Good day and thank you for standing by. Welcome to the Evercoats Second Quarter 2021 Earnings Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. I will now turn the call over to your first speaker, Brynlee Johnson of The Blueshirt Group, you may begin your conference.
Thank you. Good afternoon and welcome to EverQuote's Q2 2021 We'll be discussing the results announced in our press release issued today after the market close. With me on the call this afternoon is Jamie Mendell, EverQuote's Chief Executive Officer and John Wagner, Chief Financial Officer of EverQuote. During the call, we will make Our strategy and our plans to execute on our growth strategy key initiatives, including our direct to consumer agency our investments in the business The growth levers we expect to drive our business, our ability to maintain existing and acquire new customers, our recent and planned acquisitions and interest or ability to acquire other companies, our goals for integrations and other statements regarding our plans and prospects. Forward looking statements may be identified with words and phrases such as we expect, We believe, we intend, we anticipate, we plan, may, upcoming and similar words and phrases.
These statements reflect our views only as of today and except as required by law. Forward looking statements are not promises or guarantees of future performance and are subject to a variety of risks and uncertainties that could cause the actual contained under the heading Risk Factors in our most recent quarterly report on Form 10 Q and our annual report on Form 10 ks, which is on file with the and available on the Investor Relations section of our website at investor. Everquote.com and on the SEC's website at atsec.gov. Finally, during the course of today's call, we will refer to certain non GAAP financial measures, which we believe are helpful to investors. A reconciliation of GAAP to non GAAP measures was included in the press release we issued after the market closed today, which is available on the Investor Relations section of our website at investors.
Everquote.com. With that, I'll turn it over to Jamie.
Thank you, Brinley, and thank you everyone for joining us today. We delivered a strong second quarter with growth across all of our key metrics. Year over year, revenue increased 34% With over 30% revenue growth in the first half of the year, we continue building towards our vision of becoming the largest online source of insurance policies by using data and technology to make insurance simpler, more affordable and personalized. At the beginning of the year, I outlined 4 growth levers in our strategy, including number 1, attracting more shoppers Number 2, growing insurance provider coverage and budget. Number 3, optimizing and deepening consumer provider engagement.
And number 4, expanding non auto verticals. I'd like to provide an update on progress against our strategy in the context of these growth levers. Before discussing Q2, I'll share the strategic rationale for our recently announced acquisition of PolicyFuel. PolicyFuel operates in Property and Casualty or P and C Insurance Verticals, providing policy sales as a service that focus exclusively on selling that provider's offerings to its target customers. PolicyFuel earns revenue based on policy sold and broadens EverQuote's ability to access the $135,000,000,000 commission component of our total addressable market.
We are excited to welcome PolicyFuel's founders and team to EverQuote and expect the transaction to close by the end of Q3. To put this in the context of our strategy, last year we kicked off a series of strategic initiatives that I began to evolve our business to capture a larger portion of the economic value chain of each insurance transaction, while at the same time bringing us closer
to our
customers. We launched our DTC agency initiative in the health vertical with our acquisition of Crosspoint and in the life vertical with a homegrown agency. With the planned acquisition of PolicyFuel and P&C, we will complete the foundation for a multivertical tech and data enabled DTC agency platform. We believe this platform will enable EverQuote to deliver better buying experiences for consumers, improved performance for providers And higher monetization and margin for our business over time, thus advancing progress against all of our growth levers simultaneously. In addition to PolicyFuel, we continued making operational investments in our existing DTCA platform in Q2 as we build the Team, process and technology to support a steep ramp in health and Medicare agent capacity in advance of this year's open enrollment period or OEP in Q4.
