EverQuote (EVER) Q2 2025 Earnings Transcript

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Date

Monday, Aug. 4, 2025 at 4:30 p.m. ET

Call participants

• Chief Executive Officer — Jayme Mendal
• Chief Financial Officer — Joseph Sanborn

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Takeaways

• Total revenue -- $156.6 million, a 34% increase year over year, attributed mainly to a 61% rise in enterprise carrier spend.
• Auto insurance revenue -- $139.6 million, up 36% year over year, indicating significant strength in the core vertical.
• Home and renters insurance revenue -- $17 million, representing 23% growth both year over year and sequentially, driven by broader market improvements.
• Variable marketing dollars (VMD) -- $45.5 million, up 25% compared to the prior year period.
• Variable marketing margin (VMM) -- 29.1%, up from 28% in the previous quarter, reflecting improved monetization and efficiency.
• Adjusted EBITDA -- $22 million, up from $12.9 million in the prior year; margin expanded to a record 14%.
• Net income -- $14.7 million, more than doubling from $6.4 million in the comparable period last year.
• Cash and cash equivalents -- $148.2 million at quarter end, rising from $125 million at the end of the prior quarter.
• Operating cash flow -- $25.3 million, marking a record for the company.
• Operating expenses -- $23.6 million (cash basis, excluding certain items); sequentially down and below expectations due to deferred hiring and short-term project delays.
• Share repurchase program -- Board authorized up to $50 million in repurchases over the next twelve months, described by management as "evidence of the continued confidence we have in our business."
• Credit facility -- Established a new three-year, $60 million committed credit facility, replacing a previous $25 million undrawn line; no immediate plans to draw.
• Q3 2025 guidance -- Revenue targeted at $163 million to $169 million; VMD forecasted at $47 million to $50 million; adjusted EBITDA projected at $22 million to $24 million.
• AI and technology investment -- Ongoing increased investments in AI across operations, including engineering and call centers, aiming to drive efficiency and support future growth initiatives.
• Carrier panel recovery -- Management anticipates returning to a "full carrier panel by historical standards" by year-end, with laggard states and carriers expected to reactivate following improvements outside of challenging geographies like California.
• Multiproduct agent engagement -- Paid products per agent up more than 15% over six months, with over one third of agents now using multiple company offerings.
• Home insurance underwriting environment -- Sequential and yearly growth attributed to improved underwriting trends and stabilization, particularly relative to the prior quarter's pressure from catastrophic loss events.

Summary

EverQuote (NASDAQ:EVER) delivered record adjusted EBITDA margin and net income for the reported period, underpinned by robust auto and home insurance vertical growth and continued margin expansion.

• Management introduced a $50 million share repurchase program and closed a new $60 million committed credit facility to enhance capital flexibility.
• Investments in AI-driven technology are expanding across engineering and call center functions, supporting operational efficiency and serving as a differentiator in client carrier and agent partnerships.
• The company forecasts double-digit revenue and EBITDA growth in the next quarter, while focusing on returning to a full carrier panel and further scaling multiproduct agent adoption.
• Management stated that "our plan to get to $1 billion of revenue does not rely on M&A," outlining confidence in organic growth, with mergers and acquisitions presented as potential accelerants rather than necessities.
• Sequential reduction in operating expenses was attributed to "hiring and short-term projects," with strategic investments anticipated to accelerate in the second half.
• Management confirmed that despite competitive pressures in marketing channels, advancements in AI bidding and channel diversification enabled the company to maintain margin expansion.
• "We anticipate being back to what we would characterize as a full carrier panel by historical standards by the end of this year," management stated, highlighting improved demand from carriers in most states except California and certain lagging regions.
• EverQuote ended the quarter with no debt and the stated cash position, demonstrating "fortress balance sheet" management as described on the call.
• Guidance for the next quarter implies year-over-year revenue growth of 15% at the midpoint, with adjusted EBITDA forecasted to grow 22% based on management’s provided range.
• Leadership reaffirmed long-term financial model targets of 20% annual revenue growth and 20% adjusted EBITDA margins, positioning the company’s spending and operational leverage strategies around these benchmarks.
• Paid product adoption among agent customers broadened, with management quantifying both overall uptake and the proportion of multiproduct users for the first time.

