What changed in this filing

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Item 1A. Risk Factors

2021-11-08 compared with 2021-08-09 · 32 added, 36 removed, 649 unchanged (9% of the section changed)

14 unchanged sentences

As a result, we cannot guarantee that insurance providers will continue to work with us, or, if they do, the number of referrals they will purchase from us, the price they will pay per referral or their total spend with us.

For example, we are currently experiencing, and expect to continue to experience, a decrease in auto insurance carrier marketing spend, which we believe is due to challenges in the auto insurance industry.

In addition, we may not be able to attract new insurance providers to our marketplace or increase the amount of revenue we earn from insurance providers over time.

If we are unable to maintain existing relationships with insurance providers in our marketplace, or unable to add new insurance providers, we may be unable to offer our consumers the shopping experience they expect.

If we are unable to maintain existing relationships with insurance providers in our marketplace, or are unable to add new insurance providers, we may be unable to offer our consumers the shopping experience they expect.

This deficiency could reduce consumers’ confidence in our services, making us less popular with consumers.

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Quote requests increased to 7,392,000 in the three months ended March 31, 2020, decreased to 6,777,000 in the three months ended June 30, 2020 decreased to 6,291,000 in the three months ended September 30, 2020 and increased to 6,553,000 in the three months ended December 31, 2020.

Quote requests increased to 7,720,000 in the three months ended March 31, 2021 and decreased to 6,781,000 in the three months ended June 30, 2021.

Quote requests increased to 7,720,000 in the three months ended March 31, 2021, decreased to 6,781,000 in the three months ended June 30, 2021, and increased to 7,613,000 in the three months ended September 30, 2021.

Additionally, even if we are successful in generating traffic to our websites, we may not be able to convert these visits into consumer quote requests.

21 unchanged sentences

The degree to which COVID-19 impacts

our results will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the outbreak, its severity, the actions to contain the virus or treat its impact, other actions taken by governments, businesses, and individuals in response to the virus and resulting economic disruption, and how quickly and to what extent normal economic and operating conditions can resume.

our results will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration of the COVID-19

pandemic, its severity, the actions to contain the virus or treat its impact, other actions taken by governments, businesses, and individuals in response to the virus and resulting economic disruption, and how quickly and to what extent normal economic and operating conditions can resume.

We are similarly unable to predict the degree to which the pandemic will impact our users, insurance provider customers, suppliers, vendors, and other partners, and their financial conditions, but a material effect on these parties could also adversely affect us.

25 unchanged sentences

A significant portion of our revenue in recent periods was derived from one customer, and our results of operations could be adversely affected and stockholder value harmed if we lose business from this customer.

Sales to Progressive Casualty Insurance Company accounted for 22% of our revenue for the year ended December 31, 2020 and 19% of our revenue for the six months ended June 30, 2021.

Sales to Progressive Casualty Insurance Company accounted for 22% of our revenue for the year ended December 31, 2020 and 18% of our revenue for the nine months ended September 30, 2021.

This customer made purchases from us under short-term agreements and may decrease or cease doing business with us at any time with no notice.

12 unchanged sentences

Because our insurance provider customers can stop buying from us, or spend less with us, at any time our business, results of operations and financial condition could be materially adversely affected with little to no notice.

For example, some of our large auto insurance carrier customers have reduced their bids, and have indicated further bid reductions, in response to challenges in the auto insurance industry.

If we are unable to develop new offerings, achieve increased consumer adoption of those offerings or penetrate new vertical markets, our business and financial results could be materially adversely affected.

13 unchanged sentences

A substantial majority of the insurance purchased through our marketplace is automobile insurance and our financial prospects depend significantly on the larger automotive industry ecosystem.

Revenue from automotive insurance providers accounted for 82% of our total revenue for the six months ended June 30, 2021 and 82% of our revenue for the year ended December 31, 2020.

Revenue from automotive insurance providers accounted for 82% of our total revenue for the nine months ended September 30, 2021 and 82% of our revenue for the year ended December 31, 2020.

If insurance carriers experience large or unexpected losses through the offering of insurance, these carriers may choose to decrease the amount of money they spend with us.

