Q4 2025 Earnings Call Transcript

Ladies and gentlemen, thank you for standing by. My name is Abbe, and I'll be your conference operator today. At this time, I would like to welcome everyone to the EverQuote Fourth Quarter and Full Year 2025 Earnings Call. [Operator Instructions] Thank you and I would now like to turn the conference over to Brinlea Johnson with The Blueshirt Group. You may begin.

Thank you. Good afternoon, and welcome to EverQuote's Fourth Quarter and Full Year 2025 Earnings Call. We'll be discussing the results announced in our press release issued today after the market close. With me on the call this afternoon are Jayme Mendal, EverQuote's Chief Executive Officer; and Joseph Sanborn, EverQuote's Chief Financial Officer and Chief Administrative 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 considering our financial guidance for the first quarter of 2026. 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.

Thank you, Brinlea, and thank you all for joining us today. 2025 was a phenomenal year for EverQuote, and we're excited about our position entering 2026. We grew revenue by 38% in 2025, making material progress toward our vision of becoming the #1 growth partner to P&C insurance providers. We delivered this growth by scaling our marketplace, launching new products, further integrating AI into our operations and deepening provider relationships, all of which accelerated our evolution to a growth solutions partner to our customers. More impressively, we delivered this growth with increasing operating leverage.

We grew adjusted EBITDA by 62% as we continue to generate efficiency throughout our operations through the use of AI and other technologies. Thanks to the team's strong execution, we exited 2025 with record financial performance across all our key financial metrics, a highly capital-efficient operation and a strong balance sheet. We entered 2026 from a position of strength and with a stable and healthy P&C insurance market. Consumer shopping levels remain elevated following rate increases in recent years.

Carrier underwriting is profitable and our carrier conversations about 2026 have centered around growth. This backdrop supports a confident outlook for 2026. Since going public in 2018, EverQuote management has established a 7-year track record of delivering against our commitments while navigating an always dynamic set of market conditions. We now reiterate our next commitment, which is to achieve $1 billion of revenue while continuing to expand the cash generation of our marketplace. We will do this amidst continued dynamism in the market, this time brought on by the rapid acceleration of the capabilities of AI.

We believe that we are well positioned to lead and benefit from this shift. Applying data and technology to insurance shopping to remove friction for consumers and deliver growth to providers has been deeply ingrained in our DNA since our founding. We have amassed a one-of-a-kind data moat from our hundreds of millions of historical insurance shopping events, each of which contributes proprietary data that can be used in many ways to create enhanced digital and AI native experiences. In recent years, we have applied AI to automate our traffic bidding.

We have rolled out products like smart campaigns, our AI provider bidding solution. We have deployed AI voice into our call center operations, and we have begun adopting Gen AI throughout our operations to drive efficiency. All of these advances have contributed to our growing operating leverage, punctuated by last year's 62% growth in adjusted EBITDA and a more than doubling of our revenue since 2023 despite nearly 0 increase in our operating expenses. In 2026, EverQuote will accelerate our evolution towards an AI-first future.

Within our operations, we will further accelerate our engineering team's path to more fulsome agentic coding and adoption of AI tools and agents throughout our operations to drive further operating efficiency. For our customers, we will roll out new products and features that combine our unique data with newfound capabilities of generative AI to accelerate their ability to derive value from this technology. We look forward to sharing more about some exciting features we are developing later this year. I want to thank and congratulate the EverQuote team for delivering results in 2025 that exceeded expectations.

As we progress into 2026, we will build on this momentum and are taking steps that redefine EverQuote and insurance distribution for the age of AI. I'll now turn the call over to Joseph to discuss our financial results.

Thank you, Jayme, and thank you all for joining. Today, I will be discussing our financial results for the fourth quarter and full year 2025 as well as our guidance for the first quarter of 2026. We delivered strong results in Q4, exceeding our prior guidance across all metrics and closed out a record year, which we achieved total revenue growth of 38% year-over-year to $692.5 million and adjusted EBITDA expansion of 62% year-over-year to $94.6 million. Total revenues in the fourth quarter grew 32% year-over-year to a record $195.3 million. Revenue growth was primarily driven by stronger carrier spend, which was up 39% year-over-year.

Revenue from our auto insurance vertical increased to $179.9 million in Q4, up over 32% year-over-year. Full year auto insurance revenue grew 41% year-over-year to $629.8 million. Revenue from our home insurance vertical increased to $15.4 million in Q4, up 37% year-over-year. Full year home insurance revenue grew 20% to $62.7 million.

