EverQuote Inc (EVER) 2021 Q3 法說會逐字稿

Good day, and thank you for standing by. Welcome to the EverQuote Third Quarter 2021 Earnings Call. (Operator Instructions) After the speaker's presentation, there will be a question session. Please be advised that today's conference is being recorded. (Operator Instructions) I would now like to hand the conference over to your speaker today, Brinlea Johnson of The Blueshirt Group. Please go ahead.

Thank you. Good afternoon, and welcome to EverQuote's Third Quarter 2021 Earnings Call. We'll be discussing the results announced in our press release issued today after the market closed. With me on the call this afternoon is Jayme Mendal, EverQuote's Chief Executive Officer; 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 the federal securities laws including statements concerning our financial guidance for the fourth quarter and full year 2021; our growth strategy and our plans to execute on our growth strategy; key initiatives, including our direct-to-consumer agency; our investments in the business; the growth levers we expect to drive our business; the impact of COVID on our business and the insurance industry; our ability to maintain existing and acquire new customers; our recent and planned acquisitions and interest or ability to acquire other companies; our goals for integrations 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 the 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 quarterly report on Form 10-Q and our 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 investor.everquote.com and on the SEC's website at sec.gov.

Finally, during the course of today's call, we refer to certain non-GAAP financial measures which we believe are helpful to investors. A reconciliation of GAAP to non-GAAP measures is included in the press release issued after the close of market today, which is available on the Investor Relations section of our website at investors.everquote.com.

And with that, I'll turn it over to Jayme.

Thank you, Brinlea, and thank you, everyone, for joining us today. On October 18, we announced preliminary results for our third quarter and addressed current challenges in the auto insurance market. Several key carrier customers experienced higher-than-expected claims losses, resulting in a sudden pullback in our marketing spend in the second half of the quarter as they attempted to restore their target levels of profitability.

Based on carrier feedback, higher-than-expected claims losses were primarily attributable to a higher loss severity or cost per claim driven by 2 factors: first, vehicle replacement value and cost of vehicle repair rose significantly, stemming from supply chain and labor shortages; second, liability or medical cost increased due to a larger-than-expected number of accidents with serious injuries or fatalities as well as overall medical inflation. In addition, claims associated with extreme weather, including Hurricane Ida, placed further strains on carrier profitability. We believe these industry dynamics are isolated to our auto insurance vertical, temporary in nature, and will correct in the coming quarters as carriers adjust their pricing to a new underwriting environment before restoring higher levels of customer acquisition spend.

During our decade serving auto carriers, we have seen similar challenges from which EverQuote has reaccelerated growth following a period of pricing correction by the carriers. In an effort to align our cost structure to the current auto insurance environment, we implemented an approximate 10% structural reduction in non-marketing operating expenses, excluding noncash items. As part of reducing operating expenses, we did an extensive review of our business, which resulted in making organizational changes to consolidate leadership and streamline decision-making, which we believe will better position EverQuote for strong growth when the auto insurance industry rebounds.

We remain steadfast in building towards our long-term vision of becoming the largest online source of insurance policies by using data and technology to make insurance simpler, more affordable and personalized.

At the beginning of 2021, I outlined 4 levers of our growth strategy, including: number one, attracting more shoppers; number two, growing insurance provider coverage and budget; number three, optimizing and deepening consumer provider engagement; and number four, expanding non-auto verticals. Here's an update on progress in the context of these growth levers.

During the quarter, we reported strong traffic growth as we successfully attracted more consumers to our marketplace, resulting in a reacceleration of quote request growth to 21% year-over-year. This quarter, we closed our previously announced acquisition of Policy Fuel, and we are pleased with the early performance and how the team has integrated into our broader direct-to-consumer agency, or DTC agency operations. The acquisition of Policy Fuel is consistent with the strategy we first announced last year to begin building a multi-vertical tech and data-enabled DTC agency platform, which enables EverQuote to capture a larger portion of the economic value of each transaction, while giving us a path to directly access the lion's share of the $150 billion addressable market. And at the same time, it brings us closer to our customers, enabling us to develop more seamless buying experiences and deeper relationships with consumers.

