PRCH - Earnings call transcript Q3 2021

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Walter Ruddy

Before we go further, I'd like to read from the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Today's discussion may contain forward-looking statements, including, but not limited to, statements regarding Porch's expectations or predictions of future financial and business performance or conditions; business strategy and plans; and anticipated impacts from pending or completed acquisitions.

Forward-looking statements are inherently subject to risks, uncertainties, and assumptions, and they are not guarantees for any future performance.

You should not put undue reliance on these statements.

You should understand that such forward-looking statements involve risks and uncertainties, including the items discussed under the risk factors in Porch's recent public filings with the SEC. actual updated the to on indicated SEC, website may be subsequent in the by may to and with performance filings which cause such factors statements. from from time time Porch's SEC differ Such materially or those results are available by Porch no information, except result a of expressly circumstances, new obligation disclaims update, otherwise, obligation to law. as is or statement, otherwise required whether events, under future as or alter, revise and any any forward-looking changed remarks today's non-GAAP refer financial measures. certain In we'll to also Definitions the of Slide the available these non-GAAP financial measures X legal are in presentation. on disclaimers found of porchgroup.com. for comparable these GAAP Also, tables non-GAAP directly refer please the on to the most press of reconciliation measures, the included measures a in to located release

legal for replay on after this We additional everyone the at to for company's remind to of refer information. shortly available this like you webcast be website presentation that such disclaimers the conclusion will I'd also porchgroup.com.

presentation has Ehrlichman, CEO, on presentation Chairman, who submit and the take that Zoom and within will those Porch the a time. it questions of commentary. Matt on to With submit Matt? function would webinar turn allotted over For its best chat company's follow available also that, do presenters' like Group website. can along it the the made the will the found during slide The be let you a today's platform. please Porch. into to all of me Founder through log presentation, to question Management

Matthew Ehrlichman

our consecutive into to our We've we'll to grow performance, continue earnings business, going topics since Good quarter joining beat conference I'm today. and service you, and cover adjacent us get expanded excited fifth afternoon, is raise Walter. verticals for XXXX for QX Insurance suite Thanks into strong our which our SaaS both home third Thank call. everybody. public. our

strategy. the becomes build by a here purpose that opportunities one of truly company enduring unique making at home category attacking Our a simple. the market great, winner Porch We're a largest is to with

quarter million again guidance versus our excellent, XXXX. full are more which these expectations to exceeding $XX.X and revenue was XXX% year we're year-over-year XXXX. share Marty is about will but performance raising So results with QX begin, shortly, revenue, for third in up

in important As software the you'll home, our We've XXXX consumers software our future. position in for more and companies, year. us are particular, our we investing We're thereby KPIs, to We EBITDA their to that this execution increasing ability M&A to strategy. QX adjusted by revenue, to see Insurance, to for of guidance our growth margin more improvement is our been $XXX modules premium outperformance written in for catalysts million. and product helping the companies technology full-year in with our level get do services produces growing a continued aggressively consistent into rapidly. software the BXB of to more increasing strong gross selling these for driven sell each access

manage market. to. of billion the possible, than the it macro to able our business slowing being our expected our and positioned acquisition returns partners. near the in points of not announcements a of the recorded strong housing margins, adjusted year communicated first-ever I in to in in aggressively reinsurance when our as are but expect performance profitable business improvement choose. EBITDA on reinforced, in Given the meaningful we record our on any in we It's in date allows QX, American winning consistent historically greater growth XX% based Based but in our us, of manage available opportunities adjusted AHP, be QX market to we'll warranties offer homebuyers. quality select in contribution do We're To number the each we've including opportunities given opportunity. to strategy We reinsurance to change XXXX, from here confidence certainly Protect, market We to home of we believe QX to softening where achievement, to our of massive challenging $XXX to the proud quarter. included signal in managing results focused doesn't with pursuit return or on which seeing of our good investment no strong invest remain philosophy, profitability U.S. a us EBITDA are the notable believe, as high-quality to this XXXX, term. the Home we in profitability margin

We the expect now operation in insurance regulatory after of mid-XXXX We into more approval to CSE signing to states. acquisition process also California. lengthy announced expand in a close our

we and here officers, and loan embed access quarter. in us process. acquisition to recently a our announced strong future ensure software we $XXX companies M&A Just closed setting to to Floify loan we offering note application for the have insurance provide homebuyers in sheet to the QX, third into of have To an convertible earlier mortgage even opportunities, to up a seamlessly also balance million

strategy over go Marty me and to XXXX more to let through handing first revisit previously our in our Before articulated priorities. performance financial detail, company

our consistent them services been companies, this transaction such revenues well purchase home insurance. loan as facilitate move. industry officers, help and as services companies, who strategy doing Looking we important to executing of to the we companies, we access these during here generate roofing we've inspection grow. services the recurring revenues homebuyers generate and software then to to unique companies stress, BXB By in helping mortgage home at so, time, buyers BXBXC by gain contractors early recurring and save a provide Slide help title software money and X, home on as From and moving

to our level our begun to with and and our disclosure help to This better operating additional two Vertical of Software understand excited Insurance. we've business this segments: quarter report We're shareholders provide increased business.

