Porch Group, Inc. · NASDAQ:PRCH

Porch — Q1 2023 Earnings Presentation

42 slides from Porch's earnings presentation, May 10, 2023

Slide 1: Q1 2023 Earnings Presentation
Q1 2023 Earnings Presentation May 10, 2023 Love your home. For moving and improving and everything in between. Copyright 2023 Porch Group, Inc. All rights reserved
Slide 2: Presenters
Presenters Matt Ehrlichman Shawn Tabak Matthew Neagle Nicole Pelley CEO, Chairman & Founder Chief Financial Officer Chief Operating Officer SVP, Product & Technology Copyright 2023 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 6: Q1 2023 Financials: In-line With Expectations
Q1 2023 Financials: In-line With Expectations Q1’23 Total Revenue ($m) Q1’23 Adjusted EBITDA (loss)1 ($m) $87.4 Q1'22 Q1'23 $63.6 +37% ($10.4) Approximately $15m due to hardened reinsurance market ($21.9) Q1'22 Q1'23 ▪ Solid financial performance continued in Q1’23, with YoY revenue growth +37% ▪ Q1
Slide 7: HOA Outperforms Majority of Peers
HOA Outperforms Majority of Peers Delivering third highest growth and third highest performing combined ratio in 2022 2022 Gross Written Premium1 Growth 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 2022 G
Slide 8: Q1 2023 Key Updates
Q1 2023 Key Updates 1. Insurance strategic initiatives are on track ○ Reciprocal exchange application filed with TDI in March; anticipated for H2 ○ Reinsurance ceding moved to 50% in January ○ Non-renewal of 37,000 higher risk policies in process 2. Porch Warranty officially launched 3. Software bus
Slide 9: Filed Application to form a Reciprocal Exchange with TDI
Filed Application to form a Reciprocal Exchange with TDI ● If approved, Porch Insurance Reciprocal Exchange would be owned by policy- holder members who: ○ Benefit from new Porch value propositions ○ Can participate in future dividends ● HOA insurance carrier and its capital would transfer to the Re
Slide 11: Financial Highlights – Q1 2023
Financial Highlights – Q1 2023 1 Total Revenue ($m) Revenue less Cost Adj EBITDA (loss) Gross Written of Revenue ($m) ($m) Premium ($m) $115 $87.4 $102 +12% $63.6 +37% $38.4 $36.1 +(6)% Q1'22 Q1'23 Q1'22 Q1'23 Q1'22 Q1'23 ($10.4) Q1'22 Q1'23 60% 41% ($21.9) Revenue less Cost of Revenue Margin ▪ +37%
Slide 12: Revenue by Segment – Q1 2023
Revenue by Segment – Q1 2023 Total Revenue ($m) Insurance Segment ($m) Vertical Software Segment ($m) $87.4 $63.6 +37% $58.7 $34.4 $28.6 (17)% $29.2 +101% Q1'22 Q1'23 Q1'22 Q1'23 Q1'22 Q1'23 46% 67% 54% 33% % Total Revenue % Total Revenue ▪ Insurance was 67% of ▪ Strong growth in ▪ Moving services i
Slide 13: Adjusted EBITDA by Segment – Q1 2023
Adjusted EBITDA by Segment – Q1 2023 1 Total Adjusted Insurance Segment Vertical Software Corporate EBITDA (loss) ($m) ($m) Segment ($m) Expenses ($m) $2.9 Q1'22 Q1'23 $0.2 Q1'22 Q1'23 ($0.4) Q1'22 Q1'23 ($10.4) ($7.2) Q1'22 Q1'23 ($13.5) ($14.3) ($21.9) 21% 16% Corporate expenses as % of total reve
Slide 14: Reiterating 2023 Guidance
Reiterating 2023 Guidance 2023: >20% Revenue Growth H2 2023: Adjusted EBITDA Positive $330m - $350m >+20% growth YoY with strong growth in Insurance. Relatively flat growth in Vertical Software, assumes home sales 18% decline Revenue $170m - $180m Range due to uncertain weather. Assumes 62% gross lo
Slide 15: Balance Sheet as of March 31, 2023
Balance Sheet as of March 31, 2023 $272 million cash and investments as of March 31, 2023 ● Includes $165 million HOA cash and investments ● Excludes $15 million restricted cash held for warranty and captive businesses ● ~$43m expected to move to restricted cash in future quarters Further shares rep
Slide 16: Issued New $333m Senior Secured Convertible Notes
Issued New $333m Senior Secured Convertible Notes Reduced medium-term debt maturity Sources and Uses ● From $425m to $225m New secured notes $333m Repayment of existing notes $(200)m Boosts balance sheet with +$102m cash Repay HOA loan $(10)m ● Replaces cash that will move with HOA carrier to Recipr
Slide 18: KPIs - Q1 2023
KPIs - Q1 2023 30.6k ▪ Broadly similar to Q4’22 and +20% increase from Q1’22 Avg Number of Companies $951 ▪ An increase of +15% from Q1’22 Avg Revenue ▪ Driven by higher premium per policy, change in reinsurance ceding and rapid per Company per Month growth in warranty 214K ▪ Small increase from Q4’
Slide 19: Insurance Segment: Q1 2023 Performance
Insurance Segment: Q1 2023 Performance $115m 376k Insurance (Licensed Q1’23 GWP Policies In Force agency in 50 states. Q1’22: $102m Q1’22: 338k Carrier now live in 22 states) 107% $612 Premium Retention Annualized Revenue Per Policy Q1’22: 100% Q1’22: $330 Warranty (Live in 49 states and D.C.) 79% 7
Slide 20: 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
Slide 22: Insights Driving Insurance Pricing Model Accuracy
Insights Driving Insurance Pricing Model Accuracy More Accurate Policy Pricing Model Accuracy Improvements ● Porch has insights into ~90% of US homebuyers Non-Cat Weather ● Combined with claims history across many categories (fire, non-cat weather, water, etc.) +~20% ● Unique data and advanced prici
