EverQuote revenue rises 25 per cent while net income slips
EverQuote increased third-quarter revenue by 25 per cent to 218.1 million dollars as both its automotive and home insurance businesses grew. Operating income and cash generation improved, but higher taxes and a contract termination payment weighed on net income. The digital customer acquisition company ended the quarter with 229.1 million dollars in cash and no outstanding debt.
Economics & Markets··Evening
Insurance customer acquisition revenue expands
EverQuote, a digital customer acquisition company serving insurance providers, increased third-quarter revenue by about 25 per cent. Revenue reached approximately 218.1 million dollars, against 173.9 million dollars a year earlier. The November 2 results cover the quarter ended September 30 and include its automotive, home and renters insurance businesses.[1], [2]
Automotive insurance revenue was 190.4 million dollars, increasing 21 per cent year on year. Home and renters revenue reached 27.7 million dollars, with growth of 70 per cent. Chief executive Jayme Mendal said insurance carriers continued to show an appetite for growth. EverQuote provides services that help insurers and agents acquire customers through digital channels, with the automotive business accounting for most quarterly revenue.[1]
Higher taxes reduce net income
Operating income increased from 17.5 million dollars to 23.9 million dollars, but net income declined from 18.9 million dollars to 18.2 million dollars. Diluted earnings per share fell from 0.50 dollars to 0.49 dollars. Management cited higher income taxes and a one-time item. Tax expense was approximately 7 million dollars, compared with a tax benefit in the year-earlier quarter.[1]
The company paid 4 million dollars to terminate a multiyear advertising services contract that carried a remaining commitment of 15.5 million dollars. Adjusted earnings before interest, taxes, depreciation and amortization rose 41 per cent to 35.5 million dollars from 25.1 million dollars. Its reconciliation excludes the contract termination payment and adjusts for stock-based compensation, depreciation, interest income and taxes. This measure is calculated separately from reported net income.[1]
Cash grows as management sets the next-quarter outlook
Operating cash flow rose from 19.8 million dollars to 40.5 million dollars. EverQuote ended the quarter with 229.1 million dollars of cash and equivalents and no outstanding debt; cash increased approximately 36.8 million dollars over the quarter. For the fourth quarter, management projects revenue of 213–223 million dollars and adjusted earnings before interest, taxes, depreciation and amortization of 29–32 million dollars. The company also referred to its previously announced 50 million dollar share repurchase programme.[1]
