# EverQuote, Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [EverQuote, Inc.](/companies/ever.md) (CIK 1640428)
- Form: 10-Q
- Filed: 2025-05-07
- Accepted by EDGAR: May 7, 2025, 17:00 ET
- Period: 2025-03-31
- Accession: 0000950170-25-065862
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1640428/000095017025065862/ever-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1640428/000095017025065862/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $166.6m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-31 | $5.4m | us-gaap:CostOfRevenue |
| Research and development | 3 months, 2025-01-01 to 2025-03-31 | $7.5m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | $8.0m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | $684.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | $8.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.21 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.22 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 37,667 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | $23.3m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-01-01 to 2025-03-31 | $1.1m | us-gaap:PaymentsToAcquireProductiveAssets |
| Cash and equivalents | at 2025-03-31 | $125.0m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $194.3m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $232.1m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $80.4m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $82.6m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-03-31 | $149.5m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 36,805 characters.

*The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our consolidated financial statements and the related notes and other financial information included in our Annual Report on Form 10-K for the year ended December 31, 2024, on file with the Securities and Exchange Commission. The following discussion and analysis contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below, elsewhere in this Quarterly Report on Form 10-Q, particularly in Item 1A. Risk Factors, and in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024.*

We operate a leading online marketplace for insurance shopping, connecting consumers with insurance provider customers, which includes both carriers and agents. Our vision is to be the leading growth partner for P&C insurance providers. Our results-driven marketplace, powered by our proprietary data and technology platform, is improving the way insurance providers attract and connect with consumers shopping for insurance.

We operate a marketplace to connect insurance providers to a large volume of high-intent, pre-validated consumer referrals that match the insurers’ specific underwriting and profitability requirements. The transparency of our marketplace, as well as the campaign management tools we offer, are designed to make it easy for insurance carriers and third-party agents to evaluate the performance of their marketing spend on our platform and manage their own return on investment. We present consumers with a single starting point for a comprehensive insurance shopping experience where consumers can engage with insurance carriers through multiple channels based on their preferences. Our marketplace enables consumers to choose to visit an insurance provider’s website to purchase a policy or engage with a carrier or agent by phone or submit their data to insurance providers to receive quotes. Our services are free for consumers, and we derive our revenue principally from consumer inquires sold as referrals to insurance providers.

In the three months ended March 31, 2025 and 2024, our total revenue was $166.6 million and $91.1 million, respectively, representing a year-over-year increase of 83.0%. We had net income of $8.0 million and $1.9 million for the three months ended March 31, 2025 and 2024, respectively, and had $22.5 million and $7.6 million in adjusted EBITDA for the three months ended March 31, 2025 and 2024, respectively. See the section titled “—Non-GAAP Financial Measure” for information regarding our use of adjusted EBITDA and its reconciliation to net income (loss) determined in accordance with generally accepted accounting principles in the United States, or GAAP.

### Factors Affecting Our Performance

We believe that our performance and future growth depend on a number of factors that present opportunities for us but also pose risks and challenges, including those discussed below, elsewhere in this Quarterly Report on Form 10-Q, particularly in Item 1A. Risk Factors, and in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024.

### Auto insurance industry risk

For the three months ended March 31, 2025 and 2024, we derived 92% and 85%, respectively, of our revenue from auto insurance providers and our financial results depend on the performance of the auto insurance industry. Furthermore, total revenue from our largest auto insurance carrier customers was 43% and 13% of our revenue for the three months ended March 31, 2025 and 30% of our revenue for the three months ended March 31, 2024. In 2023 and 2022, the auto insurance industry experienced deteriorated underwriting performance due to a rise in claims, inflation, and inadequate policy premiums. This deteriorated underwriting performance caused our insurance carrier customers to reduce spending on new customer acquisition, which had a negative impact on the pricing and demand for consumer referrals in our marketplace throughout 2023. The state of the auto insurance market remains volatile, and while we have seen improvements in spending patterns, including from our two largest carrier customers, not all of our carrier customers have increased their spend in a proportional or significant manner, and a full recovery could be prolonged by further cost inflation, including the impact of potential increased tariffs; increased claim severity and frequency; or insufficient policy premium increases.