As we mentioned last quarter, our strong revenue growth through the first 9 months of 2025 gave us the opportunity to invest more in existing and new traffic lines during the fourth quarter to support future growth. The strategy worked. And as expected, these investments put temporary pressure on variable marketing dollars or VMD and variable marketing margin or VMM during the period, which in turn impacted our Q4 adjusted EBITDA and associated margin. Fourth quarter VMD was $49.3 million, an increase of 12% from the prior year period, representing a 25.3% VMM.

For the full year, VMD grew 24% to $191.9 million, representing a 27.7% VMM. 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 the use of AI, other technologies and disciplined expense management. While other technology companies are describing their plans to make AI investments to deliver incremental efficiency, we have been on this path at EverQuote for over 2 years.

In the fourth quarter, we grew GAAP net income to $57.8 million, up from $12.3 million in the prior year period. GAAP net income this quarter included a one-time non-cash tax benefit of $38.4 million, primarily driven by the release of the valuation allowance against our deferred tax assets. Full year 2025 GAAP net income increased to $99.3 million compared to $32.2 million for 2024. Without the impact of these deferred tax benefits, we would have reported net income in Q4 and full year 2025 of $19.3 million and $60.9 million, representing a year-on-year increase of 57% and 89%, respectively. Q4 adjusted EBITDA increased 32% from the prior year period to $25.1 million, representing a 12.8% adjusted EBITDA margin.

Adjusted EBITDA for the full year increased 62% to $94.6 million, representing an adjusted EBITDA margin of 13.7%, an increase of approximately 200 basis points over 2024. Cash operating expenses, which excludes advertising spend and certain non-cash and other one-time charges, were $24.3 million in Q4, down modestly from Q3. For full year 2025, we also continue to drive strong operating leverage in our model with total cash operating expenses of approximately $97 million being effectively flat year-over-year. At the same time, our steadfast commitment to drive increasing efficiencies through automation in our core operations enable us to shift significant additional investment through 2025 into areas that drive future growth, such as AI capabilities, new products and data science.

As Jayme mentioned, since 2023, we have more than doubled revenues while keeping operating expenses essentially flat. We delivered strong operating cash flow of $27 million for the fourth quarter and $95.4 million for the full year 2025. We ended the period with no debt and cash and cash equivalents of $171.4 million. As a reminder, we implemented a $50 million share repurchase program last July. To date, we have repurchased approximately $30 million of shares, including approximately $9 million since the start of 2026. We are pleased with our outperformance in the fourth quarter as we benefited from carriers who are well below their targeted combined ratios for the year and accelerated spend, deciding to not delay additional new customer acquisition until 2026. As a result of this dynamic, Q4 revenues were up a record 12% sequentially, meaningfully breaking with our previous seasonal pattern in which revenues declined sequentially on average in mid-single-digit percentage from Q3 to Q4. Turning to 2026. We continue to operate in a favorable industry environment.

Our carrier partners are indicating that 2026 will be a growth year in which they will compete more aggressively for profitable policy growth after a 2-plus year focus on rate restoration and underwriting margin recovery. We expect this growth to be measured. Following carriers' record level of investment in new customer acquisition in Q4, we are seeing carriers take a more disciplined approach to Q1 marketing spend as they begin a new budget year and seek to position themselves to have greater flexibility as the year unfolds. This contrasts with our historical seasonal patterns which we would have customarily see a sequential step-up into Q1 as carriers will look to aggressively start a new year by quickly deploying budget and then consider tapering spend as they progress through the year based on their underwriting profitability.

Now turning to guidance for the first quarter of 2026. We expect revenue to be between $175 million and $185 million. We expect VND to be between $49 million and $52 million, and we expect adjusted EBITDA to be between $23.5 million and $26.5 million. Entering 2026, we believe that we are well positioned to operate in a dynamic environment fueled by a rapidly evolving AI landscape. From our experience in serving insurance providers over the past few years, our battle-hardened team has honed its ability to quickly adapt our operations to changes in the environment with a clear-eyed view towards identifying opportunities that will both enable us to better serve our customers and drive strong financial performance.

As Jayme shared in his remarks, we have recognized and embraced AI capabilities that allow us to more aggressively adapt our operations and investment approach to create opportunities for EverQuote to deliver long-term sustainable growth. We look forward to sharing more with you on our achievements over the course of the year. In summary, our record 2025 performance reflects our steadfast commitment to strong execution and a clear growth strategy. As we look at the remainder of this year and beyond, we are focused on our goal of creating a $1 billion revenue business over the next 2 to 3 years by being the leading growth partner for P&C insurance providers and doing so in a manner that will generate expanding levels of profitability and free cash flow.

Jayme and I will now take your questions.

