Executive Summary

Q1 2024 delivered revenue of $91.1M, Variable Marketing Margin (VMM) of $30.8M (33.8%), adjusted EBITDA of $7.6M, and diluted EPS of $0.05; EverQuote reported record GAAP net income of $1.9M and exceeded the high end of guidance for revenue, VMM, and adjusted EBITDA .
Auto vertical rebounded sharply: auto revenue reached $77.5M, up ~72% sequentially on carrier budget reactivation; home and renters revenue was $12.7M, up 29% QoQ; VMM dollars rose ~50% QoQ, reflecting improved monetization and volumes .
Q2 2024 outlook implies continued strength: revenue $100–$105M, VMM $31–$33M, and adjusted EBITDA $7–$9M; management flagged a front‑loaded recovery with auto approaching Q1 2023 peak levels and uncertainty around sequential seasonality in H2 given remaining regulatory bottlenecks in large states .
Stock narrative catalyst: breadth of carrier re‑entry (top 10 carriers stepped up spend), aggressive expansion by at least one large carrier, and visible pricing recovery across channels; sustained auto recovery and Q2 guide near prior peak levels are key drivers .

What Went Well and What Went Wrong

What Went Well

Exceeded guidance and posted records: “record levels of net income, Adjusted EBITDA and operating cash flow” on disciplined execution and 2023 realignment back to a capital‑efficient marketplace .
Auto recovery gaining traction: carriers “reactivate campaigns, restored budgets and reopened their state footprints”; all top‑10 carriers stepped up spend into Q1; one major carrier leaned in aggressively .
Home and renters strength: record home revenue in Q1; underwriting improved amid relatively light catastrophe losses; management expects continued growth in 2024 .

What Went Wrong

YoY declines tied to vertical exit and hard market: total revenue down 17% YoY (health was $8.7M in Q1’23), auto down 14% YoY as industry recovery is still early .
VMM margin % compression vs Q4: VMM % fell from record Q4 levels as ad costs rose, mix shifted toward enterprise, and re‑ramping/testing into channels reduced efficiency near term (still strong in dollar terms) .
Recovery unpredictability: H2 seasonality may not follow historical sequential patterns; large states’ regulatory timing could delay broader carrier openings until 2025, limiting Q3 sequential gains .

Financial Results

Quarterly Trend (oldest → newest)

Metric	Q3 2023	Q4 2023	Q1 2024
Revenue ($USD Millions)	$55.0	$55.7	$91.1
Variable Marketing Margin ($USD Millions)	$19.4	$20.7	$30.8
VMM Margin (%)	35.2%	37.1%	33.8%
Adjusted EBITDA ($USD Millions)	-$1.9	-$0.886	$7.6
Adjusted EBITDA Margin (%)	N/A	N/A	8.3%
Net Income (Loss) ($USD Millions)	-$29.2	-$6.3	$1.9
Diluted EPS ($USD)	N/A	N/A	$0.05

Notes:

Q4’23 adjusted EBITDA from the investor presentation reconciliation .
Adjusted EBITDA margin explicitly provided for Q1’24 (8.3%) .

YoY Comparison (Q1 2024 vs Q1 2023)

Metric	Q1 2023	Q1 2024
Total Revenue ($USD Millions)	$109.2	$91.1
Auto Revenue ($USD Millions)	$89.7	$77.5
Home & Renters Revenue ($USD Millions)	$9.5	$12.7
Other Revenue ($USD Millions)	$10.1	$0.8
VMM ($USD Millions)	$35.6	$30.8
Adjusted EBITDA ($USD Millions)	$5.4	$7.6
Net Income (Loss) ($USD Millions)	-$2.5	$1.9
Diluted EPS ($USD)	-$0.08	$0.05

Segment Breakdown (Q1 2024)

Segment	Revenue ($USD Millions)
Automotive	$77.5
Home and Renters	$12.7
Other	$0.8
Total	$91.1

KPIs and Balance Sheet

KPI	Q1 2024
Cash Flow from Operations ($USD Millions)	$10.4
Cash & Cash Equivalents ($USD Millions)	$48.6
Working Capital ($USD Millions)	$48.6

Actuals vs Wall Street Estimates

Metric	Q1 2024 Actual	Q1 2024 S&P Global Consensus	Surprise
Revenue ($USD Millions)	$91.1	Unavailable — S&P Global data not accessible	N/A
Primary EPS ($USD)	$0.05	Unavailable — S&P Global data not accessible	N/A
EBITDA / Adj. EBITDA ($USD Millions)	Adj. EBITDA $7.6	Unavailable — S&P Global data not accessible	N/A

S&P Global consensus estimates were unavailable due to data access limits during retrieval.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	Q2 2024	N/A	$100.0–$105.0	Introduced
Variable Marketing Margin ($USD Millions)	Q2 2024	N/A	$31.0–$33.0	Introduced
Adjusted EBITDA ($USD Millions)	Q2 2024	N/A	$7.0–$9.0	Introduced