### Expanding consumer traffic

Our success depends in part on the growth of our consumer traffic. We have historically increased consumer traffic to our marketplace by expanding existing advertising channels and adding new channels such as by engaging with consumers through our verified partner network. Over the long term, we plan to increase consumer traffic by leveraging the features and growing the data assets of our platform. While we plan to grow consumer traffic, we have the ability to decrease advertising spend when the revenue associated with such consumer traffic does not result in incremental profit to our business or in response to lower demand for consumer referrals. Further, our profitability will be impacted by our ability to acquire quote requests in significant volume, at prices that are attractive, and that represent high-intent shoppers for which insurance providers will purchase referrals.

### Increasing the number of insurance providers and their respective spend in our marketplace

Our success also depends on our ability to retain and grow our insurance provider network. Historically, we have generally expanded both the number of insurance providers and the spend per provider on our platform. However, we have also experienced periods of decreasing carrier spend in the automotive insurance vertical as described above.

### Regulation

Our revenue and earnings may fluctuate from time to time as a result of changes to federal, state, and industry-based laws and regulations, or changes to standards concerning the enforcement thereof. Our business could be affected directly because we operate websites, conduct telephonic and email marketing, and collect, store, share, and use consumer information and other data. Our business also could be affected indirectly if our customers were to adjust their operations as a result of regulatory changes and enforcement activity. For example, on January 26, 2024, the FCC published regulations which, among other things, would have amended the consent requirements of the TCPA by requiring “one-to-one consent” for outbound telemarketing calls or texts made using an automatic telephone dialing system or pre-recorded or artificial voice messages to wireless or residential numbers. On January 24, 2025, the United States Court of Appeals for the Eleventh Circuit vacated these amended regulations, which were scheduled to go into effect on January 27, 2025. It remains unclear whether or how government agencies or legislatures will revisit telephone call consent issues.

In addition, a number of states have enacted (and others are considering) broad data privacy laws that could affect our business. Although it remains unclear how these new privacy laws may be modified or interpreted, their effects could have an impact on our business, and may require us to modify our data use practices and policies and incur compliance-related costs and expenses.

### Key Business Metrics

We regularly review a number of metrics, including GAAP operating results and the key metrics listed below, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections, and make operating and strategic decisions. Some of these metrics are non-financial metrics or are financial metrics that are not defined by GAAP.

### Adjusted EBITDA

We define Adjusted EBITDA as net income (loss), adjusted to exclude: stock-based compensation expense, depreciation and amortization expense, legal settlement expense, interest income and income taxes. Adjusted EBITDA is a non-GAAP financial measure that we present in this Quarterly Report on Form 10-Q to supplement the financial information we present on a GAAP basis. We monitor and present Adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our operating performance, to establish budgets and to develop operational goals for managing our business. Adjusted EBITDA should not be considered in isolation from, or as an alternative to, measures prepared in accordance with GAAP. Adjusted EBITDA should be considered together with other operating and financial performance measures presented in accordance with GAAP. Also, Adjusted EBITDA may not necessarily be comparable to similarly titled measures presented by other companies. For further explanation of the uses and limitations of this measure and a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, net income (loss), please see “—Non-GAAP Financial Measure”.

### Variable Marketing Dollars and Margin

We define variable marketing dollars, or VMD, as revenue, as reported in our consolidated statements of operations and comprehensive income, less advertising costs (a component of sales and marketing expense, as reported in our consolidated statements of operations and comprehensive income). We define variable marketing margin, or VMM, as VMD divided by revenue.

We use VMD and VMM to measure the efficiency of individual advertising and consumer acquisition sources and to make trade-off decisions to manage our return on advertising. We do not use VMD or VMM as a measure of profitability.

