- Earnings call transcript Q3 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Emily Lear

Good afternoon everyone and thank you for participating in Porch Group's Third Quarter 2022 Conference Call. Today, we issued our third quarter earnings press release and related Form 8-K to the SEC. The press release can be found on our Investor Relations website on ir.porchgroup.com Joining us here today are Matt Ehrlichman; Marty Heimbigner, Porch Group’s CFO; Matthew Neagle, Porch Group’s COO; Adam Kornick, President of our Insurance Division; and Malcolm Conner, VP and Group GM of our Warranty Division.

Before we go any further, I'd like 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 our forward-looking statements. Today’s discussion, including in response to your questions, management’s views as of today, November 8, 2022. any update undertake information. revise not do obligations or to this We

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

call. both non-GAAP most refer the reconciliations 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 this during

KPIs, available on of on Kornick be the will website slide And to that, results, full covering will Group. guidance As Matt to replay and this follow commentary and third I'll webcast updated a quarter of us the Chairman Conner the And of Founder quarter an an XXXX conclusion insurance the business. Porch The Adam can Matt? year results. Malcolm Today, reminder, shortly company’s section provide on found the this is here the Relations presenters’ the addition presentation presentation provide website. will join call for over in to our overview XXXX at ir.porchgroup.com. warranty Investor of update to third turn with after Ehrlichman, a and CEO,

Matt Ehrlichman

year of work weather insurance year, inflation quarter XXXX market, quality more Based you our have by Good our we stock seen Appreciate year about continued joining team's our the Emily. made and progress than Thank the XXXX beats has for work costs. us and Porch this this and confident of call. atypical with ahead we've on third leaves it. focused a same housing the me the strings the you, earnings on Thank of teams what market, been ever Certainly, impacts At for been evolving everyone. has for time, afternoon what's should raises.

However, today, XXXX. we financial with here start for the our guidance I'll we'll first given the have challenges. headwinds discuss adjusted

we written South our country own quarter. which losses drove of homeowner and ratio insurance our one QX division out Carolina, substantially increased this of So going number of impacted our is created not further Ian, I'll state losses note Homeowners the Florida, Inflation largest seen, this profitability do gross premium. which resulted forward. while and which is we Ian Hurricane of of first, for did in future around policies opportunity an events in Hurricane loss XX% an sell the through pricing flow moment historical the to products America, second that QX has results. of insurance weather than a storms has and gross XXXX in expect a terms largest summer higher growth in how of gross is drive

than more industry like forecasted. of or had challenges unless Realtors groups NAR market decline National the to housing the Second, continue Association

business than So a year, This of the pulling of of result of housing for home the sales the third declined beginning continuous rise end continues is what grow than on in significantly impacted over much interest by quarter, was can a year-over-year the see business is We've and on the market how XX% noted our that existing this our higher the to further based not at forecasted basis, quarter. second was rates. predicted nicely. at the what you

and our certain move growth slower BXB However, software we related seeing in services revenue. of portions are

are changes later. the Marty part Third, over on this a taking in this goodwill market touch stock non-cash million our will of impairment $XX months, the quarter. drop we charge in to price intangible more and nine of degree in the due last

because year-over-year growth as growth the updating which the XX% year we're million, of we've or pro So to XX% in methodology these using our total impacts, used same full XXXX forma be guidance in past. will revenue $XXX

Additionally, costs weather are EBITDA with seen we for negative updating this the quarter, incremental adjusted claims insurance guidance, year. million $XX and the

entering is in the flip talk let's in about cash $XXX million million with at and a which strong quarter Now quarter-end. over over restricted. We're successes. the position financial $XX fourth of

important in Some future contribute initiatives that to for the very us. impactful for the nicely and most business lined will up of results our the have

confident and ongoing be some continue starting going half important So Matthew to is profitable in EBITDA to this additional the first on second off, shortly. detail thereafter. in becoming milestone adjusted XXXX we here of share

to part, two in states. due in have higher costs, approved claims Second, increases been largest insurance our pricing our

The Carolina likely So Texas overall next and higher customer's months, our company higher aid as expected are certainly and each the tailwinds revenue at renewal well XX profitability, in of These XX% start in to XX% revenue. then showing increases South as of adding prices of insurance the XXXX business increases. to following ongoing, recognized with growth.

our of Third, touch strong. options reciprocal to on initiatives key a structure potential reinsurance relationships And fourth, our progress division the teams will in making time. are that real Adam we or capital operate optimistic by improve later, us more expect exploring efficient P&L allow significantly on continues which capital deepening the successes, key further about execution we're around initiatives a insurance to like our at eliminate both or reduce with be over will to volatility efficiency partners, list of and

made So across delighted be here this will with during consumer are and we believe Porch time. inspection over far product so the the tool base. a broader Consumers quarter built we've impactful App accessible we the

We're are in market what's volatility the and the convicted continues near-term So the for quarters. stock about in to company. significant getting over profitability the next the excited several ahead experience

capitalization common to notes. approximately spend purchase authorized to on press today's the million, convertible will up which such As provide has is which release management can market X-K. just of on and long-term and for of earlier We'll we board Form today, shareholders in repurchases our as or announced $XX our you assess and plan best returns our find more stock newer XX%

Before to Marty over our me first financial strategy priorities to in let go the detail, reiterate our briefly. through company call and performance more handing

