EverQuote, Inc. (EVER)

CIK: 0001640428. SIC: 7370 Services-Computer Programming, Data Processing, Etc.. Latest 10-K as of: 2026-02-24.

SIC breadcrumb: Services > Business Services > SIC 7370 Services-Computer Programming, Data Processing, Etc.

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1640428. Latest filing source: 0001193125-26-066957.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-24. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001640428.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-05. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001640428.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001193125-26-206363.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Published MD&A gate trimmed front/tail over-capture. Confidence: high. Filing date: 2026-05-05. Report date: 2026-03-31.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read together with our condensed consolidated financial statements and related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and our consolidated financial statements and the related notes and other financial information included in our Annual Report on Form 10-K for the year ended December 31, 2025, on file with the Securities and Exchange Commission. The following discussion and analysis contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below, elsewhere in this Quarterly Report on Form 10-Q, particularly in Item 1A. Risk Factors, and in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025.

We are a leading AI-powered growth solutions partner for regulated property and casualty insurance entities, enabling the largest insurance carriers and thousands of agents to maximize customer acquisition across digital channels. Fueled by our proprietary data assets and our AI traffic engine, EverQuote is transforming the way providers attract and engage consumers to grow market share.

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. The transparency of our marketplace, as well as the campaign management tools we offer, are designed to make it easy for insurance carriers and third-party agents to evaluate the performance of their marketing spend on our platform and manage their own return on investment. We present consumers with a single starting point for a comprehensive insurance shopping experience where consumers can engage with insurance carriers through multiple channels based on their preferences. 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.

In the three months ended March 31, 2026 and 2025, our total revenue was $190.9 million and $166.6 million, respectively, representing a year-over-year increase of 14.5%. We had net income of $18.7 million and $8.0 million for the three months ended March 31, 2026 and 2025, respectively, and had $29.3 million and $22.5 million in adjusted EBITDA for the three months ended March 31, 2026 and 2025, respectively. See the section titled “—Non-GAAP Financial Measure” for information regarding our use of adjusted EBITDA and its reconciliation to net income (loss) determined in accordance with generally accepted accounting principles in the United States, or GAAP.

Factors Affecting Our Performance

We believe that our performance and future growth depend on a number of factors that present opportunities for us but also pose risks and challenges, including those discussed below, elsewhere in this Quarterly Report on Form 10-Q, particularly in Item 1A. Risk Factors, and in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2025.

Auto insurance industry risk

For the three months ended March 31, 2026 and 2025, we derived 90% and 92%, respectively, of our revenue from auto insurance providers and our financial results depend on the performance of the auto insurance industry. Furthermore, total revenue from our largest auto insurance carrier customer was 40% of our revenue for the three months ended March 31, 2026 and total revenue from our two largest auto insurance carrier customers was 43% and 13% of our revenue, respectively, for the three months ended March 31, 2025. Business cycles within the auto insurance industry heavily impact our carrier customers’ advertising spend with us, such as in 2022 and 2023 when the auto insurance industry experienced deteriorated underwriting performance due to a rise in claims, inflation, and inadequate policy premiums, which had a negative impact on the pricing and demand for consumer referrals in our marketplace throughout 2023.

Expanding consumer traffic

Our success depends in part on the growth of our consumer traffic. We have historically increased consumer traffic to our marketplace by expanding existing advertising channels and adding new channels such as by engaging with consumers through our verified partner network. Over the long term, we plan to increase consumer traffic by leveraging the features and growing the data assets of our platform. 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. 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.

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Increasing the number of insurance providers and their respective spend in our marketplace

Our success also depends on our ability to retain and grow our insurance provider network. Historically, we have generally expanded both the number of insurance providers and the spend per provider on our platform. However, we have also experienced periods of decreasing carrier spend in the automotive insurance vertical as described above.

Key Business Metrics

We regularly review a number of metrics, including GAAP operating results and the key metrics listed below, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections, and make operating and strategic decisions. Some of these metrics are non-financial metrics or are financial metrics that are not defined by GAAP.

Adjusted EBITDA

We define Adjusted EBITDA as net income (loss), adjusted to exclude: stock-based compensation expense, depreciation and amortization expense, legal settlement expense, interest income and income taxes. Adjusted EBITDA is a non-GAAP financial measure that we present in this Quarterly Report on Form 10-Q to supplement the financial information we present on a GAAP basis. We monitor and present 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. Adjusted EBITDA should not be considered in isolation from, or as an alternative to, measures prepared in accordance with GAAP. Adjusted EBITDA should be considered together with other operating and financial performance measures presented in accordance with GAAP. Also, Adjusted EBITDA may not necessarily be comparable to similarly titled measures presented by other companies. 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, less advertising costs (a component of sales and marketing expense, as reported in our consolidated statements of operations and comprehensive income). 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. We do not use VMD or VMM as a measure of profitability.

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. To simplify the quoting process for the consumer and improve performance for the provider, we are able to provide consumer-submitted quote request data along with each referral. We recognize revenue from consumer referrals at the time of delivery. 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.

For the periods presented, our total revenue consisted of revenue generated within our insurance verticals as follows:

Three Months Ended March 31,

2026

2025

(in thousands)

Automotive

$

172,386

$

152,715

Home and renters

18,466

13,904

Other

—

13

Total revenue

$

190,852

$

166,632

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We expect an overall increase in revenue in 2026 as compared to 2025, driven by our automotive and home and renters verticals, as we anticipate increased spending from our carrier partners. We expect revenue from our other insurance verticals to be insignificant in 2026 as a result of our focus on the P&C market.

Cost and Operating Expenses

Our cost and operating expenses consist of cost of revenue, sales and marketing, research and development, general and administrative and legal settlement expense.

We allocate certain overhead expenses, such as rent, utilities, office supplies and depreciation and amortization of general office assets, to cost of revenue and operating expense categories based on headcount. As a result, an overhead expense allocation is reflected in cost of revenue, sales and marketing, research and development and general and administrative expenses. Personnel-related costs included in cost of revenue and operating expense categories include wages, fringe benefit costs and stock-based compensation expense.

Cost of Revenue

Cost of revenue is comprised primarily of the costs of operating our marketplace and delivering consumer referrals to our customers. These costs consist primarily of technology service costs including hosting, software, data services, and third-party call center costs. In addition, cost of revenue includes depreciation and amortization of our platform technology assets and personnel-related costs.

Sales and Marketing

Sales and marketing expense consists primarily of advertising and marketing expenditures as well as personnel-related costs for employees engaged in sales, marketing, data analytics and consumer acquisition functions. Advertising expenditures consist of variable costs that are related to attracting consumers to our marketplace, generating consumer quote requests, including the cost of quote requests we acquire from our verified partner network, and promoting our marketplace to carriers and agents. Advertising costs are expensed as incurred. 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.

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 f

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-02-24. Report date: 2025-12-31.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing in Part II, Item 8 of this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the ‘‘Risk Factors’’ section of this Annual Report on Form 10-K, our actual results could differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis.

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.

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. The transparency of our marketplace, as well as the campaign management tools we offer, are designed to make it easy for insurance carriers and third-party agents to evaluate the performance of their marketing spend on our platform and manage their own return on investment. We present consumers with a single starting point for a comprehensive insurance shopping experience where consumers can engage with insurance carriers through multiple channels based on their preferences. 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 inquiries sold as referrals to insurance providers.

In the years ended December 31, 2025, 2024 and 2023, our total revenue was $692.5 million, $500.2 million and $287.9 million, respectively, representing year-over-year increases of 38.5% from 2024 to 2025 and 73.7% from 2023 to 2024. We had net income of $99.3 million and $32.2 million for the years ended December 31, 2025 and 2024, respectively, and a net loss of $51.3 million for the year ended December 31, 2023, and had $94.6 million, $58.2 million and $0.5 million in adjusted EBITDA for these same periods, respectively. See the section titled “—Non-GAAP Financial Measure” for information regarding our use of adjusted EBITDA and its reconciliation to net income (loss) determined in accordance with generally accepted accounting principles in the United States, or GAAP.

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, 2025 and 2024, we derived 91% and 89%, respectively, of our revenue from auto insurance providers and our financial results depend on the performance of the auto insurance industry. Furthermore, total revenue from our two largest customers accounted for 38% and 11%, respectively, of our total revenue for the year ended December 31, 2025 and revenue from our largest auto insurance carrier customer was 39% of our revenue for the year ended December 31, 2024. Business cycles within the auto insurance industry heavily impact our carrier customers’ advertising spend with us, such as the downturn we saw in 2022 and 2023, when the auto insurance industry experienced deteriorated underwriting performance due to a rise in claims, inflation, and inadequate policy premiums, which had a negative impact on the pricing and demand for consumer referrals in our marketplace throughout 2023. The state of the auto insurance market remains volatile, and while spending patterns have significantly improved since 2023, a number of our top carrier customers remain below their peak historical spend.

Expanding consumer traffic

Our success depends in part on the growth of our consumer traffic. We have historically increased consumer traffic to our marketplace by expanding existing advertising channels and adding new channels such as by engaging with consumers through our verified partner network. Over the long term, we plan to increase consumer traffic by leveraging the features and growing the data assets of our platform. 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. 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.

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Increasing the number of insurance providers and their respective spend in our marketplace

Our success also depends on our ability to retain and grow our insurance provider network. Historically, we have generally expanded both the number of insurance providers and the spend per provider on our platform. However, we have also 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. 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, on January 26, 2024, the FCC published regulations which, among other things, would have amended the consent requirements of the TCPA by requiring “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. On January 24, 2025, the United States Court of Appeals for the Eleventh Circuit vacated these amended regulations, which were scheduled to go into effect on January 27, 2025. Also, on June 20, 2025, the Supreme Court of the United States held that the Hobbs Act does not bind district courts in civil enforcement proceedings to an agency’s interpretation of a statute, including the FCC’s interpretation of the TCPA. It remains unclear whether or how government agencies or legislatures will revisit telephone call consent issues.

In addition, a number of states have enacted (and others are considering) broad data privacy laws that could affect our business. 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.

Key Business Metrics

We regularly review a number of metrics, including GAAP operating results and the key metrics listed below, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections, and make operating and strategic decisions. Some of these metrics are non-financial metrics or are financial metrics that are not defined by GAAP.

Adjusted EBITDA

We define Adjusted EBITDA as net income (loss), adjusted to exclude: stock-based compensation expense, depreciation and amortization expense, legal settlement 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. We monitor and present 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. Adjusted EBITDA should not be considered in isolation from, or as an alternative to, measures prepared in accordance with GAAP. Adjusted EBITDA should be considered together with other operating and financial performance measures presented in accordance with GAAP. Also, Adjusted EBITDA may not necessarily be comparable to similarly titled measures presented by other companies. 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)). 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. We do not use VMD or VMM as a measure of profitability.

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. To simplify the quoting process for the consumer and improve performance for the provider, we are able to provide consumer-submitted quote request data along with each referral. We recognize revenue from consumer referrals at the time of delivery. We support three secure consumer referral formats:

•
Clicks: An online-to-online referral, with a handoff of the consumer to the provider’s website.

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•
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.

Prior to the sale of carrier contracts in May 2025, we also generated revenue in the automotive insurance vertical from commission fees for the sale of policies as part of our direct to consumer agency and, prior to our exit from the health insurance vertical in 2023, we generated commission revenue in our 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.

For the periods presented, our total revenue consisted of revenue generated within our insurance verticals as follows:

Year Ended December 31,

2025

2024

2023

(in thousands)

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

We expect an overall increase in revenue in 2026 as compared to 2025, driven by our automotive and home and renters verticals, as we anticipate increased spending from our carrier partners. We expect revenue from our other insurance verticals to be insignificant in 2026 as a result of our focus on the P&C market.

Cost and Operating Expenses

Our cost and operating expenses consist of cost of revenue, sales and marketing, research and development, general and administrative, legal settlement, restructuring and other charges and acquisition-related costs.

We allocate certain overhead expenses, such as rent, utilities, office supplies and depreciation and amortization of general office assets, to cost of revenue and operating expense categories based on headcount. As a result, an overhead expense allocation is reflected in cost of revenue, sales and marketing, research and development and general and administrative expenses. Personnel-related costs included in cost of revenue and operating expense categories include wages, fringe benefit costs and stock-based compensation expense.

