EverQuote, Inc.

Ladies and gentlemen, thank you for standing by. My name is Abby and I'll be your conference operator today. At this time, I would like to welcome everyone to the ever quote fourth quarter and full year 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one a second time. Thank you, and I would now like to turn the conference over to Brinley Johnson with the Blue Shirt Group. You may begin.

Thank you. Good afternoon, and welcome to EverQuote's fourth quarter and full year 2025 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 are Jamie Mendel, EverQuote's chief executive officer, and Joseph Sanborn, EverQuote's chief financial officer and chief administrative officer. During the call, we'll make statements related to our business that may be considered forward-looking statements under federal securities laws, including statements considering our financial guidance for the first quarter of 2026. Forward-looking statements may be identified with words and phrases such as expect, believe, intend, anticipate, 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 subject to a variety of risks and uncertainties that could cause the actual results to differ materially from our expectations. For discussion of those risks and uncertainties, please refer to our SEC filings, including our annual report on Form 10-K and our quarterly reports on Form 10-Q on file with the Securities and Exchange Commission and available on the Investor Relations section of our website. Finally, during the course of today's call, we referred 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. And with that, I'll turn it over to Jamie.

Thank you, Brimley, and thank you all for joining us today. 2025 was a phenomenal year for EverQuote, and we're excited about our position entering 2026. We grew revenue by 38% in 2025, making material progress toward our vision of becoming the number one growth partner to PNC insurance providers. We delivered this growth by scaling our marketplace, launching new products, further integrating AI into our operations and deepening provider relationships, all of which accelerated our evolution to a growth solutions partner to our customers. More impressively, We delivered this growth with increasing operating leverage. We grew adjusted EBITDA by 62% as we continue to generate efficiency throughout our operations through the use of AI and other technologies. Thanks to the team's strong execution, we exited 2025 with record financial performance across all our key financial metrics, a highly capital efficient operation, and a strong balance sheet. We entered 2026 from a position of strength and with a stable and healthy P&C insurance market. Consumer shopping levels remain elevated following rate increases in recent years. Carrier underwriting is profitable, and our carrier conversations about 2026 have centered around growth. This backdrop supports a confident outlook for 2026. Since going public in 2018, EverQuote Management has established a seven-year track record of delivering against our commitments. while navigating an always dynamic set of market conditions. We now reiterate our next commitment, which is to achieve a billion dollars of revenue while continuing to expand the cash generation of our marketplace. We will do this amidst continued dynamism in the market, this time brought on by the rapid acceleration of the capabilities of AI. We believe that we are well positioned to lead and benefit from this shift. Applying data and technology to insurance shopping to remove friction for consumers and deliver growth to providers has been deeply ingrained in our DNA since our founding. We have amassed a one-of-a-kind data moat from our hundreds of millions of historical insurance shopping events, each of which contributes proprietary data that could be used in many ways to create enhanced digital and AI native experiences. In recent years, we have applied AI to automate our traffic bidding, We have rolled out products like smart campaigns, our AI provider bidding solution. We have deployed AI voice into our call center operations, and we have begun adopting GenAI throughout our operations to drive efficiency. All of these advances have contributed to our growing operating leverage, punctuated by last year's 62% growth in adjusted EBITDA and a more than doubling of our revenue since 2023, despite nearly zero increase in our operating expenses. In 2026, EverQuote will accelerate our evolution towards an AI-first future. Within our operations, we will further accelerate our engineering team's path to more fulsome agentic coding and adoption of AI tools and agents throughout our operations to drive further operating efficiency. For our customers, we will roll out new products and features that combine our unique data with newfound capabilities of generative AI to accelerate their ability to derive value from this technology. We look forward to sharing more about some exciting features we are developing later this year. I want to thank and congratulate the EverQuote team for delivering results in 2025 that exceeded expectations. As we progress into 2026, we will build on this momentum and are taking steps that redefine EverQuote and insurance distribution for the age of AI. I'll now turn the call over to Joseph to discuss our financial results.

Thank you, Jamie, and thank you all for joining. Today I will be discussing our financial results for the fourth quarter and full year 2025, as well as our guidance for the first quarter of 2026. We delivered strong results in Q4, exceeding our prior guidance across all metrics, and closed out a record year, which we achieved total revenue growth of 38% year-over-year to $692.5 million, and adjusted EBITDA expansion of 62% year-over-year to $94.6 million. Total revenues in the fourth quarter grew 32% year-over-year to a record 195.3 million. Revenue growth was primarily driven by stronger carrier spend, which was up 39% year-over-year. Revenue for auto insurance vertical increased to 179.9 million in Q4, up over 32% year-over-year. Full-year auto insurance revenue grew 41% year-over-year to $629.8 million. Revenue from our home insurance vertical increased to $15.4 million in Q4, up 37% year over year. Full year home insurance revenue grew 20% to $62.7 million. As we mentioned last quarter, our strong revenue growth through the first nine months of 2025 gave us the opportunity to invest more in existing and new traffic lines during the fourth quarter to support future growth. The strategy worked, and as expected, these investments put temporary pressure on variable marketing dollars, or VMD, and variable marketing margin, or VMM, during the period, which in turn impacted our Q4 adjusted EBITDA and associated margin. Fourth quarter VMD was 49.3 million, an increase of 12% from the prior year period, representing a 25.3% VMM. For the full year, VMD grew 24% to 191.9 million, representing a 27.7% of VMM. Turning to operating expenses and the bottom line. As we scale and drive top-line growth, we continue to expand operating leverage in our business through the use of AI, other technologies, and disciplined expense management. While other technology companies are describing their plans to make AI investments to deliver incremental efficiency, we have been on this path at EverQuote for over two years. In the fourth quarter, we grew GAAP net income to $57.8 million, up from $12.3 million in the prior year period. GAAP net income this quarter included a one-time non-cash tax benefit, $38.4 million. primarily driven by the release of the valuation allowance against our deferred tax assets. Full year 2025 GAAP net income increased to $99.3 million compared to $32.2 million for 2024. Without the impact of these deferred tax benefits, we would have reported net income in Q4 and full year 2025 of $19.3 million and $60.9 million representing a year-on-year increase of 57% and 89% respectively. Q4 adjusted EBITDA increased 32% from the prior year period to $25.1 million, representing a 12.8% adjusted EBITDA margin. Adjusted EBITDA for the full year increased 62% to $94.6 million, representing an adjusted EBITDA margin of 13.7%, an increase of approximately 200 basis points over 2024. Cash operating expenses, which excludes advertising spend in certain non-cash and other one-time charges, were $24.3 million in Q4, down modestly from Q3. The full year 2025, we also continued to drive strong operating leverage in our model, with total cash operating expenses of approximately $97 million being effectively flat year over year. At the same time, our steadfast commitment to drive increasing efficiencies through automation in our core operations enable us to shift significant additional investment through 2025 into areas that drive future growth, such as AI capabilities, new products, and data science. As Jamie mentioned, since 2023, We have more than doubled revenues while keeping operating expenses essentially flat. We delivered strong operating cash flow of $27 million for the fourth quarter and $95.4 million for the full year 2025. We ended the period with no debt and cash and cash equivalents of $171.4 million. As a reminder, we implemented a $50 million share repurchase program last July. To date, we have repurchased approximately $30 million of shares, including approximately $9 million since the start of 2026. We are pleased with our outperformance in the fourth quarter, as we benefited from carriers who were well below their targeted combined ratios for the year and accelerated spend, deciding to not delay additional new customer acquisition until 2026. As a result of this dynamic, Q4 revenues were up a record 12% sequentially, meaningfully breaking with our previous seasonal pattern in which revenues declined sequentially on average in mid-single-digit percentage from Q3 to Q4. Turning to 2026, we continue to operate in a favorable industry environment. Our carrier partners are indicating that 2026 will be a growth year in which they will compete more aggressively for profitable policy growth after a two-plus year focus on rate restoration and underwriting margin recovery. We expect this growth to be measured. Following Carrier's record-level investment in new customer acquisition in Q4, we are seeing Carriers take a more disciplined approach to Q1 marketing spend as they begin a new budget year and seek to position themselves to have greater flexibility as the year unfolds. This contrasts with our historical seasonal patterns, which we would have customarily see a sequential step up into Q1. as carriers will look to aggressively start a new year by quickly deploying budget and then consider tapering spend as they progress through the year based on their underwriting profitability. Now turning to guidance for the first quarter of 2026. We expect revenue to be between $175 and $185 million. We expect V&D to be between $49 and $52 million. and we expect the gestity to be between 23.5 and 26.5 million. Entering 2026, we believe that we are well positioned to operate in a dynamic environment fueled by a rapidly evolving AI landscape. From our experience in serving insurance providers over the past few years, our battle-hardened team has honed its ability to quickly adapt our operations to changes in the environment, with a clear-eyed view towards identifying opportunities that will both enable us to better serve our customers and drive strong financial performance. As Jamie shared in his remarks, we have recognized and embraced AI capabilities that allow us to more aggressively adapt our operations and investment approach to create opportunities for EverQuote to deliver long-term sustainable growth. We look forward to sharing more with you on our achievements over the course of the year. In summary, our record 2025 performance reflects our steadfast commitment to strong execution and a clear growth strategy. As we look at the remainder of this year and beyond, we are focused on our goal of creating a billion-dollar revenue business over the next two to three years by being the leading growth partner for P&C insurance providers and doing so in a manner that will generate expanding levels of profitability and free cash flow. Jamie and I will now take your questions.

Thank you, and we will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one a second time. If you are called upon to ask your question and are listening via speakerphone on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, it is star one to join the queue. And our first question comes from the line of Maria Rips with Canaccord Genuity. Your line is open.

Great. Thanks so much for taking my question. I know you're not providing full year guidance at this time, but maybe any directional color you could share in terms of the growth trajectory throughout the year based on conversations with your carrier partners. How should investors think about growth normalizing from this projected to one level?

Sure. Thanks, Maria, for the question. Just want to make sure everyone can hear us okay. You're broken up a bit, Maria. Everybody can hear us okay.

Excellent. Can I repeat my question?

I think the question, Maria, to make sure I had it was, you know, outlook for full year 2026 based on the Q1 guide, can we give some insight on the rest of the year? No, we're not giving you any of that. Perfect. So thank you, Maria. We'll start with our carrier partners are indicating that 2026 will be a growth year for them broadly. And their focus for this growth year is really about competing for profitable policy growth. This is after sort of a two-plus year period where they were focused on getting rate adequacy and getting underwriting margins to be sustainable. As we think about how they're looking at this period, we're seeing it as a disciplined approach to starting Q1 and you know, in part reflecting a really strong Q4. We had this very strong Q4 dynamic where we were up sequentially 12% of record level. So coming into Q1, they're coming in with a view we're going to grow. And as we progress through the rest of the year, you can touch more in Q1 questions if you have them. But for the rest of the year, I would prefer you to what we talked about in our November call, which is our path to a billion in revenues. It remains unchanged in our approach. We'll be a billion-dollar company in revenues in two to three years. And as we think about what that implies for growth rates, if we did that in three years, that would say it would be a 13% top-line growth. If we did that in two years, it would be a 20%, 21% top-line growth. So I think that would be the first data point I'd point to you. Obviously, some years will be higher, some years will be lower in terms of revenue growth. Then when you think about EBITDA, going further down in the P&L, we've said in our November call that EBITDA margins in our path to a billion will go between 100 and 150 basis points. We're reiterating that view. They'll be between 100 and 150 basis points. And consistent with what we said in the November call for 2026, we think they'll be closer to 100 basis points, reflecting that in 2025 we had 200 basis points of improvement. Probably the last insight I'd give you on this year is if you think about that top-line growth and what that implies for EBITDA dollar growth, it implies at least 20% EBITDA dollar growth for 2026. And I think you'll see that on our path to a billion in 2020. along the way each year.

That's very helpful. And then can you maybe share a little bit more, Carl, around your traffic investments in Q4 and particularly anything you can share about AI-related search and quality of that traffic? Clearly, this investment benefit is Q4, but do you anticipate annual base benefits of filling over into Q1 and 2026?

Yeah, I'm sorry, Maria, you're coming in a little choppy for us, but was the question about expectations for traffic coming from AI search going in 2026?

Yeah, can you hear me now? Can you hear me okay?

Yeah, I hear you better now.

I was just wondering if you could talk about your traffic investments in Q4 more broadly and And then specifically as it relates to AI-related search, is there anything you can share about the quality of that traffic? And then as we think about Q1 and going forward, do you anticipate any benefits from this investment in Q4 to flow through into Q1 and into 2026?

Yeah, okay. So broadly, we mentioned in the previous call that we are making investments in expanding into... under-penetrated traffic channels, particularly higher funnel traffic channels, and we're investing in some of these new traffic programs going from late last year into early this year. What we are... Experience is more or less what we expected, which is we were able to drive some significant scale through some of these channels in Q4. As Joseph referenced, every time we're standing up a new traffic program or channel, you have to kind of burn it in, and so it takes some time to get to the steady state margin profile. And now in Q1, you're starting to see the margins sort of normalize back to more of a steady state level. But this will be a process as we step into more channels over the course of the year. So our goal is to continue growing quote request volume and traffic to meet our customers' demand. And one of the key vectors to do that is to launch and scale up incremental channels of traffic and incremental programs. So that's going to plan. Then I think you asked to sort of double-click specifically into any insight around some of the AI search traffic. And what I can share there is we're actively talking to and building into the big LLM chatbot platforms, and we do expect to start to see traffic grow from those platforms in 2026. There's a number of different ways that you can sort of integrate or start to receive traffic from them. One is through content, getting picked up in their training runs through kind of a new version of SEO. Two is through technical integrations with them or building apps in those platforms. And third, now we're starting to see them open up to testing paid advertising. So we are positioning to begin to access traffic across all three of those. We have on the content front the benefit of not having had an SEO program, a legacy program in the past. So all of that we're approaching with a clean sheet from first principles, and we're going to start to build in to that content program in a way that is tailored to and customized for the way that these LLMs want to absorb information. On number two, as I mentioned, we're beginning to sort of talk to and build into some of the LLM chatbots where I think The user experience will be more important, and we'll be able to rely on some of our proprietary data and distribution relationships to create some really cool and differentiated user experiences. And then a third piece is programmatic advertising, right? So there are a few companies out there who are more effective at programmatic advertising for insurance, and certainly as these platforms open up to paid advertising, we'll be first in line to participate. So I hope that answered your question.

Yeah, that's very helpful. Thank you very much.

Thanks, Maria.

And our next question comes from the line of Corey Carpenter with JP Morgan. Your line is open.

Hey, good afternoon. Jamie, maybe one for you and one for Joseph. Hoping for me, Jamie, just an update. In the last few quarters, you talked a lot more about these new products and becoming a holistic suite. So maybe an update on where you're at and the progress you've made with the AI bidding and some of the smart campaign and subscription products that are in earlier initiative stage for you guys. And, and Joseph, for you, I think, you know, the question people are trying to square this afternoon is, you know, I think hear loud and clear the confidence of the 1 billion over two to three years and kind of those 13 to 21% guardrails. The 1Q guide implies, if I'm doing my math right, 8% growth. So I guess the question is what's giving you confidence in that growth, you know, re-accelerating over the next year or two. Thank you.

Sure. Thanks, Corey. So as it relates to broadening the suite and evolving from a lead gen provider to more of a growth solution provider to customers, we made significant progress last year. You referenced smart campaigns, which is one of the products that has gotten the most attention. And that really expanded to the bulk of our carrier customers over the course of the last couple of years. And this year is the year where we're going to start to roll it out to local agents. So we've got a different version for agents. We're also going to begin to cut it across different referral types and vertical markets. So for our calls product and for our home vertical. So we'll see continued development as it relates to smart campaigns. And then we're investing in improving the performance of the models themselves. by adding new features like auction competitiveness and beginning to introduce more reinforcement learning into the model. So Smart Campaigns has been a big step forward for the way that providers fit into our auctions and get performance from us. And by the end of this year, I think we'll have many agents on it, too. We'll still have really widespread adoption across our distribution. And then where we're focused on extending the product offering beyond that most acutely is with the local agents, right? The vision with the local agents is to evolve from a lead vendor to the one-stop growth partner for them by developing and rolling out value-add features and products on and around our core lead offering. And in doing so, accessing more of their growth budget and really starting to expand the ways that we help agents grow. So that's come a long way too. I think we've stepped up once again from the last time we reported this number. We've now got 40% of agents using more than one of our products across leads, calls, telephony, and digital solutions. So that strategy is more or less going as planned, and we're continuing to make significant inroads both with carriers and with the local agents.

So I'll take the second part of your question, Corey. So, you know, and thank you. I guess in terms of the path to a billion, maybe I'll pitch some high-level points and then I'll go into a little bit of sort of dynamics around, you know, what's going on in Q1 versus Q4 and the context for the year. So our path to the billion remains the same as we've articulated before. It comes across, you know, three areas principally. One is on the distribution side, the idea that we're going to get more carrier budget and pricing as we improve performance. And that's principally being driven by our AI products. You know, as Jamie talked about smart campaigns, key part of why a carrier is coming to us, we're helping them drive better performance. Today's smart campaigns is used by the majority of our carriers. We think you will see more and more budget coming through smart campaigns over time. The second is we get more agents to get more share of their marketing budgets more broadly. We've talked about in the past how we're moving from sort of being a one-product company to agents, now being a multi-product strategy with agents. You know, at this point, we're at sort of 1.4 products per agent, you know, relative to where we were, you know, 18 months ago, it was much closer to one. So we'll continue to make progress there. Third is traffic, expanding into new and more traffic channels. We made some investments in Q4. We feel good about how those are progressing. You know, Jamie talked a little bit about how AI search will change our landscape, and we feel that will also benefit us as well when we're well-positioned to take advantage of that. And then lastly, I'd look at verticals. Today, if you look at our marketplace, we're roughly 90% auto, 10% home. If you think about the insurance landscape for P&C, home is roughly 50% of the size of auto. So we see a real opportunity between 10% and 50% to grow this over time at a faster rate. And we think in the medium-term horizon, you'll actually see home growing at a faster rate than auto. And just to remind you on the home piece, home was a vertical that It had some of the same dynamics of auto coming out of COVID. It was further behind in recovery, and we saw some nice growth last year at 20% growth year-on-year. Again, we feel bullish about that. So those are, I guess, the path to the billion that we continue to feel bullish about. I guess the comments in terms of what's going on in Q1, maybe I could double-click on that and give you a little context on the seasonal pattern. I think one of the dynamics we have emerging in the business is potentially a new seasonal pattern. We've had, now based on the past two quarters, we had a Q4 dynamic where we We had a record sequential increase from Q3 to Q4 of 12%. To put that in context, our seasonal pattern on average from Q3 to Q4 is usually down, low single digits, so we're up 12% of record. I think some carriers took Q4 as an opportunity when they had very favorable combined ratios to sort of invest in growth last year, and they pulled some of the Q1 into Q4. Then you look at the start of this year, we see growth coming across where carriers are clearly indicating to us they want to grow. When broadly out, they were having carriers tell us that. I think what they are also telling us is they're going to do it in a measured way throughout the year to make sure they maintain flexibility as the year unfolds. When you put those dynamics together, different dynamic in Q4, different dynamic in Q1, we are actually encouraged by how carriers will be unfolding. We could see a change from what we used to see, which was, CARES would start out of the gates really hot in Q1. Then you'd have tapering throughout the year and some volatility. We think it could be a more sustained view from CARES as we look into 2026. Probably the last data point I'd give you in terms of the seasonal pattern, you know, we're not giving guidance for the year, but as I look at Q1, typically Q1 would be down to Q2. What we would suggest is probably a reasonable place to think about Q2 is sort of flattish and sort of flattish levels of revenues, BMD adjusted EBITDA versus Q1. So that would imply a much higher growth in Q2 than Q1, north of the taking three years to get to a path to a billion. I think it would be a 15%, 16% growth.

That's very helpful. Thank you both.

Thanks, Corey.

Thank you, Corey.

And our next question comes from the line of Ralph Shackert with William Blair. Your line is open.

Good afternoon. Thanks for taking the question. First one for Jamie. You know, there's obviously a lot of concern in the market with currently on how AI agents can disrupt some models. But just kind of curious how you see AI agents sort of progressing within sort of your platform and maybe more broadly within the P&C market. And then maybe on the BMD for Joseph, it seems like, you know, the margin has sort of bounced back or at least got into it in Q1. How should we think about that margin as it progresses through the year? Thank you.

Thanks, Ralph. Yeah, so on the agentic AI piece, I think I would start here. I think there was some broad-based misunderstanding about how exposed our business is and whether we're more likely to benefit or be challenged by the development of AI agent capabilities. Yeah, I think I'd start by pointing out that we're not a software business, right? We're a data-powered, two-sided marketplace, right? And so the software layer of our stack is, say, 20% of the value. So much more of the value is in our proprietary data, our traffic engine, our distribution relationships, which, by the way, are with regulated entities, and how we integrate all these things into a complex system whose sole purpose is to be the dominant industry-specific performance marketing platform. So that is not something that we believe can be replicated directly by LLMs or AI agents without a lot of human involvement. Now, I will acknowledge, of course, that shopping for everything will evolve. And in insurance specifically, there are some factors which will cause it to evolve differently than other categories. First and foremost, it's very opaque. So, you know, rates for many of the best insurance products are not readily available, you know, or accessible through public APIs. And in fact, carriers go to great lengths, as you know, to prevent their rates from being accessed anywhere outside of their own quoting funnel. So, you know, can LLMs or agents help at the top of the funnel? Yes. But I would say what we've seen so far and what we've been able to kind of do ourselves so far is a far cry from a transformative experience. I think what's out there in the taking a web experience and applying a very lightweight conversational front end to it before spitting the consumer back into a fairly common web-based quoting or binding experience. So there's not much depth to it just yet. Now, over time, I do think that these agents will enable more transformative change. So I want to be clear about that. And I also think it's likely that EverQuo will be in the driver's seat of bringing that to fruition. We've got the distribution relationships to access rates. We have the data to make consumer experiences more seamless. And we've got the technology chops to build the app or experience of the future. And we will. So these are things that we're actively working on and sort of building with. So for right now, like today, can these AI agents help us by making our marketplace operations and performance more efficient? Absolutely, and they are. And, you know, can they start to improve how customers compare insurance options in a way that's more user-friendly? Yeah, they can. And so this is all underway, but it's precisely what we're focused on this year is really harnessing the power of a Gentic ad to drive better results for our customers and for the business.

And then to turn to your question on the VMM margin sort of context for the year. So just context, you know, we were over 25% in Q4, very much in line with what we said in our last call, which is we had a really strong start to the year in 2025, that first three quarters. So we consciously made a choice to invest in new channels in Q4, brought us down to around 25% as expected. The strategy worked. As we looked at Q1, you're sort of seeing us coming back to a guy that shows that it plays in the high 20s, which, you know, 28% is at the midpoint. Again, very much in line with what we expect and what we said would happen. You know, if you look at where we were last year and the overall year, we were just under 28%. So when I think about the rest of this year, I'd say high 20s is where we expect to be. It'll bounce around certainly quarter to quarter. Why will it bounce around? Two reasons. One is we do not run the business on a day-to-day basis to drive VMM margin. We run the business on a day-to-day basis to drive VMD. That's first. Second is what do we control and not control in determining our VMD and VMM? We do not control advertising costs. What we do control is the efficiency with how we acquire advertising. So in advertising costs, certainly quarter to quarter, month to month, there can be pressures on advertising costs that drives those up or down, and we take advantage of those where we can, but we obviously are buying that as sort of a raw material for our business. The last thing I'd say about our efficiency and how we buy things, a reference point I give, and actually we did a road show in December, Ralph, I remember it was helpful, was if you looked at our business back in 2023, you know, where our business was, you know, 260 million auto insurance business, 270 million auto insurance business, that had a VMM in the high 20s. Today, the business is almost three times that size. We have a VMM still in the high 20s. Certainly, the advertising environment has gotten significantly more competitive in that time period. There's no question about that. I think we have been able to maintain it because The investments we've made in our technology, our AI bidding traffic platforms that take advantage of our data, the efficiency with how we acquire that advertising is the thing we do control and we do that well.

Great. That's helpful. Thanks, Joseph. Thanks, Jamie. Thank you.

And our next question comes from the line of Mayank Pandan with Needham. Your line is open.

Thank you. Good evening, Jamie and Joseph. I was just curious, in terms of the potential upside case to 1Q, and then if we assume the basic case for 2026, even though, Joseph, you're not giving guidance, is, say, low team growth based on your billion-dollar revenue target in three years, what is the potential bull case to that? What I'm curious is, is California a potential positive catalyst that could drive upside I think last quarter, Jamie, you had mentioned that top 25 carriers were still below peak spending levels. Is that something that could also be a potential upside case? I'm just curious in terms of what the catalyst might be that could drive faster growth than what you're currently maybe modeling or at least indicating to the street.

Sure. Thanks, Mike. So, again, the range, I would say, is what we said in the November call. Still a path to a billion in two to three years. That remains our goal for top-line growth. Mathematically, that implies if it takes two years, it's 20%. If you do it in three years, it's 13%, just to give you the context and the numbers. What could drive it to the higher in a year versus lower in a year? Probably a couple things I'd point to. So first is you have one large national carrier who's really coming back online with us this year. You know, that was a carrier that was a top three carrier for us prior to the downturn. We think that carrier could be certainly an important dynamic in our market placing beneficial. How exactly that plays out, how quickly, how slowly, a lot remains to be seen, but I think that certainly is one key dynamic. If you look at the state footprint, we have states coming back broadly. California is one we saw some progress in 2025. There is some room for incremental progress in 2025, certainly, excuse me, in 2026, but we had some progress in 2025, but I think some more there I've referenced. The other dynamic I'd mention is when you look at Where is insurance going online relative to other industries? Insurance remains a laggard going online. With everything that has happened through the past few years, you can't lose sight of a key tailwind for our businesses. Insurance remains an area that has gone online much more slowly than other areas. Lots of different stats you can look out there, but one of the ones I like to look at is relative to financial services. About a third fewer folks get insurance today online than versus broader financial services. So there's this opportunity for insurance to grow. How fast that may grow and catch up with others, that also could bring it higher or lower within a given year. Those are probably the three key ones I'd point to.

Got it. Very helpful. And then Joseph, I think you like this question. So I'll ask you, in terms of capital allocation, you're flush with cash, a good problem to have. So you talked about the buyback program, but does this also potentially open up maybe more appetite for M&A? or how else would you be able to leverage the cash on hand?

Sure. So thank you, Mike. I appreciate the question. So I guess I'd start with just, you know, we expect to continue generating meaningful cash flow from operations, and we have a high cash conversion from adjusted EBITDA to operating cash flow, you know, subject to normal working capital in a quarter. But, you know, in Q4, cash conversion was, you know, around 100%. And we ended Q4 with almost $171 million in cash, up from $146 million in Q3, the difference being the same as our EBITDA for the quarter. When we think about cash, we think about three things. So first, we think about having a strong balance sheet. We think a strong balance sheet is critical. We have no debt. You know, we have access to up to $85 million, but we have no debt today. We have a fortress balance sheet, and we want to make sure we continue to have that. The second is a share buyback program. We announced our inaugural share buyback program last summer. It has a one-year duration. It was a $50 million program. We used $30 million of that to date has been purchased, including $9 million since the start of this year. And we'll continue to be opportunistic in using the rest of that $20 million between now and that program's expiration this summer. And we'll continue to evaluate options to extend that program in future periods. And then third, we'll continue to look selectively at acquisitions. As we've talked about, we do not believe we need M&A on our path to a billion. Our path to a billion in revenue can be achieved entirely through organic growth. However, we do think there's an opportunity to potentially accelerate organic growth and importantly accelerate our strategy to be the leading growth provider to P&C carriers and agents, and M&A could play a part in that. And so as we talked about last year, we're spending more time thinking about that this year and being more thoughtful about it, and that could be a third use of cash as well. Excellent. Very helpful. Thank you so much. Thank you.

And our next question comes from the line of Zach Cummins with B Reilly Securities. Your line is open.

Hi. Good afternoon, Jamie and Joseph. Thanks for taking my question. So I'll do one for Jamie and one for Joseph. Jamie, I think you touched on this a little bit earlier with your commentary, but can you give us a sense if you've seen any meaningful changes in the traffic that's coming onto your platform since we've seen more of an emergence with these large LLM platforms, any sort of shift in terms of channels or where you're focusing your attention from a traffic standpoint? And the second one, maybe for Joseph, as you think about just the early conversations you're having with carriers, I mean, as you said, baseline expectations for this year. Are you anticipating kind of a broadening of contribution that you see from your carrier base this year? Or what's the right way to think about kind of contribution across the key carrier partners?

Sure. Thanks, Zach. So I'll start. I'd say we felt no material impact, direct impact, or mixed shift as a result of the growth of some of the AI search platforms. In fact, overall volume remains at historically high levels, and that was true throughout the course of last year. And even search volume remains at historically high levels. So we haven't been impacted there. Recall, I think the primary point of impact has been in organic traffic or SEO-originated traffic, which was really never part of our mix. So in that regard, we've not really experienced any direct kind of effects from it. So that being said, we do see it as a growth opportunity moving forward, as I sort of mentioned and kind of spoke to in detail answering Maria's question. So I think we'll start to originate a meaningful amount of traffic from these platforms in 2026 through a combination of content, technical integrations, and paid advertising. And it will become a channel of substance for us in 2026. At the same time, we're continuing to expand the traffic portfolio in other ways, primarily through some of these higher funnel channels. These are things like social video and so on and so forth. For those, we've been kind of working on an evolved digital experience that's more compatible with these channels, and that continues to be an area of investment going into this year.

Maybe to address your question, with regards to how we think about the carrier base and the broadening of it, maybe I'll give you a few data points that may help you as we think about this year. As we look at Q4, 75% of our top 25 carriers in Q4 were below their peak quarterly spend on the platform. So I'll give you that one stat. That shows to us there's ample room to grow for carriers. Obviously, not all carriers spend at the same quarter every time, so you'd expect that to ebb and flow. But again, 75% were not at peak quarterly spend in Q4. So that's one data point I give you in terms of composition. The other one I give you in terms of composition is in Q4, you had our top four carriers in Q4 – were also our top four carriers in Q3. They had some movements in their relative share percentage in the quarters, but that fact did hold true from Q3 to Q4. And then what you saw in Q4 is that from four, sort of five through 10, you had some movement around it. You had competition within those carriers more meaningfully. As we look into Q1, I think there's a potential for some carriers to have more competition movement around. Why do we think that? We think that because what is driving carriers right now? It's all about profitable policy growth. That contrasts what we saw over the past few years where carriers were focused on getting rate adequacies and underwriting profitability. They were less focused on maintaining share. As you see this sort of soft market cycle evolve, you see them increasingly focused on how can we competitively grow, how can we more aggressively grow policies and force and do it in a profitable way. We think that plays really well to digital channels. We also think it creates dynamic where there could be more competition between the carriers and some movement around in those positions within our marketplace. And related to that, also, we have another national carrier coming on who was not involved in the marketplace last year. We think that will also create a competitive dynamic as well, which I think will result in some movement around as we progress through the period of Q1 and into the rest of the year. And, again, we think that's good for the marketplace. It creates a more dynamic and healthy marketplace. You have more carriers competing for profitable policy growth, and digital channels like we provide do that very effectively.

Understood. Well, thanks for taking my questions, and best of luck with the rest of the quarter. Thanks, Zach. Thank you, Zach.

And our next question comes from the line of Jed Kelly with Oppenheimer. Your line is open.

Hey, great. Thanks for taking my question, and good year. I guess just these LLMs, they're commanding a ton of the markets of tension. I guess historically, we've always seen the carriers not want to put their quotes on third-party sites. And that would imply to me that I guess aggregators like yourself should benefit into these new LLMs if the carriers aren't going to want to put their rates on LLMs. Is that the right way to think about it? And then I have a follow-up.

Yeah, Jed, we share that perspective. And so I think I referenced that earlier. The carriers are very protective of their rates, right? They have gone to great lengths over the years to resist any kind of traditional rate comparison experience in the U.S. insurance market. And that position has not changed. You can find examples of, you know, rate comparisons out there, but those experiences typically only show rates for maybe, you know, 30%, 40% of the available product, and you're missing some of the best product, progressive direct or, you know, so on and so forth. And so... That dynamic is not likely to be any different just with the technology shift, which creates an opportunity for players like us who have unique access to carrier distribution, whether that's in the form of a rate or in the form of connecting someone with a local agent or in the form of bridging them over to directly land on a quoting experience with the carrier. it is this complexity and kind of this like different and really dynamic distribution landscape that someone like us can organize on behalf of any given LLM that wants to connect their consumers with insurance distribution. So we think there is a role to play and there's an opportunity to really carve out a material role in that. And we feel really well positioned, right? Like you've got to, Remember, our whole company was built on the ability to marry our data with technology to connect consumers with insurance distribution. And now, 15 years on, we've built this data asset from hundreds of millions of historical insurance shopping events, each of which gives us some proprietary data that we can use to streamline, optimize, and innovate digital and AI-native experiences. So we feel like we're in a really good position to go on offense here, and we're looking forward to this next chapter.

