EverQuote, Inc. Revenue Disclosure
Revenue Recognition
The Company derives its revenue primarily by selling consumer referrals to its insurance provider customers, including insurance carriers, agents and indirect distributors. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606 Revenue from Contracts with Customers (“ASC 606”), the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation.
The Company only applies the five-step model to contracts when collectibility of the consideration to which the Company is entitled in exchange for the goods or services it transfers to the customer is determined to be probable. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less.
Referral Revenue
The Company recognizes referral revenue when it satisfies its performance obligations by delivering the referrals to its customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those referrals.
Commission Revenue
Prior to the sale of carrier contracts in May 2025 (see Note 3), the Company also generated revenue in the automotive insurance vertical from commission fees for the sale of policies as part of its direct to consumer agency and, prior to its exit from the health insurance vertical in 2023 (see Note 15), the Company also generated commission revenue in its other insurance vertical. Commission revenue represented less than 1% of total revenue for each of the years ended December 31, 2025 and 2024, and less than 10% of revenue for the year ended December 31, 2023.
Disaggregated Revenue
The Company presents disaggregated revenue from contracts with customers by distribution channel, as the distribution channel impacts the nature and amount of the Company’s revenue, and by vertical market segment. The Company’s direct distribution channel consists of insurance carriers and third-party agents. The Company’s indirect distribution channel consists of insurance aggregators and media networks who purchase referrals with the intent to resell. Revenue generated via the Company’s direct distribution channel is generally higher per referral than revenue generated by the Company’s indirect distribution channels and provides the Company with additional insights and data regarding insurance provider demand and referral performance.
Total revenue is comprised of revenue from the following distribution channels:
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Direct channels |
|
|
87 |
% |
|
|
86 |
% |
|
|
81 |
% |
Indirect channels |
|
|
13 |
% |
|
|
14 |
% |
|
|
19 |
% |
|
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
Total revenue is comprised of revenue from the following insurance verticals (in thousands):
|
|
Year Ended December 31, |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Automotive |
|
$ |
629,831 |
|
|
$ |
446,095 |
|
|
$ |
227,505 |
|
Home and renters |
|
|
62,650 |
|
|
|
52,013 |
|
|
|
40,889 |
|
Other |
|
|
40 |
|
|
|
2,082 |
|
|
|
19,527 |
|
Total Revenue |
|
$ |
692,521 |
|
|
$ |
500,190 |
|
|
$ |
287,921 |
|
The Company has elected to apply the practical expedient in ASC 606 to expense incremental direct costs of obtaining a contract, consisting of sales commissions, as incurred as the expected period of benefit of the sales commissions is one year or less. At December 31, 2025 and 2024, the Company had not capitalized any costs to obtain any of its contracts.
Deferred Revenue
Amounts received for referrals prior to satisfying the revenue recognition criteria are recorded as deferred revenue in the accompanying balance sheets. Amounts expected to be recognized as revenue within 12 months of the balance sheet date are classified as current deferred revenue. Deferred revenue was $1.7 million and $1.8 million as of December 31, 2025 and 2024, respectively. During the year ended December 31, 2025, the Company recognized revenue of $1.6 million that was included in the contract liability balance (deferred revenue) at December 31, 2024. The Company recognizes deferred revenue by first allocating from the beginning deferred revenue balance to the extent that the beginning deferred revenue balance exceeds the revenue to be recognized. Billings during the period are added to the deferred revenue balance to be recognized in future periods.
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.