Q3 2019 Earnings Call
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Thank you good afternoon, and welcome to Everclear third quarter 2019 earnings call, we'll be discussing the results announced in our press release issued today after the market close with me on the call. This afternoon.
Evercores, Chief Executive Officer, and co founder and John Wagner, Chief Financial Officer.
During the call, we'll make statements related to our business that maybe considered forward looking statements under the federal securities laws, including statements concerning our financial guidance for the fourth quarter and full year 2019, our growth strategy and our plans to execute on our growth strategy initiatives the growth levers makes.
That's the driver business are believed to maintain existing and acquiring new customers or interest or ability to acquire other companies.
And expansion into international markets and other statements regarding our plans and prospects.
Forward looking statements, maybe identified with words and phrases such as we expect we believe we intend we anticipate we plan may upcoming and similar words and phrases. These statements reflect our views only as of today and should not be considered our views as with any subsequent date.
We specifically disclaim any obligation to update or revise these forward looking statements except as required by law.
Forward looking statements are not promises or guarantees of future performance and are subject to a variety of risks.
And uncertainties that could cause actual results could differ materially from our expectation.
Please refer to these.
Under the heading risk factor in her most recent quarterly report on Form 10-Q , which is on file with the Securities and Exchange Commission and available on the Investor Relations section of our website and Investor Dot Everclear Dot com and on the Fccs, let's say I see that though.
Finally during the course of today's call, we'll refer to certain non-GAAP financial matters, which we believe are hopeful to investors reconciliation of GAAP to non-GAAP measures is included in the press release, we issued after the close of market today, which is available on the Investor Relations section of our website investors that evercore.
With that I'll turn it over to.
Thank you Lisa good afternoon, and thank you everyone for joining US today, we're pleased to report strong third quarter results across all our key financial metrics, we delivered revenue growth of 61% year over year with variable marketing margin of 67% over the prior year period, the strength of our data.
Driven marketplace, coupled with improving operating leverage resulted in another quarter of expanding adjusted EBITDA Importantly, we achieved a major milestone and reported our first quarter of GAAP profitability as a public company.
In the quarter, we saw a material improvement in adjusted EBITDA, while continuing to invest in the business to capitalize on our large and expanding market opportunity, we're executing well across our key growth lever is expanding consumer volume growing provider coverage and budget deepening customer engagement and adding new verticals.
Disciplined execution across our key growth levers resulted in another strong quarter, a variable marketing margin growth, we are achieving greater success with consumers and insurance providers by leveraging our investments in proprietary data automation and machine learning algorithms. Finally, we are benefiting.
Across all of our vertical from strong tailwinds in the secular shift of insurance online based on our strong third quarter results and positive momentum, we're increasing our guidance for the full year 2019, which John will detail in a moment after I cover progress on our growth levers and key initiatives are superbly growing team.
Jim is passionate and committed to our mission of being the largest online source for insurance policies in the world, We're leveraging data and technology to make insurance simpler more affordable and personalized we believe that winning the war for talent is critical for our success and we are thrilled that we're a magnet for top town in Q.
Three we welcome significant senior hires the our team to drive our expansion into new verticals improve customer engagement and expand distribution as well as supports the growth of our organization, including Alif Neumeyer as Chief people officer from Wayfair Jaywalk as SVP of distribution services from Amazon.
Eric Terrata as general manager of home and renters insurance from Wayfair she'll be shanker on as he VP of commercial insurance and special project from Amazon and Joseph Sanborn as SVP of corporate development and strategy from GE GE. These individuals complements our existing leaders.
Team and embraced our highly collaborative data driven culture, which is rooted in a fanatical motivation to drive innovation and scale for our customers.
Both consumers and providers in our marketplace.
Now turning to a deeper discussion on our growth levers on T. initiative.
Growth in consumer traffic was substantial and broad based in the quarter as our traffic seems a new traffic leaders executing well against a backdrop of favorable market conditions, we delivered an 81% increasing consumer quote requests volume year over year, while reducing cost for co requests by 13%.
