Porch Group, Inc. (“Porch” or “the
Company”) (NASDAQ: PRCH), a leading vertical software
company reinventing the home services industry, today reported
financial results for the first quarter ended March 31, 2021.
First Quarter 2021 Financial ResultsTotal
revenue for the first quarter of 2021 was $26.7 million, an
increase of 77% from $15.1 million in the first quarter of 2020.
When adjusting for past divestitures by the Company, year-over-year
growth was 112%, up from $12.6 million in the first quarter of 2020
pro forma. The increase in total revenue was driven by selling
software to more companies, by significantly increasing both the
B2B SaaS fees and transaction revenue generated per company, and
acquisitions.
Comparing to the first quarter of 2020 adjusting for past
divestitures, cost of revenue as a percentage of total revenue for
the first quarter 2021 was 78% compared to 80% in the same year-ago
period and contribution margin was 41%, up from 5% in the same
year-ago period.
GAAP net loss for the first quarter of 2021 total $65.1 million,
driven primarily by remeasurement of the earnout liability and
private warrant liability related to Porch’s SPAC merger, as well
as non-cash stock-based compensation. Adjusted EBITDA loss, a
non-GAAP metric, for the first quarter of 2021 totaled $9.6 million
(or -36% of total revenue), an improvement from Adjusted EBITDA
loss of $10.8 million (or -71% of total revenue) in the first
quarter of 2020.
As of March 31, 2021, cash, cash equivalents, and restricted
cash totaled $233.4 million.
First Quarter 2021 Key Performance Indicators
(KPIs)Software and services to companies:
- Average number of companies increased to 13,995 from 11,157 in
Q4 2020
- Average revenue per company per month increased approximately
32% to $637 from $484 in Q1 2020
Monetized services for consumers:
- Number of monetized services was 182,779 in Q1 2021, up
approximately 20% as compared to Q1 2020
- Average revenue per monetized service was $92 approximately
flat from Q1 2020
M&A highlights from the first quarter include Porch
acquiring V12 on January 12, 2021 as well as other small software
companies to expand the vertical markets we serve, and signing
definitive agreements to acquire Homeowners of America (which was
closed on April 6, 2021).
Management Commentary“In the first quarter, our
strong results demonstrated our ability to execute on our strategy
to drive growth and expand our business through organic growth and
acquisitions,” said Matt Ehrlichman, founder, chairman and CEO.
“For the quarter, our total revenue increased by 112% compared to
Q1 2020 pro forma net of past divestitures, giving us even greater
confidence in the trajectory of our business and growth outlook for
2021. We are performing well against the key strategic areas of our
business, with insurance at the core of our synergistic platform.
Our InsurTech division provides us with fundamental advantages and
positions us in a unique spot with our durable and transformational
capabilities, and we are focused on capitalizing on our market
opportunity and driving sustained returns. I’m exceptionally proud
of our team’s hard work and commitment to building a truly great
and enduring company that benefits all of our valued
stakeholders.”
Full Year 2021 Financial OutlookPorch provides
guidance based on current market conditions and expectations.
For the full year of 2021, Porch increased its revenue outlook
from $175 million to $178 million, representing approximately 147%
year-over-year revenue growth. Porch continues to expect
approximately 25% of 2021 total revenue to be from B2B SaaS fees,
approximately 65% of revenue from B2B2C move-related services which
includes recurring insurance revenue, and approximately 10% of
revenues from post-move services. Porch reiterated its 2021
guidance for contribution margin, defined as total revenue less all
variable expense, of 40%, an improvement from 31% and 19% in 2020
and 2019 respectively, pro forma adjusted for past divestitures.
The Company introduced guidance for revenue less cost of revenue of
approximately 72% for 2021. Porch continues to expect Adjusted
EBITDA margin of -10% to -16% for the full year of 2021, which is
an improvement from -26% in 2020 and -57% in 2019 pro forma
adjusted for past divestitures.
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.
Conference
Call Porch
management will host a conference call today (May 17, 2021) 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.
To access the webinar by telephone, please see below:
Or One tap mobile:U.S.: +14086380968,,88683232630#,,,,*810400#
US or +16699006833,,88683232630#,,,,*810400#
Or join by phone:Dial (for higher quality, dial a number based
on your current location):US: +1 408 638 0968 or +1 669 900 6833 or
+1 253 215 8782 or +1 346 248 7799 or +1 646 876 9923 or +1 301 715
8592 or +1 312 626 6799 Webinar ID: 886 8323
2630Passcode: 810400
International numbers available 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
GroupSeattle-based Porch
Group, the vertical software platform for the
home, provides software and services to more than 11,150 home
services companies such as home inspectors,
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,
moving,
security, TV/internet,
home repair and improvement, and
more. To learn more about Porch, visit
porchgroup.com or
porch.com.
