Porch Group, Inc. · NASDAQ:PRCH

Porch — Q4 2022 Earnings Presentation

33 slides from Porch's earnings presentation, Mar 14, 2023

Slide 1: Q4 2022 Earnings Presentation
Q4 2022 Earnings Presentation March 14, 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 Adam Kornick CEO, Chairman & Founder Chief Financial Officer Chief Operating Officer President, Insurance Division 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: Q4'22 Financial Snapshot
Q4’22 Financial Snapshot Q4’22 Total Revenue ($m) Q4’22 Adjusted EBITDA ($m) $64.1 $51.6 Q4'21 Q4'22 +24% ($5.4) CAT weather impact approx. $7m, incl. Winter Storm Elliott ($13.3) Q4'21 Q4'22 ▪ Q4 ’22 YoY +24% revenue growth ▪ FY ’22 YoY +43% revenue growth ▪ +95% CAGR over the 2 years since we’ve b
Slide 7: 2022 Strategic Progress
2022 Strategic Progress 1. Expanded market position of software products 2. Acquired HIP and RWS to bolster position in the inspection and warranty industries 3. Visibility into ~80% of all U.S. homebuyers 4. Smartphone app gaining traction 5. HOA was the fastest growing homeowner’s insurance carrie
Slide 8: Application for Reciprocal Exchange
Application for Reciprocal Exchange 1. File application with Texas Department of Insurance 2. If approved, Porch Insurance Reciprocal Exchange would be formed in Texas 3. Reciprocal owned by policyholder-members 4. HOA insurance carrier and its capital would transfer to Reciprocal 5. Improves margin
Slide 10: Operating Models in Home Insurance Industry
5 Operating Models in Home Insurance Industry 1. Collect demand and sell leads 2. Retail insurance agency CARRIER RECIPROCAL EXCHANGE Return 3. Managing general agency (MGA) MGA INSURANCE 4. Insurance Carrier AGENCY LEAD GEN 5. Operator of Reciprocal Exchange1 Risk (1) A reciprocal insurer is an ins
Slide 11: 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 12: Long-Term Benefits of Porch Reciprocal
Long-Term Benefits of Porch Reciprocal 1. For policyholders: ▪ Members will benefit from new Porch value propositions ▪ Members are owners and can participate in future dividends 2. For Porch: ▪ Less direct exposure to weather ▪ Less volatile earnings ▪ Improved margins ▪ Less capital requirements 3
Slide 13: 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 15: Financial Highlights – Q4 2022
Financial Highlights – Q4 2022 1 Total Revenue ($m) Revenue less Cost Adj EBITDA ($m) Gross Written of Revenue ($m) Premium ($m) $131 $64.1 $101 +30% $51.6 +24% $43.9 $37.4 +17% Q4'21 Q4'22 Q4'21 Q4'22 Q4'21 Q4'22 Q4'21 Q4'22 ($5.4) CAT weather impact 73% 69% approx. $7m, incl Winter ($13.3) Storm E
Slide 16: Revenue By Segment – Q4 2022
Revenue By Segment – Q4 2022 Total Revenue ($m) Insurance Segment ($m) Vertical Software $64.1 Segment ($m) $51.6 +24% $31.2 $35.5 $33.0 (7)% $16.1 +94% Q4'21 Q4'22 Q4'21 Q4'22 Q4'21 Q4'22 31% 49% 69% 51% % Total Revenue % Total Revenue ▪ Insurance segment ▪ +94% growth driven by ▪ Decline driven by
Slide 17: Adjusted EBITDA by Segment – Q4 2022
Adjusted EBITDA by Segment – Q4 2022 1 Total Adjusted Insurance Segment Vertical Software Corporate EBITDA ($m) ($m) Segment ($m) Expenses ($m) $5.9 $3.2 Q4'21 Q4'22 $0.7 $1.1 Q4'21 Q4'22 Q4'21 Q4'22 Q4'21 Q4'22 ($5.4) ($14.5) ($15.1) ($13.3) 28% 24% Corporate expenses as % of total revenue ▪ CAT we
Slide 18: Financial Highlights – FY 2022
Financial Highlights – FY 2022 1 Total Revenue ($m) Revenue less Cost Adj EBITDA ($m) Gross Written of Revenue ($m) Premium ($m) $536 $276 $168 $307 +75% $192 +43% $155 $134 +26% $137 $121 FY'21 FY'22 $55 FY'21 FY'22 FY'21 FY'22 FY'21 FY'22 ($24) Vertical Software Segment 69% 61% ($50) Insurance Seg
Slide 19: Balance Sheet
Balance Sheet Cash balance ▪ $307m cash and investments at Dec 31, 2022 (includes $78m of cash and $92m of investments at HOA), down from $320m at Sep 30, 2022 ▪ Q4 2022: Repurchased 2.4m shares at an average share price of $1.82 Insurance Balance Sheet ▪ Porch group transferred $34m to the insuranc
Slide 21: 2023 Guidance
2023 Guidance 2023: >20% Revenue Growth H2 2023: Adj 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 - $180m Range due to uncertain weather. Assumes 62% GLR. No CAT event assump
Slide 22: Path to Adj EBITDA Positive in H2 2023
Path to Adj EBITDA Positive in H2 2023 Underwriting actions, pricing, and cost management driving profitability improvement Adjusted EBITDA Bridge ($m) $10+ Positive 1 (1) Improvement from focus on improving underwriting performance, in addition to less CAT weather expected. Copyright 2023 Porch Gro
Slide 24: 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 25: 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 Month1 40,000 2018 2019 2020 2021 2022 30,860 30,000 20,000 24,601 10,000 11,157 10,000 10,972 0 Q4'18 Q4'19 Q4'20 Q4'21 Q4'22 Q1 Q2 Q3 Q4 30,860 companies in Q4 2022 $693 reven
Slide 26: Monetized Services & Average Revenue Per Monetized Service
Monetized Services & Average Revenue Per Monetized Service Number of Monetized Services in Quarter1 Average Revenue per Monetized Service1 $219 2018 2019 2020 2021 2022 $150 $98 $78 $44 Q1 Q2 Q3 Q4 Q4 '18 Q4 '19 Q4 '20 Q4 '21 Q4 '22 213K monetized services in Q4 2022 $219 revenue per monetized servi
Slide 27: Insurance Segment: Q4 2022 Performance
Insurance Segment: Q4 2022 Performance $132M 389K Insurance (Licensed Q4’22 GWP Policies agency in 50 states. Carrier now live in 21 states) 86% $347 Annualized Revenue Customer Retention Per Policy Warranty (Live in 49 states and D.C.) Catastrophic weather impact 55.7% Gross Loss Ratio (excl. CAT)
Slide 29: CEO Closing Remarks
CEO Closing Remarks 1. Unique data in insurance pricing approved in 9 states 2. Insurance price increases rolling out to policyholders 3. Smartphone app distributed to consumers of ~50% of ISN inspection companies 4. Home warranty integration successful with excellent growth 5. Rollout of software m
Slide 32: 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 — Q4 2022 Earnings Presentation on 6ix