Data and technology are core to our platform advantage. Each day, we accumulate millions of data point, which leverage our ability to optimize consumer acquisition, we have seen multiple wins with the application of our proprietary data and machine learning algorithms to grow existing sources and add new ones our expertise.
Leveraging machine learning to personalize the experience enables us to continue to refine our product mix to more effectively serve our entire customer base. We continue to scale. Our inbound calls program, which provides consumers an option to accelerate their path to a quote by phone, we are adding more providers and expanding.
Budget with existing cars and agents to grow overall revenue, 93% revenues in the quarter came from providers, who are on our platform a year ago. In Q3, we added 24, new integration as we work towards the goal of getting each consumer one quick one called away from a binding <unk>, we're optimizing cover.
As rates in our consumer shopping funnel, which our internal metrics indicate lead to an increase in the rate at which consumers buying or purchase a policy. The deepening of our integrations with our provider partners is a key component of our efforts to reduce friction in the consumer shopping journey.
During the quarter. We saw continued evidence of the value of our machine learning capabilities. For example, our real time bidding campaigns allow us to more efficiently reach and match our perspective policyholders with provider partners, which led to a broadening of our portfolio of carriers carriers in our marketplace are seeing higher LTV efficiency.
And stronger performance across our K P. I'd as indicated by higher bids in our marketplace auction and increasing revenue peripheral for example, one of our largest partners using these new capabilities is experiencing a 50% increase in consumer referrals from our marketplace at their desired ROI target continued.
The expansion of our machine learning and real time bidding capabilities will allow our partners to officially grow their advertising spend with evercore, well, achieving even better ROI for campaigns in our marketplace.
The priority growth initiatives, we talked about last quarter included our accelerated growth program for larger insurance agents and our verify partner program to enable third party partners to participate with providers in our marketplace. Both continue to succeed scale and have been well received by our insurance provider partners and help accelerate or age.
Business this quarter.
In addition to achieving strong rose in autos, we are diversifying our business with growth in other verticals during the quarter, we reported strong growth in our new verticals of home renters life and health and had revenue up 68% over the prior year period, our health vertical is off to a promising.
Sorry, bringing with it increased diversity in our provider base with nine new direct provider partners added this quarter. We're excited about our first Medicare open enrollment period and health.
Ever quote agents have been capitalizing on the expansion of home traffic in order to buy highly coveted multi line or bundled prospects for example, Matthew Golden a large agent in our accelerated growth program from Milwaukee concentrate from Evercore home consumer referrals to drive ROI focused growth.
With over 60% of his new Evercore business closing as high value bundled policies in comparing us to other providers. This agent commented that there's a constant fluctuation with my other providers, but with Evercore. It's been consistent the whole time Evercore is just ahead of the game it doesn't get much better.
Then what you guys are doing.
Most recently, we launched our commercial offering and partnered with another ensure tech innovator bold Penguin, who share their vision for making the insurance buying process simpler more efficient and affordable to consumers.
We expect to make steady investments in our new vertical to increasingly diversify our consumer traffic revenue and business, while providing consumers more great insurance option, we remain focused on improving the consumer experience through investments in our technology platform and new offerings that drive greater customer satisfaction loyalty and lifetime.
The success in our marketplace is underpinned by our core strength in a mapping and combining a large quantity of insurance shopping data with our proprietary machine learning and automation technology. This expertise enables us to possess unique insights into the relative preferences of consumers and cares personalized experience for both parties and did show.
Weve alignment for product in terms of price and coverage, we had a focused effort during 2019 and applying new machine learning model to specific marketing channels and consumer experiences, resulting in significant margin improvements derived from gains in marketing efficiency consumer conversion rate an increase carrier monetization we.
We are confident are increasing use of an investment in artificial intelligence and machine learning technology, coupled with our growing data advantage will improve customer experiences, while expanding revenue and profitability across our business.
As a result, we're increasing our investment in data Sciences, and Hey, I approaches as well as machine learning algorithms development by growing our team of data scientists and data engineers.
