Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 05, 2022 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2022 | |
Entity File Number | 001-39142 | |
Entity Registrant Name | Porch Group, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 83-2587663 | |
Entity Address, Address Line One | 411 1st Avenue S. | |
Entity Address, Address Line Two | Suite 501 | |
Entity Address, City or Town | Seattle | |
Entity Address State Or Province | WA | |
Entity Address, Postal Zip Code | 98104 | |
City Area Code | 855 | |
Local Phone Number | 767-2400 | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | PRCH | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 99,760,638 | |
Entity Central Index Key | 0001784535 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 271,003 | $ 315,741 |
Accounts receivable, net | 38,474 | 28,767 |
Short-term investments | 8,165 | 9,251 |
Reinsurance balance due | 273,971 | 228,416 |
Prepaid expenses and other current assets | 22,621 | 14,338 |
Restricted cash | 10,574 | 8,551 |
Total current assets | 624,808 | 605,064 |
Property, equipment, and software, net | 9,984 | 6,666 |
Operating lease right-of-use assets | 6,052 | 4,504 |
Goodwill | 273,831 | 225,654 |
Long-term investments | 56,228 | 58,324 |
Intangible assets, net | 136,575 | 129,830 |
Restricted cash, non-current | 500 | 500 |
Long-term insurance commissions receivable | 10,461 | 7,521 |
Other assets | 1,519 | 684 |
Total assets | 1,119,958 | 1,038,747 |
Current liabilities | ||
Accounts payable | 7,739 | 6,965 |
Accrued expenses and other current liabilities | 47,967 | 37,675 |
Deferred revenue | 243,425 | 201,085 |
Refundable customer deposit | 19,246 | 15,274 |
Current portion of long-term debt | 150 | 150 |
Losses and loss adjustment expense reserves | 88,894 | 61,949 |
Other insurance liabilities, current | 61,516 | 40,024 |
Total current liabilities | 468,937 | 363,122 |
Long-term debt | 416,568 | 414,585 |
Operating lease liabilities, non-current | 3,622 | 2,694 |
Earnout liability, at fair value | 100 | 13,866 |
Private warrant liability, at fair value | 926 | 15,193 |
Other liabilities (includes $29,858 and $9,617 at fair value, respectively) | 30,825 | 12,242 |
Total liabilities | 920,978 | 821,702 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity | ||
Common stock, $0.0001 par value: Authorized shares - 400,000,000 and 400,000,000, respectively Issued and outstanding shares - 99,440,528 and 97,961,597, respectively | 10 | 10 |
Additional paid-in capital | 659,814 | 641,406 |
Accumulated other comprehensive loss | (4,559) | (259) |
Accumulated deficit | (456,285) | (424,112) |
Total stockholders' equity | 198,980 | 217,045 |
Total liabilities and stockholders' equity | $ 1,119,958 | $ 1,038,747 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Condensed Consolidated Balance Sheets | ||
Other liabilities | $ 29,858 | $ 9,617 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common Stock, Shares Authorized | 400,000,000 | 400,000,000 |
Common stock, shares issued | 99,440,528 | 97,961,597 |
Common stock, shares outstanding | 99,440,528 | 97,961,597 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Condensed Consolidated Statements of Operations | ||||
Revenue | $ 70,769 | $ 51,340 | $ 133,330 | $ 78,083 |
Operating expenses(1): | ||||
Cost of revenue | 28,558 | 19,500 | 49,747 | 25,429 |
Selling and marketing | 28,826 | 23,122 | 54,569 | 37,762 |
Product and technology | 15,777 | 11,050 | 30,009 | 22,841 |
General and administrative | 28,405 | 20,611 | 55,103 | 44,625 |
Total operating expenses | 101,566 | 74,283 | 189,428 | 130,658 |
Operating loss | (30,797) | (22,943) | (56,098) | (52,575) |
Other income (expense): | ||||
Interest expense | (1,858) | (1,216) | (4,151) | (2,439) |
Change in fair value of earnout liability | 2,587 | (4,032) | 13,766 | (22,801) |
Change in fair value of private warrant liability | 4,078 | (4,303) | 14,267 | (20,212) |
Gain on extinguishment of debt | 8,243 | 8,243 | ||
Investment income and realized gains, net of investment expenses | 243 | 387 | 440 | 397 |
Other expense, net | (162) | (165) | (107) | (91) |
Total other income (expense) | 4,888 | (1,084) | 24,215 | (36,904) |
Loss before income taxes | (25,909) | (24,027) | (31,883) | (89,479) |
Income tax benefit (expense) | (468) | 7,731 | (290) | 8,081 |
Net loss | $ (26,377) | $ (16,296) | $ (32,173) | $ (81,398) |
Loss per share - basic (in dollars per share) | $ (0.27) | $ (0.17) | $ (0.33) | $ (0.89) |
Loss per share - diluted (in dollars per share) | $ (0.27) | $ (0.17) | $ (0.33) | $ (0.89) |
Weighted-average shares used in computing net loss attributable per share to common stockholders: | ||||
Shares used in computing basic loss per share | 97,142,163 | 95,221,928 | 96,611,294 | 91,483,053 |
Shares used in computing diluted loss per share | 97,142,163 | 95,221,928 | 96,611,294 | 91,483,053 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Stock based compensation expense | $ 9,702 | $ 6,642 | $ 15,556 | $ 23,477 |
Cost of revenue. | ||||
Stock based compensation expense | 1 | |||
Selling and marketing | ||||
Stock based compensation expense | 1,270 | 1,424 | 1,902 | 3,506 |
Product and technology | ||||
Stock based compensation expense | 1,840 | 1,836 | 2,977 | 4,154 |
General and administrative | ||||
Stock based compensation expense | $ 6,592 | $ 3,382 | $ 10,677 | $ 15,816 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Condensed Consolidated Statements of Comprehensive Loss | ||||
Net loss | $ (26,377) | $ (16,296) | $ (32,173) | $ (81,398) |
Other comprehensive loss: | ||||
Current period change in net unrealized loss, net of tax | (1,785) | 267 | (4,300) | 267 |
Comprehensive loss | $ (28,162) | $ (16,029) | $ (36,473) | $ (81,131) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total |
Beginning Balance at Dec. 31, 2020 | $ 8 | $ 424,823 | $ (317,506) | $ 107,325 | |
Beginning Balance (in shares) at Dec. 31, 2020 | 81,669,151 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (65,101) | (65,101) | |||
Stock-based compensation | 4,462 | 4,462 | |||
Stock-based compensation - earnout | 12,373 | 12,373 | |||
Issuance of common stock for acquisitions | 1,169 | 1,169 | |||
Issuance of common stock for acquisitions (in shares) | 90,000 | ||||
Reclassification of earnout liability upon vesting | 25,815 | 25,815 | |||
Vesting of restricted stock awards (in shares) | 2,078,102 | ||||
Exercise of stock warrants | $ 1 | 93,007 | 93,008 | ||
Exercise of stock warrants (in shares) | 8,087,623 | ||||
Exercise of stock options | 355 | 355 | |||
Exercise of stock options (in shares) | 593,106 | ||||
Income tax withholdings | (16,997) | (16,997) | |||
Income tax withholdings (in shares) | (1,062,250) | ||||
Transaction costs | (402) | (402) | |||
Ending Balance at Mar. 31, 2021 | $ 9 | 544,605 | (382,607) | 162,007 | |
Ending Balance (in shares) at Mar. 31, 2021 | 91,455,732 | ||||
Beginning Balance at Dec. 31, 2020 | $ 8 | 424,823 | (317,506) | 107,325 | |
Beginning Balance (in shares) at Dec. 31, 2020 | 81,669,151 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (81,398) | ||||
Ending Balance at Jun. 30, 2021 | $ 10 | 627,396 | (398,903) | $ 267 | 228,770 |
Ending Balance (in shares) at Jun. 30, 2021 | 96,293,416 | ||||
Beginning Balance at Mar. 31, 2021 | $ 9 | 544,605 | (382,607) | 162,007 | |
Beginning Balance (in shares) at Mar. 31, 2021 | 91,455,732 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (16,296) | (16,296) | |||
Other comprehensive income | 267 | 267 | |||
Stock-based compensation | 2,466 | 2,466 | |||
Stock-based compensation - earnout | 4,176 | 4,176 | |||
Issuance of common stock for acquisitions | 28,372 | 28,372 | |||
Issuance of common stock for acquisitions (in shares) | 1,292,441 | ||||
Reclassification of private warrant liability upon exercise | 16,843 | 16,843 | |||
Vesting of restricted stock awards (in shares) | 33,182 | ||||
Exercise of stock warrants | $ 1 | 33,761 | 33,762 | ||
Exercise of stock warrants (in shares) | 2,862,312 | ||||
Exercise of stock options | 2,227 | 2,227 | |||
Exercise of stock options (in shares) | 946,392 | ||||
Income tax withholdings | (5,194) | (5,194) | |||
Income tax withholdings (in shares) | (296,643) | ||||
Transaction costs | 140 | 140 | |||
Ending Balance at Jun. 30, 2021 | $ 10 | 627,396 | (398,903) | 267 | 228,770 |
Ending Balance (in shares) at Jun. 30, 2021 | 96,293,416 | ||||
Beginning Balance at Dec. 31, 2021 | $ 10 | 641,406 | (424,112) | (259) | 217,045 |
Beginning Balance (in shares) at Dec. 31, 2021 | 97,961,597 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (5,796) | (5,796) | |||
Other comprehensive income | (2,515) | (2,515) | |||
Stock-based compensation | 5,854 | 5,854 | |||
Contingent consideration for acquisitions | 530 | 530 | |||
Vesting of restricted stock awards (in shares) | 245,855 | ||||
Exercise of stock options | 473 | 473 | |||
Exercise of stock options (in shares) | 185,685 | ||||
Income tax withholdings | (712) | (712) | |||
Income tax withholdings (in shares) | (95,951) | ||||
Ending Balance at Mar. 31, 2022 | $ 10 | 647,551 | (429,908) | (2,774) | 214,879 |
Ending Balance (in shares) at Mar. 31, 2022 | 98,297,186 | ||||
Beginning Balance at Dec. 31, 2021 | $ 10 | 641,406 | (424,112) | (259) | 217,045 |
Beginning Balance (in shares) at Dec. 31, 2021 | 97,961,597 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (32,173) | ||||
Ending Balance at Jun. 30, 2022 | $ 10 | 659,814 | (456,285) | (4,559) | 198,980 |
Ending Balance (in shares) at Jun. 30, 2022 | 99,440,528 | ||||
Beginning Balance at Mar. 31, 2022 | $ 10 | 647,551 | (429,908) | (2,774) | 214,879 |
Beginning Balance (in shares) at Mar. 31, 2022 | 98,297,186 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | (26,377) | (26,377) | |||
Other comprehensive income | (1,785) | (1,785) | |||
Stock-based compensation | 9,702 | 9,702 | |||
Issuance of common stock for acquisitions | 3,552 | 3,552 | |||
Issuance of common stock for acquisitions (in shares) | 628,660 | ||||
Vesting of restricted stock awards (in shares) | 563,406 | ||||
Exercise of stock options | 219 | 219 | |||
Exercise of stock options (in shares) | 88,772 | ||||
Income tax withholdings | (1,210) | (1,210) | |||
Income tax withholdings (in shares) | (137,496) | ||||
Ending Balance at Jun. 30, 2022 | $ 10 | $ 659,814 | $ (456,285) | $ (4,559) | $ 198,980 |
Ending Balance (in shares) at Jun. 30, 2022 | 99,440,528 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (32,173) | $ (81,398) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | 12,899 | 6,356 |
Amortization of operating lease right-of-use assets | 604 | 803 |
Loss on sale and impairment of long-lived assets | 169 | 126 |
Gain on extinguishment of debt | (8,243) | |
Loss (gain) on remeasurement of private warrant liability | (14,267) | 20,212 |
Loss (gain) on remeasurement of contingent consideration | 4,686 | |
Loss (gain) on remeasurement of earnout liability | (13,766) | 22,801 |
Stock-based compensation | 15,556 | 23,477 |
Amortization of investment premium/accretion of discount, net | 1,132 | 654 |
Net realized losses on investments | 138 | |
Interest expense (non-cash) | 2,339 | 67 |
Other | 80 | |
Other | (1,479) | |
Change in operating assets and liabilities, net of acquisitions and divestitures | ||
Accounts receivable | (9,907) | (5,017) |
Reinsurance balance due | (45,555) | (94,883) |
Prepaid expenses and other current assets | (7,758) | 1,654 |
Accounts payable | (4,226) | (21,417) |
Accrued expenses and other current liabilities | 2,358 | (3,292) |
Losses and loss adjustment expense reserves | 26,945 | 29,655 |
Other insurance liabilities, current | 21,492 | 76,474 |
Deferred revenue | 37,610 | 15,824 |
Refundable customer deposits | 3,972 | (1,273) |
Deferred income tax benefit | (8,153) | |
Long-term insurance commissions receivable | (2,940) | (2,775) |
Operating lease liabilities, non-current | (1,368) | (886) |
Other | (326) | 255 |
Net cash used in operating activities | (2,306) | (30,772) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (1,539) | (539) |
Capitalized internal use software development costs | (3,496) | (1,510) |
Purchases of short-term and long-term investments | (13,561) | (9,476) |
Maturities, sales of short-term and long-term investments | 12,241 | 8,110 |
Acquisitions, net of cash acquired | (32,049) | (127,883) |
Net cash used in investing activities | (38,404) | (131,298) |
Cash flows from financing activities: | ||
Repayments of principal and related fees | (150) | (150) |
Proceeds from line of credit | 1,000 | |
Proceeds from exercises of warrants | 126,772 | |
Proceeds from exercises of stock options | 692 | 2,544 |
Income tax withholdings paid upon vesting of restricted stock units | (1,922) | (22,126) |
Payments of acquisition-related contingent consideration | (1,625) | |
Net cash (used) provided by financing activities | (2,005) | 107,040 |
Net change in cash, cash equivalents, and restricted cash | (42,715) | (55,030) |
Cash, cash equivalents, and restricted cash, beginning of period | 324,792 | 207,453 |
Cash, cash equivalents, and restricted cash end of period | 282,077 | 152,423 |
Supplemental disclosures | ||
Cash paid for interest | 1,587 | 1,779 |
Non-cash consideration for acquisitions | 21,607 | 37,792 |
Cash payable for acquisition | $ 5,000 | |
Reduction of earnout liability due to a vesting event | $ 25,815 |
Description of Business and Sum
Description of Business and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2022 | |
Description of Business and Summary of Significant Accounting Policies | |
Description of Business and Summary of Significant Accounting Policies | 1. Description of Business and Summary of Significant Accounting Policies Description of Business Porch Group, Inc. (“Porch Group,” “Porch” or the “Company”) is a vertical software platform for the home, providing software and services to over 28,500 home services companies. The Vertical Software segment provides software and services to home services companies, such as home inspectors, mortgage companies and loan officers, title companies, moving companies, real estate agencies, utility companies, and others, and the Insurance segment operates both as an insurance carrier underwriting home insurance policies, and as an agent selling home and auto insurance for over 20 major and regional insurance companies. The Insurance segment also includes Porch’s warranty service offering. Porch helps home service providers grow their business and improve their customer experience. In addition, through these relationships Porch gains access to homebuyers and is able to offer services to make the moving process easier, helping consumers save time and make better decisions about critical services, including insurance, warranty, moving, security, TV/Internet, home repair and improvement. Unaudited Interim Financial Statements The accompanying unaudited condensed consolidated financial statements include the accounts of Porch Group, Inc. and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, these unaudited condensed consolidated financial statements and notes should be read in conjunction with the Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on March 16, 2022. The information as of December 31, 2021, included in the unaudited condensed consolidated balance sheets was derived from the Company’s audited consolidated financial statements. The unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q (this “Quarterly Report”) were prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments (all of which are of a normal recurring nature) considered necessary to present fairly the Company’s financial position, results of operations, comprehensive loss, stockholders’ equity, and cash flows for the periods and dates presented. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022, or any other interim period or future year. Comprehensive Loss Comprehensive loss consists of adjustments related to unrealized gains and losses on available-for-sale securities. Reclassifications Certain reclassifications to previously reported 2021 balances were made to conform to the current period presentation in the unaudited condensed consolidated statements of cash flows. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the amounts reported and disclosed in the unaudited condensed consolidated financial statements and accompanying notes. On an ongoing basis these estimates, which include, but are not limited to, estimated variable consideration for services performed, estimated lifetime value of insurance agency commission revenue, current estimate for credit losses, depreciable lives for property and equipment, the valuation of and useful lives for acquired intangible assets, goodwill, the valuation allowance on deferred tax assets, assumptions used in stock-based compensation expense, unpaid losses for insurance claims and loss adjustment expenses, contingent consideration, earnout liabilities and private warrant liabilities, are evaluated by management. Actual results could differ materially from those estimates, judgments, and assumptions. Concentrations Financial instruments which potentially subject the Company to credit risk consist principally of cash, money market accounts on deposit with financial institutions, money market funds, certificates of deposit and fixed-maturity securities, as well as receivable balance in the course of collection. The Company’s insurance carrier subsidiary has exposure and remains liable in the event of insolvency of one of its primary reinsurers. Management and its reinsurance intermediary regularly assess the credit quality and ratings of its reinsurer counterparties. One reinsurer represented more than 10% individually, and 34% in aggregate, of the Company’s insurance subsidiary’s total reinsurance receivables as of June 30, 2022. Substantially all of the Company’s insurance-related revenues in the Insurance segment are derived from customers in Texas (which represent approximately 55% of such revenues in the six months ended June 30, 2022), South Carolina, North Carolina, Georgia, Virginia and Arizona, which could be adversely affected by economic conditions, an increase in competition, or environmental impacts and changes. No individual customer represented more than 10% of the Company’s total revenue for the three and six months ended June 30, 2022 or 2021. As of June 30, 2022 and December 31, 2021, no individual customer accounted for 10% or more of the Company’s total accounts receivable. As of June 30, 2022, the Company held approximately $169.7 million of cash with one U.S. commercial bank. Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. The Company maintains cash balances that may exceed the insured limits by the Federal Deposit Insurance Corporation. Restricted cash equivalents as of June 30, 2022 includes $0.5 million held in certificates of deposits and money market mutual funds pledged to the Department of Insurance in certain states as a condition of its Certificate of Authority for the purpose of meeting obligations to policyholders and creditors, $7.7 million in funds held for the payment of possible warranty claims as required under regulatory guidelines in twenty five twenty five The reconciliation of cash and cash equivalents to amounts presented in the unaudited condensed consolidated statements of cash flows are as follows: June 30, 2022 December 31, 2021 Cash and cash equivalents $ 271,003 $ 315,741 Restricted cash and restricted cash equivalents - current 10,574 8,551 Restricted cash and restricted cash equivalents - non-current 500 500 Cash, cash equivalents and restricted cash $ 282,077 $ 324,792 Accounts Receivable and Long-term Insurance Commissions Receivable Accounts receivable consist principally of amounts due from enterprise customers and other corporate partnerships, as well as credit card receivables. The Company estimates allowances for uncollectible receivables based on the creditworthiness of its customers, historical trend analysis and general economic conditions. Consequently, an adverse change in those factors could affect the Company’s estimate of allowance for doubtful accounts. The allowance for uncollectible receivables at June 30, 2022 and December 31, 2021, was $0.5 million and $0.4 million, respectively. Long-term insurance commissions receivable balance consists of the estimated commissions from policy renewals expected to be collected. The Company records the amount of renewal insurance commissions expected to be collected in the next twelve months as current accounts receivable. Deferred Policy Acquisition Costs The Company capitalizes deferred policy acquisitions costs (“DAC”) which consist primarily of commissions, premium taxes and policy underwriting and production expenses that are directly related to the successful acquisition by the Company’s insurance subsidiary of new or renewal insurance contracts. DAC are amortized to expense on a straight-line basis over the terms of the policies to which they relate, which is generally one year. The amortization of DAC is included in sales and marketing expense in the unaudited condensed consolidated statements of operations and comprehensive loss. DAC is also reduced by ceding commissions paid by reinsurance companies which represent recoveries of acquisition costs. DAC is periodically reviewed for recoverability and adjusted if necessary. Future investment income is considered in determining the recoverability of DAC. As of June 30, 2022, and December 31, 2021, DAC of $7.8 million and $4.0 million is included in prepaid expenses and other current assets. Changes in DAC for the three and six months ended June 30, 2022, are as follows: 2022 Deferred policy acquisition costs at December 31, 2021 (net) $ 3,988 Capitalized costs 16,753 Amortized costs (13,001) Deferred policy acquisition costs at March 31, 2022 (net) 7,740 Capitalized costs 23,617 Amortized costs (23,584) Deferred policy acquisition costs at June 30, 2022 (net) $ 7,773 Fair Value of Financial Instruments Fair value, as defined by the accounting standards, represents the amount at which an asset or liability would be transferred in a current orderly transaction between willing market participants. Emphasis is placed on observable inputs being used to assess fair value. To reflect this approach the standards require a three-tiered fair value hierarchy be applied based on the nature of the inputs used when measuring fair value. The three hierarchical levels of inputs are as follows: Level 1 Observable inputs, such as quoted prices (unadjusted) in active markets for identical assets or liabilities at the measurement date; Level 2 Observable inputs, other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. This may include active markets for similar assets and liabilities, quoted prices in markets that are not highly active, or other inputs that are observable or can be corroborated by observable market data; and Level 3 Unobservable inputs that are arrived at by means other than current observable market activity. The level of the least observable significant input used in assessing the fair value determines the placement of the entire fair value measurement in the hierarchy. Management’s assessment of the significance of a particular input to the fair value measurement requires the use of judgment specific to the asset or liability. Other Insurance Liabilities, Current The following table details the components of other insurance liabilities, current on the condensed consolidated balance sheets: June 30, 2022 December 31, 2021 Ceded reinsurance premiums payable $ 33,268 $ 22,523 Advance premiums 12,721 4,277 Commissions payable, reinsurers and agents 12,414 10,697 Funds held under reinsurance treaty 1,959 2,206 General and accrued expenses payable 1,154 321 Other insurance liabilities, current $ 61,516 $ 40,024 Income Taxes Provisions for income taxes for the three months ended June 30, 2022, and 2021 were a $0.5 million expense and a $7.7 million benefit, respectively, and the effective tax rates for these periods were (1.81)% and 32.18%, respectively. Provisions for income taxes for the six months ended June 30, 2022, and 2021, were a $0.3 million expense and a $8.1 million benefit, respectively, and the effective rates for these periods were (0.91)% and 9.03%, respectively. The difference between the Company’s effective tax rates for the 2022 period and the U.S. statutory rate of 21% was primarily due to a full valuation allowance related to the Company’s net deferred assets. The difference between the Company’s effective tax rates for the 2021 period and the U.S. statutory rate of 21% was primarily due to the release of a portion of the valuation allowance due to deferred tax liabilities created by certain acquisitions. Recently Adopted Accounting Standards In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers fiscal years beginning after December 15, 2022, including interim periods in those fiscal years. The ASU clarifies that early adoption of the amendments is permitted, including adoption in an interim period. An entity that early adopts in an interim period should apply the amendments (1) retrospectively to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of early application and (2) prospectively to all business combinations that occur on or after the date of initial application. The Company early adopted this ASU as of January 1, 2022, and will apply the guidance prospectively for business combinations that occur after the adoption date. Therefore, the adoption will have no impact to the existing consolidated balance sheets, statements of operations, and statements of cash flows. |
Revenue
Revenue | 6 Months Ended |
Jun. 30, 2022 | |
Revenue | |
Revenue | 2. Revenue Disaggregation of Revenue The Company generates revenue in its Vertical Software segment from (1) software and service subscription fees received for continued access to and transactions processed using owned software platforms by individual contractors, small business service providers and large enterprise service providers, (2) move-related transactions for a variety of services when end customers are connected with service providers primarily related to moving or settling into a new home, and (3) post-move transactions for the delivery of leads to service providers who primarily support the continued maintenance of the home. The revenue generated by the Company’s Insurance segment is primarily from the sale of its own written insurance and warranty policies or third-party policies via its agency. This revenue includes insurance and warranty premiums earned over the life of the policy, reinsurance profit share, policy fees, commissions earned at the time it is put in force or ceded. Total revenues consisted of the following: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Vertical Software segment Software and service subscriptions $ 20,544 $ 12,987 $ 38,509 $ 23,867 Move-related transactions (excluding insurance) 17,535 16,295 29,728 25,256 Post-move transactions 4,734 5,122 9,264 10,219 Total Vertical Software segment revenue 42,813 34,404 77,501 59,342 Insurance segment Insurance and warranty premiums, commissions and policy fees (1) 27,956 16,936 55,829 18,741 Total Insurance segment revenue 27,956 16,936 55,829 18,741 Total revenue $ 70,769 $ 51,340 $ 133,330 $ 78,083 (1) Contracts with Customers Contract Assets - Insurance Commissions Receivable A summary of the activity impacting the contract assets during the six months ended June 30, 2022, is presented below: Contract Assets Balance at December 31, 2021 $ 9,384 Estimated lifetime value of commissions on insurance policies sold by carriers 4,848 Cash receipts (1,645) Balance at June 30, 2022 $ 12,587 As of June 30, 2022, $2.1 million of contract assets are expected to be collected within the next 12 months and therefore are included in current accounts receivable on the condensed consolidated balance sheets. The remaining $10.5 million of contract assets are expected to be collected in the following periods and are included in long-term insurance commissions receivable on the condensed consolidated balance sheets. Contract Liabilities — Refundable Customer Deposits A summary of the activity impacting the contract liabilities during the six months ended June 30, 2022, is presented below: Contract Liabilities Balance at December 31, 2021 15,274 Additions to contract liabilities 17,565 Contract liabilities transferred to revenue (13,593) Balance at June 30, 2022 $ 19,246 As of June 30, 2022, $19.2 million in contract liabilities related to refundable customer deposits received in advance of warranty services provided, are included in current refundable customer deposits on the consolidated balance sheets because the policyholder may cancel the policy at any time and receive a pro-rated refund. If the policies are not canceled, the balance is expected to be transferred to revenue over the term of the policies, which is, on average, 19 months. Deferred Revenue Timing may differ between the satisfaction of performance obligations and the collection of amounts from customers. Liabilities are recorded for amounts that are collected in advance of the satisfaction of performance obligations. To the extent the amounts relate to services or coverage performed by the Company over time, these liabilities are classified as deferred revenue. If the amounts collected are related to a point in time obligation which has yet to be performed, these liabilities are classified as refundable customer deposits. A summary of the activity impacting deferred revenue balances during the six months ended June 30, 2022, is presented below: Vertical Software Insurance Total Deferred Revenue Deferred Revenue Deferred Revenue Balance at December 31, 2021 $ 3,814 $ 197,271 $ 201,085 Revenue recognized (1) (5,279) (91,994) (97,273) Additional amounts deferred 5,722 89,323 95,045 Balance at March 31, 2022 4,257 194,600 198,857 Revenue recognized (1) (6,027) (97,654) (103,681) Additional amounts deferred 5,815 136,728 142,543 Impact of acquisitions 196 5,510 5,706 Balance at June 30, 2022 $ 4,241 $ 239,184 $ 243,425 (1) In the table above, revenue recognized on earned premiums related to the insurance segment is presented as the gross amount from policy holders excluding the impact of ceded premiums. On the unaudited condensed statements of operations for the three and six months ended June 30, 2022, earned premiums are presented net of ceded premiums of $83.1 million and $154.8 million, respectively . Remaining Performance Obligations Contracts with customers include $4.2 million related to performance obligations that will be satisfied at a later date. These amounts primarily include performance obligations that are recorded in the condensed consolidated balance sheets as deferred revenue. The amount of the transaction price allocated to performance obligations to be satisfied at a later date, which is not recorded in the condensed consolidated balance sheets, is immaterial as of June 30, 2022, and December 31, 2021. The Company has applied the practical expedients provided for in the accounting standards, and does not present unsatisfied performance obligations for (i) contracts with an original expected length of one year |
Investments
Investments | 6 Months Ended |
Jun. 30, 2022 | |
Investments | |
Investments | 3. Investments The following table provides the Company’s investment income, and realized gains and losses on investments during the periods presented: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Investment income, net of investment expenses $ 313 $ 419 $ 578 $ 429 Realized gains on investments 4 20 6 20 Realized losses on investments (74) (52) (144) (52) Investment income and realized gains, net of investment expenses $ 243 $ 387 $ 440 $ 397 The following table provides the amortized cost, fair value and unrealized gains and (losses) of the Company’s investment securities: June 30, 2022 Gross Unrealized Amortized Cost Gains Losses Fair Value U.S. Treasuries $ 3,146 $ 1 $ (150) $ 2,997 Obligations of states, municipalities and political subdivisions 10,427 — (922) 9,505 Corporate bonds 31,436 3 (2,191) 29,248 Residential and commercial mortgage-backed securities 15,524 15 (942) 14,597 Other loan-backed and structured securities 8,419 — (373) 8,046 Total debt securities $ 68,952 $ 19 $ (4,578) $ 64,393 December 31, 2021 Gross Unrealized Amortized Cost Gains Losses Fair Value U.S. Treasuries $ 5,452 $ 1 $ (36) $ 5,417 Obligations of states, municipalities and political subdivisions 8,913 21 (84) 8,850 Corporate bonds 31,491 89 (155) 31,425 Residential and commercial mortgage-backed securities 14,387 34 (139) 14,282 Other loan-backed and structured securities 7,637 5 (41) 7,601 Total debt securities $ 67,880 $ 150 $ (455) $ 67,575 The amortized cost and fair value of securities at June 30, 2022, by contractual maturity, are shown in the following table. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. June 30, 2022 Remaining Time to Maturity Amortized Cost Fair Value Due in one year or less $ 6,583 $ 6,539 Due after one year through five years 20,701 19,441 Due after five years through ten years 14,270 12,688 Due after ten years 3,455 3,082 Residential and commercial mortgage-backed securities 15,524 14,597 Other loan-backed and structured securities 8,419 8,046 Total $ 68,952 $ 64,393 Other-than-temporary Impairment The Company regularly reviews its individual investment securities for other-than-temporarily impairment. The Company considers various factors in determining whether each individual security is other-than-temporarily impaired, including: - the financial condition and near-term prospects of the issuer, including any specific events that may affect its operations or earnings; - the extent to which the market value of the security has been below its cost or amortized cost; - general market conditions and industry or sector-specific factors; - nonpayment by the issuer of its contractually obligated interest and principal payments; and - the Company’s intent and ability to hold the investment for a period of time sufficient to allow for the recovery of costs. Securities with gross unrealized loss position, aggregated by investment category and length of time the individual securities have been in a continuous loss position, are as follows: Less Than Twelve Months Twelve Months or Greater Total Gross Gross Gross Unrealized Fair Unrealized Fair Unrealized Fair At June 30, 2022 Loss Value Loss Value Loss Value U.S. Treasuries $ (127) $ 1,935 $ (23) $ 746 $ (150) $ 2,681 Obligations of states, municipalities and political subdivisions (737) 7,172 (185) 2,033 (922) 9,205 Corporate bonds (2,088) 19,257 (103) 1,974 (2,191) 21,231 Residential and commercial mortgage-backed securities (848) 12,570 (94) 1,571 (942) 14,141 Other loan-backed and structured securities (365) 7,821 (8) 219 (373) 8,040 Total securities $ (4,165) $ 48,755 $ (413) $ 6,543 $ (4,578) $ 55,298 Less Than Twelve Months Twelve Months or Greater Total Gross Gross Gross Unrealized Fair Unrealized Fair Unrealized Fair At December 31, 2021 Loss Value Loss Value Loss Value U.S. Treasuries $ (36) $ 5,007 $ — $ — $ (36) $ 5,007 Obligations of states, municipalities and political subdivisions (84) 4,292 — — (84) 4,292 Corporate bonds (155) 15,446 — — (155) 15,446 Residential and commercial mortgage-backed securities (139) 9,687 — — (139) 9,687 Other loan-backed and structured securities (41) 6,818 — — (41) 6,818 Total securities $ (455) $ 41,250 $ — $ — $ (455) $ 41,250 At June 30, 2022, and December 31, 2021, there were 446 and 358 securities, respectively, in an unrealized loss position. Of these securities, 77 had been in an unrealized loss position for 12 months or longer. The Company believes there were no fundamental issues such as credit losses or other factors with respect to any of its available-for-sale securities. The unrealized losses on investments in fixed-maturity securities were caused primarily by interest rate changes. It is expected that the securities would not be settled at a price less than par value of the investments. Because the declines in fair value are attributable to changes in interest rates or market conditions and not credit quality, and because the Company has the ability and intent to hold its available-for-sale investments until a market price recovery or maturity, the Company does not consider any of its investments to be other-than-temporarily impaired at June 30, 2022. |
Fair Value
Fair Value | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value | |
