Good afternoon. My name is Christine, and I will be your conference operator today. At this time, I would like to welcome everyone to the EverQuote First Quarter 2019 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Allise Furlani of The Blueshirt Group, you may begin your conference.

Thank you. Good afternoon, and welcome to EverQuote’s first quarter 2019 earnings call. We will be discussing the results announced in our press release issued today after the market close. With me on the call is Seth Birnbaum, EverQuote’s Chief Executive Officer and Co-Founder; 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 second quarter and full year 2019, our growth strategy and our plans to execute on our growth strategy, the growth levers we expect to drive our business, our ability to maintain existing and acquire new customers, our interest or ability to acquire other companies, our planned expansion into international markets and other statements regarding our plans and prospects. Forward-looking statements may be identified with words and phrases such as we expect, we believe, we intend, we anticipate, we 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 not promises or guarantees of future performance and are subject to a variety of risks and uncertainties that could cause our actual results to differ materially from our expectations. For a discussion of material risks and other important factors that could affect our actual results, please refer to those contained under the heading Risk Factors in our most recent Annual Report on Form 10-K, which is on file with the Securities and Exchange Commission and available on the Investor Relations section of our website at investors.everquote.com and on the SEC’s website at sec.gov. Finally, during the course of today’s call, we will refer to certain non-GAAP financial measures, which we believe are helpful to investors. A reconciliation of GAAP to non-GAAP measures was included in our press release we issued after the market close today, which is available on our Investor Relations section of our website at investors.everquote.com. With that, I will turn the call over to Seth.

Thank you, Allise. Good afternoon, everyone, and thank you for joining us today to discuss our first quarter 2019 results. Before we get started, let me review our call agenda. I will begin by discussing our view on our market and Q1 results. Then I will turn the call over to John to speak to our financials and guidance for 2019. Finally, I will wrap with progress against our growth levers and key initiatives. EverQuote continues to grow and thrive capitalizing on the secular shift of insurance online. During the first quarter, revenue increased 28% year-over-year with excellent growth across verticals. We saw strong consumer demand growth in Q1 across traffic sources and teams as well as a continued increase in monetization from insurance providers in our marketplace consistent with the trends identified in our previous call. We grew our insurance shopping consumer volume, expanded our insurance provider network and continue to scale our newest verticals, while deepening consumer provider engagement with additional partial provider partner integrations. Growth in consumer demand and insurance providers spend in our marketplace was broad based in the quarter. We’ve exceeded expectations while simultaneously making investments in improving consumer experience and the performance for provider partners. We’ve seen ongoing strength in the P&C Insurance market in the U.S. with insurance providers exhibiting strong demand for growth with us and demonstrating a continued appetite for online growth and technology investment. This past year continued to be a strong year for insurance technology investments. We’ve used these trends as indicative of continued growth opportunity for partners spent with EverQuote both in P&C and other insurance verticals. It’s an exciting time to be in insurance business and we’re confident we’re well positioned as a leader in the industry’s continued shift online. We’re delighted to play a growing role in empowering consumers to better protect life’s most important assets, their family, property and future. We continue to grow the investment in our business, but the goal to be the largest online source of insurance policies in the world by using data and technology to make insurance decisions simpler and coverage more affordable. We enhanced our management team and have added some experience leaders from top Internet marketplace companies since our last call. We were pleased to announce our recent addition of Anand Iyer at eBay in Performance Marketing; Matt Mamet out of TripAdvisor to head our consumer experience, and Paul Deninger to our Board, where his deep operating experience along with extensive knowledge of the technology market will help support EverQuote’s corporate strategy and development as we begin to evaluate potential acquisition opportunities to grow our business. As we look ahead to the balance of 2019, I’m excited by the opportunities to drive more growth as we continue to build our business, while expanding and evolving our consumer and provider offerings. We are executing well against our major growth levers and key initiatives, which I’ll cover later in the call. Now I’ll turn the call over to John.

Thank you, Seth, and good afternoon, everyone. I’ll start by discussing our financial results for the first quarter of 2019 and then provide second quarter 2019 guidance and update our full year 2019 guidance. We are very pleased to report first quarter revenue of $52.2 million, up 28% year-over-year and higher than our revenue guidance provided last quarter. With revenue of $45 million for the quarter growth in our auto insurance vertical accelerated to 25% year-over-year, while revenue from our home and life insurance vertical increased 50% year-over-year to $7.2 million for the quarter. Our revenue is coming increasingly from our direct relationships with insurance providers. In the first quarter, direct revenue was 93% of total revenue and increased from 86% in the prior year’s quarter. Our revenue growth in Q1 was broad based with 7 out of our top 10 carriers increasing their spend on our platform in Q1 as compared to Q1 of last year. We also continue to expand our data integrations with our insurance providers to improve the ease of getting insurance quotes for our consumers. This past quarter, we completed six new and expanded 14 partial integrations with our insurance providers with a new partial integration recently completed with a large carrier, we are now pleased that all of our top 10 providers have achieved at least a partial integration with us. We are delighted with this progress and expect more to come through 2019 and beyond. Our strong year-over-year revenue growth in the quarter was driven by accelerated growth and quote request volume as well as a healthy increase in revenue per quote request. Compared to the first quarter of 2018, the number of quote requests increased 19% to $4.1 million, while revenue per quote requests increased 8% to $12.70. As a reminder, while…