Forward-Looking StatementsCertain 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’s 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, are inherently uncertain. Factors that may cause actual
results to differ materially from current expectations include, but
are not limited to: (1) the ability to recognize the anticipated
benefits of Porch’s December 2020 business combination (the
“Merger”) with PropTech Acquisition Corporation (“PropTech”), which
may be affected by, among other things, competition and the ability
of the combined company to grow and manage growth profitably,
maintain key commercial relationships and retain its management and
key employees; (2) expansion plans and opportunities, including
future and pending acquisitions or additional business
combinations; (3) costs related to the Merger and being a public
company; (4) litigation, complaints, and/or adverse publicity; (5)
the impact of changes in consumer spending patterns, consumer
preferences, local, regional and national economic conditions,
crime, weather, demographic trends and employee availability; (6)
privacy and data protection laws, privacy or data breaches, or the
loss of data; (7) the impact of the COVID-19 pandemic and its
effect on the business and financial conditions of Porch; and (8)
other risks and uncertainties described in Porch’s most recent
annual report on Form 10-K and quarterly report on Form 10-Q, filed
with the Securities and Exchange Commission (the “SEC”), 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. 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 MeasuresSome of the
financial information and data contained in this press release,
such as Adjusted EBITDA, Adjusted EBITDA margin and contribution
margin, has not been prepared in accordance with United States
generally accepted accounting principles (“GAAP”). Porch defines
Adjusted EBITDA as net income (loss) plus interest expense, net,
income tax expense (benefit), other expense, net, and 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 margin is defined as Adjusted
EBITDA as a percentage of total revenue. Contribution margin is
defined as revenue less all variable expenses, including cost of
revenue, market, and sales. See the reconciliation table below for
more details regarding these non-GAAP measurements, including the
reconciliation of historical non-GAAP figures to the nearest
comparable GAAP measure.
Porch uses these non-GAAP measures to compare Porch’s
performance to that of prior periods for budgeting and planning
purposes. Porch believes that the use of these non-GAAP financial
measures provides an additional tool for investors to use in
evaluating projected operating results and trends in and in
comparing Porch’s financial measures with other similar companies,
many of which present similar non-GAAP financial measures to
investors. Porch's method of determining these non-GAAP measures
may be different from other companies' methods and, therefore, may
not be comparable to those used by other companies and Porch does
not recommend the sole use of these non-GAAP measures to assess its
financial performance. Porch management does not consider these
non-GAAP measures in isolation or as an alternative to financial
measures determined in accordance with GAAP.
You should review the following reconciliation of non-GAAP
measures to the nearest comparable GAAP measures, and not rely on
any single financial measure to evaluate Porch’s business:
|
|
|
|
|
|
|
|
|
|
March
31, |
|
March
31, |
|
|
|
2021 |
|
2020 |
|
Net loss |
|
$ |
(65,101 |
) |
|
$ |
(18,367 |
) |
|
Interest expense |
|
|
1,223 |
|
|
|
3,086 |
|
|
Income tax (benefit) expense |
|
|
(350 |
) |
|
|
21 |
|
|
Depreciation and amortization |
|
|
2,463 |
|
|
|
1,789 |
|
|
Other expense, net |
|
|
(83 |
) |
|
|
1,874 |
|
|
Non-cash long-lived asset impairment charge |
|
|
68 |
|
|
|
167 |
|
|
Non-cash stock-based compensation |
|
|
16,723 |
|
|
|
369 |
|
|
Non-cash bonus expense |
|
|
290 |
|
|
|
— |
|
|
Revaluation of contingent consideration |
|
|
(355 |
) |
|
|
(80 |
) |
|
Revaluation of earnout liability |
|
|
18,770 |
|
|
|
— |
|
|
Revaluation of private warrant liability |
|
|
15,910 |
|
|
|
— |
|
|
Acquisition and related (income) expense |
|
|
840 |
|
|
|
371 |
|
|
Adjusted
EBITDA (loss) |
|
$ |
(9,602 |
) |
|
$ |
(10,770 |
) |
|
Adjusted
EBITDA (loss) as a percentage of revenue |
|
|
(36 |
)% |
|
|
(71 |
)% |
|
|
|
|
|
|
|
|
|
|
|
Investor Relations Contact:Cody Slach, Matt
GloverGateway Group, Inc. (949) 574-3860PRCH@gatewayir.com
Porch Press contact:Jordan SchmidtGateway
Group, Inc. (949) 386-6332PRCH@gatewayir.com
Porch Group, Inc.
