Financial Data and Key Metrics Changes - In Q3 2024, Porch Group reported revenue of $111.2 million, a 14% decrease from the prior year, primarily due to the Vesttoo matter [14] - Adjusted EBITDA was $16.9 million, an $8.1 million improvement from the prior year, driven by the insurance segment and strong cost control [14][19] - Net income for Q3 was positive at $14 million, with positive operating cash flow of $12 million [9][20] - The gross loss ratio in Q3 was 57%, with an attritional loss ratio of 21% without catastrophic weather [10][48] Business Line Data and Key Metrics Changes - The insurance segment accounted for 72% of total revenue, generating $79.9 million, a 16% decrease from the prior year [16] - Vertical Software segment revenue was $31.3 million, a decrease of 9% from the prior year, although software and services subscriptions revenue increased by 7% [16] - Gross written premium in the insurance segment decreased by 10% from the prior year, while premium per policy increased by 25% year-over-year [15][46] Market Data and Key Metrics Changes - The company has constrained premium growth to approximately flat until the approval of the reciprocal exchange, with plans to reactivate channel partners and launch a premium growth plan [8] - The annualized premium per policy for HOA increased by 25% to $2,208, with premium retention at 100% [47] Company Strategy and Development Direction - Porch Group is transitioning to a reciprocal insurance model, expected to result in higher margins and more predictable financial results [7][31] - The company plans to launch Porch Insurance in Texas in January 2025, with a focus on enhancing the value proposition for consumers [34] - The new insurance services segment will operate with two business units, focusing on risk management and capital solutions [30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving full-year profitability in 2024, with a focus on delivering positive adjusted EBITDA each quarter [52] - The company anticipates strong growth in 2025, leveraging the new reciprocal model and improved insurance profitability [53] Other Important Information - The company repurchased $43 million of its September 2026 unsecured debt for $20 million in cash, reducing outstanding debt [12][20] - The expected surplus for HOA at the end of the year is approximately $100 million, compared to $50 million at the end of the prior year [23] Q&A Session Summary Question: How does the new value proposition for consumers differ from past offerings? - Management highlighted the integration of moving services and a 90-day warranty as differentiators for homebuyers, aiming to enhance the customer experience [55] Question: What was the decision behind exiting the corporate relocation business? - The company noted a decline in corporate relocations due to remote work trends, making it less viable to focus on that segment [56] Question: How will the reciprocal impact overall corporate revenue and expenses? - Management indicated that the new model would lead to a more fixed expense profile, enhancing profitability [58] Question: What are the plans for growing policies in force post-reciprocal launch? - The focus will be on expanding in Texas and other states, leveraging agent recruitment and Home Factors data for profitable growth [61][65] Question: How stable is the 20% commission fee? - Management suggested that while the 20% rate is a good starting point, there may be opportunities for it to increase in the future [66] Question: What is the current performance of Floify and the embedded insurance marketplace? - Management acknowledged challenges in the mortgage market but expressed optimism about future growth opportunities in the vertical software segment [70][72] Question: What is the potential of Home Factors for Porch Group? - Management expressed excitement about the Home Factors opportunity, indicating it could become a significant pillar of the business due to its unique data and positive feedback from third parties [73][74]