Fair Value | 4. Fair Value The following table details the fair value measurements of assets and liabilities that are measured at fair value on a recurring basis: Fair Value Measurement at June 30, 2022 Total Level 1 Level 2 Level 3 Fair Value Assets Money market mutual funds $ 12,354 $ — $ — $ 12,354 Debt securities: U.S. Treasuries 2,997 — — 2,997 Obligations of states and municipalities — 9,505 — 9,505 Corporate bonds — 29,248 — 29,248 Residential and commercial mortgage-backed securities — 14,597 — 14,597 Other loan-backed and structured securities — 8,046 — 8,046 $ 15,351 $ 61,396 $ — $ 76,747 Liabilities Contingent consideration - business combinations $ — $ — $ 29,858 $ 29,858 Contingent consideration - earnout — — 100 100 Private warrant liability — — 926 926 $ — $ — $ 30,884 $ 30,884 Fair Value Measurement at December 31, 2021 Total Level 1 Level 2 Level 3 Fair Value Assets Money market mutual funds 17,318 $ — $ — $ 17,318 Debt securities: U.S. Treasuries 5,417 — — 5,417 Obligations of states and municipalities — 8,850 — 8,850 Corporate bonds — 31,425 — 31,425 Residential and commercial mortgage-backed securities — 14,282 — 14,282 Other loan-backed and structured securities — 7,601 — 7,601 $ 22,735 $ 62,158 $ — $ 84,893 Liabilities Contingent consideration - business combinations $ — $ — $ 9,617 $ 9,617 Contingent consideration - earnout — — 13,866 13,866 Private warrant liability — — 15,193 15,193 $ — $ — $ 38,676 $ 38,676 Financial Assets Money market mutual funds are valued at the closing price reported by the fund sponsor from an actively traded exchange. As the funds are generally maintained at a net asset value which does not fluctuate, cost approximates fair value. These are included as a Level 1 measurement in the table above. The fair values for available-for-sale fixed-maturity securities are based upon prices provided by an independent pricing service. The Company has reviewed these prices for reasonableness and has not adjusted any prices received from the independent provider. Level 2 securities represent assets whose fair value is determined using observable market information such as previous day trade prices, quotes from less active markets or quoted prices of securities with similar characteristics. There were no transfers between Level 1 and Level 2. Contingent Consideration – Business Combinations The Company estimated the fair value of the business combination contingent consideration triggered by EBITDA or revenue milestones, related to certain 2021 acquisitions using the Monte Carlo simulation method. The fair value of $0.1 million and $0.3 million as of June 30, 2022, and December 31, 2021, respectively, is based on the simulated revenue and net income (loss) of the Company over the maturity date of the contingent consideration. The Company estimated the fair value of the business combination contingent consideration that is triggered by stock price milestones, related to Floify acquisition in October 2021, using the Monte Carlo simulation method. The fair value is based on the simulated stock price of the Company over the maturity date of the contingent consideration. As of June 30, 2022, the key inputs used to determine the fair value of $14.1 million, were the stock price of $2.56, strike price of $36.00, discount rate of 11.2% and volatility of 75%. As of December 31, 2021, the key inputs used in the determination of the fair value of $9.3 million included the volume weighted average price of $16.37, strike price of $36.00, discount rate of 7% and volatility of 60%. The Company estimated the fair value of the business combination contingent consideration based on specific metrics, related to the acquisition of Residential Warranty Services (“RWS”), described in Note 13, using the Monte Carlo simulation method. The fair value is based on the simulated metrics of the Company over the maturity date of the contingent consideration. As of June 30, 2022, the key inputs used to determine the fair value of $15.6 million, were the discount rate of 15% and volatility of 24%. Contingent Consideration - Earnout The Company estimated the fair value of the earnout contingent consideration using the Monte Carlo simulation method. The fair value of $0.1 million is based on the simulated price of the Company over the maturity date of the contingent consideration and increased by certain employee forfeitures. As of June 30, 2022, the key inputs used to determine the fair value included exercise price of $22.00, volatility of 75%, forfeiture rate of 15% and stock price of $2.56. As of December 31, 2021, the key inputs used in the determination of the fair value included exercise price of $22.00, volatility of 65%, forfeiture rate of 15% and stock price of $15.59. Private Warrants The Company estimated the fair value of the private warrants of $0.9 million using the Black-Scholes-Merton option pricing model. As of June 30, 2022, the key inputs used to determine the fair value included exercise price of $11.50, expected volatility of 75%, remaining contractual term of 3.48 years, and stock price of $2.56. As of December 31, 2021, the key inputs used to determine the fair value included exercise price of $11.50, expected volatility of 60%, remaining contractual term of 3.98 years, and stock price of $15.59. Level 3 Rollforward Fair value measurements categorized within Level 3 are sensitive to changes in the assumptions or methodology used to determine fair value and such changes could result in a significant increase or decrease in the fair value. The changes for Level 3 items measured at fair value on a recurring basis using significant unobservable inputs are as follows: Contingent Contingent Consideration - Private Consideration - Business Warrant Earnout Combinations Liability Fair value as of January 1, 2022 $ 13,866 $ 9,617 $ 15,193 Additions — — — Settlements — — — Change in fair value, loss (gain) included in net loss (1) (11,179) 3,205 (10,189) Fair value as of March 31, 2022 $ 2,687 $ 12,822 $ 5,004 Additions — 15,555 — Settlements — — — Change in fair value, loss (gain) included in net loss (1) (2,587) 1,481 (4,078) Fair value as of June 30, 2022 $ 100 $ 29,858 $ 926 Contingent Contingent Consideration - Private Consideration - Business Warrant Earnout Combinations Liability Fair value as of January 1, 2021 $ 50,238 $ 3,549 $ 31,534 Additions — 1,737 — Settlements (25,815) (2,062) — Change in fair value, loss (gain) included in net loss (1) 18,770 (355) 15,910 Fair value as of March 31, 2021 $ 43,193 $ 2,869 $ 47,444 Additions — — — Settlements — — (16,843) Change in fair value, loss (gain) included in net loss (1) 4,031 (300) 4,302 Fair value as of June 30, 2021 $ 47,224 $ 2,569 $ 34,903 (1) Changes in fair value of contingent consideration related to business combinations are included in general and administrative expenses in the unaudited condensed consolidated statements of operations. Ch anges in fair value of the earnout contingent consideration and private warrant liability are disclosed separately in the unaudited condensed consolidated statements of operations. Fair Value Disclosure As of June 30, 2022, and December 31, 2021, the fair value of the convertible senior notes is $225.3 million and $400.4 million, respectively. The decrease of $199.8 million is primarily due to the decline in the stock price at June 30, 2022, as compared to December 31, 2021. The fair value of other debt approximates the unpaid principal balance and is considered a Level 3 measurement. See Note 7. |
Property, Equipment, and Softwa
Property, Equipment, and Software | 6 Months Ended |
Jun. 30, 2022 | |
Property, Equipment, and Software | |
Property, Equipment, and Software | 5. Property, Equipment, and Software Property, equipment, and software net, consists of the following: June 30, December 31, 2022 2021 Software and computer equipment $ 8,071 $ 7,287 Furniture, office equipment, and other 2,220 2,006 Internally developed software 15,241 13,102 Leasehold improvements 1,160 2,191 26,692 24,586 Less: Accumulated depreciation and amortization (16,708) (17,920) Property, equipment, and software, net $ 9,984 $ 6,666 Depreciation and amortization expense related to property, equipment, and software was $1.0 million and $1.2 million for the three months ended June 30, 2022 and 2021, respectively, and $2.0 million and $2.3 million for the six months ended June 30, 2022, and 2021, respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Jun. 30, 2022 | |
Intangible Assets and Goodwill | |
Intangible Assets and Goodwill | 6. Intangible Assets and Goodwill Intangible Assets Intangible assets are stated at cost or acquisition-date fair value less accumulated amortization, and consist of the following, as of June 30, 2022: Weighted Average Intangible Intangible Useful Life Assets, Accumulated Assets, (in years) gross Amortization Net Customer relationships 8.0 $ 71,480 $ (10,557) $ 60,923 Acquired technology 5.0 50,115 (15,105) 35,010 Trademarks and tradenames 12.0 26,088 (3,790) 22,298 Non-compete agreements 3.0 650 (378) 272 Value of business acquired 1.0 400 (400) — Renewal rights 6.0 9,824 (1,462) 8,362 Trademarks and tradenames Indefinite 4,750 — 4,750 Insurance licenses Indefinite 4,960 — 4,960 Total intangible assets $ 168,267 $ (31,692) $ 136,575 The aggregate amortization expense related to intangibles was $5.4 million and $2.7 million for the three months ended June 30, 2022 and 2021, respectively, and $10.9 million and $4.1 million for the six months ended June 30, 2022 and 2021, respectively. Goodwill The following tables summarize the changes in the carrying amount of goodwill for the three and six months ended June 30, 2022: Goodwill Balance as of December 31, 2021 $ 225,654 Purchase price adjustments 922 Balance as of March 31, 2022 226,576 Acquisitions 47,445 Purchase price adjustments (190) Balance as of June 30, 2022 $ 273,831 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2022 | |
Debt | |
Debt | 7. Debt At June 30, 2022, debt comprised of the following: Debt Unaccreted Issuance Carrying Principal Discount Costs Value Convertible senior notes, due 2026 $ 425,000 $ — $ (9,673) $ 415,327 Line of credit, due 2022 1,000 — — 1,000 Other notes 450 (59) — 391 $ 426,450 $ (59) $ (9,673) $ 416,718 Convertible Senior Notes Interest expense recognized related to the 0.75% Convertible Senior Notes due 2026 (the “2026 Notes”) was approximately $1.4 and $2.7 million for the three and six months ended June 30, 2022, and comprised of contractual interest expense and amortization of debt issuance costs. There was no interest expense related to the 2026 Notes in the three and six months ended June 30, 2021. Line of Credit In connection with the acquisition of Homeowners of America on April 5, 2021, the Company assumed a $5.0 million revolving line of credit (“RLOC”) with Legacy Texas Bank. Outstanding balances under the RLOC bear interest at the Wall Street Journal Prime + 0% and mature on November 16, 2022. In addition, the Company pays 0.25% per annum of the daily-unused portion of the RLOC. Outstanding borrowings on the RLOC at June 30, 2022, were $1.0 million. Collateral for the RLOC includes all assets and stock of Homeowners of America Holding Corporation (“HAHC”), HOA’s insurance holding company, and its subsidiaries. The credit agreement is subject to standard financial covenants and reporting requirements. At June 30, 2022, the Company was in compliance with all required covenants. Term Loan Facility In connection with the acquisition of HOA on April 5, 2021, the Company assumed a nine-year, $10.0 million term loan facility with a local bank. As of June 30, 2022, the Company has made no borrowings on the term loan facility. |
Equity and Warrants
Equity and Warrants | 6 Months Ended |
Jun. 30, 2022 | |
Equity and Warrants | |
Equity and Warrants | 8. Equity and Warrants Common Shares Outstanding and Common Stock Equivalents The following table summarizes the Company’s fully diluted capital structure: June 30, December 31, 2022 2021 Issued and outstanding common shares 97,390,528 95,911,597 Earnout common shares 2,050,000 2,050,000 Total common shares issued and outstanding 99,440,528 97,961,597 Common shares reserved for future issuance: Private warrants 1,795,700 1,795,700 Common stock options outstanding (Note 9) 4,429,426 4,822,992 Restricted stock units and awards (Note 9) 7,157,392 2,717,154 2020 Equity Plan pool reserved for future issuance 7,324,131 8,126,263 Convertible senior notes, due 2026 (1) 16,998,130 16,998,130 Total shares of common stock outstanding and reserved for future issuance 137,145,307 132,421,836 (1) In connection with the September 16, 2021, issuance of the 2026 Notes, the Company used a portion of the proceeds to pay for the capped call transactions, which are expected to generally reduce the potential dilution to the Company’s common stock. The capped call transactions impact the number of shares that may be issued by effectively increasing the conversion price for the Company from $25 per share to approximately $37.74 per share, which would result in 11,261,261 potentially dilutive shares instead of the shares reported in this table. The table above excludes common stock contingently issuable in connection with prior acquisitions. Such common stock is issuable to the extent specified operational milestones are achieved or market conditions are met in the future. Warrants There was no activity related to public and private warrants during the six months ended June 30, 2022. Number of Common Shares Issued Cash Received Balances as of January 1, 2022 1,795,700 $ — Exercised — — Canceled — — Balances as of June 30, 2022 1,795,700 $ — |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2022 | |
Stock-Based Compensation | |
Stock-Based Compensation | 9. Stock-Based Compensation Under the Company’s 2020 Stock Incentive Plan, which replaced the Company’s 2012 Equity Incentive Plan in December 2020, the employees, directors and consultants of the Company are eligible for grants of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards (“RSA”), restricted stock units (“RSU”), performance awards (“PRSU”), and other stock awards, collectively referred to as “Awards”. Stock-based compensation consists of expense related to equity awards in the normal course, earnout restricted stock and a secondary market transaction as described below: Three months ended Six months ended June 30, June 30, 2022 2021 2022 2021 Secondary market transaction $ — $ — $ — $ 1,933 Employee earnout restricted stock — 4,176 — 16,549 Employee awards 9,702 2,466 15,556 4,995 Total operating expenses $ 9,702 $ 6,642 $ 15,556 $ 23,477 Detail related to stock option, RSU and RSA activity for the three and six months ended June 30, 2022, is as follows: Number of Number of Number of Restricted Restricted Options Stock Units Stock Awards Balances as of December 31, 2021 4,822,992 2,712,762 4,392 Granted - RSUs — 1,001,986 — Granted - PRSUs — 883,739 — Vested — (241,463) (4,392) Exercised (185,685) — — Forfeited, canceled or expired (67,564) (131,038) — Balances as of March 31, 2022 4,569,743 4,225,986 — Granted - RSUs 9,396 2,903,594 — Granted - PRSUs — 904,795 — Vested — (563,406) — Exercised (88,772) — — Forfeited, canceled or expired (60,941) (313,577) — Balances as of June 30, 2022 4,429,426 7,157,392 — |
Reinsurance
Reinsurance | 6 Months Ended |
Jun. 30, 2022 | |
Reinsurance | |
Reinsurance | 10. Reinsurance The effects of reinsurance on premiums written and earned for the three and six months ended June 30, 2022, and 2021 were as follows: Three Months Ended June 30, 2022 2021 Written Earned Written Earned Direct premiums $ 124,914 $ 93,082 $ 81,132 $ 62,352 Ceded premiums (117,926) (83,095) (70,844) (59,077) Net premiums $ 6,988 $ 9,987 $ 10,288 $ 3,275 Six Months Ended June 30, 2022 2021 Written Earned Written Earned Direct premiums $ 212,037 $ 177,400 $ 81,132 $ 62,352 Ceded premiums (178,562) (154,822) (70,844) (59,077) Net premiums $ 33,475 $ 22,578 $ 10,288 $ 3,275 The effects of reinsurance on incurred losses and loss adjustment expense (“LAE”) for the three and six months ended June 30, 2022, and 2021 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Direct losses and LAE $ 74,617 $ 125,295 $ 142,838 $ 125,295 Ceded losses and LAE (60,133) (114,570) (119,106) (114,570) Net losses and LAE $ 14,484 $ 10,725 $ 23,732 $ 10,725 The detail of reinsurance balances due is as follows: June 30, 2022 December 31, 2021 Ceded unearned premium $ 177,450 $ 153,710 Losses and LAE reserve 75,730 56,752 Reinsurance recoverable 20,460 17,780 Other 331 174 Reinsurance balance due $ 273,971 $ 228,416 |
Unpaid Losses and Loss Adjustme
Unpaid Losses and Loss Adjustment Reserve | 6 Months Ended |
Jun. 30, 2022 | |
Unpaid Losses and Loss Adjustment Reserve | |
Unpaid Losses and Loss Adjustment Reserve | 11. Unpaid Losses and Loss Adjustment Reserve The following table provides the rollforward of the beginning and ending reserve balances for unpaid losses and LAE, gross of reinsurance for the three and six months ended June 30, 2022: 2022 Reserve for unpaid losses and LAE, at December 31, 2021 $ 61,949 Reinsurance recoverables on losses and LAE (56,752) Reserve for unpaid losses and LAE reserve, net of reinsurance recoverables at December 31, 2021 5,197 Add provisions (reductions) for losses and LAE occurring in: Current year 9,868 Prior years (620) Net incurred losses and LAE during the current year 9,248 Deduct payments for losses and LAE occurring in: Current year (4,431) Prior years (1,602) Net claim and LAE payments during the current year (6,033) Reserve for unpaid losses and LAE, net of reinsurance recoverables, at end of period 8,412 Reinsurance recoverables on losses and LAE 71,196 Reserve for unpaid losses and LAE at March 31, 2022 79,608 Add provisions (reductions) for losses and LAE occurring in: Current year 13,506 Prior years 979 Net incurred losses and LAE during the current year 14,485 Deduct payments for losses and LAE occurring in: Current year (9,118) Prior years (615) Net claim and LAE payments during the current year (9,733) Reserve for unpaid losses and LAE, net of reinsurance recoverables, at end of period 13,164 Reinsurance recoverables on losses and LAE 75,730 Reserve for unpaid losses and LAE at June 30, 2022 $ 88,894 As a result of additional information on claims occurring in prior years becoming available to management, changes in estimates of provisions of losses and LAE were made, resulting in an increase of $1.0 million and $0.4 million for the three and six months ended June 30, 2022. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 12. Commitments and Contingencies Acquisition Commitments On September 2, 2021, Porch.com, Inc. (“Buyer”), a subsidiary of the Company, entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Covéa Coopérations S.A., a French société anonyme (“Seller”), to acquire all of the shares of GMF Financial Services Corporation (“GMFF”), which owns all of the issued and outstanding stock of Civil Service Employees Insurance Company, CSE Safeguard Insurance Company, CSE Insurance Services, Inc. and CSE Group Services Company, a California-based personal lines insurer focused on property and auto, (collectively, “CSE”), for a purchase price of $48.6 million in cash, subject to customary conditions, including, among others, the absence of a material adverse effect on GMFF and the receipt of specified governmental consents and approvals (the “Transaction”). The Purchase Agreement was terminated on August 8, 2022, see Note 16 for additional information. Litigation From time to time the Company is or may become subject to various legal proceedings arising in the ordinary course of business, including proceedings initiated by users, other entities, or regulatory bodies. Estimated liabilities are recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In many instances, the Company is unable to determine whether a loss is probable or to reasonably estimate the amount of such a loss and, therefore, the potential future losses arising from a matter may differ from the amount of estimated liabilities the Company has recorded in the financial statements covering these matters. The Company reviews its estimates periodically and makes adjustments to reflect negotiations, estimated settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular matter. Cases under Telephone Consumer Protection Act Porch and/or an acquired entity, GoSmith.com, are party to twelve legal proceedings alleging violations of the automated calling and/or Do Not Call restrictions of the Telephone Consumer Protection Act of 1991. Some of these actions allege related state law claims. The proceedings were commenced as mass tort action by a single plaintiffs’ law firm in December 2019 and April/May 2020 in federal district courts throughout the United States. One of the actions was dismissed with prejudice and is on appeal before the Ninth Circuit Court of Appeals. The remainder have been consolidated in the United States District Court for the Western District of Washington, where Porch resides. That case is stayed pending the outcome of the appeal. Plaintiffs seek actual, statutory, and/or treble damages, injunctive relief, and reasonable attorneys’ fees and costs. These actions are at an early stage in the litigation process. It is not possible to determine the likelihood of an unfavorable outcome of these disputes, although it is reasonably possible that the outcome of these actions may be unfavorable. Further, it is not possible to estimate the range or amount of potential loss (if the outcome should be unfavorable). Porch intends to contest these cases vigorously. Kandela, LLC v Porch.com, Inc. In May 2020, the former owners of Kandela, LLC filed complaints against Porch in the Superior Court of the State of California, alleging a breach of contract related to the terms and achievement of an earnout agreement related to the acquisition of the Kandela business and related fraudulent inducement claims. Claimants sought to recover compensatory damages based on an asset purchase agreement entered into with Porch and related employment agreements. Claimants also sought punitive damages, attorney’s fees and costs. Certain claimants settled their claims, and this settlement is within the range of the estimated accrual. Arbitration of the remaining claims occurred in March 2022. In May 2022, the arbitrator issued an interim award finding no merit to any of the claims asserted by claimant Kandela, LLC and determined Porch to be the prevailing party on all counts. In July 2022, the arbitrator issued a final award, affirming the interim award and awarding Porch its prevailing party legal fees and costs. We will pursue collection of our legal fees and do not expect to record any recovery until we are able to collect the fees in cash. Porch had previously recorded an estimated accrual related to the claims underlying the aforementioned settlement, which was reversed in June 2022. Putative Wage and Hours Class Action Proceeding A former employee of HireAHelper™ filed a complaint in San Diego County Superior Court in November 2020, asserting putative class action claims for failure to pay overtime, failure to pay compensation at the time of separation and unfair business practices in violation of California law. HireAHelper™ was served with the complaint in December 2020 and on January 28, 2021 defendants removed the case to the United States District Court for the Southern District of California. The plaintiff seeks to represent all current and former non-exempt employees of HireAHelper™ and Porch (prior to the December 23, 2020 merger) and Porch’s other affiliated companies in the State of California during the relevant time period. Plaintiffs seek damages for unpaid wages, liquidated damages, penalties, attorneys’ fees and costs for which, Porch has recorded an estimated accrual for a contingent loss based on information currently known. The parties recently attended mediation in an effort to resolve the matter. The mediation was successful, and a deal was reached. The parties have executed the long form settlement agreement and obtained preliminary approval from the court on April 25, 2022. Notices went out to the putative class and there were no opt outs. The parties will seek final approval of the settlement from the court on August 11, 2022. If final approval is granted, the settlement will likely be funded around September 11, 2022 and checks will be issued in early October 2022. Those checks expire after 180 days after which, the case will be complete Other In addition, in the ordinary course of business, Porch Group and its subsidiaries are (or may become) parties to litigation involving property, personal injury, contract, intellectual property and other claims, as well as stockholder derivative actions, class action lawsuits and other matters. The amounts that may be recovered in such matters may be subject to insurance coverage. Although the results of legal proceedings and claims cannot be predicted with certainty, neither Porch Group nor any of its subsidiaries is currently a party to any legal proceedings the outcome of which, the Company believes, if determined adversely to the Company, would individually or in the aggregate have a material adverse effect on the business, financial condition or results of operations. |
Business Combinations
Business Combinations | 6 Months Ended |
Jun. 30, 2022 | |
Business Combinations | |
Business Combinations | 13. Business Combinations During the six months ended June 30, 2022, the Company completed a number of business combination transactions. The aggregate transaction costs of $1.1 million primarily comprised of legal and due-diligence fees, and are included in general and administrative expenses on the condensed consolidated statements of operations. The results of operations for each acquisition are included in the Company’s consolidated financial statements from the date of acquisition onwards. The following table summarizes the total consideration and the preliminary estimated fair value of the assets acquired and liabilities assumed for business combinations made by the Company during the six months ended June 30, 2022: Weighted Average Useful Life (in years) RWS Other Total Purchase consideration: Cash (1) $ 25,572 $ 13,763 $ 39,335 Issuance of common stock 3,552 — 3,552 Holdback liabilities and amounts in escrow 1,000 1,500 2,500 Contingent consideration - liability-classified 15,555 — 15,555 Total purchase consideration: $ 45,679 $ 15,263 $ 60,942 Assets: Cash, cash equivalents and restricted cash $ 2,030 $ 256 $ 2,286 Current assets 525 7 532 Property and equipment 497 — 497 Operating lease right-of-use assets 871 — 871 Intangible assets: Customer relationships 7.0 11,920 2,750 14,670 Acquired technology 4.5 500 1,480 1,980 Trademarks and tradenames 9.3 500 200 700 Non-competition agreements 6.6 180 20 200 Renewal rights 5.0 90 — 90 Goodwill 36,726 10,719 47,445 Total assets acquired 53,839 15,432 69,271 Current liabilities (4,884) (169) (5,053) Operating lease liabilities, non-current (871) — (871) Long term liabilities (2,405) — (2,405) Net assets acquired $ 45,679 $ 15,263 $ 60,942 (1) April 1, 2022 Acquisition of Residential Warranty Services (“RWS”) On April 1, 2022, the Company entered into a stock and membership interest purchase agreement with Residential Warranty Services (“RWS”) to acquire its home warranty and inspection software and services businesses. On this date, the Company completed the acquisition of substantially all of RWS’ operations except for those in Florida and California. The aggregate consideration, subject to certain closing adjustments, for the completed acquisitions was $45.7 million, including $20.6 million in cash of which $5.0 million was paid in March 2022, $6.0 million in future cash payable of which $1.0 million will be held in escrow for 24 months to satisfy potential indemnifications, $3.6 million of Porch common stock and additional contingent consideration tied to the performance of a recently launched business line, and $15.6 million in contingent consideration based on specific metrics. $5.0 million of cash consideration was paid in July 2022. The Company recorded the fair value of the assets acquired and liabilities assumed on the acquisition date. The acquisitions of the Florida and California operations are subject to certain regulatory and other approvals and are expected to close in the second half of 2022 or as soon as practicable thereafter. The Company expects to pay approximately $2.4 million, subject to certain closing adjustments, to close these acquisitions. The purpose of the acquisitions is to expand the scope and nature of Porch’s service offerings, add additional team members with important skillsets, and realize synergies. Goodwill is expected to be deductible for tax purposes and is subject to further adjustment pending the closing of the acquisition of the remaining RWS operations in Florida and California. The Company will assign the goodwill to reporting units, which will be determined pending completion of the remaining acquisitions. The following table summarizes the fair value of the intangible assets of RWS as of the date of the acquisition: Estimated Fair Useful Life Value (in years) Intangible assets: Customer relationships $ 11,920 5.4 Acquired technology 500 3.0 Trademarks and tradenames 500 9.0 Non-competition agreements 180 7.0 Renewal rights 90 5.0 $ 13,190 The weighted-average amortization period for the acquired intangible assets is 5.5 years. The estimated fair value of the customer related intangible assets, including renewal rights, was calculated through the income approach using the multi-period excess earnings methodology. The estimated fair value of the trademarks and tradenames were calculated through the income approach using the relief from royalty methodology. The estimated fair value of the acquired internally developed and used technology was derived using the cost approach considering the estimated costs to replicate existing software. The estimated fair value of the non-competition agreement was calculated through the income approach using the with and without method over the contractual term of the agreement. Other acquisitions In the quarter ended June 30, 2022, the Company completed one or more acquisitions which were not material to the condensed consolidated financial statements. The purpose of any such acquisition, may include without limitation, to expand the scope and nature of the Company’s services offerings, add additional team members with important skillsets, and/or realize synergies. Goodwill of $10.7 million is expected to be deductible for tax purposes. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2022 | |
Segment Information | |
Segment Information | 14. Segment Information Beginning in 2021, the Company has two reportable segments that are also operating segments: Vertical Software and Insurance. These reportable segments have been identified based on how our chief operating decision-maker (“CODM”) manages the business, makes operating decisions and evaluates operating and financial performance. The Chief Executive Officer is the CODM and reviews financial and operational information for the two reportable segments. Operating segments are components of an enterprise for which separate discrete financial information is available and operational results are regularly evaluated by the CODM for the purposes of making decisions regarding resource allocation and assessing performance. The Vertical Software segment primarily consists of a vertical software platform for the home, providing software and services to home services companies, such as home inspectors, moving companies, utility companies, title companies and others, and includes software fee revenues from companies, and non-insurance revenue. The Vertical Software segment also includes per-lead and per-quote-based revenue from insurance companies. The Insurance segment offers various forms of homeowner insurance policies through its own insurance carrier and certain homeowner and auto insurance policies through its licensed insurance agency. The Insurance segment also includes home warranty service revenue. The following table provides the Company’s revenue by segment: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Segment revenues: Vertical Software $ 42,813 $ 34,404 $ 77,501 $ 59,342 Insurance 27,956 16,936 55,829 18,741 Total segment revenue $ 70,769 $ 51,340 $ 133,330 $ 78,083 The Company’s segment operating and financial performance measure is segment Adjusted EBITDA (loss). Segment Adjusted EBITDA (loss) is defined as revenue less the following expenses associated with these segments: cost of revenue, sales and marketing, product and technology, and general and administrative expenses. Segment Adjusted EBITDA (loss) also excludes non-cash items or items that management does not consider are reflective of ongoing core operations. Currently, the Company does not allocate any shared expenses to the reportable segments. These expenses are included in Corporate and Other. Corporate and Other includes shared expenses such as sales and marketing, certain product and technology, accounting, human resources, legal and general and administrative, and other income, expenses, gains and losses that are not allocated in assessing segment performance due to their function. Such transactions are excluded from the reportable segments results but included in reported consolidated results. The reconciliation of segment Adjusted EBITDA (loss) to consolidated loss from operations below includes the effects of corporate and other items that the CODM does not consider in assessing segment performance. The following tables provide financial information for the two reportable segments and reconciliations to consolidated financial information for the periods presented: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Segment adjusted EBITDA (loss): Vertical Software $ 6,038 $ 8,107 $ 9,022 $ 11,258 Insurance (5,068) (2,951) (1,782) (2,443) Corporate and Other (15,237) (15,073) (28,577) (28,334) Total segment adjusted EBITDA (loss) (14,267) (9,925) (21,337) (19,519) Reconciling items: Depreciation and amortization (6,416) (3,894) (12,899) (6,356) Non-cash stock-based compensation expense (9,702) (7,035) (15,556) (24,160) Acquisition and related expense (214) (1,056) (1,110) (1,784) Non-cash long-lived asset impairment charge — (72) (70) (139) Revaluation of contingent consideration (1,481) (574) (4,686) (220) Investment income and realized gains (243) (387) (440) (397) Non-cash bonus expense 1,526 — — — Operating loss $ (30,797) $ (22,943) $ (56,098) $ (52,575) The CODM does not review assets on a segment basis. All of the Company’s revenue is generated in the United States. As of June 30, 2022 and December 31, 2021, the Company did not have assets located outside of the United States. |
Basic and Diluted Net Loss Per
Basic and Diluted Net Loss Per Share | 6 Months Ended |
Jun. 30, 2022 | |
Basic and Diluted Net Loss Per Share | |
Basic and Diluted Net Loss Per Share | 15. Basic and Diluted Net Loss Per Share Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities. Under the two-class method, basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per share attributable to common stockholders adjusts basic earnings per share for the potentially dilutive impact of stock options, RSUs, PRSUs, RSAs, convertible notes, earnout shares and warrants. As the Company has reported losses for all periods presented, all potentially dilutive securities are antidilutive and accordingly, basic net loss per share equals diluted net loss per share. The following table sets forth the computation of the Company’s basic and diluted net loss attributable per share to common stockholders for the three and six months ended June 30, 2022 and 2021: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Numerator: Net loss used to compute net loss per share - basic and diluted $ (26,377) $ (16,296) $ (32,173) $ (81,398) Denominator: Weighted average shares outstanding used to compute loss per share - basic and diluted 97,142,163 95,221,928 96,611,294 91,483,053 Loss per share - basic and diluted $ (0.27) $ (0.17) $ (0.33) $ (0.89) The following table discloses securities that could potentially dilute basic net loss per share in the future that were not included in the computation of diluted net loss per share because to do so would have been antidilutive for all periods presented: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Stock options 4,429,426 6,350,253 4,429,426 6,350,253 Restricted stock units and awards 5,331,673 2,975,463 5,331,673 2,975,463 Performance restricted stock units 1,825,719 — 1,825,719 — Public and private warrants 1,795,700 3,125,154 1,795,700 3,125,154 Earnout shares 2,050,000 4,099,999 2,050,000 4,099,999 Convertible debt (1) 16,998,130 — 16,998,130 — (1) |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events. | |
Subsequent Events | 16. Subsequent Events Termination of the Acquisition Commitment As mentioned in Note 12, on September 2, 2021, Porch.com, Inc. (“Buyer”), a subsidiary of the Company, entered into a Stock Purchase Agreement (the “Purchase Agreement”) with Covéa Coopérations S.A., a French société anonyme (“Seller”), to acquire all of the shares of GMF Financial Services Corporation (“GMFF”), which owns all of the issued and outstanding stock of Civil Service Employees Insurance Company, CSE Safeguard Insurance Company, CSE Insurance Services, Inc. and CSE Group Services Company, a California-based personal lines insurer focused on property and auto, (collectively, “CSE”), for a purchase price of $48.6 million in cash, subject to customary conditions, including, among others, the absence of a material adverse effect on GMFF and the receipt of specified governmental consents and approvals (the “Transaction”). Buyer and Seller have mutually determined not to proceed with the Transaction, and on August 8, 2022, Buyer and Seller entered into a termination agreement, pursuant to which the parties agreed to terminate the Purchase Agreement effective immediately pursuant to Section 7.1(d) of the Purchase Agreement. In addition, on August 8, 2022, Buyer’s external counsel submitted a letter to the California Department of Insurance withdrawing the Form A Applications filed by Buyer and the other applicants with respect to the Transaction. Borrowings on Term Loan Facility and Line of Credit During August 2022, the Company drew an additional $4.0 million on the RLOC described in Note 7. The Company also borrowed |
Description of Business and S_2
Description of Business and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Description of Business and Summary of Significant Accounting Policies | |
Unaudited Interim Financial Statements | Unaudited Interim Financial Statements The accompanying unaudited condensed consolidated financial statements include the accounts of Porch Group, Inc. and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, these unaudited condensed consolidated financial statements and notes should be read in conjunction with the Annual Report on Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on March 16, 2022. The information as of December 31, 2021, included in the unaudited condensed consolidated balance sheets was derived from the Company’s audited consolidated financial statements. The unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q (this “Quarterly Report”) were prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments (all of which are of a normal recurring nature) considered necessary to present fairly the Company’s financial position, results of operations, comprehensive loss, stockholders’ equity, and cash flows for the periods and dates presented. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022, or any other interim period or future year. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss consists of adjustments related to unrealized gains and losses on available-for-sale securities. |