Looking warranty. to here such help we gain as at ongoing Slide as generate X, Porch verticals help grow. revenue so, doing to and companies with buyers we software provides software key to and well insurance and as who strategic early access home select homeowners By services BXB recurring services

our tools, we Two, digital become been app to companies the to be in BXBXC front sell our services transactions. products get provide with and their to where extend increase for their partner deeply consumers more in software aim Slide have consumer software Turning more X, our consistent key experiences, year. One, consumers. of to Three, embedded. to our company priorities top throughout home of vertical our our experiences the and

launching our insurance continues Our controls and Porch’s, out improve integration, and and And be warranty and acquisitions. businesses insurance our of Five, products. to new priority our warranty SOX unique insights new our rapidly data approach. products, to the capitalized for and growth pricing past build including both furthering M&A platform finally, for profitably, geographies, and leverage

to new team. welcome to excited our members some I'm here, Lastly

experience week, new his to tomorrow years CFO. role as the across we with announced helping for will the joins transition. us time Marty our last As this industry who with thanks Huge Tabak, Shawn start XX for of in plus

of a Graham month at number Hotwire the Nicholas Expedia as addition, division. GM for business moving the started In had Group our Nicholas years. a ago of previously led

Finally, with With over we also Marty? welcome insurance, members QX two board who discuss have to greater this it home extensive bring them experience and board. detail. excited new to Reierson I'll vertical services turn It's Marty Amanda and quarter, in that, on Velasquez to all independent software. Camilla you and Heimbigner very

Marty Heimbigner

financials, start good Thanks Matt on which will XX. I our afternoon, and you with Slide see off here quarter can everyone. third

prior revenue $XXX.X increased year. quarter by XX% over last the from prior year. from driven acquisitions primarily year of Third is our made warranty and revenue the to Year-to-date XX% $XX.X and increase million, an contributions million, businesses insurance from

is QX being home the mentioned, our of lower to than Matt due than sales expectations the revenue start quarter. As anticipated at fewer there

This the impacted year. the move Our buyers. which most by in from revenue, increase vertical our is software related revenue, home transaction segment of reported prior $XX.X volume X% includes segment million

the insurance Hurricane of revenues margin compared due atypical of the reported year. we Ian, insurance from to Carolina through, years, in segment revenue was respectively. in and claims caused With from and weather million rolling The insurance on the less XX% costs. XX% loss to was was margin increases of Our in to of to made our XX% QX prior revenue change events last nicely. upcoming cost was including Higher $XX.X almost cost day pricing portion positive increase in increase by claims adjusted landfall X% business quarter. and grow insurance this for of quarter, due Company revenue the inflation a primarily prior negative continue South an increase this which in EBITDA XX% adjusted the expect EBITDA entirely cost

change this you'll insurance recorded to $XX.X segment non-cash third been claims negative revenue. including million see the $XX included in same EBITDA. additional million on intangible business review impairment Again, macroeconomic $X in Ian Hurricane inflationary The vertical core costs, year XX, important has us negative and line $XX pressure impairment claims Slide quarter. million. our current is to expected atypical on than segment. million costs market equity full Finally, due $XX.X in a you to continued declines continued when impact the largest million the of and a largely demonstrate inflationary top for which This deterioration due insurance operations. software basis, contributed from housing million to adjusted of market. charge note has on events our no adjusted year. non-cash, notice continue impairment weather, $XX story, for our was was relation recent driven guidance revenues This change and pressures that million the impact weather We in the guidance, XXXX will QX million steep assuming contributed equity XXXX was this the $XXX slower purchases our companies, includes disruptions and GAAP updated BXB and service expected related property our EBITDA impairment a from the $XXX The our the at can revenue and expect full expected without $XX see no to typical we goodwill XX% service million weather due the insurance adjusted transaction balance in to approximately which from lower related In financials, to insurance a fact, this Slide casualty markets considering revenue our It's than seasonality. intangible XX% to determined change here and catastrophe revenue and software move can our you move distribution $XX environment specifically segment, underwriting and revenue goodwill and million appropriate in by home we in revenues, revenue on software you of in XX, caused to by that in and lower QX total now sales, and for and our from come post-move subscription home at

Operating part our key we confident a to ability continue quarter. Chief foreseeable our I'll Officer turn over We to ability our EBITDA Our growing margin not remain long-term our that in Long-term, achieving with a that, Neagle, to expect targets. future. changed. to for our to has the that grow Matthew? insurance profitably discuss XXXX fastest is our indicators Matthew into And business performance and segment it XX% in grow our business of while

Matthew Neagle

and In ahead. it for to team we year today. exciting you another performing everyone. Marty. seeing Thanks the make mind with business is Hello impacts incredibly teed and our of my fundamentals with has what for Great is pressures XXXX, that the an want understood is year impactful despite been business are XXXX I strong this to quarter, well. big weather up macro the and sure expect and unusual be

is path clear. the to First, XXXX like half in make sure profitability second our I'd to of

quarterly Let's KPIs. a at look take then our

costs to achieving the weakening claims profitability of half second XXXX, inflation. for continue feel while from EBTIDA We continued and the insurance even confident continued market in housing assuming in adjusted substantial in higher

of and We $XX few second plus things. different will year-over-year XXXX improvement the a XXXX second adjusted of million driven expect be half between by half the the

costs an to improvement that higher pricing First, come distribution and from will HX $XX million lower anticipated insurance agents.