As part of this effort, we recently hired Garrett Kitsch, formerly VP of Medicare Sales at Ehealth To lead our Health and Life DTCA sales operations, Garrett's track record of rapidly scaling teams of health insurance agents to drive significant growth It's already proved invaluable as we prepare for this year's OEP in which we expect to have approximately 3x the number of agents compared to last year. We decided to step up investments in OEP readiness compared to our original operating plan, which we believe will help us more rapidly build a long term Profitable growth engine in our health DTC agency. In addition, based on feedback from carrier We continue enabling more granular and targeted bidding for providers as we shift focus away from volume of referrals we deliver and towards volume of consumer and provider outcomes. Furthermore, we continue investing in machine learning applications to improve the alignment and matching of the right consumer to the right provider with whom they are most likely to bind. These actions have led to improvement and monetization as Carrier pricing now aligns more closely to buying performance and along with investments in DTCA marked progress in our evolution from being Per referral to per policy.
In the second half of this year, our growth will be more balanced between continued monetization expansion and consumer volume growth. However, as we continue to focus on capturing more of the economic value in each transaction, Metrics based on the volume of quote requests or referrals will increasingly be less relevant to analyzing and understanding the performance of our business. As we build EverQuote, we are guided by serving customers on both sides of our marketplace. Consumers seeking a more streamlined shopping experience with personalized coverage options and insurance providers seeking more profitable policies. Q2 marked another quarter of consistent forward progress in service of these customer needs.
We are pleased with our Q2 performance And we are excited by important steps we're taking to accelerate that progress through critical strategic initiatives, most notably our DTC agency platform. As we advance through this year of investment and additional foundations for growth, I firmly believe that we have the right strategy and team To emerge as an industry defining company as the $2,000,000,000,000 insurance industry moves into the digital age. Thank you all again for your time. Now I'll turn the call over to John to provide more details on our financial results.
Thank you, Jamie, and good afternoon, everyone. I'll start by discussing our financial results for the Q2, provide a brief overview of our recent agreement to acquire Policy Fuel And conclude with guidance for the Q3 and our updated guidance for the full year. We're very pleased to report strong Q2 2021 results With performance above our guidance range for revenue, VMM and adjusted EBITDA. Our revenue for the quarter which reflected a healthy demand in our core vertical for both carriers and agents through the period of COVID reopening in Q2. Revenue from our other insurance verticals, which include home, renters, life, health and commercial insurance increased to $18,700,000 a growth rate of 36% year over year and representing 18% of revenue.
We continue to attract high intent, more valuable consumers, which fueled a 34% increase in revenue per quote request year over year, while quote requests remained flat at $6,800,000 Looking ahead to Q3, We anticipate some moderation in carrier demand for acquisition of new insurance consumers, but we believe we will maintain much The improvement we've made in monetization. We expect revenue per quote request to moderate slightly in Q3 from Q2's record levels, while continuing to grow modestly on a year over year basis. We also expect the volume of consumers coming to our marketplace to emerge This is consistent with our expectations expressed in prior remarks that we believe consumer volume and monetization Both contribute to our year over year growth in the second half of twenty twenty one. We delivered 2nd quarter variable margin or VMM, which we define as revenue less advertising expense of $32,800,000 An increase of 40% year over year, which exceeded the high end of our guidance range provided last quarter. As a percentage of revenue, 2nd quarter VMM expanded to 31%, up from 30% in Q2 of last year.
Notably, consumer acquisition costs captured in cost per quote request were significantly higher this quarter reflecting a more competitive online advertising landscape, but were outpaced by growth in revenue per quote request, resulting in our margin improvement this quarter. As we look forward, we expect consumer acquisition cost Slight reductions in monetization coupled with current elevated consumer acquisition costs will put pressure on VMM growth and VMM as a percentage of revenue in Q3. Looking further ahead into Q4, we expect our VMM operating point to improve And to be largely consistent with Q4 of 2020. Given our expected strong growth within our health direct to consumer agency during the annual health open enrollment period and the higher VMM margin profile associated with that revenue stream. Turning to profitability.