Thanks, John. Let me wrap up by highlighting progress with our key growth levers and initiatives. As I have outlined before, we continue to drive our business along our four key levers for growth. Attracting more consumers to our marketplace, increasing provider coverage, expanding provider and consumer engagement, and launching new verticals. First, to attract more consumers to our marketplace, we continue to invest in our marketing teams and expand marketing channels and verticals to reach more consumers. In our existing channels, we continue to leverage the vast data from our marketplace to drive optimization and automation in consumer acquisition. We regularly rollout proprietary new ad tech, including machine learning-based services, which we expect to drive further efficiency in our ad spend. Most notably, we saw a 19% increase in consumer quote request volume for Q1 year-on-year, further demonstrating leverage in our consumer traffic and advertising operations. The non-branded DRTV test that we mentioned on our prior call has gone well. And we’re confident that we will be able to leverage direct response and targeted TV to grow our consumer audience efficiently in the future. Our new inbound call service to help provide quotes for consumers who prefer to contact us by phone rather than online, while still modest, grew significantly in Q1. We are confident that this program gives us significant upside in consumer volume in 2019 and beyond. We are preparing to launch three new verticals: renters, health and commercial insurance. We’re excited about the addition of health as consumers increasingly start online when seeking information and access to health insurance. We expect renters’ insurance and health insurance verticals to be live before the end of June with plans to launch commercial insurance before the end of the year. We have sequenced health into Q2 so that we…

[Operator Instructions] Your first question comes from the line of Doug Anmuth from JPMorgan. Your line is open.

Thanks for taking the questions. I just have a couple. First, I think you kind of went into the quarter thinking that you had an outlook on quote requests and revenue per quote request, maybe just you can help us understand more kind of what drove the upside there in terms of volume? And then second, you mentioned 7 of the top 10 providers grew year-over-year, was just curious if you could talk about the other three kind of what the initiatives are there? And how you can get them going in the right direction. And then just lastly, anything on health, I think that’s kind of newer to The Street, just curious how you think about that business structurally relative to autos and then also home and life? Thanks.

Doug, you muffled out a little bit on the last question. But I am going to let Wag start with the first question. And I will come to the second and then just double check to make sure we understood your third question.

So Doug, we did talk about last quarter that we thought we’d see more of a balanced growth between monetization and traffic growth. I think we were pleasantly surprised by the progress we were able to make in traffic. We delivered revenue per quote request increase of about 8%. But it was the – really the quote request volume increase of 19% that drove the kind of the beat in revenue. And so I think we saw strength later in the quarter on that. I think going forward, we now feel like there’s an opportunity in traffic. I think generally you will expect that at least in the near term, we see more opportunity in driving quote request volume, in the long term will drive both. I think with regard to the 7 out of 10 providers that increase their spend on our platform, really the other three, it’s really just a function of the auction dynamics with our larger carriers, sometimes carriers even when they are spending at a healthy level may just get bid out based on other carriers that have become more aggressive in the auction. So nothing with those three carriers that is systematic, it’s just simply other carriers getting aggressive in a rising monetization environment.

Competitive auction dynamics, Doug.

And then if you can hear me any better – the last one was just on health how you think about it structurally relative to autos and then also home and life?

Again, from a technology and platform perspective including, once again, distribution, especially, on the agent and broker side of the marketplace, on the supply side with insurance providers, there is a lot of healthy overlap and leverage in the platform in going into health. So we feel that there’s a lot of similarities, the continuing trends in terms of consumer demand for health information and access to health insurance continue unabated. And in analyzing these insurance verticals continuously, it became clear to us, we believe, we’re confident there’s a big opportunity in health for us, and for EverQuote and the platform is very leverageable.

Okay. Thank you, guys.

Your next question comes from the line of Michael Graham from Canaccord. Your line is open.

Okay. Thanks very much. Just two questions, please. One on autos, in general, just sort of the volumes that you saw in the quarter. And autos relative to some of your other verticals, can you just maybe go into a little more depth about some of the puts and takes there? And then just it’s great that you’re raising guidance and congrats on the results. I’m just wondering, it looks like you’re increasing the revenue guidance for the year more than the VMM guidance. And so I’m just wondering if you can talk a little bit about some of the decision-making behind that?