In addition to our successful integration of Policy Fuel, we continued making foundational investments in our health and Medicare DTC agency platform in Q3. We grew the team, improved many business processes and built new technology to support a steep ramp in health and Medicare agent capacity in advance of the annual and open enrollment periods in Q4. We now have approximately 3x the number of agents in our health and Medicare DTC agency compared to last year, and we remain confident that we will deliver strong Q4 performance in our health insurance vertical and further solidify this foundational pillar of future growth.

On the provider side of the marketplace, our diversified distribution model benefited us in the third quarter. As carriers move to quickly reduce their direct marketing expenses in response to higher-than-expected claims losses, our third-party local agent demand and DTC agency operations have experienced significantly less impact from the current headwinds in the auto insurance markets.

As we continue to build EverQuote, we are guided by serving customers on both sides of our marketplace: consumers seeking a more streamlined shopping experience with personalized coverage options and insurance providers seeking more profitable policies in the age of digital insurance shopping. We are executing on our strategy, and we are increasingly well positioned to deliver on our customer promises.

We believe EverQuote occupies a unique position in the industry as the only player at scale with marketplace and agency operations across major personal lines of insurance. We have assembled a distinctive combination of data, technology and operational assets that can be leveraged to generate advantages in areas like bidding for traffic, expanding customer LTV via multiline customer relationships, and designing innovative experiences to own and manage a customer's insurance life in ways that do not exist today.

While the current auto insurance market dynamics present a temporary setback, it is indeed temporary. I truly believe EverQuote will be better positioned than ever before to emerge as a powerful player in the $150 billion insurance distribution market.

Now I'll turn the call over to John to provide more details on our financial results.

Thank you, Jayme, and good afternoon, everyone. I'll start by discussing our financial results for the third quarter and conclude with guidance for the fourth quarter and an updated guidance for the full year.

Our revenue for the quarter was $107.6 million, an increase of 20% year-over-year. Revenue in our auto insurance vertical increased to $89.7 million, a growth rate of 20% year-over-year. Revenue from our other insurance verticals, which includes home and renters, life, health and commercial insurance, increased to $17.9 million, a growth rate of 18% year-over-year representing 17% of revenue within the quarter.

Our revenue growth in the third quarter was driven by a 21% increase in the volume of quote requests in our marketplace, offset by a 1% year-over-year reduction in revenue per quote request. As Jayme outlined, the performance of our auto insurance vertical in the third quarter was impacted by some carriers reducing their marketing spend in an effort to manage to their profitability targets given a sudden spike in their claims losses. Though increases in claims frequency were largely anticipated by carriers as miles driven have continued to approach pre-pandemic levels, claims severity was significantly greater than expected. This led certain carriers to abruptly and dramatically reduce their advertising spend in our marketplace late in the quarter and in a manner that we had not anticipated. This pullback in demand directly impacted our marketplace monetization through lower revenue per quote request.

We believe these higher claims losses will continue to impact carriers' profitability in the near term, which, in turn, impacts their willingness to spend on marketing and new consumer acquisition. Having begun in Q3, the full extent of reduced carrier spend will impact us in Q4, and it is likely to take multiple quarters for auto insurance carriers to fully reprice their insurance book of business to current trends and for their marketing spend to completely recover.

That said, our marketplace remains healthy and increasing auto insurance rate environment will likely drive more consumer shopping over the same period. We expect continued growth in quote requests in Q4 at rates similar to those that we achieved in Q3 on a year-over-year basis. While reduced demand as a result of insurance industry factors will cause both sequential and year-over-year reductions in revenue per quote request.

In Q3, we delivered variable marketing margin, or VMM, which we define as revenue less advertising expense, of $32.4 million, an increase of 10% year-over-year. As a percentage of revenue, third quarter VMM was 30%, down from 33% in Q3 of last year. Though partially offset by lower advertising cost per quote request, VMM was directly impacted by the decline in marketplace monetization and carrier demand.

As we look forward to Q4, we expect the dynamics of the auto insurance market will continue to put pressure on VMM within our auto insurance vertical. But as our advertising cost structure is highly variable, we will seek to calibrate our advertising spend to optimize VMM in absolute dollars. Apart from our auto insurance vertical, we expect VMM to benefit from strong revenue growth within our health direct-to-consumer agency during the annual health open enrollment period in Q4. This is expected to drive an improvement in VMM operating point for the business overall in Q4 versus Q3 despite the downward pressure in the auto insurance vertical. Our DTC agency within our health, life and auto insurance verticals operates with a considerably higher revenue per quote request and VMM, which demonstrates the financial benefit of guiding our marketplace consumers through the complete insurance coverage journey through to purchase.

