Porch Group, Inc. (“Porch Group” or “the Company”)
(NASDAQ: PRCH), a leading vertical software company reinventing the
home services and insurance industries, today reported
first-quarter results for the Company as of March 31, 2023, with
total revenue of $87.4 million, which increased 37% compared to
$63.6 million in the first quarter of 2022.
CEO Summary“I am excited by the
transformational year before us. Already in 2023 Porch Group has
filed an application for a Reciprocal Exchange to move our
insurance business forward and raised $333 million with a new
convertible note alongside other key operational successes. The
Porch team achieved this while producing solid results despite a
26% year-over-year decline in home sales and the hardened
reinsurance market. We are executing well and believe we are set up
for important milestones ahead including Adjusted EBITDA
profitability for the second half of this year.” Matt Ehrlichman,
Chief Executive Officer, Chairman and Founder.
First Quarter 2023 Financial Results
- Total revenue of $87.4 million, an increase of 37% or $23.8
million (first quarter of 2022: $63.6 million).
- Revenue less cost of revenue of $36.1 million, or 41% of total
revenue (first quarter 2022: $38.4 million, 60% of total revenue).
As expected, reinsurance markets have hardened, which resulted in a
reduction in Revenue less cost of revenue by approximately $15
million in the first quarter of 2023 compared to the same quarter
prior year.
- GAAP net loss of $38.7 million, compared to $9.3 million for
the first quarter of 2022, and was similarly impacted by the
hardened reinsurance markets.
- Adjusted EBITDA loss of $21.9 million in-line with Company’s
expectations, a decrease from the prior year (first quarter of
2022: loss of $10.4 million) driven by the hardened reinsurance
markets in the Insurance Segment and to a lesser extent, the soft
housing market impact on the Vertical Software Segment. Excluding
the impact from reinsurance market dynamics, Adjusted EBITDA loss
would have been approximately $7 million.
- Insurance gross written premium for the quarter was $115
million with approximately 376 thousand policies.
- $272 million unrestricted cash plus investments at the end of
the first quarter.
First Quarter 2023 Operational Highlights
- Filed an application with the Texas Department of Insurance to
form the Porch Insurance Reciprocal Exchange.
- Insurance initiatives to facilitate the transition to the
proposed Reciprocal Exchange are on track, including moving to 50%
reinsurance ceding in January, successful placement of our excess
of loss reinsurance in April, and non-renewing 37,000 high risk
policies.
- Successfully launched Porch Warranty product with
differentiated protection and services for consumers and across
multiple channels.
- Enhanced our software offerings including a new version of our
ISN Report Writer for inspectors, integrations with new partners
for mortgage companies, and bundle solutions for title
companies.
- Continued to progress advanced insurance pricing, leverage
Porch’s unique property data.
- Moving services launched ‘Plus’, a fixed-price higher margin
premium moving product for consumers.
- Rolled out Porch’s consumer app to nearly all eligible
inspection companies, with the Recall Check Monitoring feature
having wide appeal.
The following table presents financial highlights of the
Company’s first quarter 2023 results compared to the first quarter
2022 (dollars are in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter 2023 |
|
Insurance |
|
|
Vertical Software |
|
|
Corporate |
|
|
Consolidated |
|
Revenue |
|
$ |
58.7 |
|
|
|
$ |
28.6 |
|
|
|
$ |
— |
|
|
|
$ |
87.4 |
|
|
Year-over-year growth |
|
|
101 |
|
% |
|
|
(17 |
) |
% |
|
|
— |
|
% |
|
|
37 |
|
% |
Revenue less cost
revenue(1) |
|
$ |
14.4 |
|
|
|
$ |
21.7 |
|
|
|
$ |
— |
|
|
|
$ |
36.1 |
|
|
Year-over-year growth |
|
|
5 |
|
% |
|
|
(12 |
) |
% |
|
|
— |
|
% |
|
|
(6 |
) |
% |
As % of revenue |
|
|
24 |
|
% |
|
|
76 |
|
% |
|
|
— |
|
% |
|
|
41 |
|
% |
GAAP net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(38.7 |
) |
|
Adjusted EBITDA (loss)(2) |
|
$ |
(7.2 |
) |
|
|
$ |
(0.4 |
) |
|
|
$ |
(14.3 |
) |
|
|
$ |
(21.9 |
) |
|
Adjusted EBITDA (loss)
margin(3) |
|
|
(12 |
) |
% |
|
|
(1 |
) |
% |
|
|
— |
|
% |
|
|
(25 |
) |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Quarter 2022 |
|
Insurance |
|
|
Vertical Software |
|
|
Corporate |
|
|
Consolidated |
|
Revenue |
|
$ |
29.2 |
|
|
|
$ |
34.4 |
|
|
|
$ |
— |
|
|
|
$ |
63.6 |
|
|
Revenue less cost
revenue(1) |
|
$ |
13.7 |
|
|
|
$ |
24.7 |
|
|
|
$ |
— |
|
|
|
$ |
38.4 |
|
|
As % of revenue |
|
|
47 |
|
% |
|
|
72 |
|
% |
|
|
— |
|
% |
|
|
60 |
|
% |
GAAP net loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(9.3 |