for have more their X, XXXX one, of software Slide consumers. services for with providing top to companies to additional number sell leads these two, from organizations; more companies or embedded here Porch to these deeply starting access So consumers; three, provide to and become these modules are: more the our which priorities on

connect property M&A lastly, platform. unique five, leverage help and helping earlier; our a inspectors acquisition agent, general with carrier, agency brands companies like to and bringing expand the more we and four, with we're and advantages; can we our to we homebuyers our advertisers As managing as use and happier look experience, accretive focus home is customer strategic insurance to in services, good; to continue consumer we on full-stack with where data

against our of areas, the results XXXX. to these are of over guidance performing the each remainder I'll is Heimbigner, QX business and it that, Marty and And Marty? strong. discuss for updated CFO, Our to our with well turn

Martin Heimbigner

Thanks, Matt, afternoon, and good everyone.

now Turning XXXX. to September financial XX, our results the quarter for ended

was million XXXX, increase QX million $XX.X revenue an $XX.X of year-over-year. with total in compared Our XXX%

do the as regulatory a of break reminder, was current we and of the accelerated them organic and during we recent in announce growth close in As approval, to, is being the Typically, QX. Case once the out as created QX. million acquisition acquisitions, Floify revenue announced only following year acquisitions approximately, of year separate acquisition significant only three join for growth prior acquisitions Porch. approximately, Porch companies acquired pending our generated, target AHP last CEC out from, them the has incremental point, X% ongoing, the QX acquisition. from not by platform annual XX% impacted $X approximately, namely the completed AHP to year in consistently because this growth the

line Looking quarter-over-quarter. a at Slide we Margins with X, Revenue were increase strong. well million the from $XX.X margins. in QX, or clearly in also top QX million QX, performed well in increased as in upswings XXXX $XX.X XX% to as significant

too margin to business with revenue adjusted with we as As line, of us the I this that reiterate Above and short profitability. our be margins, adjusted contribution Matt strong margin cost to make. XX% demonstrate we believe nor that it not mentioned, to term. could in choices make is less demonstrated are first quarter of contribution to attractive desire investments just do would expect margin. many high we very near-term, our EBITDA to that XX% profitable EBITDA continue given the allow QX continues revenue There

company, here This from previously our $XXX growth. stated $XXX our million revenue of million. our Floify given business XX, for million our public at from the on XXX% are the Slide months consecutive guidance full growth year. in we This and from is XX a our million see would now million $X raising of a as guidance the QX, revenue $XXX you to organic to acquisition As $XXX.X expected IPO raise in be year-over-year fifth

on XXXX baseline had grow as January XXXX, forma revenue $XXX ahead If XXXX. the year forma you our to closed if as throughout discussed This year, acquired to pro we they would look the full we had our to we is were million. acquisitions been to XXXX X, be from pro anticipate

a and some in more there homebuyers in company. those companies per increases higher for revenue are revenue our transaction our quarters, reminder, QX service two business. QX As seasonality is revenue as typically which

While are to date expect nine our months be typical which revenue, and we decline. $XX annual guidance, performance, quarterly that to guidance we we would be, QX don't set approximately, our noting in million on seasonal based

transactional margin to a it of margins, bearing of account cost use approximately, mix Not margin. of our to, business revenue, for of had meaningful no the revenue to targets. on gross which lower certain which adjusting contribution less services mover revenue, impact some terms profitability like are of instead guidance we In XX% we shifts for are or margin slightly as

contribution minus full-year start year. we at to of out our reiterating of margin we set guidance this finish are Depending XXXX We expect or plus at, XX%. the mix, of guidance this the approximately, X% on

growth are We negative implies, also XX%, QX, which EBITDA we XX% which negative to negative adjusted loss margin EBITDA factors adjusted full-year investments XX% guidance in approximately, reiterate in making. of

the updated million XXX%. Vertical in XXXX, is segment we our million expected be guidance $XX $XXX For from from and million Overall, to $XXX Insurance segment. growth year-over-year Software expect of

XX% of anticipated, with can BXB largely our expected XX% from total from On revenue recurring and our approximately, of revenue distribution vertical reoccurring pricing transactional move SaaS anticipated software our revenue. of insurance Slide is of is XX% from previous XXXX revenue, Approximately, guidance. vertical increased and software revenue and has line see you with platform nonrecurring our a subset only, revenues XX, monetization and our approximately, to, XX% from post XXXX revenue. approximately, streams the side right of in

additional continue new We revenues BXB growth modules fee software SaaS see upselling expansion into increase. in companies, pricing to strong and by to verticals,

Operating Chief on Slide EBITDA loss to adjusted XX, see margin and on Matthew anticipate, to the and turn our to XXXX. update As Officer, negative I'll targets contribution to for XX% our the negative we continue for approximately, can call key XX% performance now over margin margin our you meet XXXX an to Nagl, here provide track QX indicators XX% year.

