PRCH - Earnings call transcript Q2 2022

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Operator

Good afternoon, everyone, and thank you for participating in Porch Group’s Second Quarter 2022 Conference Call. Today we issued our second quarter earnings press release and related Form 8-K to the SEC. The press release can be found on our Investor Relations website at ir.porchgroup.com Joining us today are Matt Ehrlichman, Porch Group’s, CEO, Chairman and Founder; Marty Heimbigner, Porch Group’s CFO; Matthew Neagle, Porch Group’s COO; and Joshua Steffan, VP and Group GM, for our Inspection and Real Estate Team.

Before we go further, I’d like to take a moment to read the company’s Safe Harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995, which provides important cautions regarding forward-looking statements.

As today’s discussion, including in response to your questions reflects management’s view, as of today, August 9, 2022. any update undertake information. revise not do obligations or to this We

additional plans uncertainties, SEC from we statements on to or business risk and encourage looking make actual you current information. conditions, anticipated consider our strategy Additionally, These forward or expectations about could the and results will acquisitions or filings forward-looking to pending completed statements future assumptions. financial business and based impacts are which those We subject differ described statements. our in factors for risks and cause materially from to performance

call. both non-GAAP most refer the reconciliation We GAAP will call. release non-GAAP today’s of measures comparable Please GAAP reference today’s for press and earnings financial measures to on discussed measures to the during

Matt. guidance will of Inspection provide available of near be us Chairman, that, I'll can the presentation long XXXX and website over the in quarter addition As Matt replay this our and update call will presenters to and webcast the XXXX a covering to follow of an second conclusion and and the Group. reminder, join shortly in updated our term Ehrlichman, company’s on CEO section progress on also the to this initiatives. the Relations the found Industry Estate software of and Today, Joshua slide And with KPIs, Home presentation results, Steffan, Real GM several on strategic will division and Inspection Porch for website. at ir.porchgroup.com, Investor turn after a commentary the founder

Matt Ehrlichman

call. we're housing at same of the anticipated, million, June Group decline our through exciting we to year-over-year worse us quarter market increase inflationary grow XX% XX% and had reported period than second everybody. afternoon last originally what continuing nicely. Good We and XX, Despite a headwinds year. from Thanks Porch you, Thank joining for a second for quarter an earnings had revenues $XX.X XXXX Emily.

given to housing stated, In current rapidly SOX with recurring work. we strong well expect a we harder made our setting QX As progress for future. market, great revenue, up grow control to through internal our integrations and continue ourselves and teams strategy right the

including Our I update modules software Josh into and a the as anticipate bolt we be new on new to We released provide expand, deal title states. foreseeable in continued insurance this future. three will such software on inspection a for the more of industry, which company, business the later. M&A final M&A completed home will acquisition acquisition

before in to designed We're EBITDA we're thoughts the baton. create and new reality. start shareholder market make term software, companies continued want confident long ahead related continuing progress on profitability. I We're the focus Porch. and what's thoughtful of this insurance but that's our term the and for other for value, towards near to acknowledging in happened I the in market an shift decisions So team pass strategy increasing love to and our I We market with certainly seeing. very acknowledgement growth, a understand housing the ours. by pressure few the like stock Porch

been effective parent on the CSE agreement that CSE disclosed other over it’s on last stock Insurance have the several have immediately, The as the As of we amount with and I Porch my company Members Covéa. acquisition of update of purchased executed a mutual given Directors today most of a is Management. for timely termination personally Board meaningful previously months, and and conviction, our

our of capital the aspect importance that of light agreement we in capital working While this with and of markets are business given has hardened CSE, announced at this the cost disappointed have and capital correct since this won’t The regulatory XXXX, model, environment we is be team first the the we're increased. economic the forward. acquisition we confident and that current path given QX

deploy ways continue $XX management to million agency. via California, consider but insurance attractive operate to in to of the will approximately other capital acquisition. able now is team the now CSE solely we Our Note our to previously allocated

with Our plans as delayed homeowners insurance XXXX had to to year to in bundle CSE's be we this auto products auto past insurance will planned rapidly. leverage launch

discuss, acquisition and and from XXXX included signing an Given and time for into auto and full are confidence guidance, be with result of the insurance this bundling we the have of factors revenue the revenue closed XXXX. business adjusting so by we’ll would we our from both at XXXX, HOA revenue CSE previous our targets a other guidance the financial synergies our year that middle removing the from both as it of CSE EBITDA

open and related costs it the new We've pull are control forward millions profitability. one-time including the EBITDA also second approximately XXXX adjusted in year, digit in A testing see guidance latest lastly, but on and the can for million million includes roles, six, really XX% which And of adjusting where full growth. SOX EBITDA initiatives, that's weather reduction CSE in in included from guidance year represents updated the guidance profitability anticipated this would our we had to-date revenue events. housing order Also you declines the market. the half auto on revenue forecast elimination So $XX XXXX adjustments. of of to quarter. Removal year. million, corresponding ahead seen these adjusted good insurance progress represent majority our our We now growth updated to here spending slide expect of to XX $XXX $XXX guidance last of is the the no mid-single that severe we communicated and negative to related assuming in be year-over-year