In summary, we delivered a strong Q3 was solid execution across all of our verticals our disciplined approach to managing our operations resulted in expanded levels of adjusted EBITDA and achieving GAAP profitability, our strong momentum into Q4 positions us to end the year firing on all cylinders, we're scaling the business an x.
Accusing well on team building growth levers key initiatives and our mission as we capitalize on the massive market opportunity in front of US we're bullish on the long term prospects for a business and believe we have set the stage for continued growth and profitability in 2020 and beyond now I'll turn the call over to John to provide more details on our financial.
No.
Thank you Sarah and good afternoon, everyone I'll start by discussing our financial results for the third quarter of 2019, and then provide fourth quarter 2019 guidance and our increased guidance for the full year 2019.
We're very pleased to report third quarter revenue of $67.1 million up 61% year over year and above our revenue guidance provided last quarter.
Revenue growth rates accelerated across multiple verticals with continued impressive growth in our auto insurance vertical and the resurgence of growth in our other insurance verticals, which includes Herman renters life and health.
Revenue in our auto insurance vertical increased to $57.3 million the growth rate of 60% year over year.
Revenue from our other insurance verticals increased to $9.8 million a growth rate of 68% and now represent 15% of total revenue.
Our growth in Q3 was broad based with strong demand from our carriers and continued success in building consumer traffic to our marketplace.
Revenue continues to be driven by our direct insurance providers those carriers and agents that participate directly on our platform now represent 95% of revenue.
This quarter, 98% of this direct revenue came from established providers, meaning those who have been on our platform for at least one year.
These measures illustrates the direct and recurring nature of our revenue, which in turn improves the visibility we have into the future of our business.
Growth in consumer traffic volume was substantial and broad based in the quarter as a result of strong execution by our traffic teams in attracting consumers to our insurance marketplace.
We delivered 81% year over year, increasing consumer quote request to 5.5 million, while reducing cost per quote request 13%.
Revenue per quote request declined 11% year over year and was relatively consistent with Q2, despite much higher quote request volume.
More importantly, because cost per quote request declined more than revenue per quote request variable marketing margin as a percentage of revenue expanded this quarter.
Throughout the quarter carrier demand remains strong as reflected in a year over year increase than the average price per referral. This is a good indication of the performance in value that our insurance providers experience from our consumer referrals.
With regard to variable marketing margin or VMM defined as revenue less advertising expense, we had a solid quarter with VMM of $20.9 million, an increase of 67% year over year, which exceeded our guidance provided last quarter.
As a percentage of revenue VMM was 31% an expansion of one point from 30% in Q3 of last year.
This quarter, we achieved a major milestone with our first GAAP profitable quarter as a public company third quarter GAAP net income was $200000 for one cents per share based on approximately 28 million diluted weighted average shares outstanding.
We delivered record adjusted EBITDA for the third quarter of $3.8 million or 5.8% as a percentage of revenue favorable to our guidance range due to better than expected VMM performance and continued disciplined operating expense management.
On the balance sheet, we ended the quarter with 41.9 million in cash and cash equivalents, a 4.9 million dollar improvement from the previous quarter end.
We achieved positive free cash flow $3.7 million in the quarter, largely driven by our positive adjusted EBITDA.
Turning to guidance, while Q4 is generally a seasonally softer quarter than Q3, we are encouraged by our recent performance. We're reflecting this continued momentum in our Q4 2019 guidance asphalt us.
We expect revenues to be between 67 and $69 million, we expect variable marketing margin to be between 19 and $20 million and we expect positive adjusted EBITDA to be between two and $3 million.
By extension, we are anticipating a stronger full year 2019, and we are raising our guidance as follows.
We expect revenue to be between 242 and $244 million an increase from our previous full year guidance of between 215 and $219 million.
We expect variable marketing margin to be between 70.5 and $71.5 million an increase from our previous full year guidance of between 62.5 and $64.5 million.
And we expect positive adjusted EBITDA of between 6.1 and $7.1 million an improvement from our previous range of between one and $2.5 million in summary, we delivered impressive third quarter financial results across the business.