You want to go in second, first and I’ll take the first part.

Sure. So happy to give a little bit of color on our thoughts around the guidance. We’re very pleased with the performance in the Q, and that we are able to reflect that in the full year guide. Like the quarter itself, the guidance increase was most reflected within the revenue line item. And that really just reflects what we saw in Q1 as well as the guide we gave for Q2. We did increase both VMD for the year or VMM for the year as well as adjusted EBITDA. So we think of it as kind of a blended increase in guidance, reflecting both Q1 as well as the very positive Q2 guide that we gave. But right now, we have seen a lot of upside in Q1 in revenue. And we’ve reflected that in the full year guidance as well. Kind of giving you that high confidence plan that gives you the same visibility that we have based on what we’re seeing in the business right now.

With regards to auto, again, for the consumer demand side of the marketplace, Michael, we saw really broad-based growth across both traffic, teams in traffic sources and even autos versus new verticals. We did see plenty of success in the autos that obviously helped with that growth. But it was truly broad-based. And the traffic teams deserve a huge kudos, really stepping up execution. They’ve really done an outstanding job.

Great. Thank you, guys.

Thanks, Michael.

Your next question comes from the line of Mayank Tandon from Needham & Company. Your line is open.

Thank you. Good evening. Congrats, Seth and John for the results. Quick question on the market. So one of your larger peers also called out insurance as being a strong growth engine. I’m just wondering how much of this is just the market adoption of online increasing versus maybe a share shift? And it’d be great just to hear in terms of how you’re doing versus some of your larger peers out there on the insurance side?

Sure. We’ve said it before and, again, we are very confident that it’s just an absolutely huge TAM, that secular shift of that on the – offline distribution spend in insurance, literally billions of dollars shifting online is what drives the overall market and the market shift. If you just focus in on the ad spent, figure roughly $9 billion per year of insurance ad spent, which is, let’s say, $2 billion per year today, shifting at 16% per year, EverQuote grew at 28%, which is a 50% faster than even that market share metric. So we’re really confident we’re growing faster than the market shift. But there’s plenty of space. And just like in travel, I suspect we will see multiple big winners in the insurance space.

Got it. That’s helpful. And then John, I think you mentioned about visibility. I am just curious in terms of visibility into the model for the next quarter and then more importantly for the rest of the year. Has that increased as you have tightened integrations with your providers? How does visibility work in your business? And how does that improve over time? Is it a function of the stickier client relationships? Or is it a function of the integrations or a combination of both? If you can just help us out in terms of understanding the predictability of the model going forward.

Certainly, it is a function of the direct nature of the revenue. So as we continue to drive more direct revenue, that’s ultimately where we get the most insight based on our sales teams in terms of what the carriers, what our agents are budgeting going forward. So that’s probably, our visibility increases as our business goes more direct. That’s a trend we have seen in the last year and a half that gives us fairly good visibility into revenue. Certainly, the nature of the business, the fact that in any given quarter, we are going into a quarter knowing where the vast majority of our revenue is coming from because it’s coming from our existing customers. At this point a lot of this business is about performance and building the relationships we have with the large carriers as well as our network of agents. So our revenue at this point has almost a recurring nature to it due to the fact that most of our revenue in any given quarter is coming from relationships that are already on our platform, and we get that visibility through our sales and distribution teams.

Okay. Thank you.

Your next question comes from the line of Ron Josey from JMP Securities. Your line is open.

Great. Thanks for taking the question here. I just wanted to ask a little more about guidance, John. Historically, I think you have said 1Q sort of sets the tone for the full year, and you’re seeing revenue growth to accelerate on better quote requests. Just can you talk about maybe what the contribution is, if any, from newer verticals in guidance? And while you’re talking about these newer verticals as renters, commercial and health. Just what’s the approach here. I think you said commercial was delayed until the fall, and so any insight there would be great. So that’s sort of what 1Q guided and another just quick one. Any insight on how QA is accelerating the quarter? I think you said you saw strength later in the quarter and that follows I think similar commentary around 4Q. So that 4Q improved, and January, February, improved. So how that trending thus far will be helpful too? Thank you.

Sure. So I will let Seth speak to the verticals, I’ll talk a little bit about the guidance and what we’re seeing. So yes, we did see an improvement over the quarter. It was – I don’t think it was any type of a trend related to Q4, just both quarters strengthened as the quarters went on. In terms of seasonality in the business, Q1 is our big sequential growth quarter. It does kind of set the tone for the year, generally, Q2 is down slightly from Q1. Q3 is generally up slightly and Q4 is generally down slightly. That is the historic, kind of…

Seasonal.

