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): May 10, 2022
PORCH GROUP, INC.
(Exact name of registrant as specified in its charter)
411 1st Avenue S., Suite 501 | |
Seattle, Washington | 98104 |
(Address of principal executive offices) | (Zip Code) |
(855) 767-2400
(Registrant’s telephone number, including area code)
2200 1st Avenue S., Suite 300, Seattle, WA 98134
(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 | ||
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 May 10, 2022, Porch Group, Inc. (the “Company”) issued an earnings release announcing financial results for the quarter ended March 31, 2022. 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 May 10, 2022, the Company will host an earnings call at 5:00 p.m. Eastern time to discuss its financial results for the quarter ended March 31, 2022. Live and archived webcasts of the presentation will also be available on the Company’s investor relations website at https://ir.porchgroup.com.
On May 10, 2022, the Company posted supplemental investor materials on its investor relations website. The Company uses its investor relations website as a means of disclosing material non-public information, announcing upcoming investor conferences and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor Porch Group’s investor relations website in addition to following Porch Group press releases, SEC filings and public conference calls and webcasts.
The information in this Current Report on Form 8-K and the exhibit 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 | ||
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: May 10, 2022
Exhibit 99.1
Porch Group Reports First Quarter 2022 Results; Affirms 2022 Guidance
- Reports $62.6 Million of Revenue, up 134% Year-Over-Year -
SEATTLE, May 10, 2022 – Porch Group, Inc. (“Porch”,” Porch Group” or “the Company”) (NASDAQ: PRCH), a leading vertical software company reinventing the home services and insurance industries, today reported first quarter revenues of $62.6 million, compared to first quarter 2021 revenues of $26.7 million, in line with company expectations.
CEO Summary
“Porch is off to a strong start in 2022,” said Matt Ehrlichman, founder and Chief Executive Officer of Porch Group, Inc. “Our vertical software and insurance segments are performing very well and reported substantial revenue increases. This strong performance early in the year gives us confidence in affirming our previously disclosed guidance and highlights why the team is excited about the remainder of the year.”
“Further, we are proud of the continued success in our insurance business, where we now offer our own product in 17 states and have begun filing for price adjustments based on our proprietary data. While only the start, we are pleased to have approvals in Arizona, Georgia and Virginia to leverage insights from Porch Group data such as water heater location data into our underwriting models.”
First Quarter 2022 Financial Results
| ● | Total revenue for the first quarter of 2022 was $62.6 million, an increase of $35.9 million from $26.7 million in the first quarter of 2021. |
| ● | Revenue less cost of revenue for the first quarter of 2022 was $41.4 million or 66.1% of total revenue, compared to $20.8 million or 77.8% of total revenue for the first quarter of 2021. |
| ● | GAAP net loss for the first quarter of 2022 totaled $5.8 million, compared to a GAAP net loss of $65.1 million for the first quarter of 2021. |
| ● | Adjusted EBITDA loss for the first quarter of 2022 totaled $7.1 million or -11.3% of total revenue, compared to an Adjusted EBITDA loss of $9.6 million or -36% of total revenue for the first quarter of 2021. |
Segment Results for the First Quarter 2022
| ● | Vertical Software revenue for the quarter was $34.7 million, revenue less cost of revenue was $24.9 million or 71.9% of Vertical Software revenue and GAAP net loss was $7.2 million. Adjusted EBITDA for the first quarter was $3.0 million or 8.6% of Vertical Software revenue. |
| ● | Insurance revenue for the quarter was $27.9 million, revenue less cost of revenue was $16.4 million or 58.9% of Insurance revenue and GAAP net loss was $364 thousand. Adjusted EBITDA was $3.3 million or 11.8% of Insurance revenue. |
| ● | Insurance gross written premium for the quarter was $102.5 million with 338 thousand policies. |
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First Quarter 2022 and Recent Operational Highlights
| - | Launched in beta embedded insurance into Floify point of sale mortgage software. |
| - | Filed and received approval from 3 states to utilize the first of Porch’s proprietary data in insurance pricing. |
| - | Homeowners of America, a Porch Group subsidiary, continued its nationwide expansion plan, now operating in 17 states. |
| - | Ended the quarter with approximately $303 million in cash and cash equivalents. |
| - | Porch Group Board of Directors unanimously approved a proposal to declassify the Board effective as of the 2024 annual meeting. Additional information on this proposal can be found in the Company’s definitive 2022 proxy statement for its 2022 annual meeting. |