Slide 23: 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 9 states Unique information about the borrowers ● AZ, VA, GA, SD, CO, SC, AL, TX, NC Other insights (roof, floor, plumbing, bathrooms): ● Approved in 3 states Make, mod
Slide 24: B2B Software Developments
B2B Software Developments 1. Mortgage: Created a ‘bundled’ Floify POS+LOS package for mortgage brokers and launched two new products Copyright 2023 Porch Group, Inc. All rights reserved 24
Slide 25: B2B Software Developments
B2B Software Developments 1. Mortgage: Created a ‘bundled’ Floify POS+LOS package for mortgage brokers and launched two new products 2. Inspection: Launched a new version of our Inspection Report Writer software which serves as an all-in-one solution for inspection companies Copyright 2023 Porch Gro
Slide 26: B2B Software Developments
B2B Software Developments 1. Mortgage: Created a ‘bundled’ Floify POS+LOS package for mortgage brokers and launched two new products 2. Inspection: Launched a new version of our Inspection Report software which serves as an all-in-one solution for inspection companies 3. Title: Rolled out price incr
Slide 27: Enhancing The Consumer Experience
Enhancing The Consumer Experience 1. Consumer App: Launched to nearly all eligible ISN inspection companies, with Recall Check monitoring a key feature for consumers Copyright 2023 Porch Group, Inc. All rights reserved 27
Slide 28: Enhancing The Consumer Experience
Enhancing The Consumer Experience 1. Consumer App: Launched to nearly all eligible ISN inspection companies, with Recall Check monitoring a key feature for consumers 2. Moving: Launched ‘Plus’, a higher margin, fixed price, premium moving offering for consumers to simplify the move Copyright 2023 Po
Slide 29: Enhancing The Consumer Experience
Enhancing The Consumer Experience 1. Consumer App: Launched to nearly all eligible ISN inspection companies, with Recall Check monitoring a key feature for consumers 2. Moving: Launched ‘Plus’, a higher margin, fixed price, premium moving offering for consumers to simplify the move 3. Inspection: IS
Slide 30: Enhancing The Consumer Experience
Enhancing The Consumer Experience 1. Consumer App: Launched to nearly all eligible ISN inspection companies, with Recall Check monitoring a key feature for consumers 2. Moving: Launched ‘Plus’, a higher margin, fixed price, premium moving offering for consumers to simplify the move 3. Inspection: IS
Slide 32: Closing Remarks
Closing Remarks 1. Remain confident in the business, strategy and outlook 2. Expect to continue to face macro headwinds this year 3. Laser focused on execution 4. Excited for the second half of 2023, with key milestones ahead Copyright 2023 Porch Group, Inc. All rights reserved 32
Slide 35: Premium Retention Historic Trend
Premium Retention Historic Trend 107% 107% 105% 102% 100% Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 107% Premium Retention in Q1 2023 Copyright 2023 Porch Group, Inc. All rights reserved 35
Slide 36: Path to Adj EBITDA Positive in H2 2023
Path to Adj EBITDA Positive in H2 2023 Underwriting actions, pricing, and cost management driving profitability improvement Adjusted EBITDA Bridge ($m) $10+ Positive 1 (1) Improvement from focus on improving underwriting performance, in addition to less CAT weather expected. See Q1 2023 earnings rel
Slide 37: What is a Reciprocal?
What is a Reciprocal1? A reciprocal insurer is an insurance association owned by its policyholder-members Porch Group Reciprocal Owned by Policyholders / Members Policyholders / Members Insurance Premiums & Claims & Surplus Payments Coupon-bearing Note Porch Insurance Software Segment Insurance Segm
Slide 38: 2023 Insurance Actions
2023 Insurance Actions Seeking Texas Department of Formation of a Reciprocal on Porch’s proposed terms is a key 1 Insurance approval for new part of the strategy to reduce exposure to earnings volatility Reciprocal Exchange1 by mitigating direct exposure to claims and weather events Moving to be les
Slide 39: 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 40,000 2018 2019 2020 2021 2022 2023 30,618 30,000 25,545 20,000 13,995 10,903 10,000 10,199 10,000 0 Q1'18 Q1'19 Q1'20 Q1'21 Q1'22 Q1'23 Q1 Q2 Q3 Q4 30,618 companies in Q
Slide 40: Monetized Services & Average Revenue Per Monetized Service
Monetized Services & Average Revenue Per Monetized Service Number of Monetized Services in Quarter Average Revenue per Monetized Service 2018 2019 2020 2021 2022 2023 $328 $175 $93 $88 $42 $43 Q1 Q2 Q3 Q4 Q1'18 Q1'19 Q1'20 Q1'21 Q1'22 Q1'23 214k monetized services in Q1 2023 $328 revenue per monetiz
Slide 41: Glossary
Glossary Term Definition Annualized Revenue Per Policy Includes quarterly revenue for the segment divided by the number of policies in the segment multiplied by four. 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