Industry glossary

• Variable marketing dollars (VMD): Gross profit calculated as revenue minus digital advertising expense, reflecting marketing-driven contribution before fixed costs.
• Variable marketing margin (VMM): VMD expressed as a percentage of revenue, indicating marketing margin efficiency on spend.
• P&C insurance: Property and casualty insurance, encompassing auto, homeowners, and renters' insurance products.
• Combined ratio: Insurance industry metric representing total incurred losses and expenses divided by earned premiums, with values below 100% indicating underwriting profitability.
• Smart Campaigns: EverQuote’s proprietary machine learning-driven digital advertising solution deployed for insurance carrier clients.

Full Conference Call Transcript

Jayme Mendal, EverQuote's Chief Executive Officer; and Joseph Sanborn, EverQuote's Chief Financial Officer. During the call, we will make statements related to our business that may be considered forward-looking statements under federal securities laws, including statements concerning our financial guidance for the third quarter of 2025. Forward-looking statements may be identified with words and phrases such as expect, believe, intend, anticipate, 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 subject to a variety of risks and uncertainties that could cause the actual results to differ materially from our expectations. For a discussion of those risks and uncertainties, please refer to our SEC filings, including our annual report on Form 10-K and our quarterly reports on Form 10-Q on file with the Securities and Exchange Commission and available on the Investor Relations section of our website. Finally, during the course of today's call, we will refer to certain non-GAAP financial measures, which we believe are helpful to investors.

A reconciliation of GAAP to non-GAAP measures was included in the press release we issued after the close of market today, which is available on the Investor Relations section of our website. And with that, I'll turn it over to Jayme.

Jayme Mendal: Thank you, Brinlea, and thank you all for joining us today. We achieved strong results in Q2, growing 34% year-over-year and delivering record adjusted EBITDA margin and net income. Against the backdrop of healthy carrier profitability, our team remains focused on helping carriers and agents accelerate growth. We continue to make progress toward our vision of becoming the #1 growth partner to P&C insurance providers by efficiently delivering better performing referrals, bigger traffic scale and a broader suite of products and services. In Q2, carrier demand remained stable, reflecting a carrier landscape that is broadly healthy, coupled with consumer shopping levels that remain strong.

One large carrier grew spend to record levels, marking their full recovery, while another tightened budgets seeking the optimal balance of growth and efficiency and a few remained laggards, sharing plans to reactivate in the second half of the year. With the exception of certain challenged geographies like California, we anticipate being back to what we would characterize as a full carrier panel by historical standards by the end of this year. As carriers work to grow policies in force, we remain focused on differentiating our marketplace through superior performance that is underpinned by our data advantage. Our data scale enables us to deploy AI throughout our traffic and distribution bidding and routing systems.

For example, as another major carrier adopted our ML-driven smart campaigns product, it drove immediate improvement in their spend efficiency by about 20%. Over time, greater adoption of smart campaigns propels our flywheel as higher ad spend efficiency in our marketplace compels carriers to shift more budget to EverQuote relative to alternative advertising platforms. And as we get more budget and outcome data, we feed this data to our AI-driven systems to enable further improvements to customer performance. Agent and captive carrier demand also remained strong in Q2 with continued growth from our local agent base. We are making progress in our transition from a leads vendor to a strategic growth partner for local agents by driving multiproduct adoption.