We believe that our initiatives in 2019 to expand our marketplace into new verticals and strengthen our data and technology advantage has set the stage for continued success in 2020 and would that sets and I look forward to answer your questions.
As a reminder, if you'd like to ask a question. Please press star followed by the number one on your telephone keypad, we'll pause for just a moment to compiled acuity roster.
Your first question comes from Ron Josey from JMP Securities. Your line is open.
Great. Thanks for taking the question and what a great quarter I wanted to ask two things I'm pleased to on guidance clearly a pretty big increase in lots going on with new partnerships in new verticals can you just help us understand.
Understand maybe the drivers in guidance I mean, it we're talking about up sequentially in Fourq, you something that I think seasonality seasonally isn't necessarily isn't something we see that often so just break out guidance and what's driving the increase would be helpful. And then maybe bigger picture that 93% of revs in the quarter from clients on the platform for more than a year I think that's a new disclosure and implies.
Around a 150% net retention revenue retention. So just broadly maybe south you can talk about what's happening to these existing clients are devoting more spend evercore digital overall, just anything around like these trends that you're seeing the industry. That's driving that would be would be helpful. Thanks, a lot guys.
Thanks, Ron I'll take the first part of that and on guidance.
Hi, guys. It very consistent with past quarters right. We reflect what we have a high confidence in what were seen in the business.
For Q4 like previous quarters. This year, we're continuing to see very strong traffic growth.
And that is generally driving kind of revenue in through Q4, we obviously have reflected the fact that we see a lot of momentum, leaving Q3 and in the first part of Q4, So you're right seasonally Q4, we expect that to be down.
But this year, we've reflected that actually at the midpoint as slightly up.
So I think that reflects really how we're feeling about the corner and im a little bit about how we're feeling about our other verticals as well as they're contributing as well.
Thanks.
John Let me take the second part so there's two factors that are eke out a specific Ron one is performance both in terms of consumer volume and in terms of consumer conversion rate. Yeah that has been driven for out provider partners, where there are folks on the platform are spending more because of integrations because of technologies like smart campaigns, which enables us to better match.
A carrier and a consumer coming to ever quote looking for insurance, that's driving up the from the providers.
Performance in the marketplace without driving up their cost per sale. So that's been a real powerful driver of growing not just budget, but share with existing partners on the platform and we have I didn't mention though not as deeply the fact that a vast majority of our direct revenue is re occurring and that continues to.
Well really quickly I think macro REIT industry broader trends are that the to the shift of insurance online continues and maybe some certainly we believe that there's some early indicators that it's picking up an accelerating and that's also contributing to that.
Great. Thank you.
Your next question comes from Michael Graham from Canaccord. Your line is open.
Thank you and and a great quarter.
I wanted to see if you could give us a little more depth on some of your AD Tech initiatives and then more broadly kind of building on Ron's question. You know just when we think back to 2016 into 2017, you sort of had a tough year for the auto insurance industry in general and 16 that led to.
Less spending in 17 and I'm just wondering as we look ahead to next year, you know what sort of macro things are you seeing an auto insurance market that.
You know aside from the marketing mix shifting online just sort of generally fundamentally what do you see in in the auto insurance market as we head into next year.
Sure. So on the on the AD Tech front, obviously emphasize.
Earlier in the call machine learning driving wins across the not just the AD tech stack, but even things like product, but specifically the AD tech using a more sophisticated data sciences to select creatives for updated bid strategies for automating bid strategies has been successful not just in sort of single marketing can.
Pains, but across several different marketing campaigns and channels and so that's been a lot of or some of the wins that that we've had in the past quarter with regard to the macro trends in autos brokers and agents in our view seem quite healthy they're profitable and then we're in a little bit at least again from our perspective in a goal do you.
Locks situation for the auto insurance vertical and so far as you have the multiplicative insurers are doing quite well the consumers continue to sort of demand have demand for the product and they're also shifting their marketing spend online in terms of looking for efficient growth. So it's a really nice situation from a macro pressure.
Active.
Okay sounds good thank you Jeff.
Your next question comes from Ralph Schackart from William Blair. Your line is open.