Reclassifications | Reclassifications Certain reclassifications to previously reported 2021 balances were made to conform to the current period presentation in the unaudited condensed consolidated statements of cash flows. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the amounts reported and disclosed in the unaudited condensed consolidated financial statements and accompanying notes. On an ongoing basis these estimates, which include, but are not limited to, estimated variable consideration for services performed, estimated lifetime value of insurance agency commission revenue, current estimate for credit losses, depreciable lives for property and equipment, the valuation of and useful lives for acquired intangible assets, goodwill, the valuation allowance on deferred tax assets, assumptions used in stock-based compensation expense, unpaid losses for insurance claims and loss adjustment expenses, contingent consideration, earnout liabilities and private warrant liabilities, are evaluated by management. Actual results could differ materially from those estimates, judgments, and assumptions. |
Concentrations | Concentrations Financial instruments which potentially subject the Company to credit risk consist principally of cash, money market accounts on deposit with financial institutions, money market funds, certificates of deposit and fixed-maturity securities, as well as receivable balance in the course of collection. The Company’s insurance carrier subsidiary has exposure and remains liable in the event of insolvency of one of its primary reinsurers. Management and its reinsurance intermediary regularly assess the credit quality and ratings of its reinsurer counterparties. One reinsurer represented more than 10% individually, and 34% in aggregate, of the Company’s insurance subsidiary’s total reinsurance receivables as of June 30, 2022. Substantially all of the Company’s insurance-related revenues in the Insurance segment are derived from customers in Texas (which represent approximately 55% of such revenues in the six months ended June 30, 2022), South Carolina, North Carolina, Georgia, Virginia and Arizona, which could be adversely affected by economic conditions, an increase in competition, or environmental impacts and changes. No individual customer represented more than 10% of the Company’s total revenue for the three and six months ended June 30, 2022 or 2021. As of June 30, 2022 and December 31, 2021, no individual customer accounted for 10% or more of the Company’s total accounts receivable. As of June 30, 2022, the Company held approximately $169.7 million of cash with one U.S. commercial bank. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. The Company maintains cash balances that may exceed the insured limits by the Federal Deposit Insurance Corporation. Restricted cash equivalents as of June 30, 2022 includes $0.5 million held in certificates of deposits and money market mutual funds pledged to the Department of Insurance in certain states as a condition of its Certificate of Authority for the purpose of meeting obligations to policyholders and creditors, $7.7 million in funds held for the payment of possible warranty claims as required under regulatory guidelines in twenty five twenty five The reconciliation of cash and cash equivalents to amounts presented in the unaudited condensed consolidated statements of cash flows are as follows: June 30, 2022 December 31, 2021 Cash and cash equivalents $ 271,003 $ 315,741 Restricted cash and restricted cash equivalents - current 10,574 8,551 Restricted cash and restricted cash equivalents - non-current 500 500 Cash, cash equivalents and restricted cash $ 282,077 $ 324,792 |
Accounts Receivable and Long-term Insurance Commissions Receivable | Accounts Receivable and Long-term Insurance Commissions Receivable Accounts receivable consist principally of amounts due from enterprise customers and other corporate partnerships, as well as credit card receivables. The Company estimates allowances for uncollectible receivables based on the creditworthiness of its customers, historical trend analysis and general economic conditions. Consequently, an adverse change in those factors could affect the Company’s estimate of allowance for doubtful accounts. The allowance for uncollectible receivables at June 30, 2022 and December 31, 2021, was $0.5 million and $0.4 million, respectively. Long-term insurance commissions receivable balance consists of the estimated commissions from policy renewals expected to be collected. The Company records the amount of renewal insurance commissions expected to be collected in the next twelve months as current accounts receivable. |
Deferred Policy Acquisition Costs | Deferred Policy Acquisition Costs The Company capitalizes deferred policy acquisitions costs (“DAC”) which consist primarily of commissions, premium taxes and policy underwriting and production expenses that are directly related to the successful acquisition by the Company’s insurance subsidiary of new or renewal insurance contracts. DAC are amortized to expense on a straight-line basis over the terms of the policies to which they relate, which is generally one year. The amortization of DAC is included in sales and marketing expense in the unaudited condensed consolidated statements of operations and comprehensive loss. DAC is also reduced by ceding commissions paid by reinsurance companies which represent recoveries of acquisition costs. DAC is periodically reviewed for recoverability and adjusted if necessary. Future investment income is considered in determining the recoverability of DAC. As of June 30, 2022, and December 31, 2021, DAC of $7.8 million and $4.0 million is included in prepaid expenses and other current assets. Changes in DAC for the three and six months ended June 30, 2022, are as follows: 2022 Deferred policy acquisition costs at December 31, 2021 (net) $ 3,988 Capitalized costs 16,753 Amortized costs (13,001) Deferred policy acquisition costs at March 31, 2022 (net) 7,740 Capitalized costs 23,617 Amortized costs (23,584) Deferred policy acquisition costs at June 30, 2022 (net) $ 7,773 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value, as defined by the accounting standards, represents the amount at which an asset or liability would be transferred in a current orderly transaction between willing market participants. Emphasis is placed on observable inputs being used to assess fair value. To reflect this approach the standards require a three-tiered fair value hierarchy be applied based on the nature of the inputs used when measuring fair value. The three hierarchical levels of inputs are as follows: Level 1 Observable inputs, such as quoted prices (unadjusted) in active markets for identical assets or liabilities at the measurement date; Level 2 Observable inputs, other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. This may include active markets for similar assets and liabilities, quoted prices in markets that are not highly active, or other inputs that are observable or can be corroborated by observable market data; and Level 3 Unobservable inputs that are arrived at by means other than current observable market activity. The level of the least observable significant input used in assessing the fair value determines the placement of the entire fair value measurement in the hierarchy. Management’s assessment of the significance of a particular input to the fair value measurement requires the use of judgment specific to the asset or liability. |
Other Insurance Liabilities, Current | Other Insurance Liabilities, Current The following table details the components of other insurance liabilities, current on the condensed consolidated balance sheets: June 30, 2022 December 31, 2021 Ceded reinsurance premiums payable $ 33,268 $ 22,523 Advance premiums 12,721 4,277 Commissions payable, reinsurers and agents 12,414 10,697 Funds held under reinsurance treaty 1,959 2,206 General and accrued expenses payable 1,154 321 Other insurance liabilities, current $ 61,516 $ 40,024 |
Income Taxes | Income Taxes Provisions for income taxes for the three months ended June 30, 2022, and 2021 were a $0.5 million expense and a $7.7 million benefit, respectively, and the effective tax rates for these periods were (1.81)% and 32.18%, respectively. Provisions for income taxes for the six months ended June 30, 2022, and 2021, were a $0.3 million expense and a $8.1 million benefit, respectively, and the effective rates for these periods were (0.91)% and 9.03%, respectively. The difference between the Company’s effective tax rates for the 2022 period and the U.S. statutory rate of 21% was primarily due to a full valuation allowance related to the Company’s net deferred assets. The difference between the Company’s effective tax rates for the 2021 period and the U.S. statutory rate of 21% was primarily due to the release of a portion of the valuation allowance due to deferred tax liabilities created by certain acquisitions. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers fiscal years beginning after December 15, 2022, including interim periods in those fiscal years. The ASU clarifies that early adoption of the amendments is permitted, including adoption in an interim period. An entity that early adopts in an interim period should apply the amendments (1) retrospectively to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of early application and (2) prospectively to all business combinations that occur on or after the date of initial application. The Company early adopted this ASU as of January 1, 2022, and will apply the guidance prospectively for business combinations that occur after the adoption date. Therefore, the adoption will have no impact to the existing consolidated balance sheets, statements of operations, and statements of cash flows. |
Description of Business and S_3
Description of Business and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Description of Business and Summary of Significant Accounting Policies | |
Schedule of cash, cash equivalents and restricted cash | June 30, 2022 December 31, 2021 Cash and cash equivalents $ 271,003 $ 315,741 Restricted cash and restricted cash equivalents - current 10,574 8,551 Restricted cash and restricted cash equivalents - non-current 500 500 Cash, cash equivalents and restricted cash $ 282,077 $ 324,792 |
Schedule of changes in DAC | 2022 Deferred policy acquisition costs at December 31, 2021 (net) $ 3,988 Capitalized costs 16,753 Amortized costs (13,001) Deferred policy acquisition costs at March 31, 2022 (net) 7,740 Capitalized costs 23,617 Amortized costs (23,584) Deferred policy acquisition costs at June 30, 2022 (net) $ 7,773 |
Schedule of components of other insurance liabilities, current | June 30, 2022 December 31, 2021 Ceded reinsurance premiums payable $ 33,268 $ 22,523 Advance premiums 12,721 4,277 Commissions payable, reinsurers and agents 12,414 10,697 Funds held under reinsurance treaty 1,959 2,206 General and accrued expenses payable 1,154 321 Other insurance liabilities, current $ 61,516 $ 40,024 |
Revenue (Tables)
Revenue (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenue | |
Schedule of disaggregation of revenue | Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Vertical Software segment Software and service subscriptions $ 20,544 $ 12,987 $ 38,509 $ 23,867 Move-related transactions (excluding insurance) 17,535 16,295 29,728 25,256 Post-move transactions 4,734 5,122 9,264 10,219 Total Vertical Software segment revenue 42,813 34,404 77,501 59,342 Insurance segment Insurance and warranty premiums, commissions and policy fees (1) 27,956 16,936 55,829 18,741 Total Insurance segment revenue 27,956 16,936 55,829 18,741 Total revenue $ 70,769 $ 51,340 $ 133,330 $ 78,083 (1) |
Summary of the activity impacting the contract assets | Contract Assets Balance at December 31, 2021 $ 9,384 Estimated lifetime value of commissions on insurance policies sold by carriers 4,848 Cash receipts (1,645) Balance at June 30, 2022 $ 12,587 |
Summary of the activity impacting the contract liabilities | Contract Liabilities Balance at December 31, 2021 15,274 Additions to contract liabilities 17,565 Contract liabilities transferred to revenue (13,593) Balance at June 30, 2022 $ 19,246 |
Summary of the activity impacting deferred revenue | Vertical Software Insurance Total Deferred Revenue Deferred Revenue Deferred Revenue Balance at December 31, 2021 $ 3,814 $ 197,271 $ 201,085 Revenue recognized (1) (5,279) (91,994) (97,273) Additional amounts deferred 5,722 89,323 95,045 Balance at March 31, 2022 4,257 194,600 198,857 Revenue recognized (1) (6,027) (97,654) (103,681) Additional amounts deferred 5,815 136,728 142,543 Impact of acquisitions 196 5,510 5,706 Balance at June 30, 2022 $ 4,241 $ 239,184 $ 243,425 (1) In the table above, revenue recognized on earned premiums related to the insurance segment is presented as the gross amount from policy holders excluding the impact of ceded premiums. On the unaudited condensed statements of operations for the three and six months ended June 30, 2022, earned premiums are presented net of ceded premiums of $83.1 million and $154.8 million, respectively . |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Investments | |
Schedule of gain and losses on investments | Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Investment income, net of investment expenses $ 313 $ 419 $ 578 $ 429 Realized gains on investments 4 20 6 20 Realized losses on investments (74) (52) (144) (52) Investment income and realized gains, net of investment expenses $ 243 $ 387 $ 440 $ 397 |
Summary of amortized cost, market value and unrealized gains (losses) of debt securities | June 30, 2022 Gross Unrealized Amortized Cost Gains Losses Fair Value U.S. Treasuries $ 3,146 $ 1 $ (150) $ 2,997 Obligations of states, municipalities and political subdivisions 10,427 — (922) 9,505 Corporate bonds 31,436 3 (2,191) 29,248 Residential and commercial mortgage-backed securities 15,524 15 (942) 14,597 Other loan-backed and structured securities 8,419 — (373) 8,046 Total debt securities $ 68,952 $ 19 $ (4,578) $ 64,393 December 31, 2021 Gross Unrealized Amortized Cost Gains Losses Fair Value U.S. Treasuries $ 5,452 $ 1 $ (36) $ 5,417 Obligations of states, municipalities and political subdivisions 8,913 21 (84) 8,850 Corporate bonds 31,491 89 (155) 31,425 Residential and commercial mortgage-backed securities 14,387 34 (139) 14,282 Other loan-backed and structured securities 7,637 5 (41) 7,601 Total debt securities $ 67,880 $ 150 $ (455) $ 67,575 |
Summary of remaining Time to Maturity | June 30, 2022 Remaining Time to Maturity Amortized Cost Fair Value Due in one year or less $ 6,583 $ 6,539 Due after one year through five years 20,701 19,441 Due after five years through ten years 14,270 12,688 Due after ten years 3,455 3,082 Residential and commercial mortgage-backed securities 15,524 14,597 Other loan-backed and structured securities 8,419 8,046 Total $ 68,952 $ 64,393 |
Summary of securities with gross unrealized loss position | Less Than Twelve Months Twelve Months or Greater Total Gross Gross Gross Unrealized Fair Unrealized Fair Unrealized Fair At June 30, 2022 Loss Value Loss Value Loss Value U.S. Treasuries $ (127) $ 1,935 $ (23) $ 746 $ (150) $ 2,681 Obligations of states, municipalities and political subdivisions (737) 7,172 (185) 2,033 (922) 9,205 Corporate bonds (2,088) 19,257 (103) 1,974 (2,191) 21,231 Residential and commercial mortgage-backed securities (848) 12,570 (94) 1,571 (942) 14,141 Other loan-backed and structured securities (365) 7,821 (8) 219 (373) 8,040 Total securities $ (4,165) $ 48,755 $ (413) $ 6,543 $ (4,578) $ 55,298 Less Than Twelve Months Twelve Months or Greater Total Gross Gross Gross Unrealized Fair Unrealized Fair Unrealized Fair At December 31, 2021 Loss Value Loss Value Loss Value U.S. Treasuries $ (36) $ 5,007 $ — $ — $ (36) $ 5,007 Obligations of states, municipalities and political subdivisions (84) 4,292 — — (84) 4,292 Corporate bonds (155) 15,446 — — (155) 15,446 Residential and commercial mortgage-backed securities (139) 9,687 — — (139) 9,687 Other loan-backed and structured securities (41) 6,818 — — (41) 6,818 Total securities $ (455) $ 41,250 $ — $ — $ (455) $ 41,250 |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value | |
Schedule of fair value measurements of liabilities measured at fair value on recurring basis | The following table details the fair value measurements of assets and liabilities that are measured at fair value on a recurring basis: Fair Value Measurement at June 30, 2022 Total Level 1 Level 2 Level 3 Fair Value Assets Money market mutual funds $ 12,354 $ — $ — $ 12,354 Debt securities: U.S. Treasuries 2,997 — — 2,997 Obligations of states and municipalities — 9,505 — 9,505 Corporate bonds — 29,248 — 29,248 Residential and commercial mortgage-backed securities — 14,597 — 14,597 Other loan-backed and structured securities — 8,046 — 8,046 $ 15,351 $ 61,396 $ — $ 76,747 Liabilities Contingent consideration - business combinations $ — $ — $ 29,858 $ 29,858 Contingent consideration - earnout — — 100 100 Private warrant liability — — 926 926 $ — $ — $ 30,884 $ 30,884 Fair Value Measurement at December 31, 2021 Total Level 1 Level 2 Level 3 Fair Value Assets Money market mutual funds 17,318 $ — $ — $ 17,318 Debt securities: U.S. Treasuries 5,417 — — 5,417 Obligations of states and municipalities — 8,850 — 8,850 Corporate bonds — 31,425 — 31,425 Residential and commercial mortgage-backed securities — 14,282 — 14,282 Other loan-backed and structured securities — 7,601 — 7,601 $ 22,735 $ 62,158 $ — $ 84,893 Liabilities Contingent consideration - business combinations $ — $ — $ 9,617 $ 9,617 Contingent consideration - earnout — — 13,866 13,866 Private warrant liability — — 15,193 15,193 $ — $ — $ 38,676 $ 38,676 |
Schedule of Level 3 items measured at fair value on a recurring basis | Contingent Contingent Consideration - Private Consideration - Business Warrant Earnout Combinations Liability Fair value as of January 1, 2022 $ 13,866 $ 9,617 $ 15,193 Additions — — — Settlements — — — Change in fair value, loss (gain) included in net loss (1) (11,179) 3,205 (10,189) Fair value as of March 31, 2022 $ 2,687 $ 12,822 $ 5,004 Additions — 15,555 — Settlements — — — Change in fair value, loss (gain) included in net loss (1) (2,587) 1,481 (4,078) Fair value as of June 30, 2022 $ 100 $ 29,858 $ 926 Contingent Contingent Consideration - Private Consideration - Business Warrant Earnout Combinations Liability Fair value as of January 1, 2021 $ 50,238 $ 3,549 $ 31,534 Additions — 1,737 — Settlements (25,815) (2,062) — Change in fair value, loss (gain) included in net loss (1) 18,770 (355) 15,910 Fair value as of March 31, 2021 $ 43,193 $ 2,869 $ 47,444 Additions — — — Settlements — — (16,843) Change in fair value, loss (gain) included in net loss (1) 4,031 (300) 4,302 Fair value as of June 30, 2021 $ 47,224 $ 2,569 $ 34,903 (1) Changes in fair value of contingent consideration related to business combinations are included in general and administrative expenses in the unaudited condensed consolidated statements of operations. Ch anges in fair value of the earnout contingent consideration and private warrant liability are disclosed separately in the unaudited condensed consolidated statements of operations. |