We continue to build on our foundation in leads by adding additional value-add products and services, broadening the ways we help agents grow, which in turn enables us to consolidate agent marketing budgets and positions us as the indispensable growth partner for these same agents. Over the last 6 months, our paid products per agent have increased by more than 15% with over 1/3 of our agent base now using multiple products. Our consumer acquisition teams executed well in Q2, driving 25% year-over-year VMD growth despite elevated competitive pressure in the broader advertising landscape as carriers step up their direct advertising efforts as well.

As monetization improves and in order to keep pace with carrier appetite for growth, we are making investments in scaling incremental customer acquisition channels, including on several social and video platforms. As we continue to grow, we remain laser focused on increasing operating efficiency and productivity, evidenced by our record adjusted EBITDA margin and net income. On top of the expense management discipline honed over the last couple of years, we are increasingly layering on AI-driven efficiency applications. For example, in our engineering organization, copilots have gained rapid adoption.

We also have teams experimenting with rethinking how we can develop software more holistically using an AI- first approach to inference production-ready code faster and more efficiently than can be done by humans, inclusive of our ability to integrate, release, test and maintain production-quality code consistent with our performance requirements. In our call center operations, we have introduced AI voice agents with the goal of reducing reliance on human call centers over time. Lastly, we are testing AI agents to help automate operational tasks. We have stood up our first dedicated AI team, which will serve as our nucleus for building and supporting AI use cases across the business.

In May, I shared our goal of exceeding $1 billion of annual revenue in the near future. Having just finished our most recent annual growth planning cycle, the road map to accomplish this is increasingly clear, and we are making the requisite investments to do so. We are confident that as we continue to execute our strategy, we will emerge as P&C insurance providers leading growth partner. I'll now turn the call over to Joseph to discuss our financial results.

Joseph Sanborn: Thank you, Jayme, and thank you all for joining. I will start by discussing our financial results for the second quarter of 2025 before providing an update on our capital allocation strategy and our guidance for the third quarter of this year. We delivered a strong second quarter as we further enhanced our operating performance and focused on driving expanding levels of profitability. Total revenues in the second quarter grew 34% year-over-year to $156.6 million. Revenue growth was primarily driven by stronger enterprise carrier spend, which was up over 61% from the comparable period last year. Revenue from our auto insurance vertical increased to $139.6 million in Q2, up 36% year-over-year.

Revenue from our home and renters insurance vertical increased to $17 million in Q2, up 23% both year-over-year and sequentially. Variable Marketing Dollars, or VMD, increased to $45.5 million in the second quarter, up 25% from the prior year period. Variable Marketing Margin, or VMM, which is VMD as a percentage of revenue, was 29.1% for the quarter, up from 28% in Q1. Turning to operating expenses and the bottom line. As we scale and drive top line growth, we continue to expand operating leverage in our business through disciplined expense management and by utilizing AI and other technology investments to deliver incremental efficiency.

In the second quarter, we grew net income to a record $14.7 million, up from $6.4 million in the prior year period. Q2 adjusted EBITDA increased to $22 million compared to $12.9 million in the prior year period. Adjusted EBITDA margin expanded to a record 14%. We reported record operating cash flow of $25.3 million for the second quarter, ending the period with no debt and cash and cash equivalents of $148.2 million, up from $125 million at the end of Q1. Cash operating expenses, which excludes advertising spend and certain noncash and other onetime charges, were $23.6 million in Q2.

Operating expenses were sequentially down in the quarter and lower than expected, reflecting some hiring and short-term projects being deferred to the second half of the year. Also announced today, I wanted to highlight our inaugural share repurchase program. The Board has authorized the company to purchase up to $50 million in shares of common stock over the next 12 months, evidence of the continued confidence we have in our business. We will be opportunistic in repurchasing stock and believe this program is a prudent use of capital and reflects our conviction in EverQuote's business, market opportunity and cash flow.