Condensed Consolidated Statements of
Operations(In thousands, except share and per
share data)
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
March 31, |
|
|
2021 |
|
2020 |
|
Revenue |
$ |
26,742 |
|
|
$ |
15,074 |
|
|
Operating
expenses: |
|
|
|
|
|
|
Cost of revenue |
|
5,930 |
|
|
|
4,099 |
|
|
Selling and marketing |
|
14,638 |
|
|
|
12,853 |
|
|
Product and technology |
|
11,789 |
|
|
|
7,352 |
|
|
General and administrative |
|
24,016 |
|
|
|
4,156 |
|
|
Total
operating expenses |
|
56,373 |
|
|
|
28,460 |
|
|
Operating
loss |
|
(29,631 |
) |
|
|
(13,386 |
) |
|
Other income
(expense): |
|
|
|
|
|
|
Interest expense |
|
(1,223 |
) |
|
|
(3,086 |
) |
|
Change in fair value of earnout liability |
|
(18,770 |
) |
|
|
— |
|
|
Change in fair value of private warrant liability |
|
(15,910 |
) |
|
|
— |
|
|
Other income (expense), net |
|
83 |
|
|
|
(1,874 |
) |
|
Total other
income (expense) |
|
(35,820 |
) |
|
|
(4,960 |
) |
|
Loss before
income taxes |
|
(65,451 |
) |
|
|
(18,346 |
) |
|
Income tax
(benefit) expense |
|
(350 |
) |
|
|
21 |
|
|
Net
loss |
$ |
(65,101 |
) |
|
$ |
(18,367 |
) |
|
|
|
|
|
|
|
|
Net loss
attributable per share to common stockholders: |
|
|
|
|
|
|
Basic |
$ |
(0.76 |
) |
|
$ |
(0.53 |
) |
|
Diluted |
$ |
(0.76 |
) |
|
$ |
(0.53 |
) |
|
|
|
|
|
|
|
|
Weighted-average shares used in computing net loss attributable per
share to common stockholders: |
|
|
|
|
|
|
Basic |
|
85,331,575 |
|
|
|
34,965,300 |
|
|
Diluted |
|
85,331,575 |
|
|
|
34,965,300 |
|
|
|
|
|
|
|
|
|
Porch Group,
Inc.Condensed Consolidated Balance
Sheets(In thousands)
|
|
|
|
December 31,
2020 |
|
|
March 31, 2021 |
|
(Restated) |
Assets |
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
222,948 |
|
|
$ |
196,046 |
|
Accounts receivable, net |
|
|
9,629 |
|
|
|
4,268 |
|
Prepaid expenses and other current assets |
|
|
7,869 |
|
|
|
4,080 |
|
Restricted cash |
|
|
10,435 |
|
|
|
11,407 |
|
Total current assets |
|
|
250,881 |
|
|
|
215,801 |
|
Property,
equipment, and software, net |
|
|
5,328 |
|
|
|
4,593 |
|
Goodwill |
|
|
50,120 |
|
|
|
28,289 |
|
Intangible
assets, net |
|
|
22,715 |
|
|
|
15,961 |
|
Long-term
insurance commissions receivable |
|
|
4,748 |
|
|
|
3,365 |
|
Other
assets |
|
|
444 |
|
|
|
378 |
|
Total assets |
|
$ |
334,236 |
|
|
$ |
268,387 |
|
|
|
|
|
|
|
|
Liabilities and Stockholders Equity |
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
Accounts payable |
|
$ |
6,384 |
|
|
$ |
9,203 |
|
Accrued expenses and other current liabilities |
|
|
15,268 |
|
|
|
9,905 |
|
Deferred revenue |
|
|
4,346 |
|
|
|
5,208 |
|
Refundable customer deposit |
|
|
2,026 |
|
|
|
2,664 |
|
Current portion of long-term debt |
|
|
7,480 |
|
|
|
4,746 |
|
Total current liabilities |
|
|
35,504 |
|
|
|
31,726 |
|
Long-term
debt |
|
|
42,624 |
|
|
|
43,237 |
|
Refundable
customer deposit, non-current |
|
|
396 |
|
|
|
529 |
|
Earnout
liability, at fair value |
|
|
43,193 |
|
|
|
50,238 |
|
Private
warrant liability, at fair value |
|
|
47,444 |
|
|
|
31,534 |
|
Other
liabilities (includes $2,869 and $3,549 at fair value,
respectively) |
|
|
3,068 |
|
|
|
3,798 |
|
Total liabilities |
|
|
172,229 |
|
|
|
161,062 |
|
Commitments
and contingencies |
|
|
|
|
|
|
Stockholders
equity |
|
|
|
|
|
|
Common
stock, $0.0001 par value: |
|
|
8 |
|
|
|
8 |
|
Authorized shares 400,000,000 and 400,000,000 |
|
|
|
|
|
|
Issued and outstanding shares 91,455,732 and 81,669,151 |
