Porch Group, Inc. · NASDAQ:PRCH
Porch — Q3 2023 Earnings Presentation
23 slides from Porch's earnings presentation, Nov 7, 2023
Slide 1: Q3 2023 Earnings Presentation
Q3 2023 Earnings Presentation November 7, 2023 Copyright 2023 Porch Group, Inc. All rights reserved
Slide 2: Presenters
Presenters Matt Ehrlichman Shawn Tabak Matthew Neagle CEO, Chairman & Founder Chief Financial Officer Chief Operating Officer Copyright 2023 Porch Group, Inc. All rights reserved 2
Slide 3: Disclaimer
Disclaimer 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. Although the Company believes that its plans, intenti
Slide 4: Agenda
Agenda 1. CEO Update 2. Q3’23 Results & FY’23 Guidance 3. KPIs 4. Closing Remarks 5. Q&A Copyright 2023 Porch Group, Inc. All rights reserved
Slide 5: CEO Update
CEO Update Matt Ehrlichman CEO, Chairman & Founder Copyright 2023 Porch Group, Inc. All rights reserved
Slide 6: Q3 2023 Financials: Delivering Positive Adjusted EBITDA
Q3 2023 Financials: Delivering Positive Adjusted EBITDA Total Revenue ($m) Revenue Less Cost of Adjusted EBITDA (loss)1 Revenue ($m) ($m) $129.6 +67% $77.4 $76.6 $8.8 $44.4 +72% ($10.9) Q3'22 Q3'23 Q3'22 Q3'23 Q3'22 Q3'23 57% 59% (14)% 7% Revenue less Cost of Revenue Margin Adjusted EBITDA margin ▪
Slide 7: Q3 2023 Key Updates
Q3 2023 Key Updates ● HOA released from TDI supervision ● Insurance business performing very well with sustainable differentiation ● Sharing demand with 3rd party agencies continues to perform ● Software businesses launching new products to drive margin despite headwinds Copyright 2023 Porch Group,
Slide 8: Q3'23 Results & FY'23 Guidance
Q3’23 Results & FY’23 Guidance Shawn Tabak Chief Financial Officer Copyright 2023 Porch Group, Inc. All rights reserved
Slide 9: Financial Highlights – Q3 2023
Financial Highlights – Q3 2023 1 Total Revenue ($m) Revenue less Cost Adj EBITDA (loss) Gross Written $129.6 of Revenue ($m) ($m) Premium ($m) $157 $154 (2)% +67% $77.4 $76.6 $44.4 +72% $8.8 Q3'22 Q3'23 Q3'22 Q3'23 Q3'22 Q3'23 ($10.9) Q3'22 Q3'23 57% 59% (14)% 7% Revenue less Cost of Revenue Margin
Slide 10: Revenue by Segment – Q3 2023
Revenue by Segment – Q3 2023 Total Revenue ($m) Insurance Segment ($m) Vertical Software Segment ($m) $129.6 $95.2 $45.0 $77.4 +67% $34.3 (24)% $32.3 +195% Q3'22 Q3'23 Q3'22 Q3'23 Q3'22 Q3'23 42% 73% 58% 27% % Total Revenue % Total Revenue ▪ Insurance Segment was ▪ Premium per policy increased ▪ 17%
Slide 11: Adjusted EBITDA by Segment – Q3 2023
Adjusted EBITDA by Segment – Q3 2023 1 Total Adjusted Insurance Segment Vertical Software Corporate EBITDA (loss) ($m) ($m) Segment ($m) Expenses ($m) $19.0 $5.5 $8.8 $3.2 ($0.9) Q3'22 Q3'23 Q3'22 Q3'23 ($13.4) ($10.9) ($15.6) Q3'22 Q3'23 Q3'22 Q3'23 (14)% 7% (3)% 20% 12% 9% 20% 10% Adjusted EBITDA
Slide 12: Balance Sheet as of September 30, 2023
Balance Sheet as of September 30, 2023 ● $458 million unrestricted cash and investments as of September 30, 2023 ○ Includes $347 million HOA cash and investments ○ In addition, $19 million restricted cash and $23 million investments held for warranty and captive businesses ● Cash flow from operation
Slide 13: Vesttoo Recap and Update
Vesttoo Recap and Update ● Task force charged with: ○ Recovering funds ○ Securing supplementary reinsurance ○ Addressing TDI supervision ● HOA appointed to Vesttoo credit committee in chapter 11 proceedings ● Terminated the contract, ceding less resulting in: ○ ~$30 million of Revenue ○ ~$10 million
Slide 14: Updating 2023 Guidance
Updating 2023 Guidance 2023: ~50% Revenue Growth H2 2023: Adjusted EBITDA Positive Previously: ~$330m - $350m $415m Increase reflecting the impact of premium-per-policy increases and Revenue Vesttoo reinsurance ceding changes Previously: ~$145m - $160m $190m Assumes cat weather is in line with histo
Slide 15: KPIs
KPIs Matthew Neagle Chief Operating Officer Copyright 2023 Porch Group, Inc. All rights reserved
Slide 16: KPIs – Q3 2023
KPIs – Q3 2023 31k ▪ Broadly similar to Q2’23 and Q3’22 with continued housing market headwinds Avg Number of Companies $1,436 ▪ An increase of +72% from Q3’22 Avg Revenue ▪ We continue to monetize the insurance opportunity more effectively per Company per Month 225k ▪ Decrease of 29% vs Q3’22 predo
Slide 17: Insurance Segment KPIs: Q3 2023 Performance
Insurance Segment KPIs: Q3 2023 Performance $154m 334k Insurance (Licensed Q3’23 GWP1 Policies In Force1 agency in 50 states. Q3’22: $157m Q3’22: 391k Carrier live in 22 states) $1,139 $1,762 Annualized Revenue Per Annualized Premium Policy1 Per Policy2 Q3’22: $300 Q3’22: $1,276 Warranty (Live in 49
Slide 18: Underwriting Actions Position Porch for Profitable Growth
Underwriting Actions Position Porch for Profitable Growth Q3’23 Gross Loss Ratio Q3’23 Gross Combined Ratio 93% 74% 20% 58% 39% 7% Cat 54% 32% Non-cat Q3'22 Q3'23 Q3'22 Q3'23 ● Using unique data in 12 states which has a significant impact on our loss ratios year-over-year ● Increased deductibles in
Slide 19: Cost Control Initiatives
Cost Control Initiatives ● Business leaders tasked with executing a cost review ● ~300 role reduction in force completed throughout the past year ● Review material vendors, advisers, and contractors ● ~$20 million annual benefit of actions with all areas driving efficiencies Copyright 2023 Porch Gro
Slide 20: Closing Remarks
Closing Remarks Matt Ehrlichman CEO, Chairman & Founder Copyright 2023 Porch Group, Inc. All rights reserved
Slide 21: Q&A
Q&A Copyright 2023 Porch Group, Inc. All rights reserved
Slide 22: 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
Slide 23: Email: IR@porch.com Website: IR.porchgroup.com
Email: IR@porch.com Website: IR.porchgroup.com Copyright 2023 Porch Group, Inc. All rights reserved 23