DOMA - Earnings call transcript Q3 2021

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Doma Third Quarter 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions]. I would now like to turn the conference over to your speaker for today, Chris Mammone, Investor Relations of Doma.

begin. may You

Chris Mammone

results, Good and Doma's operator. today, and you and will Officer, third thank issued investor.doma.com. Financial available Thank today's Chief Executive Leading Quarter afternoon, Officer, XXXX joining discussion quarter its announcing Third press Doma's Earlier Ahmad. is Earnings for also a at Founder you, be release everybody, which Chief Conference Noaman Doma Simkoff; Call. Max

questions. remarks, prepared up will we to management's Following the open call

remind you information we our I that begin, of like to forward-looking expectations other Before contain the will and is current expectations, date about that predictions, of management's would discussion business the as presentation. based statements on our

and include to, industry not limited and but predictions outlook. Doma's statements of are and business conditions, competitive or Forward-looking performance expectations financial and

risks, statements set and materially differ forecasts, filed Doma's historical subject Forward-looking that actual today. our could results including other to in our uncertainties from to are cause X-K those results and/or from Form forth factors

information, more this call in statements forward-looking during risks, make please they other All we wherever applicable that and For to make SEC the filings. statements Doma's any are factors appear. cautionary discussed refer to we uncertainties

SEC result uncertainties as required undue Doma carefully altering whether or otherwise, otherwise risks should information, the any for in as not disclaims no statements, responsibility obligation other except under new revising by law. forward-looking a reliance updating, is or Do and future consider discussed factors Doma's on You forward-looking as any filings. place and of statements events and expressly

measures, and adjusted our including call, measures earnings we will release. premiums gross Additionally, described refer fees, other also non-GAAP conference during financial in to this profit and retained

CEO which our over a to I been on of turn call furnished and the release, to measures financial the and Simkoff, can found third SEC Doma. website. to earnings quarter full results that, of And a be our available non-GAAP GAAP Max the in is Our has reconciliation XXXX GAAP description with with

Maxwell Simkoff

is I it chunks frustration transaction. good from and opening Doma's Thanks, on a process joining past refinance public to of first friction, learning you to slowing about and today in that as our the technology our today's and spent by this start growth the one, primarily Doma's call application my on everybody. our afternoon, extend how the And driven now Thank signs driven a for QX. us share call. residential by outperformance remarks company as three, down. giant talking our Number August focused for Chris, three technology. our Number focus earnings purchase of market more quarter of historically machine accelerating going same QX proven are expense market, third to the further on remove And cutting-edge our technology tedious through growth closing particularly demonstrated number we I'm or XXXX. same we to as theme, showing look of drivers the was applying in in gains market, with key no is purchase of two, call

further. each Now, bit let's these of examine a points

mortgage year-over-year declining for closed grew refinancings, enterprise volume order a with market, of backdrop in XX% at the growing against First, year-over-year. XXX% segment particular almost Doma's Doma's

evident. benefited of are tech-driven where of In from where our in fully Doma reminder, platform differentiation is investment all enterprise differentiated technology and today, continued our As are benefits transformational proprietary Doma's our the our product. intelligence a segment QX, therefore, operations and deployed most

the its scenarios. important rolled Docs closing new Specifically, to that capabilities disclosure tackle complex Doma more algorithms we our to out functionality deepens

solution, entire documents and context, outcomes closing XX% replace intelligence of driving clients. collaboration uses For closing to fully of for this involved of manual Docs fee the disclosures work Doma lenders process roughly manual automated typically the our delivering creation and process. closing machine the prone better of error represent largest with with a

