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Common stock, par value $0.0001 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

  

FORM 8-K

  

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): March 1, 2022

  

PORCH GROUP, INC.

(Exact name of registrant as specified in its charter)

  

Delaware   001-39142   83-2587663

(State or other jurisdiction
of incorporation)

  (Commission File Number)   (IRS Employer
Identification No.)

 

2200 1st Avenue South, Suite 300  
Seattle, Washington 98134

(Address of principal executive offices)

(Zip Code)

 

(855) 767-2400

(Registrant’s telephone number, including area code)

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e- 4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class  

Trading

Symbol(s)

 

Name of each exchange
on which registered

Common stock, par value $0.0001   PRCH   The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company   ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ¨

 

 

 

 

 

 

Item 2.02. Results of Operations and Financial Condition.

 

On March 1, 2022, Porch Group, Inc. (the “Company”) issued an earnings release announcing financial results for the quarterly period and year ended December 31, 2021. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

 

Item 7.01. Regulation FD Disclosure.

 

On March 1, 2022, the Company will host an earnings call at 5:00 p.m. Eastern time to discuss its financial results for the quarterly period and year ended December 31, 2021. The investor presentation to be used for the call is attached as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference. Live and archived webcasts of the presentation will be available on the Company’s website at https://ir.porchgroup.com.

 

The information in this Current Report on Form 8-K and the exhibits attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit 
No.
  Description
99.1   Press Release, dated March 1, 2022
99.2   Investor Presentation, dated March 1, 2022
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  PORCH GROUP, INC.
     
  By:  /s/ Martin L. Heimbigner
    Name:  Martin L. Heimbigner
    Title:  Chief Financial Officer

 

Date: March 1, 2022

 

 

 

Exhibit 99.1

 

 

 

Porch Group Reports Fourth Quarter and Full Year 2021 Financial Results

  

- 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 1, 2022 – 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 28th 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.

 

2022E Guidance1

Gross Written Premium

~$600M

(95% year-over-year growth)

Revenue

~$320M

(66% year-over-year growth)

Revenue Less Cost of Revenue

~$210M

(53% year-over-year growth)

Adj. EBITDA

~-9% and >-$26.5M

(>400 basis points of Adj EBITDA margin improvement)

 

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)

 

   Three Months Ended December 31,   Year Ended December 31, 
   2021   2020   2021   2020 
Revenue  $51,581   $18,596   $192,433   $72,299 
Operating expenses(1):                    
Cost of revenue   10,697    4,310    55,284    17,562 
Selling and marketing   23,635    11,222    84,271    41,665 
Product and technology   12,847    10,422    47,005    28,546 
General and administrative   25,248    12,660    91,711    28,199 
Gain on divestiture of businesses               (1,442)
Total operating expenses   72,427    38,614    278,271    114,530 
Operating loss   (20,846)   (20,018)   (85,838)   (42,231)
Other income (expense):                    
Interest expense   (1,461)   (4,405)   (5,757)   (14,734)
Change in fair value of earnout liability   (3,131)       (18,519)    
Change in fair value of private warrant liability   2,132    2,427    (15,389)   2,427 
Gain (loss) on extinguishment of debt       4,671    5,110    5,748 
Investment income and realized gains, net of investment expenses   253        701     
Other income (expense), net   115    (4,881)   340    (6,931)
Total other income (expense)   (2,092)   (2,188)   (33,514)   (13,490)
Loss before income taxes   (22,938)   (22,206)   (119,352)   (55,721)
Income tax benefit   356    1,722    10,273    1,689 
Net loss  $(22,582)  $(20,484)  $(109,079)  $(54,032)
Induced conversion of preferred stock       (17,284)       (17,284)
Net loss attributable to common stockholders  $(22,582)  $(37,768)  $(109,079)  $(71,316)
                     
Loss per share - basic  $(0.23)  $(0.93)  $(1.16)  $(1.96)
Loss per share - diluted  $(0.25)  $(0.93)  $(1.16)  $(2.03)
                     
Shares used in computing basic loss per share   97,862,144    40,499,732    93,884,566    36,344,234 
Shares used in computing diluted loss per share   98,588,325    40,499,732    93,884,566    36,374,215 

 

(1)      Amounts include stock-compensation expense, as follows:  

 

   Three Months Ended December 31,   Year Ended December 31, 
   2021   2020   2021   2020 
Cost of revenue  $   $1   $1   $2 
Selling and marketing   696    1,715    5,584    1,901 
Product and technology   1,701    4,629    7,223    5,248 
General and administrative   6,834    3,410    25,784    4,145 
   $9,231   $9,755   $38,592   $11,296 

 

 

 

 

 

PORCH GROUP, INC.

Statements of Comprehensive Income 

Years Ended December 31, 2021 and 2020 

(all numbers in thousands, except share amounts, unaudited)

 

   Year Ended December 31, 
   2021   2020 
Net loss  $(109,079)  $(54,032)
Other comprehensive income (loss):          
Current period change in net unrealized loss, net of tax   (259)    
Comprehensive loss  $(109,338)  $(54,032)

 

 

 

 

 

PORCH GROUP, INC. 