Matthew Neagle

Hello, I'll Thanks, our public in Marty. jump KPIs. everyone. with

QX with average revenue XX,XXX, up company XX, number KPIs to in XX% average Beginning XX% also growth $X,XXX Slide in more month, saw up is the on the we companies, in the strong. which Here is growth and than of per year-over-year, quarter were companies per to year-over-year. which

unusual company And SaaS and a BXB than moving online more more continue faster rate in and help will we revenue we We naturally QX with sale. companies insurance year, per down where states after impacts forward. the fluctuations believe grow. out homebuyers in in inspectors COVID, companies QX. ways. positive to generate per new number QX offerings the coming growth in their in as growth We We our back revenue more to of more will help get services. more transaction generate were XXXX seasonal these modules. access upcoming more a volume. to We roll We We sell in There such drive slow

company That companies, saw expected anchored increase X,XXX We is for add, Mover division, from per Floify nice the smaller up revenue and QX, approximately, adding is per services revenue than more company. companies smaller is VXX. our our but division In albeit lower has which with also companies, is businesses marketing Marketing their ramped product to a in average. with a

in In addition, QX. seasonally lower we revenue expect

XX% XX, per services. representing increased we XX% lower to be Slide revenue almost per types monetized XXX,XXX growth across and QX, On a As expect for $XXX continue of such, monetized our growth QX, we seasonal roughly in all company monetized line strong year-over-year. year-over-year services in to QX than to saw We see with in typical service, decline. increase

growth from in services results insurance, services the key monetized in revenue service. focused we per are Importantly, such is which higher on, monetized coming as

revenue per time. grow and expand we we the expect states more to service over our offerings to monetized As into continue increase home to insurance average warranty, continue

QX years. a expect across is two We these with in consistent seasonal previous as metrics decline

Let's now operating segments. our two into related to additional jump disclosure

Vertical First, Insurance segment. Kornick Adam Software, I'll the about on update will then and talk

Turning XX. to Slide

leading small offerings This space; provider and grow serves our of software inspectors; small- home mortgage home As their service you variety title; services a which know, the a home to help and of across we companies and are Floify in more medium-sized includes run and fragmented These companies ISN strategic HireAHelper medium-sized verticals. businesses and iRoofing. in Rynoh software, moving; efficiently. in

are we in and proposition, to revenues. our in valuable we transaction companies improving plus product particularly services, our us. Because As offer layer our development, and value SaaS invest and modules more able monetization to products BXB are these growing more model, SaaS

and continue drive growth. to such, product in we strong technology unit marketing to sales invest to As have and rapid which and continued, allow us economics,

see our popular We offerings are XX. our Slide with to why Turning customers.

to best-in-class our others development. plus invest and to model, in vertical, SaaS First, product of because specific transaction tailored we're we more offer economic the able solutions than

Second, stand but we companies make with just better help service, our more particular Concierge out, provide for to their We move to to these their Moving their own scores. companies service and to than NPS customers, these easy. help experience allow improve a their entire the customers provide

we operating is we moving Third, meet we're together. link inspection to part multiple a service When how consumers in across industries drive strategy to companies. demand home able of our home company, from them

inspection the the does only the the the title right or to schedule companies, Software we the demand to home it very performance turn when software By agent. are generate it Now financial at makes driving find we Vertical more of help an consumer our not revenue, software our discuss introduced can of like segment. now 'XX I'd point also to sticky. loan, and Slide

and revenue, XX% contributed million segment predominantly transaction nonrecurring this is For is Clearly, in only the quarter, Vertical third $XX.X post-move recurring Software revenue. this revenue. the in revenue. Of revenue reoccurring

announcement, reminder, Floify QX, of margin as in revenue Software in adjusted also healthy In XX% contribution the profile a the margin $X of and highlighting SaaS a of into QX. financials, strong, economics Software strong an business. XX% will expect to BXB EBITDA is with Vertical The Floify QX, the we be our the had segment Vertical fourth in layered As quarter approximately, unit margin. segment contribute, million noted

corporate G&A Software Based produced EBITDA on XXXX, cost on segment. utilization margin work, in to preliminary to we aggressive look investments. we As these Vertical each for may allocate would including our more product and based costs, despite technology adjusted have a QX low-double-digit

a it are we now President vertical of turn to reminder, division. a revenue would the over segment as highlights our Overall, QX the to make of I'll EBITDA predictable, these with continue and element of a Kornick, factors expect QX. InsurTech versus recurring a point margin seasonal very As lower strengths our performance where as software our combination pleased QX. two with the segment, we we would revenue growing, adjusted rapidly has And to lower company revenues. in investments, in which Adam