approximately shareholders. for So with unrestricted to of the increase opportunity benefit reinforces strategically deploy the it the capital CSE given by cash in the $XX million termination,

right to do at the create convertible that In most that We to right the and are with and company we'll what performance including time we will our can and looking continue at we of be business the believe believe be manner demonstrating look valued energies opportunities our consider focus the over I the or and to very and and in just significant. value. execute this continuing to how the building repurchase share closely, value meantime, business on both in time control, term notes long more, our should

to rollout access fully consumers we and more to more. the to many our we business grow and expect into inspection more insurance our As app mortgage profile, of gain embed insurance, we software warranty to homebuyers as

insurance capital of we light, advantaged just our effectively make growing more started. most and one can to of data we even operations As into states, the our are getting insurance and expand products build as more companies. proprietary We believe really use ways price to more our we we more insurance fastest find

our Five, doing and our the integration For sell to both services homebuyers, new companies growth strategy the Four, their and their into deeply building acquisitions. ways continue eight, digital focus recurring consumers. and insurance insights are rapidly front to we lastly by or embed grow our those revenues of increase to and on data software tools M&A, and consumers with grow, leveraging continue strategy and businesses seven to who software top remain can Starting of as year homeowners and experience. as verticals, continued warranty hit extending same more I’ll more related and three, software presented embed we with as that XXXX it. provide early outlines generate One, key our Porch, and end warranty. slide to at improve in insurance select they consumer over the our unique unique products unique past get And Porch on warranty next in we and BXB parties and services, to happier into help of of to experiences of slide to help quickly. consistent the ongoing generate in revenue, BXBXC our more new app our quarter. access and our services insurance to software to so with can will We and go-to journey important profitably, a improve the which The platform for gain our well companies core and vertical the first Two, such for leads of market the from as geographies. products the we purchase services where to then continue new variety transactions, are pricing support experiences, products. be out launching our homeownership

our to discuss that, our to to results. Marty, you. it Marty second CFO, I’ll So quarter with turn over Heimbigner,

Marty Heimbigner

our Thanks, Matt comparison you can financials, with up here year-over-year and XX, things Starting our results. slide second good the see quarter of on everyone. afternoon

XX% a reported prior For of the the of million. Porch million, second Group year’s revenues quarter increase from $XX.X XXXX $XX.X

May margin of insurance margin look and well. of respectively, and to Overall, and we past and years adjusted revenue our for hiring looked revenue in prior perform negative warranty compared May levels seen ramp the we ramp seasonality historically. have year. we April and between strong instead feel a different the how April, May results June, financial occurring In up balance Our than are about set saw good strong particular, the and movers loss home and fewer as optional consumers XX% while the XX% EBITDA year’s of XX%. such we services saw service, XX% negative and we core and were cost as the Margins continued to at June

QX in Texas, reflect to pull expectations our quarter due well seasonal SOX in second primarily a as was weather reminder, of loss as cost typical line insurance expenses. certain one-time which related expected As a in patterns, with our results higher forward

quarter The software left this balance prior from an the hand XX% generate can see we are more which provide from BXB we the for consumers margins reported Adjusted Moving of increased XX, transactional most to as which EBITDA of we the year, vertical in volume results to fees you from million of companies revenue we companies. service. the software meet is the side. on XX%. increase is software for segment slide We segment our revenue, $XX.X of

On you grow business the see side right to insurance our that can quickly. continues hand

XX% as in a negative This for insurance segment million contributions XX% and in $XX.X in the warranty was operations quarter negative the prices. from EBITDA this prior to compared quarter, prior add for we holders acquired a the XX% year. the Our operations our increase segment reported and more Adjusted more reflects increased policies, prior of insurance second in growth in the XX the revenues from increase months year. year-over-year states

events I renewals reinsurance good or typically cost that impact impacted we the pricing business see the severe is any lowers As volume as contrast planes, would XXXX, second HOA we look higher small This news were took is In ahead. is our events that not quarter. place which a EBITDA in thus a to the did XXXX, margins in weather the by which quarter weather margins. of of number insurance of year's and revenue increases mentioned, where adjusted

XX, slide to updated our Moving year for you guidance the can full see XXXX.

now of said, what the entire with market adjustments guidance we most the a assumes revenue year-over-year in Also, this originally moving Matt acquisition launching forecast, insurance assumed updated of existing to a forward acquisition, in As to these million in mid-year the comparison revenue year, change cause cash sales unrestricted with adjusted with nearly balance now of decline $XX now data. in related for guidance. million the Not excludes the more guidance home and CSE conservative line bundled approximately the updated $XXX XXXX, auto synergies this higher. from was our CSE