Seasonal pattern. Often, we have opportunities to break that seasonal pattern with growth opportunities. One thing that is not captured within the guidance, we always refer to our guidance as kind of a high confidence guidance that we have good visibility into. One thing that we don’t reflect is the impact of new growth initiatives. Now to the point where we have a basis to be able to forecast those initiatives. So much of what we are talking about in terms of the new verticals, although, we don’t expect them to contribute a lot in 2019 just because of the fact that they are brand new, and we start off small generally. It is generally upside to us because it’s not factored into the guidance.

As far as commercial, we sequenced health for Q2, Ron, to take advantage of the open enrollment in Q4. So we really wanted to get it out the door at some level of scale in Q2. And the plan is to do that in June. So it was less of a delay on commercial than a resequencing. We expect to resource both as we progress, obviously. And we plan to launch commercial prior to the end of the year.

Got it. Thank you.

[Operator Instructions] Your next question comes from the line of Jed Kelly from Oppenheimer. Your line is open.

Great, thanks for taking my question. My first one, Seth, can you just follow-up on your comment on acquisition opportunities. What type of acquisitions would you be looking to acquire? Would it be something in different verticals or something SEM-related, can you just help us there?

The simplest way and the way we think about it internally, Jed, obviously we’re going to be focused on acquisitions that will drive significant, I hate to use the synergy. But yes, that’s the idea, significant shareholder value above what they cost. But for us, the focus is always going to be around our growth levers. So looking at the potential acquisitions around more consumers to our marketplace. So traffic opportunities, increasing provider coverage or connectivity, really deepening that engagement between consumers or providers through acquiring product or product folks, and then finally, obviously, looking at entire verticals. So could we do an acquisition that really fuels incremental growth in either existing verticals but as a vertical or net new verticals done as an acquisition. So those are kind of the broad buckets, that’s identical to our key growth levers. And obviously, again, we’d be looking for ways to increase shareholder value and be really thoughtful about it as we do that.

Okay, helpful. And then just on your VMM margin dynamics, I know you managed the business, the VMM dollars. So can you just discuss some of the puts and takes around the margin profile on your traffic acquisition related to competition? And then just one more, does look like non-marketing OpEx came in higher than what we’re modeling. Can you just expound on that too?

Sure. Seth, you want to take the – because I’m happy to take – well, go ahead.

Sure. So with regards to the – we’ll take the second piece. With regards to the kind of the operating expenses, there is an aspect of the operating expenses that are driven by revenue and by volume. So when you see increases in volume, increases in revenue, positive beats on the top line, there’s an aspect of that, that also drives some of our variable costs within operating. So you see some of that there. In terms of the variable marketing margin, as you point out, we manage the business for variable marketing dollars. We are pleased in the quarter that we are able to still increase variable marketing as a percentage of revenue and what we have talked about kind of over the long term is as we manage for variable marketing dollars, we do expect VMM as a percentage of revenue to increase. We saw that in Q1, we think, and we have also reflected in the guidance that we think we expect to see that for the balance of the year. But again, we will, if we have the opportunity to grow top line and do so with incremental VMD dollars, we will do so. But generally, we expect positive momentum in terms of the operating point as well.

Thank you.

Your next question comes from the line of Ralph Schackart from William Blair. Your line is open.

Good afternoon. Just curious if you can maybe give us a sense of the 7 out of the 10 customers that increased spend year-over-year. Maybe how that compared to previous years? And Seth, I know you talked about an expanding TAM, I’m guessing that’s a portion of why those dollars continue to flow to your platform. But give us a sense of how much, maybe, was expanding TAM versus the platform responding? And perhaps a little bit better this year for those types of customers? Thanks.

Maybe, again, hi Ralph, we’ll rewind the tape – If you just look at sort of TAM expansion assuming, and this is an assumption that it’s roughly 15% of those offline advertising dollars shifting online. In insurance, we grew at 28%. So we over indexed market shift by 50%. So that’s to me, again, the assumption, and my belief is that’s flowing from leverage in the EverQuote platform, the people, the data, the technology, to your, sort of the first part of your question on to carrier or provider bid ups, it was broad- based for us. I think it was in fact and again, we should check the tape, it was very similar to last quarter in terms of the number of providers that bid up. Remembering that we also added a slug of agents to the marketplace. So those provider bids tend to be, they are not all carriers, but tend to be carriers. We also added a good number of agents to the platform. So when we say it’s broad-based, it’s similar certainly to Q4. But it continued of the trends we talked about over the past two calls of strengthening monetization, strengthening demand from the insurance providers, obviously we think that’s very encouraging, Ralph.

Great. Thanks, Seth.

There are no further questions at this time. Seth, I turn the call back over to you.

Thank you. Thank you everybody for joining us. And look forward to seeing you all in the future as we progress and on the road. Thanks a lot.

This concludes today’s conference call. You may now disconnect.