The changing dynamics within our business, namely higher engagement, higher take rate and higher lifetime value within our DTC agency are not consistently captured within a traditional marketplace volume metric like quote requests. And we intend to review how we may evolve our quarterly metrics to better capture our new initiatives in 2022.

As Jayme mentioned, we implemented an approximate 10% structural reduction in cash non-marketing expenses in an effort to realign our cost structure and streamline and focus our organization. As this action took place in Q4, the cost reductions will partially impact Q4 with the full reductions captured in expense run rate entering 2022.

We believe this will position us to continue to target operating at positive adjusted EBITDA for as long as carrier demand remains constrained and will allow us to quickly return to higher levels of profitability when the auto insurance carriers return to their normal pattern of acquiring consumers through digital channels.

Turning to profitability. GAAP net loss increased to $5.3 million, or a loss of $0.18 per share based on 29.3 million weighted average shares outstanding. GAAP net loss included a tax benefit of $2.5 million from a onetime partial release of our NOL valuation allowance associated with the Policy Fuel acquisition. We delivered adjusted EBITDA of $2.7 million or 2.5% of revenue for the third quarter. Lower VMM from our auto insurance vertical and higher expense associated with the closing of the Policy Fuel acquisition, earlier than planned within the quarter, both impacted adjusted EBITDA this quarter.

Positive operating cash flow of $2.8 million within the quarter tracked closely to adjusted EBITDA and resulted in $41.8 million of cash and cash equivalents on the balance sheet at the end of the quarter, net of the $16 million in cash paid at the closing of the Policy Fuel acquisition. Historically, cash flow from operations has tracked closely to adjusted EBITDA as it did in Q3.

As we anticipate policy sales commissions to contribute more significantly to Q4 revenue, we also expect that operating cash flow will trail adjusted EBITDA in Q4 as we collect most policy sales commissions over the expected lifetime of the policy sold, which stretches into future periods.

On August 16, we announced that we closed the acquisition of Policy Fuel. We have been pleased with the integration and ramp so far and now expect Policy Fuel to perform above our previously stated expectations for Q4. Similar to our non-auto insurance verticals and our health and life DTC agency, we expect Policy Fuel's Policy sales-as-a-Service business model will not be significantly impacted by carrier marketing reductions and will provide us with revenue diversity during a challenging period for our auto insurance marketplace.

Turning to guidance. Our Q4 guidance is significantly impacted by industry factors affecting our auto insurance vertical in the near term. For the quarter, we expect revenue to be between $93.5 million and $98.5 million, variable marketing margin to be between $30.5 million and $33.5 million, and adjusted EBITDA to be between negative $1.5 million and positive $1.5 million.

Consequently, we are lowering our full year 2021 guidance for revenue, VMM and adjusted EBITDA as follows: We expect revenue to be between $410 million and $415 million, a year-over-year increase of 19% at the midpoint and a decrease from our prior guidance of between $440 million and $446 million. We expect variable marketing margin to be between $127 million and $130 million, a year-over-year increase of 18% at the midpoint and a decrease from our prior guidance of between $138 million and $141 million, and we expect adjusted EBITDA of between $12.5 million and $15.5 million, a year-over-year decrease of 24% at the midpoint and a decrease from our prior guidance of between $23 million and $26 million.

In summary, though we foresee near-term headwinds, we remain confident in our ability to manage our business during this period and to return to performance consistent with our long-term model of high growth and increasing profitability as industry demand normalizes. Looking beyond the temporary conditions driving auto insurance industry demand, we believe our direct-to-consumer agency is poised for a breakout performance in Q4, validating our strategy. Jayme and I look forward to answering your questions.

(Operator Instructions) The first response is from Michael Graham of Canaccord.

I just wanted to ask a little bit more about the -- what you see as the potential duration of some of the softness in auto. I remember at the time of your IPO, you were just sort of coming off of a flat year for -- with similar circumstances, claims going up and margins compressing. And I believe it took a couple of quarters after that at that time. Just wondering if you could maybe put a little more color around sort of the timing you expect to see unfold here.