### Key Components of Our Results of Operations

### Revenue

We generate our revenue primarily from consumer inquiries sold as referrals to insurance provider customers, consisting of carriers and agents, as well as to indirect distributors. To simplify the quoting process for the consumer and improve performance for the provider, we are able to provide consumer-submitted quote request data along with each referral. We recognize revenue from consumer referrals at the time of delivery. We support three secure consumer referral formats:

- Clicks: An online-to-online referral, with a handoff of the consumer to the provider’s website.
- Data: An online-to-offline referral, with quote request data transmitted to the provider for follow-up.
- Calls: An online-to-offline referral for outbound calls and an offline-to-offline referral for inbound calls, with the consumer and provider connected by phone.

We also generate revenue from commissions paid to us by insurance carriers for the sale of policies by our direct to consumer, or DTC, insurance agency, primarily in our automotive insurance vertical. Commission revenue is recognized upon satisfaction of our performance obligation, which we consider to be submission of the policy application to the insurance carrier. We recognize revenue based on our constrained estimate of commission payments we expect to receive over the lifetime of the policies sold, which we refer to as constrained LTVs, of commission payments. Commission revenue was insignificant for the three months ended March 31, 2025 and 2024, and we do not expect it to be a material source of revenue in the future.

For the periods presented, our total revenue consisted of revenue generated within our insurance verticals as follows:

*(in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Automotive | $152,715 | $77,538 |
| Home and renters | 13,904 | 12,689 |
| Other | 13 | 838 |
| Total revenue | $166,632 | $91,065 |

We expect an overall increase in revenue in 2025 as compared to 2024 driven by our automotive and home and renters verticals, as we anticipate increased spending from our carrier partners. We expect revenue from our other insurance verticals to significantly decrease from 2024 to 2025 as a result of our focus on the P&C market.

### Cost and Operating Expenses

Our cost and operating expenses consist of cost of revenue, sales and marketing, research and development, general and administrative expenses, and legal settlement expense.

We allocate certain overhead expenses, such as rent, utilities, office supplies and depreciation and amortization of general office assets, to cost of revenue and operating expense categories based on headcount. As a result, an overhead expense allocation is reflected in cost of revenue, sales and marketing, research and development and general and administrative expenses. Personnel-related costs included in cost of revenue and operating expense categories include wages, fringe benefit costs and stock-based compensation expense.

#### Cost of Revenue

Cost of revenue is comprised primarily of the costs of operating our marketplace and delivering consumer referrals to our customers. These costs consist primarily of technology service costs including hosting, software, data services, and third-party call center costs. In addition, cost of revenue includes depreciation and amortization of our platform technology assets and personnel-related costs.

#### Sales and Marketing

Sales and marketing expense consists primarily of advertising and marketing expenditures as well as personnel-related costs for employees engaged in sales, marketing, data analytics and consumer acquisition functions and amortization of sales and marketing-related intangible assets. Advertising expenditures consist of variable costs that are related to attracting consumers to our marketplace, generating consumer quote requests, including the cost of quote requests we acquire from our verified partner network, and promoting our marketplace to carriers and agents. Advertising costs are expensed as incurred. Marketing costs consist primarily of content and creative development, public relations, memberships, and event costs. We expect our sales and marketing expense will increase as we expect increased carrier spend for referrals, which will impact our advertising expenditures.

#### Research and Development

Research and development expense consists primarily of personnel-related costs for software development and product management. We have focused our research and development efforts on improving ease of use and functionality of our existing marketplace platform and developing new offerings and internal tools. We primarily expense research and development costs. Direct development costs related to software enhancements that add functionality are capitalized and amortized as a component of cost of revenue. We expect that research and development expense will increase modestly in 2025 as compared to 2024, primarily due to personnel-related costs.

#### General and Administrative

General and administrative expense consists of personnel-related costs and related expenses for executive, finance, legal, human resources, technical support and administrative personnel as well as the costs associated with professional fees for external legal, accounting and other consulting services, insurance premiums and payment processing and billing costs. We expect that general and administrative expense will increase in 2025 as compared to 2024, primarily due to personnel-related costs.

#### Legal settlement

Legal settlement includes costs associated with the settlement of our litigation with the former owners of certain entities acquired in 2021 (see Notes 8 and 13 to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q).

