Porch Group, Inc. (NASDAQ:PRCH) Q2 2021 Earnings Conference Call August 16, 2021 5:00 PM ET Company Participants Walter Ruddy - Head of Investor Relations & Treasury Matt Glover - Gateway Group, Inc. IR Matthew Ehrlichman - Chief Executive Officer, Chairman and Founder Marty Heimbigner - Chief Financial Officer Matthew Neagle - Chief Operating Officer Adam Kornick - President of InsurTech Division Conference Call Participants Jason Helfstein - Oppenheimer John Campbell - Stephens Inc. Jason Kreyer - Craig-H ...

Group Love your home. For moving and improving and everything in between. Copyright 2021 Porch Group, Inc. All rights reserved 1 Q2 2021 Earnings Presentation August 16, 2021 Presenters Matt Ehrlichman CEO & Founder, Porch Group Marty Heimbigner CFO, Porch Group Matthew Neagle COO, Porch Group Adam Kornick President, InsurTech Division Copyright 2021 Porch Group, Inc. All rights reserved DISCLAIMERS 3 Forward-Looking Statements Certain statements in this presentation may be considered "forward-looking state ...

Part I. Financial Information [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Unaudited statements show significant growth in assets, liabilities, and revenue driven by acquisitions, alongside a wider net loss and negative operating cash flow [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Highlights | Balance Sheet Highlights | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :--- | :--- | :--- | | **Total Assets** | **$777,624** | **$268,387** | | Cash and cash equivalents | $150,201 | $196,046 | | Goodwill | $120,961 | $28,289 | | Intangible assets, net | $84,670 | $15,961 | | **Total Liabilities** | **$548,854** | **$161,062** | | Deferred revenue | $162,627 | $5,208 | | Losses and loss adjustment expense reserves | $115,500 | $— | | **Total Stockholders' Equity** | **$228,770** | **$107,325** | - Total assets increased by **190%** from December 31, 2020, to June 30, 2021, primarily due to acquisitions which significantly increased Goodwill, Intangible Assets, and Reinsurance balances[9](index=9&type=chunk) - Total liabilities grew by **241%** over the same period, largely driven by increases in deferred revenue and insurance-related liabilities resulting from the acquisition of Homeowners of America (HOA)[9](index=9&type=chunk) [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Income Statement | Income Statement (in thousands) | Q2 2021 | Q2 2020 | YoY Change | H1 2021 | H1 2020 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | **$51,340** | **$17,122** | **+200%** | **$78,083** | **$32,196** | **+143%** | | Cost of revenue | $19,500 | $3,792 | +414% | $25,429 | $7,891 | +222% | | Total operating expenses | $74,283 | $22,101 | +236% | $130,658 | $50,561 | +158% | | **Operating loss** | **($22,943)** | **($4,979)** | **+361%** | **($52,575)** | **($18,365)** | **+186%** | | **Net loss** | **($16,296)** | **($6,258)** | **+160%** | **($81,398)** | **($24,625)** | **+231%** | | Net loss per share, basic | ($0.17) | ($0.18) | - | ($0.89) | ($0.70) | - | - Stock-based compensation expense increased significantly to **$6.6 million in Q2 2021** from $0.4 million in Q2 2020, and to **$23.5 million in H1 2021** from $1.0 million in H1 2020[10](index=10&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary | Cash Flow Summary (in thousands) | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($30,772) | ($9,742) | | Net cash used in investing activities | ($131,298) | ($1,633) | | Net cash provided by financing activities | $107,040 | $11,063 | | **Change in cash, cash equivalents, and restricted cash** | **($55,030)** | **($312)** | - Cash used in investing activities surged to **$131.3 million in H1 2021**, primarily due to **$127.9 million used for acquisitions**, net of cash acquired[16](index=16&type=chunk) - Financing activities provided **$107.0 million in cash**, largely from **$126.8 million in proceeds from the exercise of warrants**, which was partially offset by $22.1 million paid for income tax withholdings on vested restricted stock units[16](index=16&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) - The company operates as a single reportable segment, with all revenue generated in the United States[32](index=32&type=chunk)[33](index=33&type=chunk) - On April 5, 2021, the Company acquired Homeowners of America Holding Corporation ("HAHC"), an insurance holding company, which significantly expanded its insurance operations[22](index=22&type=chunk) Revenue Disaggregation | Revenue Disaggregation (in thousands) | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Core services revenue | $28,684 | $11,709 | $39,708 | $20,837 | | Managed services revenue | $9,669 | $3,698 | $14,314 | $7,833 | | Software and service subscription revenue | $12,987 | $1,715 | $24,061 | $3,526 | | **Total revenue** | **$51,340** | **$17,122** | **$78,083** | **$32,196** | - In H1 2021, the company completed several acquisitions for total consideration of **$185.9 million**, adding **$92.7 million in goodwill**, with key acquisitions including V12 Data, Homeowners of America (HOA), and Rynoh[149](index=149&type=chunk)[150](index=150&type=chunk) - In June 2021, the company's **$8.1 million Paycheck Protection Program (PPP) loan was forgiven in whole**, resulting in a gain on extinguishment of debt[116](index=116&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=36&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong revenue growth to acquisitions and organic expansion, while higher operating losses are due to growth-related costs and public company expenses [Business Overview and Key Performance Measures](index=37&type=section&id=Business%20Overview%20and%20Key%20Performance%20Measures) - Porch operates as a vertical software platform for the home, providing software and services to approximately **17,000 home services companies** as of Q2 2021[186](index=186&type=chunk)[190](index=190&type=chunk) Key Performance Metrics | Key Performance Metrics | Q2 2021 | Q2 2020 | YoY Change | | :--- | :--- | :--- | :--- | | Average Companies in Quarter | 17,120 | 10,523 | +62.7% | | Average Revenue per Account per Month | $1,000 | $556 | +79.9% | | Monetized Services in Quarter | 302,462 | 181,520 | +66.6% | | Revenue per Monetized Service in Quarter | $129 | $86 | +50.0% | - The company has expanded through selective acquisitions, including ISN™, HireAHelper™, and in H1 2021, V12 Data, HOA, and Rynoh[188](index=188&type=chunk) [Results of Operations](index=41&type=section&id=Results%20of%20Operations) - Q2 2021 revenue increased **200% YoY to $51.3 million**, driven by acquisitions and organic growth in moving, inspection, and insurance businesses, which contributed $36.0 million of the increase[218](index=218&type=chunk) - Cost of Revenue for Q2 2021 increased **414% YoY**, primarily due to growth in the moving business and costs from acquired businesses, rising to **38% of revenue** from 22% in the prior year[221](index=221&type=chunk) - General and Administrative expenses for Q2 2021 grew **250% YoY**, mainly due to a **$3.2 million increase in stock compensation**, costs of operating as a public company, and increased hiring[229](index=229&type=chunk) - Total stock-based compensation expense for H1 2021 was **$23.5 million**, a significant increase from $1.0 million in H1 2020, largely driven by employee earnout restricted stock and other awards post-merger[232](index=232&type=chunk) [Non-GAAP Financial Measures](index=45&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA (Loss) Reconciliation | Adjusted EBITDA (Loss) Reconciliation (in thousands) | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--- | :--- | :--- | :--- | :--- | | Net loss | $(16,296) | $(6,258) | $(81,398) | $(24,625) | | Adjustments... | ... | ... | ... | ... | | **Adjusted EBITDA (loss)** | **$(10,312)** | **$(2,094)** | **$(19,916)** | **$(12,864)** | - Adjusted EBITDA loss for H1 2021 was **$19.9 million**, a decline from a loss of $12.9 million in H1 2020, attributed to weather-related losses in the HOA insurance business and higher public company costs[245](index=245&type=chunk)[247](index=247&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2021, the company had cash and cash equivalents of **$150.2 million** and restricted cash of $2.2 million[248](index=248&type=chunk) - In H1 2021, the company raised approximately **$126.8 million** from the exercise of public warrants[250](index=250&type=chunk) - The company spent **$127.9 million in cash** (net of cash acquired) and $22.9 million in stock to acquire several companies during the first six months of 2021[251](index=251&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's primary market risk is interest rate exposure from its variable-rate debt, with minimal inflation or foreign currency risk - The company is exposed to interest rate risk through its variable-rate senior secured term loans, which totaled **$43.8 million** as of June 30, 2021[262](index=262&type=chunk) - A hypothetical **1% increase in interest rates** on variable-rate debt would increase annual interest expense by approximately **$0.5 million**[263](index=263&type=chunk) [Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective due to previously identified material weaknesses, and a remediation plan is currently underway - The CEO and CFO concluded that the company's **disclosure controls and procedures were not effective** as of June 30, 2021[268](index=268&type=chunk) - The ineffectiveness is attributed to **material weaknesses in internal control over financial reporting** described in the company's Annual Report on Form 10-K/A[268](index=268&type=chunk) - Remediation efforts include hiring a new CFO and Controller, recruiting additional personnel, improving system automation, and enhancing the review process for complex accounting matters[269](index=269&type=chunk)[273](index=273&type=chunk) Part II. Other Information [Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in several legal proceedings concerning TCPA violations, a contract dispute, and a wage class action, with outcomes currently uncertain - The company is party to **14 legal proceedings** alleging violations of the Telephone Consumer Protection Act (TCPA), which have been consolidated in the Western District of Washington[165](index=165&type=chunk)[276](index=276&type=chunk) - A complaint was filed by the former owners of Kandela, LLC, alleging **breach of contract related to an earnout agreement**, with arbitration scheduled for Q1 2022[168](index=168&type=chunk)[278](index=278&type=chunk) - A former employee filed a putative **class action lawsuit for wage and hour violations** in California, and a tentative settlement has been reached pending court approval[169](index=169&type=chunk)[279](index=279&type=chunk) [Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from industry competition, acquisition integration challenges, and its recent expansion into the highly regulated insurance business - The company operates in competitive industries (insurance, moving, home services, software) with **low switching costs for consumers**, which could adversely affect business[282](index=282&type=chunk)[283](index=283&type=chunk) - Significant risks are associated with acquisitions, including the ability to successfully integrate businesses and realize synergies, with the recent **HOA acquisition noted as particularly large and complex**[300](index=300&type=chunk)[302](index=302&type=chunk)[304](index=304&type=chunk) - Expansion into the insurance business exposes the company to new risks, including **underwriting risk, catastrophic weather events, state-level regulation**, and potential inadequacy of loss reserves[306](index=306&type=chunk)[307](index=307&type=chunk)[318](index=318&type=chunk)[330](index=330&type=chunk)

Financial Performance - Total revenue for the three months ended March 31, 2021, was $26,742,000, a 77.6% increase from $15,074,000 in the same period of 2020[83]. - Referral network revenue increased to $11,024,000 in Q1 2021 from $9,128,000 in Q1 2020, representing a 20.8% growth[83]. - Software and service subscription revenue surged to $11,074,000 in Q1 2021, compared to $1,811,000 in Q1 2020, marking a 509.4% increase[83]. - Moving services accounted for 82% of total revenue in Q1 2021, up from 51% in Q1 2020, while post-move services decreased from 49% to 18%[83]. - The Company reported a net loss of $65,570 for the three months ended March 31, 2021, compared to a net loss of $21,264 for the same period in 2020[160]. Cash and Cash Equivalents - As of March 31, 2021, the company reported cash and cash equivalents of $222,948,000, an increase from $196,046,000 as of December 31, 2020, representing a growth of approximately 13.7%[47]. - Restricted cash as of March 31, 2021, was $10,435,000, up from $8,407,000 as of December 31, 2020, reflecting an increase of approximately 24.1%[47]. Revenue Recognition - Revenue is primarily generated from three streams: Referral Network Revenue, Managed Services Revenue, and Software and Service Subscription Revenue, with revenue recognized upon delivery of services or goods[58][59]. - The company assesses collectability based on factors including collection history and customer creditworthiness, delaying revenue recognition until collectability is probable[60]. - The company’s revenue recognition framework includes identifying contracts, performance obligations, and determining transaction prices, ensuring compliance with GAAP[59]. Tax and Liabilities - For the three months ended March 31, 2021, the company reported an income tax benefit of $350,000, resulting in an effective tax rate of 0.53%[74]. - Contract liabilities decreased from $3,193,000 at December 31, 2020, to $2,422,000 by March 31, 2021, with $2,026,000 expected to be recognized as revenue within the next 12 months[90]. - Deferred revenue balance was $4,346,000 as of March 31, 2021, down from $5,208,000 at December 31, 2020[91]. Acquisitions - The Company acquired V12 Data on January 12, 2021, for a total consideration of $27,075, which includes $20,169 in cash and $1,410 in contingent consideration[156]. - Revenue