Going forward, we expect our strong cash flow generation to position us to retain a fortress balance sheet while continuing to invest in growth initiatives, including AI. In addition, on August 1, we entered into a new 3-year $60 million committed credit facility. While our previous $25 million line of credit was never drawn upon, and we have no immediate plans to utilize the new facility, the arrangement provides us with additional financial flexibility. Looking to the back half of 2025, as mentioned last quarter, we plan to increase investment in our AI capabilities, technology and data assets to drive continued operational efficiency and strengthen EverQuote's long-term competitive moat.

We are already seeing evidence of the benefits of our strategic investments, and we'll be disciplined in balancing incremental operating expenses to generate adjusted EBITDA margins at or near current levels. Now turning to guidance for the third quarter of 2025. We expect revenue to be between $163 million and $169 million, representing 15% year-over-year growth at the midpoint. We expect VMD to be between $47 million and $50 million, representing 10% year-over- year growth at the midpoint. And we expect adjusted EBITDA to be between $22 million and $24 million, representing 22% year- over-year growth at the midpoint. In summary, our performance to date this year reflects our steadfast commitment to strong execution and a clear strategy.

We remain focused on delivering on our long-term target of approximately 20% annual revenue growth with 20% EBITDA margins. We believe that the strength of our operating model and future growth initiatives will position EverQuote to deliver continued growth, profitability and free cash flow generation. Jayme and I will now take your questions.

Operator: [Operator Instructions] Our first question comes from the line of Maria Ripps with Canaccord Genuity.

Maria Ripps: First, just given the uncertainty around tariffs and the potential impact on carrier profitability in the back half of the year, could you maybe give us a sense of how committed your budgets are in the second half of this year based on your conversations with carriers? Just trying to get a sense of your level of visibility into the second half of the year.

Jayme Mendal: Thanks, Maria. While we don't have a committed spend model, I think all signs point to a very healthy carrier landscape right now. Carrier demand has been stable and building so far this year. And if you look at some of the latest prints from the carriers, the big carriers are showing 80s combined ratio, so extremely healthy. And then in every interaction that we have with carriers that I personally have with carriers over the last few months, the dialogue has been entirely around growth and us finding more ways to help them grow. So we don't anticipate encountering any budget constraints or pullback over the back part of the year.

We do know that the carriers have been watching the tariffs, but they're starting from a position of significant strength. And so we think they'll be able to absorb whatever impact ends up flowing through the system.

Maria Ripps: Got it. That's very helpful. And then can you maybe help us understand a little bit better how to think about sort of the ongoing shift sort of in AI-powered search impacting -- sort of how it could impact your traffic acquisition strategy down the line?

Jayme Mendal: Sure. Yes. I think it's fairly evident that search and shopping for everything will evolve over time. We believe there -- there are reasons to believe it could move a bit more slowly in insurance. There's -- this is an industry that is more opaque. So rates aren't readily available on the open Internet. It's a regulated industry. It's a relatively high-value, high stakes purchase for the consumer. But over time, clearly, more search volume and shopping will move over to these AI platforms. And we think we're really well positioned to engage with that LLM-based traffic. Right now, we've started building LLM-based conversational workflows in our call center operations.

And you can sort of think about those as effectively taking the top of the shopping funnel using agentic AI. And over time, we'll be working our way down the funnel to facilitate more of that buying experience. So I think how and when these platforms open up to advertisers is still a bit of an open question and how much of that is paid versus organic. But I'd say given our monetization and our AI capabilities that are sort of fast developing, we're going to be really well positioned to acquire this traffic.

Operator: Your next question comes from the line of Cory Carpenter with JPMorgan.

Cory Alan Carpenter: Maybe 2 -- another one on tariffs maybe just asked more directly. Do you think that impacted carrier budgets in 2Q? And are you incorporating any potential impact from that in 3Q? And then maybe just at a higher level, the 2Q results and the 3Q guide imply pretty typical seasonality that we would expect in the auto business. Could you just kind of help us reconcile that with the fact that it sounds like you're still bullish on the potential for a step but at some point as the recovery broadens to more carriers in the last remaining states open?