Revenue and Premiums - Gross Written Premium for Q3 2024 was $139 million, a decrease of 10% from $154 million in Q3 2023[113] - Total revenue decreased by $18.4 million, or 14%, from $129.6 million in Q3 2023 to $111.2 million in Q3 2024, primarily due to higher reinsurance ceding and a reduction in policies in force[126] - Insurance segment revenue was $79.9 million, representing 72% of total revenue, down from $95.2 million or 74% of total revenue in the same quarter of 2023, primarily due to a reduction in policies in force[131] - Vertical Software segment revenue decreased to $31.3 million, down 9% from $34.3 million in the prior year, driven by a 33% decline in move-related transactions[130] - Year-to-date revenue for the nine months ended September 30, 2024, was $337.5 million, a 7% increase from $315.7 million in the same period of 2023[136] - Total revenue for the nine months ended September 30, 2024, was $337.5 million, reflecting a 7% increase from $315.7 million in the same period of 2023[141] - Insurance segment revenue increased to $246.1 million for the nine months ended September 30, 2024, up 13% from $218.3 million in the same period of 2023, accounting for 73% of total revenue[141] Policies and Loss Ratios - Policies in Force decreased by 34% to 219,000 from 334,000 year-over-year[113] - Gross Loss Ratio increased to 57% from 39%[115] - Non-catastrophe gross loss ratio improved by 11 percentage points from the prior year, driven by premium per policy increases and non-renewal of higher risk policies[123] Expenses and Cash Flow - Selling and marketing expenses decreased by $12.9 million, or 32%, from $40.1 million in Q3 2023 to $27.2 million in Q3 2024, primarily due to a decrease in variable policy acquisition costs[126] - Interest expense increased by 50% to $31.8 million for the nine months ended September 30, 2024, compared to $21.2 million in the same period of 2023[137] - Net cash used in operating activities was $(5.1) million for the nine months ended September 30, 2024, a decrease of $79.978 million or 107% compared to $74.9 million in the same period of 2023[3] - Net cash used in investing activities increased by 53% to $(52.2) million for the nine months ended September 30, 2024, from $(34.2) million in 2023[4] - The company reported a net cash change of $(80.6) million for the nine months ended September 30, 2024, compared to a positive change of $133.1 million in 2023, reflecting a 161% decrease[8] Debt and Equity - The company repurchased $51.2 million of its 2026 senior convertible notes at an average par value of 45.3%, for $23.2 million during the nine months ended September 30, 2024[123] - A gain of $22.5 million on extinguishment of debt was recognized during Q3 2024 due to the repurchase of a portion of the 2026 Notes[127] - The company repurchased $43.2 million of its 2026 Notes in September 2024, paying an average of 47% of par value, resulting in a $22.5 million gain on extinguishment of debt[5] - The company issued a total of 18.3 million newly issued shares to HOA to support the transition of Porch's insurance underwriting business, enhancing HOA's balance sheet strength[121] - The company contributed a total of 18.3 million newly issued shares to HOA to support its insurance underwriting business transition, which is expected to bolster HOA's balance sheet and support premium growth in 2025[7] Net Loss and Adjusted EBITDA - The company recorded a loss of $5.3 million from the sale of its insurance agency, Elite Insurance Group, for a sale price of $12.2 million[119] - Net loss for the nine months ended September 30, 2024, was $63.3 million, a 52% improvement from a net loss of $131.4 million in the same period of 2023[136] - Adjusted EBITDA loss for the nine months ended September 30, 2024, was $(34.6) million, a $21.6 million improvement from $(56.2) million in the same period of 2023[148] - Segment Adjusted EBITDA for the Insurance segment improved to a loss of $24.8 million, a 30% increase compared to a loss of $19.0 million in the same period last year[133] - Vertical Software segment Adjusted EBITDA increased to a loss of $5.1 million, improving by 62% from a loss of $3.2 million in the prior year[134] - Vertical Software segment Adjusted EBITDA improved to $11.0 million for the nine months ended September 30, 2024, compared to $4.6 million in the same period of 2023, a 140% increase[143] - Insurance segment Adjusted EBITDA loss narrowed to $(5.4) million for the nine months ended September 30, 2024, from $(19.3) million in the same period of 2023, an improvement of 72%[143] Cash and Investments - Cash recoveries on terminated reinsurance contracts amounted to approximately $28 million during the nine months ended September 30, 2024[123] - Cash and cash equivalents as of September 30, 2024, totaled $206.7 million, with an additional $10.0 million in restricted cash[149] - The insurance carrier, HOA, held cash and cash equivalents of $150.5 million and investments of $166.0 million as of September 30, 2024[6] - The company has a $197.8 million portfolio of fixed income securities with an unrealized loss of $(0.9) million as of September 30, 2024[10] - Investment income and realized gains increased to $3.8 million in Q3 2024 from $2.5 million in Q3 2023, attributed to a higher investment balance and reinvested securities at higher interest rates[127] - Investment income and realized gains increased to $11.0 million for the nine months ended September 30, 2024, compared to $4.5 million in the same period of 2023[138] Regulatory and Contractual Developments - The Texas Department of Insurance approved the application to form a reciprocal exchange on October 25, 2024[116] - The terminated reinsurance contract with Vesttoo would have required approximately $20 million in additional premium payments if not terminated[116]

