News Details

- Reports $192.4 Million of Full Year 2021 Revenue, up 166% Year-Over-Year -

- Provides 2022 Guidance of $320 Million in Revenue and $600 Million of Gross Written Premium, Representing 66% and 95% Year-over-Year Growth Respectively; Targets Approximately -9% EBITDA Margin in 2022 -

- Announces acquisition of Residential Warranty Services to Continue Expansion Into Home Warranty and Home Inspection Software -

SEATTLE, March 01, 2022 (GLOBE NEWSWIRE) -- Porch Group, Inc. (“Porch” or “the Company”) (NASDAQ: PRCH), a leading vertical software company reinventing the home services and insurance industries, today reported financial results for the fourth quarter and full year ended December 31, 2021.

“Our operational and strategic execution delivered strong fourth quarter and full year results, highlighted by $192.4 million in full year revenues as well as our first quarter of Adjusted EBITDA profitability in the third quarter,” said Matt Ehrlichman, Founder, Chairman and CEO. “In our first year as a public company we continued to grow our position in key verticals such as home inspection, expanded into new software verticals such as mortgage and title, enhanced our insurance and warranty offerings via the acquisitions of Homeowners of America and American Home Protect, increased our insurance footprint into many new states, and raised capital to fund future growth. I am proud of the efforts of our team. We are excited to continue to build on our 2021 accomplishments and continue to execute on our strategy in 2022.”

Fourth Quarter 2021 Financial Results

• Total revenue for the fourth quarter of 2021 was $51.6 million, an increase of 172% from $18.6 million in the fourth quarter of 2020.
• Revenue less cost of revenue for the fourth quarter 2021 was $40.9 million or 79% of total revenue, compared to $14.7 million or 77% of total revenue for the fourth quarter of 2020.
• Contribution margin was $22.4 million or 44% of total revenue, compared to $5.8 million or 31% of total revenue for the fourth quarter of 2020.
• GAAP net loss for the fourth quarter of 2021 totaled $22.6 million, compared to a GAAP net loss of $20.5 million for the fourth quarter of 2020.
• Adjusted EBITDA loss for the fourth quarter of 2021 totaled $7.9 million or -15% of total revenue, compared to an Adjusted EBITDA loss of $4.0 million or -22% of total revenue for the fourth quarter of 2020.
  
  

Segment Results for the Fourth Quarter 2021

• Vertical Software revenue for the quarter was $35.5 million, revenue less cost of revenue was $24.1 million or 68% of Vertical Software revenue, contribution margin was $14.0 million or 39% of Vertical Software revenue and Adjusted EBITDA was $3.2 million or 9% of Vertical Software revenue.
• Insurance revenue for the quarter was $16.1 million, revenue less cost of revenue was $16.8 million or 104% of Insurance revenue, contribution margin was $8.7 million or 54% of Insurance revenue and Adjusted EBITDA was $3.4 million or 21% of Insurance revenue. These results reflect the full year impact of a change to how Homeowners of America accounts for claims fees as described later in this release.
• Insurance gross written premium for the quarter was $101 million with 304 thousand policyholders.
  
  

Fourth Quarter 2021 and Recent Operational Highlights

• Announced the acquisition of Floify, a leading SaaS provider for mortgage companies and loan officers.
• Homeowners of America, a Porch Group Subsidiary, continued its nationwide expansion plan, now operating in 15 states.
• Launched nationwide inspection pop-up conferences for home inspectors on its Inspection Fuel Tour.
• Announced the addition of a new Pay-At-Close module to its suite of software solutions provided to home inspection companies through its inspection software business, Inspection Support Network.

Fourth Quarter 2021 Key Performance Indicators (KPIs)
Software and services to companies:

• Average number of companies increased to 24,603 from 11,157 in Q4 2020.
• Average revenue per company per month increased 26% to $699 from $556 in Q4 2020.

Monetized services for consumers:

• Number of monetized services was 260,352 in Q4 2021, up from 169,949 in Q4 2020.
• Average revenue per monetized service was $132, a 35% increase from $98 in Q4 2020.

