10-Q 1 ever-20230930.htm 10-Q 10-Q
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Table of Contents

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2023

OR

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from to .

Commission File Number: 001-38549

EverQuote, Inc.

(Exact name of registrant as specified in its charter)

Delaware

26-3101161

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer
Identification No.)

 

 

210 Broadway

Cambridge, Massachusetts

02139

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (855) 522-3444

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange

  on which registered

Class A Common Stock, $0.001 Par
Value Per Share

EVER

The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

Smaller reporting company

 

 

 

 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

As of September 30, 2023, the registrant had 28,107,681 shares of Class A common stock, $0.001 par value per share, issued and outstanding and 5,604,278 shares of Class B common stock, $0.001 par value per share, issued and outstanding.

 

 

 


Table of Contents

 

Table of Contents

Page

PART I.

FINANCIAL INFORMATION

5

Item 1.

Condensed Consolidated Financial Statements (Unaudited)

5

Condensed Consolidated Balance Sheets

5

Condensed Consolidated Statements of Operations and Comprehensive Loss

6

Condensed Consolidated Statements of Stockholders’ Equity

7

Condensed Consolidated Statements of Cash Flows

9

Notes to Unaudited Condensed Consolidated Financial Statements

10

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

21

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

33

Item 4.

Controls and Procedures

34

PART II.

OTHER INFORMATION

35

Item 1.

Legal Proceedings

35

Item 1A.

Risk Factors

35

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

37

Item 5.

Other Information

37

Item 6.

Exhibits

39

Signatures

40

 

2


Table of Contents

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and financial position, business strategy and plans, and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties, and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “may,” “should,” “expects,” “might,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “seek,” “would” or “continue,” or the negative of these terms or other similar expressions. The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition liquidity and results of operations. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of risks, uncertainties and assumptions described in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2022, in our subsequent periodic filings with the Securities and Exchange Commission and elsewhere in this Quarterly Report on Form 10-Q, particularly in Item 1A. Risk Factors. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. While we may elect to update these forward-looking statements at some point in the future, whether as a result of any new information, future events, or otherwise, we have no current intention of doing so except to the extent required by applicable law.

Some of the key factors that could cause actual results to differ include:

our future financial performance, including our expectations regarding our revenue, cost of revenue, variable marketing margin, operating expenses, cash flows and ability to achieve, and maintain, future profitability;
our ability to attract and retain consumers and insurance providers using our marketplace;
our dependence on our relationships with insurance providers with no long-term contracts;
our reliance on a small number of insurance providers for a significant portion of our revenue;
our dependence on revenue from automotive insurance providers for a significant portion of our revenue and those automotive insurance providers' exposure to risks related to the automotive insurance industry;
our ability to attract consumers searching for insurance, including through search engines, display advertising, email and social media;
our ability to develop new and enhanced products and services to attract and retain consumers and insurance providers, and our ability to successfully monetize them;
our anticipated growth and growth strategies and our ability to effectively manage that growth;
our ability to maintain and build our brand;
our ability to properly collect, process, store, share, disclose and use consumer information and other data;
our reliance on our third-party service providers;
the impact of competition in our industry and innovation by our competitors;
our ability to hire and retain necessary qualified employees to expand our operations;
the impact of our recent restructuring and anticipated costs savings and operational efficiencies;
our increased reliance on acquiring quote requests from third-party sources;
our ability to stay abreast of and comply with new or modified laws and regulations that currently apply or become applicable to our business;
failure to maintain an effective system of internal controls necessary to accurately report our financial results and prevent fraud; and

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the future trading prices of our Class A common stock.

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PART I—FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited)

EVERQUOTE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and per share amounts)

 

 

 

 

 

 

 

 

 

September 30, 2023

 

 

December 31, 2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

39,049

 

 

$

30,835

 

Accounts receivable, net

 

 

22,151

 

 

 

29,604

 

Commissions receivable, current portion

 

 

4,820

 

 

 

13,530

 

Prepaid expenses and other current assets

 

 

4,078

 

 

 

7,005

 

Total current assets

 

 

70,098

 

 

 

80,974

 

Property and equipment, net

 

 

5,625

 

 

 

6,460

 

Goodwill

 

 

21,501

 

 

 

21,501

 

Acquired intangible assets, net

 

 

5,516

 

 

 

7,955

 

Operating lease right-of-use assets

 

 

2,108

 