Condensed Consolidated Balance Sheets Years Ended 2021 and 2020

(all numbers in thousands, except share amounts, unaudited)

 

   December 31, 
   2021   2020 
Assets        
Current assets          
Cash and cash equivalents  $315,741   $196,046 
Accounts receivable, net   27,121    4,268 
Short-term investments   9,251     
Reinsurance balance due   228,416     
Prepaid expenses and other current assets   10,167    4,080 
Restricted cash   8,551    11,407 
Total current assets   599,247    215,801 
Property, equipment, and software, net   6,666    4,593 
Operating lease right-of-use assets   4,504     
Goodwill   225,654    28,289 
Long-term investments   58,324     
Intangible assets, net   129,830    15,961 
Restricted cash, non-current   500     
Long-term insurance commissions receivable   9,167    3,365 
Other assets   684    378 
Total assets  $1,034,576   $268,387 
           
Liabilities and Stockholders’ Equity          
Current liabilities          
Accounts payable  $6,965   $9,203 
Accrued expenses and other current liabilities   33,246    9,905 
Deferred revenue   203,816    5,208 
Refundable customer deposit   15,274    2,664 
Current portion of long-term debt   150    4,746 
Losses and loss adjustment expense reserves   61,949     
Other insurance liabilities, current   40,024     
Total current liabilities   361,424    31,726 
Long-term debt   414,585    43,237 
Operating lease liabilities, non-current   2,694     
Refundable customer deposit, non-current       529 
Earnout liability, at fair value   13,866    50,238 
Private warrant liability, at fair value   15,193    31,534 
Other liabilities (includes $9,617 and $3,549 at fair value, respectively)   12,242    3,798 
Total liabilities   820,004    161,062 
Commitments and contingencies (Note 16)          
Stockholders’ equity          
Common stock, $0.0001 par value:   10    8 
Authorized shares – 400,000,000 and 400,000,000, respectively          
Issued and outstanding shares – 97,961,597 and 81,669,151, respectively          
Additional paid-in capital   641,406    424,823 
Accumulated other comprehensive loss   (259)    
Accumulated deficit   (426,585)   (317,506)
Total stockholders’ equity   214,572    107,325 
Total liabilities and stockholders’ equity  $1,034,576   $268,387 

 

 

 

 

 

PORCH GROUP, INC.

Condensed Consolidated Statements of Cash Flows

Three Months and Years Ended December 31, 2021 and 2020 

(all numbers in thousands, unaudited)

 

 

    Year Ended December 31, 
    2021   2020 
Cash flows from operating activities:           
Net loss   $(109,079)  $(54,032)
Adjustments to reconcile net loss to net cash used in operating activities           
Depreciation and amortization    16,386    6,644 
Amortization of operating lease right-of-use assets    1,861     
Loss on sale and impairment of long-lived assets    595    895 
Gain on extinguishment of debt    (5,110)   (5,748)
Loss on remeasurement of debt        895 
Gain on divestiture of businesses        (1,442)
Loss on remeasurement of Legacy Porch warrants        2,584 
Loss (gain) on remeasurement of private warrant liability    15,389    (2,427)
Loss (gain) on remeasurement of contingent consideration    (2,244)   1,700 
Loss on remeasurement of earnout liability    18,519     
Stock-based compensation    38,592    11,296 
Amortization of premium/accretion of discount, net    1,317     
Net realized gains on investments    67     
Interest expense (non-cash)    998    7,488 
Deferred taxes        (30)
Other    1,055    7 
Change in operating assets and liabilities, net of acquisitions and divestitures           
Accounts receivable    (1,260)   203 
Reinsurance balance due    (15,343)    
Prepaid expenses and other current assets    (1,151)   (2,587)
Accounts payable    (11,779)   4,092 
Accrued expenses and other current liabilities    (17,757)   (15,946)
Losses and loss adjustment expense reserves    (22,417)    
Other insurance liabilities, current    15,969     
Deferred revenue    56,287    2,206 
Refundable customer deposits    11,324    (3,521)
Deferred income tax benefit    (9,760)    
Long-term insurance commissions receivable    (5,802)   (3,365)
Operating lease liabilities, non-current    (2,141)    
Other    (9,297)   2,419 
Net cash used in operating activities    (34,781)   (48,669)
Cash flows from investing activities:           
Purchases of property and equipment    (972)   (279)
Capitalized internal use software development costs    (3,718)   (2,601)
Purchases of short-term and long-term investments    (24,006)    
Maturities, sales of short-term and long-term investments    21,694     
Acquisitions, net of cash acquired    (256,430)   (7,791)
Net cash used in investing activities    (263,432)   (10,671)
Cash flows from financing activities:           
Proceeds from recapitalization and PIPE financing        305,133 
Distribution to stockholders        (30,000)
Transaction costs - recapitalization        (5,652)
Proceeds from debt issuance, net of fees    413,537    66,190 
Repayments of principal and related fees    (46,965)   (81,640)
Proceeds from issuance of redeemable convertible preferred stock, net of fees        4,714 
Capped call transactions    (52,913)    
Proceeds from exercises of warrants    126,741     
Proceeds from exercises of stock options and Legacy Porch warrants    4,288    911 
Income tax withholdings paid upon vesting of restricted stock units    (29,136)    
Repurchase of stock        (42)
Net cash provided by financing activities    415,552    259,614 
Net change in cash, cash equivalents, and restricted cash   $117,339   $200,274 
Cash, cash equivalents, and restricted cash, beginning of period   $207,453   $7,179 
Cash, cash equivalents, and restricted cash end of period   $324,792   $207,453 