Full Year 2021 Financial Results

• Total revenue for the full year 2021 was $192.4 million, an increase of 166% from total revenue of $72.3 million for the full year 2020.
• Revenue less cost of revenue for the full year 2021 was $137.1 million or 71% of total revenue for the full year 2021, compared to $54.7 million or 76% of total revenue for the full year 2020.
• Contribution margin was $78.8 million for the full year 2021 or 41% of total revenue for the full year 2021, compared to $22.4 million or 31% of total revenue for the full year 2020.
• GAAP net loss for the full year of 2021 totaled $109.1 million, compared to a GAAP net loss of $54.0 million for the full year 2020.
• Adjusted EBITDA loss, a non-GAAP metric, for the full year 2021 totaled $26.5 or -13.8% of total revenue), an improvement on a percentage basis from the Adjusted EBITDA loss of $18.3 million or -25% of total revenue for the full year 2020.
  
  

Segment Results for the Full Year 2021

• Vertical Software revenue for the full year 2021 was $137.2 million, revenue less cost of revenue was $96.6 million or 70% of full year Vertical Software revenue, contribution margin was $57.4 or 42% of Vertical Software revenue, and Adjusted EBITDA was $20.7 million or 15% of Vertical Software revenue
• Insurance revenue was $55.3 million, revenue less cost of revenue $40.6 million or 73% of Insurance revenue, contribution margin was $23.8 million or 43% of Insurance revenue and Adjusted EBITDA was $6.5 million or 12% of Insurance revenue
• Insurance gross written premium for the year was $307 million.
  
  

Acquisition of Residential Warranty Services
On February 28^th Porch signed a definitive agreement for the acquisition of certain businesses relating to home warranty products and inspector-centric software and services from Residential Warranty Services, Inc. (“RWS”). Total consideration is $33 million including $29 million of cash, $4 million of Porch stock and additional contingent consideration tied to the performance of a recently launched business line. Of the total consideration, $4.95 million was paid at signing. Full year 2022 revenue impact to Porch is expected to be approximately $8 million, with approximately $10 million of expected annualized revenue. The acquisition is targeted to close in early Q2 2022.

Full Year 2022 Financial Outlook
Porch provides guidance based on current market conditions and expectations.

¹ Guidance includes impact of announced but not yet closed acquisitions of CSE and RWS

Porch is not providing reconciliations of expected Adjusted EBITDA margin or contribution margin for future periods to the most directly comparable measures prepared in accordance with GAAP because Porch is unable to provide these reconciliations without unreasonable effort because certain information necessary to calculate such measures on a GAAP basis is unavailable or dependent on the timing of future events outside of Porch’s control.

Previous revenue guidance of $195 million included the assumption of HOA’s claims fee revenue continuing to be booked on a gross basis as it had historically. Instead, this estimate of $7.5 million should have been reflected as a contra claims expense and not as revenue because of our reinsurance ceding. Thus, our guidance number would have been $187.5 million of revenue had we reflected this change. The actual financial results, of $192.4 million of revenue for the year ended December 31, 2021, have appropriately accounted for this issue with no net impact on Adjusted EBITDA loss as reported.

Porch also announced a Form 12b-25 filing with the SEC today providing for a fifteen (15) calendar day extension for its Annual Report on Form 10-K for the fiscal year ended December 31, 2021. Porch Group became a large accelerated filer as of December 31, 2021 and due to the related expanded requirements associated with the Sarbanes-Oxley Act of 2022 and the reduced filing time from 90 days to 60 days after year end, Porch requires additional time to complete and file its Annual Report on Form 10-K.

In preparing the Company’s financial statements as of and for the year ended December 31, 2021, the Company identified material weaknesses in its internal controls over financial reporting. While these material weaknesses create a reasonable possibility that an error in financial reporting may go undetected, no material adjustments, restatement or other revisions to previously issued financial statements are expected to be required. Porch currently expects to finalize its financial results and file its 2021 Annual Report on Form 10-K by March 16, 2022 (the expiration date of the extension period). Such a filing within the periods noted is considered timely.

Conference Call        
Porch management will host a conference call today (March 1, 2022) at 5:00 p.m. Eastern time (2:00 p.m. Pacific time). The presentation will be accompanied by a slide presentation available on the Investor Relations section of the Company’s website. A question-and-answer session will follow management’s prepared remarks.

All are invited to listen to the event by registering for the webinar here.

If you have any difficulty connecting with the conference call or webcast, please contact Porch’s investor relations team at (949) 574-3860 or PRCH@gatewayir.com.

A replay of the webinar will also be available in the Investors section of Porch’s corporate website.

About Porch Group
Seattle-based Porch Group, the vertical software platform for the home, provides software and services to more than 24,000 home services companies such as home inspectors, mortgage companies and loan officers, title companies, moving companies, real estate agencies, utility companies, and warranty companies. Through these relationships and its multiple brands, Porch provides a moving concierge service to homebuyers, helping them save time and make better decisions on critical services, including insurance, warranty, moving, security, TV/internet, home repair and improvement, and more. To learn more about Porch, visit porchgroup.com or porch.com.

Forward-Looking Statements
Certain statements in this release 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 (“Porch”) future financial or operating performance. For example, projections of future revenue, contribution margin, Adjusted EBITDA and other metrics, business strategy and plans, and anticipated impacts from pending or completed acquisitions, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expect,” “intend,” “will,” “estimate,” “anticipate,” “believe,” “predict,” “potential” or “continue,” or the negatives of these terms or variations of them or similar terminology. Such forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from those expressed or implied by such forward looking statements.

These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Porch and its management at the time they are made, are inherently uncertain.  Factors that may cause actual results to differ materially from current expectations include, but are not limited to:  (1) expansion plans and opportunities, including recently completed acquisitions as well as future acquisitions or additional business combinations; (2) costs related to being a public company; (3) litigation, complaints, and/or adverse publicity; (4) the impact of changes in consumer spending patterns, consumer preferences, local, regional and national economic conditions, crime, weather, demographic trends and employee availability; (5) further expansion into the insurance industry, and the related federal and state regulatory requirements; (6) privacy and data protection laws, privacy or data breaches, or the loss of data; (7) the duration and scope of the COVID-19 pandemic and its continued effect on the business and financial conditions of Porch; and (8) other risks and uncertainties described in Porch’s most recent Form 10-K/A and subsequent reports filed with the Securities and Exchange Commission (the “SEC”), such as Porch’s quarterly reports on Form 10-Q for the quarters ended March 31, 2021, June 30, 2021 and September 30, 2021, as well as in its subsequent reports on Form 8-K, all of which are available on the SEC’s website at www.sec.gov.

Nothing in this release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. You should not place undue reliance on forward-looking statements, which speak only as of the date of this release. Unless specifically indicated otherwise, the forward-looking statements in this release do not reflect the potential impact of any divestitures, mergers, acquisitions, or other business combinations that have not been completed as of the date of this release. Porch does not undertake any duty to update these forward-looking statements, whether as a result of changed circumstances, new information, future events or otherwise, except as may be required by law. 

Non-GAAP Financial Measures
This release includes one or more non-GAAP financial measures, such as Adjusted EBITDA (loss), Adjusted EBITDA (loss) as a percentage of revenue, contribution margin, and average revenue per monetized service.

Porch defines Adjusted EBITDA (loss) as net income (loss) adjusted for interest expense, net, income taxes, other expenses, net, depreciation and amortization, certain non-cash long-lived asset impairment charges, stock-based compensation expense and acquisition-related impacts, including compensation to the sellers that requires future service, amortization of intangible assets, gains (losses) recognized on changes in the value of contingent consideration arrangements, if any, gain or loss on divestures and certain transaction costs. Adjusted EBITDA (loss) as a percentage of revenue is defined as Adjusted EBITDA (loss) divided by GAAP total revenue. Contribution margin is defined as revenue less all variable expenses, including cost of revenue, variable marketing and sales. Average revenue per monetized services in quarter is the average revenue generated per monetized service performed in a quarterly period. When calculating average revenue per monetized service in quarter, average revenue is defined as total quarterly monetized service revenues generated from monetized services.