Adam Kornick

Matthew. Thanks,

revenues For to we what this detail about largely been moats of and that we're more the business excited fees. one confirm communicating, fastest-growing our Insurance to that able companies distribution segment generate in margins insurance we as I'm competitive we the and be commissions view, industry share high and unique durable have with believe through

let's Insurance revisit our Here on Slide 'XX, and strategy. business

early data. Vertical as to Porch low-cost as well platform know, homebuyers, has you unique As household property our and through Software and access

fundamental and or advantages plus low-cost of build a with leverage and to business on business won is unique risk. based for for insurance We fast-growing important data Fortunately, to access these understanding capital-light insurance a loss structure. us, the demand largely timely

in insurance operating our Homeowners under America to across we addition products XX states, our In all agency banner states of XX operate today. the insurance own insurance

ability data we price properties recently warranties to company, have more over have in insurance, help a warranty home Similar about the customers' Protect, effectively We proprietary to our layered to Home homes. time. protect leverage American to fully

update is regulatory brief a progressing. on Additionally, CAC. process The

and Given mid-XXXX. receive date, issues we in the raised the during have been seeing, the no expect approval To pace regulatory process. to close acquisition we're material

XX. to Turning Slide

the Insurance than rate. had more was $XX.X financial million, QX, Gross performance. $XXX strong a Segment revenue written representing segment $XXX run million During were annualized premiums million.

annualized gross an and XX% fees. written rate. commissions significant Insurance million Again, a segment So, reinsurance approximately, or of $XX premium run partner over carrier revenue either and we now from derive of this majority insurance

We the level. aren't segment below providing further revenue breakdown in

providing our year-over-year at per through segment. In XXXX, as per that a streams growth or was still operating -- minimis. quote we isn't it of In revenue expanding time, XXXX, XXXX, still aren't a We as and lead different de are were also some legacy we clean agency, QX those segment were and revenue comparison.

had XX% revenue Contribution you we XX% and margins less cost a the which EBITDA strong instead As QX, in of quarter. were of revenue see, adjusted margin. use we in margins were XX% gross

for have allocations, As and to been would adjust quarter we future adjusted closer margins. corporate EBITDA potential this normalize XX%

metrics these Porch. our this has As value clearly capable of also for segment note producing that is significant I'd Insurance some show, seasonality. business

revenue This prorated policies commissions revenue being revenues fee While QX, such and are with the as when are margin year, quarters, in show contribution are cost the across certain sold. less will seasonal of high. lower QX recognized

designed are volatility down continue to reduce capital requirements, path. strategy and and model Our that will minimize and we

margins contribution in late intent we period, premiums portion drag the is reinsurance see model. revenue it cost which the regulatory be stub short-term could move a layer couple next revenue quarter on on of to that able create CSE is and Porch's during year of of to market, less year. our reinsurance toward approval, we Depending As possible after the it only will

one will on on XX-month rolling $XXX On into a QX, and Briefly year. end September the insurance average of basis, customer toward of we per moving of customer had, reinsurance KPIs. our generating XXXX, policyholders we day efforts CAC of an At XXX,XXX approximately, be XX% system close. retention. had an we're Our per revenue as

be track year HOA with XX own now to targets are products the to insurance on We the acquisition. our of our in a and continue completion after states meet expansion within

our again of which quota capital want carrier volatility of light with XX% approximately, nature Page our I levels. the highlight Overall, insurance Turning our to risk today, within to means our operations. is via see, business, premium we with and XX. expected the system lower capital-light share,

reinsurance us Having of have more distribution In generating the This a have addition, proprietary strong to still partnerships. revenues limit and our product control pricing we property losses. our of commissions, higher loss It over in important faster performance, their can we expected time. also excess improve to approach via growth use over control model [indiscernible]. product, allows to is insurance generates higher data while capital-light so reinsurance

impact the share Turning XX. proprietary to gotten about to the over could We've size the data time, Slide our and questions of excited I'm have opportunity.

underwriting, data underwriting As in that the data late preliminary states pricing having we've into discussed before, the anticipate derives XXXX. We for select process and is integrated engine quality

and of can and hail, homeowners' damage wind systems all of losses. and account industry You water home XX% for warranty for that nearly losses. finally lightning appliance see and failure over account freezing, and fire In

Fire risk with through quality. most often due is a and correlation have roof [indiscernible] underwriting. we damage failure. heater system appliances better often path or tied to and each Wind Water and For faulty to hail roof to loss loss appliance driven to failure. segmentation by and water or is primarily warranty wiring, is clear pricing improve

quality; model, cetera. these systems, helps each that data appliances make, proprietary have of et of age We roof areas: in

you, us in growth. the margins goal right customer. size and accelerating our prices We the each about the allow progress am opportunity policies with ahead. This the customers improve lower personalizing platform teams of to our better excited and I for can to are investing Back data meaningful of pricing for and Matt.

