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What changed in EverQuote, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of EverQuote, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+211 added−236 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-27)

Top changes in EverQuote, Inc.'s 2024 10-K

211 paragraphs added · 236 removed · 182 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

28 edited+6 added−2 removed50 unchanged
Biggest changeThe state of the auto insurance market remains volatile, and while we believe we have started to see some improvement in spending patterns, a recovery could be prolonged by further cost inflation, increased claim severity and frequency, or insufficient policy premium increases. In June 2023, we implemented a workforce reduction plan to improve operating efficiency.
Biggest changeThe state of the auto insurance market remains volatile, and while we have seen improvements in spending patterns in 2024, including from our largest carrier customer, not all of our carrier customers have increased their spend in a proportional or significant manner, and a full recovery could be prolonged by further cost inflation, increased claim severity and frequency, or insufficient policy premium increases.
Our cost structure provides us with the flexibility to react to changes in the business cycle. Our largest expense advertising is variable and can be quickly adjusted to market conditions. During periods of economic expansion, we can increase advertising spend to attract consumers to our platform and further enhance the strength of our marketplace.
Our cost structure provides us with the flexibility to react to changes in the business cycle. Our largest expense is advertising spend, which is variable and can be quickly adjusted to market conditions. During periods of economic expansion, we can increase advertising spend to attract consumers to our platform and further enhance the strength of our marketplace.
We use network, website, service and hardware-level monitoring, coupled with remote-content monitoring, to maintain a high level of uptime and availability for our systems with high-performance delivery. Our Customers Our insurance provider customers include insurance carriers and third-party insurance agents. Insurance carriers write auto, home and renters, and life insurance policies for consumers directly and through agents.
We use network, website, service and hardware-level monitoring, coupled with remote-content monitoring, to maintain a high level of uptime and availability for our systems with high-performance delivery. Our Customers Our insurance provider customers include insurance carriers and third-party insurance agents. Insurance carriers write auto and home and renters insurance policies for consumers directly and through agents.
Our human capital is integral to our future success. For that reason, our human capital resources objectives include attracting, retaining, developing and motivating a diverse team of highly skilled employees at all levels. We value our employees and provide them with competitive cash compensation as well as opportunities for equity ownership.
Our human capital is integral to our future success. For that reason, our human capital resources objectives include attracting, retaining, developing and motivating a team of highly skilled employees at all levels. We value our employees and provide them with competitive cash compensation as well as opportunities for equity ownership.
With our diverse team of analysts, engineers and business development employees, as well as our relationships with leading third-party insurance providers, we are working to build the largest and most trusted online insurance marketplace in the United States.
With our team of analysts, engineers and business development employees, as well as our relationships with leading third-party insurance providers, we are working to build the largest and most trusted online insurance marketplace in the United States.
In addition, we regularly conduct employee surveys to gauge employee engagement and solicit feedback and enhance our understanding of the views of our employees, work environment and culture.
In addition, we conduct employee surveys to gauge employee engagement and solicit feedback and enhance our understanding of the views of our employees, work environment and culture.
These challenges include: • Misalignment of providers and consumers creates an inefficient match between supply and demand • A complex, fragmented and opaque market for consumers • Inefficient advertising channels for insurance providers Due to these challenges, insurance providers are seeking more efficient ways to connect with consumers, and as a result the internet has become increasingly influential in consumer insurance shopping.
These challenges include: • Misalignment of providers and consumers, creating an inefficient match between supply and demand • A complex, fragmented and opaque market for consumers • Inefficient advertising channels for insurance providers Due to these challenges, insurance providers are seeking more efficient ways to connect with consumers, and as a result the internet has become increasingly influential in consumer insurance shopping.
As a result, we are affected by laws and regulations relating to the insurance industry, which is heavily regulated. While it is difficult to determine the impact of potential reforms on our future business, it is possible that such changes in industry regulation could affect our operations and demand for our platform.
We are affected by laws and regulations relating to the insurance industry, which is heavily regulated. While it is difficult to determine the impact of potential reforms on our future business, it is possible that such changes in industry regulation could affect our operations and demand for our platform.
Our robust distribution network includes approximately 75 insurance carriers and 6,500 agents representing virtually all major and niche P&C carriers operating in the United States. Our distribution network is a significant competitive advantage that allows us to offer consumers a broad array of insurance solutions and enables us to attract a broad spectrum of consumer traffic efficiently.
Our robust distribution network includes approximately 60 insurance carriers and approximately 6,000 agents representing virtually all major and niche P&C carriers operating in the United States. Our distribution network is a significant competitive advantage that allows us to offer consumers a broad array of insurance solutions and enables us to attract a broad spectrum of consumer traffic efficiently.
Proprietary, data-driven technology platform. Our platform efficiently attracts consumers shopping for insurance to our websites and call center, which match them to relevant providers for streamlined quoting. This enables us to maintain high levels of quality control and provide real-time referrals to insurance providers at the moment of the consumer’s purchase intent. Insurance provider engagement and benefits.
Our platform efficiently attracts consumers shopping for insurance to our websites and call center, which match them to relevant providers for streamlined quoting. This enables us to maintain high levels of quality control and provide real-time referrals to insurance providers at the moment of the consumer’s purchase intent. Insurance provider engagement and benefits.
See —“Risk factors-Risks related to Laws and Regulation.” Intellectual Property We seek to protect our intellectual property through a combination of copyrights, trademarks, service marks, domain names, trade secret laws, confidentiality procedures and contractual restrictions. We have a number of registered and unregistered trademarks. We own federal registrations for trademarks including EVERQUOTE, as well as multiple pending applications.
See —“Item 1A. Risk Factors—Risks related to Laws and Regulations.” Intellectual Property We seek to protect our intellectual property through a combination of copyrights, trademarks, service marks, domain names, trade secret laws, confidentiality procedures and contractual restrictions. We have a number of registered and unregistered trademarks. We own federal registrations for trademarks including EVERQUOTE, as well as multiple pending applications.
Furthermore, we believe the breadth of the insurance provider options in our marketplace gives us an inherent advantage over single-brand insurance providers with respect to conversion and bind rates for consumers. Employees and Human Capital Resources Our company culture is data-driven, entrepreneurial, diverse and innovative. As of January 31, 2024, we had 384 employees, of which 381 were full-time.
Furthermore, we believe the breadth of the insurance provider options in our marketplace gives us an inherent advantage over single-brand insurance providers with respect to conversion and bind rates for consumers. Employees and Human Capital Resources Our company culture is data-driven, entrepreneurial and innovative. As of January 31, 2025, we had 331 employees, of which 324 were full-time.
Because we work with consumer information and other data and engage in marketing and advertising activities via telephone, email, and text messages, we are also subject to laws and regulations that address privacy, data protection and collection, storing, sharing, use, disclosure, retention, security, protection transfer and other processing of personal information and other data, including the California Consumer Privacy Act, or CCPA, the California Privacy Rights Act, or CPRA, and other state privacy laws, the Controlling the Assault of Non-Solicited Pornography and Marketing Act, or CAN-SPAM Act, and the Telephone Consumer Protection Act of 1991, or TCPA.
Because we work with consumer information and other data and engage in marketing and advertising activities via telephone, email, and text messages, we are also subject to laws and regulations that address privacy, data protection and collection, storing, sharing, use, disclosure, retention, security, protection transfer and other processing of personal information and other data, including the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020, or collectively, the CCPA, and other state privacy laws, the Controlling the Assault of Non-Solicited Pornography and Marketing Act, or CAN-SPAM Act, and the TCPA.
In order to increase our focus on property and casualty, or P&C, insurance verticals, we also exited our health insurance vertical, an area that would have required significant capital investment and scale to effectively compete amid an increasingly unpredictable regulatory environment.
In order to increase our focus on P&C insurance verticals, we also sold health insurance-related assets and exited our health insurance vertical, an area that would have required significant capital investment and scale to effectively compete amid an increasingly unpredictable regulatory environment.
Our principal executive offices are located at 210 Broadway, Cambridge, Massachusetts 02139, and our telephone number at that address is (855) 522-3444. Our website address is www.everquote.com.
Our principal executive offices are located at 141 Portland Street, Cambridge, Massachusetts 02139, and our telephone number at that address is (855) 522-3444. Our website address is www.everquote.com.
Over time, we believe we will increase our brand equity and recognition as we serve more ad impressions. Additionally, we have built an efficient, consultative sales and customer success organization, which sells our marketplace referrals to insurance carriers and agencies. Carrier sales and marketing.
Our marketing spend across channels is fundamentally algorithmic and performance based. Over time, we believe we will increase our brand equity and recognition as we serve more ad impressions. Additionally, we have built an efficient, consultative sales and customer success organization, which sells our marketplace referrals to insurance carriers and agencies. Carrier sales and marketing.
We are focused on further penetrating the large base of more than 100,000 insurance agencies in the United States. 6 Table of Contents Sales and Marketing Our sales and marketing efforts are designed to increase engagement by both insurance providers and consumers and enhance their awareness of our company. Our marketing spend across channels is fundamentally algorithmic and performance based.
We are focused on further penetrating the large base of more than 100,000 P&C insurance agencies in the United States. 6 Table of Contents Sales and Marketing Our sales and marketing efforts are designed to increase engagement by both insurance providers and consumers and enhance their awareness of our company.
We take a variety of technical and organizational security measures and other measures to protect our data, including data pertaining to our consumers, employees, and business partners. Despite measures we put in place, we may be unable to anticipate or prevent unauthorized access to such data. A substantial majority of the insurance carriers using our platform are P&C insurance carriers.
We take a variety of technical and organizational security measures and other measures to protect our data, including data pertaining to our consumers, employees, and business partners. Despite measures we put in place, we may be unable to anticipate or prevent unauthorized access to such data.
Market Opportunity Insurance is one of the largest segments of the United States economy and is highly fragmented with over 2,500 insurance carriers and over 100,000 insurance agencies, which collectively issued policies representing over $2 trillion in premiums in 2021.
Market Opportunity P&C insurance is one of the largest segments of the United States economy and is highly fragmented with over 2,500 insurance carriers and over 100,000 insurance agencies, which collectively issued policies representing over $1 trillion in premiums in 2023. To capture new policies and retain their existing customers, U.S.
Our marketplace enables consumers to choose to visit an insurance provider’s website to purchase a policy or engage with a carrier or agent by phone or submit their data to insurance providers to receive quotes.
Our marketplace enables consumers to choose to visit an insurance provider’s website to purchase a policy or engage with a carrier or agent by phone or submit their data to insurance providers to receive quotes. Our services are free for consumers, and we derive our revenue principally from consumer inquires sold as referrals to insurance providers.
To capture new policies and retain existing customers, U.S. insurance carriers spent $171 billion in 2021 on marketing and distribution, of which $100 billion related to P&C insurance alone. However, carriers face challenges in this market that create a significant opportunity for companies that can efficiently align consumers and providers.
P&C insurance carriers spent $117 billion in 2023 on marketing and distribution. However, carriers face challenges in this market that create a significant opportunity for companies that can efficiently align consumers and providers.
Our marketplace consists of an extensive network of national and regional carriers as well as technology-enabled start-ups. Our two largest customers together accounted for 27% of our total revenue for the year ended December 31, 2023. We plan to continue to grow both the number of carriers participating in our marketplace and the level of participation from each carrier.
Our marketplace consists of an extensive network of national and regional carriers as well as technology-enabled companies. Our largest customer accounted for 39% of our total revenue for the year ended December 31, 2024. Our two largest customers together accounted for 27% of our total revenue for the year ended December 31, 2023.
Insurance agents deliver auto, home and renters, and life insurance to consumers on behalf of one or more carriers. As of December 31, 2023, we had approximately 6,500 enrolled insurance agencies on our platform.
We plan to continue to grow both the number of carriers participating in our marketplace and the level of participation from each carrier. Insurance agents deliver auto and home and renters insurance to consumers on behalf of one or more carriers. As of December 31, 2024, we had approximately 6,000 enrolled insurance agencies on our platform.
Starting in late 2021 and continuing throughout 2023, the auto insurance industry experienced deteriorating underwriting performance due to a rise in claims, inflation, and inadequate policy premiums. This deteriorated underwriting performance has caused our insurance carrier customers to reduce spending on new customer acquisition, which had a negative impact on the pricing and demand for consumer referrals in our marketplace.
This deteriorated underwriting performance caused our insurance carrier customers to reduce spending on new customer acquisition, which had a negative impact on the pricing and demand for consumer referrals in our marketplace throughout 2023. In 2023, we implemented a workforce reduction plan to improve operating efficiency.
