Slide 1: Love your home. Q3 2022 Earnings Presentation
Love your home. For moving and improving and everything in between. Q3 2022 Earnings Presentation November 8, 2022 Copyright 2022 Porch Group, Inc. All rights reserved 1
Slide 2: Presenters
Presenters Matt Ehrlichman Marty Heimbigner Matthew Neagle CEO, Chairman & Founder Chief Financial Officer Chief Operating Officer Adam Kornick Malcolm Conner President, Insurance Division VP and Group GM, Warranty Division Copyright 2022 Porch Group, Inc. All rights reserved 2
Slide 3: Disclaimers
DISCLAIMERS Forward-Looking Statements Certain statements in this presentation 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 futur
Slide 4: Agenda
Agenda 1. Strategy Recap 2. Q3 2022 Results & Guidance 3. Segments & KPIs 4. Deep Dive: 3Q Insurance Results 5. Deep Dive: Porch Warranty 6. Q&A Copyright 2022 Porch Group, Inc. All rights reserved 4
Slide 5: CEO Update
Q3 2022 Earnings Call CEO Update 5 Copyright 2022 Porch Group, Inc. All rights reserved
Slide 6: Strong execution in challenging macro environment
Strong execution in challenging macro environment Successes Affirming 2H23 Adjusted EBITDA profitability outlook Insurance rate increases approved in TX and SC Progressing capital efficiency of Insurance business Continued consumer app roll-out in inspection industry Board authorized $15M
Slide 7: Porch, the Vertical Software Platform for the Home
Porch, the Vertical Software Platform for the Home Vertical Software Insurance (SaaS + Transaction) (Carrier, Agency & Warranty) (1) Customer acquisition cost Copyright 2022 Porch Group, Inc. All rights reserved 7
Slide 8: Key Focus Areas for 2022
Key Focus Areas for 2022 1. Sell Vertical Software to more companies, increasing our reach in key strategic verticals 2. Embed and expand B2B2C Transactions via our privileged access to consumers 3. Enhance Consumer Experience and Conversion via app, digital, and concierge experiences 4. Profitably
Slide 9: Porch Group Welcomes Key Team Members
Porch Group Welcomes Key Team Members Shawn Tabak Nick Graham Amanda Reierson Camilla Velasquez Chief Financial Officer SVP, GM – Moving Group Independent Director Independent Director No Jerks / No Egos Care Deeply Be Ambitious Together We Win Solve Each Problem Copyright 2022 Porch Group, Inc. All
Slide 10: Q3 2022 Results & Guidance
Q3 2022 Earnings Call Q3 2022 Results & Guidance 10 Copyright 2022 Porch Group, Inc. All rights reserved
Slide 11: Third Quarter 2022 Results
Third Quarter 2022 Results Consolidated Results Vertical Software Segment $75.4M $44.5M Revenue 73% Revenue Less 11% Adj. EBITDA Cost of Revenue Margin Revenue Margin(1,2) 56% Revenue Less Insurance Segment Cost of Revenue Margin $30.9M 40% -7% -17% Revenue Revenue Less Adj. EBITDA Cost of Revenue M
Slide 12: Updating Full Year 2022E Guidance
Updating Full Year 2022E Guidance Previous 2022E Guidance Current 2022E Guidance ~$290M ~$275M ▲ Drivers: Revenue Revenue • Lower than- ~$195M expected home sales ~$175M • Worse than expected Revenue Less Cost of Revenue weather, including Revenue Less Cost of Revenue Hurricane Ian ~-10% >-$30M • Hi
Slide 13: 2022E Revenue
2022E Revenue: FY 2022E Guidance Revenue Distribution Year-over-Year Growth Consolidated Revenue ~7% ~$275M ~27% $192M 43% ~22% YoY Growth ~44% 2021 2022E Software & Services Subscriptions (~27%)(1) B2B Recurring Fees From Companies Vertical Software Insurance Move-Related Services – Excl. Insurance
Slide 14: Profitability & KPIs
Q3 2022 Earnings Call Profitability & KPIs 14 Copyright 2022 Porch Group, Inc. All rights reserved
Slide 15: Key Drivers to 2H 2023 Profitability
Key Drivers to 2H 2023 Profitability + Approved insurance price increases & lower distribution costs + Reduced exposure to volatile weather impacts + G&A expense savings (SOX, D&O, etc) + Business growth while keeping G&A and R&D largely flat Copyright 2022 Porch Group, Inc. All rights reserved 15
Slide 16: Number of Companies & Average Revenue Per Company
Number of Companies & Average Revenue Per Company Average Number of Companies in a Quarter Average Revenue Per Company Per Month (1,4) (2,3,4) 40,000 2018 2019 2020 2021 2022 30,951 30,000 $987 $812 $664 20,000 $552 20,419 $500 10,000 10,000 10,699 10,792 0 Q1 Q2 Q3 Q4 Q3'18 Q3'19 Q3'20 Q3'21 Q3'22