Cost of Revenue

Cost of revenue is comprised primarily of the costs of operating our marketplace and delivering consumer referrals to our customers. These costs consist primarily of technology service costs including hosting, software, data services, and third-party call center costs. In addition, cost of revenue includes depreciation and amortization of our platform technology assets and personnel-related costs.

Sales and Marketing

Sales and marketing expense consists primarily of advertising and marketing expenditures as well as personnel-related costs for employees engaged in sales, marketing, data analytics and consumer acquisition functions and amortization of sales and marketing-related intangible assets. Advertising expenditures consist of variable costs that are related to attracting consumers to our marketplace, generating consumer quote requests, including the cost of quote requests we acquire from our verified partner network, and promoting our marketplace to carriers and agents. Advertising costs are expensed as incurred. 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.

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. Direct development costs related to software enhancements that add functionality are capitalized and amortized as a component of cost of revenue. We expect that research and development expense will increase in 2026 as compared to 2025.

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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. We expect that general and administrative expense will increase in 2026 as compared to 2025, primarily due to personnel-related costs.

Legal settlement

Legal settlement includes costs associated with the settlement of our litigation in 2025 with the former owners of certain entities acquired in 2021 (see Note 3 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K).

Restructuring and Other Charges

Restructuring and other charges includes costs related to the restructuring and our exit from the health insurance vertical that we completed in 2023.

Acquisition-related

Acquisition-related costs include expenses associated with third-party professional services we utilize for the evaluation and execution of acquisitions as well as changes in the fair value of our contingent consideration liabilities recorded as the result of our acquisitions of Eversurance and PolicyFuel, which occurred in 2020 and 2021, respectively.

Other Income (Expense)

Other income (expense) consists of interest income and other income (expense). Interest income consists of interest earned on invested cash balances. Other income (expense) consists of miscellaneous income (expense) unrelated to our core operations.

Income Taxes

Income tax benefit (expense) is based on taxable income (loss), applicable income tax rates, net research and development tax credits, net operating loss carryforwards, changes in valuation allowance estimates and deferred income taxes. In the fourth quarter of 2025, based on our ongoing assessment of all available evidence, both positive and negative, including sustained improvement in our profitability, we concluded that it is more likely than not that our net deferred tax assets would be realized and released our valuation allowance of $48.5 million against these net deferred tax assets. Our judgment regarding the likelihood of realization of these deferred tax assets could change in future periods, which could result in a material impact to our income tax benefit (expense) in the period of change.

As a result of the release of our valuation allowance, we expect our tax rate will increase in the future. However, we intend to use our net operating loss carryforwards and tax credits, to the extent available, to reduce the cash tax payments associated with our operations.

Non-GAAP Financial Measure

To supplement our consolidated financial statements presented in accordance with GAAP and to provide investors with additional information regarding our financial results, we present in this Annual Report on Form 10-K adjusted EBITDA as a non-GAAP financial measure. 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; legal settlement expense; restructuring and other charges; acquisition-related costs; interest income; and income taxes. 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. In particular, we believe that excluding the impact of these expenses in calculating adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core operating performance.

We use adjusted EBITDA to evaluate our operating performance and trends and make planning decisions. We believe adjusted EBITDA helps identify underlying trends in our business that could otherwise be masked by the effect of the expenses that we exclude in the calculation of adjusted EBITDA. 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.

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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. There are a number of limitations related to the use of adjusted EBITDA rather than net income (loss), which is the most directly comparable financial measure calculated and presented in accordance with GAAP. 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 legal settlement expense that affects cash available to us;

•
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.

In addition, other companies may use other measures to evaluate their performance, all of which could reduce the usefulness of adjusted EBITDA as a tool for comparison.

The following table reconciles adjusted EBITDA to net income (loss), the most directly comparable financial measures calculated and presented in accordance with GAAP.

