more stable distribution channels of local agents and our direct consumer agency helped us deliver a quarter that exceeded expectations across all of our three primary financial KPIs. As auto carrier demand recovers, we expect that EverQuote will be well positioned to return to our historic trend, strong revenue growth and expanding adjusted EBITDA. We remain laser focused on building an industry-defining company. I continue to be incredibly proud of our team's ability to navigate changes in the industry as we build to our objective of being the one-stop insurance shop for the digital age. Now I'll turn the call over to John to provide more details on our financial results.