Porch Group, Inc. · NASDAQ:PRCH

Porch — Investor Presentation (August 2024)

46 slides from Porch's investor presentation, August 2024

Slide 2: Disclaimer
Disclaimer Forward-Looking Statements Certain statements in this presentation may be considered forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of management. Although we believe that our plans,
Slide 4: Porch: A New Kind of Homeowners Insurance Company
Porch: A New Kind of Homeowners Insurance Company How We’ll Win Vertical Software Homeowners insurance differentiators Home Services Leading SaaS products Insurance, warranty and for inspection, mortgage moving services and title companies Advantaged underwriting Best for homebuyers Whole home prote
Slide 5: Porch Investment Highlights
Porch Investment Highlights Vertical Software Unique Data Insights Strong Loss Ratios SaaS leader for inspectors, title Ability to price insurance risk Homeowners Insurance 2023: agents, and loan officers more effectively, resulting in a 69% Gross Loss Ratio provides homebuyer access higher quality
Slide 7: Whole Home Protection
Whole Home Protection Insurance Carrier Home Warranty • Write homeowners insurance policies in 22 states • Variety of products; whole-home, 90-day, service line and extended labor in 49 states and Washington, D.C. • Utilizes Porch’s unique data to assess home factors, underwrite risk, and effectivel
Slide 8: Insights Driving Insurance Pricing Model Accuracy
Insights Driving Insurance Pricing Model Accuracy More Accurate Policy Pricing Model Accuracy Improvements ● Porch has insights a majority of US homebuyers Non-Cat Weather ● Combined with claims history across many +~20% 2022 2023 categories (fire, non-cat weather, water, etc.) ● Unique data and adv
Slide 9: Expanded Home Insights With Our Unique Pricing Data
Expanded Home Insights With Our Unique Pricing Data Filed And Approved Unique Data Advantages Water heater locations: ● Approved in 13 states Unique information about the borrowers ● AZ, VA, GA, SD, SC, AL, TX, NC, IL, UT, OR, IA, MI Other insights (roof, floor, plumbing, bathrooms): ● Approved in 9
Slide 10: Top Decile 2023 Direct Combined Ratio
Top Decile 2023 Direct Combined Ratio US Top 50 Homeowners’ Insurance Carriers: 2023 Direct Combined Ratio1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Texas Top 50 Homeowners’ Insurance Carriers: 2023 D
Slide 11: Insurance Profitability Actions Drive GLR Improvement
Insurance Profitability Actions Drive GLR Improvement Q2 severe CAT Q2 severe CAT Q1’22: Material weather weather price increases implemented Q2’22: Started using unique Porch Q4’22: Started Q2’23: property data non-renewals Gross loss ratio (GLR) trend line Increased deductibles Q4’23: Further non-
Slide 12: New & Updated Reciprocal Application Filed
New & Updated Reciprocal Application Filed ● Reciprocal application filed with the Texas Potential flywheel ahead1,2: Department of Insurance ● Working closely with TDI towards approval PRCH stock this year price increases ● Porch will handle the day-to-day operations and receive fees as a percentag
Slide 14: SaaS & Transaction Based Revenue
SaaS & Transaction Based Revenue Technology company that protects the real estate transaction by providing settlement agents with software Software company helping mortgage companies and loan Software company providing a officers create a better mortgage leading software solution for and refinancing
Slide 15: Moving Services
Moving Services Makes the moving experience convenient and An online marketplace to hassle-free with a find and vet professional concierge service movers For further brands and services visit porchgroup.com/companies Copyright 2024 Porch Group, Inc. All rights reserved 15
Slide 16: Porch Group Proposition to Software Companies
Porch Group Proposition to Software Companies Best-in-Class Vertical Software Differentiated Value Prop Demand Generation Mortgage Inspection Movers More Copyright 2024 Porch Group, Inc. All rights reserved 16
Slide 18: Four Key Pillars Of Predicting & Pricing Risk