Reconciliation of Net Income (Loss) to Adjusted EBITDA:

Year Ended December 31,

2025

2024

2023

(in thousands)

Net income (loss)

$

99,311

$

32,169

$

(51,287

)

Stock-based compensation

24,299

20,614

22,808

Depreciation and amortization

3,811

5,672

6,196

Legal settlement

8,232

—

—

Restructuring and other charges

—

—

23,568

Acquisition-related costs

—

—

(150

)

Interest income

(3,574

)

(2,079

)

(1,251

)

Income taxes

(37,488

)

1,839

577

Adjusted EBITDA

$

94,591

$

58,215

$

461

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Results of Operations

The following tables set forth our results of operations for the periods shown:

Year Ended December 31,

2025

2024

2023

(in thousands)

Statement of Operations Data:

Revenue(1)

$

692,521

$

500,190

$

287,921

Cost and operating expenses(2):

Cost of revenue

19,375

20,922

22,455

Sales and marketing

541,008

387,700

240,131

Research and development

31,504

29,553

27,591

General and administrative

34,066

30,264

26,301

Legal settlement

8,232

—

—

Restructuring and other charges

—

—

23,568

Acquisition-related costs

—

—

(150

)

Total cost and operating expenses

634,185

468,439

339,896

Income (loss) from operations

58,336

31,751

(51,975

)

Other income (expense):

Interest income

3,574

2,079

1,251

Other income (expense), net

(87

)

178

14

Total other income, net

3,487

2,257

1,265

Income (loss) before income taxes

61,823

34,008

(50,710

)

Income tax benefit (expense)

37,488

(1,839

)

(577

)

Net income (loss)

$

99,311

$

32,169

$

(51,287

)

Other Financial and Operational Data:

Variable marketing dollars

$

191,855

$

155,227

$

100,282

Adjusted EBITDA(3)

$

94,591

$

58,215

$

461

(1)
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

%

(2)
Includes stock-based compensation expense as follows:

Year Ended December 31,

2025

2024

2023

(in thousands)

Cost of revenue

$

122

$

182

$

219

Sales and marketing

7,139

6,796

8,667

Research and development

6,291

5,502

8,053

General and administrative

10,747

8,134

5,869

Restructuring and other charges

—

—

1,288

$

24,299

$

20,614

$

24,096

(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.

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Comparison of the Years Ended December 31, 2025 and 2024

Revenue

Year Ended December 31,

Change

2025

2024

Amount

%

(dollars in thousands)

Revenue

$

692,521

$

500,190

$

192,331

38.5

%

Revenue increased by $192.3 million from $500.2 million for the year ended December 31, 2024 to $692.5 million for the year ended December 31, 2025. The increase in revenue was primarily due to an increase of $183.7 million in our automotive vertical due to an increase in carrier spend for referrals, primarily from our three largest customers. Revenue also increased in our home and renters vertical by $10.6 million due to an increase in carrier spend for referrals.

Cost of Revenue

Year Ended December 31,

Change

2025

2024

Amount

%

(dollars in thousands)

Cost of revenue

$

19,375

$

20,922

$

(1,547

)

-7.4

%

Percentage of revenue

2.8

%

4.2

%

Cost of revenue decreased from $20.9 million for the year ended December 31, 2024 to $19.4 million for the year ended December 31, 2025. Decreases in personnel-related costs of $0.8 million related primarily to decreased headcount in our call center. Amortization expense decreased by $0.7 million primarily due to certain assets being fully depreciated in the third quarter of 2024. Increases in technology and consulting costs were fully offset by decreases in lead verification services and office and occupancy costs due to lower headcount and lower rent expense.

Sales and Marketing

Year Ended December 31,

Change

2025

2024

Amount

%

(dollars in thousands)

Sales and marketing expense

$

541,008

$

387,700

$

153,308

39.5

%

Percentage of revenue

78.1

%

77.5

%

Sales and marketing expenses increased by $153.3 million from $387.7 million for the year ended December 31, 2024 to $541.0 million for the year ended December 31, 2025. The increase in sales and marketing expense was primarily due to an increase in advertising costs of $155.7 million due to an increase in carrier spend and increases in lead verification services and consulting services of $0.8 million and $0.7 million, respectively. These increases were partially offset by a decrease in office and occupancy costs of $1.4 million due primarily to lower rent expense and a decrease in amortization expense of $1.2 million due to the sale of acquired intangible assets in May 2025 as part of the settlement of litigation. Marketing costs also decreased by $0.5 million.