And maybe if I could just add on to that, you've got sort of a standard growth ambition of around 20% per year. I'm just wondering how you're thinking about that as we finish up this year and head into next.

Mike, thanks for the question. This is Jayme. So we have a couple of data points to draw on in terms of the expectations around timing and duration. Obviously, we don't have perfect information, but the first thing we can draw on is historical experience. I think you're right. It was around 2016 into 2017, last time we experienced something like this.

And then the second data point is just the feedback we're getting from carriers. And so the playbook that they deploy is the drawdown marketing spend to solve for 2 things really. The first is in-period profitability, the in-quarter or in-year profitability. The second is to stop acquiring policyholders they now know to be unprofitable.

Step two, to address that second piece, is the carriers will refile their rates with state departments of insurance. And that's a process that will take several months. And then once they feel good about the rates, they'll reengage and resume to normalized levels of marketing spend.

So that's what we saw in the previous time we went through this. That's what we expect to see happen this time. It's the guidance we've been given by carriers. In terms of how long we expect it to persist, the best information we have right now suggests that we'll find the trough. We'll find the bottom in Q4, likely to see a step up in Q1, and then somewhat gradual recovery over the course of next year.

And I think different carriers sort of were affected in different ways and will respond with different approaches or at least levels of speed. That's been our experience. So we'd expect to see somewhat of a phased-in approach over the course of next year, ultimately having us exit next year back to normalized levels of spend.

And then, Michael, I would just add to that with regard to the second part of your question, that also implies that we would exit next year back on our long-term growth model, right? Our long-term growth model is still an appropriate long-term growth model to use. Obviously, what we're seeing in this next number of quarters is something that is tied to the industry and tied to some of the macro trends for the industry. But we are confident that we will emerge into 2023 back on our long-term model of growth and profitability growth.

Your next response is from Ralph Schackart with William Blair.

I guess, Jayme, kind of circling back off of Michael's question. I know you've seen these changes before, particularly at the IPO, and I did correct. But I guess what's similar with what we're seeing today versus last cycle, which a big last cycle related to more technology in cars and pushing up claims cost? But then you also have some added crosscurrents here with supply chain issues and then getting people to go back to work. So I'd just love your perspective on sort of the compare and contrast.

Yes. Thanks, Ralph. So the -- there are -- there's a confluence of factors that are occurring this time, which are distinctive, right? They are different. The underlying drivers are different than the last time around. So one difference is the fact that it's -- the carriers have an other rep under their belts, right, and I think are better positioned this time to respond quickly, having learned some lessons from the last time this occurred, and we are hearing some of that. The second is just the underlying drivers.

So in this case, you've got this confluence of events, number one, being miles driven coming back to almost pre-COVID levels. I think we're at about 96% of pre -- of '19 levels of miles driven. And so accident frequency is going up as a result.

What we hear from the carriers, this was largely anticipated, right, and so perhaps not a driving factor relative to expectations. But number two is increases in levels of severity. And this was not completely expected. So they're seeing more serious accidents, right, and more bodily injury expenses associated with that. And they're seeing, as you mentioned, supply chain shortages, labor shortages, which are making the cost of repairing and replacing vehicles more expensive.

And then you layer on top of that, Hurricane Ida came through, again, not an unexpected event for a hurricane to land in Louisiana. But for that hurricane to proceed and flood a good chunk of the Northeastern United States wasn't expected, right? And so it is higher frequency plus higher severity plus catastrophe all coming together at the same time, some of which was unexpected, which is making this a particularly sort of sudden shock to the system.

But back to my first point. I do think the carriers this time around are at least better prepared, right? The playbooks are pretty well understood at this point. And so they go through the motions and they'll all -- we anticipate they emerge kind of back to where we started once rates have been normalized.

That's helpful perspective. Just maybe 1 more clarifying question. I guess just in terms of what's driving the claim severity, maybe if you could flesh that out a little bit. Is that something that has continued through, I guess, Q4? Or what would sort of, I guess, slow down or neuter, so to speak, or neutralize the severity part of what's going on?