Four Key Pillars Of Predicting & Pricing Risk Personal Geographic Home Interior Home Exterior Past claims Weather Water heater Roof type and history location defects Distance to coast Porch’s Insurance score Type of piping Window quality Home Wildfire risk Factors No. household Presence of wood Foun
Slide 19: Actioning Home Factors
Actioning Home Factors Home Factors in production: • Piping Material • Foundation Repair / Replace • Foundation Type • Windows Repair / Replace 30% • Roofing Repair / Replace • Roofing Materials 65% • Presence of Swimming Pool • Water Heater Location • Presence of Water Intrusion • Window Repair / R
Slide 20: Case Studies: Monetizing Our Unique Data Products
Case Studies: Monetizing Our Unique Data Products 1) Insurance Carrier 2) Large Retailer 3) Security Company Risk Use Case Acquisition Use Case Retention Use Case ▪ Home Factors evaluated ▪ Two data products provided, ▪ MoverMatch product identifies against historic claims data homes needing repair
Slide 22: Progress Since Listing
Progress Since Listing Total Revenue ($m) Revenue less Cost Adj EBITDA (loss) ($m) of Revenue ($m) $460 ~60% 4-year CAGR $430 $276 ~40% 4-year CAGR $210 $195 $192 $168 $134 $72 $55 H2’23: H2’24: +$21m +$37m FY'20 FY'21 FY'22 FY'23 FY'24 FY'20 FY'21 FY'22 FY'23 FY'24 ($18) ($15) guidance guidance ($2
Slide 23: Q2 2024: Key Updates
Q2 2024: Key Updates ● Warranty launched Surge Protection product with early good results ● Launched Home Factors data products to third-party companies ● Filed suit against two parties regarding Vesttoo (reinsurance fraud) ● Porch recertified as a Great Place to Work Copyright 2024 Porch Group, Inc
Slide 24: Q2 2024 Financials: $8m Adj. EBITDA Improvement YOY
Q2 2024 Financials: $8m Adj. EBITDA Improvement YOY Total Revenue Revenue Less Cost of Adjusted EBITDA (loss)1 Revenue $110.8 $98.8 +12% $17.4 $19.2 ~$23m loss due to May Houston +10% CAT Event Q2'23 Q2'24 Q2'23 Q2'24 +$8m ($34.8) ($43.1) Q2'23 Q2'24 18% 17% (44)% (31)% Revenue less Cost of Revenue
Slide 25: KPIs: Q2 2024
KPIs: Q2 2024 29k ▪ Broadly in line with prior quarters (30k) Avg Number of Companies $1,253 ▪ +17% vs Q2’23, driven by lower ceding and premium per policy increases Avg Revenue ▪ Broadly consistent vs prior quarter (3)% per Company per Month 231k ▪ 5% lower than Q2’23 and 4% lower than prior quarte
Slide 26: Insurance Segment KPIs: Q2 2024
Insurance Segment KPIs: Q2 2024 Insurance Segment KPIs: $117m 232k $1,348 Gross Written Policies in Force Annualized Revenue Premium Per Policy Q2’23: $143m1 Q2’23: 358k 1 Q2’23: $517 1 Insurance Carrier (HOA) KPIs: $2,059 88% 117% Annualized Premium Premium Retention Gross Loss Ratio Per Policy Q2’
Slide 27: Attritional Loss Ratio & Gross Combined Ratio Improved YoY
Attritional Loss Ratio & Gross Combined Ratio Improved YoY Gross Loss Ratio1 Gross Combined Ratio improved 3pp YoY improved 56pp YoY 180% 120% 117% 124% 85% Catastrophic Weather 96% Loss Ratio 35% Attritional Loss Ratio2 21% Q2'23 Q2'24 Q2'23 Q2'24 (1) Current accident year gross loss ratio. (2) Att
Slide 28: Underwriting & Pricing Update
Underwriting & Pricing Update Product: leverage unique data to 1 evaluate risk Earned Premium Per Policy ($) +28% YoY 2,059 1,861 1,948 1,762 Price: implement rate and deductible 2 1,603 1,468 increases to drive profitability Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 H2 2025 2024 Portfolio: non-renew high
Slide 29: Resilient SaaS Revenues
Resilient SaaS Revenues 2.9 2.4 Software and Service Subscription Revenue Industry Home Sales Volumes1 ($m) 1.9 $20 1.5m $18 $18 $18 $17 $18 $17 $17 1.4m $17 1.4 $16 1.2m 1.2m 1.1m 1.1m 1.0m 0.9m 0.9m 0.8m 0.9 0.4 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Q2'24 Q1'22 Q2'22 Q3'22 Q4'22 Q1
Slide 30: First Half 2024: Adj EBITDA +$13m Over Prior Year
First Half 2024: Adj EBITDA +$13m Over Prior Year Total Revenue Adj EBITDA (loss) $226 $186 $60 +22% Vertical Software $63 $166 Insurance $123 Insurance +$8m H1'23 H1'24 All numbers are $million unless otherwise stated. Copyright 2024 Porch Group, Inc. All rights reserved 30
Slide 31: Balance Sheet as of June 30, 2024