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

I know you're not providing full year guidance at this time, but maybe any directional color you could share in terms of the growth trajectory throughout the year based on conversations sort of with your carrier partners? I guess how should investors think about sort of growth normalizing from this projected Q1 levels?

Sure. Thanks, Maria, for the question. Just want to make sure everyone can hear us okay. You're broken up a bit, Maria. Operator can hear us okay, excellent.

Can I repeat my question?

I think the question, Maria, just to make sure I had it was, outlook for full year 2026 based on the Q1 guide, can we give some insight on the rest of the year, even though we're not giving annual guidance, correct? Perfect. So thank you, Maria. I'll start with our carrier partners are indicating that 2026 will be a growth year for them broadly.

And their focus in this growth year is really about competing for profitable policy growth. This is after sort of a 2-plus year period where they were focused on getting rate adequacy and getting underwriting margins to be sustainable. As we think about how they're looking at this period, we're seeing it as a disciplined approach to starting Q1 in part reflecting a really strong Q4. We had this very strong Q4 dynamic where we -- we were up sequentially 12% a record level. So coming into Q1, they're coming in with a view we're going to grow.

And as we progress through the rest of the year, I can touch more in Q1 questions if you have them. But for the rest of the year, I would refer you to what we talked about in our November call, which is our path to $1 billion in revenues. It remains unchanged in our approach. We'll be a $1 billion company in revenues in 2 to 3 years.

And as we think about what that implies for growth rates, if we did that in 3 years, that would say it'd be a 13% top line growth. If we did that in 2 years, it'd be 20%, 21% top line growth. So I think that would be the first data point I'd point to you. Obviously, some years will be higher, some years will be lower in terms of revenue growth.

Then when you think about EBITDA going down further down in the P&L, we've said in our November call that EBITDA margins and our path to $1 billion will go between 100 and 150 basis points. We're reiterating that view there'll be between 100 and 150 basis points. And consistent with what we said in the November call for 2026, we think they'll be closer to 100 basis points, reflecting that in 2025, we had 200 basis points of improvement. Probably the last insight I'd give you on this year is if you think about that top line growth and that -- what that implies for EBITDA dollar growth, it implies at least 20% EBITDA dollar growth for 2026. And I think you'll see that on our path to $1 billion along the way each year.

Got it. That's very helpful. And then can you maybe share a little bit more color around your traffic investments in Q4 and particularly anything you can share about AI-related search and the quality of that traffic? And clearly, these investments benefited Q4, but do you anticipate any of those benefits spilling over into Q1 and 2026?

Yes. I'm sorry, Maria, you're coming in a little choppy for us, but I think was the question about expectations for traffic coming from AI search going in 2026?

Yes. Can you hear me now? Can you hear me okay?

Yes. I hear you better now.

I was just wondering if you could talk about your traffic investments in Q4 more broadly. And then specifically as it relates to AI-related search, sort of, is there anything you can share about the sort of quality of that traffic? And then as we think about sort of Q1 and going forward, do you anticipate any benefits from these investments in Q4 to sort of flow through into Q1 and into 2026?

Yes. Okay. So broadly, we mentioned in the previous call that we are making investments and expanding into or underpenetrated traffic channels, particularly sort of higher funnel traffic channels. And we're investing in some of these new traffic programs kind of going from late last year into early this year.

What we have experienced is more or less what we expected, which is we were able to drive some significant scale through some of these channels in Q4. As Joseph referenced, it came -- any time we're standing up a new traffic program or channel, it does -- you have to kind of burn it in. And so it takes some time to get to the steady-state margin profile. And now in Q1, you're starting to see the margins sort of normalize back to more of a steady-state level. But this will be a process as we step into more channels over the course of the year.

So our goal is to continue growing quote request volume and traffic to meet our customers' demand. And one of the key vectors to do that is to launch and scale up incremental channels of traffic and incremental programs. So that's going to plan. Then I think you asked to sort of double-click specifically into any insight around some of the AI search traffic.

And what I can share there is we are -- we're actively talking to and building into a big LLM chatbot platforms, and we do expect to start to see traffic grow from those platforms in 2026. There's a number of different ways that you can sort of integrate or start to receive traffic from them. One is through content, getting picked up in their training runs through kind of new version of SEO. Two is through like technical integrations with them or building apps in those platforms. And third, now we're starting to see them open up to testing paid advertising.

So we are positioning to begin to access traffic across all 3 of those. We have, on the content front, the benefit of not having had an SEO program, a legacy program in the past. So all of that, we're approaching with a clean sheet from first principles, and we're going to start to build into that content program in a way that is tailored to and customized for the way that these LLMs want to absorb information. Number two, as I mentioned, we're beginning to sort of talk to and build into some of the LLM chatbots where I think the user experience will be more important, and we'll be able to rely on some of our proprietary data and distribution relationships to create some really cool and differentiated user experiences.