XXXX. of continue declines a minority to housing As XX% with will our still and reflect revenue a BXB insulated. guidance impact updated in our is year-over-year only Even insurance, largely expect reminder, to revenue software market, a we in depressed a of our warranty sell growth much home

for about long of means We what the term the are excited business. this success

more to would drive growth order in quarter. In profitability, new we also last adjusted profitability feel in focusing terms being investments, from expected our are while internal even profitability of that of faster EBITDA on guidance ahead HX, and selective XXXX XXXX. we We efficiencies our in I where note and optimistic to versus

catalyst profitability EBITDA written million to of expected loss, I profitability insurance to incorporate given tipping focus a on for work CSE. be been guided know annualized a continue impact a loss And rate timeline will from loss for XXXX business. gross previously over EBITDA note premium we to we in guidance into end to our that We this finally the million $XX Adjusted year business. a will at the adjusted adjusted with has and run as revenue auto the of the XXXX pull from would down $XX.X

to We written will premium which now the now switch guiding $XXX million. is year-over-year, gross

contributions remain by unchanged. XX, can our revenue you business from As segment see also slide

in total vertical revenue fees come software of like segments is revenue expected our insurance. housing estimate vertical business After that now of growth and revenues factoring million XX% recurring drive a from near BXB to market, XXXX, to more come conservative investments faster Note increase from our We expect from expect balance we revenue year-over-year. of profitability XX% to in in term slowing software the $XXX the insurance of XX% and segment. a software

M&A insurance the are in expected $XXX discuss it an Now revenues or Matthew be prior XXX% our auto increase over without million Chief and insurance from Operating year’s million. segments to incremental XXXX, I'll $XX And that, with to KPIs. turn operating Officer synergies, assumed Neagle, our of to

Matthew Neagle

left. to saw year-over-year the had We in XX,XXX, quarter KPI public jump KPIs step-up Of QX, performance commentary. this I'll from strong comes nice with next on X,XXX companies We than the strong beginning the a software and from in with everyone! acquisition. in quarter growth a strong slide, inspection more Hello had in up this we companies of – and is number the recent growth XX% which XXXX. average companies

revenue On average housing given revenue year prior new front market, had we revenue seen growth like substantial services, primarily Rynoh due Despite fewer that company as industry company, being ways, from consumers customer. companies revenue on modules more continue to per we platform the you released than margin Porch to in our $XXX company given our we drive headwinds believe in sheet. to SaaS reporting in more companies we We consumers per lower more and right, can across us ISN serve more operating, of gain or housing well generating of shifts month, of help ways. number or with access sell into as smaller we recent the to in the several expand aren't can the the offerings per see in monetization and per per they yet engine. integrated M&A opportunity can We can and BXB insurance have recently them average, in closed a

recorded in XX% Let's move across services. see prior we we and both to types quarter $XXX quarter through year-over-year. monetized per monetized organically the and slide We quarter, XX. approximately of increase service all second to saw growth, Throughout XXX,XXX year services continue the the a acquisitions for strong second monetized

with of expand slide suite build average XX, we of our insurance to insurance expect more to we per seed states. XXXX highlight Oklahoma, the in capital retention XX we And XX% into our products offer want nature that partners, I care insurance risk at business. capital-light volatility risks remains our XX% had the As service second and approximately into of policies, are homeowners, states, over services with offer to an we year. we rolling see own average our operations. continue you our expansions quarter which XX to and per approximately monetized an premiums basis, announced HOA of per the within June business, almost revenue a we policy XXX,XXX lower On Delaware the can to rate reinsurance generating Indiana offerings can month means out levels. increase we now recently of high system and value as and continue On time. the insurance revenue with $XXX business light expected our Today ended to of XX, and

make it to progress for will data our insurance progress structuring periodically. utilize on on proprietary continue and We this pricing update to

simplicity, also management to not we hand model. I'll a could but for be predictability of only XXX% opportunities increased to move With catalyst margins. it because capital-light quarterly believe for our the closer If Joshua we exploring that, teams Additionally, higher the and it business, do deep our or over our business so, to continue to would dive.

Joshua Steffan

an Nice you of home be all provide we've public. in on metrics the here I'm Matthew. to with going in and Thanks to industry inspection some progress since excited update key made the

building fantastic to they out make the of to inspectors need platform. continued aspect connect in their run every toolset We complete have We progress with our business.

variety provide inspectors help of products stand also out. We a that

less field time inspections on more the faster administrative Our and completing grow spending tasks. inspectors can in by time

Our CRM much more, services drive help tools, of to online and report and platform scalable that bookings, reliable and inspectors automate generate more their processing, parts revenue. growth, writing a functionality, payment calendaring offers our set of much, giving business add tools

As strong share I'll our NPS, inspectors inspectors continue and are loving our it it, as to monthly momentarily. – less as well are see and much loving rate X% churn which than

now or works estimate than across about more country. home inspections home XX,XXX monetizes annually XX% over inspections platform inspection Our our the million inspection of X.X companies by with all and

of point in when home a early comparison, inspections our point country's of platform. was data XXXX our the public monetization XX% through As previous on last flowed

a new sizes to our of made progress the recently, a marketing have sales our growth lot is adding products improve value M&A. years. inspectors, and due variety over fit of past proposition most This the new couple expansion and of of modules types of We and that introducing efforts, that

early announced from completion Inspection As software the check home and and warranties the Residential and recall Warranty Services inspection than companies. a reminder, quarter in our of acquisition more Services, a which the inspection X,XXX provides Home to Warranty business we of centric CRM