Research and Development

Year Ended December 31,

Change

2025

2024

Amount

%

(dollars in thousands)

Research and development expense

$

31,504

$

29,553

$

1,951

6.6

%

Percentage of revenue

4.5

%

5.9

%

Research and development expenses increased by $2.0 million from $29.6 million for the year ended December 31, 2024 to $31.5 million for the year ended December 31, 2025. The increase in research and development expense was primarily due to an increase in personnel-related costs of $1.2 million due to increased headcount and increased consulting expense of $0.5 million.

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General and Administrative

Year Ended December 31,

Change

2025

2024

Amount

%

(dollars in thousands)

General and administrative expense

$

34,066

$

30,264

$

3,802

12.6

%

Percentage of revenue

4.9

%

6.1

%

General and administrative expenses increased by $3.8 million from $30.3 million for the year ended December 31, 2024 to $34.1 million for the year ended December 31, 2025. The increase in general and administrative expenses was primarily due to an increase in personnel-related costs of $2.3 million, primarily due to increased stock-based compensation expense, and an increase in professional fees of $0.9 million for consulting services. Personnel-related costs included $10.7 million and $8.1 million of stock-based compensation expense for the years ended December 31, 2025 and 2024, respectively. Bank service fees also increased by $0.6 million.

Legal Settlement

Legal settlement expense for the year ended December 31, 2025 consisted of costs to settle the litigation of $7.8 million and legal expense related to the settlement of $0.4 million. For additional information, see Note 3 to the Consolidated Financial Statements included elsewhere in this Annual Report on Form 10-K.

Other Income (Expense)

Other income (expense) included interest income of $3.6 million and $2.1 million for the years ended December 31, 2025 and 2024, respectively. The increase in interest income in 2025 was due to higher invested cash balances. Other income (expense), net was not significant for either of the years ended December 31, 2025 or 2024.

Income Taxes

We had an income tax benefit of $37.5 million for 2025, as compared to income tax expense of $1.8 million in 2024. Our effective tax rate was (60.6%) and 5.4% for 2025 and 2024, respectively. Our effective tax rate for 2025 differs from the U.S. federal statutory income tax rate of 21.0% primarily due to the decrease in the valuation allowance maintained against our net deferred tax assets and federal and state research and development tax credits. In the fourth quarter of 2025, we concluded that it is more likely than not that our net deferred tax assets are realizable, resulting in a valuation allowance release of $48.5 million. Our effective tax rate for 2024 differs from the U.S. federal statutory income tax rate of 21.0% primarily due to the valuation allowance previously maintained against our net deferred tax assets, partially offset by state and federal income taxes for the portion of our taxable income that was not offset by operating loss and tax credit carryforwards.

Variable Marketing Dollars and Margin

Year Ended December 31,

Change

2025

2024

Amount

%

(dollars in thousands)

Revenue

$

692,521

$

500,190

$

192,331

38.5

%

Less: total advertising expense (a

  component of sales and marketing

  expense)

500,666

344,963

Variable marketing dollars

$

191,855

$

155,227

$

36,628

23.6

%

Variable marketing margin

27.7

%

31.0

%

The increase in variable marketing dollars was due primarily to increased carrier spend. The decrease in variable marketing margin was primarily due to competitive pricing for advertising spend and the relative mix of referral types.

Comparison of the Years Ended December 31, 2024 and 2023

For a discussion of our results of operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023, see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Comparison of the Years Ended December 31, 2024 and 2023 included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

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Table of Contents

Liquidity and Capital Resources

Our principal sources of liquidity are cash and cash equivalents of $171.4 million as of December 31, 2025 and up to $60.0 million of availability under our revolving line of credit.

On August 1, 2025, we entered into a new senior secured revolving credit facility with the Lenders. This facility replaced the prior $25.0 million revolving line of credit with Western Alliance Bank. The Credit Agreement provides for a $60.0 million senior secured revolving line of credit. Subject to customary terms and conditions (including the absence of any default or event of default under the Credit Agreement), we shall have the right, from time to time, to request incremental revolving commitments in an aggregate amount not to exceed up to $25.0 million during the term of the Credit Agreement. Availability under the Credit Agreement will terminate on August 1, 2028, or the Revolving Commitment Period, and all outstanding revolving loans must be paid on or before such date. We will pay a commitment fee of 0.075% per annum on the average daily unused portion of commitments under the Credit Agreement during the Revolving Commitment Period.

