Thank you for standing by. My name is Eric, and I'll be your conference operator today. At this time, I would like to welcome everyone to the EverQuote 4th Quarter 2023 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Brinlea Johnson, Investor Relations. Please go ahead. Thank you. Good afternoon, and welcome to EverQuote's 4th Quarter and Full Year 2023 earnings call. We'll be discussing the results announced in our press release issued today after the market closed. With me on the call this afternoon is Jayme Mendal, EverQuote's Chief Executive Officer, and Joseph Sanborn, Chief Financial Officer of EverQuote. During the call, we will make statements related to our business that may be considered forward-looking statements under federal securities laws, including statements concerning our financial guidance for the 1st quarter of 2024, our growth strategy, and our plans to execute on our growth strategy, the initiatives, our investments in the business, the growth levers we expect to drive our business, our ability to maintain existing and acquire new customers, our expectations regarding recovery of the auto insurance industry, and other statements regarding our plans and prospects. Forward-looking statements may be identified with words and phrases such as we expect, we believe, we intend, we anticipate, we plan, may, upcoming, and similar words and phrases. These statements reflect our views only as of today and should not be considered our views as of any subsequent date. We specifically disclaim any obligation to update or revise these forward-looking statements except as required by law. Forward-looking statements are not promises or guarantees of future performance and are subject to a variety of risks and uncertainties that could cause the actual results to differ materially from our expectations. For discussion of material risks and other important factors that could cause the actual results to differ materially from our expectations, please refer to those contained under the heading Risk Factors in our most recent quarterly report on Form 10-Q or annual report on Form 10-K that is on file with the Securities and Exchange Commission and available on the Investor Relations section of our website at investors.everquote.com and on the SEC's website at sec.gov. Finally, during the course of today's call, we will refer to certain non-GAAP financial measures, which we believe are helpful to investors. A reconciliation of GAAP to non-GAAP measures was included in the press release we issued after the close of market today, which is available on the Investor Relations section of our website at investors.everquote.com. With that, I'll turn it over to Jayme. Thank you, Brinlea, and thank you all for joining us today. 2023 was a transformative year for EverQuote. Our team continued to demonstrate a strong command of the business, managing effectively through a challenged auto insurance market. We maintained positive Adjusted EBITDA for the year, improved our balance sheet, and produced record-high VMM as a percentage of revenue against historically low carrier demand. We also returned to our roots as a capital-efficient digital insurance marketplace, completing a significant restructuring of the business. We exited our health vertical, including our direct-to-consumer agency. We significantly reduced our headcount and operating expenses, and we refocused on extending the customer acquisition, provider network, data, and technology advantages that are the foundation of our industry-leading P&C insurance marketplace. By consolidating operations and teams, we have not only reduced expenses and improved our capital efficiency, but we have accelerated operational execution within our core P&C marketplace. An example of this can be seen in our home and renters insurance vertical, which grew by 28% year-over-year in 2023. We entered 2024 with a streamlined operation, a focused team, and a healthy balance sheet. Additionally, recent signs point to a less unfavorable auto insurance outlook as profitability appears to be improving for a number of carriers in our marketplace. In the last several months, we have seen carriers reactivate campaigns, expand their geographical footprints, and increase budgets. Nonetheless, we will continue operating with heightened discipline. We have seen previous auto carrier recoveries falter, and while this recovery appears more sustainable in that we see a broader base of improving carrier profitability, we don't discount the possibility that volatility may persist in 2024. We also continue operating with urgency, driven by the magnitude of the opportunity that remains in front of us. P&C insurance distribution and advertising is a $100 billion market, of which digital advertising comprises $6 billion, growing at a rate in excess of 10% per year. This shift is supported by the majority of consumers now favoring online-to-in-person shopping and insurance carriers steadily improving their digital customer acquisition funnels. We also believe this shift may accelerate as new technology, including AI, enables EverQuote and our customers to solve for certain points of friction in online insurance shopping in new