As is QX, total of addition Pro inspectors X,XXX is in tool Inspector acquisition another writing or used system in and considered count. of software our inspection completed mentioned report operation, in ISN, Home XXXX. earlier, home sizes we approximately HIP to industry. company Matt but HIP the believe a a We varying HIP brings leading software inspection also leading to is smaller

moving which Work, includes processing acquisition the expect and XXXX, integration of we in into once meaningfully be to accretive payment pay-at-close. We Porch ISN, both Synergy completion concierge this and finalized have

couple of focused and provide XX a want slides are update on. initiatives an XX, we strategic I on on to Here

in make the growth App Porch of XXXX. unique is our consumers want and to powerful all begin We our QX, which home to us several out inspection move inspection broadly more a and the tool the at the scheduled to app make will invest We opportunities, help to exciting data delivery Porch help app end continue for and to manage App, their customers, homeowners. including the of rolling

need pull three numbers, the of in all has the details model appliance so repair. record and home the the furnace to homeowner and app We at fingertips. that sorts key Our can inspectors important and about spend their details of four home, into as areas such condition, and all the roof that to-do's data hours

offer and right helps another getting plan appliances in the to of report, at with able primary and Strategically, being consumers alert from with know the there's point way completed, all more their front details services the about repairs. in a us appliances full over going RWS now home. help recall of is introduced point systems get to Our future and download now ready-made of with with ways, the consumers extending a of in touch consumers, relationship a systems them offer to inspection we app to through their home in if to consumers three inspection time. lists important the consumers issue of And being this let to able the to-do subset can to and as access acquisition check

so platform our help Pay-At-Close. with Our new and the their concourse but look moving app good inspectors product does customers. helps consumer this, our to Certainly

real-estate see it seen closing. their adoption interested product cost roll how and are front, for to as up have not start but agents pay consumers the to of inspection to of good into We inspectors be able early this

of Since increase and by inspectors, revenue by purchase for between their add-on offering services. strapped cash per allowing introduction they to consumers the seeing are XX% inspection Importantly more this, XX% of the we at complete, end seeing virtually these as churn once module is and more onboarding no and seen this have in more inspectors agents attract good consumers. growth are of XXXX, they

Floify run like and ISN small of and their industry us. in and on the showcased look are model, transaction companies of the home companies would companies offerings I our more to which SaaS Rynoh and a mortgage space, These medium are in broader here our software up, Because services leading XX. course vertical plus title all efficiently. wrap I these of help Before Home at fee, industry, including sized grow particularly businesses slide monetization take Inspection, valuable to and

products our our company. headwinds across XX, we that strong and to happy such, us As results It title throughout have of in the industries. XX our higher despite to Floify allow is XX which continue the the technology Rynoh drive and evident mortgage and by economics investments platform in unit investing growth, seen average marketing, and NPS respectively, than customers significantly scores all demonstrated ISN, SaaS for are sales,

to in customer strong service see strong growth across and we metrics, to low continue our addition companies churn In platform. new

results dives, insurance continue our in Matt. over With to I'll it mortgage back turn will that, tightly We deep share including more into to upcoming software. of integrated

Matt Ehrlichman

proud help make first companies and huge the Thanks year. been Joshua. to inspections in move to we easy, home just our these Overall, I get we've able Good throughout our create already across these provide to update, monetize more modules platform. of advantages pricing. to we're It’s Certainly we insurance XX% continue appreciate performance upside the it. with pleased ahead agreed approximately more to of introduced half as consumers of their

grow a continue great produce our to rapidly is company. Group Porch truly to at and focus way to significant on and generational long-term revenue value Our margins becoming

will of at be and ahead, so consumer continue will it, exciting believe Joshua about. the the to ample While, auto We catalysts would an the to be the like $XX look the several background. we to in market, believe is the talked great Simply, time with a our when most insurance have opportunities add or solution integration thing would take this to and and if while own price, operate of in auto our Floify retain we it products continue have insurance been million to we time advantage year, important app CSE it's the provide including acquisition with agency deal launch to bundled purchase through approximately to future. for California in insurance XXXX the

profitability. options an capital-light and continue to to will to our EBITDA more insurance move Our system opportunities segments teams explore path our to insurance even to accelerate

to more As we our organically working questions. has us, second on take We’ll it the Q&A. of demonstrate as to our engine. excited very successful year. share lines into this finish now and is move in for while and though will that strategy XXXX, clearly is year been M&A half I'm be that we up management will can With open Emily, the additive you your that up the to team please

Operator

Thank is you. question in Morgan. [Operator Carpenter first with Instructions] Our coming today Cory? J.P. from Cory

Cory Carpenter

for Hey Matt! Thanks questions. two. I the had

you Just homeowners thinking but expand of it, on with that in first, in America, stock Maybe options maybe back prioritizing convert You've $XX capital? about bit million you’re could I'll how follow-up. potentially other and California. preserving the I'll buybacks what my and a expansion for accelerating weight even you come in potentially like redeploying geographic to about mentioned of that

Matt Ehrlichman

Sure.