Joseph Sanborn: Sure. Thanks, Cory. I'll start on the answer and then Jayme can add on. When you look at Q2, I'd say the question was, what was the impact of tariffs on Q2? Our sense -- just to remind folks, tariffs were announced on April 1. And so I think for carriers, like most of the business community, I think the early part of Q2 was a bit of uncertainty saying, let's figure out what's going to -- what tariffs will mean to us. From the point of view of the carriers, the carriers were worried about whether that would increase claims costs, right? So that was the question they monitored.

Our sense as we look through the quarter was, I think carriers had very healthy combined ratios in underwriting margins throughout the period. And one of the things that we would observe as we thought through how the quarter would unfold, I think we might have thought that carriers leaning in a bit sooner given their underwriting margins than they did. I think that reflects a little bit of hesitancy on how tariffs are impacting in Q2. That being said, as we progress through the quarter and got to the latter part of the quarter, we actually saw the carriers step up as you got into June. And I think -- and that has continued into July.

And I think that, in part, reflects getting greater clarity on what's going on in the tariff environment, and that's obviously been reflected in the guide we gave for Q3. And then as recovery broadens to more states, I think right now, we generally have broad-based recovery in a lot of states. There is still an outlier in California to some extent as well as a handful of other states. As Jayme mentioned in his prepared comments, we see by the end of the year having sort of a full carrier panel back in line within the marketplace. And we think you'll start to see some of these laggard states come on in a more meaningful way in 2026.

Exact timing is -- we can't give you specifics. But again, you're starting to see some of these states start to come on, just it's happening quite gradually. In California, for example, you've seen the carriers -- existing carriers get rates so they'll stay in the state. It hasn't translated into dramatic increases in trying to grow and bring in new consumers, but you're starting to see some signs. And so we'll see how it plays out through the rest of this year and into next.

Operator: Your next question comes from the line of Zach Cummins with B. Riley Securities.

Zachary Cummins: Maybe just digging a little bit deeper into some of your carrier commentary here in Q2. It sounded like you had one major carrier that really ramped up spend, while another was more so in a defensive mode here in Q2. So any additional context you can give around that and kind of where you're at with the rest of the carrier base in terms of ramping up budgets here in the coming quarters?

Jayme Mendal: Yes. So I would say that most of the carriers are back in growth mode and feel largely sort of stable in their budget levels. There was one carrier that was kind of fluctuating a bit over the first half of the year, and that was reflected in the commentary. But even they are now sort of fluctuating back up from where they were in Q2. So -- but on balance, I would say the carriers feel oriented towards growth and the demand feels stable. There were a couple of carriers that have really not yet reactivated in our marketplace, but we've gotten signal from them that they do intend to reactivate in the second part of this year.

And so we expect to exit the year with, as Joseph said, what we would characterize as a full panel of carriers relative to sort of historical participation in the marketplace.

Zachary Cummins: Understood. That's helpful on that side. And just given where the balance sheet is right now, nice to see the share repurchase authorization. Just curious on the flip side of that, if there is any interesting M&A that you're considering at this juncture? And any sort of update as to how you're thinking about potentially deploying that capital?

Joseph Sanborn: So thanks for the question. I guess just give you some context on the buybacks. Obviously, we're pleased to do our first buyback to $50 million -- up to $50 million over the next 12 months been authorized by the Board. And I think it really reflects the confidence we have in our business and really just the cash flow generation of the business. At the same time, obviously, we'll continue to look selectively at M&A. And M&A is certainly something we will think about, particularly as it accelerates what we're trying to do in our core markets of P&C and accelerates our long-term position to be the leader in that space.

And so we'll continue to look at that, and we'll update you as we have more to share, but something will -- certainly part of the things we're looking at over the next several months.

Zachary Cummins: Best of luck to the rest of the quarter.

Jayme Mendal: Thanks, Zach.

Operator: Your next question comes from the line of Jason Kreyer with Craig-Hallum.