Financial Performance - Total revenue for Q3 2024 was $111.2 million, a decrease of 14% compared to $129.6 million in Q3 2023[4] - GAAP net income improved to $14.4 million from a net loss of $5.7 million in the prior year[4] - Adjusted EBITDA for Q3 2024 was $16.9 million, an increase of $8.1 million from $8.8 million in Q3 2023[4] - Porch Group reported a net income of $14.4 million for the three months ended September 30, 2024, compared to a net loss of $5.7 million for the same period in 2023[31] - Adjusted EBITDA for the three months ended September 30, 2024, was $16.9 million, representing 15% of total revenue, up from $8.8 million or 7% in the same period last year[31] - For the nine months ended September 30, 2024, Porch Group's net loss was $63.3 million, an improvement from a loss of $131.4 million in the same period of 2023[31] - Net loss for the nine months ended September 30, 2024, was $63,303, compared to a net loss of $131,447 for the same period in 2023, representing a 52% improvement[40] Insurance Segment Performance - Gross written premium in the Insurance segment was $139 million, with approximately 219 thousand policies in force, reflecting a 10% decrease from $154 million in Q3 2023[9] - The attritional loss ratio improved to 21% from 32% in the prior year, driven by profitability actions in the insurance business[5] - The Insurance segment reported an Adjusted EBITDA of $24.8 million for the three months ended September 30, 2024, with a margin of 31.1%, up from 20.0% in the same period last year[33] - The company expects a full year 2024 loss ratio of 68%, with potential downside due to catastrophic weather events[18] Strategic Initiatives - Porch Group launched three new Home Factors to enhance risk assessment in its insurance offerings[6] - The Texas Department of Insurance approved the formation of a reciprocal exchange, expected to enhance the insurance business's financial profile[13] - Future growth strategies include the formation of a reciprocal insurance structure, which is expected to enhance margins and provide a more predictable financial profile[25] - The company is focusing on leveraging unique data for advantaged underwriting in homeowners insurance, aiming to protect the whole home and enhance service offerings for homebuyers[23] - Porch Group maintains strategic relationships with approximately 30,000 companies in the home-buying transaction ecosystem, which is critical for its competitive advantage[23] - Porch Group is committed to developing new products and enhancing existing services to increase transaction volume and customer retention[26] Financial Position and Cash Flow - Total current assets decreased from $481,078 thousand as of December 31, 2023, to $406,870 thousand as of September 30, 2024, a decline of approximately 15.4%[36] - Total liabilities increased slightly from $935,076 thousand as of December 31, 2023, to $944,307 thousand as of September 30, 2024, an increase of approximately 1.5%[36] - Total operating expenses for the nine months ended September 30, 2024, were $427,138 thousand, down from $513,424 thousand for the same period in 2023, a reduction of approximately 16.8%[37] - Cash flows from operating activities resulted in a net cash used of $5,080 for the nine months ended September 30, 2024, compared to a net cash provided of $74,898 in 2023[40] - Total cash and cash equivalents at the end of the period decreased to $216,678 from $361,714 in the previous year, reflecting a decline of 40%[40] - Purchases of short-term and long-term investments amounted to $98,148, up from $59,851 in the prior year, indicating a 64% increase[40] - The company reported a gain on extinguishment of debt amounting to $22,545 thousand for the three months ended September 30, 2024[37] - The company recorded a gain on the extinguishment of debt of $27,436 for the nine months ended September 30, 2024, compared to a gain of $81,354 in 2023[40] - Net cash used in investing activities was $52,209, compared to $34,203 in the previous year, reflecting a 53% increase in cash outflow[40] - Net cash provided by (used in) financing activities was $(23,265), a significant decrease from $92,414 in the prior year[40] Key Metrics - Average Monthly Revenue per Account in Quarter is a key growth metric, reflecting the revenue generated from existing customers[34] - The company achieved a Premium Retention Rate, which measures the ratio of renewed premiums over the last four quarters to base premiums, indicating customer loyalty[34] - Average Quarterly Revenue per Monetized Service is a focus area for growth, emphasizing the shift towards higher revenue services[34] - The company reported a Gross Loss Ratio, which is calculated as gross losses divided by gross earned premium, indicating the efficiency of its insurance operations[34] - Stock-based compensation expenses were $19,208, slightly down from $20,277 in the previous year[40] - The change in fair value of derivatives resulted in a gain of $7,772, compared to a gain of $2,440 in the same period last year, showing a significant increase[40] - The company reported a loss on divestiture of business amounting to $5,331, with no comparable figure in the previous year[40]