Property, Equipment, and Soft_2
Property, Equipment, and Software (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Property, Equipment, and Software | |
Schedule of property, equipment, and software net | June 30, December 31, 2022 2021 Software and computer equipment $ 8,071 $ 7,287 Furniture, office equipment, and other 2,220 2,006 Internally developed software 15,241 13,102 Leasehold improvements 1,160 2,191 26,692 24,586 Less: Accumulated depreciation and amortization (16,708) (17,920) Property, equipment, and software, net $ 9,984 $ 6,666 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Intangible Assets and Goodwill | |
Schedule of intangible assets | Weighted Average Intangible Intangible Useful Life Assets, Accumulated Assets, (in years) gross Amortization Net Customer relationships 8.0 $ 71,480 $ (10,557) $ 60,923 Acquired technology 5.0 50,115 (15,105) 35,010 Trademarks and tradenames 12.0 26,088 (3,790) 22,298 Non-compete agreements 3.0 650 (378) 272 Value of business acquired 1.0 400 (400) — Renewal rights 6.0 9,824 (1,462) 8,362 Trademarks and tradenames Indefinite 4,750 — 4,750 Insurance licenses Indefinite 4,960 — 4,960 Total intangible assets $ 168,267 $ (31,692) $ 136,575 |
Summary of changes in the carrying amount of goodwill | Goodwill Balance as of December 31, 2021 $ 225,654 Purchase price adjustments 922 Balance as of March 31, 2022 226,576 Acquisitions 47,445 Purchase price adjustments (190) Balance as of June 30, 2022 $ 273,831 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt | |
Schedule of debt | Debt Unaccreted Issuance Carrying Principal Discount Costs Value Convertible senior notes, due 2026 $ 425,000 $ — $ (9,673) $ 415,327 Line of credit, due 2022 1,000 — — 1,000 Other notes 450 (59) — 391 $ 426,450 $ (59) $ (9,673) $ 416,718 |
Equity and Warrants (Tables)
Equity and Warrants (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Equity and Warrants | |
Summary of fully diluted capital structure | June 30, December 31, 2022 2021 Issued and outstanding common shares 97,390,528 95,911,597 Earnout common shares 2,050,000 2,050,000 Total common shares issued and outstanding 99,440,528 97,961,597 Common shares reserved for future issuance: Private warrants 1,795,700 1,795,700 Common stock options outstanding (Note 9) 4,429,426 4,822,992 Restricted stock units and awards (Note 9) 7,157,392 2,717,154 2020 Equity Plan pool reserved for future issuance 7,324,131 8,126,263 Convertible senior notes, due 2026 (1) 16,998,130 16,998,130 Total shares of common stock outstanding and reserved for future issuance 137,145,307 132,421,836 (1) In connection with the September 16, 2021, issuance of the 2026 Notes, the Company used a portion of the proceeds to pay for the capped call transactions, which are expected to generally reduce the potential dilution to the Company’s common stock. The capped call transactions impact the number of shares that may be issued by effectively increasing the conversion price for the Company from $25 per share to approximately $37.74 per share, which would result in 11,261,261 potentially dilutive shares instead of the shares reported in this table. |
Schedule of warrant activity | Number of Common Shares Issued Cash Received Balances as of January 1, 2022 1,795,700 $ — Exercised — — Canceled — — Balances as of June 30, 2022 1,795,700 $ — |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Stock-Based Compensation | |
Schedule of stock-based compensation expense | Three months ended Six months ended June 30, June 30, 2022 2021 2022 2021 Secondary market transaction $ — $ — $ — $ 1,933 Employee earnout restricted stock — 4,176 — 16,549 Employee awards 9,702 2,466 15,556 4,995 Total operating expenses $ 9,702 $ 6,642 $ 15,556 $ 23,477 |
Summary of stock option, RSU and RSA activity | Number of Number of Number of Restricted Restricted Options Stock Units Stock Awards Balances as of December 31, 2021 4,822,992 2,712,762 4,392 Granted - RSUs — 1,001,986 — Granted - PRSUs — 883,739 — Vested — (241,463) (4,392) Exercised (185,685) — — Forfeited, canceled or expired (67,564) (131,038) — Balances as of March 31, 2022 4,569,743 4,225,986 — Granted - RSUs 9,396 2,903,594 — Granted - PRSUs — 904,795 — Vested — (563,406) — Exercised (88,772) — — Forfeited, canceled or expired (60,941) (313,577) — Balances as of June 30, 2022 4,429,426 7,157,392 — |
Reinsurance (Tables)
Reinsurance (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Reinsurance | |
Schedule of effects of reinsurance on premiums written, earned, incurred losses and LAE | The effects of reinsurance on premiums written and earned for the three and six months ended June 30, 2022, and 2021 were as follows: Three Months Ended June 30, 2022 2021 Written Earned Written Earned Direct premiums $ 124,914 $ 93,082 $ 81,132 $ 62,352 Ceded premiums (117,926) (83,095) (70,844) (59,077) Net premiums $ 6,988 $ 9,987 $ 10,288 $ 3,275 Six Months Ended June 30, 2022 2021 Written Earned Written Earned Direct premiums $ 212,037 $ 177,400 $ 81,132 $ 62,352 Ceded premiums (178,562) (154,822) (70,844) (59,077) Net premiums $ 33,475 $ 22,578 $ 10,288 $ 3,275 The effects of reinsurance on incurred losses and loss adjustment expense (“LAE”) for the three and six months ended June 30, 2022, and 2021 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Direct losses and LAE $ 74,617 $ 125,295 $ 142,838 $ 125,295 Ceded losses and LAE (60,133) (114,570) (119,106) (114,570) Net losses and LAE $ 14,484 $ 10,725 $ 23,732 $ 10,725 |
Schedule of reinsurance balances due | June 30, 2022 December 31, 2021 Ceded unearned premium $ 177,450 $ 153,710 Losses and LAE reserve 75,730 56,752 Reinsurance recoverable 20,460 17,780 Other 331 174 Reinsurance balance due $ 273,971 $ 228,416 |
Unpaid Losses and Loss Adjust_2
Unpaid Losses and Loss Adjustment Reserve (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Unpaid Losses and Loss Adjustment Reserve | |
Schedule of rollforward of the beginning and ending reserve balances for unpaid losses and LAE, gross of reinsurance | 2022 Reserve for unpaid losses and LAE, at December 31, 2021 $ 61,949 Reinsurance recoverables on losses and LAE (56,752) Reserve for unpaid losses and LAE reserve, net of reinsurance recoverables at December 31, 2021 5,197 Add provisions (reductions) for losses and LAE occurring in: Current year 9,868 Prior years (620) Net incurred losses and LAE during the current year 9,248 Deduct payments for losses and LAE occurring in: Current year (4,431) Prior years (1,602) Net claim and LAE payments during the current year (6,033) Reserve for unpaid losses and LAE, net of reinsurance recoverables, at end of period 8,412 Reinsurance recoverables on losses and LAE 71,196 Reserve for unpaid losses and LAE at March 31, 2022 79,608 Add provisions (reductions) for losses and LAE occurring in: Current year 13,506 Prior years 979 Net incurred losses and LAE during the current year 14,485 Deduct payments for losses and LAE occurring in: Current year (9,118) Prior years (615) Net claim and LAE payments during the current year (9,733) Reserve for unpaid losses and LAE, net of reinsurance recoverables, at end of period 13,164 Reinsurance recoverables on losses and LAE 75,730 Reserve for unpaid losses and LAE at June 30, 2022 $ 88,894 |
Business Combinations (Tables)
Business Combinations (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Business Combinations | |
Schedule of estimated fair value of the assets acquired and liabilities assumed for business combinations | Weighted Average Useful Life (in years) RWS Other Total Purchase consideration: Cash (1) $ 25,572 $ 13,763 $ 39,335 Issuance of common stock 3,552 — 3,552 Holdback liabilities and amounts in escrow 1,000 1,500 2,500 Contingent consideration - liability-classified 15,555 — 15,555 Total purchase consideration: $ 45,679 $ 15,263 $ 60,942 Assets: Cash, cash equivalents and restricted cash $ 2,030 $ 256 $ 2,286 Current assets 525 7 532 Property and equipment 497 — 497 Operating lease right-of-use assets 871 — 871 Intangible assets: Customer relationships 7.0 11,920 2,750 14,670 Acquired technology 4.5 500 1,480 1,980 Trademarks and tradenames 9.3 500 200 700 Non-competition agreements 6.6 180 20 200 Renewal rights 5.0 90 — 90 Goodwill 36,726 10,719 47,445 Total assets acquired 53,839 15,432 69,271 Current liabilities (4,884) (169) (5,053) Operating lease liabilities, non-current (871) — (871) Long term liabilities (2,405) — (2,405) Net assets acquired $ 45,679 $ 15,263 $ 60,942 |
Residential Warranty Services | |
Business Combinations | |
Summary of the fair value of the intangible assets as of the date of the acquisition | Estimated Fair Useful Life Value (in years) Intangible assets: Customer relationships $ 11,920 5.4 Acquired technology 500 3.0 Trademarks and tradenames 500 9.0 Non-competition agreements 180 7.0 Renewal rights 90 5.0 $ 13,190 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Information | |
Schedule of revenue by segment | Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Segment revenues: Vertical Software $ 42,813 $ 34,404 $ 77,501 $ 59,342 Insurance 27,956 16,936 55,829 18,741 Total segment revenue $ 70,769 $ 51,340 $ 133,330 $ 78,083 |
Schedule of financial information of reportable segments and reconciliations to consolidated financial information | The following tables provide financial information for the two reportable segments and reconciliations to consolidated financial information for the periods presented: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Segment adjusted EBITDA (loss): Vertical Software $ 6,038 $ 8,107 $ 9,022 $ 11,258 Insurance (5,068) (2,951) (1,782) (2,443) Corporate and Other (15,237) (15,073) (28,577) (28,334) Total segment adjusted EBITDA (loss) (14,267) (9,925) (21,337) (19,519) Reconciling items: Depreciation and amortization (6,416) (3,894) (12,899) (6,356) Non-cash stock-based compensation expense (9,702) (7,035) (15,556) (24,160) Acquisition and related expense (214) (1,056) (1,110) (1,784) Non-cash long-lived asset impairment charge — (72) (70) (139) Revaluation of contingent consideration (1,481) (574) (4,686) (220) Investment income and realized gains (243) (387) (440) (397) Non-cash bonus expense 1,526 — — — Operating loss $ (30,797) $ (22,943) $ (56,098) $ (52,575) |
Basic and Diluted Net Loss Pe_2
Basic and Diluted Net Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Basic and Diluted Net Loss Per Share | |
Schedule of earnings per share, basic and diluted | Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Numerator: Net loss used to compute net loss per share - basic and diluted $ (26,377) $ (16,296) $ (32,173) $ (81,398) Denominator: Weighted average shares outstanding used to compute loss per share - basic and diluted 97,142,163 95,221,928 96,611,294 91,483,053 Loss per share - basic and diluted $ (0.27) $ (0.17) $ (0.33) $ (0.89) |
Schedule of antidilutive securities excluded from computation of earnings per share | Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Stock options 4,429,426 6,350,253 4,429,426 6,350,253 Restricted stock units and awards 5,331,673 2,975,463 5,331,673 2,975,463 Performance restricted stock units 1,825,719 — 1,825,719 — Public and private warrants 1,795,700 3,125,154 1,795,700 3,125,154 Earnout shares 2,050,000 4,099,999 2,050,000 4,099,999 Convertible debt (1) 16,998,130 — 16,998,130 — (1) |
Description of Business and S_4
Description of Business and Summary of Significant Accounting Policies - Description of Business (Details) | Jun. 30, 2022 company |
Description of Business and Summary of Significant Accounting Policies | |
Number of Home Service Companies Served | 28,500 |
Number of Insurance Companies Served | 20 |
Description of Business and S_5
Description of Business and Summary of Significant Accounting Policies - Additional Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 USD ($) state | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) item state | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) state | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Number of reinsurers | item | 1 | ||||
Percentage of insurance subsidiary's total insurance receivables | 34% | 34% | |||
Cash balance at bank | $ 169,700 | $ 169,700 | |||
Restricted cash equivalents | 500 | 500 | $ 300 | ||
Restricted funds held for payment of possible warranty claims | $ 7,700 | $ 7,700 | $ 5,900 | ||
Number of states regulatory guidelines of warranty claims | state | 25 | 25 | 25 | ||
Escrow deposit with insurance regulator | $ 500 | $ 500 | |||
Indemnification hold back cost | 2,900 | $ 2,600 | |||
Customer deposits | 300 | ||||
Allowance for uncollectible receivables | 500 | 500 | 400 | ||
Income tax expense (benefit) | $ 468 | $ (7,731) | $ 290 | $ (8,081) | |
Effective income tax rate | (1.81%) | 32.18% | (0.91%) | 9.03% | |
U.S. federal statutory tax rate | 21% | 21% | |||
Other Noncurrent Assets [Member] | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Indemnification hold back cost | $ 500 | $ 500 | |||
Revenue Benchmark | Customer Concentration Risk | Customers in Texas | |||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||
Insurance related revenues percentage | 55% |
Description of Business and S_6
Description of Business and Summary of Significant Accounting Policies - Cash and cash equivalents (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Description of Business and Summary of Significant Accounting Policies | ||||
Cash and cash equivalents | $ 271,003 | $ 315,741 | ||
Restricted cash and restricted cash equivalents - current | 10,574 | 8,551 | ||
Restricted cash and restricted cash equivalents - non-current | 500 | 500 | ||
Cash, cash equivalents and restricted cash | $ 282,077 | $ 324,792 | $ 152,423 | $ 207,453 |
Description of Business and S_7
Description of Business and Summary of Significant Accounting Policies - Deferred Policy Acquisition Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Mar. 31, 2022 | |
Movement Analysis of Deferred Policy Acquisition Costs [Roll Forward] | ||
Deferred policy acquisition costs, net - Beginning balance | $ 7,740 | $ 3,988 |
Capitalized costs | 23,617 | 16,753 |
Amortized costs | (23,584) | (13,001) |
Deferred policy acquisition costs, net - Ending balance | $ 7,773 | $ 7,740 |
Description of Business and S_8
Description of Business and Summary of Significant Accounting Policies - Components of Other Insurance Liabilities, Current (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Description of Business and Summary of Significant Accounting Policies | ||
Ceded reinsurance premiums payable | $ 33,268 | $ 22,523 |
Advance premiums | 12,721 | 4,277 |
Commissions payable, reinsurers and agents | 12,414 | 10,697 |
Funds held under reinsurance treaty | 1,959 | 2,206 |
General and accrued expenses payable | 1,154 | 321 |
Other insurance liabilities, current | $ 61,516 | $ 40,024 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 70,769 | $ 51,340 | $ 133,330 | $ 78,083 |
Vertical Software | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 42,813 | 34,404 | 77,501 | 59,342 |
Insurance | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 27,956 | 16,936 | 55,829 | 18,741 |
Software and service subscriptions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 20,544 | 12,987 | 38,509 | 23,867 |
Move-related transactions (excluding insurance) | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 17,535 | 16,295 | 29,728 | 25,256 |
Post-move transactions | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,734 | 5,122 | 9,264 | 10,219 |
Insurance and warranty premiums, commissions and policy fees | Insurance | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 27,956 | $ 16,936 | 55,829 | $ 18,741 |
Revenue recognized for regulated property and casualty insurance entity | $ 18,200 | $ 38,200 |
Revenue - Contract Assets (Deta
Revenue - Contract Assets (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Change in Contract with Customer, Asset [Abstract] | |
Balance at beginning of the year | $ 9,384 |
Estimated lifetime value of insurance policies sold by carriers | 4,848 |
Cash receipts | (1,645) |
Balance at end of the year | 12,587 |
Contract assets | 12,587 |
Long-term accounts receivable | 10,500 |
Accounts Receivable Current | |
Change in Contract with Customer, Asset [Abstract] | |
Balance at end of the year | 2,100 |
Contract assets | $ 2,100 |
Revenue - Contract Liabilities
Revenue - Contract Liabilities - Refundable Customer Deposits (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Change in Contract with Customer, Liability | |
Average period to recognize contract with customer liability as revenue | 19 months |
Refundable Customer Deposits, Current | |
Change in Contract with Customer, Liability | |
Ending balance | $ 19,200 |
Refundable Customer Deposits | |
Change in Contract with Customer, Liability | |
Beginning balance | 15,274 |
Additions to contract liabilities | 17,565 |
Contract liabilities transferred to revenue | (13,593) |
Ending balance | $ 19,246 |
Revenue - Contract Liabilitie_2
Revenue - Contract Liabilities - Activity Impacting Deferred Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2022 | |
Change in Contract with Customer, Liability | |||
Earned premium, net of ceded | $ 83,100 | $ 154,800 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01 | |||
Change in Contract with Customer, Liability | |||
Revenue, remaining performance obligation, amount | $ 4,200 | $ 4,200 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 12 months | 12 months | |
Refundable Customer Deposits | |||
Change in Contract with Customer, Liability | |||
Beginning balance | $ 15,274 | $ 15,274 | |
Revenue recognized | (13,593) | ||
Additional amounts deferred | 17,565 | ||
Ending balance | $ 19,246 | 19,246 | |
ASC 606 | |||
Change in Contract with Customer, Liability | |||
Beginning balance | 198,857 | 201,085 | 201,085 |
Revenue recognized | (103,681) | (97,273) | |
Additional amounts deferred | 142,543 | 95,045 | |
Ending balance | 243,425 | 198,857 | 243,425 |
Impact of acquisitions | 5,706 | ||
ASC 606 | Vertical Software | |||
Change in Contract with Customer, Liability | |||
Beginning balance | 4,257 | 3,814 | 3,814 |
Revenue recognized | (6,027) | (5,279) | |
Additional amounts deferred | 5,815 | 5,722 | |
Ending balance | 4,241 | 4,257 | 4,241 |
Impact of acquisitions | 196 | ||
ASC 606 | Insurance | |||
Change in Contract with Customer, Liability | |||
Beginning balance | 194,600 | 197,271 | 197,271 |
Revenue recognized | (97,654) | (91,994) | |
Additional amounts deferred | 136,728 | 89,323 | |
Ending balance | 239,184 | $ 194,600 | $ 239,184 |