Jason Michael Kreyer: So you talked about kind of a full panel of carriers, a full panel of states. I'm just curious from a competition standpoint, if you've seen any greater competition for leads, if you think that's creating any more volatility or any more pressure on VMM either in Q2 or as the year progresses?

Jayme Mendal: Thanks, Jason. So we have seen over the course of this year, some of the competitive pressure to return to the advertising landscape. As carriers -- obviously, we benefit from their increased budgets in our marketplace, but they're also stepping into the more open advertising market as well. And so we have seen some competitive pressure in that regard. That being said, I think we've continued to execute really well in a more competitive traffic environment. We're continuing to kind of build out our AI bidding solutions. We drove 25% VMD growth year-on-year. And we actually were able to achieve a step-up in our VMM margin from what it was, I think, around 28% last quarter to 29% this quarter.

So yes, more competitive pressure, but I think we're managing through it well, and we're focused on maintaining margin and kind of finding the growth through incremental channels, as I mentioned earlier.

Jason Michael Kreyer: So last year, you saw a nice budget flush as we approach year-end. With the combined ratios of the carriers tracking so much below their targets right now, I'm just curious what your sense is for a similar budget flush as 2025 progresses.

Jayme Mendal: I'm as curious about this as you are. I would say intuition would suggest that the carriers will have quite a bit of room going into the back part of the year in terms of their combined ratios, particularly for those that manage to kind of a calendar year outcome. So we've received no indication from any carriers that there's some end-of-year budget flush coming. But in the past, when we've entered the end of the year and we've seen both pressure for growth and margin in profitability, we have seen some carriers deploy excess budget into the market at the end of the year.

Joseph Sanborn: Maybe I'll just add to that. That tends to be a phenomenon you see more with public companies than you do with some of the mutual companies. They just have a different sort of mentality about managing annual budgets. So just trying to be cognizant of it [ as in terms of how ] we've seen it in the past.

Jason Michael Kreyer: All fingers crossed something like that again.

Jayme Mendal: Thank you.

Operator: Your next question comes from the line of Ralph Schackart with William Blair.

Ralph Edward Schackart: Just on the -- some of the pressures you're seeing in the search engine marketing channels from the carriers coming back online, would you sort of categorize this as sort of typical, I guess, pressures you've seen before and would have to build workarounds for? Or is there something different or more pronounced from what you see today? And maybe just a follow-up question there is, maybe if you could provide some perspective on what you're seeing in some of the incremental channels that you've been testing, that also would be helpful.

Jayme Mendal: Yes. So thanks, Ralph. I would say there's nothing out of the ordinary in terms of the competitive pressure we're seeing. It's most acute, as you'd expect in some of the industry-specific channels like search. We're seeing more stability and more generalized channels like social and video. And so these are -- that's where some of our dollars are being directed in order to kind of offset some of the competitive pressure in search. So nothing really out of the ordinary. What was -- remind me the second part of the question?

Ralph Edward Schackart: Yes. Just any sort of update you can provide or metrics around social or the video channels and just any progress that you're making there?

Jayme Mendal: Got it. So these were channels that we were fairly active in before the downturn. And then as the auto monetization kind of fell out, we pulled back a bit in these channels. And so there's a part of this that's just kind of reactivating the engine and rescaling the engine. And we're seeing some traction, right? So these are -- some of these channels are beginning to scale. And then there's some incremental platforms, which we've not been as active in the past, which now with monetization where it is, we believe we should be able to compete as well.

Operator: Your next question comes from the line of Mayank Tandon with Needham.

Mayank Tandon: Jayme and Joseph, even though you didn't provide specific guidance for the fourth quarter, could you just remind us of the seasonality just so that we get our model straight, don't get over our [ skis? ] Any thoughts around how we should think about the top line, VMD and just the leverage in the model on the EBITDA front?