know – today thoughts not you radar. months announcements of that. of not doing would mean a at convertible note what but couple to I do, did we're on terms our One, Cory a know go a on make buyback, make stock ago or You ready going in you know say I to we any all certainly was XX we’re

going basis. is on evaluating going drive to overall of given an the deploy best something to where returns that discuss, that’s the you we're you market what it's clearly on want Now just so kind that we discussing. are Clearly to we’re capital and know in the and ways have

you in say I the on timeline we to making in focused of profitability what are being into thoughtful a certainly now? those the in go did note also Like get you growth know products there's of sense half of we second making No, our sure us. pursuing so we communicated California know that in and that I right insurance You for the that number wouldn't make we are, the forward going initiatives new we’re we would had today. additional obvious very year, deploy own that and we investments business pushing capital that to know are But know we’re in terms you mentioned really initiatives.

across So we to profitability the line. want business get that

to a think opens opportunities then continue up that to us invest. I lot for of

Cory Carpenter

then of and areas just back help some bit to and follow-up, should in primary the that hiring the you're [ph]? you see where benefits Okay, the expect pulling where we flow P&A us as with on in through could a and a that expenses

Matt Ehrlichman

Yeah.

Marty Heimbigner

yeah, to know and able folks, are first show revenue we time. fixed – so is line do have the can the the to costs. one no costs underlying the your deal question, the I we Sure. fast you pretty I’d not – want improvements have scale remind game top as as and high margins fixed Cory we back, you you know margin with to know been to to you have we significant over But constraining know

higher eliminations. You mentioned planned XX about know Matt

see centers and it product is which year-over-year, then some of actually corporate in we're did keeping flat you also being our costs we and technology you over you'll committed some think we We’re And next controls, areas that as know too, you can so year. year. know the will drive for SaaS the help we costs certain there investments, where we more prior our something efficiencies get third cost party to year certain think to selective DNO, next profitability G&A have about

Cory Carpenter

you. Thank

Operator

And with Oppenheimer. have our we from coming Jason next question Helfstein

Unidentified Analyst

for everyone! here Hi Steve, on Jason.

of to XQ what can would home wanted other inspections impacting and I year you both comment slide, little profitability customers. selling info then impacting in I if just know rising thank and quick a on your to annually. also for then terms on And are XQ, last on on a and rates that, put know number the wanted insurance it get question for look secondly, costs XQ if a through did you. of I closed it's like of products the just – versus costs how So you sense funnel sequentially and

Marty Heimbigner

Sure, that I'll add and take if can you in you Matt like.

highlight impact insurance The You costs. as will know know claims? question inflation how are know everywhere our or thing had impacting was you have seeing we're is the we – you costs those be increase impacting though how are ahead our we we of some aggressively effort certainly I claims the working do across insurance would think concerted in so have You premium know costs. is a I to and to increases that business first

we're to the those those higher immediately. working where of over costs, course the of Now even experience pricing year, some aggressively effect some of of increases may be take ahead do claims we the costs though

forward. that I question, the net it could impact, yes, if inspections going related And can you repeat maybe So I on ways we some think second mitigate that answer, there's to but then quarter-over-quarter. think it,

Unidentified Analyst

exactly. Alright,

So put slide, a the a home previous slide, of you number the kind of annually. inspections on had

Just of any products quarter this affecting overall, other a of ability last know and number you Thank through you. the kind seeing your sort that's if in versus of of how inspections of difference then get wanted terms to that. to home quarter sense you're sell

Marty Heimbigner

Yeah, I Matt. can take that

Matt Ehrlichman

Sure.

Marty Heimbigner

cool past market inspection bit power in may know the about the is You the inspection saw natural home and choose that reason sales, a housing inspections. industry home more in market in talked in to – we’ve happens spike this the the hedge markets rate contingency that a see a as so buyers more of and space a that competitive as waive not kind same so buyers get inspection the have to down, increase we've shared inspections a and did home in at an there's little the

others think so what and to you metrics, you fewer still progress so that's hard growing are some good however of home we're saying, expansion, thus know would and is starting seeing a reflected competitive in in you environment that market are know care overall the pretty more seeing so and a while faster. kind normalize, And normal And platform we’re given our that and add to inspections on guidance, we it goes be I without onto tougher our it's certainly and would anything Matt? markets

Matt Ehrlichman

think No, right. I that's

clearly and you seeing know quickly. inspection know the Just is natural there hedge to that our summarize, you we're is growing business

so to get able certainly access to more rates, yes, know are clearly back couple able of growing mean to more I conversion years with look you'd to continue in and able be you we quarter-over-quarter, then increase of If the services, them to and happening. to question consumers help that’s last continue the be it's asked, that over to you

the in of of call, changes we spending step we've opportunities are that you to consumers and the can have real we – these in get level noted to there. As function know there terms these access you of time amount been

next Just question important think question, to and good want to I a back note. the Matthews answer, it an thing before I go you because was to to look

flows and for at helps that know prices like look have know have really you that forward top up over put start that the we we revenue and that insurance been impact states start But approvals. place filings that gotten price, and the through. away bottom that you it's selling been we showing we both, requested, for the filings at recognize to the team right – XX pleased months, forward the work cost you price levels financing you and and price as done we have have with in the inflation, businesses you increase right next price our approved, to know and – the important get that booked has into then noted, pleased know even the as the Matthew higher line but are line you so increase as will We

Unidentified Analyst

you. thank Great,

Operator

question at John? next Stephens. with Campbell comes John the And

John Campbell

afternoon! Good guys! Hey

Matt Ehrlichman

Hey John!