ways. Insurance distribution remains ripe for disruption, and as insurance shopping continues to shift online, we believe EverQuote is well-positioned to emerge as the company which defines insurance distribution for the digital era. We continue to build on a unique set of advantages which will enable us to do so. EverQuote processes a vast amount of auto, home, and renters insurance quote requests each year, nearly 35 million in 2023. We believe that the data generated through these marketplace transactions provides EverQuote with a unique competitive moat in its data assets, which will enable us to deploy increasingly sophisticated and effective AI and machine learning models across aspects of our business ranging from traffic bidding to experience personalization to consumer-provider matching and recommendations. This will make our marketplace more effective for consumers and providers and more operationally efficient for EverQuote. EverQuote's marketplace offers access to a relatively broad set of P&C insurance products. As a reminder, P&C insurance carriers distribute their insurance products through different channels, some directly to consumers, others through captive agents, and others through independent agents. EverQuote has built a marketplace which supports all carriers in their pursuit of profitable growth, most notably through the inclusion of the largest local agent network in the industry. We continue to invest behind our advantage with local agents who we believe represent the best point of purchase for many consumers who go online to shop for insurance. Our vision remains unchanged: to become the largest online source of insurance policies by using data, technology, and knowledgeable advisors to make insurance simpler, more affordable, and personalized. While market conditions made progress toward this goal challenging in 2022 and 2023 as carrier underwriting appetite contracted, in 2024, we expect a return of conditions for progress as the carrier market begins to normalize and carriers once again seek to acquire new policyholders. Additionally, we entered the year leaner and more focused than any time in recent memory. We believe the stage is set for a year in which we rebuild momentum in our operations, financial performance, and progress towards our longer-term vision. Our team's strength and discipline and resilience and our financial health will serve us well as we continue our relentless pursuit to build an enduring, industry-defining company. Thank you. I'll now turn the call over to Joseph. Thank you, Jayme, and thank you all for joining. I will start by discussing our financial results for the 4th Quarter and Full Year 2023 before providing an update on what we are currently seeing in the auto insurance sector and our guidance for the 1st Quarter of 2024. We exceed guidance for the 4th Quarter across all three of our primary financial metrics of total revenue, variable marketing margin, or VMM, and Adjusted EBITDA. In addition, Q4, which is typically seasonally down from Q3, showed quarter-over-quarter improvement across all three metrics, most notably at the Adjusted EBITDA level. These results were driven by continued strong execution by our operating teams in what was a prolonged and deeply challenging environment. Total revenues in the 4th Quarter were $55.7 million, driven by stronger enterprise carrier spend up more than 50% from Q3 levels. For the full year, revenue was $287.9 million. As a reminder, EverQuote announced the exit of our health insurance vertical in late June, which represented approximately $15 million of 2023 full year revenue. Revenue from our auto insurance vertical was $45 million in Q4, representing 81% of revenues in the period. We saw a modest increase in auto revenues in Q4 relative to the third quarter, which was a new low point since the auto industry downturn began in late summer 2021. Revenue from our auto insurance vertical was $227.5 million for full year of 2023, or 83% of total revenues excluding revenues from our former health insurance vertical. Beginning in Q3, as a result of our exit from health in June 2023, we are reporting revenue on two primary verticals: auto insurance and home insurance, which includes renters. Revenues from our principal non-auto vertical, home and renters insurance, was $9.8 million in Q4, a year-over-year increase of 48%, and for the full year was $40.9 million, a year-over-year increase of 28%, highlighting the benefit of dedicated leadership focused on this vertical during 2023. VMM was $20.7 million for the 4th Quarter and $100.3 million for full year. VMM as a percentage of revenue was a record quarterly and annual high of 37.1% for the 4th Quarter and 34.8% for the full year, driven by three primary factors. First, our traffic teams continue to execute well in adapting our operations to a volatile environment. Second, our significant investment in developing proprietary technology and processes to better leverage our data to acquire high-intent consumers is continuing to yield results. And finally, we benefited from a relatively more favorable advertising environment. This is further evidence that our strategic decision to focus