) |
|
Adjusted EBITDA (loss)(2) |
|
$ |
0.2 |
|
|
|
$ |
2.9 |
|
|
|
$ |
(13.5 |
) |
|
|
$ |
(10.4 |
) |
|
Adjusted EBITDA (loss)
margin(3) |
|
|
1 |
|
% |
|
|
8 |
|
% |
|
|
— |
|
% |
|
|
(16 |
) |
% |
|
(1) |
|
See Non-GAAP Financial Measures section for the definition and
Revenue less Cost of Revenue table for the reconciliation to the
nearest GAAP measure |
|
(2) |
|
See Non-GAAP Financial Measures
section for the definition and Adjusted EBITDA (loss) table for the
reconciliation to GAAP operating loss |
|
(3) |
|
Adjusted EBITDA (loss) margin is
calculated as Adjusted EBITDA (loss) as a percentage of
Revenue |
The following tables presents the Company’s key performance
indicators:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Key Performance Indicators |
|
Q1 2023 |
|
|
Q1 2022 |
|
|
|
Change |
|
Gross Written Premium (in millions) |
|
$ |
115.0 |
|
|
|
$ |
102.5 |
|
|
|
|
12 |
|
% |
Premium Retention Rate |
|
|
107 |
|
% |
|
|
101 |
|
% |
|
|
|
|
Average Companies in
Quarter |
|
|
30,618 |
|
|
|
|
25,545 |
|
|
|
|
20 |
|
% |
Average Revenue per Account
per Month in Quarter |
|
$ |
951 |
|
|
|
$ |
829 |
|
|
|
|
15 |
|
% |
Monetized Services in
Quarter |
|
|
214,097 |
|
|
|
|
263,183 |
|
|
|
|
(19 |
) |
% |
Average Revenue per Monetized
Service in Quarter |
|
$ |
328 |
|
|
|
$ |
175 |
|
|
|
|
87 |
|
% |
Balance Sheet
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,2023 |
|
|
December 31,2022 |
|
|
|
Change |
|
Cash and cash equivalents |
|
$ |
179.4 |
|
|
|
$ |
215.1 |
|
|
|
|
(17 |
) |
% |
Investments |
|
|
93.1 |
|
|
|
|
91.6 |
|
|
|
|
2 |
|
% |
Cash, cash equivalents and
investments |
|
|
272.5 |
|
|
|
|
306.7 |
|
|
|
|
(11 |
) |
% |
The Company ended the first quarter 2023 with unrestricted cash
plus investments of $272 million. Of this, the insurance carrier,
Homeowners of America (“HOA”), had unrestricted cash of $72 million
and investments of $93 million.
As of March 31, 2023, convertible debt on the balance
sheet was $425 million. On April 20, 2023, the Company completed a
private offering of $333 million aggregate principal amount of
6.75% Senior Secured Convertible Notes due 2028 (the “2028 Notes”).
A portion of the net proceeds from the 2028 Notes was used to
repurchase $200 million of the 0.75% Convertible Senior Notes due
2026 (“Existing Notes”) and to fund the repayment of a $10 million
senior secured term loan of a Porch Group subsidiary, in each case
plus accrued and unpaid interest thereon and related fees and
expenses. The Company expects to use the remainder of the net
proceeds for general corporate purposes.
The 2028 Notes will be convertible into cash, shares of common
stock of the Company (“common stock”), or a combination of cash and
shares of common stock at Porch’s election at an initial conversion
rate of 39.9956 shares of common stock per $1,000 principal amount
of the 2028 Notes, which is equivalent to an initial conversion
price of approximately $25.00 per share.
Common Stock and Note Repurchases
In the first quarter of 2023, the Company repurchased
approximately 1.4 million shares for $3.1 million (including
commissions) at an average price of $2.20 per share. Total
repurchases under the existing $15 million program are 3.8 million
shares for $7.4 million (including commissions).
Ongoing, under the terms of the 2028 Notes, the Company has
annual and aggregate caps on the amount that can be spent to
repurchase common stock, including repurchase of its Existing
Notes. The Company’s executive officers and directors are not
subject to such limitations and may purchase shares of common stock
from time to time at their discretion in accordance with the
Company’s insider trading policy and federal securities laws.
Full Year 2023 Financial Outlook
Porch Group reiterates its previously provided full year 2023
guidance based on current market conditions and expectations. Porch
Group believes it is prudent to provide a range of outcomes given
the additional weather exposure particularly in the first half of
the year, where higher claims volumes have been seen historically.
Should there be catastrophic weather conditions in excess of our
historic norms, this would create downside to the lower end of the
range. Alternatively, if the Gross Loss Ratio for 2023 is better
than our assumption of 62%, or if the housing market declines less
than our assumption of 18%, results could be better than this
range.
A loss is expected in the first half of 2023 before higher risk
policies are non-renewed and before the existing insurance premium
per policy increases have taken full effect. Porch Group manages
costs carefully and reiterates guidance to expect positive Adjusted
EBITDA profitability in the second half of 2023 and beyond.
