Porch Group, Inc. · NASDAQ:PRCH
Porch — Investor Presentation (March 2024)
35 slides from Porch's investor presentation, March 2024
Slide 1: About Us Presentation
About Us Presentation Porch Group March 2024 Copyright 2024 Porch Group, Inc. All rights reserved
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation contains 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, Porch Group, Inc., believe that our plans, intentions
Slide 3: Introduction to Porch Group
Introduction to Porch Group Copyright 2024 Porch Group, Inc. All rights reserved
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 6: Insurance Segment
Insurance Segment Copyright 2024 Porch Group, Inc. All rights reserved
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: HOA Outperforms Majority of Peers
HOA Outperforms Majority of Peers 2022: 3rd highest growth & 3rd best combined ratio (‘23 AM Best report to be released soon) 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 5
Slide 11: Insurance Profitability Actions Drive GLR Improvement
Insurance Profitability Actions Drive GLR Improvement Q1’22: Material price increases Q2’22: Started using implemented unique Porch property data Q4’22: Started Q2’23: Gross loss ratio (GLR) trend line non-renewals Increased Q4’23: Further non- deductibles renewals & new business restrictions GLR ex
Slide 12: Vertical Software Segment
Vertical Software Segment Copyright 2024 Porch Group, Inc. All rights reserved
Slide 13: 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 14: 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 14
Slide 15: 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 15
Slide 16: Q4'23 Highlights
Q4’23 Highlights Copyright 2024 Porch Group, Inc. All rights reserved
Slide 17: Progress Since Listing
Progress Since Listing Total Revenue ($m) Revenue less Cost Adj EBITDA (loss) ($m) of Revenue ($m) $470 +60% 4-year CAGR $430 $276 +42% 4-year CAGR $210 $223 $192 $168 $134 $72 $55 H2’23: +$21m $6 FY'20 FY'21 FY'22 FY'23 FY'24 FY'20 FY'21 FY'22 FY'23 FY'24 guidance ($18) ($24) guidance ($50) ($45) m
Slide 18: Q4 2023: Key Updates
Q4 2023: Key Updates ● ~2 years ago set H2’23 Adj EBITDA profitability target: Achieved $21 million ● No material weaknesses ● Important product updates: ○ Launched new title product: RynohVerifi ○ Landed new utilities partnerships: now 12, covering 14m households ○ Launched new HVAC micro-warranty
Slide 19: Q4 2023 Financials: Delivered $12M Adjusted EBITDA
Q4 2023 Financials: Delivered $12M Adjusted EBITDA Total Revenue ($m) Revenue Less Cost of Adjusted EBITDA (loss)1 Revenue ($m) ($m) $114.6 +79% $64.1 $79.9 $11.7 +$25m $43.9 +82% ($13.3) Q4'22 Q4'23 Q4'22 Q4'23 Q4'22 Q4'23 69% 70% (21)% 10% Revenue less Cost of Revenue Margin Adjusted EBITDA margin
Slide 20: KPIs – Q4 2023
KPIs – Q4 2023 30k ▪ Broadly similar to Q3’23 and Q4’22 with continued housing market headwinds Avg Number of Companies $1,277 ▪ +84% from Q4’22 as we monetize the insurance opportunity more effectively Avg Revenue per Company per Month 220k ▪ Increase of 3% vs Q4’22 with the industry-wide decline i
Slide 21: Insurance Segment KPIs: Q4 2023
Insurance Segment KPIs: Q4 2023 Insurance Segment KPIs: $112m 310k $1,120 Gross Written Policies in Force Annualized Revenue Premium Per Policy Q4’22: $131m Q4’22: 389k Q4’22: $347 Insurance Carrier (HOA) KPIs: $1,861 96% 36% Annualized Premium Premium Retention1 Gross Loss Ratio Per Policy Q4’22: $
Slide 22: 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 $17 $17 1.4m $16 1.4 1.2m 1.2m 1.1m 1.0m 0.9m 0.9m 0.9 0.4 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 ▪ Indust
Slide 23: Balance Sheet as of December 31, 2023
Balance Sheet as of December 31, 2023 Unrestricted cash, cash equivalents and investments ($m) Total Porch Group $398 Porch $87 $34m FY’23 Operating Cash Flow Homeowners of America $310 +$43m H2’23 Operating Cash Flow Dec 31, 2023 ▪ ~$35 million incremental cash received in Q1 2024 ▪ In addition to
Slide 24: 2024 Guidance
2024 Guidance $450m-$490m ● 2024 Revenue growth of 5% to 14% Revenue $215m-$230m Revenue less Cost of ● Assumes 63% GLR in line with 5-year weighted average Revenue $1m-$10m ● Expect to be profitable on a full year basis Adj EBITDA $460m-$480m ● Managing GWP approximately flat1 Gross Written Premium
Slide 25: Appendix
Appendix Copyright 2024 Porch Group, Inc. All rights reserved
Slide 26: Proven Team Built A Culture-Driven Business
Proven Team Built A Culture-Driven Business Matt Ehrlichman Matthew Neagle Shawn Tabak CEO, Chairman, & Founder Chief Operating Officer Chief Financial Officer Nicole Pelley Efram Ware Matt Cullen Malcolm Conner Nick Graham Joshua Steffan Janet Zimmerman SVP of Product President and GM, General Coun
Slide 27: Strategic Pillars
Strategic Pillars Execute Insurance Strategy (including launching Reciprocal Exchange) Grow SaaS Businesses and Aggregate More Unique Data Organizational Efficiency and Cost Control Copyright 2024 Porch Group, Inc. All rights reserved 27
Slide 28: Our Vision For The Consumer
Our Vision For The Consumer Whole Home Protection Insurance Warranty Maintenance Copyright 2024 Porch Group, Inc. All rights reserved 28
Slide 29: Our Highest Priority ESG Areas
Our Highest Priority ESG Areas Diversity, Equity, & Inclusion Risk Management & Climate Recruiting diverse talent, providing Mitigating the key risks and uncertainties equitable outcomes and opportunities that can affect the long-term for our employees, and ensuring inclusive sustainability of our b
Slide 30: Financial Highlights – FY 2023
Financial Highlights – FY 2023 1 Total Revenue ($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 31: 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 32: 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 33: Operating Cash Flow
Operating Cash Flow Q1 Q2 Q3 Q4 FY FY Reconciliation to Adj EBITDA 2023 2023 2023 2023 2023 2022 Operating Cash Flow $(22)m $13m $84m $(41)m $34m $(18)m Working capital $(1)m $(57)m $(75)m $43m $(89)m $(38)m Cash interest expense $1m $-m $-m $10m $11m $6m Adjusted EBITDA $(22)m $(43)m $9m $12m $(45)
Slide 34: 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 35: Email: IR@porch.com Website: IR.porchgroup.com
Email: IR@porch.com Website: IR.porchgroup.com Copyright 2024 Porch Group, Inc. All rights reserved 35