We believe that the rise of digital insurance products and shopping experiences will enable more personal, end-to-end shopping experiences, products and services, resulting in more consumers shopping for insurance online. 4 Table of Contents Our Solution Our results-driven marketplace, powered by our proprietary data and technology platform, matches and connects consumers seeking to purchase insurance with relevant options from our network of insurance providers, saving consumers and providers time and money.
Our Solution Our results-driven marketplace, powered by our proprietary data and technology platform, matches and connects consumers seeking to purchase insurance with relevant options from our network of insurance providers, saving consumers and providers time and money. Proprietary, data-driven technology platform.
ITEM 1. BUS INESS Company Overview We operate a leading online marketplace for insurance shopping, connecting consumers with insurance provider customers, which includes both carriers and agents. Our vision is to become the largest online source of insurance policies by using data, technology and knowledgeable advisors to make insurance simpler, more affordable and personalized.
ITEM 1. BUS INESS Company Overview We operate a leading online marketplace for insurance shopping, connecting consumers with our insurance provider customers, which includes both carriers and agents. Our vision is to be the leading growth partner for property and casualty, or P&C, insurance providers.
Our Growth Strategies We aspire to be the largest online source of insurance policies by using data and technology to make insurance simpler, more affordable and personalized. Data-driven innovation is at the core of our strategy, culture and operating focus.
Our Growth Strategies We aspire to be the leading growth partner of P&C insurance providers. Data-driven innovation is at the core of our strategy, culture and operating focus.
The insurance industry is also making products easier to buy and sell through digital channels with the integration and digitalization of insurance products.
The insurance industry is also making products easier to buy and sell through digital channels with the integration and digitalization of insurance products. We believe that the rise of digital 4 Table of Contents insurance products and shopping experiences will enable more personal, end-to-end shopping experiences, products and services, resulting in more consumers shopping for insurance online.
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Our services are free for consumers, and we derive our revenue from consumer inquires sold as referrals to insurance providers and directly from commissions on sales of policies by our direct to consumer, or DTC, insurance agency. General Developments A substantial majority of the referrals made through our marketplace have historically been for automotive insurance.
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General Developments A substantial majority of the referrals made through our marketplace have historically been for automotive insurance. Starting in late 2021 and continuing throughout 2023, the auto insurance industry experienced deteriorating underwriting performance due to a rise in claims, inflation, and inadequate policy premiums.
Removed
In August 2023, we sold assets related to our health insurance vertical including Eversurance LLC, a former subsidiary of the Company.
Added
On January 24, 2025, the United States Court of Appeals for the Eleventh Circuit vacated amended regulations by the Federal Communications Commission, or FCC, under the Telephone Consumer Protection Act, or TCPA, that were published on January 26, 2024 and that would have taken effect on January 27, 2025.
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The vacated regulations would have required “one-to-one consent” for outbound telemarketing calls or texts made using an automatic telephone dialing system or pre-recorded or artificial voice messages to wireless or residential numbers. It remains unclear whether or how government agencies or legislatures will revisit telephone call consent issues.
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The effects of such types of regulations could require us to modify our data use practices and policies and incur compliance-related costs and expenses and our business could be impacted either directly or indirectly if our customers were to adjust their operations as a result of regulatory changes and enforcement activity.
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In addition, a number of states have enacted (and others are considering) broad data privacy laws that could affect our business.
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Although it remains unclear how these new privacy laws may be modified or interpreted, their effects could have an impact on our business, and may require us to modify our data use practices and policies and incur compliance-related costs and expenses.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

66 edited+8 added−15 removed172 unchanged
Biggest changeOur corporate governance documents include provisions: • providing that directors may be removed by stockholders only for cause and only with a vote of the holders of shares representing a majority of the voting power of all shares that stockholders would be entitled to vote for the election of directors; • limiting the ability of our stockholders to call and bring business before special meetings of stockholders and to take action by written consent in lieu of a meeting; • requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our board of directors; • authorizing blank check preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to our Class A common stock; and • limiting the liability of, and providing indemnification to, our directors and officers.
Biggest changeOur corporate governance documents include provisions: • providing that directors may be removed by stockholders only for cause and only with a vote of the holders of shares representing a majority of the voting power of all shares that stockholders would be entitled to vote for the election of directors; • limiting the ability of our stockholders to call and bring business before special meetings of stockholders and to take action by written consent in lieu of a meeting; • requiring advance notice of stockholder proposals for business to be conducted at meetings of our stockholders and for nominations of candidates for election to our board of directors; • authorizing blank check preferred stock, which could be issued with voting, liquidation, dividend and other rights superior to our Class A common stock; and • limiting the liability of, and providing indemnification to, our directors and officers. 22 Table of Contents As a Delaware corporation, we are also subject to provisions of Delaware law, including Section 203 of the Delaware General Corporation Law, which limits the ability of stockholders holding shares representing more than 15% of the voting power of our outstanding voting stock from engaging in certain business combinations with us, unless the interested stockholder attained such status with the approval of our board of directors or unless the business combination is approved in a prescribed manner.
Further, uncertainties exist in case law 13 Table of Contents and regulations regarding intellectual property ownership and license rights, including copyright, of AI output, creating risks with respect to both the ability to adequately protect intellectual property underlying AI systems and software as well as inadvertent infringement.
Further, uncertainties exist in case law and regulations regarding intellectual property ownership and license rights, including copyright, of AI output, creating risks with 13 Table of Contents respect to both the ability to adequately protect intellectual property underlying AI systems and software as well as inadvertent infringement.
Each of our customer verticals is also subject to various laws and regulations, and our marketing activities on behalf of our customers are regulated. Many of these laws and regulations are frequently changing and can be subject to various interpretations and emphasis, and the extent and evolution of future government regulation is uncertain.
Each of our customer verticals is also subject to various laws and regulations, and our marketing activities on behalf of our customers are also regulated. Many of these laws and regulations are frequently changing and can be subject to various interpretations and emphasis, and the extent and evolution of future government regulation is uncertain.
In addition, if we expand the scope of our services or served markets, we may compete with a greater number of technology companies, websites, buyers and traditional media companies across an increasing range of different services, including in vertical markets where competitors may have advantages in expertise, brand recognition and other areas.
If we expand the scope of our services or served markets, we may compete with a greater number of technology companies, websites, buyers and traditional media companies across an increasing range of different services, including in vertical markets where competitors may have advantages in expertise, brand recognition and other areas.
In addition, any indebtedness we incur under our current revolving line of credit will bear interest at a variable rate, which would make us vulnerable to increases in the market rate of interest. If the market rate of interest increases substantially, we would have to pay additional interest, which would reduce cash available for our other business needs.
In addition, any indebtedness we incur under our current revolving line of credit will bear interest at a variable rate, which would make us vulnerable to increases in the market rate of interest. If the market rate of interest increases, we would have to pay additional interest, which would reduce cash available for our other business needs.
Risks related to Laws and Regulation Negative changes in the regulatory environment, including with respect to the insurance industry, telemarketing restrictions and data privacy requirements, have had in the past, and may in the future have, a material and adverse impact on our revenue, business and growth. We are subject to regulation regarding the insurance industry.
Risks related to Laws and Regulations Negative changes in the regulatory environment, including with respect to the insurance industry, telemarketing restrictions and data privacy requirements, have had in the past, and may in the future have, a material and adverse impact on our revenue, business and growth. We are subject to regulation regarding the insurance industry.
Our efforts to comply with the TCPA have not had a material impact on traffic conversion rates. However, depending on future traffic and product mix, it could potentially have a material effect on our revenue and profitability, including increasing our and our customers’ exposure to enforcement actions and litigation.
Our efforts to comply with the TCPA have not had a material impact on traffic conversion rates. However, depending on future traffic and product mix, the TCPA could potentially have a material effect on our revenue and profitability, including increasing our and our customers’ exposure to enforcement actions and litigation.
Our restated certificate further provides that the federal district courts of the United States of America are the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
Our restated certificate of incorporation further provides that the federal district courts of the United States of America are the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.
Some of the factors that may cause the market price of our Class A common stock to fluctuate include: • price and volume fluctuations in the overall stock market from time to time; • volatility in the market price and trading volume of comparable companies; • actual or anticipated changes in our earnings or fluctuations in our operating results or in the expectations of securities analysts; • announcements of new service offerings, strategic alliances or significant agreements by us or by our competitors; • loss of key personnel; • litigation involving us or that may be perceived as having an adverse effect on our business; • changes in general economic, industry and market conditions and trends; • investors’ general perception of us; • sales of large blocks of our stock; and • announcements regarding industry consolidation.
Some of the factors that may cause the market price of our Class A common stock to fluctuate include: • price and volume fluctuations in the overall stock market from time to time; • volatility in the market price and trading volume of comparable companies; • actual or anticipated changes in our earnings or fluctuations in our operating results or in the expectations of securities analysts; • announcements of new service offerings, strategic alliances or significant agreements by us or by our competitors; • loss of key personnel; • litigation involving us or that may be perceived as having an adverse effect on our business; • changes in general economic, industry and market conditions and trends; • investors’ general perception of us; • sales of large blocks of our stock; and 20 Table of Contents • announcements regarding industry consolidation.
In addition, the Board of Directors could designate and sell a class of preferred stock with preferential rights over the Class A common stock with respect to dividends or other distributions.
In addition, our board of directors could designate and sell a class of preferred stock with preferential rights over the Class A common stock with respect to dividends or other distributions.
Our restated certificate provides that the Court of Chancery of the State of Delaware is the sole and exclusive forum for substantially all disputes between us and our stockholders.
Our restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the sole and exclusive forum for substantially all disputes between us and our stockholders.
If insurance providers are not able to acquire their preferred referrals in our marketplace, they may stop buying referrals from us or decrease the amount they are willing to spend for referrals. The majority of our insurance provider customers can stop participating in our marketplace or reduce or terminate their marketing spend with us at any time without notice.
If insurance providers are not able to acquire their preferred referrals in our marketplace, they may stop buying referrals from us or decrease the amount they are willing to spend for referrals. Our insurance provider customers can stop participating in our marketplace or reduce or terminate their marketing spend with us at any time without notice.
Moreover, holders of a significant number of shares of our Class A common stock and Class B common stock as of January 31, 2024, have rights, subject to certain conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.
Moreover, holders of a significant number of shares of our Class A common stock and Class B common stock as of January 31, 2025, have rights, subject to certain conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.
A substantial majority of our revenue is derived from sales of qualified consumer inquiries sold as referrals in various ways, such as clicks, data and calls, to insurance provider customers, which includes both carriers and agents. We generate revenue from carriers and agents that directly purchase referrals from us.
A substantial majority of our revenue is derived from qualified consumer inquiries that are sold as referrals in various ways, such as clicks, data and calls, to insurance provider customers, which includes both carriers and agents. We generate revenue from carriers and agents that directly purchase referrals from us.
Periodically, certain of our customers and third-party publishers seek to prohibit or limit our collection or use of data derived from the use of cookies. Our business could be materially and adversely affected by a cybersecurity breach or other attack involving our computer systems or our third-party service providers.
Periodically, certain of our customers and third-party publishers seek to prohibit or limit our collection or use of data derived from the use of cookies. Our business could be materially and adversely affected by a cybersecurity breach or other attack, failure or interruption involving our computer systems or our third-party service providers.
For example, our Class A common stock traded within a range of a high price of $63.44 per share and a low price of $4.05 per share for the period beginning June 28, 2018, our first day of trading on the Nasdaq Global Market, through December 31, 2023.
For example, our Class A common stock traded within a range of a high price of $63.44 per share and a low price of $4.05 per share for the period beginning June 28, 2018, our first day of trading on the Nasdaq Global Market, through December 31, 2024.
If any audits, inquiries, investigations, 18 Table of Contents claims of non-compliance and lawsuits by federal and state governmental agencies, regulatory agencies, attorneys general and other governmental or regulatory bodies are unfavorable to us, we may be required to pay monetary fines or penalties or have restrictions placed on our business, which could materially adversely affect our business, financial condition, results of operations and cash flows.
If any audits, inquiries, investigations, claims of non-compliance and lawsuits by federal and state governmental agencies, regulatory agencies, attorneys general and other governmental or regulatory bodies are unfavorable to us, we may be required to pay monetary fines or penalties or have restrictions placed on our business, which could materially adversely affect our business, financial condition, results of operations and cash flows.
Interruptions, delays or failures in these systems, whether due to earthquakes, adverse weather conditions, other natural disasters, power loss, computer viruses, cybersecurity attacks, physical break-ins, terrorism, errors in our software or otherwise, could be prolonged and could affect the security or availability of our websites and applications, and prevent consumers from accessing our services.
Interruptions, delays or failures in these systems, whether due to earthquakes, adverse weather 14 Table of Contents conditions, other natural disasters, power loss, computer viruses, cybersecurity attacks, physical break-ins, terrorism, errors in our software or otherwise, could be prolonged and could affect the security or availability of our websites and applications, and prevent consumers from accessing our services.