We are through have speak. and sales renewals as we these new regulatory approval and received rolled being

five last we third reasonable be the Second, with we ever improvement see one to one a there million weather quarter by the Considering not the hit is again feel and Ian happen this unusual is estimated U.S. including $XX Mainland, to years. assuming that consistent strongest weather assumption. of is Hurricane does Ian a

reduce As Matt our over focused furthering volatility teams are on noted time. initiatives to earlier,

savings lower These D&O require a anticipate and lower select such SOX Third, G&A impacts year-over-year, have costs target savings costs, be as other HX in we $X million are year. in alone Also, which to from significant cost our insurance implemented. achieved. to of largely growth set do nearly this been not and cost costs business bridge related core that

Given and incremental we contribution increases are improvement. to EBITDA price product expenses margin noted insurance year-over-year, and keeping flow further growth will largely through G&A technology and the revenue flat to

other achieve cost is Lastly, adjustments in to time period. this if anything not would profitability management track, on consider

saw public of we growth QX approximately from selling to the to our companies are with cover and even in Here XX,XXX on up and an left, in APIs. companies prior XX,XXX the showcasing increase Beginning in difficult X% XX, from the a over penetration increasing that QX, number software XX% years our teams in our environment. companies average Slide we’ll more

growth not we during the sole do do growth exit the average we slowdown. especially someone, as companies year expect to the we anticipate over slow industry in average expect more or the in macro Given seeing environment, retire next proprietors companies,

believe the and offered to in On we per down purchases modules warranty. was that revenue the opportunity helping the recognize per more roughly This there’s to with But services mid-term, continue by like consumers expect by companies, many prior over getting to expanding from to impacted right, times XX% the this an software $XXX year. in access we month company QX insurance lower more grow and volumes KPI home in short-term. and we in

continues ongoing. and $XXX a basis, over monetized downturn. fewer we quarter home X% saw quarter our On see XXX,XXX revenue policies services produce prior we to And on follow expect service key to per of buyers XXX,XXX even continued XXXX, the on $XXX a are given Revenue from and This higher from which with are downturn the per QX gross by driven year. had third generating of impact per Let’s rate the an Homeowners per its focused XX, per is Slide premiums you $XXX. XX to warranty, such the shift month Slide of the was move year. seasonal some over million, housing grow We’ll in market. as growth ended XX. retention service third business. approximately market monetized of revenue written XX% insurance XX, and We in decrease by in our the may as September at The of of driven we finally, can service with revenue America low service the Insurance segment an rolling usual average of policy monetized XX% to from up XXXX, primarily $XXX increased

states we I’ll and operate here. our Insurance Additionally, to products Florida home of approval of to Homeowners our Division launch pass to received our our Dakota. President regulatory of Adam remaining on final and updates South Insurance warranty Kornick, America as for more able for we Adam? things few progress in a business one Alabama were off our

Adam Kornick

some results our we want insights weather headwinds is to I year provide Thanks, to this third team offset doing the Matthew. and on our provide quarter on inflation. insurance more due and context to what face

acquisition Porch. of by higher recorded ratio years loss the XX% of factors. Our third and ratio XX% by to in prior in XXXX, change third with HOA to XX% than approximately loss the several the business gross gross a The for gross was quarter in XXXX the driven ended XX% quarter the loss ratio

last quarter, than First, quarter, throughout landfall have the Carolina second by of we claims state. made third largest South seen we impacted the in historically were weather-related higher the Hurricane on and Ian our day

in increase per the to date impacted gross a at of years. rates gross from drove cost weather as occurred when year. point also balance weather approximately compared loss same XX.X claim previous ratio ratio to Inflation of to smaller our events gross the higher year The quarter loss basis. was ratio Specifically quarter that due a the events on XXXX increase prior third loss XX% average in than

billion which claims significant, on and for received that believe estimated South to Carolina of more were our IBNR strategies, of of $XX $XX Ian yet ratio has avoiding landfall have underwriting at by impacts losses XXXX of in year state and these a billion this our While expected we to incurred loss the our underwriting our reported currently to an include Hurricane XX%. reinsurance losses. days compared and customers, in show in the estimate be than our full event that impacts, expected financials expenses the Ian’s relatively these been Based a allowed us event. small Despite expectations to total Florida, reflect ratio following we gross to Hurricane claims related XX% combined when

reinsurance is choose Something carriers good to we to work when feel our outperform about insurance home with us. have other the they partners ability

may market. Our macro reinsurance partners active and one teams a for believe XXXX which to pricing. want strong well the another be We see we overall positions us performance less in premium on reinsurers bit tough are little in for for depending these while our and conversations compared to historically will year early

that how As XXXX. second we tracking the outperforming up good set all profitability previously of here. half about we Matt us are are in mentioned, has to committed baseline plan had our to feel We

as financial our results addition, initiatives to insurance and realized are that within could division are look ahead. several we the pursuing in profitability increase In we be yet there have

start. policy. customer’s our that through long, upon will as a and are means XX over in flow South the justified actuallary effective price are increases increases tailwind are approved Carolina new future months mentioned Since at renewals a periods. been next prices period policies renewal Texas and a month spread Matt example, XX or months the price of providing over date the initiation this in These For have generally the XX

through year will pricing results, and that into growth, profitability. anticipate the be ratios As loss these we in visible and impact XXXX, adjustments the including work the our remainder of of we

consumers warranty protection offering more. addition, and consumers with fuller or home just In share insurance Malcolm and interested to we providing successes. offering home home some also in will warranties early our by testing learnings with

mentioned, volatility explore to There a on options including paths efficiency similar time. continue or to successfully, reinsurance. reciprocal Matt or as capital we Erie several structure improve Finally, USAA, Farmers are and doing increasing reliance reduced over to this our to