|
|
|
|
|
|
Additional
paid-in capital |
|
|
544,606 |
|
|
|
424,823 |
|
Accumulated
deficit |
|
|
(382,607 |
) |
|
|
(317,506 |
) |
Total stockholders equity |
|
|
162,007 |
|
|
|
107,325 |
|
Total liabilities and stockholders equity |
|
$ |
334,236 |
|
|
$ |
268,387 |
|
|
|
|
|
|
|
|
Porch Group,
Inc.Consolidated Statements of Cash Flows
(In thousands)
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
|
March 31, |
|
|
2021 |
|
2020 |
Cash
flows from operating activities: |
|
|
|
|
|
|
Net loss |
|
$ |
(65,101 |
) |
|
$ |
(18,367 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities |
|
|
|
|
|
|
Depreciation and amortization |
|
|
2,463 |
|
|
|
1,789 |
|
Loss on sale and impairment of long-lived assets |
|
|
68 |
|
|
|
167 |
|
Loss (gain) on extinguishment of debt |
|
|
— |
|
|
|
247 |
|
Loss on remeasurement of debt |
|
|
— |
|
|
|
454 |
|
Loss on remeasurement of warrants |
|
|
15,910 |
|
|
|
1,079 |
|
Loss (gain) on remeasurement of contingent consideration |
|
|
(355 |
) |
|
|
(80 |
) |
Loss on remeasurement of earnout liability |
|
|
18,770 |
|
|
|
— |
|
Stock-based compensation |
|
|
16,835 |
|
|
|
672 |
|
Interest expense (non-cash) |
|
|
311 |
|
|
|
1,089 |
|
Other |
|
|
(225 |
) |
|
|
167 |
|
Change in operating assets and liabilities, net of acquisitions and
divestitures |
|
|
|
|
|
|
Accounts receivable |
|
|
(846 |
) |
|
|
559 |
|
Prepaid expenses and other current assets |
|
|
441 |
|
|
|
281 |
|
Long-term insurance commissions receivable |
|
|
(1,383 |
) |
|
|
(174 |
) |
Accounts payable |
|
|
(8,090 |
) |
|
|
1,414 |
|
Accrued expenses and other current liabilities |
|
|
2,625 |
|
|
|
1,651 |
|
Deferred revenue |
|
|
(1,362 |
) |
|
|
136 |
|
Refundable customer deposits |
|
|
(837 |
) |
|
|
(880 |
) |
Contingent consideration - business combination |
|
|
(1,663 |
) |
|
|
|
Other |
|
|
(496 |
) |
|
|
158 |
|
Net cash used in operating activities |
|
|
(22,935 |
) |
|
|
(9,638 |
) |
Cash
flows from investing activities: |
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(34 |
) |
|
|
(84 |
) |
Capitalized internal use software development costs |
|
|
(798 |
) |
|
|
(890 |
) |
Acquisitions, net of cash acquired |
|
|
(22,882 |
) |
|
|
— |
|
Net cash used in investing activities |
|
|
(23,714 |
) |
|
|
(974 |
) |
Cash
flows from financing activities: |
|
|
|
|
|
|
Proceeds from debt issuance, net of fees |
|
|
— |
|
|
|
1,940 |
|
Repayments of principal and related fees |
|
|
(150 |
) |
|
|
(401 |
) |
Proceeds from issuance of redeemable convertible preferred stock,
net of fees |
|
— |
|
|
|
4,714 |
|
Proceeds from exercises of warrants |
|
|
89,771 |
|
|
|
— |
|
Proceeds from exercises of stock options |
|
|
355 |
|
|
|
1 |
|
Income tax withholdings paid upon vesting of restricted stock
units |
|
|
(16,997 |
) |
|
|
— |
|
Settlement of contingent consideration related to a business
combination |
|
|
(400 |
) |
|
|
— |
|
Net cash provided by financing activities |
|
|
72,579 |
|
|
|
6,254 |
|
Change in cash, cash equivalents, and restricted
cash |
|
$ |
25,930 |
|
|
$ |
(4,358 |
) |
Cash, cash equivalents, and restricted cash, beginning of
period |
|
$ |
207,453 |
|
|
$ |
7,179 |
|
Cash, cash equivalents, and restricted cash end of
period |
|
$ |
233,383 |
|
|
$ |
2,821 |
|
|
|
|
|
|
|
|
Porch (NASDAQ:PRCHW)
Historical Stock Chart
From Jun 2024 to Jul 2024
Porch (NASDAQ:PRCHW)
Historical Stock Chart
From Jul 2023 to Jul 2024