|9 Months Ended|
Sep. 30, 2021
12. Segment Information
Beginning in the quarter ending September 30, 2021, the Company has two reportable segments that are also our operating segments - Vertical Software and Insurance. Our reportable segments have been identified based on how our CODM manages our business, makes operating decisions and evaluates operating and financial performance. The chief executive officer acts as the CODM and reviews financial and operational information for our two reportable segments. Operating segments are components of an enterprise for which separate discrete financial information is available and operational results are regularly evaluated by the CODM for the purposes of making decisions regarding resource allocation and assessing performance. The change from our previous one reportable segment reflects changes in how the CODM manages the business, allocates resources, makes decisions and evaluates operating and financial performance.
Our Vertical Software segment primarily consists of a vertical software platform for the home, providing software and services to home services companies, such as home inspectors, moving companies, utility companies, title companies and others, and includes software fee revenues from companies, and non-insurance revenue. The Vertical Software segment also includes per-lead and per-quote based revenue from insurance companies.
Our Insurance segment offers various forms of homeowner insurance policies through its own insurance carrier and certain homeowner and auto insurance policies through its licensed insurance agency. The Insurance segment also includes home warranty revenue.
Our Vertical Software segment revenue was $42,287 and $101,629 for the three and nine months ended September 30, 2021, respectively. Revenue for our Insurance segment was $20,482 and $39,223 for the three and nine months ended September 30, 2021, respectively.
During 2020, we operated as a single reportable segment. At that time, our insurance revenue was generated solely from third-party insurance carriers though EIG, which began its operations in early 2020. Revenue for our comparable Vertical Software segment revenue was $20,226 and $46,975 for the three and nine months ended September 30, 2020, respectively. Revenue for the comparable Insurance segment was $1,281 and $2,602 for the three and nine months ended September 30, 2020, respectively. Also, during the nine months ended September 30, 2020, we recognized $4,196 of revenue related to divested businesses.
Our segment operating and financial performance measure is segment adjusted EBITDA (loss). Segment adjusted EBITDA (loss) is defined as revenue less the following expenses associated with our segments: cost of revenue, sales and marketing, product and technology, and general and administrative expenses. Segment adjusted EBITDA (loss) also excludes non-cash items or items that management does not consider are reflective our ongoing core operations.
Currently, we do not allocate any shared expenses to our reportable segments. We include these expenses in Corporate and Other. Corporate and Other includes shared expenses such as sales and marketing, certain product and technology, accounting, human resources, legal and general and administrative, and other income, expenses, gains and losses that are not allocated in assessing segment performance due to their function. Such transactions are excluded from the reportable segments results but included in reported consolidated results.
The reconciliation of segment Adjusted EBITDA income (loss) to consolidated loss from operations below includes the effects of corporate and other items that the CODM does not consider in assessing segment performance.
The following tables provide financial information for our two reportable segments and reconciliations to consolidated financial information for the periods presented:
(1) Acquisition and related (income) expense in the nine months ended September 2021 and 2020, includes $112 thousand and $302 thousand of non-cash stock based compensation related to legacy acquisitions.
The CODM does not review assets on a segment basis.
All of the Company’s revenue is generated in the United States. As of September 30, 2021 and December 31, 2020, the Company did not have assets located outside of the United States.
The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef