We continue to believe this year will have incremental improvement relative to the 30 last year. Maybe this year is in the 31, 32 range. So we see a dynamic where you continue to build every year incremental VMM margin percentage very much like we articulated. I appreciate it’s not the perfect story to watch but if you look over time, I think you’ll see our investments in the bidding technology are what really driving that is you sort of normalize behavior support a quarter on especially with advertising and recovery within auto. It’s hard to look at those right now but the bidding technology will be more sustainable. We’ll talk about as we progress through the year.
Operator: Our next question comes from the line of Jed Kelly with Oppenheimer.
Jed Kelly: Hey, great. And thanks for taking my question. Just looking at the industry [inaudible], it seems like everyone’s doing pretty well. So we’re assessing like how you’re performing relative to your carriers or up relative to the other competitors. How should we assess what key metrics should we look at? And then I think you went to the quarter with $48 million in cash. You talk about is that the right balance going forward and how you kind of do your balance sheet? Thanks.
Jayme Mendal: Sure. Thanks, Jed. Yes, so as you say, I mean, I think we’re focused on us, right, and we’ve gotten up to a very strong start this year. We have results that exceeded the high end of the range on all metrics that we manage to. So we’ve got record levels of adjusted EBITDA, operating cash flow of net income, and all that is really made possible by the actions we took last year to refocus the business into a capital efficient, P&C focused digital insurance marketplace. Jed, as we look out across the market, I think we view ourselves increasingly like there’s an element of it, which is our model is digressing a bit from that of some of our peers, simply in that we are more focused, but we are a pure play focus on P&C.
We are of the mind that going deeper in this market with carriers, with agents, with consumers in a world where we are the leading player in the space. We have access to a tremendous amount of proprietary data in the space, and we think that using that data and going deeper in this market will pay off over time and allow us to extend that advantage. So, I don’t know exactly what metrics to point you to. We’re really focused on delivering more value to our customers in the P&C insurance market. And I think that it’s hard for us to find a comp that is similarly focused. So I would just measure us on what we say we’re going to do and how we do against that.
Joseph Sanborn: Maybe I’ll take the second question, Jed, which is on capital allocation. So, I mean, just put a couple things in context. We ended Q1 with close to $50 million in cash, just under $50 million in cash. And obviously, it’s significantly improved from where we were a year ago, right, and where we were in the summer of 2023. I think it reflects, as Jayme said, we’re a managing the distinct, what we’re going to do, and we’re doing that, and we’re executing upon it. And the operating leverage we’ve driven more cash to balance sheet. We do not need, and we expect to be cash flow positive going forward as a company. So as we think about the cash position, we are pleased to see where it’s at relative to the last year.
What we’d say is we are confident in our ability to drive long-term growth organically. And as Jayme mentioned, we believe by going deeper to help clients’ needs within P&C. We’re actually going to have value that will make this increasingly differentiated from the broader market for participants. And so that’s where we feel confident about driving long-term growth organically, but we’ll continue to selectively evaluate acquisition opportunities to drive inorganic growth. And we’ll be very disciplined about this and probably the same discipline approach we’ve used to manage our operating expenses, we use the same approach looking at acquisitions. But that’s certainly sort of something we’ll consider with our cash over time. As we’ve said in our prior call with regards to M&A, we believe that M&A will make sense over time as this sector consolidates with every more M&A.
And we believe that we are well-positioned to be a leader in this space long term, and we have the team and the approach that we think will win long term.
Operator: Our last question comes from the line of Mayank Tandon with Needham.
Mayank Tandon: Thank you. Good evening. Congrats, Jayme and Joseph, on a strong quarter. A couple of clarifying questions. Joseph, sorry I missed this, but I think you walked through some of the assumptions for the back half, even though you’re not getting formal guidance. But just to be clear, if the recovery hold that you’re seeing right now, would you still expect to see sequential growth? Maybe not the same seasonality that you’ve seen historically, as you said, but some sequential growth in the back half, the 3Q and 4Q, just based on what you’re seeing in the market right now?
Joseph Sanborn: Yes, I guess it is the context I said earlier, Mike, and I’ll just repeat them for the group, which is, going into the year, we expected to have a gradual auto recovery. Good Q1, and the seasonal pattern would be Q2 would go down, Q3 would go up, Q4 would go down. What we’ve actually seen play out of something quite different, which is, we’ve seen a much stronger start to Q1 and that is progressing into Q2. And as we progress into Q2, you’re seeing in our guide, implied by our guidance, auto is added near the peak levels we saw in Q1 of 2023. So we look at that backdrop, we say, what’s going to happen as we progress into the second half of the year? So first we know what’s been driving a lot of the growth in the first half of the year and making it more frontend loaded.
We got a handful of very large carriers have leaned in aggressively. And they’ve been opening more and more states as they progress through Q1, and certainly as they’re progressing into Q2, and we expect that to continue. As we think to the end of Q2 in the second half of the year, we think it’s going to be a limited opportunity for these handful of large carriers have leaned in aggressively, it’s opened more states this year, because it will be contingent upon some of the larger states with a more challenging regulatory environment. And they may or may not open this year. They may not open until 2025, based on how rate increases are going in their states. If we look at that piece, we overlay, what do we know about the broader carrier landscape?