GAAP net loss improved to $1,900,000 or a loss of $0.06 per share based on 28,900,000 weighted average shares outstanding. This included $6,100,000 in stock based compensation. For the balance of the year, we'd expect stock based compensation between $18,000,000 $19,000,000 including the impact of new grants in Q4 related to our announced acquisition. We delivered adjusted EBITDA of $6,600,000 or 6.3 percent of revenue for the 2nd quarter, which was above the high end of our guidance range provided last quarter. This fueled record operating cash flow of $7,700,000 and resulted in $54,500,000 of cash and cash equivalents on the balance sheet at the end of the quarter.
As we look to the second half of the year, we've refined our operating plan to better support our health DTC agency in the 2nd annual enrollment period since our acquisition of Crosspoint last September. As Jamie mentioned, we have accelerated our recruitment of new EverQuote health agents, Increased the training and development time of our agents and strengthened our agent incentives. We are ensuring that our agents Fully onboarded and ready to advise consumers on policy choices when open enrollment begins in Q4. The addition of DTCA Resources Earlier than planned increases our confidence in our aggressive growth plans in Q4 for our health vertical, but it also increases our forecasted operating In the second half of the year and consequently reduces our anticipated adjusted EBITDA. Given that our plans are to triple Health DTC Agency revenue in Q4 over the same period in 2020, we believe the additional expense is justified in establishing a strong foundation for this rapidly growing new distribution channel.
As Jamie mentioned, on July 20, after the quarter ended, we were pleased to announce The expected acquisition of Policy Fuel. EverQuote agreed to pay approximately $16,000,000 in cash at closing With additional potential consideration to be paid in EverQuote stock contingent on the company achieving growth targets for Policy Sales as a Service revenue. We expect the acquisition to close by the end of Q3 and plan to fund the acquisition using cash from our balance sheet. Looking ahead, we are excited about PolicyFuel's strong business model and anticipated future contributions. Policy Fuel reported trailing 12 months revenue through March 31, 2021 of approximately $10,000,000 and is modestly profitable.
We have reflected the impact of Policy Fuel in our guidance, including approximately $3,000,000 of revenue in 2021. Turning to our outlook. As a result of our strong execution in Q2 And our confidence in the upcoming open enrollment period, we maintain our conviction in our full year revenue and VMM guidance. However, we are lowering our guidance for full year adjusted EBITDA to reflect incremental investment in our Health DTC agency and temporarily muted VMM growth in Q3. For Q3, we expect revenue $109,000,000 $111,000,000 a year over year increase of 22% at the midpoint.
We expect variable marketing margin to be between $33,000,000 $34,000,000 a year over year increase of 14% at the midpoint. And we expect adjusted EBITDA to be between $4,500,000 $5,500,000 a year over year decrease of 4% at the midpoint. For the full year 2021, we expect revenue to be between $440,000,000 $446,000,000 A year over year increase of 28% at the midpoint and an increase from our prior guidance of between 4.34 and $442,000,000 We expect variable marketing margin to be between $138,000,000 $141,000,000 A year over year increase of 28% at the midpoint and an increase from our prior guidance of between $136,000,000 $140,000,000 And we expect adjusted EBITDA of between $23,000,000 $26,000,000 a year over year increase of 33% at the midpoint We delivered strong second quarter financial results and executed well against our plan for the first half of twenty twenty one. We remain confident in our ability to execute against the market opportunity as insurance shifts online. Jamie and I look forward to answering your questions.
And your first question will come from the line of Ron Josey from JMP Securities. Your line is open.
Great. Thanks for taking the question. Jamie, I wanted to follow-up on your comments around the volume of quote requests being less relevant here. And then John, we heard the guidance for mid teens growth in 3Q, but specifically on being less relevant, can you talk about how EverQuote has And just focusing on high intent customers, I think was the commentary, which may lead to just call it consistent QR growth going forward. And then Following up from that, earlier in the year, we talked quite a bit about the Verified Partner network.