And then the third piece is programmatic advertising, right? So there are a few companies out there who are more effective at programmatic advertising for insurance. And certainly, as these platforms open up to paid advertising, we'll be first in line to participate. So I hope that answered your question.

And our next question comes from the line of Cory Carpenter with JPMorgan.

Jayme, maybe one for you and one for Joseph. Hoping for you, Jayme, just an update. In the last few quarters, you've talked a lot more about these new products and becoming a holistic suite. So maybe an update on where you're at and the progress you've made with the AI bidding and some of the smart campaign and subscription products that are in earlier initiative stage for you guys.

And Joseph, for you, I think the question people are trying to square this afternoon is, I think hear loud and clear the confidence of the $1 billion over 2 to 3 years and kind of those 13% to 21% guardrails. The 1Q guide implies, if I'm doing my math right, 8% growth. So I guess the question is, what's giving you confidence in that growth reaccelerating over the next year or 2?

Sure. Thanks, Cory. So as it relates to broadening the suite and evolving from a lead gen provider to more of a growth solutions provider to customers, we made significant progress last year. You referenced Smart Campaigns, which is one of the products that has gotten the most attention.

And that really expanded to the bulk of our carrier customers over the course of the last couple of years. And this year is the year where we're going to start to roll it out to local agents. So we've got a different version for agents. We're also going to begin to cut it across different referral types and vertical markets.

So for our calls product and for our home vertical. So we'll see continued development as it relates to Smart Campaigns. And then we're investing in improving the performance, so the models themselves by adding new features like auction competitiveness and beginning to introduce more reinforcement learning into the model. So Smart Campaigns has been sort of a big step forward for the way that providers bid into our auctions and get performance from us.

And by the end of this year, I think we'll have many agents on it, too. We also have really widespread adoption across our distribution. And then where we're focused on extending the product offering beyond that most acutely is with the local agents, right? The vision with the local agents is to evolve from a lead vendor to the one-stop growth partner for them by developing and rolling out value-added features and products on and around our core lead offering.

And in doing so, accessing more of their growth budget and really starting to expand the ways that we help agents grow. So that's come a long way, too. I think we've stepped up once again from the last time we reported this number. We've now got 40% of agents using more than one of our products across leads, calls, telephony and digital solutions.

So that strategy is more or less going as planned, and we're continuing to make significant inroads both with carriers and with the local agents.

So I'll take the second part of your question, Cory. So -- and thank you. I guess in terms of the path to $1 billion, maybe I'd take some high-level points, and then I'll go into a little bit of sort of dynamics around what's going on in Q1 versus Q4 and in the context for the year. So our path to the $1 billion remains the same as we've articulated before.

It comes across 3 areas principally. One is on the distribution side, the idea that we're going to get more carrier budget and pricing as we improve performance. And that's principally being driven by our AI products. As Jayme talked about SmartCampaigns, key part of why our carrier is coming to us, we're helping them drive better performance.

Today, SmartCampaigns is used by a majority of our carriers. We think you will see more and more budget coming through SmartCampaigns over time. The second is we get more agents to get more share of their marketing budgets more broadly. We've talked about in the past how we're moving from a sort of being a one-product company, agents now being a multiproduct strategy with agents.

At this point, we're at sort of 1.4 products per agent relative to where we were 18 months ago, it was much closer to 1. So we'll continue to make progress there. Third is traffic expanding into new -- more traffic channels. We made some investments in Q4. We feel good about how those are progressing. Jayme talked a little bit about how AI search will change our landscape, and we feel that will also benefit us as well, and we're well positioned to take advantage of that.

And then lastly, I look at verticals. Today, as you look at our marketplace, we're roughly 90% auto, 10% home. If you think about the insurance landscape for P&C, home is roughly 50% of the size of auto. So we see a real opportunity between 10% and 50% to grow this over time at a faster rate.

And we think in the medium-term horizon, you'll actually see home growing at a faster rate than auto. And just to remind you on the home piece, home was a vertical that had some of the same dynamics of auto coming out of COVID was further behind the recovery. We saw some nice growth last year at 20% growth year-on-year. And again, we feel bullish about that.

So those are, I guess, the path to the $1 billion that we continue to feel bullish about. I guess the comments in terms of what's going on in Q1, maybe I could double-click on that and give you a little context on the seasonal pattern. I think one of the dynamics we have emerging in the business is potentially a new seasonal pattern. We've had -- based in the past 2 quarters.