Well, the -- again, the 2 factors driving the severity up are more serious accidents, and so greater bodily injury expenses and health care costs associated with that. And then number two is the supply chain and labor shortages.

Now when the carriers address those issues, it can be addressed in 1 of 2 ways. One is they sort of resolve themselves, as I think you're sort of inquiring about. Number two is they just update pricing to reflect what is now a new normal. And I think it is that -- the latter tack that they are taking, they are assuming that this is a new normal, and they are revising pricing to reflect that.

Over time, one could certainly see at least the supply chain shortage and labor shortages resolving. And who knows, that could lead to a period of time where the carriers experience higher levels of profitability. But right now, as far as we can tell, they're really just focused on correcting pricing in response to what has emerged as a new normal.

Your next response is from Jed Kelly of Oppenheimer.

Great. Just on the marketing recovery, we still see a lot of insurance TV commercial. So when the carriers are bringing back their marketing spend, how does it work with the branded channels like television relative to the affiliate marketplaces like yourself?

Jed, I'll take that one. So I guess, we think that all marketing spend for the carriers will be affected. Clearly, there's a difference in terms of commitments and lead times on certain types of spend. So we think we felt this as soon as the carriers did and as soon as the carriers made the decision to calibrate their models toward trying to reach those profitability goals. So I think that's sudden for us.

I think, over time, as some of those commitments to mass media roll through, that's when other advertising sources will see reductions. And that's also -- that also might be a little bit of a tailwind for us going into 2022 in terms of carrier demand. So I think we are -- the carriers are faster to react with a marketplace like ours. And then -- but over the medium term, our marketplace also offers the carriers a more targeted level of spend that is highly attributable. And so I think we do better in the medium term as they, say, recalibrate or rebalance against other marketing and acquisition sources, those that have longer commitment cycles, and that we get proportionally more spend as our performance valid -- is worthy of.

So I think it is how you'll see roll through, Jed, but we're going to get hit first, but I think we may do better in the medium term.

Then you mentioned next year getting back to your growth targets. Would that be 20% growth? Or would that actually be a higher level of growth, call it, you'd actually think compounding to 20% growth relative to 2019? How should we think about that growth rate next year?

Yes. I think for -- we will certainly give guidance next quarter and give more thoughts on what 2022 will look like. I think we know that we are looking at something in terms of carrier demand that is multi-quarters in its length. We're confident really in emerging from 2022 back on that long-term growth path.

So with regard to 2022, we're not making any statements about where we are. With regard to emerging out of '22, we'll be back on that long-term profile.

If you look in terms of how the company might emerge, I mean, you can go back and look at periods like 2018. There were periods in which we were able to grow, especially consumers to the marketplace, volumes much more successfully coming out of the slowdown. So that may give some indication. But right now, I think we're committed to the fact that the long-term model is still the right model for us, and that, that will be back on track as soon as these carrier demand and profitability issues normalize.

All right. And then just one more for me. I guess then how does this make you rethink your direct-to-consumer initiative? I mean potentially finding a way to accelerate the process, it seems that you're able to get more agents get more commissions. That part of the business is much less cyclical.

Yes. It's a good question, Jed. So one of the interesting observations we've had through this period has been that while the sort of carrier direct business was affected suddenly and substantially, our agency distribution was largely unaffected. And that's both our third-party marketplace, third-party agents, as well as the direct-to-consumer agency.

And so to your point, I think it certainly instills high confidence that we're heading down the right path and I think emboldens us to consider how we can be a bit more aggressive in moving faster down that path as we go. I'll pause there. Does that answer your question?

Yes.

Your next response is from Cory Carpenter with JPMorgan.

Just curious just how broad-based the cuts were across your network versus isolated to a certain type of carriers and maybe kind of getting out any notable difference in cuts from traditional agency versus direct-to-consumer carriers or insurtechs?

And then as a second question, just with policy, you mentioned it's running ahead of expectations. So I'm hoping you could talk to what's worked well or some of the early lessons learned from the integration.

Sure. The industry effects are relatively broad-based, Cory. But I would say, to my earlier point, we're seeing them affect us more directly on the sort of more direct-to-consumer-oriented carriers that would buy referrals directly from us. So that would include the sort of DTC carriers. It might include some of the more like insurtech carriers, as you would classify them, seem to be responding in our marketplace more aggressively.