Porch Group — Q1 2023 Earnings Presentation on 6ix

Porch — Q1 2023 Earnings Presentation

Slide 1: Q1 2023 Earnings Presentation

Slide 2: Presenters

Slide 3: Disclaimers

Slide 4: Agenda

Slide 5: CEO Update

Slide 6: Q1 2023 Financials: In-line With Expectations

Slide 7: HOA Outperforms Majority of Peers

Slide 8: Q1 2023 Key Updates

Slide 9: Filed Application to form a Reciprocal Exchange with TDI

Slide 10: Q1'23 Results and FY'23 Guidance

Slide 11: Financial Highlights – Q1 2023

Slide 12: Revenue by Segment – Q1 2023

Slide 13: Adjusted EBITDA by Segment – Q1 2023

Slide 14: Reiterating 2023 Guidance

Slide 15: Balance Sheet as of March 31, 2023

Slide 16: Issued New $333m Senior Secured Convertible Notes

Slide 17: KPIs

Slide 18: KPIs - Q1 2023

Slide 19: Insurance Segment: Q1 2023 Performance

Slide 20: 2023 Strategic Priorities

Slide 21: Key Product Updates

Slide 22: Insights Driving Insurance Pricing Model Accuracy

Slide 23: Expanded Home Insights With Our Unique Pricing Data

Slide 24: B2B Software Developments

Slide 25: B2B Software Developments

Slide 26: B2B Software Developments

Slide 27: Enhancing The Consumer Experience

Slide 28: Enhancing The Consumer Experience

Slide 29: Enhancing The Consumer Experience

Slide 30: Enhancing The Consumer Experience

Slide 31: Closing Remarks

Slide 32: Closing Remarks

Slide 33: Q&A

Slide 34: Appendix

Slide 35: Premium Retention Historic Trend

Slide 36: Path to Adj EBITDA Positive in H2 2023

Slide 37: What is a Reciprocal?

Slide 38: 2023 Insurance Actions

Slide 39: Number of Companies & Average Revenue Per Company

Slide 40: Monetized Services & Average Revenue Per Monetized Service

Slide 41: Glossary

Slide 42: Email: IR@porch.com Website: IR.porchgroup.com