Matthew Ehrlichman

guys. Thanks, Thanks, Adam.

managing We'll and three We growing nearly an software outlook footprint, delivered third and again, our also We recap making opportunities. So acquisitions, full-year fast financial, about, continue our effectively creating right raised strong M&A expanding us. value execute insurance platform strong and on evaluate organization the I We're well quarter, very positioning delivering progress while remainder financial will XXX% our about acquisitions and costs and these the performance, excited services, continued, our strategic, But it's absorb We've our vertical are and of profitable revenue momentum quarter. our first XXXX are through warranty year-over-year. year strategically. significant KPIs, expansion. announced as our adding to growth continued how the talked future them with as we home for excellent pipeline the to is as and for able given shareholder designed. We're potential.

business in and predictable with a after. drive growth market to of lots have advantages levers we're key massive competitive We going this

take So for open Walter, your questions. with that, will the management you up line can if team please Q&A. the now

Walter Ruddy

Matt. Thanks,

The first Stephens. comes at from John question

John Campbell

tour. that on just a was thought for I vision the I behind check you want inspection to the nationwide guys. interesting announcement pretty

Just you there. define curious how success

maybe last guys said was penetration. have you think I XX%

is So there to targeting? people then is certain looking separately, share customer there And of level conversion of access? and SaaS off pay a move you're onto number certain market a kind you're

Matthew Ehrlichman

Yes.

pop-up for that announced aren't the year. we over this inspection So industry hundred in conferences launching course folks the of a aware,

underway. And so well that team is

plus different unit to had wouldn't tactics thing able our transaction deploy go because monetization SaaS be is, of software opens dollars One up Matthew economics it the into company other afford. and of allow just that model, us go-to-market referenced pure-play that that to

Group, within every John, go-to-market we look and but one way. the across the And of that money against deploying right end the these business return to so we it, each prioritize us, what's in for on the what's deploy at the CAC, at day capital so is across can prioritize of whole our tactics LTV only not we Porch what different

just tactic as if that able if as program. the we a scalable type well we keep making see what just we unit that just motion going. like would is scale So up we're other of and economics we We sure in for would be learn like that that, we on into so can to a can sustain take it's return to look to verticals see to capital

looking or John, charted inspectors number what was And space. to haven't to share in grow of second but question? expect we're your add, certainly We talked then that continue sorry, publicly to the about that

John Campbell

imagine the some probably educational just into conversion, over access of About kind customer there's element pop-up baked would moving I these to pay. tours.

Matthew Ehrlichman

great a you're them impact with in and is small What's both, that building when these really together these make person, able you're companies spend in educating to businesses big you help these to time can and companies, relationships how you're able grow.

that And software By grow. you're so our doing we able get them clearly set invest with these can help it not so, to time. up only help because companies

upsell these into helping You're experience different modules to be Concierge. to able including of our able through to a Moving to better companies, customers them provide their these all

so And right. you're

we're pay are Now, on companies inspector, of those XX% an still with fees. new new part. XX% tactic whatever vast SaaS transactions we majority it turning the companies using transactional sell of in when to paying and are

It's pop-up that And motion. so I wouldn't that through we're we're say that beating conferences. just continue to able

John Campbell

that's basically And for that. have one to mean, for how mortgages into looks Floify. follow-up on guess quickly consumers the about obviously handoff the insurance the just obviously, going us that of that insurance process I having through process, Floify. closing then have that Talk looks, process like you're to here, what Okay, helpful. you fulfillment I tied part

Matthew Ehrlichman

to to the layer now we earlier to in Floify we getting how access way. perfectly mortgage a that buyers software point-of-sale through for it's Floify and those loan We and home able buyers be but companies insurance, is, with digital about are not in loan excited because process home only software positioned go what very help are this officers believe help application complicated digitize to these those in process easy, consumers, very

things is One requirement. you you're the get insurance. when a of loan to It's have going process do to a

right so in you upload insurance application. that records, can go the one us, check obvious. of But, for kind boxes it's now, And of

time. point don't, have most great, at the in consumer if But Ask upload If they that insurance. it. already so,

your And we very to just to so able to make great, is say, what choices. them do want easy be to here's for that

As just we ready-to-bind continue America, with we'll that's Homeowners forward of quotes for have build that to them. eventually available

make price, it simply all to be them here's hey, and box a easy your and check as So, possible set. as for

that as and you do, certainly start very together, that will there's create should very view, us to But lot work to this time. as And in a seamless be to link converting It life. process. for so to be, a able our bring of over highly we

Walter Ruddy

Next question at comes Benchmark. Dan from

Daniel Kurnos

Obviously, an few year. start guess with I'll have bought excellent this year. quarter maybe and I Matt, just -- things, a you

So right implying it's your at organic. of you my the look is here, if I but the have actually, guidance, been hope math basically updated entirely this that improvements guidance year, all

I going So the can next you of, seeing just into And you're talk of, trends, see a year, follow-up. through sort then of kind have underlying what sort how you that continuing? growth

Matthew Ehrlichman

Yes.

and formal next XXXX guidance. provide we'll numbers quarter So our

technology. still a both of what investments we and to different So marketing terms now want few across all the in terms make do right in of sales businesses, finalizing kind and of and we're things; different product

what points to do we we the so make. offset want margin do each manage improvement some And the how of want of okay, versus we to is, to year business kind many make of choices that investments

So growth versus trade-off. profitability

Now we that -- constraint. invest talked to EBITDA about, going continue each aggressively our and to up year, progress certainly, we going show adjusted want to very we're consistent we as then but we're to can margin in continued

in the quarter. we'll next able share numbers So be to of specific here kind of terms more

Daniel Kurnos

of question. kind to John's follow-up just then And enough. Fair a Okay.

like some have lever pricing. might it marketplace, helpful. potentially incentive education talked across platform that about a is have multiple feels tool something about around underlying now perhaps the you the the you're And of just that would before. maybe So now given we've other bit The be putting that you It's of and verticals? little talk the is in a strength

Matthew Ehrlichman

to you do want take Matt, it?