Group 1: Porch Group - Porch Group shares surged nearly 73%, contributing to a 7.6% increase in the Live segment [1] - The Texas Department of Insurance approved Porch's application to form Porch Insurance Reciprocal Exchange, aimed at increasing profitability and stabilizing earnings by reducing exposure to claims and weather risks [2] Group 2: Fiverr - Fiverr shares gained 34.6%, boosting the Work Pillar by 2.8%, driven by programs encouraging buyers to spend more on complex projects [3] - The company's revenues were up 8% year over year to $99.6 million, despite a 9% decline in active buyers to 3.8 million, with spending per buyer increasing by 9% to $296 [4] Group 3: Roblox - Roblox shares increased by 22%, with daily active users growing 27% to 88.9 million, marking the highest growth rate in around two years [6] - The company has captured 3% of its total addressable market in the gaming space, with total hours engaged on the platform rising by 29% [6] Group 4: Visa and Mastercard - Visa's payment volume grew 8% year over year, with U.S. payment volume up 5% and international volume up 10% [8] - Mastercard reported a revenue growth of 14% to $7.4 billion, driven by healthy consumer spending and a 17% increase in cross-border volume year over year [9] Group 5: Xerox - Xerox shares fell 16.7% as quarterly revenue of $1.5 billion missed analysts' estimates of $1.6 billion, representing a 7.5% year-over-year decline [11]

Financial Data and Key Metrics Changes - Revenue grew 12% to $111 million in Q2 2024, with revenue less cost of revenue increasing 10% to $19 million [7][14] - Adjusted EBITDA loss was $34.8 million, an improvement of $8.4 million over the prior year [15][19] - Gross written premium was $117 million, a decrease from the prior year as the company focused on profitability and nonrenewal of higher-risk policies [15][25] Business Line Data and Key Metrics Changes - The insurance segment accounted for 71% of total revenue, increasing from 65% in Q2 2023, with revenue of $78.3 million, a 22% increase year-over-year [16] - Vertical software segment revenue was $32.6 million, a decrease of 5% over the prior year, although software and services subscription businesses increased 4% [16][24] - The insurance segment's adjusted EBITDA loss was $27.3 million, an improvement of $3.9 million over the prior year [17] Market Data and Key Metrics Changes - The housing market declined 3% year-over-year in Q2, impacting the company's vertical software segment [12] - The average number of companies served was 29,000, slightly lower due to pressures in the mortgage title and inspection industries [24] - Average revenue per company per month increased 17% to $1,253, driven by lower seating and premium increases [24] Company Strategy and Development Direction - The company has refiled the reciprocal exchange application to optimize its structure and reduce exposure to unusual weather events [6][9] - The launch of Home Factors data products aims to improve risk assessment and marketing for third parties [6][10] - The company is focused on controlling operating expenses and improving profitability through price increases and strong cost control [15][19] Management's Comments on Operating Environment and Future Outlook - Management highlighted strong execution in underwriting and cost control despite macro headwinds and rare weather events impacting results [6][8] - The company expects to grow premiums nicely in 2025 and beyond, leveraging unique data for insurance profitability [27][35] - Management reiterated a commitment to achieving positive adjusted EBITDA for the full year 2024, despite the impact of catastrophic weather events [23][35] Other Important Information - The company has been recertified as a great place to work, with year-over-year improvements in key metrics [12] - The contribution of 18.3 million Porch shares to HOA is expected to bolster its balance sheet and support future premium growth [10][11] - The company is pursuing legal action related to the Vesttoo fraud discovered in 2023 [12] Q&A Session Summary Question: Thoughts on investing in growth versus derisking the portfolio until TDI approval - Management believes recent catastrophic events do not change their growth plans and they are ready to unlock growth opportunities [37][38] Question: Expectations for vertical software revenue in a housing recovery - Management expects vertical software revenue to outpace the national market recovery due to improved profitability and scalability [45][46] Question: Consideration of exiting markets like Houston due to weather events - Management does not plan to exit Houston, viewing it as a historically attractive market despite recent events [49][50] Question: Update on the reciprocal application and housing market assumptions - The reciprocal application was updated to reflect actual performance and milestones achieved, with a conservative outlook on the housing market [52][54] Question: Clarification on the $18 million share contribution to HOA - The share contribution was strategic to strengthen HOA's balance sheet and support future premium growth [56][58]

APorch Group Q2 2024 Earnings Presentation August 6, 2024 Copyright 2024 Porch Group, Inc. All rights reserved Presenters Matt Ehrlichman CEO, Chairman & Founder Shawn Tabak Chief Financial Officer Matthew Neagle Chief Operating Officer Michelle Taves GM Porch Group Media, Data & Marketing Copyright 2024 Porch Group, Inc. All rights reserved 2 Disclaimer Forward-Looking Statements Certain statements in this presentation may be considered forward-looking statements as defined by the Private Securities Litiga ...