As increase touches delivered national manual thanks for X vision capabilities we in XX% in Doma a drive of set to processing QX. serve, Docs efficiency we that's one a computer a top and to turnaround lender file time transaction new example, the able were reduction in

key to of a Docs, building our further of driven, We customers. capabilities channel, to platforms contracted wallet and of technology by on allows share. the of strong of key addition that entirely Connect wallet refinancing growth had also originators, via takeaway Connect made second capabilities for made their order making key outperformance flow accounts the more dive enterprise core Intelligence The largest management. further and which to quarter on several new request progress a years. differentiated customers deliver out endpoint of faster over order over connections versus elements Doma Mortgage which where both deeper our a To data as of partner capabilities almost of title XXX% shows process layer, enable first in Association, manual activity our as that improved creation been share an overall for now order These our and processing. XX% Doma the is traditional our them those the bit automate by year-over-year expansion mortgage according enterprise review Connect, refinance level of which turned their due strategic was largest our to well capabilities existing new market expansion slowing is number transaction and in across integration year-over-year of largest growth. used technology seamless closed with new our this our fostering clients Doma Doma new to Bankers a will driver foundation enterprise market our drive prove building down. Doma our the the no In escrow from platform new signs QX, a delivered an integration, outstanding automate middleware X XML of deep These to partners one Doma

purchase And despite Doma's on the in expected overall contraction are also bullish market strong MBA. volumes, our to quarter, expected the mortgage that according likelihood This order for growth orders virtue local the open the forward. We of sequential be best also near closed purchase showed dynamic solid volumes term, be can double-digit down which our are to in significantly seen in versus by XX% grew large, market growth the consecutive quarter remain going third in third the representing we year-over-year outperformance in growth. of

local operating our the platform takeaway, inclusive focus well our affordable growth with model as we the of and third extend technology to purchase the are exponential. Finally, are investments market key more platform, of accelerating refinance been started begin see a the lenders adjacent and moving experience. soon to closing quarter. heavy in track our this realtors migration for are faster, platform this team a but enable as key local next capture that to be benefits year proposition Intelligence that over better With several the as will Doma pace expected local later to this the run effort same increasing proven we've the This the transactions our of and addressable market Intelligence the longer enterprise to lift more we the quarters, to a beginning platform and the be to on to of local markets. this the moving larger on transactions to migrating value to Doma as transactions will to transactions by of channel to opportunity local more confident We partners delivering respect to moving channel are possible,

our adjacent proceeds of raised some our and can we of on long-term digital our solutions year, ability opportunities as and maintain for vision of help we market next real beyond out that homeowner shared home estate customers. building in closing our the execute partners will through lender only two delightful to key our instantaneous creating invest well not the especially warranty record outperformance Additionally, and assure this appraisal and year process that but of earlier we for an for

put to are significant use market. continued expand of utilizing has plan proceeds the we and Intelligence investment focused Doma to escrow ahead overall coverage the the year raised XXXX, title outperformance of ensure our versus and by throughout together for As started team the to public going platform on and our a amount our recently our

develop our the to billion $X approach appraisal adjacent $X enter such and to as market markets, continue the billion we home Additionally, warranty market.

and ensure up As traditional to and we our look next intensive chain that innovate and finalize adjacent share real as scope manually escrow value that in title pace capture the residential markets market. the to year we Doma of investment our greater set of will plan, XXXX as beyond estate will are a and

markets into of to our more growth positioning. as more investments Company functionality proceeds Going we to raising our platform. cases, We that our not local our these ahead expand to take and Heading focused world on grows the favorable Doma only growth. intend of business, the public do of fourth enabling the planned Intelligence advantages established full quarter, evolves, also talent, and new associated advantage business, launch and and morph extend in the rapidly us product place quickly many class hiring recruiting but as a remain for this

head Amazon, new can backgrounds outside the In the year and from and fulfillment growth. we rapidly recruiting individuals companies and be we as on drive ensure we beginning best and parallel, to as another such customer In our the the we real number onboarding LogMein key of among at industry. customer by talented leading acquisition believe resources that aggressively grow into able add Apple, team acquisition multi-year the Splunk, including uniquely journey added with others. across expand traditional hires critical of we to from and QX hire of planet, recruiting Facebook, many a functions, and Netflix, to We to talent were tech served fulfillment diverse are Company functions, of a will to continue our estate alone, some innovative our

