EverQuote (EVER) Q3 2025: Carrier Spend Jumps 27% as AI Flywheel Accelerates Growth
EverQuote’s Q3 marked a structural leap in carrier engagement and profitability, powered by AI-driven product adoption and disciplined cost execution. The company’s evolution from lead generation to a multi-product, AI-enabled growth partner is reshaping its competitive position and expanding wallet share with both national carriers and local agents. With 80% of top carriers still below peak spend and new traffic channels ramping, EverQuote’s flywheel is primed for sustained expansion into 2026.
Summary
- AI-Driven Product Adoption: Smart Campaigns 3.0 delivered measurable spend efficiency and secured EverQuote’s position as a top acquisition partner for a major carrier.
- Carrier Budget Room: Most top carrier partners remain well below historical spend, signaling ample headroom for further growth.
- Strategic Channel Investments: New traffic channels and AI-powered tools are expected to unlock incremental scale and margin leverage into 2026.
Performance Analysis
EverQuote delivered record quarterly highs in revenue, adjusted EBITDA, and net income, underpinned by robust carrier demand and expanding AI-driven product adoption. Revenue growth was propelled by a 27% YoY surge in enterprise carrier spend, with the auto insurance vertical representing the lion’s share of business and home/renters insurance showing solid double-digit growth. Variable marketing margin (VMM), a key measure of traffic acquisition efficiency, held at 28.8% despite incremental investments in new channels.
Disciplined expense management and automation initiatives enabled operating leverage, with adjusted EBITDA margin expanding to 14.4%, outpacing revenue gains. Share repurchases reduced the share count by 2%, signaling confidence in long-term free cash flow generation and capital discipline. The company exited the quarter debt-free, with $146 million in cash and cash equivalents, maintaining balance sheet flexibility for ongoing investments and opportunistic buybacks.
- Carrier Spend Upside: 80% of EverQuote’s top 25 carrier partners remain below prior peak spend, offering a visible runway for future revenue acceleration as advertising budgets catch up to improved underwriting margins.
- AI-Enabled Margin Gains: Smart Campaigns 3.0 adoption drove a 7% improvement in ad spend efficiency for early adopters, reinforcing the platform’s competitive edge.
- Operating Leverage: Cash OpEx remained flat YoY, with efficiency gains from AI and automation offsetting targeted tech investments.
With a strong demand backdrop and operational discipline, EverQuote is positioned to sustain double-digit revenue and profit growth as it expands its marketplace and product suite.
Executive Commentary
"We achieved record top and bottom line performance in Q3. Our team continues to help carriers and agents drive profitable policy growth amidst a healthy underwriting environment. We're making steady progress toward our vision of becoming the number one growth partner to PNC insurance providers by delivering, one, better performing referrals, two, bigger traffic scale, and three, a broader suite of products and services."
Jamie Mendel, Chief Executive Officer
"We delivered record results in the third quarter, achieving new quarterly highs for revenue, variable marketing dollars of EMD, adjusted EBITDA, and net income. In addition, We continue to enhance our operating performance and drove expanding levels of profitability as reflected by our record adjusted EBITDA margin."
Joseph Sanborn, Chief Financial Officer
Strategic Positioning
1. AI-Driven Product Transformation
EverQuote’s Smart Campaigns, an AI-powered bidding platform for carriers, is central to its shift from transactional lead vendor to strategic growth partner. The latest 3.0 release delivered a 7% improvement in ad spend efficiency, prompting increased carrier budget allocation and reinforcing a data-driven flywheel. With plans to extend AI bidding to local agents, EverQuote is deepening customer integration and raising switching costs.
2. Multi-Product Expansion for Agents
Local agent customers are increasingly adopting EverQuote’s expanding suite of growth tools, with over 35% now using more than one of four agent products. This multi-product approach is building recurring revenue streams and broadening EverQuote’s value proposition beyond leads, positioning the company as a one-stop growth partner for agents.
3. Channel Diversification and Traffic Scale
EverQuote is ramping investments in new traffic channels—including social, video, display, connected TV, and AI-powered search—to diversify acquisition sources and capture incremental demand. While initial investments may pressure margins, these channels are expected to reach parity with existing sources after one to two quarters of optimization, unlocking new scale and data advantages.