and take actions to realign our operations is generating results. Turning to operating expenses and the bottom line. We continue to be very disciplined in managing expenses and driving incremental operating leverage. We ended 2023 with a significantly more efficient operating model than we had when we began last year, given the substantial actions we took to streamline our operations during the period. For context, cash operating expenses, which excludes certain non-cash and other one-time charges, were $21.6 million in the 4th Quarter or nearly 30% below the 1st Quarter of 2023. Our current workforce consists of approximately 380 employees, down by nearly 40% from this time last year. In the 4th Quarter, GAAP net loss was $6.3 million, and for the year, GAAP net loss was $51.3 million, which included a restructuring charge of $23.6 million related to actions we took last summer, which included the exit and sale of our former health insurance vertical and a significant reduction in our workforce. In addition, full year net loss includes $22.8 million in ongoing stock comp expense, which is the lowest annual level we have seen over the past four years. Adjusted EBITDA for the 4th Quarter was negative $0.9 million and positive $0.5 million for the full year. We had operating cash flow of negative $0.8 million for the 4th Quarter. With the exit from the health insurance vertical and the scale down of our remaining DTCA operations, which again require significant upfront cash investment to drive growth, we expect that Adjusted EBITDA will be a close proxy for operating cash flow going forward, subject to normal working capital adjustments. The company ended Q4 with $38 million in cash and cash equivalents, up from $30.8 million at the end of 2022. In addition, we have a $25 million undrawn working capital line of credit. We have no plans to draw on the facility, and we have no other outstanding debt. Before turning to guidance, I want to provide an update on what we are seeing in the auto insurance industry as we start this year. Based on our recent discussions, many of our carrier partners have indicated that they have made meaningful progress towards achieving their desired levels of underwriting profitability. Many insurers also have reiterated their comments to us from last fall of wanting to return to acquiring new consumers in 2024. This more growth-oriented mindset has led to a strong start for our company this year, with more auto insurers beginning to return to our marketplace. We are encouraged by the positive outlook starting this year and are cautiously optimistic that auto recovery will be different and more sustainable this time around. We recognize, however, that conditions could change rapidly as many carriers are balancing a desire to return to new customer acquisition with being careful to not do too much too quickly, which could jeopardize their considerable work over the past several quarters to restore their underwriting profitability. For example, our largest carrier partner is taking a more measured approach to customer acquisition so far this year relative to the more aggressive posture they had in Q1 of 2023. Additionally, one of our captive carrier partners has to date significantly limited the states in which they're interested in writing new business as they continue to manage their profitability goals. We also have seen a carrier pullback meaningfully in their February spend in our marketplace from their January levels as they tested the attractiveness of different markets and customer segments. While these carrier dynamics create some uncertainty over the exact timing and slope of auto recovery, we believe that insurers taking a more balanced approach to restoring their marketing spend will ultimately create a more sustainable long-term recovery, which will benefit our company. In regards to our progress following our June 2023 restructuring, we committed to restoring consistent positive quarterly cash flow from operations in the first half of this year, followed by a return to our pre-downturn Adjusted EBITDA margins in 2024. We believe we remain on track to achieve both of these goals. After a step up in first quarter operating expenses relative to Q4, largely driven by customer annual increases, we plan to continue to maintain tight expense discipline, which will drive incremental operating leverage and Adjusted EBITDA margin expansion as we benefit from what we expect to be an expanding auto recovery as we progress through 2024. Based on our strong starts this year, the midpoint of our Q1 guidance implies a near return to pre-downturn Adjusted EBITDA margins. While we are encouraged by our early performance this year, we recognize that considerable uncertainty remains around the exact timing and slope of auto carrier recovery, and as such, we will not be providing full year guidance. Turning to our outlook for Q1 2024, we expect revenue to be between $78-$82 million. We expect VMM to be between $26-$28 million, and we expect Adjusted EBITDA to be between $3-$5 million. In summary, we delivered solid performance in the 4th Quarter given the environment, exceeding the high end of our guidance across