And then I guess as a follow-up to that, if the carriers implement AI and that makes them more profitable, assuming the profitability it costs them to underwrite a policy goes up, won't that make them want to lean more into channels that can drive them traffic?

Yeah. I think that's likely. And I mean, look, it's going to happen. It's just a question of when, you know, I mean, we've been deploying AI throughout our business over the last couple of years, you know, through our traffic bidding, through smart campaigns, through our operations, most notably in like engineering where AI coding tools have really become like a productivity multiplier, call center operations, right? We're seeing AI voice, in real time, you know, take on more and more customer interactions in an insurance funnel. So I think it's an inevitability that these insurance carriers will find material cost savings, which will improve their combined ratios, which will give them more capacity to spend in marketing. And, you know, again, this is an area where I think our strength is we are a trusted partner to these carriers. So not only could we be the beneficiary on the marketing side, but we think there's a helping these carriers get leverage from AI faster and more effectively than they might be able to do on their own, whether that's through productizing some of the things that we can do, like we've done with smart campaigns, or otherwise embedding teams with the carriers to help them sort out their own AI strategy. But we feel lucky to have access to the carriers, to the talent, You know, our chairman, Dave Blunden, he's like a prominent figure on the leading edge of AI. He's been very involved in helping us shape our AI strategy and access some top AI talent. So we see this as like a really interesting space where the carriers are going to need help, and we are, you know, we're the trusted partner to help them. Thank you. Thanks, Judd.

And our next question comes from the line of Mitchell Woodman, Raymond Jameson. Your line is open.

Congratulations on the quarter in the year. In the prepared remarks, you mentioned carriers taking a more disciplined approach in the first quarter of 26 from the record levels observed in the fourth quarter. Is the pullback broad-based across carriers or concentrated among specific relationships?

Sure. Yeah, I would say when I think about carriers across Q1, There are multiple carriers who we have this dynamic with. I think the idea of discipline is a theme we're seeing across carriers. I think why is it, right? We're seeing carriers who are pivoting from a period of getting rate adequacy, restoring rates and getting underwriting profitability, to getting into a period now where they want to aggressively compete for profitable policy growth. They're also recognizing, at least what we're seeing and hearing in our discussion, which is, the dynamic is changing. The normal pattern seems to be changing for them. And that, I think, reflects as they think ahead for the year, they want to have flexibility. So as opposed to the old pattern of start the year, new budget, let's go crazy, and then we'll sort of see how the year progresses, they're being very thoughtful about how they do things throughout the year. And so we're seeing that with multiple carriers. Some more so than others, but again, multiple carriers, I think, would be what we're seeing.

Thank you for the additional detail there. Could you provide some more color on the tax the deferred tax benefit recorded in the quarter and what criteria that led to the valuation allowance release?

Sure. So with regards to the tax valuation release, this is mentioned in my prepared remarks. You know, the full year and Q4 tax benefit were the same, approximately $38 million. The benefit was primarily driven by the release of our valuation allowance against our deferred tax assets. And think about it very similarly as You know, we had NOLs that now that we're becoming a profitable company, you have the ability to use those NOLs and require the change in recognition. Effectively view this as this was a non-cash charge, so it's important to note it's a non-cash and one-time charge, but it does reflect this dynamic of now that we have sustained profitability, then now on our balance sheet and our subject field, we're able to use them as we're making more money. And what I would say on these as well is, you know, we're not the first to have this experience. You may have, you know, Other companies in our space have had the same issue as well. So it's a common issue across our space. Thank you.

And that concludes our question and answer session. I will now turn the conference back over to management for closing remarks.

Thank you. And thanks all for joining. Just to recap, we had a phenomenal year in 2025 with records across all our key financial metrics. and we're carrying that momentum into 2026 with a healthy insurance market that's hungry for growth. As a team with a longstanding track record of using our proprietary data and technology to drive profitable growth, we see the recent acceleration in AI capabilities as a huge opportunity for EverQuote moving forward. We feel very well positioned going into 2026, and we're going to become the company that leads insurance distribution into a more AI-native future. Look forward to updating everyone as the year progresses.

And ladies and gentlemen, this concludes today's call. And we thank you for your participation. You may now disconnect.