We had a Q4 dynamic where we had a record sequential increase from Q3 to Q4 of 12%. To put that in context, our seasonal pattern on average from Q3 to Q4 is usually down low single digits. So we're up 12% on record. I think some carriers took Q4 as an opportunity when they were -- had very favorable combined ratios to sort of invest in growth last year and they pulled some of the Q1 into Q4. Then you look at the start of this year, we see growth coming across where carriers are clearly indicating to us they want to grow.

And we've had -- broadly out there having carriers tell us that. I think what they are also telling us is they're going to do it in a measured way throughout the year to make sure they maintain flexibility as the year unfolds. When you put those dynamics together, different dynamic in Q4, different dynamic in Q1, we are actually encouraged by how carriers will be unfolding. We could see a change from what we used to see, which was carriers would start out of the gates really hot in Q1, then you have tapering throughout the year and some volatility.

We think it could be a more sustained view from carriers as we look into 2026. Probably the last data point I'd give you in terms of the seasonal pattern, we're not giving guidance for the year. But as I look at Q1, typically, Q1 would be down to Q2. What we would suggest is probably a reasonable place to think about Q2 is sort of flattish -- and sort of flattish levels of revenues, VMD adjusted EBITDA versus Q1. So that would imply a much higher growth in Q2 than Q1, north of the -- taking 3 years to get to a path to $1 billion. I think it will be a 15%, 16% growth.

And our next question comes from the line of Ralph Schackart with William Blair.

First one for Jayme. There's obviously a lot of concern in the market at least currently on how AI agents can disrupt some models. But just kind of curious how you see AI agents sort of progressing within sort of your platform and maybe more broadly within the P&C market? And then maybe on the VMD for Joseph, it seems like the margin has sort of bounced back or at least guided to in Q1. How should we think about that margin as it progresses through the year?

Thanks, Ralph. Yes. So on the agentic AI piece, I think I would start here. I think there is some broad-based probably misunderstanding about how exposed our business is and whether we're more likely to benefit or be challenged by the development of AI agent capabilities.

Yes, I think I'd start by pointing out that we're not a software business, right? We're a data-powered 2-sided marketplace. And so the software layer of our stack is, say, 20% of the value. So much more of the value is in our proprietary data, our traffic engine, our distribution relationships, which, by the way, with regulated entities and how we integrate all these things into a complex system whose sole purpose is to be the dominant industry-specific performance marketing platform.

So that is not something that we believe can be replicated by LLMs or AI agents without a lot of human involvement. Now I will acknowledge, of course, that shopping for everything will evolve. And in insurance specifically, there are some factors, which will cause it to evolve differently than other categories. First and foremost, it's very opaque.

So rates for many of the best insurance products are not readily available or accessible through public APIs. And in fact, carriers go to great lengths, as you know, to prevent their rates from being accessed anywhere outside of their own quoting funnel. So can LLMs or agents help at the top of the funnel? Yes.

But I would say what we've seen so far and what we've been able to kind of do ourselves so far is a far cry from a transformative experience. I think what's out there in the market today, basically taking a web experience and applying a very lightweight conversational front end to it before spinning the consumer back into a fairly common web-based quoting or binding experience. So there's not much depth to it just yet. Now over time, I do think that these agents will enable more transformative change.

So I want to be clear about that. And I also think it's likely that EverQuote will be in the driver's seat of bringing that to fruition. We've got the distribution relationships to access rates. We have the data to make consumer experiences more seamless.

And we've got the technology chops to build the app or experience of the future, and we will, right? So these are things that we're actively working on and sort of building with. So for right now, like today, can these AI agents make our -- can it help us by making our marketplace operations and performance more efficient? Absolutely, and they are.

And can they start to improve how customers compare insurance options in a way that's more user-friendly? Yes, they can. And so this is all underway, but it's precisely what we're focused on this year is really harnessing the power of agentic AI to drive better results for our customers and for the business.

And then to turn to your question on the VMM margin sort of context for the year. So just in context, we were over 25% in Q4, very much in line with what we said in our last call, which is we had a really strong start to the year in 2025, the first 3 quarters. So we consciously made a choice to invest in new channels in Q4, brought us down to around 25% as expected. The strategy worked.

As we look to Q1, you're sort of seeing us coming back to a guide that shows -- probably in the high 20s, with 28% is at the midpoint, again, very much in line with what we expect and what we said would happen. If you look at where we were last year and the overall year, we were just under 28%. So when I think about the rest of this year, I'd say high 20s is where we expect to be. It will bounce around certainly quarter-to-quarter.

Why will it bounce around? Two reasons. One is we do not run the business on a day-to-day basis to drive VMM margin. We run the business on a day-to-day basis to drive VMD.