### Non-GAAP Financial Measure

To supplement our consolidated financial statements presented in accordance with GAAP and to provide investors with additional information regarding our financial results, we present in this Quarterly Report on Form 10-Q adjusted EBITDA as a non-GAAP financial measure. Adjusted EBITDA is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to similarly titled measures presented by other companies.

*Adjusted EBITDA*. We define adjusted EBITDA as our net income (loss), excluding the impact of stock-based compensation expense, depreciation and amortization expense, legal settlement expense, interest income and income taxes. The most directly comparable GAAP measure to adjusted EBITDA is net income (loss). We monitor and present in this Quarterly Report on Form 10-Q adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our operating performance, to establish budgets and to develop operational goals for managing our business. In particular, we believe that excluding the impact of these items in calculating adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core operating performance.

We use adjusted EBITDA to evaluate our operating performance and trends and make planning decisions. We believe adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude in the calculation of adjusted EBITDA. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects.

Adjusted EBITDA is not prepared in accordance with GAAP and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of adjusted EBITDA rather than net income (loss), which is the most directly comparable financial measure calculated and presented in accordance with GAAP. Some of these limitations are:

- adjusted EBITDA excludes stock-based compensation expense as it has recently been, and will continue to be for the foreseeable future, a significant recurring non-cash expense for our business;
- adjusted EBITDA excludes depreciation and amortization expense and, although this is a non-cash expense, the assets being depreciated and amortized may have to be replaced in the future;
- adjusted EBITDA excludes legal settlement expense that affects cash available to us;
- adjusted EBITDA does not reflect the cash received from interest income on our investments, which affects the cash available to us;
- adjusted EBITDA does not reflect income taxes that affect cash available to us; and
- the expenses and other items that we exclude in our calculation of adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from adjusted EBITDA when they report their operating results.

In addition, other companies may use other measures to evaluate their performance, all of which could reduce the usefulness of adjusted EBITDA as a tool for comparison.

The following table reconciles adjusted EBITDA to net income (loss), the most directly comparable financial measures calculated and presented in accordance with GAAP.

### Reconciliation of Net Income to Adjusted EBITDA:

*(in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Net income | $7,990 | $1,907 |
| Stock-based compensation | 5,420 | 4,518 |
| Depreciation and amortization | 1,221 | 1,263 |
| Legal settlement | 7,900 | — |
| Interest income | (708) | (386) |
| Income tax expense | 684 | 286 |
| Adjusted EBITDA | $22,507 | $7,588 |

### Results of Operations

### Comparison of the Three Months Ended March 31, 2025 and 2024

The following tables set forth our results of operations for the periods shown:

*(in thousands)*

| Statement of Operations Data: | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Revenue(1) | $166,632 | $91,065 |
| Cost and operating expenses(2): |  |  |
| Cost of revenue | 5,380 | 5,041 |
| Sales and marketing | 129,430 | 70,784 |
| Research and development | 7,485 | 6,844 |
| General and administrative | 8,440 | 6,630 |
| Legal settlement | 7,900 | — |
| Total cost and operating expenses | 158,635 | 89,299 |
| Income from operations | 7,997 | 1,766 |
| Other income (expense): |  |  |
| Interest income | 708 | 386 |
| Other income (expense), net | (31) | 41 |
| Total other income, net | 677 | 427 |
| Income before income taxes | 8,674 | 2,193 |
| Income tax expense | (684) | (286) |
| Net income | $7,990 | $1,907 |
| **Other Financial and Operational Data:** |  |  |
| Variable marketing dollars | $46,860 | $30,818 |
| Adjusted EBITDA(3) | $22,507 | $7,588 |

24

(1) Comprised of revenue from the following distribution channels:

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Direct channels | 91% | 80% |
| Indirect channels | 9% | 20% |
|  | 100% | 100% |

(2) Includes stock-based compensation expense as follows:

*(in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Cost of revenue | $9 | $36 |
| Sales and marketing | 1,565 | 1,594 |
| Research and development | 1,370 | 1,312 |
| General and administrative | 2,476 | 1,576 |
|  | $5,420 | $4,518 |

(3) See “—Non-GAAP Financial Measure” for information regarding our use of adjusted EBITDA as a non-GAAP financial measure and a reconciliation of adjusted EBITDA to its comparable GAAP financial measure.