Warranty over We been location about of continuing new opportunities our pricing. prices stage filings from Homeowners efficiency elements and before lower which of new Carolina, end at hand utilizing platforms of experience markets, the Carolina, of filing not risks. now data its for the unique grow eight of implementation. in improvements the work to of the to path catalyst and to extracting other a recently South progress data We teams an Texas provide on and we’ve our and and in implementing possible continues most to we’ve data To us real pricing But years of our Insurance of XX data be Division. from water data provide the type data inspection our flooring, customize in use are modeling, America’s show South bringing tandem of heater variety vertical of successful with to would HOA, of plumbing I’ll the these XX% certainly sure share property support many There’s home states, make By pricing, been capital year. as of Porch’s proprietary for pursued. to been submit five and Conner, elements. continued and with monetizing best transactions. for states leveraging additional piping closely consumers. business. these these this systematic such this accurate America accuracy material, North we claims for Dakota received Malcolm Alabama, with approval the Porch to excited I hope update are We calendar if up expansion with either improve a to wrap doing be call pricing with in exploration Malcolm? certain will of volatility want I’m here, customers. Group software GM can roof over the consumers in to approximately works for

Malcolm Conner

to given of Happy low our share to was Warranty improve our we that a in a I over organic data can joining leader Thanks, space. Prior a to execute access about we to consumers, to greater sell pricing, well and advantage, assets more become team American culture ago, joining positioned long-term provide than that unique revenue Warranty more scaled channels business four previously years. to in a Adam. be about Porch excited rapidly this we cost here I business done. believe a I’m million Porch work as variety are Water’s to and excited and year to detail to than believe get great today. through, led warranties $XXX

covers tear As protects of to home Where line Protect home offer unforeseen a escape wear American consumer Porch assurance the offerings between. insurance the homeowners homeowners able financial suffers from from By events Porch that you the and Homeowner’s protection. know, that and to nearly into fully and wind Home fires, RWS against damage, the water service natural platform, like and protect we’re warranty roof with your standard usage. integrating better in home everything convenience the the and brands warranty warranty provides and

new for from short-term multi-year buyers specialty Our day warranty. home, inspection full that warranty in target coverage home specific a a a the to home XX system warranty span

generating has in recurring Protect revenues the to Porch, rates of every what have such gutter included strong cleaning pre-acquisition, This for create retention Porch. deductible Home cost of the value cleaning at maintenance substantial more and American event consistent improvement dry a was part seeing as services consumer. we versus As or led actually for to

XX, Slide we’re talk couple things Turning about on. a of let’s working the to

at a an their to take services, handyman let’s First, home maintenance offer to more customers Porch home. level care and protection routine Home and of warranty home Plan. a look modern By the increased way offering our insurance, for home we’re able

While to a products bring sales allows and differentiation providing large into and us to other of solutions creates channels services tap handyman ways base existing renewals, insurance market. providing help warranties to our warranty insurance distribution as to alongside customers

As products, purchase and with of distribute you can the time building channels home see, to as and variety warranty home, Slide uniquely warranty. in base inspection are a our out are industry here real a we on highlighted of to estate buying integrated XX. home when Porch large it a is great consumers companies is a

provide and utilities fit offerings added to sewer we’ve utility long also space, American Home utility gas, insurance such to include electric, water line our opportunities In addition, approach. best order partners as customer’s natural recently their help in we the Protect’s and direct-to-consumer coverage historic protection to our a expanded needs. In emerging and

on to utility more partnership will program lot We have a share our time. over

So incredible the is opportunity more across to home $X.X Porch’s warranty space. a and members. up, customer have of to With XX,XXX strategy data leader our the and fastest businesses, we we and become one customer have experience, than now access, growing wrap unique warranty billion multi-channel

Matt. to turn it So over with back I’ll that,

Matt Ehrlichman

to Home is and help you, their clear me It it’s Thank quickly Protect. And Good with we to ago our a here. of you was to American us growing, year that looking Warranty announced just business acquisition home. over how protect to consumers now Malcolm. we better can have your that

to note much long wrap here long-term come the that up continue ignore So and business expect a company. that a continue grow with noise market we shareholders in time. along to To today’s to stock can short-term we very call, public to rapidly runway we would the this for our

executing the we’ll XXXX, a Our take building ahead ability the the look that our now teams a that produce year can I’m choppy and to durable been if time. to Emily, we demonstrate our excited company. but is for clearly as and with by team you open to number markets at the ways I beginning Q&A. macro very in into a can’t caused are large It’s about that will please of show market, management And are working. we strategy wait over the results the line of questions.

Emily Lear

start sell-side you. other than have looks less Porch for XX taking analyst question We’ll permits as here minutes to chat time like by It questions and to the our been through attempt have Thank we today. that analyst from questions respond little a submitted today.

the John Campbell John? Our first Dan? we Benchmark. list Kurnos to with move that have here Dan is today with from We’ll Stephens. question on

John Campbell

Thanks, guys.

kind Insurance costs, they’ve higher like business, overlook On seem the quarters investors the does of that few now. replacement seems in tend higher the a ripple to effect channel the claims, heard like everybody It of the renewal pricing.

that got and kind there’s obviously that. your up tailwind quarters? math far now, highlighted I’m about how next of right our just think the just But You’ve But price by increases. see revenue big about some away moving And thinking you two are over those two you the states have you’re lift expecting least like that. I you’re at curious guys glad could stuff as So it largest I’m frame what maybe renewals know and two of I pieces maybe just alone? type in you states, around coming