 

 

5,769

 

Commissions receivable, non-current portion

 

 

8,724

 

 

 

33,410

 

Other assets

 

 

414

 

 

 

450

 

Total assets

 

$

113,986

 

 

$

156,519

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

20,627

 

 

$

30,680

 

Accrued expenses and other current liabilities

 

 

6,769

 

 

 

9,924

 

Deferred revenue

 

 

1,901

 

 

 

1,867

 

Operating lease liabilities

 

 

2,698

 

 

 

2,936

 

Total current liabilities

 

 

31,995

 

 

 

45,407

 

Operating lease liabilities, net of current portion

 

 

120

 

 

 

3,501

 

Other long-term liabilities

 

 

 

 

 

125

 

Total liabilities

 

 

32,115

 

 

 

49,033

 

Commitments and contingencies (Note 8)

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Preferred stock, $0.001 par value; 10,000,000 shares authorized;
    
no shares issued and outstanding

 

 

 

 

 

 

Class A common stock, $0.001 par value; 220,000,000 shares authorized;
   
28,107,681 and 26,447,880 shares issued and outstanding
    at September 30, 2023 and December 31, 2022, respectively

 

 

28

 

 

 

26

 

Class B common stock, $0.001 par value; 30,000,000 shares authorized;
  
5,604,278 and 6,139,774 shares issued and outstanding at
   September 30, 2023 and December 31, 2022, respectively

 

 

6

 

 

 

6

 

Additional paid-in capital

 

 

288,843

 

 

 

269,521

 

Accumulated other comprehensive loss

 

 

(6

)

 

 

(6

)

Accumulated deficit

 

 

(207,000

)

 

 

(162,061

)

Total stockholders' equity

 

 

81,871

 

 

 

107,486

 

Total liabilities and stockholders' equity

 

$

113,986

 

 

$

156,519

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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EVERQUOTE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited)

(In thousands, except per share amounts)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenue

 

$

55,011

 

 

$

103,223

 

 

$

232,216

 

 

$

315,819

 

Cost and operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

 

 

6,150

 

 

 

5,877

 

 

 

17,467

 

 

 

17,920

 

Sales and marketing

 

 

46,505

 

 

 

89,098

 

 

 

195,537

 

 

 

273,102

 

Research and development

 

 

6,270

 

 

 

7,832

 

 

 

21,647

 

 

 

24,273

 

General and administrative

 

 

5,741

 

 

 

7,102

 

 

 

19,339

 

 

 

21,400

 

Restructuring and other charges

 

 

19,757

 

 

 

 

 

 

23,589

 

 

 

 

Acquisition-related costs

 

 

 

 

 

(96

)

 

 

(150

)

 

 

(4,767

)

Total cost and operating expenses

 

 

84,423

 

 

 

109,813

 

 

 

277,429

 

 

 

331,928

 

Loss from operations

 

 

(29,412

)

 

 

(6,590

)

 

 

(45,213

)

 

 

(16,109

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

411

 

 

 

113

 

 

 

869

 

 

 

158

 

Other income, net

 

 

20

 

 

 

26

 

 

 

5

 

 

 

29

 

Total other income, net

 

 

431

 

 

 

139

 

 

 

874

 

 

 

187

 

Loss before income taxes

 

 

(28,981

)

 

 

(6,451

)

 

 

(44,339

)

 

 

(15,922

)

Income tax expense

 

 

(236

)

 

 

 

 

 

(600

)

 

 

 

Net loss

 

$

(29,217

)

 

$

(6,451

)

 

$

(44,939

)

 

$

(15,922

)

Net loss per share, basic and diluted

 

$

(0.87

)

 

$

(0.20

)

 

$

(1.36

)

 

$

(0.51

)

Weighted average common shares outstanding,
   basic and diluted

 

 

33,549

 

 

 

32,008

 

 

 

33,146

 

 

 

31,357

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(29,217

)

 

$

(6,451

)

 

$

(44,939

)

 

$

(15,922

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

(27

)

 

 

(32

)

 

 

 

 

 

(51

)

Comprehensive loss

 

$

(29,244

)

 

$

(6,483

)

 

$

(44,939

)

 

$

(15,973

)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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EVERQUOTE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(In thousands, except share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Class A

 

 

Class B

 

 

Additional

 

 

Other

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balances at December 31, 2022

 

 

26,447,880

 

 

$

26

 

 