John Campbell

kind housing it soft is. Obviously what Hey! is of

ahead a think backdrop, and that to to I'm You cash Matt, guys you kind go I could really you if be development. getting obviously alone me. a free kind Again, curious in on but this back your important mentioned that growth, aren't you that feeling that just, want I point pressure, well schedule. of so out EBITDA stood comment. of what that's of closer sustainable of to I'm to missed I that the in guys shed to would little know kind as are expected you flexing as timing, that extent light flow control? of more maybe really

Matt Ehrlichman

we much it’s feel to control profitability. in very Yeah, our to well get

know which Just last of like Matthew about on stress contribution XX% of look said, margins, back we're point, at expenses. variable what when is all we margins, XXXX had just net again you the kind contribution to talked

at are things we lot note that quarter. a hires, much on last end profitability margins and communicated really you focus you know the that have are we So yeah, okay, drive Obviously in aggressively certainly and to new we so been we know doing, the positive we and did John, of of the business consciously that for can the you faster limiting know underlying faster. a growth. is know you key a areas more so getting investing bit shifts important, XXXX there's margin make world But

feel You really good know second profitable. of we there. a in we're spot be XXXX half like We will

we're XXXX year. away progress didn't that more good as far goal like We’re against looks yeah, and change making really milestone, to we go how we from to and obviously this but enough come we that feel it that throughout need

John Campbell

I Okay, to helpful. on part. that's drill one guidance on And wanted down then the

you pressure $XXX earnings within in out had this $XXX how guys of Matthew stiffening revenue. point, $XXX market. is curious, from holding in million, that one guide think vertical or called $XXX BXB million kind $XXX that know I'm the to the kind to out - the $XXX last $XXX million still SaaS You is past you're is had software call, million, million but you past that was for the with saying of that million at study that housing but I million million of relative said revenue. $XXX so that Matt had the Obviously said there,

Marty Heimbigner

housing I NTS the as is less mean think you its know million I about the that Sure, is, market. a revenue good recurring and with transactions thing so very we sticky yeah. what seeing you're software $XXX happening that highlighted, have there's in high products

And add segment sell that go guidance. though So housing are so still point even hard backs our a services we come has have you less the that just into it's future verticals XX%. market, and to and to would software back grown incorporating we know I the

as growing not we normal it a as are fast just if market, amidst still were a hard So market.

Matt Ehrlichman

One thing John consumers the was that quarter. during that is biggest Marty the housing had hired, the mentioned number impact though, software specific vertical the during was service market just to segment of movers point the the emphasize from second that in the the that

that really during didn't were things those vertical that within revenue, segment. just software time. consumers purchase had moving those transactional optional we people and that into That's service, that have falls expensive, so would that an obviously been are it much fewer And more versus what

So side, that’s transaction not revenue on side. on that BXB that SaaS

John Campbell

$XXX hear And your SaaS that true revenue, and All recurring $XX revenue of is earnings I call, Mathew guys. revenue a to where thanks putting stock that SaaS on whether think to point, half or there. about you your a million is the today, its I million SaaS so last right, multiple is equating

Matt Ehrlichman

It’s the any just point in of you because any make small makes this you SaaS that could just at which are our and quick revenue far look – the follow that, a are so portion is you we relatively just our give market opened the you which we sense, I’ll right, think I just belief doesn't – past BXB it just because are to door, up our revenue. is sense, on

will great you a know is, of know our that business, the heads over you time take And name game yeah. build so us again, what care for of itself down, the execute, stuff put go that’s

John Campbell

you. We are Thank guys. with your

Operator

Berenberg. from Justin Ages with comes question Next

Justin?

Justin Ages

Hi! Thanks for taking the questions.

Just acquisitions, us the a quick seems in organic because with growing more down lot it just change given understanding growth now, one kind versus the not, is lack you on guidance, the a help acquisitions business. dig quarter-to-quarter from can of into first of like

Matt Ehrlichman

take to happy I’m that. Yeah,

to we performance. our mention comes accelerating business's which quarterly the provide, of as we quarter we report and But growth pro we the contribution Porch’s do forma the view don’t growth acquisitions, from growth So part of organic last past did as numbers.

in closed XXXX, XXXX noted about last million $XXX around that the year. we we January acquisitions revenue If quarter year, course So pro over last been would been revenue. have X, last XXXX those had talked in million was of $XXX how forma

to we’ll million what revenue So $XXX go M&A. little year in this

So noticed pulled forma expected around for in know revenue backing this down year, it so RWS, XXXX million pro was that million. to $X you out $XXX we revenue

data it, even points at communicated would that in be look it’s the that very you you market. But know we anyway growth harder really a very, So solid previously. housing