For example, we believe that some of our large auto insurance carrier customers are experiencing higher than expected loss ratios and, as a result, these carriers are decreasing their marketing spend with us.

In addition, decreases in consumer demand in the automotive industry in general could adversely affect the demand for insurance and, in turn, the number of consumers using our marketplace to request insurance quotes.

For example, trends in the automotive industry, such as from the effects of ride sharing applications, including Uber and Lyft, distracted driving and autonomous driving technologies, have the potential to adversely affect automobile purchases and to decrease the demand for auto insurance.

Similarly, we believe that current shortages of semiconductor chips for new car production, as well as the availability of automotive parts used in car repair, is resulting in higher insurance claims losses and increasing insurance carrier loss ratios.

We depend on third-party publishers, including strategic partners, for a significant portion of our visitors.

75 unchanged sentences

The operation of these systems is expensive and complex and we could experience operational failures.

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.

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.

Such interruptions also could result in third parties accessing our confidential and proprietary information, including our intellectual property or consumer information.

4 unchanged sentences

In addition, we do not own or control the operation of these facilities.

Our systems and operations are vulnerable to damage or interruption from fire, flood, power loss, telecommunications failure, terrorist attacks, acts of war, electronic and physical break-ins, computer

viruses, earthquakes and similar events.

Our systems and operations are vulnerable to damage or interruption from fire, flood, power loss, telecommunications failure, terrorist attacks, acts of war, electronic and physical break-ins,

computer viruses, earthquakes and similar events.

The occurrence of any of these events could result in damage to our systems and hardware or could cause them to fail.

45 unchanged sentences

Our revenue grew from $96.8 million in 2015 to $122.8 million in 2016, to $126.2 million in 2017, to $163.3 million in 2018, to $248.8 million in 2019 and to $346.9 million in 2020, increases of 26.8%, 2.8%, 29.4%, 52.3% and 39.4%, respectively.

Our revenue grew from $78.3 million for the three months ended June 30, 2020 to $105.1 million for the three months ended June 30, 2021 and from $159.7 million for the six months ended June 30, 2020 to $208.9 million for the six months ended June 30, 2021, increases of 34.2% and 30.8%, respectively.

Our revenue grew from $90.0 million for the three months ended September 30, 2020 to $107.6 million for the three months ended September 30, 2021 and from $250.0 million for the nine months ended September 30, 2020 to $316.4 million for the nine months ended September 30, 2021, increases of 19.5% and 26.8%, respectively.

This growth may not be indicative of our future growth, if any, and we will not be able to grow as expected, or at all, if we do not accomplish the following:

14 unchanged sentences

Cybersecurity risks have significantly increased in recent years, in part, because of the proliferation of new technologies, the use of the internet and telecommunications technologies to exchange information and conduct transactions, and the increased sophistication and activities of computer hackers, organized crime, terrorists, and other external parties, including foreign state actors.

We have been subject to, and are likely to continue to be the target of, future cyberattacks.

We have been subject to, and are likely to continue to be the target of, cyberattacks.

These cyberattacks could include computer viruses, malicious or destructive code, phishing attacks, denial of service or information, improper access by employees or third-party partners or other security breaches that have or could in the future result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of our confidential, proprietary and other information, confidential and other information concerning employees or consumers, or otherwise materially disrupt our or our other third party partners’ network access or business operations.

9 unchanged sentences

However, it is possible that these obligations may be interpreted and applied in new ways or in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices or that new regulations could be enacted.

enforcement actions, regulatory fines, litigation or public statements against us by consumer advocacy groups or others, and could cause consumers and insurance providers to lose trust in us, all of which could be costly and have an adverse effect on our business.

Any failure or perceived failure by us to comply with our privacy policies, our privacy-related obligations to consumers or other third parties, or our privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of sensitive information, which could include personally identifiable information or other user data, may result in governmental investigations, enforcement actions, regulatory fines, litigation or public statements against us by consumer advocacy groups or others, and could cause consumers and insurance providers to lose trust in us, all of which could be costly and have an adverse effect on our business.

In addition, new and changed rules and regulations regarding privacy, data protection and cross-border transfers of consumer information could cause us to delay planned uses and disclosures of data to comply with applicable privacy and data protection requirements.