Balance Sheet as of June 30, 2024 Cash, cash equivalents and investments Total Porch Group $410 $(26)m Q2’24 Operating Cash Flow Porch $117 H1’24: $(18)m Homeowners of America1 $293 $(29)m Q2’24 Free Cash Flow H1’24: $(23)m June 30, 2024 ▪ Additional $11m restricted cash and cash equivalents held in
Slide 32: 2024 Adjusted EBITDA Guidance Update
2024 Adjusted EBITDA Guidance Update $30 $8 $(23) $(15) $(30) All numbers are $million unless otherwise stated. Copyright 2024 Porch Group, Inc. All rights reserved 32
Slide 33: 2024 Guidance
2024 Guidance $450m-$470m ● Unchanged: 2024 Revenue growth of 5% to 9% Revenue (Unchanged) $190m-$200m ● Assumes 69% GLR: 5-year weighted average adjusted for H1’24 Revenue less Cost of Revenue and Hurricane Beryl in July (Previously: $230m-$240m) $(20)m-$(10)m Adj EBITDA ● Lower with May Houston Wi
Slide 35: Proven Team Built A Culture-Driven Business
Proven Team Built A Culture-Driven Business Matt Ehrlichman Matthew Neagle Shawn Tabak CEO, Chairman, & Founder Chief Operating Officer Chief Financial Officer Nicole Pelley Efram Ware Matt Cullen Malcolm Conner Nick Graham Joshua Steffan Janet Zimmerman SVP of Product President and GM, General Coun
Slide 36: Strategic Pillars
Strategic Pillars Execute Insurance Strategy (including launching Reciprocal Exchange) Grow SaaS Businesses and Aggregate More Unique Data Organizational Efficiency and Cost Control Copyright 2024 Porch Group, Inc. All rights reserved 36
Slide 38: Our Highest Priority ESG Areas
Our Highest Priority ESG Areas Diversity, Equity, & Inclusion Risk Management & Climate Recruiting diverse talent, providing Mitigating the key risks and uncertainties equitable outcomes and opportunities that can affect the long-term for our employees, and ensuring inclusive sustainability of our b
Slide 39: Financial Highlights – FY 2023
Financial Highlights – FY 2023 1 Total Revenue ($m) Revenue less Cost Adj EBITDA (loss) ($m) Gross Written of Revenue ($m) Premium ($m) $430.3 125.1 $536 $525 (2)% $275.9 +56% $210.1 154.9 $168.4 305.2 +25% ($49.6) ($44.5) 121.0 FY'22 FY'23 FY'22 FY'23 FY'22 FY'23 FY'22 FY'23 61% 49% (18)% (10)% Ins
Slide 40: Financial Highlights: Q2 2024
Financial Highlights: Q2 2024 1 Total Revenue Revenue less Cost Adj EBITDA (loss) Gross Written of Revenue Premium $143 $110.8 $117 $98.8 18% 17% (44)% (31)% (19)% +12% Revenue less Cost of Revenue Adjusted EBITDA margin as a percentage of Revenue $17.4 +10% $19.2 Q2'23 Q2'24 Q2'23 Q2'24 Q2'23 Q2'24
Slide 41: Rynoh Focused On Profitability Despite Market Decline
Rynoh Focused On Profitability Despite Market Decline Industry1 and Rynoh Transaction Volumes Rynoh Price Per Transaction 15.2 ~$13 Industry volumes ~12.2 down 62% 7.6 $6.28 5.8 ~5.8 $4.87 ~4.9 4.3 $3.68 2.9 $2.47 2.2 ~2.2 2 2 2021 2022 2023 2024 Mid-term 2 2021 2022 2023 2024 Mid-term 2 Q1’22: Q3’2
Slide 42: Rynoh: Returning Volumes & Price Increases Drive Profit
Rynoh: Returning Volumes & Price Increases Drive Profit Profitability Expected To Expand ~6x By 2028 Revenue Adjusted EBITDA ~$60 +41% CAGR ~$35 ~$14 $10.7 1 ~$8 $5.6 2023 Delivered 2024 Target 2028 Target Adjusted EBITDA Margin 52% ~60% ~60% (1) 2023 net income of $3.0m, adjusted for interest expen
Slide 43: Warranty Business: Financial Highlights
Warranty Business: Financial Highlights Revenue Expected to Double in Mid-Term with Increased Volumes Through Multiple Channels Revenue Adjusted EBITDA ~$100 +22% CAGR ~$46 $36.6 ~$40 ‘23 included certain remaining acquisition costs ~$16 $7.3 1 2023 Delivered 2024 Target 2028 Target Adjusted EBITDA
Slide 44: Operating Cash Flow
Operating Cash Flow Reconciliation to Adj EBITDA Q2 2023 Q2 2024 Operating Cash Flow $13.3m $(26.0)m Working capital and other $(56.9)m $(12.3)m Cash interest expense $0.5m $3.5m Adjusted EBITDA $(43.1)m $(34.8)m Reconciliation to Free Cash Flow Q2 2023 Q2 2024 Operating Cash Flow $13.3m $(26.0)m Ca
Slide 45: Glossary
Glossary Term Definition We define Annualized Premium Per Policy as the total direct earned premium for Homeowners of America (“HOA”) , our insurance carrier, divided by the number of active insurance Annualized Premium Per Policy policies at the end of the period, multiplied by four. Annualized Rev