Qualitative guidance detail: management expects adjusted EBITDA margins to moderate through H2 as investments rise, but remain above pre‑downturn levels (historical 5.5–6%) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’23 and Q4’23)	Current Period (Q1’24)	Trend
Auto recovery breadth	Early signs, but timing/slope uncertain; one carrier reduced agent subsidies; carriers reactivating campaigns in select states	Broad‑based improvement; all top‑10 carriers stepped up spend; one major carrier leaned in aggressively; auto near Q1’23 peaks in Q2 guide	Improving breadth, front‑loaded recovery
Pricing and ad environment	Favorable ad costs supported record VMM% in Q4; normalized marketplace VMM around ~30% longer term	Pricing “stepped up meaningfully” QoQ; broader channels (display/social) reactivated; VMM% compresses with higher ad costs and enterprise mix	Strong pricing, ad costs rising; VMM% normalizing
AI/ML bidding platform	Investments improving VMM efficiency; second‑gen bidding tech rolling out	Majority of traffic bidding on new ML‑powered platform; structural VMM uplift expected over time	Execution momentum; structural efficiency gains
Agent channel and subsidies	Captive subsidies cut in 2H’23; independents more resilient; plan to grow independent agent base	Subsidies returning in targeted states; focus on expanding independent agents and deepening relationships/products	Gradual recovery; strategic expansion
Home & renters vertical	Dedicated team drove 28–51% YoY growth; still in hard market	Record home revenue; underwriting improved with light CAT; continued growth expected, comps tougher later in ’24	Strength with improving underwriting
Seasonality and H2 outlook	Historically Q2 down/Q3 up/Q4 down; recovery timing uncertain	2024 front‑loaded; sequential Q2→Q3 increase not expected currently; large states may slip to 2025	Atypical seasonality; caution on H2
Capital allocation and M&A	Strengthened balance sheet; evaluate M&A selectively	~$49M cash; cash‑flow positive going forward; disciplined, selective M&A considered	Balance sheet improved; optionality maintained

Management Commentary

CEO: “We had a strong start to 2024… we achieved record levels of net income, Adjusted EBITDA and operating cash flow… carriers have continued to selectively reactivate marketing campaigns, increase budgets, and expand their state footprints in our marketplace.”
CFO: “Total revenues… $91.1M, driven by stronger enterprise carrier spend of more than 150% from Q4 levels… VMM was $30.8M… adjusted EBITDA reached a record $7.6M… Adjusted EBITDA margin… 8.3%.”
CEO: “We believe a sustainable auto recovery is, in fact, underway… the team… is battle hardened and energized by the results we’re beginning to see.”
CFO: “Q2 2024… revenue $100–$105M; VMM $31–$33M; adjusted EBITDA $7–$9M… adjusted EBITDA margins likely to moderate but remain above pre‑downturn levels.”

Q&A Highlights

Breadth and pace of recovery: All top‑10 carriers increased spend into Q1; one major carrier leaned in aggressively; recovery faster than expected and front‑loaded in H1 .
Seasonality and H2 trajectory: H2 sequential pattern (Q2→Q3) may not hold given remaining regulatory approvals in large states; some openings may slip to 2025 .
Pricing/ad environment: Pricing rose meaningfully QoQ; broader channels (display/social) reactivated; VMM% guided low‑30s for the year as ad costs rise and enterprise mix increases .
Technology and VMM: New ML‑powered bidding enables granular, real‑time profit‑maximizing bids; structural VMM % uplift expected over time despite near‑term channel testing .
Agent trends: Targeted return of captive subsidies; strategy to expand independent agent base and deepen product offering to grow spend and stickiness .

Estimates Context

S&P Global (Capital IQ) consensus estimates for Q1 2024 and Q2 2024 were unavailable due to data access limits during retrieval. As a result, we cannot provide definitive beat/miss comparisons vs Street consensus for revenue, EPS, or EBITDA at this time.

Key Takeaways for Investors

Q1 inflection with broad‑based auto recovery: strong sequential rebound across auto and agent channels, record profitability and cash generation—supported by carrier budget reactivation and pricing strength .
Front‑loaded 2024 setup: Q2 guide implies auto near Q1’23 peak levels; expect atypical seasonality with limited Q2→Q3 sequential growth given large‑state regulatory timing—monitor rate approvals/state reopenings .
Margin narrative: VMM % normalizing into low‑30s as ad costs rise and enterprise mix expands, but ML bidding platform drives structural efficiency; adjusted EBITDA margin remained 8.3% in Q1 and is expected to stay above pre‑downturn levels through 2024 .
Home & renters durable strength: record home revenue and improving underwriting point to continued growth—provides diversification while auto normalizes .
Balance sheet and cash: $48.6M cash, $10.4M operating cash flow in Q1, consistent cash‑flow positivity expected—supports targeted investments (AI/ML, agent products) and selective M&A optionality .
Trading implications: near‑term upside tied to sustained auto spend, broader carrier re‑entry, and pricing resilience; watch for Q2 execution against guidance and signals on large‑state rate adequacy/regulatory timing for H2 .
Medium‑term thesis: asset‑light marketplace with proprietary data and ML bidding should leverage secular digitization in P&C distribution; as recovery broadens, revenue and VMM growth coupled with disciplined OpEx can expand EBITDA and cash generation .

Appendix: Non‑GAAP Adjustments

Adjusted EBITDA excludes stock‑based compensation, depreciation and amortization, restructuring/other charges, acquisition‑related costs, interest income, and income taxes; reconciliation shows Q1 2024 adjusted EBITDA at $7.588M vs net income $1.907M .

Additional Notes

Prior two quarters’ context: Q3’23 revenue $55.0M, VMM $19.4M, adj. EBITDA -$1.9M (VMM% 35.2%); Q4’23 revenue $55.7M, VMM $20.7M (VMM% 37.1%), adj. EBITDA -$0.886M; cash improved into Q1’24 .
EverQuote exited the health vertical in Q2’23; Q1’23 health revenue was $8.7M, contributing to YoY revenue decline in Q1’24 .
Management tone: cautiously optimistic, emphasizing disciplined investments and efficiency while positioning for multi‑year recovery and growth .

EverQuote, Inc. (EVER)·Q1 2024 Earnings Summary