Slide 17: Monetized Services & Average Revenue Per Monetized Service
Monetized Services & Average Revenue Per Monetized Service Chart Title (1,4) (2,3,4) Number of Monetized Services in Quarter Average Revenue per Monetized Service 2018 2019 2020 2021 2022 $210 334k $181 318k $140 211k 198k $133 185k $97 $70 $76 $42 $0 Q1 Q2 Q3 Q4 Q3 '18 Q3 '19 Q3 '20 Q3 '21 Q3 '22 3
Slide 18: Insurance Segment: Q3 2022 Performance
Insurance Segment: Q3 2022 Performance Insurance $157M 391K (Agency in 50 states. Carrier now live in 20 states) Q3 GWP(1) Policies Warranty 88% $300 (Live in 49 states and D.C.) Customer Retention(3) Annualized Revenue Per Policy(2) Active states Approved / Signed (coming soon) Agency only (1) Gros
Slide 19: Insurance Deep Dive
Q3 2022 Earnings Call Insurance Deep Dive 19 Copyright 2022 Porch Group, Inc. All rights reserved
Slide 20: Q3 2022 Impacts to Insurance Gross Loss Ratio
Q3 2022 Impacts to Insurance Gross Loss Ratio 2022 Gross & Combined Ratios highlight 3Q’22 Gross Loss Ratio Driven By: successful underwriting performance • Atypical weather events vs same periods historically • Hurricane Ian-related impacts 2022E Combined Ratio – 13% below S&P P&C Industry Expectat
Slide 21: Porch Insurance's Proactive Approach to Profitable Growth
Porch Insurance’s Proactive Approach to Profitable Growth Effective on policy renewal or Price Increases Approved in Texas (25%) & South Carolina (35%) initiation of new policy Early tests producing learnings Porch Home Plan Insurance + warranty + home maintenance and successes Active in reins
Slide 22: Proprietary Data Used in Insurance Pricing
Proprietary Data Used in Insurance Pricing Filed & Approved Water heater location: • AL, NC, SC, SD, TX • AZ, VA, GA: Announced Q1’22 Proprietary Data Under Consideration: Residents Filings Planned Before Year End: Data Advantage: Unique information we know about the borrowers Plumbing: Type of pipi
Slide 23: Home Warranty Deep Dive
Q3 2022 Earnings Call Home Warranty Deep Dive 23 Copyright 2022 Porch Group, Inc. All rights reserved
Slide 24: Protecting Homeowners with Insurance & Warranty
Protecting Homeowners with Insurance & Warranty Insurance Routine Maintenance & Warranty Handyman Opportunities Appliances Utility Lines Sewer & Service Lines Copyright 2022 Porch Group, Inc. All rights reserved 24
Slide 25: Porch Home Plan: More than just a Warranty
Porch Home Plan: More than just a Warranty Insurance, Warranty & Routine Maintenance provide homeowners differentiated protection Porch Home Plan ✓ Home structure ✓ Home systems ✓ Routine maintenance Insurance Warranty Maintenance ✓ Home structure ✗ Home structure ✗ Home structure ✗ Home systems ✓ H
Slide 26: Porch Group Provides Access to Differentiated Demand Channels
Porch Group Provides Access to Differentiated Demand Channels Porch Proprietary Real Estate & Home Inspection Home Insurance Offering innovative 90-day warranty, annual and Emerging opportunity to provide warranty & 18-month offerings maintenance services to insurance customers Direct to Consumer Ut
Slide 27: Close & Q&A
Q3 2022 Earnings Call Close & Q&A 27 Copyright 2022 Porch Group, Inc. All rights reserved
Slide 28: Appendix
Q3 2022 Earnings Call Appendix 28 Copyright 2022 Porch Group, Inc. All rights reserved
Slide 29: Balance Sheet Well Positioned for Growth
Balance Sheet Well Positioned for Growth Balance Sheet Cash and Restricted Cash as of September 30, 2022: $276M • Well positioned to support investments: vertical software systems, insurance, buyback program, & consumer experience Plus, incremental Short & Long-Term Investments as of September 30, 2
Slide 30: Capital Structure Update
Capital Structure Update Capital Structure • Total common shares issued and outstanding as of September 30, 2022: 100.4M and 1.8M private warrants Copyright 2022 Porch Group, Inc. All rights reserved 30
Slide 31: Porch Group Investment Highlights
Porch Group Investment Highlights 1 1. Vertical software leader to key home service companies with low churn and high NPS 2 Large and ideal consumer audience provided via software companies, with low acquisition costs 2. 3 Unique, substantial, and valuable property data 3. 4 4. Large insurance opera