Porch Group, Inc. (PRCH) came out with a quarterly loss of $0.65 per share versus the Zacks Consensus Estimate of a loss of $0.58. This compares to loss of $0.73 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -12.07%. A quarter ago, it was expected that this company would post a loss of $0.33 per share when it actually produced a loss of $0.21, delivering a surprise of 36.36%. Over the last four quarters, the company has sur ...

Core Viewpoint - The Zacks rating system provides a more objective measure for individual investors to assess stock ratings, particularly in the context of Porch Group's recent upgrade due to rising earnings estimates, indicating an improvement in the company's business fundamentals [1][5][10]. Earnings Estimate Revisions - Porch Group has been upgraded to a Zacks Rank 1 (Strong Buy), reflecting a significant upward trend in earnings estimates, which is a critical factor influencing stock prices [5][9]. - Over the past three months, the Zacks Consensus Estimate for Porch Group has increased by 21.4%, showcasing a positive shift in earnings expectations [8]. - The company is projected to earn -$0.65 per share for the fiscal year ending December 2024, representing a year-over-year change of 53.2% [12]. Zacks Rating System - The Zacks rating system maintains a balanced approach with an equal proportion of 'buy' and 'sell' ratings across over 4000 stocks, ensuring that only the top 20% of stocks are highlighted for their superior earnings estimate revisions [4][15]. - Stocks rated Zacks Rank 1 have historically generated an average annual return of +25% since 1988, indicating a strong track record for this rating category [15]. Market Implications - The upgrade of Porch Group to a Zacks Rank 1 positions it among the top 5% of Zacks-covered stocks, suggesting potential for near-term price appreciation [9][10]. - Empirical research supports a strong correlation between earnings estimate revisions and stock price movements, emphasizing the importance of tracking these revisions for investment decisions [7][14].

Core Viewpoint - Porch Group (NASDAQ:PRCH) has experienced significant stock price appreciation of over 62% since the initial coverage, currently trading at $2.3, but has faced a year-to-date decline of 24% despite reaching a high of $4.5 per share [1][2] Financial Performance - Revenue growth has decreased from 60%-70% in previous quarters to 32% in Q1, with total revenue of $115.4 million, reflecting a 32% year-over-year increase and exceeding guidance by $10.9 million [6] - The insurance segment has become the largest and fastest-growing part of the business, contributing approximately 76% of total revenue, with a 50% increase in revenue from insurance premiums and commissions, totaling $87.9 million [8][6] - Operating cash flow turned positive at $8.5 million in Q1, a significant improvement from a cash burn of nearly $41 million in the previous quarter, leading to a liquidity increase with over $310 million in cash and short-term investments [6] Future Outlook - The company anticipates stronger bottom-line performance in FY 2024, driven by margin expansion in the insurance segment [7] - The adjusted EBITDA loss has improved, with a reduction from $21.9 million to $16.8 million, indicating potential for future profitability [9] Valuation - The price target for PRCH is set at $3.3, suggesting a 43% upside potential by year-end, indicating that the stock is currently undervalued [3][15] - The bull scenario projects $470 million in revenue for FY 2024, while the bear scenario estimates $450 million, with corresponding price-to-sales ratios of 0.9x and 0.48x [14][15] Conclusion - Porch Group is positioned as a key player in the home service industry, with its insurance business showing significant growth and potential for profitability, leading to an upgrade to a buy rating [17]

Porch Group, Inc. (NASDAQ:PRCH) Q1 2024 Results Conference Call May 8, 2024 5:00 PM ET Company Participants Lois Perkins - Investor Relations Matt Ehrlichman - CEO, Chairman, and Founder Shawn Tabak - Chief Financial Officer Matthew Neagle - Chief Operating Officer Efram Ware - President and General Manager, Homeowners of America Conference Call Participants Jonathan Bass - Stephens Ryan Tomasello - KBW Mark Schappell - Loop Capital Markets Lois Perkins Good afternoon. Everyone, and thank you for participat ...