4. Operating Model Leverage
Disciplined cost management and automation are driving operating leverage, with flat YoY OpEx despite 10% headcount growth and ongoing investment in AI and engineering productivity. AI-enabled automation in traffic operations, campaign management, and call centers is structurally lowering unit costs and supporting margin expansion.
5. Organic Path to $1B Revenue
Management reaffirmed its target to reach $1 billion in annual revenue within two to three years through organic execution—leveraging AI, deeper carrier and agent partnerships, and expansion into new P&C verticals. M&A remains opportunistic, not required for near-term growth goals.
Key Considerations
EverQuote’s Q3 results underscore a business in transition from lead generation to a full-stack growth solutions provider, with AI and product breadth driving both competitive differentiation and financial leverage.
Key Considerations:
- Carrier Budget Catch-Up: Most top carriers remain below historical spend, providing visible room for EverQuote to capture incremental budget as advertising aligns with underwriting profitability.
- AI Product Adoption: Smart Campaigns and other AI-driven tools are deepening carrier relationships, increasing data scale, and improving campaign performance—a key competitive moat.
- Margin Management Amid Investment: Near-term margin pressure from new channel investments is a calculated trade-off for long-term traffic scale and data flywheel effects.
- Recurring Revenue Growth: Expanding multi-product adoption among agents is building a base of recurring subscription revenue, reducing reliance on transactional lead sales.
- Capital Allocation Discipline: Share repurchases and a debt-free balance sheet reinforce management’s confidence and provide flexibility for opportunistic investment or M&A.
Risks
Key risks include: competitive intensity in insurance advertising, margin variability from new traffic channel ramp, and exposure to cyclical carrier advertising budgets. Advertising cost inflation or a reversal in carrier underwriting margins could pressure top-line growth and profitability. Execution risk remains as EverQuote transitions to a multi-product model and scales new AI-driven offerings.
Forward Outlook
For Q4 2025, EverQuote guided to:
- Revenue of $174 to $180 million (20% YoY growth at midpoint)
- V&D of $46 to $48 million (7% YoY growth at midpoint)
- Adjusted EBITDA of $21 to $23 million (16% YoY growth at midpoint)
For full-year 2025, management expects:
- Annual revenue growth of approximately 35%
- Adjusted EBITDA growth of over 55%
Management cited ongoing investments in new traffic channels and AI capabilities as temporary margin headwinds, but emphasized that these moves are positioning EverQuote for sustained double-digit growth and expanding profitability as the flywheel effect compounds into 2026.
- Carrier spend expected to rise as advertising budgets catch up to improved profitability
- AI and automation to drive continued operating leverage and margin expansion
Takeaways
EverQuote’s Q3 demonstrated the compounding effects of AI-powered product adoption, disciplined cost execution, and a favorable carrier demand backdrop.
- Flywheel Momentum: AI-driven Smart Campaigns are driving higher carrier spend, improved efficiency, and a data advantage that fuels further growth.
- Strategic Channel Investment: Short-term margin pressure from channel ramp is a deliberate move to capture long-term scale and competitive differentiation.
- Organic Growth Path: With 80% of top carriers below peak spend and multi-product adoption rising, EverQuote has a credible path to $1 billion in revenue and rule-of-40 financial performance.
Conclusion
EverQuote’s Q3 results confirm a business in strategic transition, with AI and multi-product expansion driving both top-line and bottom-line outperformance. The company’s focus on operational discipline and capital allocation positions it to capitalize on a sustained upcycle in carrier demand and deliver on its ambitious growth targets.
Industry Read-Through
EverQuote’s results signal a robust rebound in P&C insurance advertising budgets as carrier underwriting margins recover, with digital marketing partners benefiting from increased wallet share and demand for performance-based solutions. The company’s success with AI-driven bidding and automation highlights a broader industry shift toward data-driven, outcome-based marketing partnerships. Competitors in insurance lead generation, digital advertising, and martech should note the rising importance of AI-powered platforms and multi-product integration as carriers and agents seek fewer, more strategic partners. The ongoing transition from transactional lead sales to recurring, value-added growth solutions is likely to reshape economics and competitive dynamics across the insurance distribution landscape.