Joseph Sanborn: Sure. So thanks for the question. In terms of seasonality, Q3 to Q4 tends to be down sort of single digit -- low single-digit percent, like 3%, 4% -- yes, 3% to 5%, I would say, is the zone. And then in terms of VMD, I'd say no change in what we've said previously, which is sort of looking at the high 20s is what we're targeting as we run the business. And then lastly, on EBITDA, as I said in my prepared remarks, sort of at or near current levels, Q1 was 13.5%, Q2 was 14% adjusted EBITDA margins. Q3 guide implies it's basically in that same ballpark as well. The midpoint is just shy of 14%.

So I think we're sort of planning to sort of maintain those levels is our goal. And that means that we'll modulate expenses we've been doing. What you're seeing implied in Q3 is a step-up in expenses and some of that will continue, obviously, in Q4. And again, very much in line with what we said at the start of the year. We expect in the back half of the year to add incremental investments and especially around our technology areas and AI and other areas.

Mayank Tandon: Right. That's helpful. And then going from a short-term question to a long-term question. Jayme, you talked about the $1 billion road map to get there. Could you maybe just give us a little bit more on how you think about the growth coming organically? Are you including M&A opportunities to get to that type of revenue growth target? And then also, just I would add that, is this contingent on adding larger carriers that aren't clients today? Or do you feel like you have enough headroom to grow within the account base to really get to that type of level?

Jayme Mendal: Yes. So hopefully, it's not a long-term question. We hope to get there relatively soon. And we think we can do so organically and with our existing customer base. So the plan that we've got really relies on the distribution side, it's about continuing to improve performance for carriers and agents through AI products like Smart Campaigns. We've got a reliable pattern established now where when we deploy these products. They improve performance, we get more budget, we get more pricing. And so that's a part of it. With the agents, we're expanding products to get more share of their wallet.

And then on the traffic side of the marketplace, we think we can sort of size the opportunity in under and unpenetrated channels that we're beginning to sort of expand into and scale up. And then outside of auto, I think the homeowners vertical and other non-auto verticals could sort of round it out. So our plan to get to $1 billion of revenue does not rely on M&A. But as Joseph mentioned, and feel free to layer on, Joseph, that's a potential accelerant.

Joseph Sanborn: And maybe what I'd add, Mayank, is just remind folks of our long-term model. We've said for some time, we're going to average 20% top line growth, and we're going to get to adjusted EBITDA margins of 20% in the long term. If you look at what we've done in EBITDA margins, last year was 11.6% for the year. If you look at where we're -- the messaging we've given today and where we've done through the first half of the year, we'll add at least a couple of hundred basis points to that for this year. And so as you think about the path to getting to 20%, we add 200 basis points a year.

We're not saying we're going to do that every year. But I'd expect to be adding 100 basis points on average would be probably expected, and we'll see in some years, it may be more. So I think -- and I think that is the recipe we see. We see a real growth opportunity, but also continuing to drive profitability at the same time as we do that top line growth.

Operator: Your next question comes from the line of Jed Kelly with Oppenheimer.

Jed Kelly: Just looking at the guidance and the VMM margins, would you expect, as the market sort of normalizes and we return to a steady-state growth, that you would expect your VMM margins to go back into the low 30s? Or how should we just think about the level of VMM margin predictability or VM dollars predictability over the next, call it, 18 to 24 months?

Joseph Sanborn: I think the way we think about VMM is the way we've been talking about it since the start of the year. We see this sort of in the high 20s. Sometimes it may go into low 30s. But [ given, ] I think on average, it's going to be in the high 20s. That's sort of our view on how things will shake out. And any -- I think it's important to note, Jed, as we've talked about in the past is we don't run the business on a day-to-day basis. The traffic teams do not sort of try to solve for VMM. They really are driving VMD. Now of course, we look at it regularly throughout each month.

And of course, there's a correlation between the maximum VMD point and also the VMM margin nicely overlap with where we're at that sort of high 20s level right now. So we feel good about that as the right way to manage the business.

Jed Kelly: Got it. And then just the cash balance, it's a great job. It looks like, ex the buyback, could be approaching $200 million end of the year. Do you ever think about acquisitions in terms of helping you get some leverage over some larger carriers and reduce competitive spending on what you have to pay for traffic? Can you just talk about M&A and how you kind of think about using your cash balance to fund additional growth?

Joseph Sanborn: Yes. I guess when we think about M&A, it's focused on the current strategy. So we believe we want to be the leading growth partner to P&C carriers and agents. So it's not about getting leverage over carrier agents, but how we help them be successful? How can we help them be more successful? How can we get more share of their wallet to help them grow their business? And that's how we think about the opportunity. And I think M&A could -- there are some M&A opportunities that could fit within that strategy. But again, I think our desire and our belief is that we win by our customers winning.

And if we take the results they give us and we manage that business well, we'll give great results for shareholders, and that in turn helps our flywheel keep going and building shareholder value.

Operator: Your next question comes from the line of Mitchell Rubin with Raymond James.

Mitchell Rubin: This is Mitch on behalf of Greg Peters. So on Slide 12, you guys have a table where you're breaking out the auto versus home revenue quarterly. It looks like it sequentially increased each quarter since 1Q through Q4, and it came down a bit in the second quarter of '25 relative to the first quarter. So I was wondering if you could provide some color on this dynamic.

Joseph Sanborn: I think what I'd say in the home business, the way to think about home, I think this page is up the visual we give Page 12 of the investor deck to help people see the breakouts of auto versus home revenues. I think looking at the relative proportion in a given quarter, I'm not sure I'd quite look at it that way. It's generally been around 10%, give or take. I'd say with the home vertical specifically, maybe I can give you some context around that. That's a vertical that had nice performance in Q2. We had 23% growth year-on-year and also sequentially as well. So a really nice quarter.

I think that reflected the broader landscape of home having strong underwriting pickup improvements relative to Q1. As you may recall, in Q1, we had an environment where the home environment broadly for carriers had some pressure with cat losses. As you look into Q2, I think it's become a much more stable underwriting environment. So we feel good about home. We think continue to be an opportunity for us to grow for us over time. So I think that's probably the color I'd give you, it's probably the most important.

And then individuals, I think on the page, you look at the relative proportion, I think it just really reflects how fast auto has grown during this period of growth, given that it was coming out of a relative trough in '23 with the downturn.

Mitchell Rubin: My next question is on the inaugural share repurchase program. How are you guys thinking about the quarterly cadence of that going forward? Is there going to be any seasonality or relatively consistent from quarter-to-quarter?

Joseph Sanborn: The way we're thinking [ now ] it's going to be opportunistic and sort of based on market conditions. We don't have a prearranged plan to do certain things within a given quarter. But again, it's one where we view it as very much why do we do this? We feel it's a good way to reflect the confidence we have in our business and the strong cash flow generation. And it's also a way to give that value back to our shareholders in a way that we've talked about in the past, is one of the things we consider.

And so we're pleased to be able to do it, but it's be opportunistic in how we execute it for our first program.

Operator: And it seems that we have no further questions for today. That concludes the question-and-answer session. I would now like to turn the call back over to management for closing remarks.

Jayme Mendal: Thank you all for joining. Look, we continue to make great progress. This quarter was punctuated by a number of records, particularly as it relates to our operating efficiency as we introduce more ML and AI more broadly across the business. We got to record levels of net income, operating cash flow, cash balance, adjusted EBITDA margin. And we're really energized right now. We're energized to continue growing efficiently towards that $1 billion revenue goal as we build EverQuote into the unambiguous leading growth partner for P&C insurance providers. Thanks all.

Operator: This concludes today's conference. We would like to thank everyone for participating. You may now disconnect your lines. Have a pleasant day.

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