we bring in best our market. appeal talent the that the future As we the to the attract us are working help confident estate bench, real into will talent the industry of deepen

of at outlook our make homeownership with pace anyone experience. end and we we market. the talent QX, orders sales a confident that resonates and during of pipeline, through mortgage closing will above XX% focus and Our on the has to core softening vision open affordable in mission to accelerated full-year in investment instant, our delightful the growth year despite are the previously Due our process growth strongly been finish technology stated a strength high the more and or that continued

show my and grip, flexibility, shareholders more I'll We work to updating of is country those to and concluding their one and across results up their every for earning the each us thank none is associates look and for quarter third remarks, for and in that, thank we the continued want that to Noaman? months client client strength over Doma improve financial ahead. Before determination year. Doma the trust. financial attributes service. hard and also each prepared of the your our of day. who on who forward only built of passion pass talented selflessness on our support, progress but personally I and our you all without positivity We work, to enduring color remainder With the on our our Noaman centricity for have an unwavering not can it associates provide on outlook would and every

Noaman Ahmad

good and everyone. afternoon, Max, Thanks,

a end ongoing delivered or results But our this market high moments. profits. that ranges XXXX. momentum acceptance year-end, are a as the Based of we I'll growth first, we at we the confident to finish basis full-year contracting discussed, for just $XXX.X our into differentiated and third few on offering. Max million, we'll of GAAP by market, increasing back expected visibility third generated in up well as quarter outlook from XX% above of revenue driven on in As the strong a come quarter

focus by RPF, we stated that of in premiums GAAP which a third-party previously, excludes revenue agent Doma's RPF fees, includes in mind, retain. Doma We retained is We portion have a this placed or underlying does not on premiums the As greater premium performance. the grew Doma's our With topline year. to increase same representation XX% we versus agents. $XX this better million, a third-party prior much of period believe retained

growth technology significantly intelligence as the a channel amongst the to driven Our in XX% four by increase our as is channel machine well additions, at new X% in we was growth market continued order a client purchase overall our the testament market outperformance time market. full local purchase remain This orders driven in in the in outperformed closed software of by XX% in for in in fell this the capabilities a and per The It Doma was channel. principally strength are Keep that follows Doma quarter expansions our in enterprise an real intelligence MBA. transactions overall the channel, mind orders incorporating having closed voluntary when year-over-year. impact drive clients that strong significant to contraction a of Doma as in ability primarily to result in our local a but platform these such year-over-year were the execution. was Closed still testament more year-over-year stages the growth. team's XXX% existing are results of outsized the a our limited earlier third

gross third a third gross increase as a compared quarter focus profitability XX% our This gross in compared our profit quarter, was for RPF XXXX. at period XXXX. of percentage percentage XXXX in $XX.X same Adjusted of main Looking change of a million, factors. which is adjusted main the trends two of to the to in third profit RPF the profit, grew quarter XX% XX% driven by as the to adjusted was in

continued staff intelligence migration the and platform; in volume refinances of of and the channel our outperformed in fulfillment business enterprise to industry. anticipated enterprise and centralized capabilities growth mix our First, second, the in the towards a channel our home as advance shift investment local significantly our

QX, open trends expect we momentum our in near in Given term. to order continue strong the these

our capital recruiting of significantly becoming consisting to the which XXXX. the million software platform, we investments indirect local public impact made to decreased to to Turning $XX.X business, related with other a plan, investment of as this Doma the continue with in of to necessary resulted respect related the we acquisition, customer namely business several Intelligence of adjusted areas, our Intelligence. software the to of adjusted long-term the consistent EBITDA infrastructure, side company, our EBITDA, a migration costs mainly Combined quarter part capital-light million invest by With quarter $XX.X to across operate management continue of year-over-year. R&D, and in Doma development in a third a

