EverQuote, Inc.

Good afternoon, ladies and gentlemen. Thank you for attending today's EverQuote Q2 2022 earnings call. My name is Tia, and I will be your moderator for today's call. All lines 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 one on your telephone keypad. I will now pass the conference over to your host, Brindley Johnson of the Blueprint Group. You may proceed.

Thank you. Good afternoon, and welcome to EverQuote's second 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 third 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 customers 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, and the possible impact of inflation. Forward-looking statements may be identified with words and phrases such as, We expect, we believe, we intend, we anticipate, we planned, 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 our 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 the heading Risk Factors in our most recent quarterly report on Form 10Q, 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, refer to certain non-GAAP financial measures which we believe are helpful to investors. Our 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 you, Jamie.

Thank you, Brinley, and thank you all for joining us today. In the second quarter, we exceeded guidance expectations across our three primary financial KPIs, delivering revenue of $101.9 million dollars, variable marketing margin, or BMM, of $33.1 million, and adjusted EBITDA, a positive $1.4 million. We attribute our success in the quarter to agile management fueled by strong analytics, as our operating teams demonstrated their ability to effectively navigate continued volatility and increased headwinds in the auto insurance industry. On the consumer side of the marketplace, strong traffic volume growth helped offset lower carrier monetization, with consumer quote requests up 28% year on year. Our customer acquisition teams reacted swiftly, continuously adjusting ad spend in near real time to maximize margin amidst volatile carrier demand throughout the quarter. On the provider side of our marketplace, our agent-oriented distribution channels continue to exhibit strength and resilience in Q2, even while the direct carrier channel contracted. Local agent budget caps increased year-over-year within our marketplace. Our direct-to-consumer agency, or DTCA, continued to perform well, representing 13% of revenues in Q2 and exceeding our internal projections. Over the course of Q2, amidst a challenging auto carrier environment and a lock-in period for health and Medicare, we drove meaningful improvement in the unit economic profitability and cash efficiency of our DTCA operations as follows. One, we continued to improve advisor performance through continued coaching and tenuring of agents, as well as tech and traffic optimization. Two, we increased ancillary attach rates in health and Medicare. And three, we shifted policy mix towards higher LTV products. Meanwhile, The direct carrier channel continues to exhibit significant volatility. Throughout the quarter, carriers exited unprofitable states and segments. As a result, in Q2, direct carrier channel monetization reached new trough levels below the lows last seen in Q4 of 2021. July demand from auto carriers showed continued deterioration, and we are not expecting this dynamic to change meaningfully within Q3. We also expect to experience lower health demand in Q3, reflecting the seasonally slower lock-in period ahead of Q4's open enrollment period. Turning to the broader environment, auto carriers are now citing the uncertainty caused by surging inflation as a key factor limiting their pace of recovery. While we have seen loss in combined ratios improving for certain carriers, we believe that Q3 demand will likely remain significantly depressed and that a rebound previously expected to begin in the second half is unlikely to occur before 2023. Data that supports this outlook include, one, recent actions from a number of carriers to further limit their customer acquisition appetite and bid levels, and two, direct feedback from a large partner of ours that uncertainty around the go-forward loss environment caused by surging inflation is leading them to restrict budgets in the second half of 2022 more than previously expected. When inflation stabilizes and carriers are able to 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, we are successfully navigating a very turbulent market. In Q2, we reacted quickly to changes in market conditions by managing our ad spend and altering our cost structure to deliver more revenue and profitability. we also benefited from our strategy to diversify our distribution into agent channels. We remain in an unstable market, and the actions required in the third quarter are likely to be different than the second. However, with a strategy and a team that has demonstrated its capacity to adapt quickly and execute, we are confident we will continue to deliver strong financial results through the uncertainty ahead, while continuing 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. 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 auto carrier demand recovers, we expect that EverQuote will be well-positioned to return to our historic trend of strong revenue growth and expanding adjusted EBITDA. Now I'll turn the call over to John to provide more details on our financial results.