 

 

 

 

 

PORCH GROUP, INC. 

Consolidated Statements of Equity

Years Ended December 31, 2021 and 2020

(all numbers in thousands, unaudited)

 

                   Accumulated     
           Additional       Other   Total 
   Common Stock   Paid-in   Accumulated   Comprehensive   Stockholders’ 
   Shares   Amount   Capital   Deficit   Loss   Equity (Deficit) 
Balances as of January 1, 2020   34,197,822   $3   $203,492   $(263,474)  $   $(59,979)
Net loss               (54,032)       (54,032)
Stock-based compensation           10,660            10,660 
Stock-based compensation - earnout   1,976,332        636            636 
Issuance of Series B and Series C redeemable convertible preferred stock   682,539        4,836            4,836 
Conversion of convertible notes to Series C redeemable convertible preferred stock   198,750        1,436            1,436 
Repurchase of redeemable convertible preferred stock   (75,162)       (480)           (480)
Issuance of common stock warrants           44            44 
Vesting of restricted stock awards issued for acquisitions   472,141                     
Issuance of common stock for acquisitions   785,330        6,898            6,898 
Exercise of stock options and warrants   505,711        1,029            1,029 
Net share settlement of common stock options and restricted stock units   1,189,911                     
Shareholder contribution           17,584            17,584 
Inducement to convert preferred stock           (17,284)           (17,284)
Impacts of recognition of contingent beneficial conversion feature           (5,208)           (5,208)
Conversion of common stock warrants into common stock   1,705,266                     
Conversion of redeemable convertible preferred stock warrants into common stock   702,791        11,029            11,029 
Recapitalization and PIPE financing   35,304,052    5    239,722            239,727 
Tax impacts of recapitalization           187            187 
Earnout liability   4,023,668        (50,238)           (50,238)
Cancellation of redeemable convertible preferred stock repurchase liability           480            480 
Balances as of January 1, 2021   81,669,151   $8   $424,823   $(317,506)  $   $107,325 
Net loss               (109,079)   (259)   (109,338)
Stock-based compensation           15,631            15,631 
Stock-based compensation - earnout           22,961            22,961 
Issuance of common stock for acquisitions   2,042,652    1    35,706            35,707 
Contingent consideration for acquisitions           6,685            6,685 
Reclassification of earnout liability upon vesting           54,891            54,891 
Reclassification of private warrant liability upon exercise           31,730            31,730 
Vesting of restricted stock awards   2,549,223                     
Exercise of stock warrants   11,521,412    1    126,768            126,769 
Exercise of stock options   1,700,557        4,326            4,326 
Income tax withholdings   (1,521,398        (28,940)           (28,940)
Capped call transactions           (52,913)           (52,913)
Transaction costs           (262)           (262)
Balances as of December 31, 2021   97,961,597   $10   $641,406   $(426,585)  $(259)  $214,572 

 

 

 

 

 

PORCH GROUP, INC.

Adjusted EBITDA (loss)

Three Months Ended December 31, 2021 

(all numbers in thousands, unaudited)

 

    CORPORATE    INSURANCE    VERTICAL
SOFTWARE 
   Consolidated  
Adjusted EBITDA (loss)  $(14,476)  $3,449   $3,180   $(7,848)
     N/A     21%   9%   -15%
Less:                    
Acquisition and related expense   795    29          -    824 
Loss on re-measurement of warrants   (2,132)   -    -    (2,132)
Loss on re-measurement of earnout liability   3,131    -    -    3,131 
Revaluation of contingent consideration   (2,427)   -    563    (1,864)
Non-cash bonus expense   (1,378)   -    -    (1,378)
Non-cash stock-based compensation   6,489    400    2,342    9,231 
Non-cash long-lived asset impairment charge   50    -    285    335 
Other, net   (38)   0    (78)   (115)
Depreciation and amortization   597    1,001    4,000    5,598 
Income tax expense (benefit)   (1,135)   778    2    (356)
Interest expense   1,348    444    (332)   1,460 
Net income (loss)  $(19,775)  $796   $(3,603)  $(22,582)

 

 

 

 

 

PORCH GROUP, INC.