| - | Closed the acquisition of Residential Warranty Services, Inc. (“RWS”) at the start of Q2 2022. |
First Quarter 2022 Key Performance Indicators (KPIs)
Software and services to companies:
| ● | Average companies in quarter increased to 25,512 from 13,995 in the first quarter of 2021. |
| ● | Average revenue per account per month in quarter increased 28.3% to $817 from $637 in the first quarter of 2021. |
Monetized services for consumers:
| ● | Number of monetized services in quarter was 254,249 in the first quarter of 2022, up from 182,779 in the first quarter of 2021. |
| ● | Average revenue per monetized service in quarter was $176, a 91.3% increase from $92 in the first quarter of 2021. |
Acquisition of Residential Warranty Services
On April 1, 2022, the Company completed its previously announced acquisition of certain businesses relating to home warranty products and inspector-centric software and services from RWS. Total consideration is $33 million, including $29 million of cash, $4 million of Porch Group 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, on February 28, 2022. Full year 2022 revenue impact to Porch Group is expected to be approximately $8 million, with approximately $10 million of expected annualized revenue.
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Full Year 2022 Financial Outlook
Porch provides guidance based on current market conditions and expectations.
Affirmed 2022 Guidance1 | |
Gross Written Premium2 ~$600M | |
Revenue ~$320M | |
Vertical Software Revenue ~$190M | Insurance Revenue ~$130M |
Revenue Less Cost of Revenue ~$210M | |
Adj. EBITDA ~-9% and >-$26.5M | |
1 Guidance includes the impact of announced but not yet closed acquisitions of CSE Insurance (“CSE”)
2 2022 gross written premium guidance is stated as annual run rate as of year-end 2022 and is the total premium written by third-party insurance carriers through EIG, HOA’s insurance operations, and AHP for insurance and warranty policies for the face value of one year’s premium, before deductions for reinsurance and ceding commissions.
Porch is not providing reconciliations of expected Adjusted EBITDA 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 10, 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 Inc, the vertical software platform for the home, provides software and services to more than 25,500 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,
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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.
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
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’s future financial or operating performance. For example, forward-looking statements include projections of future revenue, Adjusted EBITDA (loss), and other metrics, business strategy and plans, and anticipated impacts from pending or completed acquisitions. 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 and subsequent reports filed with the Securities and Exchange Commission (the “SEC”), such as Porch’s quarterly reports on Form 10-Q, 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.
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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, 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 divestitures and certain transaction costs. Adjusted EBITDA (loss) as a percentage of revenue is defined as Adjusted EBITDA (loss) divided by GAAP total revenue. Average revenue per monetized services in quarter is the average revenue generated per monetized service performed in a quarterly period. Average revenue per monetized service in quarter, is defined as total quarterly monetized service revenues generated from monetized services.
Porch Group management uses these non-GAAP financial measures as supplemental measures of the Company’s operating and financial performanc, 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.
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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.
The following table reconciles Adjusted EBITDA (loss) to net loss for the three months ended March 31, 2022 (dollar amounts in thousands):
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PORCH GROUP, INC.
Monetized Services Revenue
(all numbers in thousands, unaudited)
|
| Three Months Ended March 31, | ||||
|
| 2022 |
| 2021 | ||
Monetized services revenue | | $ | 44,771 | | $ | 16,812 |
Other operating revenue | | | 17,790 | | | 9,930 |
Total revenue | | $ | 62,561 | | $ | 26,742 |
PORCH GROUP, INC.
Revenue Less Cost of Revenue
(all numbers in thousands, unaudited)
| | Three Months Ended March 31, 2022 | | ||||||||||
| | Corporate | | Insurance | | Vertical Software | | Consolidated | | ||||
Revenue | | $ | — | | $ | 27,873 | | $ | 34,688 | | $ | 62,561 | |
Less: Cost of revenue | | | — | | | (11,448) | | | (9,741) | | | (21,189) | |
Revenue less cost of revenue | | $ | — | | $ | 16,425 | | $ | 24,947 | | $ | 41,372 | |
Revenue less cost of revenue as a percentage of revenue | | | N/A | | | 59 | % | | 72 | % | | 66 | % |
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PORCH GROUP, INC.