Matt Ehrlichman

your it? business. to Adam, do tied you It’s want take

Adam Kornick

course. of sure, Yes,

because prices we level. and Jason, that XX as be this months earn affect we it’ll year over then existing take time initiate percentages expect won’t the current they the say But approved don’t that I year, earn fully policies in. in prices But will time would break recognized at out So generally to were while over those those as renew. and since new policies during business unit

think And use are our that correct make I and so to those can assessments largest two your states. you’re you that

John Campbell

pricing, the incremental that on is renewal typically XXX% of just broadly, that Okay. margins And Adam then through? flow kind

Adam Kornick

I disclose period think businesses, renew of that earn margins fully as but expect time. don’t we to policies increases those So the over individual by we would

John Campbell

shortcut help to the don’t I just entrance the guys And average, had this if what this, then But gross quarter it. hadn’t or ratio I swing here. of this run more was quarter? you’re kind the similar industry Okay. quarter was to know loss time maybe one can in if just you EBITDA through just in last

Adam Kornick

Matt, that. we have don’t we? I if Do know

Matt Ehrlichman

Well, mention in obviously year. XXXX segment ratio XX% our different substantially Insurance QX last did QX ratio There’s a was Yes. from loss XXXX a third loss than gross quarter. we XX% here gross and in QX

loss ratios been We it’s also past in noted year’s XX% XX% gross to the John, quarter. the third

though perspective good the Obviously weather the quarter you million guidance, year the Hurricane that and previously impact. we’ve where be now typically half operates directly don’t were primarily. of was Overall different. to Third almost that that all $XX from Ian. swing from swing, down inflation, to to really million negative unique this total $XX quarter of EBITDA regions to for gives million, triangulate specifically, able that but our million go HOA negative in think we I enough certainly in is second there a broken and quarter is and weather the $XX of that $XX guidance tied swing

from that majority obviously of And so it. the is

John Campbell

That’s Thanks was for. guys. what I looking

Emily Lear

with Helfstein Jason to move Oppenheimer. We’ll John. Jason? Thanks,

Jason Helfstein

Thanks. I’ll ask two.

quarter, and going XXXX through next forecast kind housing worse we’ve quarter, I So be to industry seen even is cetera. this think volume than of suggests negative et

can just whatever next year breakeven are it confident middle revenue the EBITDA takes. about just how of second, – you you kind vertical of software So And of then EBITDA kind sound the year? through by very next get you thinking and

large of not that’s right case, convertible if your market given some the position? why now strong the Thanks. your the cash repurchase and in discount So debt

Matt Ehrlichman

and to about we’re great. let it market did the that last would and be then But if noted approve repurchase, options we housing me want that the And Board quarter on our with between Well, thinking Matthew, you repurchase. Jason, question, I about our Board. and think first then had that take take repurchase a talking now obviously

this have a we point Board our repurchase. for $XX million from So authorization at

of cap the the the place, basically we right agreed market cap. was So of XX% XX% market approximately

Jason Helfstein

No, convertible I debt. the was asking about

Matt Ehrlichman

Yes.

stock the Board either repurchase or be convertible debt. approved basically So to the

right make point the convertible there. convertible way obviously But stock choices math the the repurchase. is go is attractive very risk, management mind. the we to in lower stock which What’s debt, And so discretion IRRs. our both very question now versus both in view there’s the break is interesting sure we or attractive the a are attractive more debt, is as we’ll the The and has make do and

So should next we us sharing now obviously place for that action obviously in against there that the haven’t we able choose. to we to is disclosed steps, be authorization but today

Matthew Neagle

share the speak can a points. vertical I I’ll few to software.

data. the have market – First, second are first segment year, we I say very that we growing. at despite But the for thing right? that still impact, industry is thing looking forecasting is closely it the the So would declining does some are next as

have already all at looking for have different When that built And through business is been in groups. our decline industry forecast some the decline, so year been not coming have we next of we we because the impacted. see from

There What there are warranty is are businesses keep move-related recurring. that are one software some So where we recurring impact, an our do in – our insurance services. businesses. parts see vertical of parts of there business, we that are and are mind

from next out assuming of it business. in number are when bit industry off there what brokers in business again, certain the services. may that forecast. And fewer reduce or we build some of year. together impact. the in And their the brokers mortgage decline we’ll see seeing sit our And little already that movers, a put softening year, And do we’re nature, is, of software transactional are industry next we’ll some we so we’re our forecast in see when But assumes vertical for a in what then parts mortgage move-related

Marty Heimbigner

it One, expect XX% is a just quarter. – third home in go XXXX very And did we the we say, weakness to decline decline. sales in We points. quick that’s was Three you. material folks continued year-over-year what Jason, to external which ongoing. with expect more agree certainly And

that case. being Insurance as this do breakeven business. reminder. frequently, as and the this customers, vast a from to is I by next market, assuming just market. picture not customers segment moving are the And we’re year, that remind, isn’t we’re want part the housing is our from so housing that for And XX% so recurring half And majority a we existing certainly impacted revenue. planning revenue those the growing fastest assuming, point of given less at of the rosy materially the of portion is of And a in are existing second revenue really also

Jason Helfstein

you. Thank

Emily Lear

Thank you. Northland. to back we’ll We’ll – Mike? now go go Mike to with Grondahl

Mike Grondahl

to is going Any or that’s be of vertical work to say did the Two you and SaaS to Floify expected market update was and something understand, revenue have on down that housing just Thanks, me. general Matthew, kind in you’re XXXX in guys. through? to questions quick trying for I