from the V12 Data acquisition from January 12, 2021, to March 31, 2021, was $5,580, with a net loss of $575 during the same period[159]. - The Company acquired Homeowners of America Holding Corporation on April 6, 2021, for a total consideration of $106,242, which includes $83,469 in cash and $22,773 in common stock[174]. Debt and Financing - The Company had total debt of $53,088 as of March 31, 2021, with a carrying value of $50,104 after accounting for unaccreted discounts[114]. - The Runway Loan Agreement was amended in January 2021, reducing the interest rate to 8.55% and eliminating a minimum cash balance requirement of $3,000[115]. - The Company received $8,139 from the Paycheck Protection Program, with a maturity date of April 18, 2022, and a fixed interest rate of 1.00%[118]. - As of March 31, 2021, the carrying value of the Porch PPP Loan was $8,317, with an application for forgiveness submitted in December 2020[121]. - A 1% increase in interest rates would result in approximately $0.5 million in additional annual interest expense for the Company[256]. Stock and Compensation - Stock-based compensation for the three months ended March 31, 2021, totaled $16,835,000, compared to $672,000 for the same period in 2020[136]. - The company expects to record $5,476,000 in stock compensation expense related to employee earnout shares over the remaining estimated service period in 2021[148]. - The 2020 Equity Incentive Plan reserves 11,005,115 shares for future issuance, with annual increases based on the lesser of 5% of outstanding shares or a board-determined amount[140]. - During the three months ended March 31, 2021, 329,132 restricted employee earnout shares fully vested, resulting in a stock compensation expense of $6,153,000[148]. - The company recorded $6,228,000 in stock compensation expense related to the CEO's restricted stock award during the three months ended March 31, 2021[150]. Assets and Fair Value - Total intangible assets as of March 31, 2021, amounted to $32,628, with net intangible assets of $22,715 after accumulated amortization of $9,913[111]. - Goodwill increased from $28,289 as of December 31, 2020, to $50,120 as of March 31, 2021, due to acquisitions totaling $21,831[112]. - The estimated fair value of contingent consideration related to business combinations was $93,506,000 as of March 31, 2021[97]. - The fair value of private warrants as of March 31, 2021, was $2,869, a decrease from $3,549 at the start of the year, with a loss of $355 included in net loss[104]. - As of March 31, 2021, the fair value of contingent consideration - earnout was $43,193, down from $50,238 at the beginning of the year, reflecting a loss of $18,770 included in net loss[104]. Accounting Standards - The Company expects the adoption of new accounting standards to increase total assets and liabilities related to operating leases by approximately $2,500,000[81]. - The Company is currently evaluating the impact of new accounting standards on its consolidated financial statements and related disclosures[79].

Group Love your home. For moving and improving and everything in between. Copyright 2021 Porch Group, Inc. All rights reserved 1 Q1 2021 Earnings Presentation May 17, 2021 DISCLAIMERS 2 Forward-Looking Statements Certain statements in this presentation may be considered "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally relate to future events or Porch Group, Inc.'s ("Porc ...

Porch Group, Inc. (NASDAQ:PRCH) Q1 2021 Earnings Conference Call May 17, 2021 5:00 PM ET Company Participants Matt Glover - Gateway Group, Inc. IR Matthew Ehrlichman - Founder, Chairman & CEO Martin Heimbigner - CFO Matthew Neagle - COO Nicole Pelley - VP, Product Management Conference Call Participants John Campbell - Stephens Inc. Daniel Kurnos - The Benchmark Company Michael Grondahl - Northland Capital Markets Jason Kreyer - Craig-Hallum Benjamin Sherlund - Cantor Fitzgerald Matt Glover Thank you f ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 001-39142 PORCH GROUP, INC (Exact name of registrant as specified in its charter) Delaware 83-2587663 (State of Other Jurisdiction of incorporation or Organization ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-39142 PropTech Acquisition Corporation (Exact name of registrant as specified in its charter) | Delaware | 83-2587663 | | - ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-39142 PropTech Acquisition Corporation (Exact name of registrant as specified in its charter) | Delaware | 83-2587663 | | --- | ...

FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-39142 PropTech Acquisition Corporation (Exact name of registrant as specified in its charter) Delaware 83-2587663 (State or oth ...