Justin Ages

just longer longer us CSE perfect. Okay, you that. quantify no the can know that? one more was us guidance. on part including of help of based that for Thanks you vast majority but macroeconomic being helping the ages on reduction I And CSE, triangulate on then mentioned no verses,

Matt Ehrlichman

a go excited particular. in would we insurance and auto we I it insurance build quite an we is are The that – we in into haven’t broken year, down Obviously specifically. when say contingency something is about. CSE Auto

out fortunately have revenue. pull CSE, we don't to when just CSE pull So we the out

XXX,XXX this auto insurance, and we’ll in just our rate have path. we've that something substantial us out which on layered a opportunity pull at also policy the pursue bundle year We for won’t if we the it's holders, based to that to be have with our at you have but seen agency, a different point, this time, right would this think year, is about over

back So and most and balance CSE talked or then kind updating to is the year. terms as is National using into for are Association the of housing are to we of auto half recent of the we assume we the an built forecast forecast change the about majority, aside what's insurance the substantial the in of the tied majority market Realtors that of

Justin Ages

much Okay. Matt. Thank very you

Operator

from Northland. Your question comes Mike with Grondahl Mike? next

Mike Grondahl

Hey, two thanks questions. guys;

The of what’s of X.X first sort referrals can pricing update, make seems does an secondly one, like and what at module, on million free inspection transactions, XX% you the Matt, a that the those. pay-at-close, newer Matt there? power thinking then lot for customer kind the Porch about close total What's you of to It an opportunity? on update versus And you're us fee getting. that monthly how tied give have sort of a you're the

Matt Ehrlichman

take and I’ll you do the Joshua, the question take second. Sure. first want to

Joshua Steffan

to between consumer thing ranges Matt. cost the where $XX pricing $XX. the it's separately inspection baked part not from, revenue essentially of module per and and inspection the that of the home attached is a Yeah, somewhere inspect sure pay-at-close Yeah, service into is to we amount generate so as of pay-at-close the charged on the so the

Matt Ehrlichman

almost the when to basis make is, provide XXx pay-at-close would of make XXX can almost straight key thing we than processing, here would more know And we so economics. when And I we say XXx that. you Mike know X%, you you payment points provide

help if so universe And our or universe, Inspections, look it’s the move can industry you us. fee, a entire know Home we forward. a across you really meaningful opportunity the And Inspections of Home you can the of at for current strategically, think about meaningful universe TAM,

for want, that and it’s Just are have inspectors reason agent certainly platform on real-estate for better to to our them. consumers something be going another and

Joshua Steffan

as a also as allowing timing it's our add in services additional pay-at-close, the on inspectors it's because that to Yes, of inspection. remarks, we part noted regularly home for nice

softer ways looking sales a home in more from smaller environment, of more, so a And for flow generate revenues home are inspectors inspections. you to know

Matt Ehrlichman

we certainly SaaS don’t then talked changed to modules home with monetizing And companies about industry, And on model where public either that a the these make thing revenue transactional more Mike to consistently inspection years from around a SaaS transaction monetization it’s I'd or second we've monetizing went want your for a that question we clear the to ago, just added but both when couple and is fee consumer. we’re revenue. know clear, if I I want as fees emphasize, fully with has

consumers doing the revenue monetize again to with just more gotten help really app to consumers software well we the opportunity, better broadly. to platform The can So things yes, for able all, of and is consumer better of and a all help now much exchange such those getting in we able and are fees consumers, module at being those introduction to we inspection virtually one be an provide as the SaaS transaction in a big that introduced to our services. with offerings that discount because we’ve more to get

Mike Grondahl

it, okay. Got you. Thank

Matt Ehrlichman

Mike. Thanks

Operator

Ryan? question next with Ryan Your from comes Tomasello KBW.

Ryan Tomasello

provide Porch particularly talk can then efforts maybe taking the for unifying for about you on longer number you Thanks plans that material recent the update term if broadly the the the just an questions. platform, remediating weakness brand, one know Can longer and guys! you Hey and on you broader envisioned progress something term. the platform across the integration acquisitions that’s

Marty Heimbigner

I first take Matt, can one. the that,

Matt Ehrlichman

And Marty… [Cross Talk]

Matthew Neagle

Sure.

well. going are say would I efforts very integration know You

You capabilities, we our level, notably general know bring have into excited playbook you we're and Porch that. of them get on broad about so our know them that know integrated different think at teams, I a we some use to opportunities, overall you monetization to a connect

embedding You insurance know about we're that is one of our excited Floify. ones into recent

are where into Floify get it's a the very Floify. a application going software mortgage they focused So through is teams can on integrating folks perfect to so have been insurance close, and they time before and a insurance so checklist,

so are know both early about officers, You customers. Doing feedback manner, and controlled started we we a in already for experience can, good that we we've the consumers as that. the introduce learn to but much so it their can to loan very It's as excited some is encouraging. a

Matt Ehrlichman

integration? And office Marty, back the to take want you

Marty Heimbigner

respect materially process put be that businesses working possible year-long internal some to on focus good as end that it of part the extensive will feel financial till control. of and our and progress continue company we’ll financials our we We make of that making in the in correct. that with investors all we're are XXXX. together of on to first effective sure are actually system that sure through a do we've efficient want into a and and to continue year it statements correct internal of doing system made controls. effort been into knit We is and the everything to assure internal control are continue our work to Yes, major acquired It will an to work, of has