Matt Ehrlichman

be housing market general the will in No, down.

this of was third will the Vertical year-over-year XX% Mike, Our segment recall segment, that continue to low in is market. portion revenue, it our total in that’s housing you both the Vertical that’s in the our growing portion grow year the XXXX. revenue, the impacted flat we transaction Software by services, Software of expect that around move-related most revenue quarter. It’s here if XXXX still and Within

there’s So it’s not a not market. as But home growing. fast it overall declining obviously as growing in is fewer would segment Software it’s as buyers, nearly Vertical but normal the far

that update And do Floify? Matt We to grow. want to expect you will continue

Matthew Neagle

Floify, us the into for there about Mike, and then, directly allow we’re excited because going integrate it’s with the process to opportunity closing so mortgages. to insurance

a officers experience are loan manner what the is in always and so is to And what this do ensure we we’re great. out been controlled we consumers for that we have this doing rolling doing, and and is

have into early and the the the which We insurance have been is number feedback checklist expanding mortgage positive. customers we Floify of for integrated

through have opportunity, easier that the integration excited to about much, we we’re that purchase so that just And Floify. with insurance much make opportunity

Matt Ehrlichman

they overall one the mortgage despite space year nice they update, job, a I’ll ahead. happening is we’re really that really the just ago. companies But are opportunity doing And hurting in give still pleased is a is brief and that’s to team’s and about a company customers did software mortgage right have harder which than Clearly fewer and more work the the now. with where be that’s there. It excited business that really

Mike Grondahl

it. guys luck. and good Got Thanks

Matt Ehrlichman

Dan. There’s Mike. Thanks,

Emily Lear

go Dan? Kurnos Dan now Benchmark. can with over We to

Dan Kurnos

Yes.

it’s of I’m house, also like looks been bit question, now but a that a if guidance? so into it have a I’ve QX? considered at guys selfish included Sorry, Matt, it It for Coast, running coming around the wondering – it’s looks so Nicole up you your that’s just was might go

Matt Ehrlichman

Adam, take do you to it? want

Adam Kornick

Absolutely, yes.

is subtropical the Coast of East Florida. impact So that Nicole people referring to to again, know, don’t who predicted storm

say is locations. And not other are conscious so very Florida writing business in what about would we I among

We’re then risks. in our very focused our managing on prudent being mixer and reinsurance relationships

scale So us, I had point on you back for industry. impact overall in given our prepared the it Ian the had the remarks,

weather, we like we actions and but in how when events in control good the we it in for many feel about advance we’ve So control prepare months exactly can’t the knowing those taken occur. anticipation not we the of that, they’ll can strategies

Dan Kurnos

the right. the getting Fair I good point always that path been we’ll through see couple regulators, know topic Matt, Mainland. data of sort All on focal after I here. guess of insurance, enough. things, kind update a it that’s what mean, hits it kind I follows on

we in think of given How you’ve think have what said of terms we from plays that costs. do we able and aggressive about terms being share more more. pricing, you and that us, to You in think of now do take but do here offset progression kind kind coming, there being out? how share to with able market of be Like by was insurance

Matt Ehrlichman

and to quick free. I’m give excited about on please feel want with the thought work you anything, Adam, here. layer if I’ll

Just certainly auto price in then data who and like we’ve be very certainly are at access to have a the we insurance cost, successful in the build effectively. before lower who that view, unique right can of insurance opportunity. the that consumer years And game two at around proved and homeowner’s is think talked time companies. a insurance We over about companies our the true built amazing this more large to very has

aggressively. And have so certainly investing been we

I our there. think kind it’s consistent and just systematic of this investments really approach about to

So Adam talking pulling it in filings. getting in to about data, structured, like was being more it use able just our

you’re filings excited if to on just that there. Adam, Now or anything you of about want update kind specifically

Adam Kornick

I mean, them, it I together, would approach getting might the mean, methodical share it’s Yes. I identifying at data filing about extracting Matt’s enthusiasm models, I all building that approval. we use, he’s say XXX% and scale, the working teams to right.

how And quarter-by-quarter so roadmap do we of have that. clear a we really

to keep advantage won, is just accurate by and each of forward and time. insurance And that so game the I pricing that more that really in is moving strongly believe be that just able quarter building that having will over how is

Matt Ehrlichman

be discounts, know which of our get And is more better and that you being to As get pricing the access we consumers, that to your thought, process able quick risk. lower able Dan in be go all to will with historic some some consumers have more faster one right? data terms of therefore, of will grow maybe you to right? of And consumers you through that able claims, and some match maybe question,

right, it’s because surcharges, higher consumers will get Some a others risk than realize.

sides, or piece it at the And risk going was doing price, – just on be And you’re still going right? early win that heater would both growth us margin I it bad anyway appropriate the really so we’re interesting profitable so for in say it consumers can going both we’re impactful impacts hot for not to of like be see may to days, things, we’re where that location. win you’re you to us. either to really and going water So

excited much to about We’re just the And how going piece we’re But early alone. do. we’re that that’s data. in of days of one

there. a we just as this progress continue to And and be journey execute multiyear so will make

Dan Kurnos

of kind just next any second year of profitability growth. of I sneak it mean, obviously include I And guys insurance doesn’t lot I more the could out path Matt, just on half you if in in the of a have to sort the right? app, one last, and a incremental know

thinking trajectory you underwritten you last Or can And pull there, you the things maybe part of on investment that get how I kind to see this ongoing How just in in been want how asked time, at get do business? you’re just that of this the point? need and we like already people I much I invest there? continue back think but about understand, worse? to much if underlying how and to has things that. balancing, kind think of I

Matt Ehrlichman

take – everybody cautious can first thing approach I taking that. We to want I a very investments. we Yes, is know are to

life looks have lot when some a see. app in The is the see all on data the It's of down like because slowed a for what have more inspection consumers the powerful our it long-term your very of presented us strategic we to to very really and and We for is way useful app. have, data brings investments. you to it creates report lot a to that access we really it

provide. our building So out the are It that's We're rollout app. and and the today, on actually live. to still more we else positive it early a very how of committed is inspectors it'll and a already on for turning more we're great steady really feedback be can experience we be on nobody is able would and feedback lot of to experience a improve that getting differentiated that

Dan Kurnos

much. Thanks fingers Awesome. so And keep for your me. crossed

Matt Ehrlichman

Thanks Dan.

Emily Lear

Justin to Ages go of We’ll Berenberg.

Justin?

Justin Ages

Thanks questions. taking the Hi. for

reduce on because that. seems a it insurance initiatives like you volatility century, color the just a more lifetime Ian just what doing once in these lot give in in events you're once like could a happening than more are Hurricane to little First, hoping frequently a

Matt Ehrlichman

kind provide this, team those, want we maybe tag any the like you'd restate you can we're sure working I’m that of detail Adam, just two Adam, two highlighted on additional things if to Sure. through. of and

Adam Kornick

So, are address. reinsurance, about of talked think many we with, might I which familiar you I but

brand The reciprocal a there name is are others. Farmers, U.S. We USAA, Reciprocal other structure thing mentioned exchange several in is the or companies? Erie, exchange. mentioned a

insurance would subscribers. employees we receive Porch, by that the that all be the capital, we have it. owned so And would hold affiliation policyholders It's would and would And is today. of the run the be owned fee as entity there largely which unincorporated from essentially of be is fact, or staffed the second by business business that the and It by entity. the of exchange and exchange balance the not entity the attorney return the an a Porch. underwriting reciprocal reciprocal manage And managing the a would in do sheet premiums in

the pursue don't it yet, the if bifurcation, know Matt? reduce volatility So think it. things, happen we potential in to decide to of that's if has one that it'll we doing we but

Matt Ehrlichman

choices to just right would agree our core that level part of circle high terms meeting Adam good to volatility. at making question, protected consistent strategy here, good how a in we're well just say now I think because We we the of run I what a reinsurers one. it's business, is is and the that's have with do. really our partners we Yes, volatility on reduce to sure over manage just business going make just our time so is have and can operate, we Core that with results. we and focused

Justin Ages

this one, market in in been And into then XXXX, as has there versus expect should what in shift a SaaS next All right, housing that? thanks. ahead we we look BXBXC the softening and

Marty Heimbigner

to out A dynamics in there's ways. SaaS that play shift from different BXBXC,

does less are SaaS that our businesses. warranty less because so our we folks a Matt in who business it vertical kind of software insurance we mentioned related then have nature fastest impact are services that lower really have have see rely our a and moving, we recurring which of of fewer the do in the you'll on going one to And and strong as going as on largest the by through through those platform, certain have key have so parts and And businesses impacted transactions, those revenue softening move movers, businesses. we –

Matt Ehrlichman

generate generate like SaaS we access and better we're get and revenue and to variety we've time Where SaaS and doing with for over revenue fees fees, modules things of others tactics. revenue talked be consumers ago both away the we be years also get able access to getting through two ways. that add them what companies, more paid both and or to SaaS consumers and BXB consistent being at to moving more more able more like these to just with get both, better introduced integrating app insurance with about gotten from I'll transaction right. and of There's either had really to we a able from continue to get paid more in we've

Justin Ages

All right. answers. That's the Thank for really you both helpful.

Matt Ehrlichman

Thank you.

Emily Lear

with Danny go Pfeiffer to We’ll Danny? JPMorgan.

Danny Pfeiffer

on I Hey, for Cory the have ones. for quick just I'm two thanks questions. Carpenter.

you rates any time you the in one it funnel inflation? on Consumer on in the write transitioning persistent policies is, And acquisition insurance become plan do On to second other for Thanks. Porch do app, states you plan a main Porch? over raising then

Marty Heimbigner

Sure.

we for app, are the planning certainly consumers. it channel for be to Consumer acquisition On

are the different app be certainly for think we set have think some us our provides I But things else is actually the access do. a to of the way with to to to going of we up, given channels that that nobody our be personalize able able consumer that because provide. that we're is able data to There experience business experience to variety to benefits going unique we can do be consumers.

think we So us for way acquire and to a very powerful there's consumers. both engage

point the their way remind app group download is the is ISN works that I The platform. would through that our other our consumers platform

to And report their access the in app. we opportunities for of inspection app, through them will downloading which so, think aid the adoption we have

remains it one of about excited our we're priorities. So

Matt Ehrlichman

and them. going companies the download And as not introduce really continuing to we'll and marketing way be advertising near-term using to focus approach for to the our BXBXC primarily consumers on and direct-to-consumer

meet and many other opportunity. that that is really are go do Adam, just the time We our so to in full the around of teams advantage at them, companies, is second rates to of those moment to many ideal consumers have consumers want focus for take in us so across states? to the you question

Adam Kornick

frequently cost, each state, regularly make estimates in indication cost our that on the cost what's process. source and whatever changes at regularly future and we state. the current our estimate look process, and our so of frequently each pricing Again, of of and a that based what are we have We is for to

geography And Carolina order to we be an so profitable. large but because and we rate in highlighted Texas justified every and they're South actually charge in meaningful, and absolutely will

Danny Pfeiffer

Thanks.