Porch — Q4 2022 Earnings Presentation

Slide 1: Q4 2022 Earnings Presentation

Slide 2: Presenters

Slide 3: Disclaimers

Slide 4: Agenda

Slide 5: CEO Update

Slide 6: Q4'22 Financial Snapshot

Slide 7: 2022 Strategic Progress

Slide 8: Application for Reciprocal Exchange

Slide 9: Insurance Deep Dive

Slide 10: Operating Models in Home Insurance Industry

Slide 11: What is a Reciprocal?

Slide 12: Long-Term Benefits of Porch Reciprocal

Slide 13: 2023 Insurance Actions

Slide 14: Q4 & FY 2022 Results

Slide 15: Financial Highlights – Q4 2022

Slide 16: Revenue By Segment – Q4 2022

Slide 17: Adjusted EBITDA by Segment – Q4 2022

Slide 18: Financial Highlights – FY 2022

Slide 19: Balance Sheet

Slide 20: FY 2023 Guidance

Slide 21: 2023 Guidance

Slide 22: Path to Adj EBITDA Positive in H2 2023

Slide 23: KPIs

Slide 24: 2023 Strategic Priorities

Slide 25: Number of Companies & Average Revenue Per Company

Slide 26: Monetized Services & Average Revenue Per Monetized Service

Slide 27: Insurance Segment: Q4 2022 Performance

Slide 28: CEO Closing Remarks

Slide 29: CEO Closing Remarks

Slide 30: Q&A

Slide 31: Appendix

Slide 32: Glossary

Slide 33: Investor Relations Contact