Internet search companies with brand recognition have significant numbers of direct sales personnel and web traffic that provide a significant competitive advantage and have a significant impact on pricing for consumer referrals or web traffic.
Internet search companies with brand recognition have significant numbers of direct sales personnel and web traffic that provide a significant competitive advantage and significantly impact pricing for consumer referrals or web traffic.
If our websites are unavailable when users attempt to access them, or if they do not load as quickly as expected, users may not return as often in the future, or at all. The operation of these systems is expensive and complex and we could 14 Table of Contents experience operational failures.
If our websites are unavailable when users attempt to access them, or if they do not load as quickly as expected, users may not return as often in the future, or at all. The operation of these systems is expensive and complex and we could experience operational failures.
TCPA regulations have resulted in an increase in individual and class action litigation against marketing companies for alleged TCPA violations. TCPA violations can result in significant financial penalties, including penalties or criminal fines imposed by the FCC or fines of up to $1,500 per violation imposed through private litigation or by state authorities.
TCPA regulations have resulted in increased individual and class action litigation against marketing companies for alleged TCPA violations. TCPA violations can result in significant financial penalties, including penalties or criminal fines imposed by the FCC or fines of up to $1,500 per violation imposed through private litigation or by state authorities.
Alternatively, if a court were to find the choice of forum provisions contained in our certificate of incorporation to be inapplicable or unenforceable in an 23 Table of Contents action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition and operating results.
Alternatively, if a court were to find the choice of forum provisions contained in our restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition and operating results.
If agents decide to terminate or reduce their relationships with us as a result of the elimination in subsidies, or for any reason, our revenue would likely be reduced, which could have a material adverse effect on our business, financial condition, operating results and cash flows. 10 Table of Contents We generated a significant portion of our revenue in recent periods from two customers, and our results of operations could be adversely affected and stockholder value harmed if we continue to lose business from these customers.
If agents decide to terminate or reduce their relationships with us as a result of an elimination in subsidies, or for any reason, our revenue would likely be reduced, which could have a material adverse effect on our business, financial condition, operating results and cash flows. 10 Table of Contents We generated a significant portion of our revenue in recent periods from a small number of customers, and our results of operations could be adversely affected and stockholder value harmed if we lose business from these customers.
We access and analyze this information in order to determine the effectiveness of a marketing campaign and to determine how to modify the campaign for optimization. The use of cookies is the subject of litigation, regulatory scrutiny and industry self-regulatory activities, including the consideration of “do-not-track” technologies, guidelines and substitutes to cookies.
We access and analyze this information in order to determine the effectiveness of a marketing campaign and to determine how to modify the campaign for optimization. The use of cookies and other information collection technologies is the subject of litigation, regulatory scrutiny and industry self-regulatory activities, including the consideration of “do-not-track” technologies, “cookie” banners, guidelines and substitutes to cookies.
Decreased participation in online advertising by our media sources or customers as a result of the proposed rules could have a material adverse impact on our business, results of operation and financial condition, as it may reduce the availability to us of qualified inquiries.
Decreased participation in online advertising by our media sources or customers as a result of regulatory changes could have a material adverse impact on our business, results of operation and financial condition, as it may reduce the availability to us of qualified inquiries.
Because a substantial majority of the referrals made through our marketplace are for automotive insurance, our financial prospects depend significantly on the larger automotive industry ecosystem. Revenue from automotive insurance providers accounted for 79% and 80% of our total revenue for 2023 and 2022, respectively.
Because a substantial majority of the referrals made through our marketplace are for automotive insurance, our financial prospects depend significantly on the larger automotive industry ecosystem. Revenue from automotive insurance providers accounted for 89% and 79% of our total revenue for 2024 and 2023, respectively.
Because we have registered 17,578,382 shares of our Class A common stock and Class B common stock that may be issued under our equity incentive plans pursuant to registration statements on Form S-8, any such shares that we issue can be freely sold in the public market upon issuance, subject to the restrictions imposed on our affiliates under Rule 144.
Because we have registered 19,287,307 shares of our Class A common stock and Class B common stock that may be issued under our equity incentive plans pursuant to registration statements on Form S-8, any such shares that we issue can be freely sold in the public market upon issuance, subject to the restrictions imposed on our affiliates under Rule 144.
Although we generally have agreements relating to cybersecurity and data privacy in place with our third-party service providers, they are limited in nature and we cannot assure you that such agreements will prevent the accidental or unauthorized access to or disclosure, loss, destruction, disablement or encryption of, use or misuse of or modification of data (including personal data) or enable us to obtain adequate or any reimbursement from our partners or third-party service providers in the event we should suffer any such incidents.
Although we generally have agreements relating to cybersecurity and data privacy in place with our third-party service providers, they are limited in nature and such agreements may not prevent the accidental or unauthorized access to or disclosure, loss, destruction, disablement or encryption of, use or misuse of or modification of data (including personal data), or enable us to obtain adequate or any reimbursement from our partners or third-party service providers in the event we should suffer any such incidents.
For example, in January 2023, we saw a major carrier return to higher spending patterns, but subsequently reduce customer acquisition spending starting in the second quarter of 2023 due to higher than expected claims losses.
For example, in January 2023, we saw a major carrier return to higher spending patterns, but subsequently reduce customer acquisition spending in the following quarter due to higher than expected claims losses.
Our directors, executive officers and holders of more than 10% of our common stock, and their respective affiliates, held in the aggregate approximately 72% of the voting power of our capital stock as of January 31, 2024; and Link Ventures, directly or through a voting agreement, together with Cogo Labs, held in the aggregate approximately 71% of the voting power of our capital stock as of that date.
Our directors, executive officers and holders of more than 10% of our common stock, and their respective affiliates, held in the aggregate approximately 60% of the voting power of our capital stock as of January 31, 2025; and Link Ventures, directly or through a voting agreement, together with Cogo Labs, held in the aggregate approximately 59% of the voting power of our capital stock as of that date.
For example, we do not have a nominations committee, and director nominees might not be selected or recommended for the board’s selection by a qualifying nominations committee or by independent directors constituting a majority of the independent directors, and our compensation committee is not comprised solely of independent directors.
For example, we do not have a nominations committee, and director nominees might not be selected or recommended for the board’s selection by a qualifying nominations committee or by independent directors constituting a majority of the independent directors, and, in the past, our compensation committee has not been comprised solely of independent directors.
The cost of compliance with new or existing regulations could impose significant costs on our business, which could materially adversely affect our business, financial condition or results of operations. 17 Table of Contents We are subject to regulation regarding telemarketing and robotexting marketing campaigns.
The cost of compliance with new or existing regulations could impose significant costs on our business, which could materially adversely affect our business, financial condition or results of operations. We are subject to regulation regarding telemarketing and text message marketing campaigns.
Additionally, the FCC’s new rules, and other future changes in laws may increase our compliance costs, and any failure by us or our media sources or customers to comply with such laws may subject us to significant liabilities. We are subject to regulation regarding email marketing campaigns.
Additionally, future changes in laws or regulations may increase our compliance costs, and any failure by us or our media sources or customers to comply with such laws or regulations may subject us to significant liabilities. We are subject to regulation regarding email marketing campaigns.
Furthermore, our agreements with these customers do not require them to spend any minimum amount. As a result, we cannot guarantee that insurance providers will continue to work with us, or, if they do, what their advertising volume, pricing or total spend will be with us. For example, we experienced significantly decreased insurance provider marketing spend in 2023.
Furthermore, our agreements with these customers do not require them to spend any minimum amount. As a result, we cannot guarantee that insurance providers will continue to work with us, or, if they do, what their advertising volume, pricing or total spend with us will be.
With respect to industry self-regulatory activities, the leading web browsing companies have started or announced their intent to block or phase out third-party cookies from their web browsers, as discussed above in “—We depend on internet search engines, display advertising, social media, online advertising and other sources . . . .” Additionally, users are able to block or delete cookies from their browser.
With respect to industry self-regulatory activities, the leading web browsing companies have contemplated adjusting their browsers’ treatment of third-party cookies by their web browsers, as discussed above in “— We depend on internet search engines, display advertising, social media, online advertising and other sources . . . . ” Additionally, users are able to block or delete cookies from their browser.
We also cannot be certain that others will not independently develop or otherwise acquire equivalent or superior technology or other intellectual property rights, which could materially adversely affect our business, financial condition and operating results. Competitors may adopt service names similar to ours, thereby harming our ability to build brand identity and possibly leading to user confusion.
Others also may independently develop or otherwise acquire equivalent or superior technology or other intellectual property rights, which could materially adversely affect our business, financial condition and operating results. 18 Table of Contents Competitors may adopt service names similar to ours, thereby harming our ability to build brand identity and possibly leading to user confusion.
Changes in search engine algorithms, including Google’s plans to phase out third-party cookies in Chrome, or increased usage of ad-blocking software may reduce the number of visitors to our website and marketplace or to our third-party publishers’ websites and, as a result, our business and financial results may be harmed.
Changes in search engine algorithms, browser companies’ treatment of third-party cookies, or increased usage of ad-blocking software may reduce the number of visitors to our website and marketplace or to our third-party publishers’ websites and, as a result, our business and financial results may be harmed.
The new rules could have a material adverse impact on our media sources and our customers due to increased costs, technological compliance challenges and additional legal risks, including potential liabilities or claims relating to compliance.
New rules could have a material adverse impact on our media sources and 17 Table of Contents our customers due to decreased inquiry volume, increased costs, technological compliance challenges and additional legal risks, including potential liabilities or claims relating to compliance.
At the U.S. federal level, we are subject to the laws and regulations promulgated under the authority of the Federal Trade Commission, which regulates unfair or deceptive acts or practices (including with respect to data privacy and security).
At the U.S. federal level, we are subject to the laws and regulations promulgated under the authority of the Federal Trade Commission, which regulates unfair or deceptive acts or practices (including with respect to data privacy and security). We are or may in the future become subject to state data privacy laws including, but not limited to, the CCPA.
We depend on relationships with insurance provider customers with no long-term minimum financial commitments. A reduction in spend by our customers, a loss of customers, lower advertising yields, or our inability to establish and maintain new relationships with insurance providers could materially harm our business, results of operations and financial condition.
A reduction in spend by our customers, a loss of customers, lower advertising yields, or our inability to establish and maintain new relationships with insurance providers could materially harm our business, results of operations and financial condition.
Under these rules, a company of which more than 50% of the voting power is held by an individual, a group or another company is a “controlled company” and, as such, will be exempt from certain corporate governance requirements, including requirements that: • a majority of the board of directors consist of independent directors; • director nominees be selected or recommended for the board’s selection by independent directors constituting a majority of the independent directors or by a nominations committee with prescribed duties and a written charter and comprised solely of independent directors; and • the board of directors maintain a compensation committee with prescribed duties and a written charter and comprised solely of independent directors.
Under these rules, a company of which more than 50% of the voting power is held by an individual, a group or another company is a “controlled company” and, as such, will be exempt from certain corporate governance requirements, including requirements that: • a majority of the board of directors consist of independent directors; • director nominees be selected or recommended for the board’s selection by independent directors constituting a majority of the independent directors or by a nominations committee with prescribed duties and a written charter and comprised solely of independent directors; and • the board of directors maintain a compensation committee with prescribed duties and a written charter and comprised solely of independent directors. 21 Table of Contents We have availed ourselves of certain of these exemptions and, for so long as we qualify as a “controlled company,” we will maintain the option to utilize from time to time some or all of these exemptions.
If either or both of these two customers further reduce their level of purchases from us or discontinue their relationships with us, the loss could have a material adverse effect on our results of operations in both the short and long term We depend on third-party media sources, such as third-party publishers, for a significant portion of our visitors.
If our largest customer reduces their level of purchases from us or discontinues their relationship with us, the loss could have a material adverse effect on our results of operations in both the short and long term. We depend on third-party media sources, such as third-party publishers, for a significant portion of our visitors.
An increase in those fees may require us to increase the prices we charge and would increase our operating expenses, either of which could harm our business, financial condition and results of operations.
For credit and debit card payments, we pay interchange and other fees, which may increase over time. An increase in those fees may require us to increase the prices we charge and would increase our operating expenses, either of which could harm our business, financial condition and results of operations.
Given the limited trading volume and market capitalization, there is a risk that an active trading market for our shares may not be sustained, which could put downward pressure on the market price of our Class A common stock and thereby affect the ability of our stockholders to sell their shares at attractive prices, at the times that they would like to sell them, or at all. 20 Table of Contents The market price of our Class A common stock has been and may continue to be volatile, which could result in substantial losses for investors and could subject us to securities class action litigation.