Unaudited Condensed Consolidated Balance Sheets
(all numbers in thousands, except share amounts)
|
| March 31, 2022 |
| December 31, 2021 | ||
Assets |
| | |
| |
|
Current assets |
| |
|
| |
|
Cash and cash equivalents | | $ | 292,373 | | $ | 315,741 |
Accounts receivable, net | |
| 29,996 | |
| 28,767 |
Short-term investments | | | 8,462 | | | 9,251 |
Reinsurance balance due | | | 239,739 | | | 228,416 |
Prepaid expenses and other current assets | |
| 21,087 | |
| 14,338 |
Restricted cash | | | 10,162 | | | 8,551 |
Total current assets | |
| 601,819 | |
| 605,064 |
Property, equipment, and software, net | |
| 8,340 | |
| 6,666 |
Operating lease right-of-use assets | | | 3,922 | | | 4,504 |
Goodwill | |
| 226,576 | |
| 225,654 |
Long-term investments | | | 56,865 | | | 58,324 |
Intangible assets, net | |
| 124,306 | |
| 129,830 |
Restricted cash, non-current | |
| 500 | |
| 500 |
Long-term insurance commissions receivable | | | 9,061 | | | 7,521 |
Other assets | |
| 5,373 | |
| 684 |
Total assets | | $ | 1,036,762 | | $ | 1,038,747 |
| |
|
| |
|
|
Liabilities and Stockholders’ Equity | |
|
| |
|
|
Current liabilities | |
|
| |
|
|
Accounts payable | | $ | 8,016 | | $ | 6,965 |
Accrued expenses and other current liabilities | |
| 35,029 | |
| 37,675 |
Deferred revenue | |
| 198,857 | |
| 201,085 |
Refundable customer deposit | |
| 16,686 | |
| 15,274 |
Current portion of long-term debt | |
| 150 | |
| 150 |
Losses and loss adjustment expense reserves | | | 79,608 | | | 61,949 |
Other insurance liabilities, current | | | 43,049 | | | 40,024 |
Total current liabilities | |
| 381,395 | |
| 363,122 |
Long-term debt | |
| 415,002 | |
| 414,585 |
Operating lease liabilities, non-current | | | 2,267 | | | 2,694 |
Earnout liability, at fair value | | | 2,687 | | | 13,866 |
Private warrant liability, at fair value | | | 5,004 | | | 15,193 |
Other liabilities (includes $12,822 and $9,617 at fair value, respectively) | |
| 15,528 | |
| 12,242 |
Total liabilities | |
| 821,883 | |
| 821,702 |
Commitments and contingencies (Note 12) | |
|
| |
|
|
Stockholders’ equity | |
|
| |
|
|
Common stock, $0.0001 par value: | |
| 10 | |
| 10 |
Authorized shares – 400,000,000 and 400,000,000, respectively | |
|
| |
|
|
Issued and outstanding shares – 98,297,186 and 97,961,597, respectively | | | | | | |
Additional paid-in capital | |
| 647,551 | |
| 641,406 |
Accumulated other comprehensive loss | | | (2,774) | | | (259) |
Accumulated deficit | |
| (429,908) | |
| (424,112) |
Total stockholders’ equity | |
| 214,879 | |
| 217,045 |
Total liabilities and stockholders’ equity | | $ | 1,036,762 | | $ | 1,038,747 |
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PORCH GROUP, INC.
Unaudited Condensed Consolidated Statements of Operations
(all numbers in thousands, except share amounts)
|
| Three Months Ended March 31, | ||||
|
| 2022 |
| 2021 | ||
Revenue | | $ | 62,561 | | $ | 26,742 |
Operating expenses(1): | |
|
| |
|
|
Cost of revenue | |
| 21,189 | |
| 5,930 |
Selling and marketing | |
| 25,743 | |
| 14,638 |
Product and technology | |
| 14,231 | |
| 11,789 |
General and administrative | |
| 26,699 | |
| 24,016 |
Total operating expenses | |
| 87,862 | |
| 56,373 |
Operating loss | |
| (25,301) | |
| (29,631) |
Other income (expense): | |
|
| |
|
|
Interest expense | |
| (2,293) | |
| (1,223) |
Change in fair value of earnout liability | | | 11,179 | | | (18,770) |
Change in fair value of private warrant liability | | | 10,189 | | | (15,910) |
Investment income and realized gains, net of investment expenses | | | 197 | | | — |
Other income, net | |
| 56 | |
| 83 |
Total other income (expense) | |
| 19,328 | |
| (35,820) |
Loss before income taxes | |
| (5,973) | |
| (65,451) |
Income tax benefit | |
| 177 | |
| 350 |
Net loss | | $ | (5,796) | | $ | (65,101) |
| | | | | | |
Loss per share - basic and diluted (Note 14) | | $ | (0.06) | | $ | (0.76) |
| |
|
| |
|
|
Shares used in computing basic and diluted loss per share | |
| 96,074,527 | |
| 85,331,575 |
(1) | Amounts include stock-based compensation expense, as follows: |
| | Three Months Ended March 31, | ||||
|
| 2022 |
| 2021 | ||
Cost of revenue |
| $ | — |
| $ | 1 |
Selling and marketing | |
| 632 | |
| 2,082 |
Product and technology | |
| 1,137 | |
| 2,317 |
General and administrative | |
| 4,085 | |
| 12,435 |
| | $ | 5,854 | | $ | 16,835 |
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PORCH GROUP, INC.
Unaudited Condensed Consolidated Statements of Comprehensive Loss
(all numbers in thousands, audited)
|
| Three Months Ended March 31, | ||||
|
| 2022 |
| 2021 | ||
Net loss | | $ | (5,796) | | $ | (65,101) |
Other comprehensive loss: | |
| | |
| |
Current period change in net unrealized loss, net of tax | | | (2,515) | |
| — |
Comprehensive loss | | $ | (8,311) | | $ | (65,101) |
10
PORCH GROUP, INC.
Unaudited Condensed Consolidated Statements of Stockholders’ Equity (Deficit)
(all numbers in thousands)
| | | | | | | | | | | | | Accumulated | | | ||
| | | | | | | Additional | | | | | Other | | Total | |||
| | Common Stock |
| Paid-in |
| Accumulated |
| Comprehensive |
| Stockholders’ | |||||||
| | Shares | | Amount |
| Capital | | Deficit | | Loss |
| Equity | |||||
Balances as of December 31, 2021 |
| 97,961,597 | | $ | 10 | | $ | 641,406 | | $ | (424,112) | | $ | (259) | | $ | 217,045 |
Net loss |
| — | |
| — | |
| — | |
| (5,796) | |
| — | |
| (5,796) |
Other comprehensive income | | — | |
| — | |
| — | | | — | | | (2,515) | | | (2,515) |
Stock-based compensation |
| — | |
| — | |
| 5,854 | |
| — | |
| — | |
| 5,854 |
Contingent consideration for acquisitions |
| — | |
| — | |
| 530 | | | — | |
| — | |
| 530 |
Vesting of restricted stock awards | | 245,855 | | | — | | | — | | | — | | | — | | | — |
Exercise of stock options |
| 185,685 | |
| — | |
| 473 | | | — | |
| — | |
| 473 |
Income tax withholdings |
| (95,951) | |
| — | |
| (712) | | | — | |
| — | |
| (712) |
Balances as of March 31, 2022 | | 98,297,186 | | $ | 10 | | $ | 647,551 | | $ | (429,908) | | $ | (2,774) | | $ | 214,879 |
| | | | | | | | | | | | | | |
| | | | | | | Additional | | | | | Total | ||
| | Common Stock |
| Paid-in |
| Accumulated |
| Stockholders’ | ||||||
|
| Shares | | Amount |
| Capital | | Deficit | | Equity | ||||
Balances as of December 31, 2020 |