2023 guidance remains unchanged at:
|
2023E Guidance |
|
|
Revenue ~$330M to
$350M>20% YoYAssumes strong
revenue growth in Insurance and relatively flat YoY growth for
Vertical Software |
|
|
Revenue Less Cost of
Revenue ~$170M to $180M |
|
|
Adj. EBITDA1 ~$(30)M to
$(40)M |
|
|
2023 Gross Written
Premium2 ~$500M |
|
1 Adjusted EBITDA is a non-GAAP measure.2 2023 gross written
premium (“GWP”) guidance is stated as the expected full-year GWP
for 2023 and is the total premium written across Homeowners of
America, Porch Group’s insurance agency, and warranty products for
the face value of one year’s premium, before deductions for
reinsurance and ceding commissions.
Porch Group is not providing reconciliations of expected
Adjusted EBITDA (loss) for future periods to the most directly
comparable measures prepared in accordance with GAAP because the
Company is unable to provide these reconciliations without
unreasonable effort because certain information necessary to
calculate such measures on a GAAP basis is unavailable or dependent
on the timing of future events outside of the Company’s
control.
Conference Call
Porch Group management will host a conference
call today May 10, 2023 at 5:00 p.m. Eastern time (2:00 p.m.
Pacific time). The call will be accompanied by a slide presentation
available on the Investor Relations section of the Company’s
website at ir.porchgroup.com. A
question-and-answer session will follow management’s prepared
remarks.
All are invited to listen to the event by registering for the
webinar here. A replay of the webinar will also be available in the
Investor Relations section of the Porch Group’s corporate website
at ir.porchgroup.com.
About Porch Group
Porch Group, Inc. (“Porch Group,” “Porch” or the
“Company”) the vertical software platform, is a
values-driven company whose mission is
to simplify the home with insurance at the
center. Porch Group provides software and services to
approximately 30,600 home services providers including home
inspectors, mortgage brokers, title companies, and moving
companies. Porch Group simplifies the home closing process and the
move, by providing high-value services including homeowners
insurance and warranty, and ongoing support with our app which
saves consumers time and helps them make better
decisions. To achieve this, Porch Group hires and retains
great people, invests in the right opportunities, and leverages our
unique capabilities such as early and privileged access to
homebuyers and deep insights into properties. To learn more
about Porch Group, visit porchgroup.com or
porch.com.
Investor Relations Contact:Lois Perkins, Head
of Investor Relations Porch Group,
Inc. Loisperkins@porch.com
Forward-Looking Statements
Certain statements in this release may be considered
“forward-looking statements” within the meaning of the “safe
harbor” provisions of the United States Private Securities
Litigation Reform Act of 1995. Forward-looking statements generally
relate to future events or Porch Group’s future financial or
operating performance. For example, forward-looking statements
include projections of future revenue, revenue less cost of
revenue, gross written premium, Adjusted EBITDA (loss), and other
metrics, business strategy and plans, and anticipated impacts from
pending or completed acquisitions. In some cases, you can identify
forward-looking statements by terminology such as “may,” “should,”
“expect,” “intend,” “will,” “estimate,” “anticipate,” “believe,”
“predict,” “potential,” “target,” or “continue,” or the negatives
of these terms or variations of them or similar terminology. Such
forward-looking statements are subject to risks, uncertainties, and
other factors which could cause actual results to differ materially
from those expressed or implied by such forward-looking
statements.
These forward-looking statements are based upon estimates and
assumptions that, while considered reasonable by Porch and its
management at the time they are made, are inherently uncertain.
Factors that may cause actual results to differ materially from
current expectations include, but are not limited to: (1) our
expansion plans and opportunities, and managing our growth, to
build a consumer brand; (2) the incidence, frequency and severity
of weather events, extensive wildfires, and other catastrophe; (3)
economic conditions, especially those affecting the housing and
financial markets; (4) our expectations regarding our revenue, cost
of revenue, operating expenses, and our ability to achieve and
maintain future profitability; (5) existing and developing federal
and state laws and regulations, including with respect to
insurance, warranty, privacy, information security, data protection
and taxation, and our interpretation of and compliance with such
laws and regulations; (6) our reinsurance program, which includes
the use of a captive reinsurer, the success of which is dependent
on a number of factors outside our control, along with our reliance
on reinsurance to protect us against loss; (7) uncertainties
related to regulatory approval of insurance rates, policy forms,
insurance products, license applications, acquisitions of
businesses or strategic initiatives, including the reciprocal
restructuring, and other matters within the purview of insurance
regulators; (8) our reliance on strategic, proprietary
relationships to provide us with access to personal data and
product information, and our ability to use such data and
information to increase our transaction volume and attract and
retain customers; (9) our ability to develop new, or enhance
existing, products, services, and features and bring them to market
in a timely manner; (10) changes in capital requirements, and our
ability to access capital when needed to provide statutory surplus;
(11) the increased costs and initiatives required to address new
legal and regulatory requirements arising from developments related
to cybersecurity, privacy and data governance and the increased
costs and initiatives to protect against data breaches,
cyber-attacks, virus or malware attacks, or other infiltrations or
incidents affecting system integrity, availability and performance;
(12) retaining and attracting skilled and experienced employees;
(13) costs related to being a public company; and (14) other risks
and uncertainties described in the “Risk Factors” section of
Porch’s most recent Annual Report on Form 10-K for the year ended
December 31, 2022 and subsequent reports filed with the Securities
and Exchange Commission (the “SEC”), all of which are available on
the SEC’s website at www.sec.gov
Nothing in this release should be regarded as a representation
by any person that the forward-looking statements set forth herein
will be achieved or that any of the contemplated results of such
forward-looking statements will be achieved. You should not place
undue reliance on forward-looking statements, which speak only as
of the date of this release. Unless specifically indicated
otherwise, the forward-looking statements in this release do not
reflect the potential impact of any divestitures, mergers,
acquisitions, or other business combinations that have not been
completed as of the date of this release. Porch Group does not
undertake any duty to update these forward-looking statements,
whether as a result of changed circumstances, new information,
future events or otherwise, except as may be required by law.