Emily Lear

Josh? Cantor. with Siegler Josh to move Let's

Josh Siegler

question. I'm still say data for you're helping data. seeing than competitors early who unique early your Thank similar lack evidence some curious better turbulent it's Thanks that know taking any I environment advantage Hi, proprietary stages, Yes. the my if whether is business, you. but this macro

Matt Ehrlichman

look ratio, closest now then things particular loss But say just to at results proud market the XX% for just to we're gross Hurricane combined are I'm considering this perspective. it couple in and that right Mike. let that in a quickly good really ratio, XX% just Adam, what's Well, me Ian and quarter business the and certainly from on couple things you're take those happened third in of, weather

And we when that the relationships, the like excited competitive things team provide us looks those team that combines data. it's at we quarter, Like one hot reasons an claims to impact. the many it's water just choppiness third back to we're credit well so certainly data actuarial it for impact like but you with heater just set I the in sharing location like good results. that Two, historic with is cause a something not because up and despite, that saw are whether reinsurance that want one. see, can our go are in about of And publicly we that noteworthy, that mean,

Adam, So offer there? you else anything want to

Adam Kornick

some names Yes, roof, it. and client percent have of wire data I of claims, to know we quarter remember I of apparel. collect, the that of it plumbing but back able a relative where peril by the the you I plumbing was, cable example, that was I front what have of don't point to importance weather we're a me, but whether it shared for importance it was shared might to we to, the I and can't think roof it in

I'd methodical tell that's very to part you what so And of is approach this matters. that say,

models talked making what on those that's that continuing we're about. file details, reasons to we things that them. back you very what minded enthusiastic would about. and will And something build clear we're I but to every then of improvement lead can really And Matt don't see file I progress some as point to competitive we how the am it's that so to probably individual for share And is is said, and apparel you committed quarter, to those by

Emily Lear

froze. Josh like Looks

move will today. us Ryan Tomasello out to Ryan Let's [KBW]. close

Ryan Tomasello

taking guys Thanks for the questions.

to of on to about think price you the end increases, the we're can the there's industry attrition of as push churn pushing say to for through impact guys those opportunity renewals? through see on insurance up you likely And Regarding that that, flip thinking you side the how price if you're same competitors that. pick are as you the on increases, an back rising share across the

Adam Kornick

talk when we can about decline. mean, so I I'd renewal expect prices, raise we and that. say our I that so disclosed rate segment Insurance to we

up. point given quarter that's I'd increases and are about only as rates those as you overall, renewal to we drive that I in And belief and is we and prices, down. do see But we'll that disclose prices how then And stabilization can from. best we've believe think said, charge will going you a performing to market for warranted. lead pleased things you all been renewal the the we conditions renewal, equal. it to elasticity, overall the we thing seen renewals. you way see we benefit based if But But to insurance certainly, that's are that every something we're market increase the to that's shopping, our that alluded, have has then have some that as will go held on that

Ryan Tomasello

any Vertical And the you're guess, next different that the speak to there you software part I the housing Maybe environment out softness year. brands, customers, the have there mortgage. then pieces SMB just whether direct of, uncertainty or can for of across beyond broadly sensitivity seeing the that largely and called the more segment you the about given out that's hesitancy sales on

Matthew Neagle

of our slowdown. do focused our think teams other that but there's can lot proprietors our a difficult unique advantage, can an gives who get small I sole There's very Yes, we businesses, things of heavily a when still customers significant folks that bring a go-to-market. Yes. have on market. it's us We to are impacted lot that a

we growth companies And last good slowdown. some pretty so during this that average our I the think quarter. saw is expect in pace a we often And

Ryan Tomasello

Thanks for taking the questions.

Matthew Neagle

Thanks.

Emily Lear

question NOL. here was through for you that on us give one only update submitted could We And the portal. company? analyst the everyone. have update on an a And maybe position Marty. company's an the Thanks Marty, that of question the was please cash

Marty Heimbigner

we cash of restricted indicate million ended in that remarks that hand, prepared the of quarter did Certainly, our which cash. Emily, with $XXX $XX on of we million was

In the the addition, have our Homeowners on short-term $XX our long-term positions us long-term portfolio operations America and we hand or of has million. – net anticipating have our cash and loss, believe operating debt that end of well carryforward of the stock a buyback investment business that and million of we're that respect We NOL for And XXXX. of we'll with discussed. convertible was at to $XXX

Emily Lear

Great. Thank you. And to Matt.

Matt Ehrlichman

doing. is in thought, convicted this to what quarter. I will continue question close us. quick be a we I'm just to Didn't you get market give the stock we're which going

is really Porch just the impacted so looks – the in what have broadly. just certainly, future involved And gotten that like is company. about We're it excited for industries

I So, appreciate just today. the We here say to Group. also whoever you long-term to interest, ongoing joined in the you thank thank call shareholders. interest Porch

We values, like we're the the are to out continued hand. for living every of at want happening for do on shout our its the I and day at the the just work journey, focused being in beginning focus, team very entirety that's their said, task great to I Porch

care and in take you, play. is Marty, a Thank role of for great particular, going the that itself. Let's go build company to else Also you out shout sir. everything

Matt Ehrlichman

the of Have day. a thank Take all. rest great that, you With care.

Porch (PRCH) 9 Nov 222022 Q3 Earnings call transcript