Pursuant to the Credit Agreement, borrowings under the Revolving Facility cannot exceed 85% of eligible accounts receivable balances. Outstanding borrowings under the Revolving Facility bear interest, at our election, at a per annum rate equal to (i) an adjusted term secured overnight financing rate for a one-month tenor, or the Term SOFR, plus 2.10% or (ii) the higher of the “prime rate” quoted in The Wall Street Journal, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System plus 0.50%, or Term SOFR plus 1.00%, or the ABR, plus 1.10%. We may elect, from time to time, to convert all or any part of our Term SOFR loans to ABR loans or to convert all or any part of the ABR loans to Term SOFR loans. In an event of default, as defined in the Credit Agreement, and until such event is no longer continuing, the annual interest rate to be charged will be the annual rate otherwise applicable to borrowings at such time plus 2.00%.

Borrowings are collateralized by substantially all of our assets and property. Under the Credit Agreement, we have agreed to certain affirmative and negative covenants, reporting requirements and other customary requirements to which we will remain subject until maturity. The covenants include limitations on our ability to incur additional indebtedness, pay cash dividends, and engage in certain fundamental business transactions, such as mergers or acquisitions of other businesses. In addition, under the Credit Agreement and through the maturity date, for any period we do not maintain a minimum Adjusted Quick Ratio of 1.30 to 1.00, defined as the ratio of (1) the sum of (x) unrestricted cash and cash equivalents held at the Lenders plus (y) net accounts receivable reflected on our balance sheet (excluding accounts receivable that are more than 90 days past due, intercompany receivables, and receivables subject to dispute) to (2) current liabilities, including all borrowings outstanding under Credit Agreement, but excluding the current portion of deferred revenue (in each case determined substantially in accordance with GAAP), the Agent shall have the ability to use our cash receipts to repay outstanding obligations until such time as the Adjusted Quick Ratio is equal to or greater than 1.30 to 1.00 for two consecutive months.

On July 22, 2025, our board of directors authorized a share repurchase program for up to $50.0 million of our Class A common stock for one year from the board approval date. Share repurchases under the $50.0 million program may be made from time to time on the open market, pursuant to Rule 10b5-1 trading plans, or by other legally permissible means. The share repurchase program does not obligate us to acquire a specific number of shares, and may be suspended, modified, or terminated at any time, without prior notice. The number of shares to be repurchased will depend on market conditions and other factors. Repurchases under the program are expected to be funded from a combination of existing cash balances and future cash flow. In August 2025, we repurchased $21.0 million of Class A shares from Link Ventures and its affiliated entities, and as of December 31, 2025, $29.0 million remained available for stock repurchases pursuant to the board authorization. During January and February 2026, we repurchased an additional $8.7 million of Class A common shares under the program via a 10b5-1 trading plan.

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 the Credit Agreement. Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our revenue, the timing and extent of spending on business initiatives, purchases of common stock under our share repurchase program, purchases of capital equipment to support our growth, sales and marketing activities, expansion of our business through acquisitions or our investments in complementary offerings, technologies or businesses, market acceptance of our platform and overall economic conditions. 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.

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. The net proceeds of any securities we sell under this registration statement may be used for general corporate purposes, including among other possible uses, the acquisition of companies or businesses, repayment and refinancing of debt, working capital and capital expenditures. At this time, we have no plans to sell any such securities under this registration statement.

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Table of Contents

Cash Flows

The following table shows a summary of our cash flows:

Year Ended December 31,

2025

2024

2023

(in thousands)

Net cash provided by (used in) operating activities

$

95,381

$

66,566

$

(2,828

)

Net cash provided by (used in) investing activities

(5,057

)

(4,114

)

9,354

Net cash provided by (used in) financing activities

(21,064

)