Porch Group — Investor Presentation (August 2024) on 6ix

Porch — Investor Presentation (August 2024)

Slide 1: About Us Presentation Porch Group

Slide 2: Disclaimer

Slide 3: Introduction to Porch Group

Slide 4: Porch: A New Kind of Homeowners Insurance Company

Slide 5: Porch Investment Highlights

Slide 6: Insurance Segment

Slide 7: Whole Home Protection

Slide 8: Insights Driving Insurance Pricing Model Accuracy

Slide 9: Expanded Home Insights With Our Unique Pricing Data

Slide 10: Top Decile 2023 Direct Combined Ratio

Slide 11: Insurance Profitability Actions Drive GLR Improvement

Slide 12: New & Updated Reciprocal Application Filed

Slide 13: Vertical Software Segment

Slide 14: SaaS & Transaction Based Revenue

Slide 15: Moving Services

Slide 16: Porch Group Proposition to Software Companies

Slide 17: Home Factors

Slide 18: Four Key Pillars Of Predicting & Pricing Risk

Slide 19: Actioning Home Factors

Slide 20: Case Studies: Monetizing Our Unique Data Products

Slide 21: Financial Highlights

Slide 22: Progress Since Listing

Slide 23: Q2 2024: Key Updates

Slide 24: Q2 2024 Financials: $8m Adj. EBITDA Improvement YOY

Slide 25: KPIs: Q2 2024

Slide 26: Insurance Segment KPIs: Q2 2024

Slide 27: Attritional Loss Ratio & Gross Combined Ratio Improved YoY

Slide 28: Underwriting & Pricing Update

Slide 29: Resilient SaaS Revenues

Slide 30: First Half 2024: Adj EBITDA +$13m Over Prior Year

Slide 31: Balance Sheet as of June 30, 2024

Slide 32: 2024 Adjusted EBITDA Guidance Update

Slide 33: 2024 Guidance

Slide 34: Appendix

Slide 35: Proven Team Built A Culture-Driven Business

Slide 36: Strategic Pillars

Slide 37: Our Vision For The Consumer

Slide 38: Our Highest Priority ESG Areas

Slide 39: Financial Highlights – FY 2023

Slide 40: Financial Highlights: Q2 2024

Slide 41: Rynoh Focused On Profitability Despite Market Decline

Slide 42: Rynoh: Returning Volumes & Price Increases Drive Profit

Slide 43: Warranty Business: Financial Highlights

Slide 44: Operating Cash Flow

Slide 45: Glossary

Slide 46: Email: IR@porch.com Website: IR.porchgroup.com