And so Jamie, can you just talk a little bit more how that's coming along and how that's impacting QR growth? Thank you.
Sure. Thanks, Ron. So the way that we're evolving our thinking on Traffic and quote requests in general is really optimizing increasingly for the outcome for the thing that we get paid for, which is Placement of a policy with carriers. And to the extent that we can drive higher quality and more favorable outcomes with less arrivals and fewer quote requests, those are trade offs that we're willing to make. So examples of actions that we've taken that might result in this were increasing the granularity with which carriers can bid on traffic target for certain new characteristics and intent levels that they weren't able to target for previously.
The net result of this has been for them to increase their There is our pricing on certain subsets of our traffic and decreased pricing on other subsets. And as that flows through our bidding into the traffic landscape, The net result is meaningfully higher monetization, but on lower growth in quote And those are trades we're comfortable making because it improves the ROI for the carriers, it improves their performance And it drives our overall growth and wins us more and more budget as a result. So that's one example. Another example is with increasing attention on an investment in The data and the technology that matches each individual consumer to the right set of options for them And through the tightening of that routing, again, we're able to drive up performance and downstream bind rate, which Improves the provider performance. And so that's our ability to improve monetization on a given quote request level.
But the general thrust is towards focusing on the policy sale, the outcome, which is what the customer cares about on both sides of the marketplace. And as a result, focusing less on the raw volume of quote requests or referrals. To the second part of your question, Ron, The Verified Partner network continues to grow. We launched Some new products into that program in the 1st part of the year. And so the 1st part of the year was focused very much on building and launching of Product, those are in market now.
We've had some good reception from both sides of the marketplace. And as we begin to now We expect that to account for some of the increased growth rate in volume in the second half of the year.
Got it. Thank you.
And your next question will come from the line of Cory Corfin Tarek from JPMorgan. Your line is open.
Great. Thanks for the question. I had 2. I wanted to circle back to a comment you made, I believe, I'm anticipating some moderation in carrier demand for customer acquisition spend. Just I think that was more of a general industry comment.
Hoping you could talk a bit more About some of the drivers and what you're seeing there. And then maybe secondly, last quarter, you talked a bit about unifying the health and life D2CA Kind of under one leadership team, just curious any lessons learned there, and how you're thinking about integrating PolicyFuel with those 2 existing businesses? Thanks.
Sure, Corey. I'll kick that off with regard to what we're seeing around pricing and monetization. We're certainly coming off of a very strong quarter for monetization in Q2. We saw record levels of revenue per quote request And strong demand coming from carriers and agents even as we went through reopening. That said, we're coming off of a year of Increases in monetization, we do anticipate some moderation in monetization and in revenue per quote request.
And we think that as we return to kind of a more of a normal Scenario in terms of autos, our autos vertical, we've certainly been the beneficiary of some surplus profit in the past year Through COVID, we expect that we'll start to see some normalization and some moderation in monetization. But certainly, we're going to maintain much of the monetization that we've gained over the past year. So what we've really reflected Is some slight moderation and against a still a fairly competitive traffic backdrop On landscape within the traffic side of the business.
And Cory, I can address your second question. So yes, we made the decision to The Health and Life direct to consumer agency platforms and operations, earlier this year. As we integrate Policy fuel, I think the view right now is that there are certain sort of platform elements that will accrue efficiency to Any agency operation within EverQuote that will migrate to shared infrastructure. So it might include things like data systems, Technology, recruiting and other sort of elements of the operation. And so where there where we don't Yes, a benefit of having the vertical or market specific expertise.
I think you'll see us move in a direction of building a More scalable platform that can be leveraged across any type of insurance product. But where there where we do perceive benefit in specialization, Whether that's in carrier relations or in the sort of agent and sales operations themselves, we'll continue to maintain separate management for those parts of the business. And so the going in view is through the integration certainly Policy fuel will continue to operate largely uninterrupted and then we'll begin looking at the different platform elements that we pull in to the more unified structure.