Non-GAAP Financial Measures
This release includes one or more non-GAAP financial measures,
such as Adjusted EBITDA (loss), Adjusted EBITDA (loss) as a percent
of revenue, average revenue per monetized service and revenue less
cost of revenue.
Porch Group defines Adjusted EBITDA (loss) as net income (loss)
adjusted for interest expense, net, income taxes, other expenses,
net, depreciation and amortization, impairment loss on intangible
assets and goodwill, non-cash long-lived impairment of property,
equipment and software, stock-based compensation expense and
acquisition-related impacts, amortization of intangible assets,
gains (losses) recognized on changes in the value of contingent
consideration arrangements, if any, gain or loss on divestures and
certain transaction costs. Adjusted EBITDA (loss) as a percent of
revenue is defined as Adjusted EBITDA (loss) divided by GAAP total
revenue. Average revenue per monetized services in quarter is the
average revenue generated per monetized service performed in a
quarterly period. When calculating average revenue per monetized
service in a quarter, average revenue is defined as total quarterly
service transaction revenues generated from monetized services.
Porch Group management uses these non-GAAP financial measures as
supplemental measures of the Company’s operating and financial
performance, for internal budgeting and forecasting purposes, to
evaluate financial and strategic planning matters, and to establish
certain performance goals for incentive programs. Porch Group
believes that the use of these non-GAAP financial measures provides
investors with useful information to evaluate the Company’s
operating and financial performance and trends and in comparing
Porch Group’s financial results with competitors, other similar
companies and companies across different industries, many of which
present similar non-GAAP financial measures to investors. However,
Porch Group's definitions and methodology in calculating these
non-GAAP measures may not be comparable to those used by other
companies. In addition, the Company may modify the presentation of
these non-GAAP financial measures in the future, and any such
modification may be material.
You should not consider these non-GAAP financial measures in
isolation, as a substitute to or superior to financial performance
measures determined in accordance with GAAP. The principal
limitation of these non-GAAP financial measures is that they
exclude specified income and expenses, some of which may be
significant or material, that are required by GAAP to be recorded
in Porch Group’s consolidated financial statements. The Company may
also incur future income or expenses similar to those excluded from
these non-GAAP financial measures, and the Company’s presentation
of these measures should not be construed as an inference that
future results will be unaffected by unusual or non-recurring
items. In addition, these non-GAAP financial measures reflect the
exercise of management judgment about which income and expense are
included or excluded in determining these non-GAAP financial
measures.
You should review the tables accompanying this release for
reconciliations of these non-GAAP financial measures to the most
directly comparable GAAP financial measure. The Company is not
providing reconciliations of non-GAAP financial measures for future
periods to the most directly comparable measures prepared in
accordance with GAAP. The Company is unable to provide these
reconciliations without unreasonable effort because certain
information necessary to calculate such measures on a GAAP basis is
unavailable or dependent on the timing of future events outside of
its control.
The following table reconciles Adjusted EBITDA (loss) to
operating loss for the periods presented (dollar amounts in
thousands):
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2023 |
|
2022 |
Segment adjusted EBITDA
(loss): |
|
|
|
|
|
|
Vertical Software |
|
$ |
(396 |
) |
|
$ |
2,884 |
|
Insurance |
|
|
(7,185 |
) |
|
|
216 |
|
Corporate and Other |
|
|
(14,301 |
) |
|
|
(13,527 |
) |
Total segment adjusted EBITDA
(loss) |
|
|
(21,882 |
) |
|
|
(10,427 |
) |
Reconciling items: |
|
|
|
|
|
|
Depreciation and
amortization |
|
|
(6,015 |
) |
|
|
(6,483 |
) |
Non-cash stock-based
compensation expense |
|
|
(6,894 |
) |
|
|
(5,854 |
) |
Acquisition and other
transaction costs |
|
|
(1,112 |
) |
|
|
(895 |
) |
Impairment loss on intangible
assets and goodwill |
|
|
(2,021 |
) |
|
|
— |
|
Non-cash losses and impairment
of property, equipment and software |
|
|
— |
|
|
|
(69 |
) |
Revaluation of contingent
consideration |
|
|
154 |
|
|
|
(3,205 |
) |
Investment income and realized
gains |
|
|
(758 |
) |
|
|
(197 |
) |
Non-cash bonus expense |
|
|
— |
|
|
|
(1,526 |
) |
Operating loss |
|
$ |
(38,528 |
) |
|
$ |
(28,656 |
) |
Excluding the $15 million impact from the hardened reinsurance
market, Adjusted EBITDA loss of $21.9 million would have decreased
to a loss of approximately $7 million.