The second -- remind me the second part of your question, Cory, please.

Policies on ...

Policy Fuel.

Policy Fuel. Yes. So we're a couple of months in now on Policy Fuel. Just to kind of reorient you to how it fits into the big picture, we first began down this direct-to-consumer agency path with the launch of our life insurance agency in early 2020. We accelerated down that path with the acquisition of Crosspointe in the health and Medicare space in the sort of mid- to late 2020. And then we've accelerated once again with the acquisition of Policy Fuel.

And with the acquisition of Policy Fuel, we now have this direct-to-consumer agency operating across all major personal lines of insurance. So we're excited to have closed the deal. The team is well integrated. And we're off to a good start. It's still quite early, so there's a lot of focus on the integration and ensuring we maintain the plan we laid out for the team. But all signs are positive so far, and we're excited to have them onboard.

(Operator Instructions) Your next response is from Mayank Tandon of Needham.

It's actually Kyle Peterson on for Mayank. Just wanted to touch a little bit on some of the emerging verticals. I noticed that both as a percentage of revenue and on an absolute dollar basis, sequentially, that dipped a little bit. Were you guys seeing some of the same challenges you guys have seen in auto in some areas, kind of like home and life? Or just wanted to see if you could provide any additional color on some of the emerging verticals.

The emerging verticals have not been affected by the same industry dynamics that the auto market has been. And we would expect to see the emerging -- the non-auto verticals accelerating into Q4. It wasn't really a catalyst for outsized growth in Q3. I think they sort of kept pace with auto but didn't exceed it.

As you recall, we have been investing quite heavily over the course of this year to get ready for the annual and open enrollment periods in health and Medicare. And that's included a 3x-ing of the number of advisers in that agency business and all the infrastructure and team to support them.

So as we progress here through Q4, still very early in the enrollment period, but the signs are positive, and we do expect that to be a large catalyst for -- to reaccelerate non-auto's growth this quarter.

That's helpful. And then I guess just maybe a follow-up on, obviously, some moving pieces between carrier demand and then, obviously, there's some expense reductions rationalizations. But how should we think about -- is there anything in that kind of 10% cut to kind of cash expenses that would impact like the pace of your ability to grow basically when the demand environment improves? Or how should we think about the puts and takes between some of these cost initiatives and kind of how you guys are prepared to reaccelerate growth as demand improves?

Yes. It's a great question. So as we approach the expense reduction, we're weighing a couple of different things. On the one hand, we're trying to model out effectively different scenarios with respect to how deep the direct auto dip would be and how long it would last and be diligent in managing expenses to sort of preserve profitability through that period of time.

On the other hand, if you just take the direct auto business and set it aside, and I know it's a big thing to set aside, but if you can do that and you look at the rest of the business, we're actually feeling very good about the investments that we've made and starting to see them pay off, right? So we've been talking a lot this year about the verified partner network on the consumer acquisition side of the business. We've been launching new products into that, and that's beginning to take hold. The direct-to-consumer agency strategy is -- our progress is accelerating. And as we move into the open enrollment period and as we acquire Policy Fuel, the marketplace agency business is healthy. And so a lot of the investments we've been making are really building some momentum right now. And we want to be very thoughtful not to disrupt the momentum that is building in other parts of the business.

So as we approached it, we were balancing those 2 things, and we feel that the level of expense reduction we got to was responsible in the context of what's going on in the auto business, but didn't necessarily slow down the momentum we are building or make any sacrifices that we couldn't live with in terms of slowing progress on the other parts of the business. And it came with some organizational changes that we think will just help us move more efficiently.

So my personal sentiment is we're in a good position. We have some tough things going on around us right now. But it will pass, is our expectation. And we believe that as it does, we'll be really well positioned to keep growing and getting back to our trajectory that we were on before.

This now concludes the Q&A for our call. I will turn the call back over to Jayme Mendal, CEO.

Thank you all for joining us today. The market presents near-term headwinds for our business, but we are confident that these issues are temporary in nature and will correct as carriers adjust their pricing strategies to the new underwriting environment. As we mentioned, we are executing well against our strategy. We believe EverQuote will emerge from this period even better positioned to be a powerful player in the $150 billion insurance distribution market. Thank you all, and have a great evening.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.