Impact of acquisitions | $ 5,510 |
Investments - Investment Income
Investments - Investment Income, Realized and Unrealized Gains and Losses on Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Investments | ||||
Investment income, net of investment expenses | $ 313 | $ 419 | $ 578 | $ 429 |
Realized gains on investments | 4 | 20 | 6 | 20 |
Realized losses on investments | (74) | (52) | (144) | (52) |
Investment income and realized gains, net of investment expenses | $ 243 | $ 387 | $ 440 | $ 397 |
Investments - Amortized Cost, F
Investments - Amortized Cost, Fair Value and Unrealized Gains and (Losses) (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Net Investment Income [Line Items] | ||
Amortized Cost | $ 68,952 | $ 67,880 |
Gross Unrealized, Gains | 19 | 150 |
Gross Unrealized, Losses | (4,578) | (455) |
Fair value | 64,393 | 67,575 |
U.S. Treasuries | ||
Net Investment Income [Line Items] | ||
Amortized Cost | 3,146 | 5,452 |
Gross Unrealized, Gains | 1 | 1 |
Gross Unrealized, Losses | (150) | (36) |
Fair value | 2,997 | 5,417 |
Obligations of states, municipalities and political subdivisions | ||
Net Investment Income [Line Items] | ||
Amortized Cost | 10,427 | 8,913 |
Gross Unrealized, Gains | 21 | |
Gross Unrealized, Losses | (922) | (84) |
Fair value | 9,505 | 8,850 |
Corporate bonds. | ||
Net Investment Income [Line Items] | ||
Amortized Cost | 31,436 | 31,491 |
Gross Unrealized, Gains | 3 | 89 |
Gross Unrealized, Losses | (2,191) | (155) |
Fair value | 29,248 | 31,425 |
Residential and commercial mortgage-backed securities | ||
Net Investment Income [Line Items] | ||
Amortized Cost | 15,524 | 14,387 |
Gross Unrealized, Gains | 15 | 34 |
Gross Unrealized, Losses | (942) | (139) |
Fair value | 14,597 | 14,282 |
Other loan-backed and structured securities | ||
Net Investment Income [Line Items] | ||
Amortized Cost | 8,419 | 7,637 |
Gross Unrealized, Gains | 5 | |
Gross Unrealized, Losses | (373) | (41) |
Fair value | $ 8,046 | $ 7,601 |
Investments - Amortized Cost an
Investments - Amortized Cost and Fair Value of Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Amortized Cost | ||
Due in one year or less | $ 6,583 | |
Due after one year through five years | 20,701 | |
Due after five years through ten years | 14,270 | |
Due after ten years | 3,455 | |
Amortized Cost | 68,952 | $ 67,880 |
Fair Value | ||
Due in one year or less | 6,539 | |
Due after one year through five years | 19,441 | |
Due after five years through ten years | 12,688 | |
Due after ten years | 3,082 | |
Fair value | 64,393 | 67,575 |
Residential and commercial mortgage-backed securities | ||
Amortized Cost | ||
Without single maturity date | 15,524 | |
Amortized Cost | 15,524 | 14,387 |
Fair Value | ||
Without single maturity date | 14,597 | |
Fair value | 14,597 | 14,282 |
Other loan-backed and structured securities | ||
Amortized Cost | ||
Without single maturity date | 8,419 | |
Amortized Cost | 8,419 | 7,637 |
Fair Value | ||
Without single maturity date | 8,046 | |
Fair value | $ 8,046 | $ 7,601 |
Investments - Securities with G
Investments - Securities with Gross Unrealized Loss Position (Details) $ in Thousands | Jun. 30, 2022 USD ($) security item | Dec. 31, 2021 USD ($) item security |
Net Investment Income [Line Items] | ||
Less Than Twelve Months, Gross Unrealized Loss | $ (4,165) | $ (455) |
Less Than Twelve Months, Fair Value | 48,755 | 41,250 |
Twelve Months or Greater, Gross Unrealized Loss | (413) | |
Twelve Months or Greater, Fair Value | 6,543 | |
Total, Gross Unrealized Loss | (4,578) | (455) |
Total, Fair Value | $ 55,298 | $ 41,250 |
Number of securities in an unrealized loss position | security | 446 | 358 |
Unrealized loss position for 12 months or longer | item | 77 | 77 |
U.S. Treasuries | ||
Net Investment Income [Line Items] | ||
Less Than Twelve Months, Gross Unrealized Loss | $ (127) | $ (36) |
Less Than Twelve Months, Fair Value | 1,935 | 5,007 |
Twelve Months or Greater, Gross Unrealized Loss | (23) | |
Twelve Months or Greater, Fair Value | 746 | |
Total, Gross Unrealized Loss | (150) | (36) |
Total, Fair Value | 2,681 | 5,007 |
Obligations of states, municipalities and political subdivisions | ||
Net Investment Income [Line Items] | ||
Less Than Twelve Months, Gross Unrealized Loss | (737) | (84) |
Less Than Twelve Months, Fair Value | 7,172 | 4,292 |
Twelve Months or Greater, Gross Unrealized Loss | (185) | |
Twelve Months or Greater, Fair Value | 2,033 | |
Total, Gross Unrealized Loss | (922) | (84) |
Total, Fair Value | 9,205 | 4,292 |
Corporate Bonds | ||
Net Investment Income [Line Items] | ||
Less Than Twelve Months, Gross Unrealized Loss | (2,088) | (155) |
Less Than Twelve Months, Fair Value | 19,257 | 15,446 |
Twelve Months or Greater, Gross Unrealized Loss | (103) | |
Twelve Months or Greater, Fair Value | 1,974 | |
Total, Gross Unrealized Loss | (2,191) | (155) |
Total, Fair Value | 21,231 | 15,446 |
Residential and commercial mortgage-backed securities | ||
Net Investment Income [Line Items] | ||
Less Than Twelve Months, Gross Unrealized Loss | (848) | (139) |
Less Than Twelve Months, Fair Value | 12,570 | 9,687 |
Twelve Months or Greater, Gross Unrealized Loss | (94) | |
Twelve Months or Greater, Fair Value | 1,571 | |
Total, Gross Unrealized Loss | (942) | (139) |
Total, Fair Value | 14,141 | 9,687 |
Other loan-backed and structured securities | ||
Net Investment Income [Line Items] | ||
Less Than Twelve Months, Gross Unrealized Loss | (365) | (41) |
Less Than Twelve Months, Fair Value | 7,821 | 6,818 |
Twelve Months or Greater, Gross Unrealized Loss | (8) | |
Twelve Months or Greater, Fair Value | 219 | |
Total, Gross Unrealized Loss | (373) | (41) |
Total, Fair Value | $ 8,040 | $ 6,818 |
Fair Value - Schedule of Fair V
Fair Value - Schedule of Fair Value Measurements of Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities, fair value disclosure | $ 64,393 | $ 67,575 |
Private warrant liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value disclosure | 900 | |
Monte Carlo simulation method | Contingent consideration - earnout | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value disclosure | 100 | |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure | 76,747 | 84,893 |
Liabilities, fair value disclosure | 30,884 | 38,676 |
Recurring | U.S. Treasuries | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities, fair value disclosure | 2,997 | 5,417 |
Recurring | Obligations of states, municipalities and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities, fair value disclosure | 9,505 | 8,850 |
Recurring | Corporate Bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities, fair value disclosure | 29,248 | 31,425 |
Recurring | Residential and commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities, fair value disclosure | 14,597 | 14,282 |
Recurring | Other loan-backed and structured securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities, fair value disclosure | 8,046 | 7,601 |
Recurring | Contingent consideration - business combination | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value disclosure | 29,858 | 9,617 |
Recurring | Contingent consideration - earnout | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value disclosure | 100 | 13,866 |
Recurring | Private warrant liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value disclosure | 926 | 15,193 |
Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure | 15,351 | 22,735 |
Recurring | Level 1 | U.S. Treasuries | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities, fair value disclosure | 2,997 | 5,417 |
Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure | 61,396 | 62,158 |
Recurring | Level 2 | Obligations of states, municipalities and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities, fair value disclosure | 9,505 | 8,850 |
Recurring | Level 2 | Corporate Bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities, fair value disclosure | 29,248 | 31,425 |
Recurring | Level 2 | Residential and commercial mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities, fair value disclosure | 14,597 | 14,282 |
Recurring | Level 2 | Other loan-backed and structured securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt securities, fair value disclosure | 8,046 | 7,601 |
Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value disclosure | 30,884 | 38,676 |
Recurring | Level 3 | Contingent consideration - business combination | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value disclosure | 29,858 | 9,617 |
Recurring | Level 3 | Contingent consideration - earnout | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value disclosure | 100 | 13,866 |
Recurring | Level 3 | Private warrant liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value disclosure | 926 | 15,193 |
Recurring | Money market mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure | 12,354 | 17,318 |
Recurring | Money market mutual funds | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure | $ 12,354 | $ 17,318 |
Fair Value - Additional Informa
Fair Value - Additional Information (Details) $ in Millions | 6 Months Ended | ||
Jun. 30, 2022 USD ($) $ / shares | Apr. 01, 2022 USD ($) | Dec. 31, 2021 USD ($) $ / shares | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Convertible senior notes, fair value | $ 225.3 | $ 400.4 | |
Decrease in stock price | (199.8) | ||
Private warrant liability | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Liabilities, fair value disclosure | $ 0.9 | ||
Current stock price | Private warrant liability | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrants, measurement input | 2.56 | 15.59 | |
Exercise Price | Private warrant liability | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrants, measurement input | 11.50 | 11.50 | |
Volatility | Private warrant liability | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrants, measurement input | 75 | 60 | |
Expected term | Private warrant liability | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Warrants term | 3 years 5 months 23 days | 3 years 11 months 23 days | |
Residential Warranty Services | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business combination contingent consideration | $ 2.4 | $ 15.6 | |
Income approach | Contingent consideration - business combination | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Liabilities, fair value disclosure | 0.1 | $ 0.3 | |
Monte Carlo simulation method | Contingent consideration - earnout | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Liabilities, fair value disclosure | $ 0.1 | ||
Monte Carlo simulation method | Current stock price | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Contingent consideration earnout, measurement input | $ / shares | 2.56 | 15.59 | |
Monte Carlo simulation method | Exercise Price | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Contingent consideration earnout, measurement input | $ / shares | 22 | 22 | |
Monte Carlo simulation method | Volatility | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Contingent consideration earnout, measurement input | 75 | 65 | |
Monte Carlo simulation method | Forfeiture Rate | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Contingent consideration earnout, measurement input | 15 | 15 | |
Monte Carlo simulation method | Floify | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business combination contingent consideration | $ 14.1 | $ 9.3 | |
Monte Carlo simulation method | Floify | Discount rate | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business combination contingent consideration, measurement input | 11.2 | 7 | |
Monte Carlo simulation method | Floify | Current stock price | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business combination contingent consideration, measurement input | $ / shares | 2.56 | 16.37 | |
Monte Carlo simulation method | Floify | Strike price | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business combination contingent consideration, measurement input | $ / shares | 36 | 36 | |
Monte Carlo simulation method | Floify | Volatility | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business combination contingent consideration, measurement input | 75 | 60 | |
Monte Carlo simulation method | Residential Warranty Services | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business combination contingent consideration | $ 15.6 | ||
Monte Carlo simulation method | Residential Warranty Services | Discount rate | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business combination contingent consideration, measurement input | 15 | ||
Monte Carlo simulation method | Residential Warranty Services | Volatility | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Business combination contingent consideration, measurement input | 24 |
Fair Value - Level 3 (Details)
Fair Value - Level 3 (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Mar. 31, 2021 | |
Contingent consideration - earnout | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | $ 2,687 | $ 13,866 | $ 43,193 | $ 50,238 |
Settlements | (25,815) | |||
Change in fair value, loss (gain) included in net loss | (2,587) | (11,179) | 4,031 | 18,770 |
Ending balance | 100 | 2,687 | 47,224 | 43,193 |
Contingent consideration - business combination | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 12,822 | 9,617 | 2,869 | 3,549 |
Additions | 15,555 | 1,737 | ||
Settlements | (2,062) | |||
Change in fair value, loss (gain) included in net loss | 1,481 | 3,205 | (300) | (355) |
Ending balance | 29,858 | 12,822 | 2,569 | 2,869 |
Private warrant liability | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 5,004 | 15,193 | 47,444 | 31,534 |
Settlements | (16,843) | |||
Change in fair value, loss (gain) included in net loss | (4,078) | (10,189) | 4,302 | 15,910 |
Ending balance | $ 926 | $ 5,004 | $ 34,903 | $ 47,444 |
Property, Equipment, and Soft_3
Property, Equipment, and Software (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||||
Property, equipment, and software, Gross | $ 26,692 | $ 26,692 | $ 24,586 | ||
Less: Accumulated depreciation and amortization | (16,708) | (16,708) | (17,920) | ||
Property, equipment, and software, net | 9,984 | 9,984 | 6,666 | ||
Depreciation and amortization | 6,416 | $ 3,894 | 12,899 | $ 6,356 | |
Software and computer equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, equipment, and software, Gross | 8,071 | 8,071 | 7,287 | ||
Furniture, office equipment and other | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, equipment, and software, Gross | 2,220 | 2,220 | 2,006 | ||
Internally developed software | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, equipment, and software, Gross | 15,241 | 15,241 | 13,102 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property, equipment, and software, Gross | 1,160 | 1,160 | $ 2,191 | ||
Property equipment software | |||||
Property, Plant and Equipment [Line Items] | |||||
Depreciation and amortization | $ 1,000 | $ 1,200 | $ 2,000 | $ 2,300 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Intangible Assets and Goodwill | ||||
Finite lived Intangible Assets, gross | $ 168,267 | $ 168,267 | ||
Accumulated Amortization | (31,692) | (31,692) | ||
Finite lived Intangible Assets, Net | 136,575 | 136,575 | ||
Aggregate amortization expense | 5,400 | $ 2,700 | 10,900 | $ 4,100 |
Trademarks and tradenames | ||||
Intangible Assets and Goodwill | ||||
Finite lived Intangible Assets, gross | 4,750 | 4,750 | ||
Finite lived Intangible Assets, Net | 4,750 | 4,750 | ||
Insurance licenses | ||||
Intangible Assets and Goodwill | ||||
Finite lived Intangible Assets, gross | 4,960 | 4,960 | ||
Finite lived Intangible Assets, Net | 4,960 | $ 4,960 | ||
Customer relationships | ||||
Intangible Assets and Goodwill | ||||
Weighted Average Useful Life (in years) | 8 years | |||
Finite lived Intangible Assets, gross | 71,480 | $ 71,480 | ||
Accumulated Amortization | (10,557) | (10,557) | ||
Finite lived Intangible Assets, Net | 60,923 | $ 60,923 | ||
Acquired technology | ||||
Intangible Assets and Goodwill | ||||
Weighted Average Useful Life (in years) | 5 years | |||
Finite lived Intangible Assets, gross | 50,115 | $ 50,115 | ||
Accumulated Amortization | (15,105) | (15,105) | ||
Finite lived Intangible Assets, Net | 35,010 | $ 35,010 | ||
Trademarks and tradenames | ||||
Intangible Assets and Goodwill | ||||
Weighted Average Useful Life (in years) | 12 years | |||
Finite lived Intangible Assets, gross | 26,088 | $ 26,088 | ||
Accumulated Amortization | (3,790) | (3,790) | ||
Finite lived Intangible Assets, Net | 22,298 | $ 22,298 | ||
Non-competition agreements | ||||
Intangible Assets and Goodwill | ||||
Weighted Average Useful Life (in years) | 3 years | |||
Finite lived Intangible Assets, gross | 650 | $ 650 | ||
Accumulated Amortization | (378) | (378) | ||
Finite lived Intangible Assets, Net | 272 | $ 272 | ||
Value of business acquired | ||||
Intangible Assets and Goodwill | ||||
Weighted Average Useful Life (in years) | 1 year | |||
Finite lived Intangible Assets, gross | 400 | $ 400 | ||
Accumulated Amortization | (400) | $ (400) | ||
Renewal rights | ||||
Intangible Assets and Goodwill | ||||
Weighted Average Useful Life (in years) | 6 years | |||
Finite lived Intangible Assets, gross | 9,824 | $ 9,824 | ||
Accumulated Amortization | (1,462) | (1,462) | ||
Finite lived Intangible Assets, Net | $ 8,362 | $ 8,362 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Changes in Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2022 | Mar. 31, 2022 | |
Goodwill [Roll Forward] | ||
Goodwill, Beginning Balance | $ 226,576 | $ 225,654 |
Acquisitions | 47,445 | |
Purchase price adjustments | (190) | 922 |
Goodwill, Ending Balance | $ 273,831 | $ 226,576 |
Debt (Details)
Debt (Details) $ in Thousands | Jun. 30, 2022 USD ($) |
Debt | |
Principal | $ 426,450 |
Unaccreted Discount | (59) |
Debt Issuance Costs | (9,673) |
Carrying Value | 416,718 |
Convertible senior notes, due 2026 | |
Debt | |
Principal | 425,000 |
Debt Issuance Costs | (9,673) |
Carrying Value | 415,327 |
Line of credit, due 2022 | |
Debt | |
Principal | 1,000 |
Carrying Value | 1,000 |
Other notes | |
Debt | |
Principal | 450 |
Unaccreted Discount | (59) |
Carrying Value | $ 391 |
Debt - Convertible Senior Notes
Debt - Convertible Senior Notes (Details) - Convertible senior notes, due 2026 - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Debt | ||||
Interest rate (stated) | 0.75% | 0.75% | ||
Interest expense | $ 1,400,000 | $ 0 | $ 2,700,000 | $ 0 |
Debt - Line of credit (Details)
Debt - Line of credit (Details) - Revolving Line of Credit - USD ($) $ in Millions | Apr. 05, 2021 | Jun. 30, 2022 |
Debt Instrument [Line Items] | ||
Aggregate amount | $ 5 | |
Fees on daily unused portion | 0.25% | |
Line of credit, outstanding | $ 1 | |
Prime rate | ||
Debt Instrument [Line Items] | ||
Basis spread on interest rate | 0% |
Debt - Term Loan Facility (Deta
Debt - Term Loan Facility (Details) - April 5, 2021 Acquisition ("HOA") - USD ($) | Apr. 05, 2021 | Jun. 30, 2022 |
Debt Instrument [Line Items] | ||
Debt instrument term | 9 years | |
Loans Assumed | $ 10,000,000 | |
