Porch Group, Inc. · NASDAQ:PRCH

Porch — Q2 2023 Earnings Presentation

27 slides from Porch's earnings presentation, Aug 8, 2023

  1. Slide 1: Q2 2023 Earnings Presentation

    Q2 2023 Earnings Presentation August 8, 2023 Love your home. For moving and improving and everything in between. Copyright 2023 Porch Group, Inc. All rights reserved

  2. Slide 2: Presenters

    Presenters Matt Ehrlichman Shawn Tabak CEO, Chairman & Founder Chief Financial Officer Malcolm Conner Matthew Neagle VP and Group GM, Chief Operating Officer Home Services and Warranty Copyright 2023 Porch Group, Inc. All rights reserved 2

  3. Slide 3: Disclaimers

    Disclaimers 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. Although the Company believes that its plans, intentions,

  4. Slide 4: Agenda

    Agenda 1. CEO Update 2. Q2 2023 Results and FY 2023 Guidance 3. KPIs 4. Deep Dive: Warranty 5. Closing Remarks 6. Q&A Copyright 2023 Porch Group, Inc. All rights reserved 4

  5. Slide 5: CEO Update

    Q2 2023 Earnings Call CEO Update Matt Ehrlichman CEO, Chairman & Founder Copyright 2023 Porch Group, Inc. All rights reserved 5

  6. Slide 6: Q2 2023 Financials: Solid Execution

    Q2 2023 Financials: Solid Execution Q2’23 Total Revenue ($m) Q2’23 Adjusted EBITDA (loss)1 ($m) $98.8 $70.9 +39% Q2'22 Q2'23 Q2’23 typically most ($15.0) expensive for claims, ~$18m loss due to extreme cat weather in Q2’23 Q2'22 Q2'23 ($43.1) ▪ $99m Revenue, +39% year-over-year, driven by the Insura

  7. Slide 7: Q2 2023 Key Updates

    Q2 2023 Key Updates 1. Reciprocal application continues to progress with the TDI 2. Maintain focus on improving underwriting performance 3. Unique data approved to use in insurance pricing in 11 states 4. Providing demand to independent insurance agencies where we share commissions 5. Warranty conti

  8. Slide 8: Q2'23 Results and FY'23 Guidance

    Q2 2023 Earnings Call Q2’23 Results and FY’23 Guidance Shawn Tabak Chief Financial Officer Copyright 2023 Porch Group, Inc. All rights reserved 8

  9. Slide 9: Financial Highlights – Q2 2023

    Financial Highlights – Q2 2023 1 Total Revenue ($m) Revenue less Cost Adj EBITDA (loss) Gross Written of Revenue ($m) ($m) Premium ($m) Q2'22 Q2'23 $145 $143 $98.8 $70.9 +39% $41.7 (58)% $17.4 Q2'22 Q2'23 Q2'22 Q2'23 Q2'22 Q2'23 ($15.0) 59% 18% Revenue less Cost of Revenue Margin ($43.1) ▪ +39% reve

  10. Slide 10: Revenue by Segment – Q2 2023

    Revenue by Segment – Q2 2023 Total Revenue ($m) Insurance Segment ($m) Vertical Software Segment ($m) $98.8 $70.9 $64.3 $42.5 +39% $34.4 (19)% $28.4 +127% Q2'22 Q2'23 Q2'22 Q2'23 Q2'22 Q2'23 40% 65% 60% 35% % Total Revenue % Total Revenue ▪ Insurance Segment was ▪ Driven by insurance carrier ▪ Movin

  11. Slide 11: Adjusted EBITDA by Segment – Q2 2023

    Adjusted EBITDA by Segment – Q2 2023 1 Total Adjusted Insurance Segment Vertical Software Corporate EBITDA (loss) ($m) ($m) Segment ($m) Expenses ($m) $5.7 Q2'22 Q2'23 Q2'22 Q2'23 $1.8 Q2'22 Q2'23 Q2'22 Q2'23 ($5.6) ($15.0) ($15.0) ($13.8) ($31.2) 21% 14% ($43.1) Corporate expenses as % of total rev

  12. Slide 12: Balance Sheet as of June 30, 2023

    Balance Sheet as of June 30, 2023 $358 million unrestricted cash and investments as of June 30, 2023 ● Includes an additional $102 million cash from the $333 million debt transaction which occurred in Q2’23 ● Includes $192 million HOA cash and investments ● In addition, $39 million restricted cash h