Given the limited trading volume, there is a risk that an active trading market for our shares may not be sustained, which could put downward pressure on the market price of our Class A common stock and thereby affect the ability of our stockholders to sell their shares at attractive prices, at the times that they would like to sell them, or at all.
For example, we were subject to a class action lawsuit alleging federal securities law violations in connection with our IPO. Because of the past and potential future volatility of our stock price, we may become the target of additional securities litigation in the future. Securities litigation could result in substantial costs and divert management’s attention and resources from our business.
For example, we were subject to a class action lawsuit alleging federal securities law violations in connection with our initial public offering. Because of the past and potential future volatility of our stock price, we may become the target of additional securities litigation in the future.
Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain protection of our trade secrets or other proprietary information could harm our business, results of operations, reputation and competitive position.
Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain protection of our trade secrets or other proprietary information could harm our business, results of operations, reputation and competitive position. 19 Table of Contents Our use of “open source” software could adversely affect our ability to protect our proprietary software and subject us to possible litigation.
Upon registration, such shares would be able to be freely sold in the public market. 22 Table of Contents Anti-takeover provisions in our restated certificate of incorporation and our amended and restated bylaws, as well as provisions of Delaware law, might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the trading price of our Class A common stock .
Anti-takeover provisions in our restated certificate of incorporation and our amended and restated bylaws, as well as provisions of Delaware law, might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the trading price of our Class A common stock .
Finding, developing and retaining high quality consumer referrals on a cost-effective basis is challenging because competition for web traffic among technology companies engaged in digital customer acquisition, websites, and search engines, as well as competition with traditional media companies, has resulted and may continue to result in significant increases in web traffic costs, declining margins and reduction in revenue.
Finding, developing and retaining high quality consumer referrals on a cost-effective basis is challenging because competition for web traffic has resulted and may continue to result in significant increases in web traffic costs, declining margins and reduction in revenue.
In addition, the covenants under our existing debt instruments, the pledge of our assets as 16 Table of Contents collateral and the negative pledge with respect to our intellectual property could limit our ability to obtain additional debt financing on acceptable terms or at all.
In addition, the covenants under our existing debt instruments, the pledge of our assets as collateral and the negative pledge with respect to our intellectual property could limit our ability to obtain additional debt financing on acceptable terms or at all. Any of these events could have a material adverse effect on our results of operations or financial condition.
In addition to our outstanding Class A common stock, as of January 31, 2024, there were 1,896,102 shares of Class A common stock subject to outstanding options, 390,748 shares of either Class A common stock or Class B common stock subject to outstanding options, 2,060,934 shares of Class A common stock subject to outstanding restricted stock unit awards, or RSUs, and an additional 1,816,303 shares of Class A common stock reserved for future issuance under our equity incentive plan.
In addition to our outstanding Class A common stock, as of January 31, 2025, there were 1,383,239 shares of Class A common stock subject to outstanding options, 127,974 shares of either Class A common stock or Class B common stock subject to outstanding options, 2,393,121 shares of Class A common stock subject to outstanding restricted stock unit awards, or RSUs, and an additional 2,452,261 shares of Class A common stock reserved for future issuance under our equity incentive plan.
Risks Related to Our Class A Common Stock An active trading market for our Class A common stock may not be sustained. In 2023, the average trading volume of our Class A common stock on the Nasdaq Global Market was 381,450 and, as of January 31, 2024, our market capitalization was $432.3 million.
Risks Related to Our Class A Common Stock An active trading market for our Class A common stock may not be sustained. In 2024, the average trading volume of our Class A common stock on the Nasdaq Global Market was 473,487.
Our use of “open source” software could adversely affect our ability to protect our proprietary software and subject us to possible litigation. We use open source software in connection with our software development. From time to time, companies that use open source software have faced claims challenging the use of open source software or compliance with open source license terms.
We use open source software in connection with our software development. From time to time, companies that use open source software have faced claims challenging the use of open source software or compliance with open source license terms.
We are filing a universal shelf registration statement on Form S-3 with the SEC concurrently with the filing of this Annual Report on Form 10-K, which when declared effective, will register for sale up to $150.0 million of any combination of our common stock, preferred stock, debt securities, warrants, rights or units from time to time and at prices and on terms that we may determine.
We have an effective universal shelf registration statement on Form S-3 with the SEC that permits us to sell up to $150.0 million of any combination of our common stock, preferred stock, debt securities, warrants, rights or units from time to time and at prices and on terms that we may determine.
For example, the Federal Communications Commission, or FCC, recently published a regulation, currently scheduled to take effect on July 24, 2024, that would require mobile wireless providers to block text messages from telephone numbers flagged by the FCC for allegedly sending unlawful text messages.
For example, a recent FCC regulation that went into effect on July 24, 2024, requires mobile wireless providers to block text messages from telephone numbers flagged by the FCC for allegedly sending unlawful text messages.
Failing to comply with those standards may violate payment card association operating rules, federal and state laws and regulations, and the terms of our contracts with payment processors. Any failure to comply fully also may subject us to fines, penalties, damages and civil liability, and may result in the loss of our ability to accept credit and debit card payments.
Any failure to comply fully also may subject us to fines, penalties, damages and civil liability, and may result in the loss of our ability to accept credit and debit card payments.
Exclusion from stock indices could make it more difficult, or impossible, for some fund managers to buy our Class A common stock, particularly in the case of index tracking mutual funds and exchange traded funds, which could adversely affect the trading liquidity and market price of our Class A common stock. 21 Table of Contents Future transfers by holders of Class B common stock will generally result in those shares converting to Class A common stock, subject to limited exceptions, such as certain transfers to trusts and individual retirement accounts.
Exclusion from stock indices could make it more difficult, or impossible, for some fund managers to buy our Class A common stock, particularly in the case of index tracking mutual funds and exchange traded funds, which could adversely affect the trading liquidity and market price of our Class A common stock.
Even if these matters do not result in litigation or are resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could harm our business, our operating results and our reputation. 19 Table of Contents As our business expands, we may be subject to intellectual property claims against us with increasing frequency, scope and magnitude.
Even if these matters do not result in litigation or are resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could harm our business, our operating results and our reputation.
Customer reductions in marketing and advertising spend have materially and adversely affected our operating results, and we are not able to accurately predict the timing or extent of our recovery from these reductions. We will likely experience similar insurance industry cycles in the future, which could materially and adversely affect our business, financial condition, operating results, cash flows, and prospects.
Customer reductions in marketing and advertising spend have materially and adversely affected our historical operating results, and we are not able to accurately predict the timing or extent of our full recovery from these reductions.
Carriers may continue to decrease the amount of money they spend with us, which may occur rapidly and without warning, and for time periods that can be difficult to predict accurately.
Carriers decreased the amount of money they spent with us in 2023 and 2022, and such decreases could reoccur rapidly and without warning, and for time periods that can be difficult to predict accurately.
The market price of our Class A common stock has been and could continue to be subject to significant fluctuations.
The market price of our Class A common stock has been and may continue to be volatile, which could result in substantial losses for investors and could subject us to securities class action litigation. The market price of our Class A common stock has been and could continue to be subject to significant fluctuations.
We have in fact experienced significant decreased levels of purchasing from both of these customers in 2023, including a decrease in subsidies by one of these carrier customers.
We have no assurances that these carrier customers will continue to purchase from us at their historical levels or at all. We in fact experienced significant decreased levels of purchasing from these customers in 2023, including a decrease in subsidies by one of our carrier customers.
In addition, if these systems fail to work properly and, as a result, we do not charge our customers’ credit cards on a timely basis or at all, our business, revenue, results of operations and financial condition could be harmed.
In addition, if these systems fail to work properly and, as a result, we do not charge our customers’ credit cards on a timely basis or at all, our business, revenue, results of operations and financial condition could be harmed. 15 Table of Contents We are also subject to payment card association operating rules, certification requirements and rules governing electronic funds transfers, which could change or be reinterpreted to make it more difficult for us to comply.
In addition to the insurance regulatory framework, we and our third-party publishers are subject to many other laws and requirements, including federal, state and local laws and regulations regarding commercial email, telemarketing, search engines, internet tracking technologies, direct marketing, data privacy and security, pricing, sweepstakes, promotions, intellectual property ownership and infringement, trade secrets, export of encryption technology, acceptable content and quality of goods, and taxation, among others.
The cost of compliance with such regulations or any non-compliance could impose material costs on us and our partners and could subject us to claims, government enforcement actions, civil and criminal liability or other remedies, including suspension of business operations, which could negatively affect our or their business, marketing practices and budgets, and could have a material and adverse effect on our business, financial condition, operating results, cash flows and prospects. 16 Table of Contents In addition to the insurance regulatory framework, we and our third-party publishers are subject to many other laws and requirements, including federal, state and local laws and regulations regarding commercial email, telemarketing, search engines, internet tracking technologies, direct marketing, data privacy and security, pricing, sweepstakes, promotions, intellectual property ownership and infringement, trade secrets, export of encryption technology, acceptable content and quality of goods, and taxation, among others.
Revenue from our two largest insurance carrier customers was 27% and 32% in the aggregate of our revenue for the years ended December 31, 2023 and 2022, respectively. We have no assurances that these carrier customers will continue to purchase from us at their historical levels or at all.
Revenue from our largest insurance carrier customer was 39% of our revenue for the year ended December 31, 2024. Revenue from our two largest insurance carrier customers was 27% and 32% in the aggregate of our revenue for the years ended December 31, 2023 and 2022, respectively.
If we do not succeed in attracting well-qualified employees or retaining and motivating existing employees, our business could be materially adversely affected. Our operating results may be impacted by factors that impact our estimate of the constrained lifetime value of commissions per policy.
If we do not succeed in attracting well-qualified employees or retaining and motivating existing employees, our business could be materially adversely affected. We are subject to a number of risks related to the credit card and debit card payments we accept. We accept payments through credit and debit card transactions.
For example, in December 2023, Google announced plans to test a new feature in Chrome that limits cross-site tracking by restricting website access to third-party cookies by default, with a goal of phasing out third-party cookies for everyone in the second half of 2024.
For example, although Google abandoned its previously announced plans to phase out third-party cookies in 2024, it announced the introduction of a new feature in Chrome that would allow users to make informed choices about their privacy settings.
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We recognize commission revenue based on the latest estimated constrained lifetime value, or constrained LTV, for each product. Constrained LTVs are impacted by a number of factors, which include, but are not limited to, carrier mix, policy duration and conversion rates of paying policies.
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We will likely experience similar insurance industry cycles in the future, which could materially and adversely affect our business, financial condition, operating results, cash flows, and prospects. We depend on relationships with insurance provider customers with no long-term minimum financial commitments.
Removed
These factors impact historical trends and changes in those factors or in historical trends will affect our constrained LTV estimates in future periods and therefore could adversely affect our revenue and financial results in those future periods.
Added
For example, we experienced significantly decreased insurance provider marketing spend in 2023 and while we saw improvements in spending patterns in 2024, including from our largest carrier customer, not all of our carrier customers have increased their spend in a proportional or significant manner.
Removed
As a result, adverse changes in the assumptions we make or constraints we apply in computing expected lifetime values, such as increased cancellation rates or lower renewal rates, would harm our business, operating results, financial condition and prospects. 15 Table of Contents Additionally, if customer cancellation rates exceed our expectations or renewal rates are less than expected, we may not receive the commission revenue we have projected to receive, despite our having incurred and recorded the cost to sell the policy.
Added
We currently compete for web traffic with technology companies engaged in digital customer acquisition, websites, and search engines, as well as with traditional media companies.
Removed
Any adverse impact on cancellation or renewal rates could lead to our receipt of commission payments that are less than the amount we estimated when we recognized commission revenue. Under such circumstances, we would need to decrease the remaining commissions receivable balance, which would result in a change to earnings in the period of the write-off.
Added
We are required to comply with payment card industry security standards. Failing to comply with those standards may violate payment card association operating rules, federal and state laws and regulations, and the terms of our contracts with payment processors.
Removed
We are subject to a number of risks related to the credit card and debit card payments we accept. We accept payments through credit and debit card transactions. For credit and debit card payments, we pay interchange and other fees, which may increase over time.
Added
As our business expands, we may be subject to intellectual property claims against us with increasing frequency, scope and magnitude.
Removed
We are also subject to payment card association operating rules, certification requirements and rules governing electronic funds transfers, which could change or be reinterpreted to make it more difficult for us to comply. We are required to comply with payment card industry security standards.
Added
Securities litigation could result in substantial costs and divert management’s attention and resources from our business.
Removed
Any of these events could have a material adverse effect on our results of operations or financial condition.