The following table presents segment adjusted EBITDA (loss) and
consolidated adjusted EBITDA (loss) as a percentage of segment and
consolidated revenue for the periods presented:
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
2022 |
|
Segment adjusted EBITDA
(loss): |
|
|
|
|
|
|
|
Vertical Software |
|
|
(1.4 |
) |
% |
|
8.4 |
|
% |
Insurance |
|
|
(12.2 |
) |
% |
|
0.7 |
|
% |
Total segment adjusted EBITDA
(loss)(1) |
|
|
(25.0 |
) |
% |
|
(16.4 |
) |
% |
|
(1) |
|
Total segment
adjusted EBITDA (loss) includes Corporate and Other segment
adjusted EBITDA (loss). |
PORCH GROUP, INC. |
Monetized Services Revenue |
(all numbers in thousands, unaudited) |
|
|
|
Three Months Ended March 31, |
|
|
2023 |
|
2022 |
Monetized services revenue |
|
$ |
70,224 |
|
$ |
46,057 |
Other operating revenue |
|
|
17,145 |
|
|
17,510 |
Total revenue |
|
$ |
87,369 |
|
$ |
63,567 |
PORCH GROUP, INC. |
Revenue Less Cost of Revenue |
(all numbers in thousands, unaudited) |
|
|
|
Three Months Ended March 31, 2023 |
|
|
|
Corporate |
|
Insurance |
|
Vertical Software |
|
Consolidated |
|
Revenue |
|
$ |
— |
|
$ |
58,742 |
|
|
$ |
28,627 |
|
|
$ |
87,369 |
|
|
Less: Cost of revenue |
|
|
— |
|
|
(44,368 |
) |
|
|
(6,907 |
) |
|
|
(51,275 |
) |
|
Revenue less cost of
revenue |
|
$ |
— |
|
$ |
14,374 |
|
|
$ |
21,720 |
|
|
$ |
36,094 |
|
|
Revenue less cost of revenue
as a percentage of revenue |
|
|
N/A |
|
|
24 |
|
% |
|
76 |
|
% |
|
41 |
|
% |
Key Performance Measures and Operating
Metrics
In the management of these businesses, the Company identifies,
measures and evaluates various operating metrics. The key
performance measures and operating metrics used in managing the
businesses are set forth below. These key performance measures and
operating metrics are not prepared in accordance with generally
accepted accounting principles in the United States (“GAAP”), and
may not be comparable to or calculated in the same way as other
similarly titled measures and metrics used by other companies.
- Average Companies in
Quarter — Porch provides software and services to
home services companies and, through these relationships, gains
unique and early access to homebuyers and homeowners, assists
homebuyers and homeowners with critical services such as insurance,
warranty and moving. The Company’s customers include home services
companies, for whom the Company provides software and services and
who provide introductions to homebuyers and homeowners and tracks
the average number of home services companies from which it
generates revenue each quarter in order to measure the ability to
attract, retain and grow relationships with home services
companies. Porch management defines the average number of companies
in a quarter as the straight-line average of the number of
companies as of the end of period compared with the beginning of
period across all of the Company’s home services verticals that (i)
generate recurring revenue and (ii) generated revenue in the
quarter. For new acquisitions, the number of companies is
determined in the initial quarter based on the percentage of the
quarter the acquired business is a part of the Company.
- Average Revenue per Account
per Month in Quarter - Management views the
Company’s ability to increase revenue generated from existing
customers as a key component of Porch’s growth strategy. Average
Revenue per Account per Month in Quarter is defined as the
average revenue per month generated across all home services
company customer accounts in a quarterly period. Average Revenue
per Account per Month in Quarter is derived from all customers
and total revenue.
The following table summarizes Average Companies in Quarter and
Average Revenue per Account per Month in Quarter for each of
the quarterly periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
2022 |
|
2022 |
|
2022 |
|
2023 |
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Q1 |
Average Companies in
Quarter |
|
|
25,545 |
|
|
28,773 |
|
|
30,951 |
|
|
30,860 |
|
|
30,618 |
Average Revenue per Account
per Month in Quarter |
|
$ |
829 |
|
$ |
822 |
|
$ |
833 |
|
$ |
693 |
|
$ |
951 |
- Monetized Services in Quarter — Porch
connects consumers with home services companies nationwide and
offers a full range of products and services where homeowners can,
among other things: (i) compare and buy home insurance
policies (along with auto, flood and umbrella policies) and
warranties with competitive rates and coverage; (ii) arrange
for a variety of services in connection with their move, from labor
to load or unload a truck to full-service, long-distance moving
services; (iii) discover and install home automation and
security systems; (iv) compare Internet and television options
for their new home; (v) book small handyman jobs at fixed,
upfront prices with guaranteed quality; and (vi) compare bids
from home improvement professionals who can complete bigger jobs.