#### Revenue

*(dollars in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| Revenue | $166,632 | $91,065 | $75,567 | 83.0% |

Revenue increased by $75.6 million from $91.1 million for the three months ended March 31, 2024 to $166.6 million for the three months ended March 31, 2025. The increase in revenue was primarily due to an increase of $75.2 million in our automotive vertical, due to an increase in carrier spend for referrals primarily from our two largest customers.

#### Cost of Revenue

*(dollars in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| Cost of revenue | $5,380 | $5,041 | $339 | 6.7% |
| Percentage of revenue | 3.2% | 5.5% |  |  |

Cost of revenue increased by $0.3 million from $5.0 million for the three months ended March 31, 2024 to $5.4 million for the three months ended March 31, 2025. Cost of revenue increased primarily due to an increase in third-party call center costs of $0.3 million due primarily to a net increase in call volume and increased usage of the third-party call center, partially offset by a decrease in personnel-related costs of $0.3 million related primarily to decreased headcount in our call center. Amortization of internal use software increased by $0.2 million.

#### Sales and Marketing

*(dollars in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| Sales and marketing expense | $129,430 | $70,784 | $58,646 | 82.9% |
| Percentage of revenue | 77.7% | 77.7% |  |  |

Sales and marketing expense increased by $58.6 million from $70.8 million for the three months ended March 31, 2024 to $129.4 million for the three months ended March 31, 2025. The increase in sales and marketing expense was primarily due to an increase in advertising costs of $59.6 million due to an increase in carrier spend, partially offset by a decrease in office and occupancy costs due of $0.3 million due primarily to lower rent expense and a decrease in personnel-related costs of $0.2 million.

#### Research and Development

*(dollars in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| Research and development expense | $7,485 | $6,844 | $641 | 9.4% |
| Percentage of revenue | 4.5% | 7.5% |  |  |

Research and development expense increased by $0.6 million from $6.8 million for the three months ended March 31, 2024 to $7.5 million for the three months ended March 31, 2025. The increase in research and development expense was primarily due to an increase in personnel-related costs of $0.4 million due to increased headcount and increased consulting expense of $0.3 million.

#### General and Administrative

*(dollars in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| General and administrative expense | $8,440 | $6,630 | $1,810 | 27.3% |
| Percentage of revenue | 5.1% | 7.3% |  |  |

General and administrative expenses increased by $1.8 million from $6.6 million for the three months ended March 31, 2024 to $8.4 million for the three months ended March 31, 2025. The increase in general and administrative expenses was primarily due to an increase in personnel-related costs of $0.8 million due primarily to increased stock-based compensation. Personnel-related costs included stock-based compensation expense of $2.5 million and $1.6 million for the three months ended March 31, 2025 and 2024, respectively. Legal fees and consulting fees also increased by $0.5 million and $0.4 million, respectively.

#### Legal Settlement

Legal settlement expense for the three months ended March 31, 2025 of $7.9 million consisted of the liability recorded for the settlement of litigation in connection with a prior acquisition (see Notes 8 and 13 to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q).

#### Other Income (Expense)

Interest income increased from $0.4 million in the three months ended March 31, 2024 to $0.7 million in the three months ended March 31, 2025 due to an increase in interest earned on our cash balances. Other income (expense), net was not significant for any periods presented.

#### Income Tax Expense

Our income tax expense consisted primarily of state income taxes as well as federal income taxes for the portion of our taxable income that was not offset by operating loss and tax credit carryforwards. We maintain a valuation allowance on our overall net deferred tax asset as it is deemed more likely than not the net deferred tax asset will not be realized.