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In some circumstances, we may determine to do so through the acquisition of complementary businesses and technologies rather than through internal development.

For example, in September 2020, we closed our acquisition of Crosspointe Insurance & Financial Services, LLC, or Crosspointe.

For example, in September 2020, we closed our acquisition of Crosspointe Insurance & Financial Services, LLC, or Crosspointe, and in August 2021, we closed our acquisition of Policy Fuel, LLC and its affiliated entities.

The identification of suitable acquisition candidates can be difficult, time-consuming and costly, and we may not be able to successfully complete identified acquisitions.

8 unchanged sentences

potential write-offs of intangibles or other assets acquired in such transactions that may have an adverse effect on our operating results in a given period;

potential liabilities for activities of the acquired company before the acquisition, including patent and trademark infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities;

potential liabilities for reputational harm from activities of the acquired company before the acquisition, including patent and trademark infringement claims, violations of laws, commercial disputes, tax liabilities and other known and unknown liabilities;

litigation or other claims in connection with the acquired company, including claims from terminated employees, consumers, former stockholders or other third parties.

2 unchanged sentences

Also, the anticipated benefits of any acquisitions may not be realized.

We have limited experience operating an insurance agency and if we are unable to successfully add insurance carriers and products, as well as hire and retain insurance agents, and successfully sell policies at the volumes we anticipate, our results of operations and financial condition could be materially adversely affected.

We have limited experience operating a direct-to-consumer insurance agency where we are compensated based on policies sold.

If we are unable to obtain or maintain insurance carrier appointments, or if we have limited insurance products that we are able to sell, we may not be able to successfully operate as an insurance agency.

In addition, we also have limited experience hiring, training, and licensing new insurance agents to sell insurance products for us.

In the event we are unable to increase the number of licensed agents selling insurance products for us, retain the agents that we have hired, or successfully manage our agents to meet our sales objectives, our business and growth plans could be materially adversely affected.

We use third-party contractor insurance agents to sell insurance for our direct-to-consumer

14 unchanged sentences

Litigation could distract management, increase our expenses or subject us to material monetary damages and other remedies.

We were previously subject to class action lawsuits alleging violations of the Telephone Consumer Protection Act, or TCPA, and were subject to a class action lawsuit alleging federal securities law violations in connection with our IPO, and may be involved from time to time in various additional legal proceedings, including, but not limited to, actions relating to breach of contract, breach of federal and state privacy laws, and intellectual property infringement that might necessitate changes to our business or operations.

We were previously subject to class action lawsuits alleging violations of the Telephone Consumer Protection Act, or TCPA, and were subject to a class action lawsuit alleging federal securities law violations in connection with our initial public offering, or IPO, and may be involved from time to time in various additional legal proceedings, including, but not limited to, actions relating to breach of contract, breach of federal and state privacy laws, and intellectual property infringement that might necessitate changes to our business or operations.

Regardless of whether any claims against us have merit, or whether we are ultimately held liable or subject to payment of damages, claims may be expensive to defend and may divert management’s time away from our operations.

22 unchanged sentences

voice messages.

Federal Communications Commission (the “FCC”), and the U.S.

Federal Trade Commission (the “FTC”) have responsibility for regulating various aspects of these laws.

Federal Communications Commission, or the FCC, and the U.S.

Federal Trade Commission, or the FTC, have responsibility for regulating various aspects of these laws.

Among other requirements, the TCPA requires us to obtain prior express written consent for certain telemarketing calls.

45 unchanged sentences

The regulation of domain names in the United States is subject to change.

Regulatory bodies could establish additional top-level domains, appoint

additional domain name registrars, or modify the requirements for holding domain names.

Regulatory bodies could establish additional top-level

domains, appoint additional domain name registrars, or modify the requirements for holding domain names.

As a result, we may not be able to acquire or maintain all domain names that use the name EverQuote.

54 unchanged sentences

certain sales or transfers of personal information, and provides consumers with a new cause of action for certain data breaches.

The CCPA authorized the Attorney General to bring enforcement actions for violations beginning July 1, 2020.

The CCPA authorized the Attorney General of the state of California to bring enforcement actions for violations beginning July 1, 2020.

The CCPA may have a substantial negative impact on our business activities and increase our compliance costs and potential liability.