Porch management uses these non-GAAP financial measures as supplemental measures of Porch’s operating and financial performance, for internal budgeting and forecasting purposes, to evaluate financial and strategic planning matters, and to establish certain performance goals for incentive programs.  Porch believes that the use of these non-GAAP financial measures provides investors with useful information to evaluate Porch’s operating and financial performance and trends and in comparing Porch’s financial results with competitors, other similar companies and companies across different industries, many of which present similar non-GAAP financial measures to investors. However, Porch's definitions and methodology in calculating these non-GAAP measures may not be comparable to those used by other companies.  In addition, Porch may modify the presentation of these non-GAAP financial measures in the future, and any such modification may be material.

You should not consider these non-GAAP financial measures in isolation, as a substitute to or superior to financial performance measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude specified income and expenses, some of which may be significant or material, that are required by GAAP to be recorded in Porch’s consolidated financial statements. Porch may also incur future income or expenses similar to those excluded from these non-GAAP financial measures, and Porch’s presentation of these measures should not be construed as an inference that future results will be unaffected by unusual or non-recurring items. In addition, these non-GAAP financial measures reflect the exercise of management judgment about which income and expense are included or excluded in determining these non-GAAP financial measures.

You should review the tables accompanying this release for reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measure. Porch is not providing reconciliations of non-GAAP financial measures for future periods to the most directly comparable measures prepared in accordance with GAAP.  Porch is unable to provide these reconciliations without unreasonable effort because certain information necessary to calculate such measures on a GAAP basis is unavailable or dependent on the timing of future events outside of Porch’s control. 

PORCH GROUP, INC.
Condensed Consolidated Statements of Operations
Three Months and Years Ended December 31, 2021 and 2020
(all numbers in thousands, except share amounts, unaudited)

PORCH GROUP, INC.
Statements of Comprehensive Income
Years Ended December 31, 2021 and 2020
(all numbers in thousands, except share amounts, unaudited)

PORCH GROUP, INC.
Condensed Consolidated Balance Sheets
Years Ended 2021 and 2020
(all numbers in thousands, except share amounts, unaudited)

PORCH GROUP, INC.
Condensed Consolidated Statements of Cash Flows
Three Months and Years Ended December 31, 2021 and 2020
(all numbers in thousands, unaudited)

PORCH GROUP, INC.
Consolidated Statements of Equity
Years Ended December 31, 2021 and 2020
(all numbers in thousands, unaudited)

PORCH GROUP, INC.
Adjusted EBITDA (loss)
Three Months Ended December 31, 2021
(all numbers in thousands, unaudited)

PORCH GROUP, INC.
Adjusted EBITDA
Twelve Months Ended December 31, 2021
(all numbers in thousands, unaudited)

PORCH GROUP, INC.
Monetized Services Revenue
Three Months and Year Ended December 31, 2021
(all numbers in thousands, unaudited)

PORCH GROUP, INC.
Revenue Less Cost of Revenue and Contribution Margin
Three Months Ended December 31, 2021
(all numbers in thousands, unaudited)

PORCH GROUP, INC.
Revenue Less Cost of Revenue and Contribution Margin
Twelve Months Ended December 31, 2021
(all numbers in thousands, unaudited)

Investor Relations Contacts:   
Walter Ruddy, Head of Investor Relations & Treasury
Porch Group, Inc.
(206) 715-2369
walter@porch.com

Matt Glover/Alex Thompson
Gateway Group, Inc.
(949) 574-3860
PRCH@gatewayir.com

Porch Press contact:
Catherine Adcock
Gateway Group, Inc.
(949) 386-6332
PRCH@gatewayir.com

Source: Porch Group, Inc.

Released March 1, 2022