revenue, VMM, and Adjusted EBITDA. We enter 2024 with strong conviction that EverQuote is extremely well-positioned to directly benefit as sustainable auto carrier recovery eventually takes hold. From an operating perspective, we will continue to focus on strong execution and controlling what we can control. We believe that the decisive strategic actions we took in 2023 to successfully refocus our operations on our core P&C markets, streamline our operations, and strengthen our balance sheet set the stage for future growth and long-term profitability. Jayme and I will now answer your questions. At this time, I would like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. Your first question comes from the line of Cory Carpenter with J.P. Morgan Please go ahead. Hey, good afternoon. I wanted to ask, I think you mentioned in the prepared remarks that enterprise carrier spend was up more than 50% sequentially. Just curious how broad-based that was versus the one carrier that I think we've heard from others has been ramping. And then maybe secondly sorry, secondly, just kind of what are you seeing this time around that's giving you the confidence or gives you confidence in that there's more sustainability kind of versus the false start that we saw this time last year? Thank you. Thanks, Cory. So I'll start with this second, well, I'll hit both questions, maybe in reverse order. The first is, I think we see a number of encouraging data points starting to build up. If you look out broadly across the industry, what we're seeing is more carriers feeling confident in their underwriting profitability in more states. And if you just look at some of the carriers that have released publicly their Q4 results or their January results, you're seeing double-digit improvements in combined ratios, and it's not unique to a single carrier. It's across now a growing set of carriers. And so I think that gives us some confidence that the industry is addressing the underlying issue more broadly. And then specific to EverQuote, in the last several months, we've seen a number of carriers reactivating campaigns, reentering states, increasing budgets. I think we've had a similar experience in that there's been one carrier that has done so in a way that's been the most impactful. But we are seeing the improvements and the expanding budget and some of these actions across a growing number of carriers. Thank you. And one more, if I could, just if you could update us, Jayme, on what you're seeing on the agency side of the business as well, that'd be helpful. Thank you. Yeah, for sure. Last year, we experienced modest declines in the agency business that were largely driven by the reduction in captive carrier subsidy support. As we turn the corner into this year, I think we are sort of getting back to a position where we expect growth out of that business this year. That's going to come from a number of areas. I think the captive carriers themselves will be probably still a little bit slow to bring back some of the marketing support dollars that existed in 2022 or early 2023. In the meantime, we've been investing in enhancing and extending our product offering with our local captive agents. We've also been working on increasing our penetration of the independent agent segment, which is less dependent on carrier subsidy support for its growth. So we've worked through some pricing and packaging that seems to be getting traction with that market. So overall, I'd say the direct segment, the direct carrier business, is likely to kind of lead the recovery. But we do see the agency business returning to growth this year as well. Great. Thank you. Appreciate it. No problem. Thanks, Cory. Your next question comes from the line of Michael Graham with Canaccord. Please go ahead. Hey, thanks. And it's great to see the momentum here. So congrats on that. I wanted to ask just if you could give a little bit of color around how you're thinking about how long it could take the business to get back to sort of those 2021 peakish levels in auto, if you think that's possible. And sort of related to that, you did a great job managing cost here throughout this downturn, and it feels like structurally, profitability could be improved at higher revenue levels. And I just wonder how you're thinking about sort of the medium-term possibility for better EBITDA margin structure. Sure. So thanks, Mike. I'll take both of your questions. So I think Jayme can add on. I think first, with regards to auto and the ability to get back to what we saw in Q3 of 2022 and 2020, excuse me, Q3 of 2021. I saw our peak was around $90 million in auto. So we certainly see a path to getting back to $90 million in auto and then some in revenue. So I think I just touched on that piece. In terms of the timing, I won't get into specifics on it. We're giving a guide for the quarter. We're not guiding for the year. We feel starting the year, we're feeling very good about how carriers are coming back and the messaging we're receiving. At the same time, we are still dealing with some variability in their how they're engaging and giving specificity in their plans for the year. So feel good about getting there over time, but the exact timing, I'm not going to call for this year at this point. Second, with regarding to sort of managing costs and profitability, so give you a little bit of insight there into building on the comments I gave in my script, is when you look at Q1, what you're seeing is operating expenses sort of ticking up. The guide from Q4, the guide implies about $23 million in sort of cash operating expenses in Q1. And what we've said is that we're going to continue to be very disciplined in managing those costs as we progress through this year. And what we will see that leading to is two things. First, obviously, returning to cash flow positive on a consistent basis. So we think we're feeling good about that in Q1 and that continuing. And the second is returning to the pre-downturn Adjusted EBITDA margins we had. Just to put that in context, our pre-downturn margins, if you say the downturn really began in earnest in Q3, look in the 12 months prior Q3 of 2021, look in the 12 months prior to that through Q2 of 2021, the average Adjusted EBITDA margin around 5.5%. Q2 of 2021 was a little over 6%. So you think about those if you look at our guide relative to that, the midpoint of our guide is around 5%. So we see a path where we committed to getting cash flow positive in the first half, getting back to pre-Adjusted EBITDA margins as the second goal for this year. We're on track to do that, and I think we'll continue to build from that. Given the expense discipline we outlined, which is $23 million in Q1, continuing to be disciplined adding any incremental expenses, we think we'll have an opportunity to, as we get out of recovery, see a significant increase in operating leverage and expanded Adjusted EBITDA margins. All right. That's great. Thank you, Joseph. Thank you. Your next question comes from the line of Jason Kreyer with Craig- Hallum. Please go ahead. Great. Thank you, guys. Jayme, just maybe wanted to ask, as this recovery takes shape, curious what you think your opportunities are for gaining market share relative to where we were at different points in the cycle in the past. Yeah. Thanks, Jason. I think the story of the last year or two has been largely focused on optimizing for margin and profitability in a highly budget-constrained environment. And as those budget constraints begin to go away, I think we'll restore greater focus on growth and share. One of the things that has always enabled us to do well from a share point of view is the local agent network that we have. It's a relatively proprietary distribution. The health of this network is strong, and we expect it to continue to build and grow. And that allows us to be more competitive in the traffic acquisition landscape. So we're confident in our ability to continue to build share as the sort of budget restrictions fade away. I think that one of the keys to doing that is going to be continuing to invest in this agency network and then flowing through that monetization as we do into our traffic landscape and our traffic bidding. We feel confident in that. Okay. Maybe a follow-up for Joseph. The VMM guide for Q1, it's a little bit of a pullback from Q4, obviously not surprising. Just curious, with a strengthening market, where do you expect VMM to settle in, or what does a more stable VMM look like as we look forward? Sure. So, give you some context. So in terms of our VMM, the guide, the VMM margins implied by our Q1 guide is a little under 34%, 33.8%. To put that in context with last year, obviously, we were pleased with our performance throughout last year of getting just under 35% on average VMM margin and 37% in Q4 last year. If you put that 35% in context for the year, that takes two pieces into it. One is a bit of DTCA in the first half of the year for exit at health, which has a higher VMM margin. And the second is the second half of the year had depressed volumes where advertising costs were relatively low. If you look at sort of normalized VMM margins in marketplace, it's around 30%-ish, as we've said before. Then we believe that we'll see VMM margins settle up between that 30-ish% and that 35% over the course of the year. You see it starting out just under 34%, and we'd expect to see some downward pressure in that as we progress through the year, as advertising costs become less favorable to us as they rise. I would emphasize that one piece that we continue to feel very strong on, and they'll over time continue to build the VMM margins in future periods, is what we've done with our data and technology investments around bidding so we can more effectively acquire high-intent consumers who perform well and monetize well with carriers. That'll continue to give enduring benefits, but again, the advertising environment will offset it. So that's what we see that's implied by the guide and sort of probably some incremental downward pressure, at least in the course of this year. Got it. Thanks, gentlemen. Your next question comes from the line of Ralph Schackart with William Blair. Please go ahead. Good afternoon. Jayme, maybe if you sort of give your perspective on market share shifts, have you seen them over the last couple of years? Obviously, the market's been fairly dynamic. And then kind of going forward, perhaps more importantly, the trends that you see there to potentially capture share. I mean, you talked about better bidding technology, using AI with your data scale, etc. But just sort of if you could kind of reframe your competitive position going forward, that'd be helpful. Yeah, sure. So I think the two things that we'd really like to point to in terms of the competitive position, which will enable us to, I think, drive share gains as the market recovers, the first is what I just alluded to, which is the agency network and the amount of monetization that comes from that. So as we continue to strengthen that agent network, we are in an advantaged position in terms of our ability to compete for and acquire traffic in a paid traffic acquisition landscape. So that'd be number one. But then the second thing that you alluded to, Mike, was, we have been developing our bidding technology since the early days of EverQuote, really. And we've got a second generation of bidding technology that's been rolling out over the last couple of years. So we, as a company, we probably see nearly as much internet insurance shopping traffic as anybody out there. And you referenced the number of quote requests that we processed last year. It was about 35 million or so quote requests. The data that we generate through these transactions gives us a real unique competitive moat. And we use the data from these transactions in that traffic bidding engine, which effectively allows us to kind of apply machine learning and AI to inference attributes or values about a consumer at various stages in their funnel and use that to make better decisions about which consumers to bid for, how much to pay for them, how much to route them to improve the overall efficiency of our traffic acquisition engine and of the marketplace. And so it's the combination of a better monetization engine and a better traffic acquisition engine that, over time, really will enable us to continue to build our share. Great. It's helpful. Thanks, Jayme. Your next question comes from the line of Dan Day with B. Riley Securities. Please go ahead. Yeah. Thanks, guys, for taking the questions. Just maybe a little on quote request volume, how it's kind of trended the last couple of months. I know you don't give the number anymore. Just generally speaking, have we seen a spike here since the calendar's turned and some carriers have raised prices? Okay. So hi, Dan. Thanks. Since the rate cycle began in 2022, we've been running with relatively elevated levels of consumer shopping for insurance. And so that was no different last year. I think we stepped up a bit from already elevated levels in 2022. I think the expectation is this year, as rates continue to flow through and as carriers continue to take rate, we will continue to see elevated levels of shopping. That combined with a more favorable monetization backdrop, so more carrier demand out there and more carriers sort of advertising and inducing shopping behavior, I think would lend itself to sort of incremental step-up in quote request volume. But generally speaking, I would say things have been elevated since 2022. They remain that way in 2023, and I expect it to remain that way in 2024 as well. Okay. Thanks. Another one just on your general strategy for attracting consumers to the marketplace. On a lot of the questions, we talked a lot about bidding strategies and mostly paid search and performance marketing. Have you guys thought about, just given there might be a lot of consumers potentially looking to switch more traditional brand advertising on TV, radio, those sorts of things, to maybe increase the number of people coming directly to EverQuote.com rather than through search or ads? Yeah. It's a good question. The answer is yes. We will compete in any channel that we can drive sufficient performance from. There are some of the channels that you referenced, which lend itself to more of a we'll call it more of a performance brand approach, right? Channels like OTT or something like that, which allow you to start to build brand, but do so in a highly performance-oriented context. I think that's probably where you'd see us go in our progression before we get to full-on brand advertising. But I do think there continues to be opportunity for us to expand the channels in which we participate, build more brand awareness over time, and drive more of that direct traffic, as you suggest. Okay. Great. Thanks, guys. Thanks, Dan. Your next question comes from the line of Greg Peters with Raymond James. Please go ahead. Yeah. Hey. Good afternoon. This is Sid on for Greg. Maybe just a cleanup question. In your prepared remarks, you mentioned the fourth quarter is typically more seasonally weak. Curious if the exit of the health vertical changed the seasonality any in the business? So yeah. One of the comments in terms of Q4 being seasonally weak was in the context of the auto and home vertical. When we had the health business, that was a counterweight to that typical seasonality dip for auto and home. And so Q4 is typically a seasonally lower for auto and home. What was unusual in Q4 of 2023 is we had some carriers who were looking to continue to spend and actually, in the second half of the quarter, continue to spend, which is unusual for carriers historically. Usually, in the P&C space, they typically pull back in that period, just given the sort of broader retail advertising and the holidays. But they didn't this year. All right. Thanks. Your next question comes from the line of Jed Kelly with Oppenheimer. Please go ahead. Hey. Great. Thanks for taking my questions. Just two, if I may. one, I get the reason behind not giving guidance. But can you just give us a sense from where you guide the 1Q and then just how we should think about the seasonality of the business and balance that with the recovery? And then can you just talk about some of the competition you're seeing in terms of performance marketing with your competitors, maybe some that aren't as aggressive versus some that are being more aggressive in the recovery? Thanks. Thanks, Jed, for the question. So why don't I take the first one, and then Jayme will follow up on the second. So in terms of our guide and our thought process for the year so as you pointed out, we are guiding for Q1. It reflects our high confidence of what we expect to happen in Q1 based on what we know now and we expect to happen in the course of the remainder of the quarter in March. When we look to the year, we did not give a guide because we didn't have high confidence in what would happen with the auto recovery cycle, just given the variability and what the carriers were doing. That being said, when we think about the factors that would drive it, I think there's a couple we would highlight. So one, obviously, if you look at where our guide was in Q1, you would look at seasonality in the business of auto and home, again, excluding the health operations that's no longer part of it. If you look over since we've been public, typically, Q2 is down from Q1 sequentially. Q3 is up from Q2, and Q4 is down from Q3. That's sort of the typical seasonal pattern over the past five years of us being public. Admittedly, there's volatility in all of that, but that's sort of the typical that would be the pattern if you look at the numbers. With regards to VMM margin, we talked about in the earlier question, which was our guide implies just under 34% for Q1. We'd expect to see some downward pressure in that as we progress through the year based on the advertising environment becoming relatively more costly. So you'd see that, and we said it would settle out between the 30% VMM margin of marketplace historically and the 35% we had last year. Then on the operating expense side, by the last piece of it, you think of that $23 million in Q1. We expect to, we said there'd be a step-up in Q1 from Q4, so 2022 going about 2023, about a 6% step-up in Q1 of this year relative to last year. Then we're going to be very disciplined in adding in the incremental costs. Again, as you look at that, the impact throughout the year, what we think that means is you're going to get what that implies is you're going to get a significant increase in operating leverage and the amount of expansion you get in Adjusted EBITDA is going to be a function of where auto recovery shakes out. Those are some of the factors I look at: seasonality, VMM margin percentages that progress through the year, and then the index operating expenses. Then, Jed, I'll try and address your second question. I mean, with respect to competition in the performance marketing landscape, it's been very dynamic to start the year. And so we have technology and people who are literally reacting in real time as things change. But generally speaking, we've seen meaningful growth from Q4, both in volume and in revenue. We've seen significant step-up in our revenue for quote requests driven by carrier budgets and carrier expansion. And so we expect to see this quarter our carrier revenue step up by over 100%. So there's a lot happening on the sort of monetization side of the marketplace. Now, that, of course, will come with more competitive ad landscape. And so we are seeing commensurate improvements or increases, I should say, in cost per quote request, which is why, what Joseph mentioned, we do expect to see a bit of VMM compression as we progress through the year and through the recovery. But net-net, it's all very positive, and we feel really good about our position as monetization comes back, and we're seeing a lot of volume flowing into our marketplace. I guess I know it's hard, but would 1Q be the lowest quarter for revenue, just given the arc of the recovery, or is it too early to say? Yeah. It's too early to say, Jed. I mean, I think for us, we guided for Q1 because we have high confidence in Q1. We can't give insight in the rest of the year with any specificity on what the exact slope of revenue would be, just given the environment we're seeing. Again, very encouraging to start to the year, but we're not going to claim victory at this point and have confidence in the exact slope of recovery for the year. All right. Got it. Thank you. Thank you. Thanks, Jed. Your final question comes from the line of Mayank Tandon with Needham. Please go ahead. Thank you. Good evening, Jayme and Joseph. I