Thank you. That's very helpful.
And your next question will comes from the line of Jed Kelly from Oppenheimer. Your line is open.
Hey, great. Thanks for taking my question. Just A couple. Just one on the competition that you're seeing for traffic. Can you talk what's driving that?
Is that more company Receiving more investments. And then just on policy fuel, can you provide like an example if you can check There's some context on how that will benefit some of your larger agency or larger carrier partners?
Sure. Hi, Jed. Thanks for the question. I guess I'll take the first part and talk about what we're seeing on the traffic landscape. We're continuing to see competitive landscape for insurance related traffic in advertising.
I'd We're also seeing probably some influence on some of the general sources of traffic that are less insurance specific from other industries As they pivot back into digital advertising. So even something like travel, I think has some effect On the overall kind of CAC landscape for us. So we're seeing a bit of a combination. Insurance Stayed strong through the pandemic insurance related advertising. And I think we're seeing some uplift from just the general Online digital advertising now that we're fully into reopening.
And Jed, I
can take the second question. So PolicyFuel operates what we're referring to as a policy sales As a service model where we they have dedicated pods of advisors or agents that complement our marketplace And provide the value added service of taking the referral and actually binding the policy on behalf of the carrier. And so for existing carriers, The benefit would be twofold. The first is one of performance. So in many cases, EverQuote through and with PolicyFuel will be able to apply our technology, our process, our data To sell more effectively and drive improved performance on the referrals that we're sending them.
And then secondly, Capacity. So when carriers are running into capacity constraints, this can be a release valve for them to enable them It's a scale beyond whatever their capacity will allow internally. The net result is going to be more profitable policies Coming from EverQuote going to the carrier. The other sort of category of Carrier that will benefit though is even in addition to our existing carriers, you've got a whole bunch of carriers in the market today That have not yet really cracked the nut on acquiring customers through digital channels, right. They are carriers, they may be regional carriers that Through local independent agents and that's what their business model is set up to do from a distribution standpoint.
However, they have great insurance products for a ton of people. But historically, we have had less success with those carriers because they're not set up operationally And with the technology to get performance out of the referrals we send them. And so by extending this service to carriers like that, We feel we're going to be able to unlock a sort of an incremental segment of the market that has historically not Participated in a meaningful way in the digital marketplaces.
Got it. And then as a follow-up, I think John you mentioned Andrew, Jamie, you mentioned during open enrollment for healthcare, you want to be up 3x. Is that on revenue? And how much revenue was from open enrollment Last year. And then is there as you get as you build out your DTC capabilities with more agents, Is there any do you plan to provide total bookings or total policies written and the total commissions you're generating?
Sure. So what we said with regard to our expectations around open enrollment in Q4, we expect our healthy TCA Revenue to be up at least 3x, that's our plan as well as our agents servicing that as well. So it's Significant and that speaks to a little bit what we've talked about in the past, which is a bit of a new seasonal pattern that we see emerging, which A strong Q4 where Q4 is traditionally weaker on the auto side of the business. We think that Our investment in health makes Q4 a seasonally strong quarter for the business on the whole. And we are considering kind of what metrics we provide in order to give some insight Into this open enrollment.
So I'd say stay tuned on that and that we expect to update you.
Thank you.
Thanks, Seth.
And your next question will come from the line of Michael Graham from Canaccord. Your line is
Thank you. Can you just maybe talk about the sort of growth rates that you expect to see between auto and your other verticals? We've seen those growth rates sort of coalesce here over the last few quarters. I'm just wondering Do you expect that to persist or just maybe any comment on the general health of the auto vertical? And then kind of Building on what Jed was asking, can you just
talk a little bit about
the investments you're making in DTC into open enrollment are Mostly agents and sort of hiring ahead of some of that volume. Can you talk about how you think about The payback or the return on investment for an agent and how good are you at
So there
are a few questions in there Mike. I'll try to do my best to cover everything. But let me know if we missed anything. In terms of the auto, non auto split, historically non auto has outpaced auto. Yes, you sort of mentioned the coalescence in this most recent quarter.