Hi, Good afternoon, just maybe kind of go back to rounds original question on some of the traffic growth you saw in the quarter. You also talked about some favorable marketing marketing market conditions, sorry of accelerating growth just curious where there's something specific are unique to Q3 or was it just the platform sort of all coming together this quarter.
And with favorable market conditions and then.
Second you had a number of key hires during the quarter, just curious sort of what skills that bring to the table and anymore color on.
The most recent hires be helpful. Thank you.
Sure out maybe we'll take the first one first the the.
As far as driving growth it was literally execution across the platform. So we had excellent execution across Tropic as you mentioned that was really across sources and marketing channels and kudos to the team. The team just did an outstanding job just everybody and it's really a matter and we make it a firing on all eight cylinder.
Then we had specific wins and tech and workflows in product in consumer experiences and then it would certainly compounded by performance that our tech and tools delivered for providers and all of that was supported by the the overall industry Tailwinds as a general backdrop. So it really is that convergence.
Great execution across the platform any industry backdrop and again, we are really bullish that that just keeps tracking in the future as far as your second question with regards to market again for US we see the industry picking up in terms of the online chef and insurance is going to continue to move in ever.
Of course direction, obviously, we couldn't be more excited about those trends.
Your next question comes from Jed Kelly from Oppenheimer. Your line is open.
Great. Thanks for taking my question.
So I think at the IPO you said you know the next four to five years, you see 20% as the.
Right barometer for sustainable topline growth.
If I look at you and the other large.
Aggregator or marketplace.
You're probably call. It you know 13% of the market I mean do you think over the next two to three years that was more cares adopting these channels I mean, it can grow at 20, 530% just how should we be thinking about.
Growth in the industry over the next two to three years.
So Jed I'm not sure where you get the 13% from when we view our market.
If you want to have been but our view of the market, it's far vast or the way. We view. It is that 120 billion dollar plus of distribution spend by the U.S. insurance industry.
So so you're talking predominantly commissions and AD spend but when you have you ever quotes revenue through the lens of that pay on which we really believe in it. We're just timing. It was very early days in terms of the shift online this huge upside across all the verticals. We operate in Im Jed I just want to be respectful of the last question.
Wrote it down but didn't answer it as far as the key hires and then obviously taken additional questions. If you'd like the key hires were focused on or are really sophisticated tech and data driven leaders, who have experienced in scale, specifically and scale of complex the whole sided or multi sided marketplaces, where accumulating data is a signal.
Taking advantage and then we also look for cultural affinity both with grit.
Performance focus.
We enjoy working with who are going to be really dedicated to our mission of building the largest online sorts of insurance in the world. So these are some just great folks they add to it already great team and we are thrilled to have them.
So Jeff I'll, just add to the the kind of the guidance aspect of yeah question.
We do and our long term, although guide to 20% plus in terms of topline growth and we're confident in that ability, especially as we add new verticals. So we can very much do more of what we're doing existing verticals and as we we add new verticals gives us new levers of growth and Ics and expands our Tam as well.
Finally, we've always said as well that there will be opportunities for us at times to grow.
Topline faster as well as to extend adjusted EBITDA faster. This quarter is a good example over time that weve been able to do both.
And as well as our guidance right. We have we kind of entered this year with a guide that was 20% plus.
On the high end for the year.
We delivered better than that in Q1, we're able to raise the guidance again beat and Q2 and then guided for Q3.
To over 40% at the high end and delivered 61%. So clearly we have momentum in the business that is real and that we're feeling throughout the year and that's really kind of led to this.
70% topline guide on Q4, it obviously gives us a lot of confidence going into 2020.
Then we will will fall back to our long term guidance short of giving our guidance for 2020 next quarter.
But that is to say that that clearly we have.
A lot of confidence in our ability to to deliver that top line. While also expanding adjusted EBITDA based on our performance this year.
And then just a couple more questions.
It looks like your non variable marketing expenses. It did accelerate this quarter anything there to call out and then I guess over the weekend Allstate spin advertising with Tina Fey sort of their safe driving.