Matthew Neagle

Say that again?

Matthew Ehrlichman

Yes, to it. for want it, go Matthew? take You

Matthew Neagle

Yes.

So do proposition have we our strong to companies. value a

We have We not a can do. are that very high to able others customer satisfaction. offer things

started pricing So in move certain verticals. we to have

think there. I aggressively revenue development. seeing growth of our product few the more some and out also company And opportunities per we're to given and that. we in obviously, then So in revenue ability is invest And that have a from

We price those over to can expand prop have opportunities one levers to our add modules of time be where and we help value us think to grow. to

Operator

question next from Jason from Helfstein The comes Oppenheimer.

Jason Helfstein

a question insurance. then a Maybe follow-up and about just just

So tell inspection kind would the a home about mean, in as -- just reason -- right, me of math would basis, Is on of do I for early full and didn't have much I And you market. full-year see think any liked probably as and XX%. growth that -- if right? that a because you organic this this you be year,

year talk Do think from written gross you'll get maybe top down us of inspection funnel. million this be think I told of next on lack that And appreciate just help disclosure. influenced added to and what revenue. means how home premium of kind into by the for you from the been kind able to like year that So then I -- could the revenue? have second, going $XXX XX% side you about of [indiscernible] So insurance of us

I COGS to get but think of million, is reinsurance like XX%. $XX XX%. implies don't That yet you

that step-through be can help this in Otherwise, great. can us be a we if period, you would get super if would that helpful. future So the quarter, on

Matthew Ehrlichman

if take that's you insurance, the or the on take Marty, and first, then, to Adam I'll want second great.

because, much-- that up end growth. again, real on So acquire the We don't the organic companies organic we Jason, break, quick growing quarter-by-quarter

Jason Helfstein

math the the of is full XX% million. base full That $XX off year. year, was The of

Matthew Ehrlichman

Yes.

And a million. $XX was because of was in yes, out COVID. million to Actual then you now the VXX year from million year to $XX that depends we million what of kind here $XX obviously. XXXX, This break revenue on the in where was $XX.X million of Insurance reasonable layered side, We that on slide obviously million see number acquisitions. is in in right for layered want of last Vertical year that of use it last highlight, XXXX you we this, XXXX. on right-hand think best $XX from the revenue America, revenue in such from layered to the to so up segment, -- a We AHP million did is down peg is able from $XXX the strange here have be $XX Homeowners Software for Floify. with those So

So disclosure. that's the

just next be we do XXXX forma. only up, all year-over-year highlighting quarter, pro growth off of our but we not will also As

if XXXX, want from underlying had looking growth. closed the a question? So at organic the how do up and what you feel the growth X, second about strong and to Marty, next take we're for for we acquisitions year, January is set all Adam business good

Adam Kornick

it's Matt, can Adam. that. sure, about Yes, I talk

a fees. tends about to us. is that around gross combination think way commission through as good both of flow XX% to obviously plus obviously, of below segment don't think XX% it slightly businesses a is and of is with But what fees way the about So gross mentioned about believe premium. Matt break the -- the down And, in we it any That's I of to of But Insurance written different. varies. written different details And I are level. the XX% that's operate, premium revenue premium that we

Jason Helfstein

does reinsurance? what tie asking. to That's How that I'm back

Matthew Ehrlichman

So when we about sell get XX% we how an as commissions. talked to as right agency, agency, an insurance XX% we've around sell now,

carrier insurance So get we we part here XX XX of own states about own the third-party we'll that product, our terms sell our our that commission the today, not commission. our on we In that's our and rate. in that average twice states insurance products of operating insurance business products are sell

Jason Helfstein

XX% So to it's XX%-- point mixed. The is, the

Matthew Ehrlichman

That's Insurance out all segment.

Jason Helfstein

out shakes it that. that's and And

Okay.

Matthew Ehrlichman

Yes.

revenue premium gross XX% getting of questions we we revenue our our commission, thing model revenue. the still is our this of want that revenue, fee and economic And Jason, to is this and around flows is, premium written occasionally up through to get we to highlight all wanted that's something stress from key revenue highlight and distribution, the insurance on high-margin we're reason, and So on Insurance the that flowing just ends gross the that tied segment written P&L. through

Walter Ruddy

head we'll Now from to Jason Craig-Hallum. Kreyer

Jason Kreyer

just for on me segment questions Two the disclosure.

segments talk each you can can where those margin, up can that to you go And on about you the Software long margin EBITDA about as the over contribution how the disclosure time, So contribution and talk then segment. Insurance? term? also impact if where on over -- two the Curious goes margin just in figures regard two gave Vertical the does