The Company tracks the number of monetized services performed
through its platform each quarter and the revenue generated per
service performed in order to measure market penetration with
homebuyers and homeowners and the Company’s ability to deliver
high-revenue services within those groups. Monetized Services in
Quarter is defined as the total number of unique services from
which the Company generated revenue, including, but not limited to,
new and renewing insurance and warranty customers, completed moving
jobs, security installations, TV/Internet installations or other
home projects, measured over a quarterly period.
- Average Revenue per Monetized Service in
Quarter - Management believes that shifting the mix of
services delivered to homebuyers and homeowners toward higher
revenue services is an important component of Porch’s growth
strategy. Average Revenue per Monetized Services in Quarter is the
average revenue generated per monetized service performed in a
quarterly period. When calculating Average Revenue per Monetized
Service in quarter, average revenue is defined as total quarterly
service transaction revenues generated from monetized
services.
The following table summarizes Monetized Services in Quarter and
Average Revenue per Monetized Service in Quarter for each of the
quarterly periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
2022 |
|
2022 |
|
2022 |
|
2023 |
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Q1 |
Monetized Services in
Quarter |
|
|
263,183 |
|
|
333,596 |
|
|
318,452 |
|
|
212,992 |
|
|
214,097 |
Average Revenue per Monetized
Service in Quarter |
|
$ |
175 |
|
$ |
158 |
|
$ |
185 |
|
$ |
219 |
|
$ |
328 |
PORCH GROUP, INC. |
Unaudited Condensed Consolidated Balance
Sheets |
(all numbers in thousands, except share amounts) |
|
|
|
March 31, 2023 |
|
December 31, 2022 |
Assets |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
179,357 |
|
|
$ |
215,060 |
|
Accounts receivable, net |
|
|
23,600 |
|
|
|
26,438 |
|
Short-term investments |
|
|
34,441 |
|
|
|
36,523 |
|
Reinsurance balance due |
|
|
292,775 |
|
|
|
299,060 |
|
Prepaid expenses and other current assets |
|
|
30,834 |
|
|
|
20,009 |
|
Restricted cash |
|
|
14,796 |
|
|
|
13,545 |
|
Total current assets |
|
|
575,803 |
|
|
|
610,635 |
|
Property, equipment, and
software, net |
|
|
13,727 |
|
|
|
12,240 |
|
Operating lease right-of-use
assets |
|
|
4,151 |
|
|
|
4,201 |
|
Goodwill |
|
|
247,118 |
|
|
|
244,697 |
|
Long-term investments |
|
|
58,678 |
|
|
|
55,118 |
|
Intangible assets, net |
|
|
101,753 |
|
|
|
108,255 |
|
Long-term insurance
commissions receivable |
|
|
13,140 |
|
|
|
12,265 |
|
Other assets |
|
|
2,346 |
|
|
|
1,646 |
|
Total assets |
|
$ |
1,016,716 |
|
|
$ |
1,049,057 |
|
|
|
|
|
|
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Accounts payable |
|
$ |
6,200 |
|
|
$ |
6,268 |
|
Accrued expenses and other current liabilities |
|
|
38,856 |
|
|
|
39,742 |
|
Deferred revenue |
|
|
246,502 |
|
|
|
270,690 |
|
Refundable customer deposits |
|
|
20,984 |
|
|
|
20,142 |
|
Current debt |
|
|
10,392 |
|
|
|
16,455 |
|
Losses and loss adjustment expense reserves |
|
|
115,527 |
|
|
|
100,632 |
|
Other insurance liabilities, current |
|
|
78,422 |
|
|
|
61,710 |
|
Total current liabilities |
|
|
516,883 |
|
|
|
515,639 |
|
Long-term debt |
|
|
425,383 |
|
|
|
425,310 |
|
Operating lease liabilities,
non-current |
|
|
2,585 |
|
|
|
2,536 |
|
Earnout liability, at fair
value |
|
|
44 |
|
|
|
44 |
|
Private warrant liability, at
fair value |
|
|
362 |
|
|
|
707 |
|
Other liabilities (includes
$24,198 and $24,546 at fair value, respectively) |
|
|
26,183 |
|
|
|
25,468 |
|
Total liabilities |
|
|
971,440 |
|
|
|
969,704 |
|
Commitments and contingencies
(Note 12) |
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
Common stock, $0.0001 par
value: |
|
|
10 |
|
|
|
10 |
|
Authorized shares – 400,000,000 and 400,000,000,
respectively |
|
|
|
|
|
|
Issued and outstanding shares – 97,018,032 and 98,455,838,
respectively |
|
|
|
|
|
|
Additional paid-in
capital |
|
|
677,426 |
|
|
|
670,537 |
|