Adjusted EBITDA

Twelve Months Ended December 31, 2021

(all numbers in thousands, unaudited)

 

    CORPORATE    INSURANCE   

VERTICAL

SOFTWARE 

   Consolidated  
Adjusted EBITDA (loss)  $(53,760)  $6,533   $20,733   $(26,493)
     N/A     12%   15%   -13.8%
Less:                    
Acquisition and related expense   5, 331    29     -    5,360 
Loss on re-measurement of warrants   15,389    -    -    15,389 
Loss on re-measurement of earnout liability   18,519    -    -    18,519 
Revaluation of contingent consideration   (2,807)   -    563    (2,244)
Non-cash stock-based compensation   33,180    876    4,537    38,592 
Non-cash long-lived asset impairment charge   252    -    298    550 
Other, net   (81)   (1)   (259)   (341)
Loss on extinguishment of debt   (5,099)   -    (11)   (5,110)
Depreciation and amortization   2,915    3,432    10,039    16,386 
Income tax benefit   (8,139)   (1,788)   (346)   (10,273)
Interest expense   4,739    508    510    5,757 
Net income (loss)  $(117,959)  $3,477   $5,402   $(109,079)

 

 

 

 

 

PORCH GROUP, INC.

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

 

   2021   2021 
Monetized Services Revenue  $34,366   $137,383 
Other Operating Revenue   17,215    55,050 
Total Revenue  $51,581   $192,433 

 

 

 

 

 

PORCH GROUP, INC.

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

 

   CORPORATE   INSURANCE   VERTICAL
SOFTWARE
   Consolidated 
Revenue  $-   $16,060   $35,520   $51,581 
Cost of Revenue  $-   $(715)  $11,412   $10,697 
Revenue Less Cost of Revenue  $-   $16,775   $24,108   $40,883 
    N/A    104%   68%   79%
                     
                     
Revenue  $-   $16,060   $35,520   $51,581 
Cost of Revenue  $-   $(715)  $11,412   $10,697 
Sales & Marketing (Variable)  $287   $8,065   $10,089   $18,440 
Contribution Margin  $(287)  $8,711   $14,019   $22,443 
    N/A    54%   39%   44%
                     
                     
Sales & Marketing (Fixed)  $905   $473   $3,816   $5,195 
Product & Technology  $6,003   $621   $6,223   $12,847 
General & Administrative  $11,407   $5,849   $7,991   $25,248 
Total Operating Expenses  $18,602   $14,293   $39,531   $72,427 
Operating Loss  $(18,602)  $1,767   $(4,011)  $(20,846)

 

 

 

 

 

PORCH GROUP, INC.

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

 

   CORPORATE   INSURANCE   VERTICAL
SOFTWARE
   Consolidated 
Revenue  $-   $55,283   $137,150   $192,433 
Cost of Revenue  $-   $14,693   $40,591   $55,284 
Revenue Less Cost of Revenue  $-   $40,590   $96,559   $137,149 
    N/A    73%   70%   71%
                     
                     
Revenue  $-   $55,283   $137,150   $192,433 
Cost of Revenue  $-   $14,693   $40,591   $55,284 
Sales & Marketing (Variable)  $2,444   $16,763   $39,111   $58,317 
Contribution Margin  $(2,444)  $23,828   $57,448   $78,832 
    N/A    43%   42%   41%
                     
                     
Sales & Marketing (Fixed)  $5,416   $7,059   $13,479   $25,954 
Product & Technology  $26,675   $1,055   $19,276   $44,005 
General & Administrative  $58,100   $14,197   $19,414   $91,711 
Total Operating Expenses  $92,635   $53,766   $131,870   $278,271 
Operating Loss  $(92,635)  $1,517   $5,280   $(85,838)

 

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

 

Exhibit 99.2

Copyright 2022 Porch Group, Inc. All rights reserved Q4 and FY 2021 Earnings Presentation March 1, 2022 Love your home. For moving and improving and everything in between.

 

 

Copyright 2022 Porch Group, Inc. All rights reserved Presenters Matt Ehrlichman CEO, Chairman & Founder Porch Group Marty Heimbigner CFO Porch Group Matthew Neagle COO Porch Group Nicole Pelley SVP, Product & Technology Porch Group 2

 

 

Copyright 2022 Porch Group, Inc. All rights reserved 3 DISCLAIMERS 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 (“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 presentation 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 presentation . 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 presentation . 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 presentation 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 Porch’s earnings release available at www . sec . gov 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 . 3

 

 

Copyright 2022 Porch Group, Inc. All rights reserved Agenda 1. Strategy Recap 2. Q4 and FY2021 Results 3. FY 2022 Guidance 4. Segments & KPIs 5. Deep Dives: Product | M&A | Targeted Future Milestones 6. Q&A 4

 

 

Copyright 2022 Porch Group, Inc. All rights reserved FY 2021 Earnings Call CEO Update

 

 

Copyright 2022 Porch Group, Inc. All rights reserved Porch, the Vertical Software Platform for the Home Insurance (Carrier, Agency & Warranty) Vertical Software (SaaS + Transaction) (1) Customer acquisition cost 6

 

 

Copyright 2022 Porch Group, Inc. All rights reserved Key Focus Areas for 2022 1. Sell Vertical Software to more companies, increasing market share in key strategic verticals 2. Embed and expand B2B2C Transactions via our privileged access to consumers 3. Grow capital light Insurance revenue via geographic and product expansion 4. Begin to leverage Proprietary Data to improve insurance and warranty Pricing Accuracy 5. Enhance Consumer Experience and Conversion via app, digital, and concierge experiences 6. Pursue strategic and accretive M&A and accelerate growth of acquired companies 7

 

 

Copyright 2022 Porch Group, Inc. All rights reserved FY 2021 Earnings Call Q4 and FY 2021 Results

 

 

Copyright 2022 Porch Group, Inc. All rights reserved Strong Growth and Margin Improvement from Q4 2020 Year Over Year ▲ Disclaimer: See Porch’s Q4 and full year 2021 earnings press release for a reconciliation of Adjusted EBITDA (loss) as a perc ent age of revenue and Contribution Margin to their most directly comparable GAAP financial measures $18.9M Revenue 77% Revenue - Cost of Revenue Margin - 21% Adj. EBITDA Margin 31% Contribution Margin $51.6M Revenue 79% Revenue - Cost of Revenue Margin - 15% Adj. EBITDA Margin 44% Contribution Margin Q4 2021 Q4 2020 9 172% Increase

 

 

Copyright 2022 Porch Group, Inc. All rights reserved Recap of 2021 Guidance History vs. Actuals $195M Revenue ~70% Revenue - Cost of Revenue Margin - 14 to - 16% Adj. EBITDA Margin ~40% Contribution Margin $192.4M Revenue 71% Revenue - Cost of Revenue Margin - 13.8% Adj. EBITDA Margin 41% Contribution Margin Actual Latest guidance 10 Disclaimer: See Porch’s Q4 and full year 2021 earnings press release for a reconciliation of Adjusted EBITDA (loss) as a perc ent age of revenue and Contribution Margin to their most directly comparable GAAP financial measures

 

 

Copyright 2022 Porch Group, Inc. All rights reserved $36M $57M $72M 2018PF 2019PF 2020A 2021A Note: PF figures are Pro Forma results which exclude the financial results of certain Porch businesses divested during 2019 a nd the first half of 2020, after giving effect to all such divestitures as if they had occurred on January 1, 2018 Disclaimer: See Porch’s Q4 and full year 2021 earnings press release for a reconciliation of Adjusted EBITDA (loss) as a perc ent age of revenue and Contribution Margin to their most directly comparable GAAP financial measures 2021A Revenue: 166 % Year - over - Year Growth Revenue % Growth 58% 26% 166% $192.4M $137M Vertical Software $55M Insurance Adjusted EBITDA % - 79% - 57% - 24% - 13.8% 25% 2018PF 2019PF 2020A 2021A Long-Term Target 11

 

 

Copyright 2022 Porch Group, Inc. All rights reserved FY 2021 Earnings Call FY 2022 Guidance

 

 

Copyright 2022 Porch Group, Inc. All rights reserved 2022 Guidance: 66% Revenue Growth & Adj EBITDA Improvement ~$320M Revenue ~ - 9% > - $26.4M Adj EBITDA % Adj EBITDA $ ~$210M Revenue Less Cost of Revenue Increase of 53% from $137M in 2021 YoY improvements of >400 bps and total Adj EBITDA $ (Guiding to profitability in 2H 2023 and FY 2024) 2022E Guidance Disclaimer: See Porch’s Q4 and full year 2021 earnings press release for a reconciliation of Adjusted EBITDA (loss) as a perc ent age of revenue and Contribution Margin to their most directly comparable GAAP financial measures Porch is not providing reconciliations of forward - looking non - GAAP guidance to the comparable GAAP measures because certain information n ecessary to calculate such measures on a GAAP basis is unavailable or dependent on the timing of future events outside of Porch’s control. In particular, the charges excluded from these non - GAAP measures are subject to high v ariability and complexity due to Porch’s ongoing growth $302.5M + $17.5M from announced acquisitions (RWS = $7.5M of $10M annualized; CSE = $10M of $25M annualized) ~$600M Gross Written Premium Increase of 95% from $307M GWP in 2021 13

 

 

Copyright 2022 Porch Group, Inc. All rights reserved Rapid Growth Expected Across Each Key Measure $192.4M $320M 2021 2022E YoY 66 % increase YoY 95% increase $ 307 M $ 600 M 0 100 200 300 400 500 600 700 2021 2022E Series 1 $ 137 M $ 210 M 0 50 100 150 200 250 2021 2022E Series 1 YoY 53% increase Revenue Less Cost of Revenue Gross Written Premium Revenue 14 Note: 2022 estimates include impact of announced but not yet closed acquisitions of CSE and RWS including revenue of: RWS ($7.5M) and CSE (+$10M based on the expectation of a mid 2022 close date)

 

 

Copyright 2022 Porch Group, Inc. All rights reserved $36M $57M $72M 2018PF 2019PF 2020A 2021A 2022E 2022E: Both Strong Growth and Margin Improvement Revenue % Growth 58% 26% 166% $192.4M $137M Vertical Software $55M Insurance Adjusted EBITDA % ~$190M Vertical Software $320M ~$130M Insurance 66% - 79% - 57% - 24% - 13.8% ~ - 9% 25% 2018PF 2019PF 2020A 2021A Long - Term Target 2022E 15 (1) (1) (2) Disclaimer: See Porch’s Q4 and full year 2021 earnings press release for a reconciliation of Adjusted EBITDA (loss) as a perc ent age of revenue and Contribution Margin to their most directly comparable GAAP financial measures (1) PF figures are Pro Forma results which exclude the financial results of certain Porch businesses divested during 2019 and the fi rst half of 2020, after giving effect to all such divestitures as if they had occurred on January 1, 2018 (2) 2022 Estimated revenue includes the amount of revenue expected from '22 acquisitions to be recorded in the '22 year: RWS ($7. 5M) and CSE (+$10M based on the expectation of a mid 2022 close date)

 

 

Copyright 2022 Porch Group, Inc. All rights reserved FY 2021 Earnings Call Segment Information

 

 

Copyright 2022 Porch Group, Inc. All rights reserved ~30% ~ 40% ~ 23% ~ 7% (1) B2B includes recurring fees paid by Companies to Porch for SaaS and other services (2) B2B2C (Move - Related Services) includes revenue predominantly related to selling consumers insurance, moving, security and TV/int ernet with majority of these consumers being provided to Porch on a reoccurring basis by companies (3) B2B2C and B2C (Post - Move Services) includes revenue predominantly related to connecting consumers with contractors across home m aintenance and improvement projects with these consumers originating from both 1) companies on a reoccurring basis, and 2) direct - to - consumer channels (4) 2022 Estimated revenue includes the amount of revenue expected from '22 acquisitions to be recorded in the '22 year: RWS ($7. 5M) and CSE (+$10M based on the expectation of a mid 2022 close date) 2022E Revenue: Strong Growth in Both Vertical Software and Insurance Software & Services Subscriptions (~30%) (1) B2B Recurring Fees From Companies Move - Related Transactions – Excl. Insurance Segment (~23%) (2) B2B2C Transaction Revenue via Companies (Reoccurring) Post - Move Transactions (~7%) (3) Transaction Revenue FY 2022E Guidance Revenue Distribution Move - Related Transactions – Insurance Segment (~40%) (2) Insurance + Warranty (Recurring Revenue) Segment Revenue Growth( 4) $137M ~$190M 2021 2022E Vertical Software $55M ~$130M 2021 2022E Insurance 132% YoY Growth 40 % YoY Growth 17

 

 

Copyright 2022 Porch Group, Inc. All rights reserved Number of Companies & Average Revenue Per Company (1) Porch management defines average companies in a quarter as an average of the end of period number of companies with the begin nin g of period number, inclusive of all companies across Porch’s home services verticals that (i) generate recurring revenue and (ii) generated revenue in the quarter. For new acquisitions, we determine t he number of customers in their initial quarter based on the percentage of the quarter they were part of Porch (2) Average revenue per account per month in quarter is defined as the total revenue from the quarter generated across all our ho me services company customer accounts divided by the average number of companies in the period divided by 3 (to provide monthly revenue). Note: while the wording of both footnote (1) and (2) on t his slide has been updated to be made more clear, they are the same calculations the company has been using to date (1) (2) 24,603 companies in Q4 2021 $699 revenue per company per month in Q4 2021 18

 

 

Copyright 2022 Porch Group, Inc. All rights reserved Monetized Services & Average Revenue Per Monetized Service (1) Monetized Services per Quarter is defined as the total number of unique consumer services from which Porch generated revenue, in cluding, but not limited to, new and renewing insurance customers, completed moving jobs, security installations, TV/internet installations or other home projects, measured over a quarterly period (2) Average revenue per monetized services in quarter is defined as the total service revenue (Move - Related Transaction revenue plus Post - Move Transaction revenue) divided by the number of Monetized Services per Quarter. Note: while the wording of both footnote (1) and (2) on this slide has been updated to be made more clear, they are the same calculations the company has been using to date. See Porch’s fourth quarter 2021 earnings press release for a reconciliation of total service revenue Q1 Q2 Q3 Q4 (1) (2) 260,352 monetized services in Q4 2021 $132 revenue per monetized service in Q4 2021 19

 

 

Copyright 2022 Porch Group, Inc. All rights reserved 20 Vertical Software Segment: 4Q 2021 Financials $35.5M Q4 Revenue 68% Revenue Less Cost of Revenue Margin 39% Contribution Margin 9% Adj. EBITDA Margin (1) Disclaimer: See Porch’s Q4 and full year 2021 earnings press release for a reconciliation of Adjusted EBITDA (loss) as a perc ent age of revenue and Contribution Margin to their most directly comparable GAAP financial measures (1) Impact of preliminary estimate of shared allocation of corporate expense would indicate a 2% Adjusted EBITDA (loss) as a perc ent age of revenue in the quarter

 

 

Copyright 2022 Porch Group, Inc. All rights reserved Insurance Segment: 4Q 2021 Financial Performance & KPI's 21 Insurance (Agency in 50 states. Carrier now live in 15 states as carrier) Warranty (Live in 46 states and D.C.) Active states Approved / Signed (coming soon) (4) Agency only (carrier opportunity) $16.1M Q4 Revenue $101M Q4 GWP (1) 104% Revenue Less Cost of Revenue Margin 304K Policyholders 21% Adj. EBITDA Margin (5) 89% Customer Retention (3) 54% Contribution Margin $211 Annualized Revenue Per Policyholder (2) Disclaimer: See Porch’s Q4 and full year 2021 earnings press release for a reconciliation of Adjusted EBITDA (loss) as a perc ent age of revenue and Contribution Margin to their most directly comparable GAAP financial measures (1) GWP includes gross written premium written for 3 rd party carriers through EIG, gross written premium HOA writes as well as AHP’s face value of policy premiums written during th e period (2) Includes quarterly revenue for the segment divided by number of policyholders in the segment multiplied by four (3) Represents rolling 12 months ending December 2021 for HOA (4) Includes CSE Insurance Group subject to regulatory approval; anticipated for mid - 2022 (5) Impact of preliminary estimate of shared allocation of corporate expense would indicate a 21% Adjusted EBITDA (loss) as a per cen tage of revenue in the quarter

 

 

Copyright 2022 Porch Group, Inc. All rights reserved FY 2021 Earnings Call Product Deep Dives

 

 

Copyright 2022 Porch Group, Inc. All rights reserved Porch Platform Consumer Experience Embedded Transactions Data Platform Proprietary Insights 23

 

 

Copyright 2022 Porch Group, Inc. All rights reserved Consumer App Demo Onboarding 24

 

 

Copyright 2022 Porch Group, Inc. All rights reserved Consumer App Demo Welcome 25 TC22

 

 

Copyright 2022 Porch Group, Inc. All rights reserved Consumer App Demo Checklist 26

 

 

Copyright 2022 Porch Group, Inc. All rights reserved Consumer App Demo My home 27 H o me Inspection Report

 

 

Copyright 2022 Porch Group, Inc. All rights reserved Consumer App Demo Contacts 28

 

 

Copyright 2022 Porch Group, Inc. All rights reserved Looking Ahead: The App for your Home 29

 

 

Copyright 2022 Porch Group, Inc. All rights reserved FY 2021 Earnings Call M&A Deep Dives

 

 

Copyright 2022 Porch Group, Inc. All rights reserved (1) Companies include acquisitions from the first half of 2021: Homeowners of America, iRoofing , Palm - Tech, Rynoh and V12. Recent acquisitions are accelerating as part of Porch 31 ~6% ~28% 2020 Average Growth Rate 2021 Average Growth Rate Growth in Revenue (1)

 

 

Copyright 2022 Porch Group, Inc. All rights reserved 2015 2017 2018 Series 1 Porch has a track record of improving growth post acquisition 19 % CAGR 2 years prior to acquisition 45 % growth 2018 Growth in Revenue 15 % CAGR 3 years prior to acquisition Growth in Revenue 32 2017 2020 2021 Series 1 19 % CAGR 3 years prior to acquisition 35 % growth 2021 Growth in GWP Growth in Revenue 2017 2020 2021 Growth in Policies 26 % CAGR 3 years prior to acquisition 50 % CAGR past 3 years 2018 2021 2022 ISN acquired Q3 2017 HOA acquired Q2 2021 Rynoh acquired Q2 2021 AHP acquired Q3 2021 Floify acquired Q4 2021 2017 2020 2021 41 % growth 2021 41 % growth 2021

 

 

Copyright 2022 Porch Group, Inc. All rights reserved RWS Acquisition Strengthens Porch’s Warranty and Inspection Capabilities Company Overview • Residential Warranty Services (“RWS”), based in Carmel, Indiana, is a national provider of home warranty products and inspector - centric software and services. • Distributes solutions through a network of real estate agents and >1,000 home inspectors. • Non - core assets have been carved out and remain with the previous owner and subject to post - closing co - marketing agreements. Strategic Rationale x Enhances Porch’s inspector offerings: x Additional software modules x Complimentary marketing and back - office services x Unique 90 - day warranty product that inspectors provide to consumers x Opportunity to provide inspectors discounted 90 - day warranty instead of free software x Both comprehensive and limited home warranty products distributed through the real estate agent channel x Porch Moving Concierge will offer existing inspectors and real estate agents added value for customers 33

 

 

Copyright 2022 Porch Group, Inc. All rights reserved RWS Offers an Attractive Addition to Porch’s Capabilities Transaction Summary • Definitive Agreements signed February 28, 2022 with closing expected in early Q2 2022 subject to certain closing conditions • Total closing consideration of $33M represents a ~3X 2022 full year estimated revenue of ~$10M. ~$8M revenue impact expected to Porch in 2022. • Revenue is recurring and we expect growth in - line with Porch's long - term targets • Expect to be slightly Adjusted EBITDA positive in 2022 • Consideration includes: • $29M of cash, of which $4.95M was paid at signing • $4M in Porch stock • Contingent consideration tied to performance of recently launched business line 34

 

 

Copyright 2022 Porch Group, Inc. All rights reserved FY 2021 Earnings Call Targeted Future Milestones

 

 

Copyright 2022 Porch Group, Inc. All rights reserved Porch’s Key Target Milestones 36 2021 $600M GWP 166% YoY Revenue Growth 2022 2024 2023 2 nd half positive Adj. EBITDA Full year positive Adj. EBITDA $1.5B revenue $320M Revenue Mid - term revenue target Disclaimer: See Porch’s Q4 and full year 2021 earnings press release for a reconciliation of Adjusted EBITDA (loss) as a perc ent age of revenue and Contribution Margin to their most directly comparable GAAP financial measures; 2022 Estimated revenue and GWP includes the amount of revenue expected from '22 acquisitions to be recorded in the '22 year: RWS ( $7. 5M) and CSE (+$10M based on the expectation of a mid 2022 close date)

 

 

Copyright 2022 Porch Group, Inc. All rights reserved ~51% ~ 41% ~ 8% 41% Contribution Margin in 2021 demonstrates profit potential 37 B2B (51%) Largely software sales and support to companies Consumer (41%) Largely consumer sales and support teams 2021 Expenses Cost of Revenue Sales & Marketing Fixed expenses 2021 Expenses 1 2021 Sales & Marketing Investments 1 Key Product & Technology Investments Corporate (8%) • Data platform build - out and integrations across Porch • Consumer app and digital experiences • Additional modules across verticals • Integration of data into insurance pricing • SOX and public company - related investments (1) Excludes non - cash expenses

 

 

Copyright 2022 Porch Group, Inc. All rights reserved $320M ~$1.5B - $200 $400 $600 $800 $1000 $1200 $1400 $1600 2022E Revenue Insurance Expansion Grow Current Software Verticals Enter New Software Verticals Mover Marketing Mid-term Target 2 3 4 Porch’s Path To $1.5 Billion Mid - Term Revenue Target Expand our insurance business: Enter new states, grow our product offerings, and convert at a higher rate to Porch customers 1 Grow in current software verticals: Sell software and services to more companies in existing verticals and increasing both B2B SaaS and B2B2C transaction revenue 2 Enhance and expand mover marketing offering: Continue to develop new products and services to brands to help them effectively reach movers 38 1 Enter new software verticals: Expand software offering to new home service verticals either organically or via M&A 4 3 ~$500M ~$400M ~$150M ~$150M

 

 

Copyright 2022 Porch Group, Inc. All rights reserved FY 2021 Earnings Call Q&A

 

 

Copyright 2022 Porch Group, Inc. All rights reserved FY 2021 Earnings Call Appendix

 

 

Copyright 2022 Porch Group, Inc. All rights reserved Balance Sheet Cash and Restricted Cash as of Dec 31, 2021: $324M • Primary use of cash expected for M&A • Well positioned to support investments; vertical software systems, Insurtech, data platform & consumer experience Total Long - Term Debt as of Dec 31, 2021: $414.6M • $425M of convertible note issued in September 2021 and due September 2026 that the Company may settle with cash, shares of the Company’s common stock, or any combination of cash and shares of the Company’s common stock • $600K Other notes Balance Sheet well positioned for growth 41

 

 

Copyright 2022 Porch Group, Inc. All rights reserved Capital Structure • Total common shares issued and outstanding as of December 31, 2021: 98.0M and 1.8M private warrants outstanding • In addition to the above, when team RSUs vest or team options both vest and are exercised, it will be added to total shares outstanding above. This relates to pre - SPAC Porch options and RSUs which rolled over and the ~8M share MIP pool from the SPAC merger agreement, some of which will be granted soon with long - term vesting and some of which may be granted in future years. Capital Structure Update 42

 

 

Copyright 2022 Porch Group, Inc. All rights reserved 1. Vertical software leader to key home service companies with low churn and high NPS 2. Large and ideal consumer audience provided via software companies, with low acquisition costs 3. Unique, substantial, and valuable property data 4. Large insurance operation with CAC, pricing, data, and value prop advantages 5. Proven team with strong track record 6. Massive and expanding addressable TAM 7. Strong financial results with fast revenue growth as well as strong and improving margins 8. Positioned for long - term leadership in the home: SaaS, insurance, warranty, moving, and homeownership 1 2 3 4 5 6 7 8 Porch Group Investment Highlights 43