Amount borrowed | $ 0 |
Equity and Warrants - Common Sh
Equity and Warrants - Common Shares Outstanding and Common Stock Equivalents (Details) - $ / shares | Sep. 16, 2021 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 15, 2021 |
Class of Stock [Line Items] | ||||
Issued and outstanding common shares | 97,390,528 | 95,911,597 | ||
Earnout common shares | 2,050,000 | 2,050,000 | ||
Total common shares issued and outstanding | 99,440,528 | 97,961,597 | ||
Common shares reserved for future issuance: | ||||
Total shares of common stock outstanding and reserved for future issuance | 137,145,307 | 132,421,836 | ||
Conversion price (per unit) | $ 37.74 | $ 25 | ||
Potentially dilutive shares | 11,261,261 | |||
Convertible senior notes, due 2026 | ||||
Common shares reserved for future issuance: | ||||
Total shares of common stock outstanding and reserved for future issuance | 16,998,130 | 16,998,130 | ||
Restricted stock units | ||||
Common shares reserved for future issuance: | ||||
Total shares of common stock outstanding and reserved for future issuance | 7,157,392 | 2,717,154 | ||
2020 Equity Plan | ||||
Common shares reserved for future issuance: | ||||
Total shares of common stock outstanding and reserved for future issuance | 7,324,131 | 8,126,263 | ||
Private Warrants | ||||
Common shares reserved for future issuance: | ||||
Total shares of common stock outstanding and reserved for future issuance | 1,795,700 | 1,795,700 | ||
Common stock warrants | ||||
Common shares reserved for future issuance: | ||||
Total shares of common stock outstanding and reserved for future issuance | 4,429,426 | 4,822,992 |
Equity and Warrants - Public an
Equity and Warrants - Public and private warrant activity (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Equity and Warrants | ||
Beginning balance | 1,795,700 | |
Exercised | ||
Canceled | ||
Ending balance | 1,795,700 | |
Cash received | $ 126,772 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of stock-based Compensation by Plan (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Stock-Based Compensation | ||||
Stock based compensation expense | $ 9,702 | $ 6,642 | $ 15,556 | $ 23,477 |
Secondary market transaction | ||||
Stock-Based Compensation | ||||
Stock based compensation expense | 1,933 | |||
Employee earnout restricted stock | ||||
Stock-Based Compensation | ||||
Stock based compensation expense | 4,176 | 16,549 | ||
Employee awards | ||||
Stock-Based Compensation | ||||
Stock based compensation expense | $ 9,702 | $ 2,466 | $ 15,556 | $ 4,995 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of stock option, RSU and RSA activity (Details) - shares | 3 Months Ended | |
Jun. 30, 2022 | Mar. 31, 2022 | |
Stock options | ||
Number of Options Outstanding | ||
Beginning balance | 4,569,743 | 4,822,992 |
Granted | 9,396 | |
Exercised | (88,772) | (185,685) |
Forfeited, canceled or expired | (60,941) | (67,564) |
Ending balance | 4,429,426 | 4,569,743 |
Restricted stock units | ||
Number of Restricted Stock Awards | ||
Beginning Balance | 4,225,986 | 2,712,762 |
Granted | 2,903,594 | 1,001,986 |
Vested | (563,406) | (241,463) |
Forfeited, canceled or expired | (313,577) | (131,038) |
Ending Balance | 7,157,392 | 4,225,986 |
Restricted stock | ||
Number of Restricted Stock Awards | ||
Beginning Balance | 4,392 | |
Vested | (4,392) | |
Performance based RSU | ||
Number of Restricted Stock Awards | ||
Granted | 904,795 | 883,739 |
Reinsurance - Effects of reinsu
Reinsurance - Effects of reinsurance on premiums written and earned (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Reinsurance | ||||
Direct premiums, written | $ 124,914 | $ 81,132 | $ 212,037 | $ 81,132 |
Ceded premiums, written | (117,926) | (70,844) | (178,562) | (70,844) |
Net premiums, written | 6,988 | 10,288 | 33,475 | 10,288 |
Direct premiums, earned | 93,082 | 62,352 | 177,400 | 62,352 |
Ceded premiums, earned | (83,095) | (59,077) | (154,822) | (59,077) |
Net premiums, earned | $ 9,987 | $ 3,275 | $ 22,578 | $ 3,275 |
Reinsurance - Effects of rein_2
Reinsurance - Effects of reinsurance on incurred losses and LAE (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Reinsurance | ||||
Direct losses and LAE | $ 74,617 | $ 125,295 | $ 142,838 | $ 125,295 |
Ceded losses and LAE | (60,133) | (114,570) | (119,106) | (114,570) |
Net losses and LAE | $ 14,484 | $ 10,725 | $ 23,732 | $ 10,725 |
Reinsurance - Detail of reinsur
Reinsurance - Detail of reinsurance balances due (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Reinsurance balances due: | ||
Ceded unearned premium | $ 177,450 | $ 153,710 |
Losses and LAE reserve | 75,730 | 56,752 |
Reinsurance recoverable | 20,460 | 17,780 |
Other | 331 | 174 |
Reinsurance balance due | $ 273,971 | $ 228,416 |
Unpaid Losses and Loss Adjust_3
Unpaid Losses and Loss Adjustment Reserve - Unpaid Losses and LAE Gross (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Unpaid Losses and Loss Adjustment Reserve | ||||
Reserve for unpaid losses and LAE | $ 79,608 | $ 61,949 | $ 61,949 | |
Reinsurance recoverable on losses and LAE | (75,730) | (71,196) | (75,730) | $ (56,752) |
Reserve for unpaid losses and LAE reserve, net of reinsurance recoverables | 8,412 | 5,197 | 5,197 | |
Add provisions (reductions) for losses and LAE occurring in: | ||||
Current year | 13,506 | 9,868 | ||
Prior years | 979 | (620) | ||
Net incurred losses and LAE during the current year | 14,485 | 9,248 | ||
Deduct payments for losses and LAE occurring in: | ||||
Current year | (9,118) | (4,431) | ||
Prior years | (615) | (1,602) | ||
Net claim and LAE payments during the current year | (9,733) | (6,033) | ||
Reserve for unpaid losses and LAE, net of reinsurance recoverable, at end of period | 13,164 | 8,412 | 13,164 | |
Reinsurance recoverable on losses and LAE | 75,730 | 71,196 | 75,730 | |
Reserve for unpaid losses and LAE | 88,894 | $ 79,608 | 88,894 | |
Provisions of losses and loss adjustment expense | $ 1,000 | $ 400 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | Sep. 02, 2021 USD ($) |
Stock Purchase Agreement with Covea Cooperations | |
Cash consideration payable in a stock purchase transaction | $ 48.6 |
Business Combinations - Fair va
Business Combinations - Fair value of the assets acquired and liabilities assumed for business combinations (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | |||
Apr. 01, 2022 | Jul. 31, 2022 | Mar. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | |
Purchase consideration: | |||||
Cash | $ 5,000 | ||||
Intangible assets: | |||||
Goodwill | $ 226,576 | $ 273,831 | $ 225,654 | ||
Customer relationships | |||||
Intangible assets: | |||||
Weighted Average Useful Life (in years) | 7 years | ||||
Acquired technology | |||||
Intangible assets: | |||||
Weighted Average Useful Life (in years) | 4 years 6 months | ||||
Trademarks and tradenames | |||||
Intangible assets: | |||||
Weighted Average Useful Life (in years) | 9 years 3 months 18 days | ||||
Non-competition agreements | |||||
Intangible assets: | |||||
Weighted Average Useful Life (in years) | 6 years 7 months 6 days | ||||
Renewal rights | |||||
Intangible assets: | |||||
Weighted Average Useful Life (in years) | 5 years | ||||
General and administrative | |||||
Business Combinations | |||||
Aggregate transaction costs for business acquisitions | $ 1,100 | ||||
Residential Warranty Services | |||||
Purchase consideration: | |||||
Cash | $ 20,600 | $ 5,000 | $ 5,000 | 25,572 | |
Issuance of common stock | 3,600 | 3,552 | |||
Holdback liabilities and amounts in escrow | 1,000 | ||||
Contingent consideration - liability-classified | 15,555 | ||||
Total purchase consideration: | $ 45,700 | 45,679 | |||
Assets: | |||||
Cash, cash equivalents and restricted cash | 2,030 | ||||
Current assets | 525 | ||||
Property and equipment | 497 | ||||
Operating lease right-of-use assets | 871 | ||||
Intangible assets: | |||||
Weighted Average Useful Life (in years) | 5 years 6 months | ||||
Goodwill | 36,726 | ||||
Total assets acquired | 53,839 | ||||
Current liabilities | (4,884) | ||||
Operating lease liabilities, non-current | (871) | ||||
Long term liabilities | (2,405) | ||||
Net assets acquired | 45,679 | ||||
Residential Warranty Services | Customer relationships | |||||
Intangible assets: | |||||
Weighted Average Useful Life (in years) | 5 years 4 months 24 days | ||||
Intangible assets, finite-lived | 11,920 | ||||
Residential Warranty Services | Acquired technology | |||||
Intangible assets: | |||||
Weighted Average Useful Life (in years) | 3 years | ||||
Intangible assets, finite-lived | 500 | ||||
Residential Warranty Services | Trademarks and tradenames | |||||
Intangible assets: | |||||
Weighted Average Useful Life (in years) | 9 years | ||||
Intangible assets, finite-lived | 500 | ||||
Residential Warranty Services | Non-competition agreements | |||||
Intangible assets: | |||||
Weighted Average Useful Life (in years) | 7 years | ||||
Intangible assets, finite-lived | 180 | ||||
Residential Warranty Services | Renewal rights | |||||
Intangible assets: | |||||
Weighted Average Useful Life (in years) | 5 years | ||||
Intangible assets, finite-lived | 90 | ||||
Other Acquisitions | |||||
Purchase consideration: | |||||
Cash | 13,763 | ||||
Holdback liabilities and amounts in escrow | 1,500 | ||||
Total purchase consideration: | 15,263 | ||||
Assets: | |||||
Cash, cash equivalents and restricted cash | 256 | ||||
Current assets | 7 | ||||
Intangible assets: | |||||
Goodwill | 10,719 | ||||
Total assets acquired | 15,432 | ||||
Current liabilities | (169) | ||||
Net assets acquired | 15,263 | ||||
Other Acquisitions | Customer relationships | |||||
Intangible assets: | |||||
Intangible assets, finite-lived | 2,750 | ||||
Other Acquisitions | Acquired technology | |||||
Intangible assets: | |||||
Intangible assets, finite-lived | 1,480 | ||||
Other Acquisitions | Trademarks and tradenames | |||||
Intangible assets: | |||||
Intangible assets, finite-lived | 200 | ||||
Other Acquisitions | Non-competition agreements | |||||
Intangible assets: | |||||
Intangible assets, finite-lived | 20 | ||||
Total Acquisition | |||||
Purchase consideration: | |||||
Cash | 39,335 | ||||
Issuance of common stock | 3,552 | ||||
Holdback liabilities and amounts in escrow | 2,500 | ||||
Contingent consideration - liability-classified | 15,555 | ||||
Total purchase consideration: | 60,942 | ||||
Assets: | |||||
Cash, cash equivalents and restricted cash | 2,286 | ||||
Current assets | 532 | ||||
Property and equipment | 497 | ||||
Operating lease right-of-use assets | 871 | ||||
Intangible assets: | |||||
Goodwill | 47,445 | ||||
Total assets acquired | 69,271 | ||||
Current liabilities | (5,053) | ||||
Operating lease liabilities, non-current | (871) | ||||
Long term liabilities | (2,405) | ||||
Net assets acquired | 60,942 | ||||
Total Acquisition | Customer relationships | |||||
Intangible assets: | |||||
Intangible assets, finite-lived | 14,670 | ||||
Total Acquisition | Acquired technology | |||||
Intangible assets: | |||||
Intangible assets, finite-lived | 1,980 | ||||
Total Acquisition | Trademarks and tradenames | |||||
Intangible assets: | |||||
Intangible assets, finite-lived | 700 | ||||
Total Acquisition | Non-competition agreements | |||||
Intangible assets: | |||||
Intangible assets, finite-lived | 200 | ||||
Total Acquisition | Renewal rights | |||||
Intangible assets: | |||||
Intangible assets, finite-lived | $ 90 |
Business Combinations - Acquisi
Business Combinations - Acquisition of Residential Warranty Services (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | ||
Apr. 01, 2022 | Jul. 31, 2022 | Mar. 31, 2022 | Jun. 30, 2022 | |
Business Acquisition [Line Items] | ||||
Cash | $ 5,000 | |||
Residential Warranty Services | ||||
Business Acquisition [Line Items] | ||||
Aggregate consideration paid | $ 45,700 | $ 45,679 | ||
Cash | 20,600 | $ 5,000 | $ 5,000 | 25,572 |
Cash consideration payable in future | 6,000 | |||
Held in escrow | $ 1,000 | |||
Term of escrow deposit | 24 months | |||
Issuance of common stock | $ 3,600 | 3,552 | ||
Contingent consideration | $ 15,600 | $ 2,400 |
Business Combination - Fair val
Business Combination - Fair value of the intangible assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Apr. 01, 2022 | Jun. 30, 2022 | |
Customer relationships | ||
Business Acquisition [Line Items] | ||
Estimated Useful Life (in years) | 7 years | |
Acquired technology | ||
Business Acquisition [Line Items] | ||
Estimated Useful Life (in years) | 4 years 6 months | |
Trademarks and tradenames | ||
Business Acquisition [Line Items] | ||
Estimated Useful Life (in years) | 9 years 3 months 18 days | |
Non-competition agreements | ||
Business Acquisition [Line Items] | ||
Estimated Useful Life (in years) | 6 years 7 months 6 days | |
Renewal rights | ||
Business Acquisition [Line Items] | ||
Estimated Useful Life (in years) | 5 years | |
Residential Warranty Services | ||
Business Acquisition [Line Items] | ||
Fair Value of Intangible assets | $ 13,190 | |
Estimated Useful Life (in years) | 5 years 6 months | |
Residential Warranty Services | Customer relationships | ||
Business Acquisition [Line Items] | ||
Fair Value of Intangible assets | $ 11,920 | |
Estimated Useful Life (in years) | 5 years 4 months 24 days | |
Residential Warranty Services | Acquired technology | ||
Business Acquisition [Line Items] | ||
Fair Value of Intangible assets | $ 500 | |
Estimated Useful Life (in years) | 3 years | |
Residential Warranty Services | Trademarks and tradenames | ||
Business Acquisition [Line Items] | ||
Fair Value of Intangible assets | $ 500 | |
Estimated Useful Life (in years) | 9 years | |
Residential Warranty Services | Non-competition agreements | ||
Business Acquisition [Line Items] | ||
Fair Value of Intangible assets | $ 180 | |
Estimated Useful Life (in years) | 7 years | |
Residential Warranty Services | Renewal rights | ||
Business Acquisition [Line Items] | ||
Fair Value of Intangible assets | $ 90 | |
Estimated Useful Life (in years) | 5 years |
Business Combination - Other Ac
Business Combination - Other Acquisitions (Details) $ in Millions | Jun. 30, 2022 USD ($) |
Other Acquisitions | |
Business Acquisition [Line Items] | |
Goodwill to be deductible for income tax purposes | $ 10.7 |
Segment Information - Revenue (
Segment Information - Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 70,769 | $ 51,340 | $ 133,330 | $ 78,083 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 70,769 | 51,340 | 133,330 | 78,083 |
Vertical Software | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 42,813 | 34,404 | 77,501 | 59,342 |
Vertical Software | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 42,813 | 34,404 | 77,501 | 59,342 |
Insurance | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 27,956 | 16,936 | 55,829 | 18,741 |
Insurance | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 27,956 | $ 16,936 | $ 55,829 | $ 18,741 |
Segment Information - Consolida
Segment Information - Consolidated Financial Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jan. 01, 2021 segment | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) segment | Jun. 30, 2021 USD ($) | |
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Number of reportable segments | segment | 2 | 2 | |||
Total segment adjusted EBITDA (loss) | $ (14,267) | $ (9,925) | $ (21,337) | $ (19,519) | |
Reconciling items: | |||||
Depreciation and amortization | (6,416) | (3,894) | (12,899) | (6,356) | |
Non-cash stock-based compensation expense | (9,702) | (7,035) | (15,556) | (24,160) | |
Acquisition and related expense | (214) | (1,056) | (1,110) | (1,784) | |
Non-cash long-lived asset impairment charge | (72) | (70) | (139) | ||
Revaluation of contingent consideration | (1,481) | (574) | (4,686) | ||
Investment income and realized gains | (243) | (387) | (440) | (397) | |
Non-cash bonus expense | 1,526 | ||||
Operating loss | (30,797) | (22,943) | (56,098) | (52,575) | |
Vertical Software | Operating Segments | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Total segment adjusted EBITDA (loss) | 6,038 | 8,107 | 9,022 | 11,258 | |
Insurance | Operating Segments | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Total segment adjusted EBITDA (loss) | (5,068) | (2,951) | (1,782) | (2,443) | |
Corporate and other | Operating Segments | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Total segment adjusted EBITDA (loss) | $ (15,237) | $ (15,073) | $ (28,577) | $ (28,334) |
Basic and Diluted Net Loss Pe_3
Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Numerator: | ||||
Basic | $ (26,377) | $ (16,296) | $ (32,173) | $ (81,398) |
Diluted | $ (26,377) | $ (16,296) | $ (32,173) | $ (81,398) |
Basic | 97,142,163 | 95,221,928 | 96,611,294 | 91,483,053 |
Diluted | 97,142,163 | 95,221,928 | 96,611,294 | 91,483,053 |
Loss per share - basic | $ (0.27) | $ (0.17) | $ (0.33) | $ (0.89) |
Loss per share - diluted | $ (0.27) | $ (0.17) | $ (0.33) | $ (0.89) |
Basic and Diluted Net Loss Pe_4
Basic and Diluted Net Loss Per Share - Computation of diluted net loss per antidilutive (Details) - $ / shares | 3 Months Ended | 6 Months Ended | ||||
Sep. 16, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Sep. 15, 2021 | |
Basic and Diluted Net Loss Per Share | ||||||
Conversion price (per unit) | $ 37.74 | $ 25 | ||||
Potentially dilutive shares | 11,261,261 | |||||
Stock options | ||||||
Basic and Diluted Net Loss Per Share | ||||||
Antidilutive securities excluded from computation of earnings per share, amount | 4,429,426 | 6,350,253 | 4,429,426 | 6,350,253 | ||
Restricted stock units and awards | ||||||
Basic and Diluted Net Loss Per Share | ||||||
Antidilutive securities excluded from computation of earnings per share, amount | 5,331,673 | 2,975,463 | 5,331,673 | 2,975,463 | ||
Public and private warrants | ||||||
Basic and Diluted Net Loss Per Share | ||||||
Antidilutive securities excluded from computation of earnings per share, amount | 1,795,700 | 3,125,154 | 1,795,700 | 3,125,154 | ||
Performance restricted stock units | ||||||
Basic and Diluted Net Loss Per Share | ||||||
Antidilutive securities excluded from computation of earnings per share, amount | 1,825,719 | 1,825,719 | ||||
Earnout shares | ||||||
Basic and Diluted Net Loss Per Share | ||||||
Antidilutive securities excluded from computation of earnings per share, amount | 2,050,000 | 4,099,999 | 2,050,000 | 4,099,999 | ||
Convertible debt. | ||||||
Basic and Diluted Net Loss Per Share | ||||||
Antidilutive securities excluded from computation of earnings per share, amount | 16,998,130 | 16,998,130 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | 1 Months Ended | 6 Months Ended | |
Aug. 31, 2022 | Jun. 30, 2022 | Sep. 02, 2021 | |
Subsequent Events | |||
Proceeds from line of credit | $ 1,000 | ||
Stock Purchase Agreement with Covea Cooperations | |||
Subsequent Events | |||
Cash consideration payable in a stock purchase transaction | $ 48,600 | ||
Subsequent Events | Term Loan | |||
Subsequent Events | |||
Debt borrowed | $ 10,000 | ||
Subsequent Events | Revolving Line of Credit | |||
Subsequent Events | |||
Proceeds from line of credit | $ 4,000 |