Added
Future transfers by holders of Class B common stock will generally result in those shares converting to Class A common stock, subject to limited exceptions, such as certain transfers to trusts and individual retirement accounts.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. P ROPERTIES Our principal executive offices are located in Cambridge, Massachusetts, where we lease approximately 32,000 square feet of space pursuant to a lease that expires in September 2024, a portion of which we have subleased. We also lease approximately 10,000 square feet of office space in Austin, Texas pursuant to a lease that expires in April 2025.
Biggest changeITEM 2. P ROPERTIES Our principal executive offices are located in Cambridge, Massachusetts, where we lease approximately 15,877 square feet of space through December 2027. We also lease approximately 8,090 square feet of office space in Belfast, Northern Ireland pursuant to a sublease that ends in July 2027.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEG AL PROCEEDINGS Information with respect to legal proceedings and this item is included in Note 13 of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K, which is incorporated herein by reference. 24 Table of Contents ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PAR T II
Biggest changeITEM 3. LEG AL PROCEEDINGS Information with respect to legal proceedings and this item is included in Note 13 of the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report on Form 10-K, which is incorporated herein by reference. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 24 Table of Contents PAR T II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 25 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 25 Item 6. Reserved 26 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 27 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 40 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 24 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 25 Item 6. Reserved 26 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 27 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 38 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities We did not purchase any of our registered equity securities during the period from October 1, 2023 to December 31, 2023. Dividends We have never declared or paid cash dividends on our capital stock.
Biggest changeIssuer Purchases of Equity Securities We did not purchase any of our registered equity securities during the period from October 1, 2024 to December 31, 2024. Dividends We have never declared or paid cash dividends on our capital stock.
Recent Sales of Unregistered Equity Securities There were no shares of equity securities sold or issued, or options granted, by us during the year ended December 31, 2023 that were not registered under the Securities Act, and that were not previously reported in a Quarterly Report on Form 10-Q or Current Report on Form 8-K.
Recent Sales of Unregistered Equity Securities There were no shares of equity securities sold or issued, or options granted, by us during the year ended December 31, 2024 that were not registered under the Securities Act, and that were not previously reported in a Quarterly Report on Form 10-Q or Current Report on Form 8-K.
Set forth below is a line graph, for the five-year period from December 31, 2018 through December 31, 2023, comparing the cumulative total stockholder return of $100 invested (assuming that all dividends were reinvested) in (1) our Class A common stock, (2) all companies listed on the Nasdaq Composite Index and (3) the Research Development Group, or RDG, Internet Composite Index.
Set forth below is a line graph, for the five-year period from December 31, 2019 through December 31, 2024, comparing the cumulative total stockholder return of $100 invested (assuming that all dividends were reinvested) in (1) our Class A common stock, (2) all companies listed on the Nasdaq Composite Index and (3) the Research Development Group, or RDG, Internet Composite Index.
Holders of Our Common Stock As of January 31, 2024, there were approximately 12 holders of record of shares of our Class A common stock and 3 holders of record of shares of our Class B common stock. These amounts do not include stockholders for whom shares are held in “nominee” or “street” name.
Holders of Our Common Stock As of January 31, 2025, there were approximately 10 holders of record of shares of our Class A common stock and 3 holders of record of shares of our Class B common stock. These amounts do not include stockholders for whom shares are held in “nominee” or “street” name.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeReconciliation of Net Loss to Adjusted EBITDA: Year Ended December 31, 2023 2022 2021 (in thousands) Net loss $ (51,287 ) $ (24,416 ) $ (19,434 ) Stock-based compensation 22,808 28,986 30,020 Depreciation and amortization 6,196 5,848 5,072 Restructuring and other charges 23,568 — — Acquisition-related costs (150 ) (4,135 ) 1,065 Severance under a plan — — 440 Interest income (1,251 ) (349 ) (37 ) Income taxes 577 — (2,510 ) Adjusted EBITDA $ 461 $ 5,934 $ 14,616 32 Table of Contents Results of Operations The following tables set forth our results of operations for the periods shown: Year Ended December 31, 2023 2022 2021 (in thousands) Statement of Operations Data: Revenue(1) $ 287,921 $ 404,127 $ 418,515 Cost and operating expenses(2): Cost of revenue 22,455 23,980 23,949 Sales and marketing 240,131 349,255 354,990 Research and development 27,591 31,713 35,732 General and administrative 26,301 28,102 24,703 Restructuring and other charges 23,568 — — Acquisition-related costs (150 ) (4,135 ) 1,065 Total cost and operating expenses 339,896 428,915 440,439 Loss from operations (51,975 ) (24,788 ) (21,924 ) Other income (expense): Interest income 1,251 349 37 Other income (expense), net 14 23 (57 ) Total other income (expense), net 1,265 372 (20 ) Loss before income taxes (50,710 ) (24,416 ) (21,944 ) Income tax (expense) benefit (577 ) — 2,510 Net loss $ (51,287 ) $ (24,416 ) $ (19,434 ) Other Financial and Operational Data: Variable marketing margin $ 100,282 $ 128,258 $ 129,553 Adjusted EBITDA(3) $ 461 $ 5,934 $ 14,616 (1) Comprised of revenue from the following distribution channels: Year Ended December 31, 2023 2022 2021 Direct channels 81 % 86 % 90 % Indirect channels 19 % 14 % 10 % 100 % 100 % 100 % (2) Includes stock-based compensation expense as follows: Year Ended December 31, 2023 2022 2021 (in thousands) Cost of revenue $ 219 $ 281 $ 363 Sales and marketing 8,667 11,018 12,405 Research and development 8,053 10,328 9,551 General and administrative 5,869 7,359 7,701 Restructuring and other charges 1,288 — — $ 24,096 $ 28,986 $ 30,020 33 Table of Contents (3) See “—Non-GAAP Financial Measure” for information regarding our use of adjusted EBITDA as a non-GAAP financial measure and a reconciliation of adjusted EBITDA to its comparable GAAP financial measure.
Biggest changeReconciliation of Net Income (Loss) to Adjusted EBITDA: Year Ended December 31, 2024 2023 2022 (in thousands) Net income (loss) $ 32,169 $ (51,287 ) $ (24,416 ) Stock-based compensation 20,614 22,808 28,986 Depreciation and amortization 5,672 6,196 5,848 Restructuring and other charges — 23,568 — Acquisition-related costs — (150 ) (4,135 ) Interest income (2,079 ) (1,251 ) (349 ) Income taxes 1,839 577 — Adjusted EBITDA $ 58,215 $ 461 $ 5,934 31 Table of Contents Results of Operations The following tables set forth our results of operations for the periods shown: Year Ended December 31, 2024 2023 2022 (in thousands) Statement of Operations Data: Revenue(1) $ 500,190 $ 287,921 $ 404,127 Cost and operating expenses(2): Cost of revenue 20,922 22,455 23,980 Sales and marketing 387,700 240,131 349,255 Research and development 29,553 27,591 31,713 General and administrative 30,264 26,301 28,102 Restructuring and other charges — 23,568 — Acquisition-related costs — (150 ) (4,135 ) Total cost and operating expenses 468,439 339,896 428,915 Income (loss) from operations 31,751 (51,975 ) (24,788 ) Other income: Interest income 2,079 1,251 349 Other income, net 178 14 23 Total other income, net 2,257 1,265 372 Income (loss) before income taxes 34,008 (50,710 ) (24,416 ) Income tax expense (1,839 ) (577 ) — Net income (loss) $ 32,169 $ (51,287 ) $ (24,416 ) Other Financial and Operational Data: Variable marketing dollars $ 155,227 $ 100,282 $ 128,258 Adjusted EBITDA(3) $ 58,215 $ 461 $ 5,934 (1) Comprised of revenue from the following distribution channels: Year Ended December 31, 2024 2023 2022 Direct channels 86 % 81 % 86 % Indirect channels 14 % 19 % 14 % 100 % 100 % 100 % (2) Includes stock-based compensation expense as follows: Year Ended December 31, 2024 2023 2022 (in thousands) Cost of revenue $ 182 $ 219 $ 281 Sales and marketing 6,796 8,667 11,018 Research and development 5,502 8,053 10,328 General and administrative 8,134 5,869 7,359 Restructuring and other charges — 1,288 — $ 20,614 $ 24,096 $ 28,986 32 Table of Contents (3) See “—Non-GAAP Financial Measure” for information regarding our use of adjusted EBITDA as a non-GAAP financial measure and a reconciliation of adjusted EBITDA to its comparable GAAP financial measure.
Investing activities Net cash provided by investing activities was $9.4 million for the year ended December 31, 2023, consisting of cash proceeds from the sale of Eversurance LLC of $13.2 million, partially offset by the acquisition of property and equipment of $3.8 million, which included the capitalization of certain software development costs.
Net cash provided by investing activities was $9.4 million for the year ended December 31, 2023, consisting of cash proceeds from the sale of Eversurance LLC of $13.2 million, partially offset by the acquisition of property and equipment of $3.8 million, which included the capitalization of certain software development costs.
During the measurement period, which extends no later than one year from the acquisition date, we may record certain adjustments to the carrying value of the assets acquired and liabilities assumed with the corresponding offset to goodwill. After the measurement period, all adjustments are recorded in the consolidated statements of operations and comprehensive loss as operating expenses or income.
During the measurement period, which extends no later than one year from the acquisition date, we may record certain adjustments to the carrying value of the assets acquired and liabilities assumed with the corresponding offset to goodwill. After the measurement period, all adjustments are recorded in the consolidated statements of operations and comprehensive income (loss) as operating expenses or income.
In addition, under the 2023 Amended Loan Agreement and through the maturity date, we are required to maintain a minimum Adjusted Quick Ratio of 1.10 to 1.00 defined as the ratio of (1) the sum of unrestricted cash and cash equivalents held at the Lender plus (y) net accounts receivable reflected on our balance sheet to (2) current liabilities, including all borrowings outstanding under the 2023 Amended Loan Agreement, but excluding the current portion of deferred revenue (in each case determined in accordance with GAAP).
In addition, under the 2023 Amended Loan Agreement and through the maturity date, we are required to maintain a minimum Adjusted Quick Ratio of 1.10 to 1.00 defined as the ratio of (1) the sum of (x) unrestricted cash and cash equivalents held at the Lender plus (y) net accounts receivable reflected on our balance sheet to (2) current liabilities, including all borrowings outstanding under the 2023 Amended Loan Agreement, but excluding the current portion of deferred revenue (in each case determined in accordance with GAAP).
Revenue Recognition We derive our revenue primarily by selling consumer referrals to our insurance provider customers, including insurance carriers, agents and indirect distributors. We also generate revenue from commission fees for the sale of policies, primarily in our automotive insurance vertical, and prior to our exit from health, in our health insurance vertical.
Revenue Recognition We derive our revenue primarily by selling consumer referrals to our insurance provider customers, including insurance carriers, agents and indirect distributors. We also generate revenue from commission fees for the sale of policies, primarily in our automotive insurance vertical, and prior to our exit from health in 2023, in our health insurance vertical.
We refer to the exit of our health insurance vertical and the Reduction Plan as our recent restructuring, which we completed by September 30, 2023.
We refer to the exit of our health insurance vertical and the Reduction Plan as our restructuring, which we completed by September 30, 2023.
The auto insurance industry has experienced deteriorated underwriting performance due to a rise in claims, inflation, and inadequate policy premiums. This deteriorated underwriting performance has caused our insurance carrier customers to reduce spending on new customer acquisition, which has had a negative impact on the pricing and demand for consumer referrals in our marketplace during 2022 and 2023.
In 2023 and 2022, the auto insurance industry experienced deteriorated underwriting performance due to a rise in claims, inflation, and inadequate policy premiums. This deteriorated underwriting performance caused our insurance carrier customers to reduce spending on new customer acquisition, which had a negative impact on the pricing and demand for consumer referrals in our marketplace throughout 2023.
Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects. Adjusted EBITDA is not prepared in accordance with GAAP and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP.
Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects. 30 Table of Contents Adjusted EBITDA is not prepared in accordance with GAAP and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Comparison of the Years Ended December 31, 2022 and 2021 included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Comparison of the Years Ended December 31, 2023 and 2022 included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Income Taxes Income tax expense is based on our estimate of taxable income, applicable income tax rates, net research and development tax credits, net operating loss carrybacks, changes in valuation allowance estimates and deferred income taxes.
Income Taxes Income tax expense is based on our estimate of taxable income, applicable income tax rates, net research and development tax credits, net operating loss carryforwards, changes in valuation allowance estimates and deferred income taxes.
As of December 31, 2023, we were obligated to make total minimum lease payments of $2.2 million under such leases, of which $2.1 million is payable in 2024. We have outstanding agreements with various vendors for hosting and other technical services. We believe that we will be able to fund these obligations through our existing cash and cash equivalents.
As of December 31, 2024, we were obligated to make total minimum lease payments of $4.1 million under such leases, of which $1.4 million is payable in 2025. We have outstanding agreements with various vendors for hosting and other technical services. We believe that we will be able to fund these obligations through our existing cash and cash equivalents.
As of December 31, 2023, we were in compliance with these covenants and we had no amounts outstanding under the revolving line of credit.
As of December 31, 2024, we were in compliance with these covenants and we had no amounts outstanding under the revolving line of credit.
In June 2023, we committed to exiting our health insurance vertical, an area that would have required significant capital investment and scale to effectively compete amid an increasingly unpredictable regulatory environment, to increase focus on core verticals, and implemented a workforce reduction plan, or the Reduction Plan, to improve operating efficiency.
In 2023, we exited our health insurance vertical, an area that would have required significant capital investment and scale to effectively compete amid an increasingly unpredictable regulatory environment, to increase focus on core verticals, and implemented a workforce reduction plan, or the Reduction Plan, to improve operating efficiency.
Factors Affecting Our Performance We believe that our performance and future growth depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in the section titled “Risk Factors.” Auto insurance industry risk For the year ended December 31, 2023, we derived 79% of our revenue from auto insurance providers and our financial results depend on the performance of the auto insurance industry.
Factors Affecting Our Performance We believe that our performance and future growth depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in the section titled “Risk Factors.” Auto insurance industry risk For the years ended December 31, 2024 and 2023, we derived 89% and 79%, respectively, of our revenue from auto insurance providers and our financial results depend on the performance of the auto insurance industry.
Commission Revenue Our commission revenue consists of the constrained LTVs of commission payments that we expect to receive in our automotive insurance vertical, and prior to our exit from health, that we expected to receive in our health insurance vertical on the sale of insurance policies to consumers and renewals of such policies.
Commission Revenue and Commissions Receivable Our commission revenue consists of the constrained LTVs of commission payments that we expect to receive in our automotive insurance vertical, and prior to our exit from health in 2023, that we expected to receive in our health insurance vertical on the sale of insurance policies to consumers and renewals of such policies.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Cash Flows included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022. 37 Table of Contents Contractual Obligations and Commitments Our cash flows are dependent on a number of factors in addition to our operational expenditures, including our contractual and other obligations.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Cash Flows included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. Contractual Obligations and Commitments Our cash flows are dependent on a number of factors in addition to our operational expenditures, including our contractual and other obligations.
Our business could be affected directly because we operate websites, conduct telephonic and email marketing, and collect, store, share, and use consumer information and other data. Our business also could be affected indirectly if our customers were to adjust their operations as a result of regulatory changes and enforcement activity. For example, the U.S.
Our business could be affected directly because we operate websites, conduct telephonic and email marketing, and collect, store, share, and use consumer information and other data. Our business also could be affected indirectly if our customers were to adjust their operations as a result of regulatory changes and enforcement activity.
Some of these limitations are: • adjusted EBITDA excludes stock-based compensation expense as it has recently been, and will continue to be for the foreseeable future, a significant recurring non-cash expense for our business; • adjusted EBITDA excludes depreciation and amortization expense and, although this is a non-cash expense, the assets being depreciated and amortized may have to be replaced in the future; • adjusted EBITDA excludes restructuring and other charges, which includes the sale of health assets, that affect cash available to us; 31 Table of Contents • adjusted EBITDA excludes acquisition-related costs that affect cash available to us and the change in fair value of non-cash contingent consideration liabilities; • adjusted EBITDA excludes severance charges incurred and paid in the fourth quarter of 2021 related to our reduction in non-marketing operating expenses that affected cash available to us; • adjusted EBITDA does not reflect the cash received from interest income on our investments, which affects the cash available to us; • adjusted EBITDA does not reflect income taxes that affects cash available to us; and • the expenses and other items that we exclude in our calculation of adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from adjusted EBITDA when they report their operating results.
Some of these limitations are: • adjusted EBITDA excludes stock-based compensation expense as it has recently been, and will continue to be for the foreseeable future, a significant recurring non-cash expense for our business; • adjusted EBITDA excludes depreciation and amortization expense and, although this is a non-cash expense, the assets being depreciated and amortized may have to be replaced in the future; • adjusted EBITDA excludes restructuring and other charges, which includes the sale of health assets, that affects cash available to us; • adjusted EBITDA excludes acquisition-related costs that affects cash available to us and the change in fair value of non-cash contingent consideration liabilities; • adjusted EBITDA does not reflect the cash received from interest income on our investments, which affects the cash available to us; • adjusted EBITDA does not reflect income taxes that affects cash available to us; and • the expenses and other items that we exclude in our calculation of adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from adjusted EBITDA when they report their operating results.
Liquidity and Capital Resources Our principal sources of liquidity are cash and cash equivalents of $38.0 million as of December 31, 2023 and up to $25.0 million of availability under our revolving line of credit pursuant to the 2023 Amended Loan Agreement (defined as the Amended and Restated Loan and Security Agreement, dated as of August 7, 2020 between us and Western Alliance Bank, as Lender, as amended by the Loan and Security Modification Agreement dated as of July 15, 2022, as amended by the Loan and Security Modification Agreement dated as of August 1, 2023, as amended by the Loan and Security Modification Agreement, dated as of on August 7, 2023).
Liquidity and Capital Resources Our principal sources of liquidity are cash and cash equivalents of $102.1 million as of December 31, 2024 and up to $25.0 million of availability under our revolving line of credit pursuant to the 2023 Amended Loan Agreement (defined as the Amended and Restated Loan and Security Agreement, dated as of August 7, 2020 between us and Western Alliance Bank, as Lender, or the 2020 Loan Agreement, as amended by the Loan and Security Modification Agreement dated as of July 15, 2022, or the 2022 Loan Amendment, as amended by the Loan and Security Modification Agreement dated as of August 1, 2023, or the 2023 Consent and Release, as amended by the Loan and Security Modification Agreement, dated as of on August 7, 2023, or the 2023 Loan Amendment, as amended by the Loan and Security Modification Agreement, dated as of September 4, 2024).
We believe our existing cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements for at least the next 12 months, without considering the borrowing availability under our revolving line of credit.
We believe our existing cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements for at least the next 12 months from the issuance date of the consolidated financial statements, without considering the borrowing availability under our revolving line of credit.
We monitor and present in this Annual Report on Form 10-K adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our operating performance, to establish budgets and to develop operational goals for managing our business.
The most directly comparable GAAP measure to adjusted EBITDA is net income (loss). We monitor and present in this Annual Report on Form 10-K adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our operating performance, to establish budgets and to develop operational goals for managing our business.
Commission revenue is recognized upon satisfaction of our performance obligation. We consider our performance obligation related to commissions for both the initial policy sale and future renewals of the policy to be satisfied upon submission of the policy application.
We consider our performance obligation related to commissions for both the initial policy sale and future renewals of the policy to be satisfied upon submission of the policy application.
Recently, we have experienced a decrease in carrier spend in the automotive insurance vertical as described above. 28 Table of Contents Regulation Our revenue and earnings may fluctuate from time to time as a result of changes to federal, state, and industry-based laws and regulations, or changes to standards concerning the enforcement thereof.
In the more recent past, we experienced periods of decreasing carrier spend in the automotive insurance vertical as described above. Regulation Our revenue and earnings may fluctuate from time to time as a result of changes to federal, state, and industry-based laws and regulations, or changes to standards concerning the enforcement thereof.
The decrease in revenue from our other insurance verticals was primarily due to a decrease in commission revenue of $18.7 million and a decrease in carrier spend for referrals of $9.6 million, both due primarily to our exit from health insurance.
The decrease in revenue from our other insurance verticals was due to a decrease in commission revenue of $10.3 million and a decrease in carrier spend for referrals of $7.2 million, both due primarily to our exit from the health insurance vertical in 2023.
We had net losses of $51.3 million, $24.4 million and $19.4 million for the years ended December 31, 2023, 2022 and 2021, respectively, and had $0.5 million, $5.9 million and $14.6 million in adjusted EBITDA for these same periods, respectively.
We had net income of $32.2 million for the year ended December 31, 2024 and net losses of $51.3 million and $24.4 million for the years ended December 31, 2023 and 2022, respectively, and had $58.2 million, $0.5 million and $5.9 million in adjusted EBITDA for these same periods, respectively.
Our estimate of constrained LTVs is based on an analysis of historical commission payment trends for relevant policies to establish an expected lifetime value and incorporates management’s judgment in interpreting those trends to calculate LTVs and to apply constraints to such LTVs. The most significant factor impacting historical trends is average policy duration.
Our estimate of constrained LTVs underlying the commissions receivable balance is based on an analysis of historical commission payment trends for relevant policies to establish an expected lifetime value and incorporates our judgment in interpreting those trends to calculate LTVs and to apply constraints to such LTVs.
Cost of Revenue Year Ended December 31, Change 2023 2022 Amount % (dollars in thousands) Cost of revenue $ 22,455 $ 23,980 $ (1,525 ) -6.4 % Percentage of revenue 7.8 % 5.9 % Cost of revenue decreased from $24.0 million for the year ended December 31, 2022 to $22.5 million for the year ended December 31, 2023.
Cost of Revenue Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Cost of revenue $ 20,922 $ 22,455 $ (1,533 ) -6.8 % Percentage of revenue 4.2 % 7.8 % Cost of revenue decreased from $22.5 million for the year ended December 31, 2023 to $20.9 million for the year ended December 31, 2024.
Net cash used by changes in our operating assets and liabilities consisted primarily of a $24.2 million increase in commissions receivable, a $2.1 million increase in prepaid expenses and other current assets and a $1.3 million decrease in accounts payable and accrued expenses and other current liabilities, partially offset by a $5.4 million decrease in accounts receivable.
Net cash provided by changes in our operating assets and liabilities consisted primarily of a $43.7 million increase in accounts payable and accrued expenses and other current liabilities and a $4.9 million decrease in commissions receivable, partially offset by a $40.2 million increase in accounts receivable.
Commission revenue represented less than 10% of total revenue for the year ended December 31, 2023.
Commission revenue represented less than 10% of total revenue for each of the years ended December 31, 2024 and 2023, and 13% of total revenue for the year ended December 31, 2022.
We expect that general and administrative expense will decrease in 2024 from 2023, partially as a result of the Reduction Plan implemented in June 2023. Restructuring and Other Charges Restructuring and other charges includes costs related to the recent restructuring and our exit of the health insurance vertical. We completed this restructuring and exit from health in 2023.
We expect that general and administrative expense will increase modestly in 2025 as compared to 2024. Restructuring and Other Charges Restructuring and other charges includes costs related to the recent restructuring and our exit of the health insurance vertical. We completed this restructuring and exit from health in 2023.
General and Administrative Year Ended December 31, Change 2023 2022 Amount % (dollars in thousands) General and administrative expense $ 26,301 $ 28,102 $ (1,801 ) -6.4 % Percentage of revenue 9.1 % 7.0 % General and administrative expenses decreased by $1.8 million from $28.1 million for the year ended December 31, 2022 to $26.3 million for the year ended December 31, 2023.
General and Administrative Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) General and administrative expense $ 30,264 $ 26,301 $ 3,963 15.1 % Percentage of revenue 6.1 % 9.1 % General and administrative expenses increased by $4.0 million from $26.3 million for the year ended December 31, 2023 to $30.3 million for the year ended December 31, 2024.
While we plan to continue to increase the number of quote requests we acquire from our verified partner network, our profitability will be impacted by our ability to acquire quote requests in significant volume, at prices that are attractive, and that represent high-intent shoppers for which insurance providers will purchase referrals.
Further, our profitability will be impacted by our ability to acquire quote requests in significant volume, at prices that are attractive, and that represent high-intent shoppers for which insurance providers will purchase referrals.
Key Components of Our Results of Operations Revenue We generate our revenue primarily from consumer inquiries sold as referrals to insurance provider customers, consisting of carriers and agents, as well as to indirect distributors.
We do not use VMD or VMM as a measure of profitability. 28 Table of Contents Key Components of Our Results of Operations Revenue We generate our revenue primarily from consumer inquiries sold as referrals to insurance provider customers, consisting of carriers and agents, as well as to indirect distributors.
As a result, our liquidity and capital resources in future periods should be analyzed in conjunction with such factors. We lease office space in Cambridge, Massachusetts under a non-cancelable operating lease that expires in September 2024. We lease office space in Austin, Texas pursuant to a lease that expires in April 2025.
As a result, our liquidity and capital resources in future periods should be analyzed in conjunction with such factors. We lease office space in Cambridge, Massachusetts under non-cancelable operating leases through December 2027. We lease office space in Belfast, Northern Ireland pursuant to a sublease that expires in July 2027.
Research and Development Year Ended December 31, Change 2023 2022 Amount % (dollars in thousands) Research and development expense $ 27,591 $ 31,713 $ (4,122 ) -13.0 % Percentage of revenue 9.6 % 7.8 % 34 Table of Contents Research and development expenses decreased by $4.1 million from $31.7 million for the year ended December 31, 2022 to $27.6 million for the year ended December 31, 2023.
Research and Development Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Research and development expense $ 29,553 $ 27,591 $ 1,962 7.1 % Percentage of revenue 5.9 % 9.6 % 33 Table of Contents Research and development expenses increased by $2.0 million from $27.6 million for the year ended December 31, 2023 to $29.6 million for the year ended December 31, 2024.
We expect that research and development expense will remain relatively flat in 2024 as compared to 2023. 30 Table of Contents General and Administrative General and administrative expense consists of personnel-related costs and related expenses for executive, finance, legal, human resources, technical support and administrative personnel as well as the costs associated with professional fees for external legal, accounting and other consulting services, insurance premiums and payment processing and billing costs.
General and Administrative General and administrative expense consists of personnel-related costs and related expenses for executive, finance, legal, human resources, technical support and administrative personnel as well as the costs associated with professional fees for external legal, accounting and other consulting services, insurance premiums and payment processing and billing costs.
The decrease in revenue was due to a decrease of $96.9 million in our automotive insurance vertical and a decrease of $28.3 million in our other insurance verticals, partially offset by an increase in revenue from our home and renters insurance vertical of $9.0 million.
The increase in revenue was due to an increase of $218.6 million in our automotive insurance vertical and an increase of $11.1 million in our home and renters insurance vertical, partially offset by a decrease of $17.4 million in our other insurance verticals.
In addition, we are filing a universal shelf registration statement on Form S-3 with the SEC concurrently with the filing of this Annual Report on Form 10-K, which when declared effective, will register for sale up to $150.0 million of any combination of our common stock, preferred stock, debt securities, warrants, rights or units from time to time and at prices and on terms that we may determine.
In addition, we have an effective universal shelf registration statement on Form S-3 with the SEC that permits us to sell up to $150.0 million of any combination of our common stock, preferred stock, debt securities, warrants, rights or units from time to time and at prices and on terms that we may determine.
At this time we have no plans to sell any such securities under this registration statement Since our inception, we have incurred operating losses and may continue to incur losses in the foreseeable future.
At this time we have no plans to sell any such securities under this registration statement. 35 Table of Contents Prior to 2024, we incurred annual operating losses and we may incur losses in the future.
In the years ended December 31, 2023, 2022 and 2021, our total revenue was $287.9 million, $404.1 million and $418.5 million, respectively, representing year-over-year decreases of 28.8% and 3.4% from 2022 to 2023 and 2021 to 2022, respectively.
In the years ended December 31, 2024, 2023 and 2022, our total revenue was $500.2 million, $287.9 million and $404.1 million, respectively, representing a year-over-year increase of 73.7% from 2023 to 2024 and a year-over-year decrease of 28.8% from 2022 to 2023.
Furthermore, total revenue from our two largest insurance carrier customers was 27% and 32% of our revenue for the years ended December 31, 2023 and 2022, respectively.
Furthermore, total revenue from our largest auto insurance carrier customer was 39% of our revenue for the year ended December 31, 2024 and revenue from our two largest customers was 27% in the aggregate of our revenue for the year ended December 31, 2023.
Our marketplace enables consumers to choose to visit an insurance provider’s website to purchase a policy or engage with a carrier or agent by phone or submit their data to insurance providers to receive quotes.
Our marketplace enables consumers to choose to visit an insurance provider’s website to purchase a policy or engage with a carrier or agent by phone or submit their data to insurance providers to receive quotes. Our services are free for consumers, and we derive our revenue principally from consumer inquires sold as referrals to insurance providers.
We use VMM to measure the efficiency of individual advertising and consumer acquisition sources and to make trade-off decisions to manage our return on advertising. We do not use VMM as a measure of profitability.
We define variable marketing margin, or VMM, as VMD divided by revenue. We use VMD and VMM to measure the efficiency of individual advertising and consumer acquisition sources and to make trade-off decisions to manage our return on advertising.
The decrease in general and administrative expenses was primarily due to a decrease in personnel-related costs of $0.9 million and decreases in insurance costs and bad debt expense of $0.5 million each. These decreases were partially offset by a net increase in professional fees of $0.5 million, primarily due to an increase in legal costs.
The increase in general and administrative expenses was primarily due to an increase in personnel-related costs of $2.2 million and an increase in professional fees of $1.8 million for consulting services, partially offset by decreases in legal fees and insurance expense of $0.3 million each.
Compensation expense for nonemployee awards is recognized in the same manner as if we had paid cash for the goods or services received, which is generally the vesting period of the respective award. 39 Table of Contents We estimate the fair value of stock options with service-based vesting or performance-based vesting granted to employees, nonemployees and directors using the Black Scholes option pricing model, which uses as inputs the fair value of our common stock and assumptions we make for the volatility of our common stock, the expected term of our common stock options, the risk-free interest rate for a period that approximates the expected term of our common stock options, and our expected dividend yield.
We estimate the fair value of stock options with service-based vesting or performance-based vesting granted using the Black Scholes option pricing model, which uses as inputs the fair value of our common stock and assumptions we make for the volatility of our common stock, the expected term of our common stock options, the risk-free interest rate for a period that approximates the expected term of our common stock options, and our expected dividend yield.
We define adjusted EBITDA as our net income (loss), excluding the impact of stock-based compensation expense; depreciation and amortization expense; restructuring and other charges; acquisition-related costs; one-time severance charges; interest income; and income taxes. The most directly comparable GAAP measure to adjusted EBITDA is net income (loss).
Adjusted EBITDA is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to similarly titled measures presented by other companies. Adjusted EBITDA . We define adjusted EBITDA as our net income (loss), excluding the impact of stock-based compensation expense; depreciation and amortization expense; restructuring and other charges; acquisition-related costs; interest income; and income taxes.
Financing activities During the years ended December 31, 2023 and 2022, net cash provided by financing activities was $0.6 million and $15.8 million, respectively. Net cash provided by financing activities during the year ended December 31, 2023 consisted of proceeds received from the exercise of common stock options, partially offset by tax withholding payments relating to net share settlements.
Net cash provided by financing activities during the year ended December 31, 2024 and 2023 consisted of proceeds received from the exercise of common stock options, partially offset by tax withholding payments relating to net share settlements. 36 Table of Contents For a discussion of our cash flows for the year ended December 31, 2022 see Item 7.
We support three secure consumer referral formats: • Clicks: An online-to-online referral, with a handoff of the consumer to the provider’s website. • Data: An online-to-offline referral, with quote request data transmitted to the provider for follow-up. • Calls: An online-to-offline referral for outbound calls and an offline-to-offline referral for inbound calls, with the consumer and provider connected by phone. 29 Table of Contents We also generate revenue from commissions paid to us by insurance carriers for the sale of policies in our automotive insurance vertical, and prior to our exit from health, in our health insurance vertical.
We support three secure consumer referral formats: • Clicks: An online-to-online referral, with a handoff of the consumer to the provider’s website. • Data: An online-to-offline referral, with quote request data transmitted to the provider for follow-up. • Calls: An online-to-offline referral for outbound calls and an offline-to-offline referral for inbound calls, with the consumer and provider connected by phone.
The state of the auto insurance market remains volatile and while we believe we have started to see some improvement in spending patterns, a recovery could be prolonged by further cost inflation, increased claim severity and frequency, or insufficient policy premium increases. Expanding consumer traffic Our success depends in part on the growth of our consumer traffic.
The state of the auto insurance market remains volatile, and while we saw improvements in spending patterns in 2024, including from our largest carrier customer, not all of our carrier customers have increased their spend in a proportional or significant manner, and a full recovery could be prolonged by further cost inflation, increased claim severity and frequency, or insufficient policy premium increases. 27 Table of Contents Expanding consumer traffic Our success depends in part on the growth of our consumer traffic.
Restructuring and other charges primarily included the loss on the sale of health insurance vertical assets of $19.4 million and an asset impairment charge of $0.4 million for the right-of-use asset related to our Cambridge, Massachusetts office lease. Restructuring costs and other charges also included net employee separation charges and non-cash compensation related to the restructuring of $3.8 million.
Restructuring and other charges of $23.6 million for the year ended December 31, 2023 consisted of the loss on the sale of health insurance vertical assets of $19.4 million and an asset impairment charge of $0.4 million for the right-of-use asset related to our Cambridge, Massachusetts office lease.
Our results-driven marketplace, powered by our proprietary data and technology platform, is improving the way insurance providers attract and connect with consumers shopping for insurance. We operate a marketplace to connect insurance providers to a large volume of high-intent, pre-validated consumer referrals that match the insurers’ specific underwriting and profitability requirements.
We operate a marketplace to connect insurance providers to a large volume of high-intent, pre-validated consumer referrals that match the insurers’ specific underwriting and profitability requirements.
Research and Development Research and development expense consists primarily of personnel-related costs for software development and product management. We have focused our research and development efforts on improving ease of use and functionality of our existing marketplace platform and developing new offerings and internal tools. We primarily expense research and development costs.
We have focused our research and development efforts on improving ease of use and functionality of our existing marketplace platform and developing new offerings and internal tools. We primarily expense research and development costs. Direct development costs related to software enhancements that add functionality are capitalized and amortized as a component of cost of revenue.
Therefore, a significant portion of the commission revenue we record upon satisfaction of our performance obligation is paid by our insurance provider customer over a multi-year time frame as policyholders renew and pay the insurance provider for their policies.
Therefore, a significant portion of the commission revenue we record upon satisfaction of our performance obligation is paid by our insurance provider customer over a multi-year time frame as policyholders renew and pay the insurance provider for their policies. 37 Table of Contents The current portion of commissions receivable consists of estimated commissions on new policies sold and estimated renewal commissions on policies expected to be renewed within one year, while the non-current portion of commissions receivable are commissions for estimated renewals expected to be renewed beyond one year.
Marketing costs consist primarily of content and creative development, public relations, memberships, and event costs. We expect our sales and marketing expense will increase as we expect increased carrier spend for referrals, which will impact our advertising expenditures, though we expect personnel-related costs to decrease in 2024 from 2023 as a result of the Reduction Plan implemented in June 2023.
Marketing costs consist primarily of content and creative development, public relations, memberships, and event costs. We expect our sales and marketing expense will increase as we expect increased carrier spend for referrals, which will impact our advertising expenditures. 29 Table of Contents Research and Development Research and development expense consists primarily of personnel-related costs for software development and product management.
Sales and Marketing Year Ended December 31, Change 2023 2022 Amount % (dollars in thousands) Sales and marketing expense $ 240,131 $ 349,255 $ (109,124 ) -31.2 % Percentage of revenue 83.4 % 86.4 % Sales and marketing expenses decreased by $109.1 million from $349.3 million for the year ended December 31, 2022 to $240.1 million for the year ended December 31, 2023.
Sales and Marketing Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Sales and marketing expense $ 387,700 $ 240,131 $ 147,569 61.5 % Percentage of revenue 77.5 % 83.4 % Sales and marketing expenses increased by $147.6 million from $240.1 million for the year ended December 31, 2023 to $387.7 million for the year ended December 31, 2024.
The increase in interest income in 2023 was due to higher interest rates. Other income (expense), net was not significant for either of the years ended December 31, 2023 or 2022. Income Taxes Income tax expense of $0.6 million for the year ended December 31, 2023 consisted of foreign and state income expense.
The increase in interest income in 2024 was due to higher invested cash balances. Other income (expense), net was not significant for either of the years ended December 31, 2024 or 2023.
Cash used by operating activities in the year ended December 31, 2022 resulted from our net loss of $24.4 million and net cash used by changes in our operating assets and liabilities of $22.8 million, partially offset by net non-cash charges of $31.4 million.
Cash provided by operating activities in the year ended December 31, 2024 resulted from our net income of $32.2 million, net non-cash charges of $26.3 million and net cash provided by changes in our operating assets and liabilities of $8.1 million.
However, we have decreased advertising spend in response to lower demand for consumer referrals and we have the ability to further decrease advertising spend in the future when the revenue associated with such consumer traffic does not result in incremental profit to our business. We have also increased the number of quote requests acquired from our verified partner network.
While we plan to grow consumer traffic, we have the ability to decrease advertising spend when the revenue associated with such consumer traffic does not result in incremental profit to our business or in response to lower demand for consumer referrals.