 

6,139,774

 

 

$

6

 

 

$

269,521

 

 

$

(6

)

 

$

(162,061

)

 

$

107,486

 

Issuance of common stock upon
   exercise of stock options

 

 

45,163

 

 

 

 

 

 

 

 

 

 

 

 

287

 

 

 

 

 

 

 

 

 

287

 

Net issuance of common stock upon
   vesting of restricted stock units

 

 

327,943

 

 

 

1

 

 

 

 

 

 

 

 

 

(131

)

 

 

 

 

 

 

 

 

(130

)

Transfer of Class B common stock
   to Class A common stock

 

 

535,496

 

 

 

 

 

 

(535,496

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,509

 

 

 

 

 

 

 

 

 

6,509

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13

 

 

 

 

 

 

13

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,529

)

 

 

(2,529

)

Balances at March 31, 2023

 

 

27,356,482

 

 

 

27

 

 

 

5,604,278

 

 

 

6

 

 

 

276,186

 

 

 

7

 

 

 

(164,590

)

 

 

111,636

 

Issuance of common stock upon
   exercise of stock options

 

 

8,500

 

 

 

 

 

 

 

 

 

 

 

 

53

 

 

 

 

 

 

 

 

 

53

 

Net issuance of common stock upon
   vesting of restricted stock units

 

 

397,028

 

 

 

1

 

 

 

 

 

 

 

 

 

(103

)

 

 

 

 

 

 

 

 

(102

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,130

 

 

 

 

 

 

 

 

 

7,130

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14

 

 

 

 

 

 

14

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(13,193

)

 

 

(13,193

)

Balances at June 30, 2023

 

 

27,762,010

 

 

 

28

 

 

 

5,604,278

 

 

 

6

 

 

 

283,266

 

 

 

21

 

 

 

(177,783

)

 

 

105,538

 

Net issuance of common stock upon
   vesting of restricted stock units

 

 

345,671

 

 

 

 

 

 

 

 

 

 

 

 

(67

)

 

 

 

 

 

 

 

 

(67

)

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,644

 

 

 

 

 

 

 

 

 

5,644

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(27

)

 

 

 

 

 

(27

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(29,217

)

 

 

(29,217

)

Balances at September 30, 2023

 

 

28,107,681

 

 

$

28

 

 

 

5,604,278

 

 

$

6

 

 

$

288,843

 

 

$

(6

)

 

$

(207,000

)

 

$

81,871

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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EVERQUOTE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

(In thousands, except share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

Class A

 

 

Class B

 

 

Additional

 

 

Other

 

 

 

 

 

Total

 

 

 

Common Stock

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Stockholders'

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income (Loss)

 

 

Deficit

 

 

Equity

 

Balances at December 31, 2021

 

 

23,544,995

 

 

$

24

 

 

 

6,407,678

 

 

$

6

 

 

$

222,730

 

 

$

10

 

 

$

(137,645

)

 

$

85,125

 

Private placement of common stock

 

 

1,004,016

 

 

 

1

 

 

 

 

 

 

 

 

 

14,999

 

 

 

 

 

 

 

 

 

15,000

 

Issuance of common stock upon
   exercise of stock options

 

 

92,975

 

 

 

 

 

 

 

 

 

 

 

 

558

 

 

 

 

 

 

 

 

 

558

 

Vesting of restricted stock units

 

 

307,953

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,464

 

 

 

 

 

 

 

 

 

7,464

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10

 

 

 

 

 

 

10

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(5,715

)

 

 

(5,715

)

Balances at March 31, 2022

 

 

24,949,939

 

 

 

25

 

 

 

6,407,678

 

 

 

6

 

 

 

245,751

 

 

 

20

 

 

 

(143,360

)

 

 

102,442

 

Issuance of common stock upon
   exercise of stock options

 

 

6,602

 

 

 

1

 

 

 

 

 

 

 

 

 

49

 

 

 

 

 

 

 

 

 

50

 

Net issuance of common stock upon
   vesting of restricted stock units

 

 

342,028

 

 

 

 

 

 

 

 

 

 

 

 

(51

)

 

 

 

 

 

 

 

 

(51

)

Transfer of Class B common stock to
   Class A common stock

 

 

237,904

 

 

 

 

 

 

(237,904

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,596

 

 

 

 

 

 

 

 

 

7,596

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(29

)

 

 

 

 

 

(29

)

Net loss