#### Variable Marketing Dollars and Margin

*(dollars in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 | Change Amount% |  |
| --- | ---: | ---: | ---: | ---: |
| Revenue | $166,632 | $91,065 | $75,567 | 83.0% |
| Less: total advertising expense (a component of sales and marketing expense) | 119,772 | 60,247 |  |  |
| Variable marketing dollars | $46,860 | $30,818 | $16,042 | 52.1% |
| Variable marketing margin | 28.1% | 33.8% |  |  |

The increase in variable marketing dollars in the three months ended March 31, 2025 was due primarily to increased carrier spend. The decrease in variable marketing margin for the same period was due to competitive pricing for advertising spend and the relative mix of referral types.

### Liquidity and Capital Resources

As of March 31, 2025, our principal sources of liquidity were cash and cash equivalents of $125.0 million and up to $25.0 million of availability under our revolving line of credit pursuant to the 2023 Amended Loan Agreement (defined as the Amended and Restated Loan and Security Agreement, dated as of August 7, 2020 between us and Western Alliance Bank, as Lender, or the 2020 Loan Agreement, as amended by the Loan and Security Modification Agreement dated as of July 15, 2022, or the 2022 Loan Amendment, as amended by the Loan and Security Modification Agreement dated as of August 1, 2023, or the 2023 Consent and Release, as amended by the Loan and Security Modification Agreement, dated as of on August 7, 2023, or the 2023 Loan Amendment, as amended by the Loan and Security Modification Agreement, dated as of September 4, 2024).

Pursuant to the 2023 Amended Loan Agreement, borrowings under the revolving line of credit cannot exceed 85% of eligible accounts receivable balances, bear interest at the greater of 7.0% or the prime rate as published in The Wall Street Journal and mature on July 15, 2025. In an event of default, as defined in the 2023 Amended Loan Agreement, and until such event is no longer continuing, the annual interest rate to be charged would be the annual rate otherwise applicable to borrowings under the 2023 Amended Loan Agreement plus 5.00%.

Borrowings are collateralized by substantially all of our assets and property. Under the 2023 Amended Loan Agreement, we have agreed to certain affirmative and negative covenants to which we will remain subject until maturity. The covenants include limitations on our ability to incur additional indebtedness and engage in certain fundamental business transactions, such as mergers or acquisitions of other businesses. In addition, under the 2023 Amended Loan Agreement and through the maturity date, we are required to maintain a minimum Adjusted Quick Ratio of 1.10 to 1.00, defined as the ratio of (1) the sum of (x) unrestricted cash and cash equivalents held at the Lender plus (y) net accounts receivable reflected on our balance sheet to (2) current liabilities, including all borrowings outstanding under the 2023 Amended Loan Agreement, but excluding the current portion of deferred revenue (in each case determined in accordance with GAAP). At any time that the Adjusted Quick Ratio is less than 1.30 to 1.00 the Lender shall have the ability to use our cash receipts to repay outstanding obligations until such time as the Adjusted Quick Ratio is equal to or greater than 1.30 to 1.00 for two consecutive months. As of March 31, 2025, we were in compliance with these covenants and we had no amounts outstanding under the revolving line of credit.

On May 1, 2025, we and the Lender amended the 2023 Amended Loan Agreement, pursuant to which, among other items, the Lender consented to the sale of certain of our subsidiaries.

We believe our existing cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements for at least the next 12 months from the issuance date of the consolidated financial statements, without considering the borrowing availability under our revolving line of credit. Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our revenue, the timing and extent of spending on business initiatives, purchases of capital equipment to support our growth, sales and marketing activities, expansion of our business through acquisitions or our investments in complementary offerings, technologies or businesses, market acceptance of our platform and overall economic conditions. If we do not achieve our revenue goals as planned, we believe that we can reduce our operating costs. If we need additional funds and are unable to obtain funding on a timely basis, we may need to significantly curtail our operations in an effort to provide sufficient funds to continue our operations, which could adversely affect our business prospects.