That's first. Second is the -- what do we control and not control in determining our VMD and VMM. We do not control advertising costs. What we do control is the efficiency with how we acquire advertising.

So on advertising costs, Certainly, quarter-to-quarter, month-to-month, there can be pressures on advertising costs that drives those up or down, and we take advantage of those where we can. But we obviously are buying that as our sort of a raw material for our business. The last thing I'd say about our efficiency and how we buy things, reference point I've given actually we did our roadshow in December, Ralph, I remember was helpful, was if you looked at our business back in 2023, where our business was $260 million auto insurance business, $270 million auto insurance business. That had a VMM in the high 20s.

Today, the business is almost 3x that size. We have a VMM still in the high 20s. Certainly, the advertising environment has gotten significantly more competitive in that time period. There's no question about that.

I think we have been able to maintain it because the investments we've made in our technology, our AI traffic platforms to take advantage of our data, the efficiency with how we acquire that advertising is the thing we do control and we do that well.

And our next question comes from the line of Mayank Tandon with Needham.

I was just curious in terms of the potential upside case to 1Q. And then if we assume the base case for 2026, even though Joseph, you're not giving guidance is, say, low teens growth based on your $1 billion revenue target in 3 years. What is the potential bull case to that? What I'm curious is California, a potential positive catalyst that could drive upside?

I think last quarter, Jayme, you had mentioned that 20 of the top 25 carriers were still below peak spending levels. Is that something that could also be a potential upside case? So just curious in terms of what the catalyst might be that could drive faster growth than what you're currently maybe modeling or at least indicating to TheStreet?

Sure. Thanks, Mayank. So again, the range I would say is what we said in the November call, still a path to $1 billion in 2 to 3 years. That remains our goal for top line growth.

Mathematically, that implies if it takes 2 years, it's 20%. To do it in 3 years, it's 13%, just to give you the context of the numbers. What could drive it to the higher in the year versus lower in the year? Probably a couple of things I'd point to.

So first is you have one large national carrier who's really coming back online with us this year. That was a carrier that was a top 3 carrier for us prior to the downturn. We think that carrier could be certainly an important dynamic in our marketplace to be beneficial. How exactly that plays out, how quickly, how slowly, a lot remains to be seen, but I think that certainly is one key dynamic.

If you look at the state footprint, we have states coming back broadly. California is one we saw some progress in 2025. There is some room for incremental progress in 2025, certainly -- excuse me in 2026. But we had some progress in '25. But I think some more there I referenced. The other dynamic I'd mention is when you look at where is auto -- where is insurance going online relative to other industries. Insurance remains a laggard going online.

With everything that has happened through the past few years, can't lose sight of the key tailwind for our businesses. Insurance remains an area that has gone online much more slowly than other areas. Lots of different stats you can look out there. But one of the ones I like to look at is relative to financial services, about 1/3 fewer folks get insurance today online than versus broader financial services.

So there's opportunity for insurance to grow. How fast that may grow and catch up with others, that also could bring it higher or lower within a given year. Those are probably the 3 key ones I'd point to.

Very helpful. And then, Joseph, I think you like this question, so I'll ask you in terms of capital allocation, you're flushed with cash, a good problem to have. So you talked about the buyback program, but does this also potentially open up maybe more appetite for M&A? Or how else would you be able to leverage the cash on hand?

Sure. So thank you, Mayank. I appreciate the question. So I guess I'd start with just we expect to continue to generate meaningful cash flow from operations, and we have a high cash conversion from adjusted EBITDA to operating cash flow, subject to normal working capital in the quarter.

But in Q4, cash conversion was around 100% -- and as we ended Q4 with almost $171 million in cash, up from $146 million in Q3, the difference being the same as our EBITDA for the quarter. When we think about cash, we think about 3 things. So first, we think about having a strong balance sheet. We think a strong balance sheet is critical.

We have no debt. We have access to up to $85 million, but we have no debt today. We have a fortress balance sheet, and we want to make sure we continue to have that. The second is the share buyback program.

We announced our inaugural share buyback program last summer. It has a 1-year duration. It was a $50 million program. We used $30 million of that to date has been purchased, including $9 million since the start of this year.

And we'll continue to be opportunistic in using the rest of that $20 million between now and that program's expiration in the summer, and we'll continue to evaluate options to extend that program in future periods. And then third, we'll continue to look at selectively at acquisitions. As we've talked about, we do not believe we need M&A on our path to $1 billion. Our path to $1 billion in revenue can be achieved entirely through organic growth.

However, we do think there's an opportunity to potentially accelerate organic growth and importantly, accelerate our strategy to be the leading growth provider to P&C carriers and agents and M&A could play a part in that. And so as we talked about last year, we're spending more time thinking about that this year and being more thoughtful about it, and that could be a third use of cash as well.