Comparison of the Years Ended December 31, 2023 and 2022 Revenue Year Ended December 31, Change 2023 2022 Amount % (dollars in thousands) Revenue $ 287,921 $ 404,127 $ (116,206 ) -28.8 % Revenue decreased by $116.2 million from $404.1 million for the year ended December 31, 2022 to $287.9 million for the year ended December 31, 2023.
Comparison of the Years Ended December 31, 2024 and 2023 Revenue Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Revenue $ 500,190 $ 287,921 $ 212,269 73.7 % Revenue increased by $212.3 million from $287.9 million for the year ended December 31, 2023 to $500.2 million for the year ended December 31, 2024.
Acquisition-related Costs Acquisition-related costs for the years ended December 31, 2023 and 2022 were $(0.2) million and $(4.1) million, respectively. We recorded these credits to acquisition-related costs for the years ended December 31, 2023 and 2022 for the decreases in fair value of our contingent consideration liabilities.
Acquisition-related costs for the year ended December 31, 2023 were $(0.2) million and consisted of a credit to acquisition-related costs for the decrease in fair value of our contingent consideration liabilities. Other Income (Expense) Other income (expense) included interest income of $2.1 million and $1.3 million for the years ended December 31, 2024 and 2023, respectively.
The decrease in sales and marketing expense was primarily due to a decrease in advertising costs of $88.2 million due to a decrease in carrier spend.
The increase in sales and marketing expense was primarily due to an increase in advertising costs of $157.3 million due to an increase in carrier spend, partially offset by a decrease in personnel-related costs of $9.2 million, primarily in our DTC agency.
If we need additional funds and are unable to obtain funding on a timely basis, we may need to significantly curtail our operations in an effort to provide sufficient funds to continue our operations, which could adversely affect our business prospects. 36 Table of Contents Cash Flows The following table shows a summary of our cash flows: Year Ended December 31, 2023 2022 2021 (in thousands) Net cash provided by (used in) operating activities $ (2,828 ) $ (15,791 ) $ 7,189 Net cash provided by (used in) investing activities 9,354 (4,290 ) (18,817 ) Net cash provided by financing activities 577 15,842 3,615 Effect of exchange rate changes on cash, cash equivalents and restricted cash 18 (27 ) (6 ) Net increase (decrease) in cash, cash equivalents and restricted cash $ 7,121 $ (4,266 ) $ (8,019 ) Operating activities Operating activities used $2.8 million and $15.8 million of cash during the years ended December 31, 2023 and 2022, respectively.
Cash Flows The following table shows a summary of our cash flows: Year Ended December 31, 2024 2023 2022 (in thousands) Net cash provided by (used in) operating activities $ 66,566 $ (2,828 ) $ (15,791 ) Net cash provided by (used in) investing activities (4,114 ) 9,354 (4,290 ) Net cash provided by financing activities 1,707 577 15,842 Effect of exchange rate changes on cash, cash equivalents and restricted cash 1 18 (27 ) Net increase (decrease) in cash, cash equivalents and restricted cash $ 64,160 $ 7,121 $ (4,266 ) Operating activities Operating activities provided $66.6 million and used $2.8 million of cash during the years ended December 31, 2024 and 2023, respectively.
Our estimates of fair value are based upon assumptions believed to be reasonable at that time but that are inherently uncertain and unpredictable. Assumptions may be incomplete or inaccurate, and unanticipated events or circumstances may occur, which may affect the accuracy or validity of such assumptions, estimates or actual results.
Assumptions may be incomplete or inaccurate, and unanticipated events or circumstances may occur, which may affect the accuracy or validity of such assumptions, estimates or actual results.
Comparison of the Years Ended December 31, 2022 and 2021 For a discussion of our results of operations for the year ended December 31, 2022 as compared to the year ended December 31, 2021, see Item 7.
The decrease in variable marketing margin was primarily due to the relative mix of referral types and competitive pricing for advertising spend. Comparison of the Years Ended December 31, 2023 and 2022 For a discussion of our results of operations for the year ended December 31, 2023 as compared to the year ended December 31, 2022, see Item 7.
Net cash used in investing activities was $4.3 million for the year ended December 31, 2022, consisting of cash used to acquire property and equipment, which included the capitalization of software development costs. During each of the years ended December 31, 2023 and 2022, we capitalized $3.6 million of software development costs.
A significant portion of our commissions receivable asset is classified as long term. Investing activities Net cash used in investing activities was $4.1 million for the year ended December 31, 2024, consisting of cash used to acquire property and equipment, which included the capitalization of software development costs.
Adjusted EBITDA is a non-GAAP financial measure that we present in this Annual Report on Form 10-K to supplement the financial information we present on a GAAP basis.
Adjusted EBITDA We define Adjusted EBITDA as net income (loss), adjusted to exclude: stock-based compensation expense, depreciation and amortization expense, restructuring and other charges, acquisition-related costs, interest income and income taxes. Adjusted EBITDA is a non-GAAP financial measure that we present in this Annual Report on Form 10-K to supplement the financial information we present on a GAAP basis.
For further explanation of the uses and limitations of this measure and a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, net income (loss), please see “—Non-GAAP Financial Measure”.
For further explanation of the uses and limitations of this measure and a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, net income (loss), please see “—Non-GAAP Financial Measure.” Variable Marketing Dollars and Margin We define variable marketing dollars, or VMD, as revenue, as reported in our consolidated statements of operations and comprehensive income (loss), less advertising costs (a component of sales and marketing expense, as reported in our consolidated statements of operations and comprehensive income (loss)).
Overview We operate a leading online marketplace for insurance shopping, connecting consumers with insurance provider customers, which includes both carriers and agents. Our vision is to become the largest online source of insurance policies by using data, technology and knowledgeable advisors to make insurance simpler, more affordable and personalized.
Overview We operate a leading online marketplace for insurance shopping, connecting consumers with insurance provider customers, which includes both carriers and agents. Our vision is to be the leading growth partner for P&C insurance providers. Our results-driven marketplace, powered by our proprietary data and technology platform, is improving the way insurance providers attract and connect with consumers shopping for insurance.
For the periods presented, our total revenue consisted of revenue generated within our insurance verticals as follows: Year Ended December 31, 2023 2022 2021 (in thousands) Automotive $ 227,505 $ 324,417 $ 330,928 Home and Renters 40,889 31,909 37,548 Other 19,527 47,801 50,039 Total Revenue $ 287,921 $ 404,127 $ 418,515 We expect an overall increase in revenue in 2024, including in our automotive and home and renters verticals, as we anticipate increased spending from our carrier partners.
For the periods presented, our total revenue consisted of revenue generated within our insurance verticals as follows: Year Ended December 31, 2024 2023 2022 (in thousands) Automotive $ 446,095 $ 227,505 $ 324,417 Home and Renters 52,013 40,889 31,909 Other 2,082 19,527 47,801 Total Revenue $ 500,190 $ 287,921 $ 404,127 Cost and Operating Expenses Our cost and operating expenses consist of cost of revenue, sales and marketing, research and development, general and administrative expenses, restructuring and other charges and acquisition-related costs.
To the extent we make changes to our estimates of constrained LTVs, we recognize any material impact of the change to commission revenue in the reporting period in which the change is made, including revisions of estimated lifetime commissions either below or in excess of previously estimated constrained LTVs recognized as an adjustment to revenue and the related contract asset.
To the extent that we make changes to our estimates of constrained LTVs, we recognize any material impact of the change as an adjustment to revenue and commissions receivable in the reporting period in which the change is made. We had commissions receivable of $7.1 million as of December 31, 2024, of which $3.0 million was classified as current.
Cost of revenue decreased primarily due to a decrease in third-party call center costs of $3.1 million as a result of shifting call referrals from third-party call centers to employees and a decrease in calls related to our health insurance vertical. Hosting costs also decreased by $0.9 million.
Cost of revenue decreased primarily due to a decrease in personnel-related costs of $1.4 million related primarily to decreased headcount related to our exit of the health insurance vertical, partially offset by an increase in third-party call center costs of $0.7 million due primarily to a net increase in call volume.
Sales and marketing expenses also decreased due to our exit from the health insurance vertical, including decreases in personnel-related costs and office and occupancy costs of $15.7 million and $1.0 million, respectively, and decreases in depreciation and amortization expense and agent license fees of $0.7 million and $0.6 million, respectively.
Technology services and agent license fees also decreased by $0.8 million and $0.6 million, respectively, due primarily to our exit from the health insurance vertical in 2023 and reduction in personnel, while marketing costs increased by $0.7 million due primarily to branding costs and customer events.
The decrease in revenue from our automotive insurance vertical was primarily due to a decrease in carrier spend for referrals of $83.3 million, including a decrease in subsidies from one of our larger carrier customers, and a decrease in commission revenue of $13.6 million.
The increase in revenue from our home and renters insurance vertical was primarily due to an increase in carrier spend for referrals.
Variable Marketing Margin Year Ended December 31, Change 2023 2022 Amount % (dollars in thousands) Revenue $ 287,921 $ 404,127 $ (116,206 ) -28.8 % Less: total advertising expense (a component of sales and marketing expense) 187,639 275,869 Variable marketing margin $ 100,282 $ 128,258 $ (27,976 ) -21.8 % Percentage of revenue 34.8 % 31.7 % 35 Table of Contents The decrease in variable marketing margin was due primarily to decreased carrier spend.
We maintain a valuation allowance on our overall net deferred tax asset as it is deemed more likely than not the net deferred tax asset will not be realized. 34 Table of Contents Variable Marketing Dollars and Margin Year Ended December 31, Change 2024 2023 Amount % (dollars in thousands) Revenue $ 500,190 $ 287,921 $ 212,269 73.7 % Less: total advertising expense (a component of sales and marketing expense) 344,963 187,639 Variable marketing dollars $ 155,227 $ 100,282 $ 54,945 54.8 % Variable marketing margin 31.0 % 34.8 % The increase in variable marketing dollars was due primarily to increased carrier spend.
We measure stock options with market-based vesting based on the fair value on the date of grant using a Monte Carlo simulation model. We estimate the fair value of each RSU based on the market value of our common stock.
We estimate the fair value of RSUs granted based on the market value of our common stock.
Restructuring and Other Charges Restructuring and other charges of $23.6 million for the year ended December 31, 2023 consisted of costs related to the Reduction Plan implemented in June 2023.
Restructuring costs and other charges also included net employee separation charges and non-cash compensation related to the restructuring of $3.8 million. Acquisition-related Costs There were no acquisition-related costs for the year ended December 31, 2024.
We did not record income tax expense for the year ended December 31, 2022 as we offset taxable income with net operating loss carryforwards.
Income Taxes Income tax expense of $1.8 million for the year ended December 31, 2024 consisted primarily of state and federal income taxes for the portion of our taxable income that was not offset by operating loss and tax credit carryforwards.
Technology services also decreased by $1.1 million and agent marketing decreased by $0.5 million due to lower usage and activity.
Travel, office allocations and consulting costs also increased by $0.4 million, $0.4 million and $0.3 million, respectively. Technology service costs decreased by $0.9 million due to decreased cloud services usage.
If we do not achieve our revenue goals as planned, we believe that we can reduce our operating costs.
If we do not achieve our revenue goals as planned, we believe that we can reduce our operating costs. If we need additional funds and are unable to obtain funding on a timely basis, we may need to significantly curtail our operations in an effort to provide sufficient funds to continue our operations, which could adversely affect our business prospects.
Removed
Our services are free for consumers, and we derive our revenue from consumer inquires sold as referrals to insurance providers and directly from commissions on sales of policies by our DTC insurance agency. Since 2011, our core mission has been to make finding insurance easy and more personal, saving consumers and insurance providers time and money.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AN D QUALITATIVE DISCLOSURES ABOUT MARKET RISK We have a credit agreement that provides us with credit at a floating rate of interest. As of December 31, 2023, we had no outstanding borrowings under our credit facility and therefore no material exposure to fluctuations in interest rates.
Biggest changeITEM 7A. QUANTITATIVE AN D QUALITATIVE DISCLOSURES ABOUT MARKET RISK We have a credit agreement that provides us with credit at a floating rate of interest. As of December 31, 2024, we had no outstanding borrowings under our credit facility and therefore no material exposure to fluctuations in interest rates.
We contract with vendors in foreign countries and we have foreign subsidiaries. As such, we have exposure to adverse changes in exchange rates of foreign currencies associated with our foreign transactions and our foreign subsidiaries. We believe this exposure to be immaterial. We do not hedge against this exposure to fluctuations in exchange rates. 40 Table of Contents
We contract with vendors in foreign countries and we have foreign subsidiaries. As such, we have exposure to adverse changes in exchange rates of foreign currencies associated with our foreign transactions and our foreign subsidiaries. We believe this exposure to be immaterial. We do not hedge against this exposure to fluctuations in exchange rates. 38 Table of Contents

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