### Cash Flows

The following table shows a summary of our cash flows for the three months ended March 31, 2025 and 2024:

*(in thousands)*

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Net cash provided by operating activities | $23,306 | $10,440 |
| Net cash used in investing activities | (1,133) | (770) |
| Net cash provided by financing activities | 669 | 999 |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 10 | (5) |
| Net increase in cash, cash equivalents and restricted cash | $22,852 | $10,664 |

#### Net cash provided by operating activities

Operating activities provided $23.3 million in cash during the three months ended March 31, 2025, primarily resulting from our net income of $8.0 million, net non-cash charges of $6.7 million and net cash provided by changes in our operating assets and liabilities of $8.6 million. Net cash provided by changes in our operating assets and liabilities consisted primarily of a $7.3 million net increase in accounts payable and accrued expenses and other current liabilities, due primarily to the accrual of legal settlement expense of $7.9 million, and a $1.0 million decrease in commissions receivable. Operating activities provided $10.4 million in cash during the three months ended March 31, 2024, primarily resulting from our net income of $1.9 million, net non-cash charges of $5.8 million and net cash provided by changes in our operating assets and liabilities of $2.7 million. Net cash provided by changes in our operating assets and liabilities consisted primarily of a $17.7 million increase in accounts payable and accrued expenses and other current liabilities and a $1.3 million and $1.0 million decrease in commissions receivable and prepaid expenses and other current assets, respectively, partially offset by an increase in accounts receivable of $17.1 million.

Changes in accounts receivable, accounts payable and accrued expenses and other current liabilities were generally due to changes in our business and timing of customer and vendor invoicing and payments. Collection of commissions receivable depends upon the timing of our receipt of commission payments from insurance carriers. A significant portion of our commissions receivable is classified as long-term.

#### Net cash used in investing activities

Net cash used in investing activities of $1.1 million and $0.8 million for the three months ended March 31, 2025 and 2024, respectively, was attributable to the acquisition of property and equipment, which included the capitalization of certain software development costs. During the three months ended March 31, 2025 and 2024, we capitalized $1.0 million and $0.8 million, respectively, of software development costs.

#### Net cash provided by financing activities

During the three months ended March 31, 2025 and 2024, net cash provided by financing activities was $0.7 million and $1.0 million, respectively. Net cash provided by financing activities during the three months ended March 31, 2025 and 2024 consisted of proceeds received from the exercise of common stock options, partially offset by tax withholding payments relating to net share settlements.

### Contractual Obligations and Commitments

Our cash flows are dependent on a number of factors in addition to our operational expenditures, including our contractual and other obligations. As a result, our liquidity and capital resources in future periods should be analyzed in conjunction with such factors.

There have been no material changes to the contractual obligations reported in our Annual Report on Form 10-K for the year ended December 31, 2024.

### Critical Accounting Policies and Significant Judgments and Estimates

Our condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of our condensed consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and the disclosure of contingent assets and liabilities in our condensed consolidated financial statements. We base our estimates on historical experience, known trends and events, and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

There have been no material changes to our critical accounting policies from those disclosed in our financial statements and the related notes and other financial information included in our Annual Report on Form 10-K for the year ended December 31, 2024, on file with the Securities and Exchange Commission. For further disclosure, refer to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q and our audited consolidated financial statements included in our Annual Report on Form 10-K.

### Recently Issued Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

## Market risk

As filed, 600 characters.

We have a credit agreement that provides us with credit at a floating rate of interest. As of March 31, 2025, we had no outstanding borrowings under our revolving line of credit and therefore no material exposure to fluctuations in interest rates.

We contract with vendors in foreign countries and we have foreign subsidiaries. As such, we have exposure to adverse changes in exchange rates of foreign currencies associated with our foreign transactions and our foreign subsidiaries. We believe this exposure to be immaterial. We do not hedge against this exposure to fluctuations in exchange rates.

## Controls and procedures

As filed, 2,309 characters.

### Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively), evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q, our principal executive officer and principal financial officer have concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

### Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 672 characters.

In addition to risks and uncertainties in the ordinary course of business that are common to all businesses, important factors that are specific to our industry and company could have a material and adverse impact on our business, financial condition, results of operations and cash flows. You should carefully consider the risk factors set forth in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024 and in our subsequent periodic filings with the Securities and Exchange Commission. There has been no material change from the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2024.

Filed May 7, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-065862. Last ingested by Listed: Oct 30, 2026, 16:20 ET. No prices; not investment advice.