Yep.
Do you view this as an opportunity for branding or just how do you think about that we would what all states doing.
So let me take the first part Chad on non variable.
We saw some increase in the non variable cost.
That would be to be expected in terms of both the topline beat as well as the VMM b.
Some portion of our non of our non AD spend costs are still variable in terms of either stock comp or some of the cost of providing the marketplace that will flex a little bit when we have large topline.
Thanks.
If you want to comment on the ever drive sure Jeff.
My interpretation would be you're asking somewhat about ever drive my belief is long term there is a significant opportunity in building out a safe driving marketplace ever drive is that after sort of take the first step at that just as we have an auto insurance marketplace build out today for online shopping you'll have one for per se.
Drivers to get connected and shop for safe driving related insurance offers this this past quarter you ever drive team was really heads down focused on launching the quote and app functionality on its either either out right now are very nearly out we'll obviously update everyone more on ever drive next quarter, but but.
From a great opportunity plays right into you can go to a single carrier to do it or you can shop at a trusted third party advisor to do it it's a very consistent with the marketplace message.
Thank you.
Thanks.
Your next question comes from Bank of Tandon from Needham Your line is open.
Thank you congrats shopping John .
I wanted to ask you about health care, if you could give us any early indications on the traction within the healthcare segment and then maybe said if you could help size the opportunity versus your other insurance areas and when you think that may really start to inflect in terms of contributing to growth has a 2020 2021, just a time line on that would be helpful.
Sure so the.
Mike I appreciate the question because as an opportunity to very probably give the whole team who work on the health care launch in scaling here a shout out they all did a fantastic job under are really driven leader here in the healthcare vertical we got obviously the first revenue out the door consumers are flowing through it were evolving the consumer.
Parents, we added you know again as we mentioned nine of though net new carrier additions in the quarter, where healthcare specific carriers, which were great. The BD team brought those carriers on into the marketplace and we're obviously really bullish that ultimately healthcare is as big or bigger than any of our other vertical. So I think long term the op.
For two days to build a significant market place just just in health care alone you. Obviously, there's some really great comps that we admire and ultimately we're not going to give a lot of specifics yet it literally just.
Rolling and we'll look forward to updating you more in future calls.
Got it okay I won't push further on that one but it has traction what I would say that we're very pleased with the way it going.
That's good to hear.
No maybe for John John just in terms of some of the underlying metrics. So if you could just talk about how we should be thinking about.
You know the court request growth revenue per cold and cough record as we model into 20, maybe just any color around that would be helpful. In terms of the trend line.
How we should think about these key drivers of revenue.
Sure for that for the balance in 2019, it's very consistent with what we've said in past quarters, which is you know we're seeing the growth in revenue come from the volume side, we're seeing very nice increases in quote requests volume and we are also seen improvements in the actual referral pricing.
And we're seeing slight decline in the number of referrals just simply based on the large amount of volume that we're bringing into the auction.
As we go into 2020, I think it's probably early to say.
We will continue to manage the business for VMM dollars.
And then and we generally would expect that we'd have to contributors over time to revenue growth and that is both volume in terms of course request as well as revenue per kilo request, we do think that theres an opportunity to continue to grow revenue per crownquest much like we saw in 2018. So we think you know they'll probably.
We have be a balance as we look out further but certainly for the balance of 2019, it's being driven by the progress we've made made and the execution within our traffic teams in terms of driving more consumers to the web site.
Okay. That's helpful. In one final one in terms of the VMM I think a when you went public you are targeting about a 30 basis point increase year on year, that's still the baseline we should be thinking about for 20 and beyond.
And another 20% plus topline growth that you mentioned earlier.
Yeah, it's specifically about VMM margin as a percentage of revenues that were tracking.
Yes, yes, yes, the 30 basis point expansion per year.
Yes. So so we have historically done better than that we've historically grown VMM faster than that but what we've said is we're going to manage the business for VMM dollars and historically when we've managed for VMM dollars. We have seen increases in VMM as a percentage of revenue just as we've applied our technology and.