Matt Ehrlichman

progress defensible pretty we property – I strategy, will in rebrand properties and we've prepared our a Yeah, great betting our right. be of the know Most it's our built But on there to our we made And teams with noted classic you to access those consumer with it's one. Obviously in I you built out property companies get a would we the moment brand consumers. ahead, with then there warranty Porch. go obviously direct-to-consumer question, the some to approach remarks. company this unique as out to been this into very fun where sustainable, ourselves channels and think know right, very moving insurance mean then services. bring is to and able help with them

really meant go kind do You And home. in able partner their of journey business. can have one that people as it they be additional of be you as then that know ways be the that what it in layer to through opens well with growth be to company, we home, obviously in up the variety to that, is Porch a into of account for their

see would we of know something doing prepping So is of it's that cohesive, experience that high you if consume of satisfaction are time say sticks I that the part and some terms things strategy. you over with the that in rollout, know this are consumer important we for really is now an

we'll out from months, into moving As we off there. over numbers knocking the one then Porch look brands be and be will properties, kind growth over the able course this that benefit of next of certain year, a and XX certain to you at know time again

Ryan Tomasello

the prepared would ways does what timeline business at can exploring that terms and Does overall move change insurance grow your I trajectory guess to the you in I economics? pace in look like which guess know and this that remarks you like get look there? to XXX% And what strategy of mentioned you and business. to that capital-light

Matt Ehrlichman

Like you know way Yeah, think I value. know insurance nothing very term you We to it do is seeding you slide we that can low announce we present, know We create in it's volatility best others. really shows running early, much operation. certainly as a it see versus we which long are still is believe how just in capital-light the mean – to this – point. at is it

will know or it's for think. believe your and so whether to we you able over today in there market, with continue but capital-light know it do be You not other, reflected move we more us, to time to the opportunities obviously are reinsurance be

you us we margins If on could that out the improve we for that time. think will and over You as yes, we go. could again, update kind it you work it pull business know the still of profile know off, and financial ahead of

Ryan Tomasello

taking for Great! Thanks questions. the

Matt Ehrlichman

Ryan. Thanks

Operator

one more question Loop. Mark have Schappel from Mark? with We

Mark Schappel

Can Hi! you me okay? hear

Matt Ehrlichman

Hi Mark!

Mark Schappel

you you remarks, your revisit feel more expected that prepared why going to than profitability plan? could lower know now, believe And you just expect profitability reaching just review reduction you you Marty, wanted you to mentioned given year. So that of share or your next initiatives targets meet where time ahead optimistic that targets about your more one the you're expense to

Matthew Neagle

to – fixed to. leer so investing things free planed have of – are underlying we then feel in. planned to in we margins, headline much Marty I’d you that The we and that and comes that had is, areas know it take high down already can two of the costs. how I’d point point a hires. One I couple XX is eliminations The

our costs corporate flat. keep focus in that’s to some Now and product that technologies, is of

into. year slightly have know growing you, you investments, have margins, this you gives and underlying also have, you if year-over-year to centers certain slower costs party technology Notably, product put remaining flat, profitability. There's that business and is more So had costs you know high that we’ve but for corporate third cost you the mindset where owners DNO, business. the variety we the put real so and a savings which the shift of and savings XX across And have that be then we initiatives you SOX both company, have XX year. on initiatives, next to know cost looking there'll of think the at probably market we a has efficiency

puts look we profitability. everybody need is the hat, experience at and my go know really when You on to

a find the couch You cushions. in lot

Marty Heimbigner

add and through is to about is will know for know the you the Mark, we Matthew top our you there the there, on big And addition pull talked initiatives I focus out would about, bottom that just the company. are line what driving in talking and line,

the So margin we’ve talked were clearly opportunities initiatives business the those of incremental with prioritizing. that very today, these – revenue these and there many high so certainly about are is streams to but them grow

Mark Schappel

Thank you.

Operator

Thank you.

coming here, of you but company? Marty, in a We portal on number analyst through to an cash update one have the can questions the the position of give us Marty.

Marty Heimbigner

and June ended we to acquisition we so in going that we'll included that cash are the evaluate able million and number for of be that use million earmarked Yes, the with $XX on this $XXX that CSE forward. obviously for as quarter we call of funds emphasized in alternatives cash

Operator

all questions, all Matt? time And you. Thank is have we for that we have today. for

Matt Ehrlichman

are I I about just interest our excited thanks joining I’ll we and appreciate say call. those positions for Well, wrap the that the first, and partnership out as and to Like ahead Porch said, all that's are the we the Credit in earn briefly to and with us company. and the enduring really ongoing build progress truly how there. Porch continue great team profitability a what's to to involved.

keep head every continue just And down, day just customers. with that, ignore our work know for the thank to You our noise, great you. single do

care. Take see all soon. you will We

Porch (PRCH) 10 Aug 222022 Q2 Earnings call transcript