Accumulated other
comprehensive loss |
|
|
(5,296 |
) |
|
|
(6,171 |
) |
Accumulated deficit |
|
|
(626,864 |
) |
|
|
(585,023 |
) |
Total stockholders’ equity |
|
|
45,276 |
|
|
|
79,353 |
|
Total liabilities and stockholders’ equity |
|
$ |
1,016,716 |
|
|
$ |
1,049,057 |
|
PORCH GROUP, INC. |
Unaudited Condensed Consolidated Statements of
Operations |
(all numbers in thousands, except share amounts) |
|
|
|
Three Months Ended March 31, |
|
|
2023 |
|
2022 |
Revenue |
|
$ |
87,369 |
|
|
$ |
63,567 |
|
Operating expenses(1): |
|
|
|
|
|
|
Cost of revenue |
|
|
51,275 |
|
|
|
25,216 |
|
Selling and marketing |
|
|
32,585 |
|
|
|
26,077 |
|
Product and technology |
|
|
13,950 |
|
|
|
14,231 |
|
General and administrative |
|
|
26,066 |
|
|
|
26,699 |
|
Impairment loss on intangible assets and goodwill |
|
|
2,021 |
|
|
|
— |
|
Total operating expenses |
|
|
125,897 |
|
|
|
92,223 |
|
Operating loss |
|
|
(38,528 |
) |
|
|
(28,656 |
) |
Other income (expense): |
|
|
|
|
|
|
Interest expense |
|
|
(2,188 |
) |
|
|
(2,427 |
) |
Change in fair value of earnout liability |
|
|
— |
|
|
|
11,179 |
|
Change in fair value of private warrant liability |
|
|
345 |
|
|
|
10,189 |
|
Investment income and realized gains, net of investment
expenses |
|
|
758 |
|
|
|
197 |
|
Other income, net |
|
|
762 |
|
|
|
56 |
|
Total other income
(expense) |
|
|
(323 |
) |
|
|
19,194 |
|
Loss before income taxes |
|
|
(38,851 |
) |
|
|
(9,462 |
) |
Income tax benefit |
|
|
111 |
|
|
|
177 |
|
Net loss |
|
$ |
(38,740 |
) |
|
$ |
(9,285 |
) |
|
|
|
|
|
|
|
Loss per share - basic and diluted (Note 15) |
|
$ |
(0.41 |
) |
|
$ |
(0.10 |
) |
|
|
|
|
|
|
|
Shares used in computing basic and diluted loss per share |
|
|
95,209,819 |
|
|
|
96,074,527 |
|
|
(1) Amounts include stock-based
compensation expense, as follows: |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2023 |
|
2022 |
Cost of revenue |
|
$ |
— |
|
|
$ |
— |
|
Selling and marketing |
|
|
1,045 |
|
|
|
632 |
|
Product and technology |
|
|
1,449 |
|
|
|
1,137 |
|
General and
administrative |
|
|
4,400 |
|
|
|
4,085 |
|
|
|
$ |
6,894 |
|
|
$ |
5,854 |
|
PORCH GROUP, INC. |
Unaudited Condensed Consolidated Statements of
Comprehensive Loss |
(all numbers in thousands) |
|
|
|
Three Months Ended March 31, |
|
|
2023 |
|
2022 |
Net loss |
|
$ |
(38,740 |
) |
|
$ |
(9,285 |
) |
Other comprehensive income
(loss): |
|
|
|
|
|
|
Current period change in net unrealized loss, net of tax |
|
|
875 |
|
|
|
(2,515 |
) |
Comprehensive loss |
|
$ |
(37,865 |
) |
|
$ |
(11,800 |
) |
PORCH GROUP, INC. |
Unaudited Condensed Consolidated Statements of
Stockholders’ Equity |
(all numbers in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
Additional |
|
|
|
|
Other |
|
Total |
|
|
Common Stock |
|
Paid-in |
|
Accumulated |
|
Comprehensive |
|
Stockholders’ |
|
|
Shares |
|
Amount |
|
Capital |
|
Deficit |
|
Loss |
|
Equity |
Balances as of December 31, 2022 |
|
98,206,323 |
|
|
$ |
10 |
|
$ |
670,537 |
|
|
$ |
(585,023 |
) |
|
$ |
(6,171 |
) |
|
$ |
79,353 |
|
Net loss |
|
— |
|
|
|
— |
|
|
— |
|
|
|
(38,740 |
) |
|
|
— |
|
|
|
(38,740 |
) |
Other comprehensive income,
net of tax |
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
875 |
|
|
|
875 |
|
Stock-based compensation |
|
— |
|
|
|
— |
|
|
6,894 |
|
|
|
— |
|
|
|
— |
|
|
|
6,894 |
|
Contingent consideration for
acquisitions |
|
— |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Vesting of restricted stock
awards |
|
295,414 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Exercise of stock options |
|
4,519 |
|
|
|
— |
|
|
8 |
|
|
|
— |
|
|
|
— |
|
|
|
8 |
|
Income tax withholdings |
|
(92,066 |
) |
|
|
— |
|
|
(204 |
) |
|
|
— |
|
|
|
— |
|
|
|
(204 |
) |
Repurchases of common
stock |
|
(1,396,158 |
) |
|
|
— |
|
|
— |
|
|
|
(3,101 |
) |
|
|
— |
|
|
|
(3,101 |
) |
Proceeds from sale of common
stock |
|
— |
|
|
|
— |
|
|
191 |
|
|
|
— |
|
|
|
— |
|
|
|
191 |
|
Balances as of March
31, 2023 |
|
97,018,032 |
|
|
$ |
10 |
|
$ |
677,426 |
|
|
$ |
(626,864 |
) |
|
$ |
(5,296 |
) |
|
$ |
45,276 |
|
PORCH GROUP, INC. |
Unaudited Condensed Consolidated Statements of Cash