Matthew Ehrlichman

for sense is get margin right a for fairly two that actually You similar. the now can both segments the contribution

to just Adam third this quarter, as margin about, tends a the talked in particular higher Now seasonality. bit Insurance have quarter from

the full guiding from is an perspective for two a targets. that higher want will margin even technology for we fairly higher But term, drive to in perspective, aggressively to be segments. continue as XX% to be segment. based margin communicate We this could a think guide year, all up, long-term EBITDA point long we're opportunity invest So to our and well to at and margins even contribution us to a them Obviously, and is for those end margin of continue on day. win, that's the been the able XX%, strong. long-term Insurance across the those trying bar, have to EBITDA balanced company, both we expect long-term we're to, targets that but growth of be set product what From to a

so mean, I around through will can additional how of and sense segment adjusted been Insurance that, shared expense both for about for We even talked almost have margin. now, normalized those, EBITDA But margin. of look we XX% right it's And EBITDA to a flow some have the adjusted kind as would you get we XXXX. adjusted XX% for

from over up each targets that do those yet and but yet. something broke broken long-term we'll haven't done of segments. our out haven't it's time, margin We Perhaps two kind of we

Jason Kreyer

then a now. months seven And is six, But maybe for HOA Okay. for into follow-up Adam. me, this better you're

kind business. talked I if in you're into over But what first can that leveraging then And us HOA a couple findings of exiting the in you data insurance give fold? can lot you kind now with know data XXXX. already curious of the about talk layering insights about any of you the the quarters if Just curious

Adam Kornick

can I that. about talk

really data. are we the Jason, excited So, about

most pricing, I something data, and thing say we on the to one use team wonderful well HOA rate come the gross to every think written have in very that When a acquisition the as to to has It's state that's been regulatory great. the premium, the that the metric and it. about top in useful it about going expansion our geographic with first, see is So to business. in regulator out growth line I'd which doing you see keep probably think in that board. And the it, as we're need get can is you mind use file with familiar for data approval to

have some exciting So data. we

one we the talk loss, think a when about roofing. examples I both of we we about lot talked about talked

that common the the the It's enters So have a home loss. a surface home. is way and roof peril on of we the a

water be other escape and often escape of water of cause water. The can the is of heaters

want quickly so get we as we using We're state. really those. we're because through But in using have of excited approved as examples not process to We with get can. data to excited them And yet to work regulator but about implemented things to some market about are that have to we then that about. them, those we're and the go

Walter Ruddy

from Mike Northland. from comes question next The

Michael Grondahl

year-over-year on clearly. there you're secondly, to Concierge Moving integrated? number looking to up out integrated I that then about any yet Congrats Is acquisitions XX Slide average and acquisitions really of forward some you've and with progress. excited again. that Matt, that think the it done companies had of there? kind that's not Anything nicely And the was One, questions. call quarter two getting

Matthew Ehrlichman

don't part, I'll the and why second you take the take first part. Yes,

Matthew Neagle

Mike. Thanks, Yes.

nice ongoing and do we another in seeing is did of our we companies. been areas exciting the this do engaging There's expect Floify to of that grow, as increase to a about companies we're example, I an expect expect We quarter. been we X,XXX That the have invest number the us. acquire us We in before, and tailwinds and QX. talk That's And obviously see sales continue mention Marketing acceleration will Mover We it. lot companies group, the to to have we with to on do did a able we rate as it to in for growth. we're one said exciting. growth But about But good new companies. marketing of expect, are how don't bring of see seeing. number we same excited a

Matthew Ehrlichman

in the yet terms yes, where then we things launched a there are Mike, have key And synergies. some few of revenue acquisitions, not the of

to Home on not to in Floify something closed be homebuyers, that yet but with process kickoffs the is loan are those the teams into that homebuyers, software recently, that. application. home to we've through but But their yet insurance integrating us. closing not transaction teams in, checklist in acquisition turned title teams yet the layer launched able for the working not So monetization. Protect that to warranty, just connect the there. embedded and so again, are the as space, starting yet perspective, we've The From Obviously, Rynoh offering of launched not warranties. already will a still working is we but able front and planning are that But be we services launched, American another be that's have on acquisition and to

Operator

Cantor. from is from Ben question Next

Benjamin Hunter

the for It's super segment disclosures. Thanks helpful.

on could expecting any states break be was the rollout new and through have I that walk we as the you maybe from if the expense into wondering HOA. help revenue So in launched XXXX Should in us revenue significant ramp already states XXXX? you

Matthew Ehrlichman

briefly. know I want great state pricing. so we it just to you launch insurance if anything, When want will set state I'll please Ben, start layer a don't a new But business, expectations. take to that conservative in question, I it's we Adam, with do do.

state to that then able that launch, flow able the that pace expected normalize are getting our feedback grow so and particular right you at price make before to you that optimal place on not you so generally, we be the white. based as able correct think to start is after get on in And learn. pace. say, six process pricing then be we data get starts through coming we to models. want to turn And takes models the sure more loop, are for the to be that that or it's start but can when we to It's increase appropriate and kind really learnings where based black to months the volume that. we of on And to we down I'd to

and do of year by to Yes, would those So state. help we some we've XXXX. it will state expect this I vary, that certainly launched last impact states say, new

and next I as here certainly, be year look and talked like yes, we'll case So into those of wrap we year. more say states up additional continue about, would the we launch states, that wouldn't we states, to some this

from And on is, how so loop also. new states those of depending quick some impact we'll an that feedback see

Benjamin Hunter

are line insurance EIG initially? kind that you expectations Okay. anything kind has have on quarter to you the closed? on Do exceeding acquisition with a $X of Is the you in initial Great. That's of And revenue in helpful. guys the million HOA since your quarters there. clear of kind that add were expecting revenue, it's then the lost still two

Matthew Ehrlichman

This actually We terms is well. first of what don't insurance it Yes. XX we all know don't insurance insurance if to perform in states, is have obviously, we have EIG our agency. would own I to Obviously, product. breaking say, time, be. I it out our out was broke in specifically continues the going revenues. ever

consumers want And to those own we Today, and not America, sometimes the offering umbrella states is our consumers with or we'll even have lead least does often, in to of Homeowners only use consumers want want policies. we states. insurance comparison, product. And offer so will that still agency. or at of or our America sometimes clearly, But other still in where Homeowners will auto

lean on to talk when we'll agency, So multiple products, offer you're trying for products. multiple our

nicely, sure. continues for grow yes, it to So

Operator

Next question Guggenheim. comes Ahmad from at

Ahmad Khalil

here of -- segment? the KPIs of next that So we expect softening see Insurance do to impact on market how expect guys should presented the this we year. I reinsurance the on wanted you how to guess, of quarter I to the you some guys some touch

Matthew Ehrlichman

you Adam, to want take?

Adam Kornick

that. I Yes, can take

record as a So long negotiation these us experienced partnerships, HOA, at successful this, Matt we market. of but annual And we're HOA, of footprint, have about not losses through night there of I have floods XX-plus effect we affect events. reinsurers mentioned, is They an for track outside losses. talked strong So years our hurricanes Europe, and think that had negotiation. but Reinsurance reinsurance other positioned. in been And are have well

of HOA exact is, reinsurers really profitably, their basically, we team. we're just effort focused expect are is some that risks hardening and appetite the through market partnerships process. track where the a from growing what we kind through So and they to think negotiation well what will what we and deep have But positioned right that the on work to a up of so want, see we we that because have now record work these of we're that's as doing take

So great to but we have as about feel we the say I outcomes, fundamentally can team and it. think be, too it's on just working exact early positioned we the financial we're well as

Matthew Ehrlichman

see our showing to of And potential that from on part commission. to to could that positioned able that headwinds. -- reinsurers. where you pay you what It's willing reinsurer to Well, question, that commissions for we see would our increase ceded just any that's But where up. be believe, your is we're the time, over second

that all of how in plays And for out year. so TBD terms next that's still

Ahmad Khalil

And guess second I alternate here. question then or part

pipeline? year guys and the You that year into think transaction growth your two we acquired XX% also integrated acquisition. that mentioned and companies about beyond after the How saw should BXBXC after they're

Matthew Ehrlichman

Porch in And then we're being X% on the mentioned. after. XX% acquisitions like not Rynoh annually of I the of and layered acquired that's monetization. the prior key a point asking I is great missed. These make proof that a model for Thanks sure the about would to get really a there's I one. on Yes. think didn't year We've yet some again, in transactional working question well, people to point that's want by because that year growing companies, If that's inclusive

rate just as rate, percent So we for that growth would a XX to gone revenue that company kind haven't being We've expect be growth to long-term turned sustain. about like synergies that. able that to XX of and we talked yet the public, on we've any

sustain growth rate. expect I that to I would think be able that to

back anything of I of settles Fundamentally, not one-year that. like or those as it's Porch of a and the we're into to kind curve would revenue the I being jump think able growth then So businesses expect part slower change platform.

Walter Ruddy

in capital the have We an as audience. on Marty, update company captive? give as the of one can well the from you level the

Martin Heimbigner

Yes.

aware, as quarter. of debt So right all of you're convertible $XXX on closed our we end million the the before

approximately, which So of Floify on then October with And acquisition $XX the million in cash. announced cash. used, $XXX we we the ended quarter XX, million

execution share into good the strategy to well disclosure organic we we feel for quarter. we've shares that in basis. did position of of And pipeline we're why still raise on XXXX. M&A outstanding, growth of really that's we as outstanding. XX-Q, So the got quarter $X.X ended third in full the exactly our our with private third as continued With count, our see a in did a is debt of our warrants respect significant common that number private warrants and less million $XX.X There a the but during we quarter exercised million cash of exercise

Walter Ruddy

Matt, now, are think us on questions we wrap I wrapping Thanks, and Marty. you up. can

Matthew Ehrlichman

great like so. we Again, quarter just call I The we're just thanks, want feel joining for today. say do the company. Take key the With point another making will though, started, and great for I great getting to is, up. everybody, would interest. front fired very support much have a But and day. us. appreciate care. we everything the feels the We're in progress, of team is the that,

Porch (PRCH) 16 Nov 212021 Q3 Earnings call transcript