1,707

577

Effect of exchange rate changes on cash,

    cash equivalents and restricted cash

3

1

18

Net increase in cash, cash equivalents

   and restricted cash

$

69,263

$

64,160

$

7,121

Operating activities

Operating activities provided $95.4 million and $66.6 million of cash during the years ended December 31, 2025 and 2024, respectively. Cash provided by operating activities in the year ended December 31, 2025 resulted from our net income of $99.3 million, partially offset by net non-cash income of $2.4 million and net cash used by changes in our operating assets and liabilities of $1.6 million. Net non-cash income included a net increase in deferred taxes of $38.4 million, primarily due to the release of our valuation allowance, partially offset by a litigation accrual settled with the sale of assets of $7.8 million and other non-cash charges of $28.2 million. Net cash used by changes in our operating assets and liabilities consisted primarily of a $13.8 million increase in accounts receivable and a $4.4 million increase in prepaid expenses and other current assets, partially offset by a net $14.8 million increase in accounts payable and accrued expenses and other current liabilities.

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. 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.

Changes in accounts receivable, prepaid expenses and other current assets and accounts payable and accrued expenses and other current liabilities were generally due to level of activity in our business and timing of customer and vendor invoicing and payments.

Investing activities

Net cash used in investing activities was $5.1 million and $4.1 million for the years ended December 31, 2025 and 2024, respectively, consisting of cash used to acquire property and equipment, which included the capitalization of software development costs. During the years ended December 31, 2025 and 2024, we capitalized $4.6 million and $2.8 million, respectively, of software development costs.

Financing activities

During the year ended December 31, 2025, net cash used in financing activities was $21.1 million primarily due to $21.0 million used to repurchase common stock under our share repurchase program from Link Ventures and its affiliated entities. Cash proceeds received from the exercise of common stock options of $3.9 million during the year ended December 31, 2025 were offset by tax withholding payments of $4.0 million relating to net share settlements. During the year ended December 31, 2024, net cash provided by financing activities was $1.7 million, consisting of proceeds received from the exercise of common stock options, partially offset by tax withholding payments relating to net share settlements.

For a discussion of our cash flows for the year ended December 31, 2023 see Item 7. 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, 2024.

Contractual Obligations and Commitments

Our cash flows are dependent on a number of factors in addition to our operational expenditures, including our share repurchase program and our contractual and other obligations. As a result, our liquidity and capital resources in future periods should be analyzed in conjunction with such factors.

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Table of Contents

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. As of December 31, 2025, we were obligated to make total minimum lease payments of $2.8 million under such leases, of which $1.4 million is payable in 2026.

In June 2025, we entered into a five-year, $18.5 million purchase commitment, in the ordinary course of business, for advertising with specified annual minimum payment amounts through July 2029. The remaining purchase commitment as of December 31, 2025 was $15.5 million, of which $3.5 million relates to the next twelve months.

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.

Critical Accounting Policies and Significant Judgments and Estimates

Our consolidated financial statements are prepared in accordance with GAAP. The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, costs and expenses, and the disclosure of contingent assets and liabilities in our consolidated financial statements. We base our estimates on historical experience, known trends and events, and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in more detail in Note 2 to our audited consolidated financial statements, appearing in Part II, Item 8 of this Annual Report on Form 10-K, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition

We derive our revenue primarily by selling consumer referrals to our insurance provider customers, including insurance carriers, agents and indirect distributors. To determine revenue recognition for arrangements that we determine are within the scope of ASC 606 Revenue from Contracts with Customers, or ASC 606, we perform 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) we satisfy a performance obligation.

We only apply the five-step model to contracts when collectibility of the consideration to which we are entitled in exchange for the goods or services we transfer to the customer is determined to be probable. Amounts are recorded as accounts receivable when our right to consideration is unconditional. We do 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. We recognize referral revenue when we satisfy our performance obligations by delivering the referrals to our customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those referrals.

Stock-Based Compensation

We measure stock options and other stock-based awards granted to employees, nonemployees and directors based on their fair value on the date of the grant. We recognize compensation expense of employee awards, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of the respective award. We apply the straight-line method of expense recognition to all employee awards with only service-based vesting conditions and apply the graded-vesting method to all employee awards with both service-based and performance-based vesting conditions, commencing when achievement of the performance condition becomes probable. 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.

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 estimate the fair value of RSUs granted based on the market value of our common stock on the date of grant.

Recently Issued Accounting Pronouncements

A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 2 to our audited consolidated financial statements appearing in Part II, Item 8 of this Annual Report on Form 10-K.

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