want to piggyback off your comments, Joseph, to the last question. Looking back and having covered you for a while, it almost seems reminiscent of EverQuote going from 2018 into 2019. I know the dynamics might be very different, but if we do look at 2019 as maybe the last sort of normal year before COVID, is that—I don't want to put you on the spot, but is that a good proxy for what the trajectory could look like if the recovery does hold on the auto side? So I would say this, right? When you think about the recovery, what's different in this period versus the last one? Yes, there was a downturn, a hard market in 2017, 2018, and we recovered nicely coming out of that. It did very well as a business. I think that the challenge in drawing comparisons is this has been a much deeper and more prolonged downturn. So in that environment, I think although there's insight you can see from looking back on what's happened on the downturns and how we recovered nicely as a business, I think it'd be hard to draw that as the same thing would happen here because it's been a much more prolonged downturn. And as we've said before, we think different carriers will come back at different times. We continue to believe that. We've seen signs from our carriers to the start of Q1 all showing positive signs, but specificity is still lacking, many of them. And so in that sense, I can't really draw a specific conclusion beyond the trend of we saw the recovery. It was quite nice in that comparison, but saying it's represented this year, I think it's hard to draw that conclusion just given the difference in the downturn characteristics. Got it. Well, let's hope it plays out like that, so we'll wait and see. The second question I have is on the customers. So I think, Jayme, you talked about growing within the installed base, and I just wanted to get clarity. What are the gating factors to driving increased penetration of the marketing spend, the ad spend, at your existing clients? What are some of the sort of nuances around that, if you could just maybe walk us through that? How do you grow market? Sure. So I think there's a number of dimensions of growth there. The first is just expanding into a market segment which, historically, we have not penetrated very deeply, and that's the independent agent segment. So the independent agents are roughly equal in size with the captive agent market from an agent count standpoint. And we've historically focused on the captive agents. When I say captive, I mean they're captive to one of the big carriers, like Allstate agents or Farmers' agents or State Farm agents. The benefit of being a captive is they tend to get support in the form of marketing dollars and/or technology and other infrastructure that helps them get performance out of a channel like ours. Independent agents lack that harness, and so we have to kind of build the harness for them and do some things differently with that market segment to help them be successful before we can expect to really scale with that segment of agents. And so one dimension of growth is expanding the market into this new segment of independent agents and growing with them. Then the other dimension is taking more wallet share within the installed base. And if you think about it from the agent's point of view, I own an insurance agency. I'm trying to get new customers in the door, and I spend my money on a number of different sort of lead-gen channels, one of which is with EverQuote. But I'm doing other things. I may be buying live calls or ancillary services that are also oriented towards helping me grow my business. I think there's an opportunity for us to kind of extend the offering that we provide to these local agents to help them consolidate that spend into one place and which play well into our strengths in terms of traffic acquisition and digital marketing. And so it's both more agents by expanding into new channels. It's also going deeper with the existing agents we have to help them consolidate their spend and better solve their needs as it relates to growing their agency. Got it. Very helpful, color. Thank you so much. All right. Thanks, Mayank. I will now turn the call back over to Jayme Mendal, CEO, for closing remarks. Please go ahead. All right. Well, thank you all for joining us today. I'll just conclude with an emphasis on our renewed sense of confidence, not only in a measured return to normalcy of the auto insurance market in the months to come, but also in EverQuote and our team's ability to execute effectively towards our vision. As I said earlier, we entered this year leaner and more focused than any time in recent memory. We are a more streamlined organization. We have a team that has grown stronger and more resilient. We have a debt-free balance sheet, and we are returning to our roots of being a capital-efficient digital marketplace focused on driving consistent cash generation. All these factors are going to position us well to build an enduring and transformative business as insurance shopping continues to move online. Thanks for your time today. Ladies and gentlemen, that concludes today's call. Thank you all for joining, and you may now disconnect your lines.