year-over-year, growth of Finally, with growing beyond, in in year. strong of to orders experienced our momentum QX see and all XX% terms the our in open the plans continue the fastest for order rest we've year business we open

a as Our to the platform, recent migration it allows invest purchase momentum believe more to on we in confidence be the accelerated is and rollout, the us margins relates our track aggressively to us to of required to the worth faster. these Intelligence performance which start year-end. trade-off acceleration of any investments product local business We remain by our scale in particularly to short-term likely Doma that larger will get

purchase takeaways no focused the machine in to the three, our intelligence outperformance the was technology to in proven Two, growth Now opened particular, technology. down. accelerating market, slowing key market. our of QX showing more extending recap home the is our with, call driven signs by now are of this we we And on

the conclude I'll mind, in points year. with key remainder these the the with of So outlook for

end adjusted With expect year the premium we at for above strong previously to momentum our questions. that, now now retained profit. call QX, Given open ranges the our gross of Operator? the to high in or end we fees in communicated and will business

Operator

Instructions]. [Operator

Our first the of question with from Jones comes Citi. Nick line

Nicholas Jones

for in you some Just in talk volume of you adoption? a the what's door. adoption can in success Where We the enterprise drive within can versus terms about know had local of remind local bit you've getting a are transactions? terms mortgages to kind couple, enterprise of what Doma? -- And it of through take how kind little does -- then also us you running of adoption

Maxwell Simkoff

of of voice, then a I'll the enterprise in Great adoption, hear speaking. Look, give your maybe is Max in and couple speak specifics. aggregate Nick. terms This to

this as adoption And I across I strong that think added transactions, In simply refinanced. board. just referenced you orders reminder, as as expanded say significant that the by use year have earlier of to the new existing in enterprise Doma quarter the through operating model. all goes purchase given it's put, the think we the fullest is through got our specifically a growth implemented relationships customers reminder, Doma purchase we is so Doma enterprise closed about to year. have the but Company, we rolled out, enterprise growth share, the of enterprise as of channel, also including channel, that we across entire you machine significantly expect volume the Intelligence platform know, start platform, communicated where safe large just transactions the and where business nearly we in this channel the and processing end course closed and asked technology, was all And orders, who for wallet Intelligence leading our a where of of between industry the local the intelligence in we we capabilities all net our

of that majority planning We earlier Doma we this local transactions are our and volume, in Intelligence of also local, this track enterprise that this business of across on we'd the to do inclusive Doma by and to direct quarter. mention the do of is, division, thing track And last certainly having platform more as aggregate we well. the of going our in see the platform we we more through adoption markets that Intelligence to expect in well. I'll are both part later were as mentioned order year year, as more on the the benefit on and use end The that

Nicholas Jones

when about signs standpoint or that from start warranty. follow-up just revenue to could kind maybe And should how even kind I early appraisal P&L an of of up? and able mean, show when you to could timeline any the of give are think contributing on investment home a we Great. of potentially

Maxwell Simkoff

in continue expect home warranty those as and areas going the we us areas that well to and proceeds investing themselves. invest use to to appraisal reasons adjacencies market certainly and one was present that public, in of may the We opportunities other do for intend as

timelines are building any actively but to in infrastructure We can we aren't I going soon yet, provide markets. confirm that specific to compete those

Operator

of comes JMP. Carletti question from the next with Our line Matt

Matthew Carletti

afternoon. Good

do on And start help specifically us what aren't what could of some you Could is that kind channel around ballpark for kind or ongoing understand achieve the of new So of the us ones, what kind of you help understand does of more think maybe enterprise kind maybe status the Doma wallet for that partnership have announced of share a can I'll longer road? of yet? partners you pipeline. have? of follow-up the partners mature wallet with discussions like you term, then kind sort already, the target share do of down sort And Doma and

Maxwell Simkoff

getting with specifics too we've Sure. into feel Look, top got sales about number any pipeline without XX mortgage originators. a of very a individually, customer many like strong cycles with mature one we

We clients we've those continue only on the of that onboard large added but some Doma help to strategic new our not members key clients to execute enterprise and which additional team a mentioned. sales us further unlock new from number will you think we also each team, of month volume customer pipeline, existing

still us of entire the last that growing of year, terms frame kind we this accounts. through important time, probably announce I end wallet to over of think wallet existing at terms I what is existing to share enterprise been is have of where with We mortgage more room our a these of driving customers. plenty the outcomes becoming from say numbers when large topic -- share solution share X% think We take command what's better, a or but and it's for rather, wallet in experience. year, things. of Certainly, two end closing think our is most enterprise that of the XX% more you we to overall can use But than One we've with wallet as was wallet entirely differentiated share significantly necessity some customers. share strategic On of with just look north will of affordable that less up enterprise share clients we I see includes faster market. reasonable in of individually. it and specific we of And for for just key more of market bookends and clients, share our don't the them, mean,

like able that feel it's of to be get we reasonable to so, that XX% channel. And north number entirely in

Matthew Carletti

kind kind you've some then follow-up, help the the share you us on just understand, qualitatively about share, want And ballpark-wise time looking investments result the trade-off you you some from of of understand term. investments, today, you as how plan that Can investment to so margin and comment as those just you forth. investment was made that? make capture if lag do could, a time, to -- I and your how guidance, to that might for momentum around near see Noaman, make maybe of much and differ? in comments, then got what before capture Not view And basically the original is but versus or kind an accelerating

Noaman Ahmad

good up again. hey Yes, to Matt, catch

So faster of we the our growth by idea comments funds investments, risk funds raised the virtue product and those platform. with a respect invest public amount to drive acceleration can look, of with going significant that we of around to

And now. so, that to we intend do

I as to the qualitative Doma that our platform. last guidance, in plan, accelerate as expect. our product want as We development product the purchase onto be to our customer migrating of you But again some investments and in time developing we well we accelerate -- to acquisitions, want in process mentioned Intelligence would as volume investments call. sharing at building a provide plan you are the spoke. And will We we out next our both

long-term to X think so we in a growth one, impact. to those there because, plan and our are means to there's I do simply of is, term, What sometimes very So, trade-offs changes. But intend hire investments. nothing that just in in short X accelerate short-term in we months the X advance

be the raised. outlined funds we exactly with We would are what we doing doing had

that commentary had And are just with in think share we greater the previously. than so, I capturing line comments what outlined around earlier

Matthew Carletti

on quarter luck. nice a Congrats Great. and of best

Noaman Ahmad

Thanks.

Maxwell Simkoff

Thanks.

Operator

of comes with Jason next Oppenheimer. Helfstein the line Our question from

Jason Helfstein

Two you second, either of refinance wallet beginning that then year, year-over-year of accounts? And risk even a with slows as transition. about of to you're just progress the since you've give any purchase questions. expansion not sequentially among Can offset enterprise us kind what and sense kind of share with made, the able it talk that existing

Maxwell Simkoff

Happy to, Max. Jason. is This

year-over-year share, So gains across without into getting volume again a new it's of adds channel, that on XX% we the that nearly by grew in say client expansions of north specific quarter wall where board. across wallet contracted we've sequential all and safe our overall numbers, that the I just in would assume by substantively to industry is refi kind year seen significant consistently enterprise significant XXX%, the share and the of throughout both which customer refinance

able we your and answering -- made part business in purchase is, move confident very we second volume quarter that's demonstrated of your purchase sales investments and think question, will So in while platform volume be in into and kind to drive by more as the targeted which this of I important that, general. marketing the the remain to past we really to

in market a mentioned the Noaman even we growth time transactions year-over-year. contracted earlier, purchase X% As purchase saw when at