And our next question comes from the line of Zach Cummins with B. Riley Securities.

So I'll do one for Jayme and then one for Joseph. So Jayme, I think you touched on this a little bit earlier with your commentary, but can you give us a sense if you've seen any meaningful changes in the traffic that's coming on to your platform since we've seen more of an emergence with these large LLM platforms? Any sort of shift in terms of channels or where you're focusing your attention from a traffic standpoint? And the second one, maybe for Joseph.

As you think about just the early conversations you're having with carriers, I mean, as you set baseline expectations for this year, are you anticipating kind of a broadening of contribution that you see from your carrier base this year? Or what's the right way to think about kind of contribution across the key carrier partners?

Sure. So I'll start. I'd say we felt no material impact -- direct impact or mix shift as a result of the growth of some of the AI search platforms. In fact, overall volume has remained at historically high levels, and that was true throughout the course of last year.

And even search volume remains at historically high levels. So we haven't been impacted there. Recall, we have -- I think the primary point of impact has been in organic traffic or SEO originated traffic, which was really never part of our mix. So in that regard, we've not really experienced any direct kind of effects from it.

So that being said, we do see it as a growth opportunity moving forward, as I sort of mentioned and kind of spoke to in detail answering Maria's question. So I think we'll start to originate a meaningful amount of traffic from these platforms in 2026 through a combination of content, technical integrations and paid advertising. And it will become a channel of substance for us in 2026. At the same time, we're continuing to expand the traffic portfolio in other ways, primarily through some of these higher funnel channels. These are things like social video and so on and so forth.

For those, we've been kind of working on an evolved digital experience that's more compatible with these channels, and that continues to be an area of investment going into this year.

Maybe answer -- address your question with regards to how we think about the carrier base and the broadening of it. Maybe I'll give you a few data points that may help you as we think about this year. As we look at Q4, 75% of our top 25 carriers in Q4 were below their peak quarterly spend on the platform. So I'll give you that one stat.

That shows to us there's ample room to grow for carriers. Obviously, not all carriers spend at the same quarter every time. So you'd expect that to ebb and flow. But again, 75% were not at peak quarterly spend in Q4. So that's one data point I'd give you in terms of composition.

The other one to give you in terms of composition is in Q4, you had our top 4 carriers in Q4 were also our top 4 carriers in Q3. They had some movements in their relative share percentage in the quarters, but that fact did hold true from Q3 to Q4. And then what you saw in Q4 is that the -- from 4, sort of 5 through 10, you had some movement around as you had competition within those carriers more meaningfully. As we look into Q1, I think there's a potential for some carriers to have more competition movement around. Why do we think that? We think that because what is driving carriers right now.

It's all about profitable policy growth. That contrasts what we saw over the past few years where carriers were focused on getting rate adequacy and underwriting profitability. They were less focused on maintaining share. As you see this sort of soft market cycle evolve, you see them increasingly focused on how can we competitively grow, how can we more aggressively grow policies in force and do it in a profitable way.

We think that plays really well to digital channels. We also think it creates a dynamic where there could be more competition between the carriers and some movement around in those positions within our marketplace. And related to that also, we have another national carrier coming on who was not involved in the marketplace last year. We think that will also create a competitive dynamic as well, which I think will result in some movement around as we progress through the period of Q1 and into the rest of the year.

And again, we think that's good for the marketplace, creates a more dynamic and healthy marketplace. We have more carriers competing for profitable policy growth and digital channels like we provide are, we do that very effectively.

And our next question comes from the line of Jed Kelly with Oppenheimer.

I guess just these LLMs, they're commanding a ton of the market's attention. I guess, historically, we've always seen the carriers not want to put their quotes on third-party sites. And that would imply to me that, I guess, aggregators like yourself should benefit into these new LLMs if the carriers aren't going to want to put their rates on LLM. Is that the right way to think about it?

And then I have a follow-up.

Yes, Jed, we share that perspective. And so -- I think I referenced that earlier. The carriers are very protective of their rates. They have gone to great lengths over the years to resist any kind of traditional rate comparison experience in the U.S. insurance market.

And that position has not changed. You can't find examples of rate comparisons out there, but those experiences typically only show rates for maybe 30%, 40% of the available product, and you're missing some of the best product, Progressive Direct or so on and so forth. And so that dynamic is not likely to be any different in the -- just with the technology shift, which continues to -- which creates an opportunity for players like us who have unique access to carrier distribution, whether that's in the form of a rate or in the form of connecting someone with a local agent or with -- in the form of bridging them over to directly land on a quoting experience with the carrier.

