Doma (DOMA) - 2024 Q2 - Quarterly Results

Financial Performance Overview Doma reported sequential revenue growth and improved profitability in Q2 2024, alongside announcing a pending acquisition by TRG expected to close in the second half of 2024 Q2 2024 Business Highlights Doma reported sequential growth in Q2 2024 with total revenues of $78 million, an 18% increase from Q1 2024, demonstrating improved profitability with gross profit up 23% and adjusted EBITDA loss narrowing to $3 million Q2 2024 Key Metrics vs. Q1 2024 | Metric | Q2 2024 | Change vs. Q1 2024 | | :--- | :--- | :--- | | Total Revenues | $78 million | +18% | | Retained Premiums and Fees | $15 million | +13% | | Gross Profit | $5 million | +23% | | Adjusted Gross Profit | $8 million | +15% | | Net Loss | $19 million | Unchanged | | Adjusted EBITDA Loss | $3 million | Improved from $6M loss | - The reported financial results and key operating data are for Doma's continuing operations, as the company has exited its local retail operations, which are now classified as "discontinued operations"[2] Pending Transaction with TRG Doma has a pending all-cash acquisition agreement with Title Resources Group (TRG) for $6.29 per share, expected to close in the second half of 2024, after which Doma will become a private company - Doma entered a definitive agreement to be acquired by Title Resources Group (TRG) in an all-cash transaction for $6.29 per share[3] - The transaction is expected to close in the second half of 2024, which will result in Doma becoming a private company[3] - Due to the pending acquisition, Doma will not hold an earnings conference call or issue forward-looking guidance[3] Financial Statements and Key Indicators This section presents Doma's key operating and financial indicators, consolidated statements of operations, and balance sheets for continuing operations, highlighting performance and financial position Key Operating and Financial Indicators Doma reported Q2 2024 total revenues of $77.6 million and a net loss of $19.0 million from continuing operations, with adjusted gross profit at $8.1 million and adjusted EBITDA loss at $2.7 million Key Financial Indicators (Three Months Ended June 30, in thousands) | Metric (in thousands) | 2024 | 2023 | | :--- | :--- | :--- | | GAAP Data | | | | Revenue | $77,646 | $81,279 | | Gross Profit | $5,056 | $1,972 | | Net Loss | $(19,008) | $(24,253) | | Non-GAAP Data | | | | Retained Premiums and Fees | $15,474 | $16,509 | | Adjusted Gross Profit | $8,131 | $4,881 | | Adjusted EBITDA | $(2,665) | $(12,141) | Consolidated Statements of Operations Doma's Q2 2024 total revenues were $77.6 million, with operating loss from continuing operations significantly reduced to $11.0 million and net loss improving to $19.0 million year-over-year Statement of Operations Highlights (Three Months Ended June 30, in thousands) | Item | 2024 | 2023 | | :--- | :--- | :--- | | Total Revenues | $77,646 | $81,279 | | Total Operating Expenses | $88,694 | $100,463 | | Operating Loss from Continuing Operations | $(11,048) | $(19,184) | | Loss from Continuing Operations, Net of Taxes | $(19,008) | $(24,253) | | Net Loss | $(20,397) | $(35,877) | | Net Loss Per Share (Basic & Diluted) | $(1.46) | $(2.69) | - Net premiums written included revenues from a related party of $38.0 million in Q2 2024, up from $33.5 million in Q2 2023[15] Consolidated Balance Sheets As of June 30, 2024, Doma reported $69.1 million in cash, total assets of $213.7 million, and total liabilities of $273.6 million, resulting in a widened stockholders' deficit of $60.0 million Balance Sheet Highlights (in thousands) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $69,098 | $65,939 | | Total Assets | $213,672 | $240,301 | | Total Liabilities | $273,642 | $266,212 | | Total Stockholders' Deficit | $(59,970) | $(25,911) | Non-GAAP Financial Measures and Reconciliations This section defines Doma's non-GAAP financial measures and provides reconciliations for Retained Premiums and Fees, Adjusted Gross Profit, and Adjusted EBITDA Definition of Non-GAAP Measures Doma uses non-GAAP measures like Retained Premiums and Fees, Adjusted Gross Profit, and Adjusted EBITDA to assess operational performance by excluding specific items from GAAP figures - Retained premiums and fees are defined as total revenue less premiums retained by agents[5] - Adjusted gross profit is defined as gross profit (loss) adjusted to exclude the impact of depreciation and amortization[5] - Adjusted EBITDA is defined as net income (loss) adjusted for interest, taxes, D&A, loss from discontinued operations, stock-based compensation, severance, merger costs, and other specific items[5] Reconciliation of Retained Premiums and Fees Doma's Q2 2024 GAAP revenue of $77.6 million reconciled to Retained Premiums and Fees of $15.5 million after agent deductions, leading to a GAAP Gross Profit of $5.1 million Reconciliation to Gross Profit (Three Months Ended June 30, in thousands) | Item | 2024 | 2023 | | :--- | :--- | :--- | | Revenue | $77,646 | $81,279 | | Less: Premiums retained by agents | (62,172) | (64,770) | | Retained premiums and fees | $15,474 | $16,509 | | Less: Other direct costs | (10,418) | (14,537) | | Gross Profit | $5,056 | $1,972 | Reconciliation of Adjusted Gross Profit Doma's Q2 2024 GAAP Gross Profit of $5.1 million was adjusted to a non-GAAP Adjusted Gross Profit of $8.1 million, a 67% increase from Q2 2023 Adjusted Gross Profit Reconciliation (Three Months Ended June 30, in thousands) | Item | 2024 | 2023 | | :--- | :--- | :--- | | Gross Profit | $5,056 | $1,972 | | Add: Depreciation and amortization | 3,075 | 2,909 | | Adjusted Gross Profit | $8,131 | $4,881 | Reconciliation of Adjusted EBITDA Doma's Q2 2024 GAAP net loss of $20.4 million was reconciled to a non-GAAP Adjusted EBITDA loss of $2.7 million, a substantial improvement from the $12.1 million loss in Q2 2023 Adjusted EBITDA Reconciliation (Three Months Ended June 30, in thousands) | Item | 2024 | 2023 | | :--- | :--- | :--- | | Net loss (GAAP) | $(20,397) | $(35,877) | | Adjustments (D&A, Interest, Taxes, etc.) | 10,969 | 8,086 | | EBITDA | $(9,428) | $(27,791) | | Other Adjustments (Discontinued Ops, SBC, Merger Costs, etc.) | 6,763 | 15,650 | | Adjusted EBITDA | $(2,665) | $(12,141) |