Data to the acquisition side of business and then we have a number of levers in terms of monetization that could also increase.
That that VMM as a percentage of revenue.
You know I think as we look out we think about long term margin as as VMM growing to about 40% and we think about that doing that over a number of years. So 30 basis points would be very comfortable for us.
And I think you just like this quarter, you'll continue to see us make slow steady progress against VMM as a percentage, even though we're going to manage to those dollars and if we have the opportunity to grow variable marketing dollars, even if it compresses VMM as a percentage we would do so if it's still made sense in terms.
You know additional VMM dollars does that help.
Absolutely. Thank you so much for taking my questions.
As a reminder, he would like to ask a question. Please press star followed by the number one on your telephone keypad.
Your next question comes from does and must from JP Morgan Your line is open.
Hey, this is David on for Doug Ulman, Congrats on the great quarter I, just wanted to understand the drivers out through Q.
Perform as a little better so I'll walk marketplace participation strong across all carriers that agents and they're going directly to give you. Some shares is trying to see if either Terry you just wrote a strong growth and if any particular customer stood out and then I was curious on your decision to launch commercial vertical as a partnership.
That's a partnership makes sense.
Well just have differences versus your other verticals in terms of economics or anything else.
Sure Yeah. So I've been revenue growth day was was broad based in the carriers and the agents is as we mentioned on the call. Both grew quite quickly the agency business. Thanks to some of the initiatives and just across the team and on the carrier side of the business again, very broad based with I'm back.
Majority of our carriers increasing their spend in the time period some of the metrics that we've mentioned in the past would be we increased.
Spend from our top 10 carriers nine out of 10 of our largest customers.
This quarter increased spend over this time last year, our largest customer in terms of.
Across kind of.
All customers was 23% in the quarter as a percentage of revenue so very much holding share.
As we've grown the business overall.
They did I wouldn't mind repeating the second question I didn't get the.
Yes, there was about your commercial launch of a partnership just wondering why he went down with the partnership probably sometime.
Article will have differences versus your other verticals in terms of economics or how are you sure go to market.
Yeah, So commercial go to market with gold Penguin, So I'd have to start with the people that the folks there.
And banner just fantastic, we'd like working with them brilliant brilliant founding team their commercial is very similar economically maybe even more.
More attractive from a marketplace perspective in so far as there is a traditionally more margin in the distribution of commercial insurance products than some of the other verticals. We already operate and so you can think of it is almost more more there's a greater percentage per dollar of premium of Tam in commercial for ever quotes.
Marketplace approach and just as a in general it's a very very fragmented marketplace. One of the more interesting aspect of commercial is that because it's so fragmented because there's so many different types of coverages businesses and products, even the work flow even the technology you need to get to take a concern.
From a quote is quite complex what Ben until you have done is really a streamlined a set of for call. It connector technologies. So that you can connect consumers and and providers more easily and since that sort of we bring consumers to the marketplace and we bring providers there almost a perfect tongue in group.
Partner for Us.
They help simplify obviously the connective tissue between it.
The workflows the tech stack, our excellent integrated right into our marketplace and I would say that's about the bulk segment relationship. One is we are very confident that it obviously accelerates our path to market and scale, but the other thing. It together, we believe we actually get to a bigger Tam and so far as it makes commercial products accessible via the answer.
No it's almost like an onramp and so we love to guide it makes a lot of sense for us and we believe that ultimately we will drive the same or better economics in commercial as we do in autos or any of our other verticals.
Great. Thanks for taking my question.
We have no further questions I would like to turn the call back over to management for closing remarks.
Sure I want to.
Thank everybody for joining us for taking the journey with US we were obviously thrilled with the result of the quarter, but just as importantly for US we stand with a with a great and growing team at the convergence of what we believed to be the right strategy as insurance moves online focused on X operations execution excellence, we couldn't be.
But the results or more excited about some wrapping up this year.
Last year, and just a huge future at the company. So again really grateful the industry our partners and the investors all of you to take the ride with US and look forward to speaking to you again in the near future. Thanks, So much.
This concludes today's conference call you may now disconnect.