It is this complexity and kind of this like different and really dynamic distribution landscape that someone like us can organize on behalf of any given LLM that wants to connect their consumers with insurance distribution. So we think there is a role to play, and there's an opportunity to really carve out a material role in that. And we feel really well positioned, right? Like you've got to remember, like our whole company was built on the ability to kind of marry our data with technology to connect consumers with insurance distribution.

And now 15 years on, we've built this data asset from hundreds of millions of historical insurance shopping events, each of which gives us some proprietary data that we can use to streamline, optimize and innovate digital and AI native experiences. So we feel like we're in a really good position to go on offense here, and we're looking forward to this next chapter.

And then I guess just as a follow-up to that, if AI -- if the carriers implement AI and that makes them more profitable, assuming the profitability it costs them to underwrite a policy goes up, won't that make them want to lean more into channels that can drive them traffic?

Yes. I think that's likely. And I mean, look, it's going to happen. It's just a question of when.

I mean we've been deploying AI throughout our business over the last couple of years through our traffic bidding, through SmartCampaigns, through our operations, most notably in like engineering where AI coding tools have really become like a productivity multiplier. Call center operations, right? We're seeing AI voice in real time, take on more and more customer interactions in an insurance funnel. So I think it's an inevitability that these insurance carriers will find material cost savings, which will improve their combined ratios, which will give them more capacity to spend in marketing.

And again, this is an area where I think our strength is we are a trusted partner to these carriers. So not only could we be the beneficiary on the marketing side, but we think there's a broader opportunity to step into helping these carriers get leverage from AI faster and more effectively than they might be able to do on their own, whether that's through productizing some of the things that we can do like we've done with SmartCampaigns or otherwise embedding teams with the carriers to help them sort out their own AI strategy. But we feel lucky to have access to the carriers, to the talent. Our Chairman, Dave Blundin, he's like a prominent figure on the leading edge of AI.

He's been very involved in helping us shape our AI strategy and access some top AI talent. So we see this as like a really interesting space, where the carriers are going to need help, and we are -- we're the trusted partner to help them.

And our next question comes from the line of Mitchell Rubin from Raymond James.

Congratulations on the quarter and the year. In the prepared remarks, you mentioned carriers taking a more disciplined approach in the first quarter of '26 from the record levels observed in the fourth quarter. Is the pullback broad-based across carriers or concentrated among specific relationships?

Sure. Yes, I would say when I think about carriers across Q1, there are multiple carriers who we have this dynamic with. I think some have -- I think the idea of discipline is a theme we're seeing across carriers. I think why is it, right?

We're seeing carriers who are pivoting from a period of getting rate adequacy restoring rates and getting underwriting profitability to getting into a period now where they are -- want to aggressively compete for profitable policy growth. They're also recognizing at least what we're seeing and hearing in our discussion, which is the dynamic is changing. The normal pattern seems to be changing for them. And that, I think, reflects as they think ahead for the year, they want to have flexibility.

So as opposed to the old pattern of start the year, new budget, let's go crazy and then we'll sort of see how the year progresses. They're being very thoughtful at how they do things throughout the year. And so we're seeing that with multiple carriers. Some more so than others, but again, multiple carriers, I think, would be what we're seeing.

Thank you for the additional detail there. Could you provide some more color on the tax -- the deferred tax benefit recorded in the quarter? And what criterias met that led to the valuation allowance release?

Sure. So with regards to the tax valuation release, this is mentioned in our -- my prepared remarks. The full year and Q4 tax benefit were the same, approximately $38 million. The benefit was primarily driven by the release of our valuation allowance against our deferred tax assets.

And think about it very similar as we had NOLs that we -- now that we're becoming a profitable company, we have the ability to use those NOLs and requires a change in recognition. It effectively view this as this was a noncash charge. And so it's important to note, it's a noncash and onetime charge. But it does reflect this dynamic of now that we have sustained profitability, they're now on our balance sheet, and we're we able to use them as we're making more money.

And what I would say on these as well is we are not the first to have this experience. You may have had other companies in our space have had the same issue as well. So it's a common issue across our space.

That concludes our question-and-answer session. I will now turn the conference back over to management for closing remarks.

Thank you, and thanks all for joining. Just to recap, we had a phenomenal year in 2025 with records across all our key financial metrics, and we're carrying that momentum into 2026 with a healthy insurance market that's hungry for growth. As a team with a long-standing track record of using our proprietary data and technology to drive profitable growth, we see the recent acceleration in AI capabilities as a huge opportunity for EverQuote moving forward. We feel very well positioned going into 2026, and we're going to become the company that leads insurance distribution into a more AI-native future.

Look forward to updating everyone as the year progresses.

And ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.