  13. Slide 13: Updating 2023 Guidance

    Updating 2023 Guidance 2023: >20% Revenue Growth H2 2023: Adjusted EBITDA Positive $330m - $350m Reiterating with solid performance across several businesses, including price increases in insurance and software verticals Revenue Unchanged $145m - $160m This assumes cat weather is in line with histor

  14. Slide 14: KPIs

    Q2 2023 Earnings Call KPIs Matthew Neagle Chief Operating Officer 14 Copyright 2023 Porch Group, Inc. All rights reserved

  15. Slide 15: KPIs – Q2 2023

    KPIs – Q2 2023 30.7k ▪ Broadly similar to Q1’23 and +7% increase from Q2’22 Avg Number of Companies $1,073 ▪ An increase of +13% from Q1’23 and +31% from Q2’22 Avg Revenue ▪ Driven by the increase in Insurance revenue per Company per Month 245k ▪ An increase of +14% vs Q1‘23 due to seasonality in th

  16. Slide 16: Insurance Segment: Q2 2023 Performance

    Insurance Segment: Q2 2023 Performance $143m 358k Insurance (Licensed Q2’23 GWP Policies In Force agency in 50 states. Q2’22: $145m Q2’22: 379k Carrier live in 22 states) 104% $517 Premium Retention Annualized Revenue Per Policy Q2’22: 102% Q2’22: $286 Warranty (Live in 49 states and D.C.) 120% 120%

  17. Slide 17: H2'23 41% Gross Loss Ratio Assumption

    H2’23 41% Gross Loss Ratio Assumption Average claims cost per policy: $377 $228 +66% H2’23 assumption H2 5-year average1 ● H2’23 $377 average claims cost per policy, increasing 66% vs the H2 5-year average ● Expect to implement further premium increases to offset impacts of higher average claims cos

  18. Slide 18: 2023 Strategic Priorities

    2023 Strategic Priorities 1. Sell more software and access higher percentage of homebuyers 2. Extend online experiences and increase revenue per homebuyer 3. Improve premium per policy in our insurance and warranty offerings 4. Launch Reciprocal and move to lower risk, higher margin business Copyrig

  19. Slide 19: Deep Dive: Warranty

    Q2 2023 Earnings Call Deep Dive: Warranty Malcolm Conner VP and Group GM, Home Services Copyright 2023 Porch Group, Inc. All rights reserved 19

  20. Slide 20: How We Differ

    How We Differ 1 HANDYMAN OFFERING Leads to improvement in retention rates 2 DIVERSE CHANNEL ACCESS Provides lower customer acquisition costs and increases LTV 3 90-DAY PRODUCT High volume of leads at low customer acquisition costs Copyright 2023 Porch Group, Inc. All rights reserved 20

  21. Slide 21: Porch Provides Access to Differentiated Demand Channels

    Porch Provides Access to Differentiated Demand Channels Real Estate & Home Inspection Direct-To-Consumer Offering innovative 90-day warranty, Provide home warranty directly to annual and 18-month offerings consumers PARTNERSHIPS Retail and Distributor Partnerships Home Insurance Provide extended lab

  22. Slide 22: Closing Remarks

    Q2 2023 Earnings Call Closing Remarks Matt Ehrlichman CEO, Chairman & Founder 22 Copyright 2023 Porch Group, Inc. All rights reserved

  23. Slide 23: Closing Remarks

    Closing Remarks 1. On track to deliver H2’2023 Adjusted EBITDA profitability 2. Continue to think Reciprocal is an ideal structure to scale insurance 3. Strong business model and team to deliver Copyright 2023 Porch Group, Inc. All rights reserved 23

  24. Slide 24: Q&A

    Q2 2023 Earnings Call Q&A 24 Copyright 2023 Porch Group, Inc. All rights reserved

  25. Slide 25: Appendix

    Q2 2023 Earnings Call Appendix 25 Copyright 2023 Porch Group, Inc. All rights reserved

  26. Slide 26: Glossary

    Glossary Term Definition Annualized Revenue Per Policy We define Annualized Revenue per Policy as quarterly revenue for the Insurance segment, divided by the number of Policies in Force in the Insurance segment, multiplied by four. We define Average Companies in Quarter as the straight-line average

  27. Slide 27: Investor Relations Contact

    Email: IR@porch.com Website: IR.porchgroup.com Copyright 2023 Porch Group, Inc. All rights reserved 27

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