Our expectation is that over the long term non auto will continue to outpace auto. Right now, our focus
Our sort
of near term highest confidence path to drive non auto growth back up to levels That we've seen historically is through the health and Medicare markets and that so therefore we're really focused on Investing in preparing for and then executing through the Q4 open enrollment period. And we do expect that that will have a meaningful impact And restoring the growth rates that we're accustomed to seeing. With respect to that investment, I'll skip to what I think was kind of your third question there. We obviously have data on the performance of the agents that we've hired to date. And so if we go back and just kind of walk through the arc of our health and Medicare direct to consumer We launched the health and Medicare marketplace in 2019.
We acquired Crosspoint in September of 2020. And we had about a month to integrate and kind of ramp for OEP last year, and we did so successfully and Profitably. And then that built some confidence that the market opportunity could support Much more aggressive growth this year and also build confidence in the leadership team to execute into that opportunity. And we've since complemented that leadership team with some experience from places where They're accustomed to the level of scale to which we aspire, which is thousands of agents over time. And so we hired Garrett Kitsch from Ehealth, who managed a big part of their sales operation.
As he's onboarded, we pulled forward some of the investment and growth there. And I think we have high confidence that the scale will come and the profitability will come Based on both the experience we had last year as well as the experience of the team, the Crosspoint team and Garrett and the rest of the leadership team.
Okay. Mike, I just want a little detail on the first part of that as well So we expect non autos to continue to grow faster than autos, certainly In the second half of the year. But obviously, in Q3, the growth rates will be closer between autos and non autos. And then Going to Q4 where we put the investment and where we believe that the growth engine for non autos this year is around health. We'll see growth rates significantly outpaced auto in the Q4 versus the 3rd.
Okay. That makes a lot of sense. Thanks for the extra color there, Thanks, Jamie.
Thanks, Mike.
Our next question will be coming from the line of Ralph Schackart with William Blair. Your line is open.
Good evening and thanks for taking the question. Two questions if I could. First on the open enrollment reinvestments, do you have any associated incremental revenues associated with that Contemplated in the revised 2021 outlook. It doesn't really look like it on our end, but just wanted to ask that. And then secondly, how should we think about these reinvestments?
They want is it one time in nature? We're just really trying to staff up more agents here in 2021? Or could it be something that you
So I'll take that, Ralph. So with regard maybe the second part first, I would say if you think about the expense We've added it really in 2 buckets. One is the pulling forward of resources into Q3 to make sure that we are ready for Q4 And that we are ready for open enrollment. I'd say the other component of expenses, foundational expenses associated with They help DTC, Inc. I'd say neither one of them really are ones that scale as revenue scale.
So they are Foundational expenses, either pulling expenses forward or foundational expenses.
And then
I would say the first part of that is What has happened as we move through the year and as we've refined our plan around health is we've really added to our conviction Around what we believe is possible with the healthy TCA. So I'd say what we've granted up is a our confidence around healthy TCA contribution in Q3. And as we've outlined, we've said now that is a tripling of revenue Over Q4 of 2020.
Okay. That's helpful. Thank you.
Our next question will be coming from the line of Mayank Pandan with Needham. Your line is open.
Thank you. Good evening. Jamie, maybe just to start with the all of the other service, is there a way to parse out how big that Opportunity is versus say your core lead gen model, if there's a way to do that? And then what is sort of the growth dynamic within that segment of the market relative to again Europe's sort of core lead gen revenue model?
So Mayank, thanks for the question. One way to think about it is the policy sales as a service, While it is a value added service, it does enable us for the really for the first time in P and C to tap directly into the $135,000,000,000 Of commission in the total addressable market. And so I think to the extent that Policy sales as a service as we expect it will delivers high performance at or above what the carriers can do themselves. We expect it to unlock quite a bit more budget. It's really hard to quantify, but the vast majority of the dollars in the value chain lives In that slice of the pie, it lives in the commissions which we are now tapping directly into.
Got it. That's helpful.
The only other thing I'll add, Mike, is and the What I mentioned earlier that we believe policy sales and service will make participation in the marketplace possible and performance For many carriers that really can't drive performance today. So they have great insurance products that we want to connect with our consumers. But because they can't get performance out of an Internet originated referral, They don't participate. So in addition to getting more wallet share and deepening partnerships with our existing carriers, We have an expectation that we'll be able to unlock a new segment of the market and begin building relationships where they don't exist today.
Okay, got it. Thank you for that. And then just as a follow-up, I wanted to ask about just M and A in general and Maybe more broadly capital allocation. John, you did Crosspoint. That seems to have been a successful deal.
And then I know you're going to Focus on digesting policy fuel for now, but how are you thinking about M and A in general? Are you seeing more attractive opportunities in the market? Or is it just way too expensive right now Trying to buy something in InsurTech, maybe broader comments around M and A, Aperolgy and then capital allocation in general? Thank you.
So I think we've been pretty consistent in terms of how we've talked about M and A and how we've executed on M and A. And that is we've seen M and A as Really an opportunity for us to grow along our stated growth levers and potentially to do that Faster than we would organically. I think you definitely saw that with Crosspoint. You were again seeing that with So it really is an opportunity to look at things that we were planning on doing anyway and see whether or not we can accelerate Our growth or our entry into a new area through M and A. So I think you would For us to continue to look for opportunities along that line.
And I think you've got 2 good representative acquisitions in Crosspoint in Dallas, if you.
Great. Thank you. Thanks,
Question will come from the line of Ben Rose from Battle Road Research. Your line is open.
Thank you and good evening. Jamie and John, as part of the open enrollment initiative going on in the Q3, how many agents do you plan to bring on board In the quarter, in order to execute on that?
So what we've said is we're more than tripling agents In Q4 as compared to last open enrollment season. And that puts us over 100 agents.
Okay.
And in general, in looking at the margin structure of the policy fuel business, how does it Differ, if at all, with EverQuote in general?
Yes. So one of the reasons we're excited about DTCA in general is that it's not just a growth lever, we think of it as a margin lever as well. It is we expect higher VMM margin as we go deeper with the consumer in terms of the value of the transaction. And then over time as well we expect it to be a higher EBITDA business as well. So we think it's both unlocking growth as well as margin potential.
Okay, great. And if I may, just going back to the comment earlier, fully understand why you would want to be Optimizing for revenue per quote request based on the outcome, Are there but in speaking about the Q3, it does look like you're looking to increase the Number of quote requests, is that from an execution standpoint, is that simply a matter of optimizing in your model To increase the number of quote requests that are being given out to the different agencies or Is there something more?
It's a function of a couple of things. I'd say the primary one is, I think it was Ron's question about the Verified Partner Network. We have launched Some new products into that market. We've enrolled some new partners into the program. And I think we're moving from Piloting into operationalizing and scaling with a number of these partners.
And we think as a we have confidence that as a result that We'll start to drive up the volume through those partnerships.
Okay, thanks. That's very helpful.
And that concludes our Q and A. I would now like to Turn it back to the management for closing remarks.
Thank you. Well, thank you all for joining us today. We're pleased with our strong Q2 performance and we're excited by the steps we're taking to accelerate progress against the strategy. Most notably, building the foundation for a multi vertical tech and data enabled direct to consumer agency platform. We're confident in the outlook for the remainder of 2021 and we're laser focused on our vision to become the largest online source of Strength of our team and increasing clarity of focus in our strategy, we are energized to continue building EverQuote into an industry defining company As the $2,000,000,000,000 insurance industry moves into the digital age.
Thank you all so much and have a great evening.