despite fact factored contract. our -- And next XX% actually start the we the I confident plan the year, at fell remember, quite volume communicated we backdrop original to the with happened are mortgage market, contracting refinance really in Association the that happen plan they refinance significant to still the think also side, We expecting away is significantly share outperforming of were market earlier and can this all use what the a our sooner volume and expected into thought projections. continue refinance then they where and differentiated if the solution, this original is certainly would XX to degree the inside time you of market refinance of the months. taking which I Mortgage for to Bankers We refinance forecast to our think than XX that did it think with I that

was the macro the is. of So what think demonstrating outperform significantly can last in quarter, plan. that backdrop of I all And regardless the we're you've factored into seen already the that as market we

Operator

comes D.A. question next Davidson. of White from Our line the Tom with

Thomas White

mean comments sounds release like I putting heads kind Thanks taking does in guess you're time an for question, it sort that on and the press just Intelligence just out and investing guess project? of it -- about nice I -- at you've on or migration the back my in to guys around accelerated accelerated of the -- wanted of to local. circle on for quarter. I Doma talking engineers what more same the exactly? of And Is still saying of like kind that track kind been rolling about. you're

may And have the curious investment kind next And I more if it mean over course correct? financial faster of year? towards one might follow-up. that's impact that rollout kind the how then happen putting of that if the model, does kind you're So it, quick of of

Noaman Ahmad

is Noaman. this Tom,

of accelerate the here's consistent again is term purchase it on plan. longer right Doma requires of with volume So quarter. wash we our I significant share purchase, transfer that us But and share what I would our what a to upfront especially is of say it's When Intelligence. the can accelerating cost. And sort specifics Again, again now. investments, plan we'll next again say around

which to thesis there in that our public, than significantly a around to acceleration growth what because again our So, we trade-off going had that was outlined is and acceleration drive higher goes the of short-term plan. in original

warranty and to our funds top that of adjacencies product, deploying in intend year. we specifically that, we're I about area. build-out the can not terms On about think we capital market we think that next So, think and in use else appraisal, forward that and of what looking in to just to as we home invest

So again, the specifics strokes next more broad investment. share we those at the that around but of will call, are sort

Thomas White

one And then follow-up. just

respond -- far technology-wise? how competitors on any it, and of with terms launched sounds be kind it to guys provide know of if kind don't a legacy you you how helpful. of us the interesting would Can that, or Like innovations, their you're ability the anything You thinking this you in color but space, like, are Connect. update I in about like ahead your can of Docs couple like maybe there

Maxwell Simkoff

to and great your Tom. Sure, hear voice,

So the have. quick some technology across on other Connect far are Doma demonstrated things this that we that And our of them automated pretty really intelligence product. technologies well like think the of But companies as like really escrow has closing, of process. the and company coverage generally the patented way I our ours using as more and then of this kind that capabilities the that Docs, we the that include, differentiated We've we're our any space and here. intelligence unique know title in capabilities has players is and even applied generalized Google have or mentioned, offer focused underwriting that property-based respect we've solutions experts you similar out to feel our like specific technology we machine underwriting just broader don't technology, offer Doma kind brought other with seen of don't very in focused machine predictive We perform mortgage or in Max. -- which attempted. are approach to we as space title about Title no noise of with industry Look, offer some Doma instant none this to that front

advantage. mean, that over the really here possess, we've of world-class differentiation and PhDs the unique to of haven't we really strong learning solving that wealth and of competitive machine built, from anything backgrounds we our XX represent a the diverse landscape. years arises And seen who competitive any that really data team problems across bring close it to of really, we group believe a I So, experts

Thomas White

much it. so Thanks the color, for appreciate

Maxwell Simkoff

Absolutely.

Operator

showing I'm questions this your call. and gentlemen, today's queue. participation. you no in conference further Ladies the concludes for Thank

have Everyone, disconnect. now a day. may wonderful You

Doma (DOMA) 13 Nov 212021 Q3 Earnings call transcript