73 unchanged sentences

The market price of our Class A common stock has been and could continue to be subject to significant fluctuations.

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 June 30, 2021.

Some of the factors that may cause the market price of our Class A common stock to fluctuate include:

37 unchanged sentences

If one or more of these analysts cease to cover our Class A common stock, we could lose visibility in the market for our Class A common stock, which in turn could cause our stock price to decline.

The dual-class structure of our common stock has the effect of concentrating voting control with the holders of our Class B common stock, including our directors, executive officers and Link Ventures and other significant stockholders, who collectively held in the aggregate approximately 77% of the voting power of our capital stock as of June 30, 2021;

and Link Ventures, directly or through a voting agreement, together with Cogo Labs, held approximately 76% of the voting power of our capital stock as of that date.

1 unchanged sentence

Our Class B common stock has 10 votes per share, and our Class A common stock has one vote per share.

Our directors, executive officers and holders of more than 10% of our common stock, and their respective affiliates, held in the aggregate approximately 77% of the voting power of our capital stock as of June 30, 2021;

and Link Ventures, directly or through a voting agreement pursuant to which each of Seth Birnbaum, through his heirs and estate, and Tomas Revesz have agreed to vote on all matters presented to our stockholders all voting capital stock held by them in the manner directed by Link Ventures, together with Cogo Labs, held in the aggregate approximately 76% of the voting power of our capital stock as of that date.

23 unchanged sentences

These sales, or the market perception that the holders of a large number of shares intend to sell shares, could reduce the market price of our Class A common stock.

In addition to our outstanding Class A common stock, as of June 30, 2021, there were 955,164 shares of Class A common stock subject to outstanding options, 948,335 shares of either Class A common stock or Class B common stock subject to outstanding options, 2,737,475 shares of Class A common stock subject to outstanding restricted stock unit awards, or RSUs, and an additional 2,264,762 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 September 30, 2021, there were 924,508 shares of Class A common stock subject to outstanding options, 784,439 shares of either Class A common stock or Class B common stock subject to outstanding options, 2,796,380 shares of Class A common stock subject to outstanding restricted stock units, or RSUs, and an additional 2,275,815 shares of Class A common stock reserved for future issuance under our equity incentive plan.

Because we have registered 14,451,367 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.

Moreover, holders of a significant number of shares of our Class A common stock and Class B common stock as of June 30, 2021, 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 September 30, 2021, 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.

Upon registration, such shares would be able to be freely sold in the public market.

17 unchanged sentences

Our restated certificate of incorporation further provides that, unless we consent in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended, or the Securities Act.

In Salzberg v.

346, 2019 (Del.

18, 2020), the Delaware Supreme Court, reversing the Delaware Court of Chancery, held that such federal forum selection provisions are

“facially valid” under Delaware law, although there is uncertainty as to whether courts in other states will enforce these provisions and we may incur additional costs of litigation should such enforceability be challenged.

18, 2020), the Delaware Supreme Court, reversing the Delaware Court of Chancery, held that such federal forum selection provisions are “facially valid” under Delaware law, although there is uncertainty as to whether courts in other states will enforce these provisions and we may incur additional costs of litigation should such enforceability be challenged.

Neither of these choice of forum provisions would affect suits brought to enforce any liability or duty created by the Securities Exchange Act of 1934, as amended, or the Exchange Act, or the rules and regulations thereunder, jurisdiction over which is exclusively vested by statute in U.S.

22 unchanged sentences

controls that could result in misstatements impacting revenue-related financial statement accounts and disclosures that would result in a material misstatement of the annual or interim consolidated financial statements that would not be prevented or detected.

We are in the process of developing and implementing a remediation plan designed to improve our internal control over financial reporting to remediate these material weaknesses with additional controls and procedures.

We are in the process of implementing a remediation plan designed to improve our internal control over financial reporting to remediate these material weaknesses, which remediation plan includes a robust risk assessment process coupled with additional controls and procedures.

We cannot assure you that the measures we have taken to date, and actions we may take in the future, will be sufficient to remediate the control deficiencies that led to the material weaknesses in our internal control over financial reporting or that they will prevent or avoid potential future material weaknesses.

12 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors