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Digital Media Solutions, Inc. (DMS)
Q2 2021 Earnings Call
Aug 09, 2021, 8:30 a.m. ET


  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Good day and thank you for standing by. Welcome to the Digital Media Solutions, Incorporated 2Q '21 earnings call. [Operator instructions] Please be advised that today's conference is being recorded. [Operator instructions] I would now like to hand the conference over to Thomas Bock, executive vice president of investor relations.

Please go ahead.

Thomas Bock -- Executive Vice President of Investor Relations

Thank you for joining us to discuss DMS' financial results for the second quarter of 2021. With me on the call are Joe Marinucci, co-founder and CEO; and Vasundara Srenivas, CFO. We posted our earnings announcement this morning in a press release and also on our Investor Relations website. By now, everyone should have access.

Before we begin, I would like to call your attention to our safe harbor provision for forward-looking statements in our financial results press release. The safe harbor provision identifies risk factors that may cause actual results to differ materially from the content of our forward-looking statements. For a more detailed description of the risk factors that may affect our results, including disclosure about the effect of the coronavirus outbreak, please refer to our financial results press release and our SEC filings. Also, during this call, management's commentary will include non-GAAP financial measures.

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Reconciliations between GAAP and non-GAAP financial measures for our reported results can be found in the tables of our financial results press release, which we have posted to our Investor Relations website at investors.digitalmediasolutions.com. The additional financial and other information to be discussed on this call can also be found on our Investor Relations website. Now I'd like to turn the call over to Joe Marinucci, our CEO.

Joe Marinucci -- Co-Founder and Chief Executive Officer

Thank you, Tom, and good morning to everyone joining the call today. Q2 was a record-breaking quarter for DMS, and I'm excited to dive into the reasons behind our success. This morning, we issued a press release with many details on our financials, so we will do our best not to duplicate that information. Vasundara will also provide you with additional color on the published numbers in her remarks.

I'm going to talk to you today about why and how our second quarter, especially including our VMM, was so strong and how our actions and results put us in a really good spot for the remainder of the year and beyond. Just quickly to frame this call, during our second quarter, we set records and beat expectations for revenue, gross profit margin, and EBITDA. Our teported revenue was $105.1 million and adjusted revenue was $109.3 million. Total revenue growth was 42.4%, adjusting for acquisitions was 19.9%.

Gross profit margin was 32.1% and our Variable Marketing Margin, or VMM, was 38.2%. I'll talk in detail about this number in a moment. Lastly, our adjusted EBITDA was $16 million, and balance sheet remains healthy with net leverage of three times. So this morning, I'm going to provide top three reasons we had such a strong quarter, and then I'll provide the top three highlights for the remainder of 2021.

Here we go with Q2.  First, we have expanded our margin during the quarter. Despite what's on the horizon regarding privacy and cookies and recognizing how changes will lead to concentrated demand in the walled gardens of Google, Facebook and the like, and we grew margins by more effectively targeting consumers, improving our engagement with these consumers and driving more efficient conversions. Our consumer engagement score, or CES, also continues to demonstrate our strong ability to efficiently create engagements and conversions that result in transactions and customers of our advertising clients. The CES for the period was 72%, up from 69% in Q1, indicative of the more targeted consumer engagement.

And we're able to create these efficiencies across all verticals because we continue to increase our leverage within the digital advertising ecosystem using these superior consumer insights, our marketplace brand, our first-party data, our proprietary technology, our vast distribution capabilities, and our many other tools in our arsenal that drive engagement.  And as our advertiser clients to spend more with us because of our effectiveness, we deploy more media dollars, which in turn, engages more consumers, grows our first-party data asset and delivers enhanced ROI. The more our first-party data asset grows, the better we become at targeting and engaging consumers, and that also leads to better ROI of our advertiser clients, which leads them to spending more with us. The other benefit of efficiency gains is margin expansion for us as demonstrated by the increasing variable marketing margin, or VMM. That is happening even as CPMs across digital media, but especially within the walled gardens, go up.

Our VMM in Q2 was 38.2%, and that is up from 32% in Q1. Second, we continue to play from strength to strength within our largest vertical of insurance. Our insurance revenue, which now accounts for the almost two-thirds of our revenue, grew by 92.2% in Q2 and by 73.1% organically. Insurance is showing strong growth for us for a number of reasons.

Consumer demand for all insurance products is the strong -- consumers are increasingly shopping online to determine the best options, promotions and savings available to them. Helping consumers connect with the insurance providers that also meet their needs is what we do best, and our growing auto insurance quote request volume, up 107% from Q2 last year that shows this. The three-digit increase in quote request volume is also indicative of the cross-section between consumer demand and auto insurance advertiser demand, which brings me to my next point. Our advertiser demand for insurance also remains very strong.

We work with all of the top insurance providers, and we've been actively growing a list of insurance agents who then buy from us. In addition, during Q2, we launched Zip Quote Ignite, a loyalty and retention program that encourages individual agents to invest larger budgets. This program already had a measurable impact. And we closed on our previously announced acquisition of assets from Crisp Results at the beginning of April.

As a result, we benefited from a full quarter of contribution concentrated within the health industry. Crisp Results has had a positive impact across our revenue and margin numbers in Q2 and will have an even stronger impact on the remainder of the year. That's perfectly -- third, our strategic investments boosted both our revenue and efficiency during Q2. Growth requires innovation and evolution, and we're not afraid of that challenge.

In our investment strategy, including our M&A strategy, is deliberate and designed to help us be the most efficient, most effective growth-focused company we can be. So this year, we've completed two transactions, the Intel in February and the assets of Crisp Results in April. The timing of the Crisp Results transaction was important to set us up for a strong Medicare open enrollment period that's coming in the fourth quarter of the year. The early Q2 close of the acquisition gives us time to integrate Crisp Results, and enhancing its already strong health insurance business with the leverage achieved from our first-party data asset, proprietary technology and expansive media reach.

We've already seen synergies between Crisp Results team and the rest of the DMS with a positive impact on Q2 as a result. Our earlier acquisition, Intel, is a proprietary web push of marketing technology with the sophisticated AI and machine learning that we acquired in February. The Intel technology is part of our efficiency story for Q2 as Intel allows us to reengage consumers by encouraging them to complete their information requests or by storing up future demand by also delivering personalized messages designed to stimulate action. Intel also brings added value to our publishing partners by encouraging website traffic to our direct-to-consumer and e-commerce advertiser clients by allowing them to retarget our consumers who have abandoned shopping carts.

This is an important year around, but is magnified during the seasonally significant Q4 online shopping period. During the second quarter, we have also made strategic investment to bring call center software in-house and the launch DMS Voice. DMS Voice adds to our already strong proprietary technology stack and presents additional solutions to some of our advertiser clients. And more importantly, DMS Voice enables us to boost our gross margin neatly during Q2 due to the cost savings on our call center expenses that have been booked into cost of goods sold.

And DMS Voice will continue to boost our gross margin in Q3 and beyond. Lastly, we made strategic hires last quarter that strengthen some of the capabilities and experience sets on our teams, including the finance and legal teams. So shifting into the remainder of this year, I'm enthusiastic about what's to come for the rest of 2021 and beyond. And just like I highlighted three things about Q2, I will now spotlight three things coming in Q3 and Q4.

First, everything we talked about for Q2, margin efficiency, playing from our strength to strength that's within insurance and strategic investments are expected to stay in place throughout the remainder of the year. Remember, as our advertiser clients continue to spend more with us, our first-party data set grows and our consumer targeting and engagement improves. This growing advertiser client spend and first-party data set boosts ROI for our clients and boosts efficiency measured through the VMM for us into Q3, into Q4 and beyond. Our insurance business continues to grow on the back of strong consumer and advertiser demand and the strongest demand for health insurance during the open enrollment period has yet to come this year.

Especially with Crisp Results within the folds of DMS, we are confident and we are well positioned to partake on the tailwinds of the digital transformation happening in health insurance advertising, especially in Medicare. The investments we made in Q2 and prior to us enhancing our people, our processes and our toolbox, including our first-party data asset, our proprietary technology and our expansive media reach, were all made with an eye toward future growth. Much of the anticipated growth, including a scaled-up OEP period and innovative our reengagement funnels that lead to stronger e-commerce conversions, will be recognized this year. Second, Protect.com, our flagship consumer portal, continues to grow.

When we rolled out Protect.com, we started with just the auto insurance. During Q2, we added life insurance, home security and mortgage refinance. By the end of Q3, we expect to see additional growth in adjacent verticals like home services, and we plan to launch the complete design and consumer portal, which will then allow people to log in to personalize their experiences and results. And the future of Protect.com is to be recognized as the premier destination for people looking for a fully integrated experience to protect their personal property with their health and their finances all in one place for the brand they know and trust.

This integration makes the consumer experience more sticky, especially now that we introduce loyalty benefits and programs. So why does this matter? It's because as Protect.com becomes known to consumers, the brand becomes easier to attract consumers to Protect.com and to keep them. More consumers that are more loyal will mean greater advertising spend, and you know the story already. This all leads to even stronger margins.

And the third and final point I'd like to highlight is that the end of the year is historically seasonally strong for us, and we've taken these actions to amplify our strengths this year. You may remember that we talked about super seasonality for Q4 last year, and we anticipate to see that again this year with the open enrollment period for health insurance and the e-commerce holiday shopping season that's happening at the same time. Insurance is our largest vertical, with health insurance experiencing significant growth, thanks to the efforts we already have in place, plus the addition of Crisp Results. And e-commerce is our second largest vertical, with some significant e-commerce revenue that's hitting at the end of the year, especially within the following categories: nonprofits scaling their sustained donor bases; direct-to-consumer and subscription brands seeking to scale our customer and subscriber acquisition; and the seasonal e-commerce brands that needs advertising support to achieve their end-of-year revenue metrics.

Of course, there are some uncertainties with regard to how the pandemic will impact in-store shopping this holiday season, but we anticipate e-commerce will be strong, whether or not the pandemic subsides again in the United States. Before summarizing, it is also worth noting that in May, we refinanced our credit facility to provide increased financial flexibility to support our growth initiatives. So in late Q2, DMS has joined the prestigious Russell 3000 Index, expanding our visibility within the investment community. Bringing us back to the top before I hand it over the call to Vasundara.

Q2 was a record quarter for us because we took action to expand our margin, as shown by our strong 38.2% VMM. We played from strength to strength, especially within our insurance vertical, leveraging consumer and advertiser demand to grow. We have made strategic investments that had immediate impact and expectations of long-term benefit. And we're looking forward to the remainder of the year because the actions we took during Q2 set us up for success in Q3, Q4 and beyond.

Protect.com continues to grow in terms of everyone it touches, consumers, publisher partners and advertiser clients and ability to grow our revenue and EBITDA. And finally, the end of the year, inclusive of both OEP and the holiday season, are historically strong for us, and we are confident we've taken steps to make them stronger this year. With that, I'll pass the call over to Vasundara.

Vasundara Srenivas -- Chief Financial Officer

Thank you, Joe, and good morning to everyone. Like Joe, I will also be focusing my remarks on the color beyond the numbers issued in this morning's press release. So let's jump in. For Q2, we beat guidance for revenue, EBITDA, and margins.

Reported revenue was $105.1 million, up 39.7% over the same quarter last year, and adjusted revenue was $109.3 million, up 42.4% year over year. Organic revenue grew 19.9% over Q2 2020 and the split between organic and inorganic revenue was healthy at approximately 84% to $16 million. The primary driver of growth was insurance, which accounted for approximately two-thirds of our total revenues in Q2. Like Joe noted, insurance revenue grew 92.2% over the second quarter of 2020, 73.1% when adjusted for Crisp acquisition.

The addition of the Crisp Results assets diversified our insurance revenue. In the quarter, auto made up 51.7% of total insurance, with health now representing 36.4%, followed by life at 6% and home at 5.9%.  So to put this into perspective, in the year-ago period, auto accounted for 71.1% of insurance revenue. Although we believe there is considerable continued growth to be seen within auto insurance, we recognize the importance of diversification, which will make it less susceptible to the ups and downs of one particular industry. Just touching on the other revenue streams, Career & Education contributed solid growth this quarter.

And we relaunched our consumer finance category in July, so we look forward to reporting this vertical's contribution later this year. We're extremely proud of our gross margin, gross profit, and billable marketing margin numbers for Q2 as they represent proof of the flywheel effect that we have so often spoken of. For the second quarter, reported gross profit was $33.7 million, equating to a 32.1% margin, nicely ahead of our typical 27% to 30% range, and above the 28.5% margin in Q1 2021 and the 30.3% margin we achieved a year ago. Billable marketing margin, or BMM, was 38.2% compared to 32% in Q1 2021 and 34.1% a year ago.

This upside in gross margin was driven by strong execution and strategic investments, like DMS Voice, which allowed us to create efficiencies and reduce our cost of goods sold. The creation of DMS Voice enabled us to streamline and eliminate systems to result in better experiences for our publisher partners, advertiser clients, and consumers and added capabilities, which have resulted in revenue and margin improvements. Furthermore, our strong gross margin performance came despite from the effect of iOS 14 changes as well as other post-cookie privacy shifts, which are contributing to increased CPMs. Our ability to improve gross margins in the quarter, even despite these industry headwinds, further highlights the positive impact of a diversified traffic sources and our insulation from broader industry changes that have negatively impacted a number of our peers.

On a reported segment basis, the Q2 Brand Direct Solutions gross margin was 26%, up from 22.8% in Q1 2021 and up from 24.2% in the same quarter last year. And the Q2 Marketplace Solutions gross margin was 28.9%, up from 25.7% in Q1 2021 and down from 30.3% from a year ago, primarily due to strategic position at the end of Q2 2020 to prioritize growth and market share over near-term margin. Other solutions, primarily include our SaaS software business, had a gross margin of 76.1%, contributing to our overall gross margin level. For operating expenses, we remain focused on improving the leverage in our business while balancing our investments for growth.

Our total operating expenses amounted to $25.8 million in the second quarter, an increase of $5.6 million from Q1 2021 and up $9.5 million year over year. Adjusted for one-time expense in the second quarter of 2021 related to nonrecurring acquisition costs of $0.4 million, stock compensation of $1.3 million, nonrecurring lease restructuring reserves of $0.4 million and mostly nonrecurring additional expenses of $1.8 million, pertaining mostly to pre-acquisition legal fees, settlements, and consulting. As a newly formed public company, we rightsized some of our corporate functions and invested in people, processes, and technology to position, improve, and sustain performance and comply with our fiduciary obligations. Building a competitive and entrepreneurial workforce that helps ensure we have the critical skill sets, the innovative minds and the passion for the continued implementation of sophisticated processes and technology, to measure, analyze, and optimize while the sustained quality and accuracy, remain top priorities.

We ended the second quarter with a total headcount of approximately 600 full-time equivalents. Finally, on profitability, adjusted EBITDA in the second quarter was $16 million for an adjusted EBITDA margin of approximately 15.2%. EBITDA decreased 2.2% year over year. As a reminder, we did not have public company expenses in the year-ago quarter, and this decreased despite margin improvements the Q2 increases in operating expenses from legal consulting fees, compliance-related matters, SEC filings, IT, and staffing upgrades to meet public company obligations and investment and stock incentives to attract and retain our workforce in a highly competitive industry.

Excluding our pro forma acquisition adjustments for the prior year, our adjusted EBITDA increased from $13.7 million to $16 million, an increase of approximately 17.1%. Lastly, turning to the balance sheet and liquidity. We ended the quarter with $18.8 million in cash, cash equivalents, and marketable securities, down $5 million from the end of Q1, reflecting the Crisp Results acquisition plus normal shifts in working capital. As discussed, we put in place a new $275 million publicly rated credit facility during the quarter, which increased our financial flexibility.

Our total debt at quarter end was $225 million, and net official cost was $218.2 million. As of quarter end, we had the full $50 million balance available to us on our new revolving credit facility. After achieving record revenue and EBITDA in Q2 and because of the three things Joe noted, including our expected strength during the upcoming OEP and holiday shopping period, we're comfortable that they're on track to achieve guidance we previously gave. Of course, like every company, there are unknowns we must monitor.

These are the two I want to call out right now. Although we are hopeful that pandemic is subsiding, the recent spikes in COVID may impact reopening of parts of the economy and the speed at which companies have their employees return to the offices. The pandemic impacted consumer behaviors, including their online shopping and research patents. COVID also impacted our publisher partner and advertiser client employees with downtime increasing when infection rates rise.

Our diversification helps us in times of change, and we are cautiously optimistic that the worst of the pandemic is behind us all.  Also, the recent privacy-related changes from Apple and the change in cookies sunset timeline from Google tell us that the big tech companies have not landed on the final solution when it comes to consumer tracking and privacy. These changes impact all advertisers and advertising solution providers, and we don't anticipate this topic to be closed anytime soon. However, with continued investment in growth and our focus on optimizing our services to create efficiencies, we are [Audio gap] and advertiser demand and the strategic investments that had immediate impact, along with expectations of long-term benefits. Although we will continue to monitor the post-COVID recovery and what that means to our business in 2021 and beyond, we look forward to the remainder of the year because the actions we took during Q2 are expected to have continued positive impact in Q3 and Q4.

Our Protect.com growth plans will have strength in revenue and EBITDA, and because we have taken the steps to boost our historically strong OEP and holiday seasons. With that, we thank you for your interest in DMS, and we will now open the lines for questions. Operator, please let our listeners know what they have to do to ask questions.

Questions & Answers:


[Operator instructions] Your first question comes from the line of Maria Ripps with Canaccord.

Maria Ripps -- Canaccord Genuity -- Analyst

Good morning and congrats on strong results. I just wanted to ask about your emphasis on growing your agent business. Can you talk about how this agent model sort of impacts unit economics? And you mentioned that that's largely in auto right now. Can you maybe talk about whether you plan to sort of implement this across other verticals in the future as well?

Joe Marinucci -- Co-Founder and Chief Executive Officer

Hi, Maria. Good morning. Good to speak to you again. So with regard to the agents model and how it impacts unit economics, generally, it favorably impacts unit economics and -- as opposed to dealing with the enterprise clients.

And it gives us great diversity in that we work with both the enterprise clients and the major insurers, and we have a very substantial base of independent sales agents, approximately 6,000, and we have very strong growth initiative there to continue to grow that base. We recently talked about our IGNITE program that we run. That has helped us grow those agents, and we continue to be focused there because of the favorable unit economics that come out of dealing with lead independent agents. That will continue to be an area of focus for us because of, again, the more favorable unit economics that exist there.

What was the second part of the question again?

Maria Ripps -- Canaccord Genuity -- Analyst

I was just trying to ask if you were planning to implement this, of course, other verticals as well?

Joe Marinucci -- Co-Founder and Chief Executive Officer

Well, insurance, as you're aware, is a substantial portion of our revenue. It's above 60%, approaching two-thirds of revenue now. And working with the independent sales agents inside of the auto insurance vertical is underpinning some of the growth inside of insurance. And it is a fairly unique ecosystem with the independent sales agents inside of the insurance category, specifically inside of the Property & Casualty segment, which skews heavily toward auto.

So we have a high degree of focus there right now, specifically inside of insurance. And then inside of property and casualty with auto but outside of that, there are the other categories, health being the second largest category inside of the insurance vertical that we do work in right now. And we do plan to continue to look at opportunities to scale there. Obviously, with the major insurers and the brokers and then beyond into the independent sales agents as well.

So yes, there is an initiative to continue to expand and work with independent sales agents outside of Property & Casualty.

Maria Ripps -- Canaccord Genuity -- Analyst

Got it. That's very helpful, Joe. And my other question is sort of as you look at your business today, are there any areas of the platform or any verticals where you see sort of the need to invest more? And more broadly, how are you thinking about the balance between growth and profitability?

Joe Marinucci -- Co-Founder and Chief Executive Officer

Well -- so generally, I mean, we saw great margin improvement this past quarter obviously, with both gross margin and variable marketing margin moving up. And so the best way for me to communicate that, I guess, is we talk a little bit about the consumer engagement score in Q2 and how it went up to 72 from 69. And that's on the back of even though global reach for us was down, engagements are up. And that's really a title in the ecosystem, right? So it benefits all verticals on both the marketplace and the brand direct side.

Going from the top down, you'd have insurance first and then brand e-commerce and then current education and consumer finance, which is really starting to reemerge that for us. So as we continue to invest in the engagements that we have with consumers through leveraging our marketplace solutions, our owned and operated websites and then interacting with our consumers that has this flywheel effect, which is really effective in reinvesting in the first-party data asset, which is connected to media reach through our proprietary technology. As we continue to go through those cycles, and we just get more efficient, which is why even though for us, global reach was down, this is not an impression-based business, right? So we're not looking at how many impressions that we have access to. We're looking at our ability to effectively and efficiently engage consumers and needing less impressions to do that means that we have more quality engagement.

So as you're aware, we're paid on performance so that means that both near customers and/or customers have to be coming out of those engagements, which when you see rising of I think -- and when you see the consumer engagement score go up and you see margin increasing means we're doing a good job of it. So we're going to continue to invest in the technology and our resources to continue to be efficient on the front end there with how we go about putting the right offer in front of the right person, in the right place at the right time now because that benefits all categories: insurance, brand e-commerce, school and education and consumer finance, so that's where our investment has to be. And then we will be successful in the verticals behind that, if that makes sense.

Maria Ripps -- Canaccord Genuity -- Analyst

That's great. Thank you so much for the color. Appreciate it.

Joe Marinucci -- Co-Founder and Chief Executive Officer

Yes. Thank you, Maria, and good morning.


Your next question comes from the line of Marvin Fong with BTIG.

Marvin Fong -- BTIG -- Analyst

Good morning. Thanks, everyone, for taking my questions.  I apologize. I jumped on the call a little late, so you may have already mentioned this but just on the variable marketing margin -- great performance. Great to see that improving.

In terms of the guidance, it looks like it would be sequentially down in the third quarter. Just wondering what were the drivers of that? And within your range of 32% to 36%, what would be the factors that might cause the trend toward -- the upper end of that range versus the lower end of that range? And then second question, just longer term, I think you mentioned some of the splits within your insurance vertical of life insurance or health insurance sorry, 36%, etc. Just curious, Joe, if you'd be willing to take a stab at maybe in the long run, what your exposures might be between auto, health and then some of your other insurance categories. Thanks.

Joe Marinucci -- Co-Founder and Chief Executive Officer

Yes. So I'll let Vasundara comment on the variable marketing margin. But for -- I guess just generally with regard to variable marketing margin, this is the first quarter that we released that as everybody is aware, and we did so in an effort to increase transparency and improve investor communications because we felt this is a metric that investors have asked for and value of several of our peers are obviously reporting it. So we're very happy to be able to start producing this metric so that people can gauge the effectiveness of our media spend.

So I'll let Vasundara speak to the variability there in a second. With regard to the breakout of the segments in insurance, property and casualty, obviously, is the biggest category, and that would be led by auto. And so that's really -- we generally have not talked about this, but automotive is about half of the insurance business right now, followed by now the emergence of health. Obviously, we have made a pretty substantial acquisition there at the beginning of the second quarter with the Crisp Results business that we acquired.  Health right now is an emerging category for us or accelerating an emerging category for us inside of insurance right behind automotive.

And then -- so those two are going to make a vast majority of our insurance revenue margin. And then behind that, you're going to have life insurance and home insurance as the two that, I would say, categories that we have tolls in that we're looking to also expand in behind the big two of automotive and health insurance. So we can work on continuing to update these categories as we continue to report numbers quarter-to-quarter, and we'll talk more about the, I guess, the less of two categories as they become more significant. But the big two are automotive, followed by health insurance.

Vasundara, if you would like to comment a little bit on the variability in the VMM? I'll let you do that now. Be great.

Vasundara Srenivas -- Chief Financial Officer

Sure. Thanks, Joe. Hi, Marvin. I think if you think about VMM today and what's happened over time and the results we put out right recently, we made strategic decisions in terms of the way we execute our operations.

We created DMS Voice, which was acquisition of a software that enabled us to streamline and eliminate systems -- to result in better experiences. So those are the big drivers for our VMM percentages being higher. With that said, we do expect us to continue going forward at a higher percentage. But as we integrate Crisp more efficiently into the business, as we look at voice and its value proposition across the business, the rising cost of CPM, so as you can see, there is an upside, but there's also a downside there or -- that we are cautiously optimistic.

So I would say we do have opportunity to beat that target, but we're very comfortable with the range that we've put out there as guidance. Hopefully, that addresses your question.

Marvin Fong -- BTIG -- Analyst

Yes -- no, it did. Thank you very much. If I could maybe add one follow-up. Just as we look ahead to fourth quarter, I think, Joe, you mentioned it's going to be a big quarter seasonally.

I understand the open enrollment period will be -- we'll see how that progresses but on the e-commerce side that you referenced, I'm just curious on your visibility there on the amount of business you might be generating there on the brand direct side or marketplace side. Update us on your thoughts there.

Joe Marinucci -- Co-Founder and Chief Executive Officer

Generally, Marvin, we have good visibility in the e-commerce brands segment of the business although there is some uncertainty around what kind of holiday shopping season we're going to see. Whether or not consumers behave the way -- they behaved last year or whether there's some shift there, where there's more in-store shopping, that's still to be determined. Specifically to answer your question on visibility, I feel that we have very good visibility because of the relationships we have with the advertisers, and we are deeply embedded in their planning cycles for the full year. But specifically for those advertisers who lean heavily on that holiday shopping season, we're very in tune with their spend, budgets, goals, so on and so forth, and how they plan on leaning into the holiday shopping season and the run-up to that because some of that actually comes in the Q3 period as you head into the Q4 period.

So generally, we believe we have good visibility across the totality of the business and the different vertical/segments of the business. It does transcend and get down into those different verticals and the sales teams are very engaged with the advertising clients in terms of how they're going to spend those dollars during the different times of the year. So I would say, generally, we have good visibility. And specifically with brand e-commerce going into the holiday season, that is certainly true.

Marvin Fong -- BTIG -- Analyst

That's terrific. Thanks, Joe and Vasundara. Thanks so much.

Joe Marinucci -- Co-Founder and Chief Executive Officer

You're welcome, Marvin.


Your next question comes from the line of Jason Kreyer with Craig-Hallum.

Jason Kreyer -- Craig-Hallum Capital Group -- Analyst

OK. Thanks, guys. Joe, I just wanted to ask, I know these first-party data sets are a key competitive advantage for you guys and so curious to what degree the conversations with customers revolve around kind of utilizing those in lieu of that impending cookie deprecation. And then now that we got that delay from Google, just kind of curious how you look at the pipeline going forward.

I mean do you think that there's an opportunity to really expand the pipeline given you've got more time to have these conversations or do you think there's potential risk that we hit some type of an air pocket where people just kind of wait on those decisions for another year until we get closer to that deadline?

Joe Marinucci -- Co-Founder and Chief Executive Officer

Hey, Jason. Good morning. Good to speak to you again. So I think I'm going to go backwards through that question with the cookie aspect of it first, because it leads us to the front part of the question.

So I think I've commented on this previously. We're basically non-reliant on cookies at this point. 95-plus percent of our media buying and how we deploy our media dollars is not aligned on cookies. And that's the result of us leveraging the first part of asset, which -- that originates from us spending our media dollars and interacting with consumers, mainly in our marketplaces in our owned and operated websites.

So yes, Google pushed back the clock by a year. Yes, that likely benefits some people in the ecosystem who are heavily dependent on cookies. It has virtually no effect on us. So they may move the clock up again.

I don't know what's going to happen there, but it was kind of a nonevent for us. With regard to just generally first-party data and how that benefits us, the iOS 14 update, as you're aware, was released on April 26, and also including app tracking transparency. And so if you look at some of the statistics a few weeks after the rollout, a disproportionately low amount of users have actually allowed tracking, right?  So the conversation is really the -- around data privacy and then you get into how that impacts platforms like Facebook, that could lead to some challenges in terms of how ad dollars are spent because you have limited ad targeting and optimization. It obviously affects conversion on campaigns, and with modifications to the attribution and reporting are there, too, right?  So because we leverage first-party data because we have a one-to-one relationship with the consumer, which also comes off the back of them interacting with us directly in those marketplace solutions, we have that data and we're communicating directly with those consumers that we're leveraging the ability to put the right offer in front of that right person, in the right place, at the right time as a result of having that data, and so we don't have to rely on the third-party data that would have been affected by the iOS 14 update or the limitation of that data, I should say that I generally feel like we're well positioned as a result of leveraging the first-party data assets we have, and you see that in our consumer engagement score that I talked to Maria about, with the score going up to 72 from 69 even though reach is down, so it just means we're more effective.

And being more effective, and we're effectively reducing friction with the ecosystem because again, it goes back to creating value by putting the right offer in front of the right person, in the right place, at the right time. And so that's why our engagement is up, conversion is up, margins up. So it's a good experience for the consumer, it's a good experience for the advertiser alike. So I kind of ran around that.

It was a long answer to a pretty short question. See if I did my job.

Jason Kreyer -- Craig-Hallum Capital Group -- Analyst

It wasn't even that short of a question, so I appreciate the response. I'm going to switch gears a little bit to Protect.com. Just wondering if you can maybe shine some light on to what degree are you currently marketing that and driving consumer traffic to that property today? And maybe contrast that with what you expect down the road and where we should anticipate consumer trends over time.

Joe Marinucci -- Co-Founder and Chief Executive Officer

Right. So we're very excited about Protect.com. We're building -- as we mentioned on the earnings call, we're building out Protect to be our flagship product, designed to connect consumers with insurance, products and services and that's also products and services within adjacent categories. So we're continuing to invest in Protect.com.

And we've already connected a meaningful amount of consumers with our insurance providers. It's more than half a million consumers now through the portal. It's currently still focused on kind of the -- and auto insurance but it's starting to diversify. And this year, we're expecting approximately $25 million revenue from Protect.com by year end.

And specifically, the expectations going into Q3 is the expansion into additional lines of insurance and then also adjacent verticals like home services and also a site redesign and portal update as we continue to invest in that marketplace solution. So big expectations. We're already well on our way with having interacted with so many consumers, as we've already interacted with. And we expect meaningful revenue to come behind the investment we've made in Protect.com thus far.

It's a pretty substantial goal this year of $25 million in revenue to come through that site when last year it was exactly zero. So that's where we're at with Protect.

Jason Kreyer -- Craig-Hallum Capital Group -- Analyst

Got it. Thank you.

Joe Marinucci -- Co-Founder and Chief Executive Officer

You're welcome.


Your next question comes from the line of Nick Jones with Citi.

Nick Jones -- Citi -- Analyst

Great. Thanks for taking the question. Me too, on the first one, given your exposure to auto insurance, what are your thoughts, I guess, on kind of one hot kind of used auto market and the kind of increased demand that at higher levels than usual and then what that looks like kind of from here? Do you see that kind of moderating? Do you visibility into that? And does kind of the platform performance have any correlation to kind of this increased demand and what might maybe come to the back half of this year and early next year? And then the second question is really just on M&A. I think in the press release, you said there's still a nice pipeline there.

Are you able to give any color on maybe the size of potential acquisitions or kind of -- are they going to be similar to Crisp or are they larger or smaller? Any color there would be great. Thanks.

Joe Marinucci -- Co-Founder and Chief Executive Officer

Hey, Nick. Good morning. Good to speak to you again. So on the auto question first with the property and casualty and the auto insurance.

Look, we saw significant growth in insurance during the quarter. up 92% from the prior quarter. So we're very substantial growth, and that's powered by broad-based demand, request volume increase 107%.  So the demand is there from the consumers and demand is currently there from I guess the insurers as well. So matching the two up certainly helps us.

And as I mentioned earlier, with Maria, we see that from the enterprise clients and we also see it coming from our agents as well. With more people -- I guess, specifically to your question about what cars are changing hands here? And I think generally, you have more people on just the road this time last -- than you had last year. So some of the carriers, two major carriers, progressive and rod communicated that they're anticipating loss ratios to rise as a result kind of having more of these drivers on the road. So I guess the commentary on that is you could see some pricing pressure from the major carriers just as a result of anticipated loss ratios going up because of all the activity that you're talking about.

But we don't really look at that as a threat to the pricing in our ecosystem because of -- we have good diversity because we work with the enterprise level clients, and we also, as Maria also keyed into, the unit economics at the agent level are more favorable. So we've got really good balance there in that. We've got a very sizable agent pool.  And so I think that generally, yes, it is certainly a hot market for autos, a lot of demand, a lot of cars on the road, people are driving more. As a result, loss ratios could go up.

There could be some pricing impact there depending on who the enterprise client is but we like that we're positioned in the market on both sides in terms of having the enterprise clients, having the agents and then generally, just being really efficient and the effective -- with media dollars that can be seen in the margin expansion. So then I guess, your question on M&A. So look, we've done two deals this year. We've done the Intel [Inaudible] push in February and then the acquisition of Crisp Results in April.

And these were two really important deals for us for two very different reasons. The Intel [Inaudible] was really an investment in technology, let's call it, portability channels with how we communicate with consumers and how we market to them and reengage them, right?  And then if you look at the Crisp Results acquisition, that was further investment in our insurance category to help rapidly expand what was already a growing business that we have built in health insurance. So two very different acquisitions. And I'd like to note that we're still very deeply involved with the integration of those businesses.

And as with every acquisition that we do, we look to wholly integrate, synergize and harmonize those businesses within the One DMS ecosystem. So we're, I'd say, aggressively down the road on that but there's still work to be done. But at the same time, we look at organic growth and M&A as being the two levers that we could pull to grow the business. So we continue to look at interesting opportunities as they present themselves.

Now it's difficult for me to comment on specifics, you know that, but what I can tell you is that we've been disciplined in the past. I believe we've done an excellent job. Our entire team has done an excellent job at sourcing quality acquisitions, integrating them, synergizing them, harmonizing them inside of our ecosystem, so we're going to continue to be just as disciplined as we always have and there's certainly no shortage of opportunities out there because it's a fragmented space. So the talented team that we have will continue to be out there looking for stuff that makes sense for us to potentially acquire to accelerate the already strong organic growth profile that the business has.

So we're excited about it, but I -- not much more I could say other than we've done a good job, and we're going to continue to be disciplined and do the things we've already done.

Nick Jones -- Citi -- Analyst

Great. Thank you.

Joe Marinucci -- Co-Founder and Chief Executive Officer

You got it.


There are no additional questions at this time. I'd like to turn it back over to management for closing remarks.

Thomas Bock -- Executive Vice President of Investor Relations

Perfect. Thank you, operator, and thank you, everybody, for joining us this morning. We look forward to the next discussion in the next quarter. Thank you.


[Operator signoff]

Duration: 53 minutes

Call participants:

Thomas Bock -- Executive Vice President of Investor Relations

Joe Marinucci -- Co-Founder and Chief Executive Officer

Vasundara Srenivas -- Chief Financial Officer

Maria Ripps -- Canaccord Genuity -- Analyst

Marvin Fong -- BTIG -- Analyst

Jason Kreyer -- Craig-Hallum Capital Group -- Analyst

Nick Jones -- Citi -- Analyst

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