Flows |
(all numbers in thousands) |
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2023 |
|
2022 |
Cash flows from
operating activities: |
|
|
|
|
|
|
Net loss |
|
$ |
(38,740 |
) |
|
$ |
(9,285 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities |
|
|
|
|
|
|
Depreciation and amortization |
|
|
6,015 |
|
|
|
6,483 |
|
Amortization of operating lease right-of-use assets |
|
|
475 |
|
|
|
582 |
|
Impairment loss on intangible assets and goodwill |
|
|
2,021 |
|
|
|
— |
|
Loss on sale and impairment of property, equipment, and
software |
|
|
4 |
|
|
|
70 |
|
Gain on remeasurement of private warrant liability |
|
|
(345 |
) |
|
|
(10,189 |
) |
Loss (gain) on remeasurement of contingent consideration |
|
|
(154 |
) |
|
|
3,205 |
|
Gain on remeasurement of earnout liability |
|
|
— |
|
|
|
(11,179 |
) |
Stock-based compensation |
|
|
6,894 |
|
|
|
5,854 |
|
Amortization of investment premium/accretion of discount, net |
|
|
(280 |
) |
|
|
566 |
|
Net realized losses on investments |
|
|
67 |
|
|
|
68 |
|
Interest expense (non-cash) |
|
|
1,534 |
|
|
|
1,046 |
|
Other |
|
|
242 |
|
|
|
64 |
|
Change in operating assets and liabilities, net of acquisitions and
divestitures |
|
|
|
|
|
|
Accounts receivable |
|
|
2,619 |
|
|
|
1,312 |
|
Reinsurance balance due |
|
|
6,286 |
|
|
|
(7,920 |
) |
Prepaid expenses and other current assets |
|
|
(10,826 |
) |
|
|
(6,415 |
) |
Accounts payable |
|
|
(69 |
) |
|
|
1,051 |
|
Accrued expenses and other current liabilities |
|
|
1,390 |
|
|
|
(4,033 |
) |
Losses and loss adjustment expense reserves |
|
|
14,895 |
|
|
|
17,659 |
|
Other insurance liabilities, current |
|
|
16,712 |
|
|
|
3,025 |
|
Deferred revenue |
|
|
(24,100 |
) |
|
|
(1,945 |
) |
Refundable customer deposits |
|
|
(4,607 |
) |
|
|
(2,949 |
) |
Long-term insurance commissions receivable |
|
|
(875 |
) |
|
|
(1,540 |
) |
Operating lease liabilities, non-current |
|
|
(489 |
) |
|
|
(235 |
) |
Other |
|
|
(700 |
) |
|
|
(696 |
) |
Net cash used in operating activities |
|
|
(22,031 |
) |
|
|
(15,401 |
) |
Cash flows from
investing activities: |
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(356 |
) |
|
|
(1,167 |
) |
Capitalized internal use software development costs |
|
|
(2,427 |
) |
|
|
(1,574 |
) |
Purchases of short-term and long-term investments |
|
|
(5,410 |
) |
|
|
(8,835 |
) |
Maturities, sales of short-term and long-term investments |
|
|
5,020 |
|
|
|
8,449 |
|
Acquisitions, net of cash acquired |
|
|
(1,974 |
) |
|
|
(4,950 |
) |
Net cash used in investing activities |
|
|
(5,147 |
) |
|
|
(8,077 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
|
Proceeds from advance funding |
|
|
313 |
|
|
|
5,143 |
|
Repayments of advance funding |
|
|
(1,281 |
) |
|
|
(3,033 |
) |
Repayments of principal and related fees |
|
|
(499 |
) |
|
|
(150 |
) |
Proceeds from exercises of stock options |
|
|
8 |
|
|
|
473 |
|
Income tax withholdings paid upon vesting of restricted stock
units |
|
|
(204 |
) |
|
|
(712 |
) |
Payments of acquisition-related contingent consideration |
|
|
(194 |
) |
|
|
— |
|
Repurchase of stock |
|
|
(5,608 |
) |
|
|
— |
|
Proceeds from sale of common stock |
|
|
191 |
|
|
|
— |
|
Net cash provided by financing activities |
|
|
(7,274 |
) |
|
|
1,721 |
|
Net change in cash,
cash equivalents, and restricted cash |
|
$ |
(34,452 |
) |
|
$ |
(21,757 |
) |
Cash, cash
equivalents, and restricted cash, beginning of period |
|
$ |
228,605 |
|
|
$ |
324,792 |
|
Cash, cash
equivalents, and restricted cash end of period |
|
$ |
194,153 |
|
|
$ |
303,035 |
|
PORCH GROUP, INC. |
Unaudited Condensed Consolidated Statements of Cash Flows
(Continued) |
(all numbers in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
2023 |
|
2022 |
Supplemental
disclosures |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
1,796 |
|
|
$ |
1,587 |
|
Income tax refunds received |
|
$ |
2,380 |
|
|
$ |
— |
|
Porch (NASDAQ:PRCH)
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Porch (NASDAQ:PRCH)
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De Jun 2023 até Jun 2024