EverQuote, Inc. (NASDAQ:EVER) Q4 2022 Earnings Call Transcript

So we’re pretty confident that we have picked up a step through the downturn, and that should position us well on the way out. And then to address your third question around non-auto verticals, I think the growth is going to be fairly well balanced across the non-auto verticals. One area that we’re leaning into a bit more heavily is home insurance. If you look at some of the carrier results, the P&C carriers, while they continue to work on restoring auto profitability, the picture in home is a bit better for them. And so therefore, they do have appetite to grow. There is more demand that is there that is more stable. And we are leaning into that and trying to rebuild momentum in the home operations. And then I think health and Medicare continues to be an area of opportunity and an area of focus.

In our direct to consumer agency, we’ve driven a tremendous amount of efficiency over the last year into the health and Medicare operation, and we’re continuing to invest in driving strong unit economics. And as we do, we’ll return to more of a growth posture in those verticals over the course of the year.

Aaron Kessler: Great. Thank you.

Jayme Mendal: No problem. Thanks, Aaron.

Operator: Thank you, Mr. Kessler. Our next question comes from the line of Jed Kelly with Oppenheimer. Your line is now open.

Jed Kelly: Hi. Great. Thanks for taking my questions. Just a couple, if I may. Just going back to the competitive dynamic, I think some of the competitors maybe are kind of guiding for somewhat of a faster growth rate maybe in 1Q. Can you discuss anything around the competitive dynamics? And then you did file a mixed shelf offering. Can you discuss any potential acquisitions or how the environment is for valuations and the overall acquisition environment? Thank you.

Jayme Mendal: Sure. I’ll take the first piece, Jed. We’ve seen and sort of like heard how some of the others are talking about the recovery. I don’t think there’s — I don’t believe there’s a difference in terms of what we’re seeing versus what others are seeing. We have seen a substantial step up sequentially from Q4 into Q1. It’s relatively concentrated, as we mentioned, in terms of it coming from a small subset of the carrier base. And so I think we are likely seeing what the rest of the industry is seeing. You have to recall that we have a different distribution sort of channel mix from most of the industry and that about half of our revenue comes from the agent channel, which has been more of a steady grower throughout.

And so you might expect to see a bit more of a swing from other companies that have less diversification in their distribution base. But by and large, we’re taking a relatively conservative approach to it, right? We appreciate that there’s still quite a bit of uncertainty in the market. We want to see some more depth in terms of carriers returning to the marketplace, more carriers returning to a growth mindset. And I think as we do, you will see us reflect that as our confidence builds that we have those dynamics in the marketplace in a way that we haven’t yet achieved, but we’re moving in the right direction for sure.

John Wagner: And Jed on the shelf registration we filed today, I would describe that really as just good housekeeping and a step to give us some capital optionality. In my prepared remarks, I went out of my way to say that it’s not something that we’re looking for to raise capital to fund the business. And in fact that we’re starting to talk about returning to positive operating cash flow next year, maybe just slightly for the year, but we are starting to manage for positive operating cash flow. So it’s not a scenario where we believe we need capital in order to run the business. And that really leaves the other major lever, which is around acquisition. We do think that the environment could become attractive and compelling over the course of the year.