| 81,669,151 | | $ | 8 | | $ | 424,823 | | $ | (317,506) | | $ | 107,325 |
Net loss |
| — | |
| — | |
| — | |
| (65,101) | |
| (65,101) |
Stock-based compensation |
| — | |
| — | |
| 4,462 | |
| — | |
| 4,462 |
Stock-based compensation - earnout | | — | | | — | | | 12,373 | | | — | | | 12,373 |
Issuance of common stock for acquisitions | | 90,000 | | | — | | | 1,169 | | | — | | | 1,169 |
Reclassification of earnout liability upon vesting | | — | | | — | | | 25,815 | | | — | | | 25,815 |
Vesting of restricted stock awards |
| 2,078,102 | |
| — | |
| — | |
| — | |
| — |
Exercise of stock warrants | | 8,087,623 | | | 1 | | | 93,007 | | | — | | | 93,008 |
Exercise of stock options |
| 593,106 | |
| — | |
| 355 | |
| — | |
| 355 |
Income tax withholdings | | (1,062,250) | | | — | | | (16,997) | | | — | | | (16,997) |
Transaction costs | | — | | | — | | | (402) | | | — | | | (402) |
Balances as of March 31, 2021 | | 91,455,732 | | $ | 9 | | $ | 544,605 | | $ | (382,607) | | $ | 162,007 |
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PORCH GROUP, INC.
Unaudited Condensed Consolidated Statements of Cash Flows
(all numbers in thousands)
| | Three Months Ended March 31, | ||||
|
| 2022 |
| 2021 | ||
Cash flows from operating activities: | | |
|
| |
|
Net loss | | $ | (5,796) | | $ | (65,101) |
Adjustments to reconcile net loss to net cash used in operating activities | |
| | |
|
|
Depreciation and amortization | |
| 6,483 | |
| 2,463 |
Amortization of operating lease right-of-use assets | | | 582 | | | 345 |
Loss on sale and impairment of long-lived assets | | | 70 | | | 68 |
Loss (gain) on remeasurement of private warrant liability | |
| (10,189) | |
| 15,910 |
Loss (gain) on remeasurement of contingent consideration | |
| 3,205 | |
| (355) |
Loss (gain) on remeasurement of earnout liability | | | (11,179) | | | 18,770 |
Stock-based compensation | |
| 5,854 | |
| 16,835 |
Amortization of investment premium/accretion of discount, net | | | 566 | | | — |
Net realized losses on investments | | | 68 | | | — |
Interest expense (non-cash) | |
| 1,046 | |
| 311 |
Other | |
| 64 | |
| (225) |
Change in operating assets and liabilities, net of acquisitions and divestitures | |
| | |
|
|
Accounts receivable | |
| (1,296) | |
| (846) |
Reinsurance balance due | | | (11,323) | | | — |
Prepaid expenses and other current assets | |
| (6,749) | |
| 441 |
Accounts payable | |
| 1,051 | |
| (8,090) |
Accrued expenses and other current liabilities | |
| (3,145) | |
| 2,625 |
Losses and loss adjustment expense reserves | | | 17,659 | | | — |
Other insurance liabilities, current | | | 3,025 | | | — |
Deferred revenue | |
| (2,228) | |
| (1,362) |
Refundable customer deposits | |
| 1,412 | |
| (837) |
Contingent consideration - business combination | | | — | | | (1,663) |
Long-term insurance commissions receivable | |
| (1,540) | |
| (1,383) |
Operating lease liabilities, non-current | | | (235) | | | (354) |
Other | |
| (696) | |
| (487) |
Net cash used in operating activities | |
| (13,291) | |
| (22,935) |
Cash flows from investing activities: | |
|
| |
|
|
Purchases of property and equipment | |
| (1,167) | |
| (34) |
Capitalized internal use software development costs | |
| (1,574) | |
| (798) |
Purchases of short-term and long-term investments | |
| (8,835) | |
| — |
Maturities, sales of short-term and long-term investments | | | 8,449 | | | — |
Non-refundable deposit for acquisition | |
| (4,950) | |
| — |
Acquisitions, net of cash acquired | | | — | | | (22,882) |
Net cash used in investing activities | |
| (8,077) | |
| (23,714) |
Cash flows from financing activities: | |
|
| |
|
|
Repayments of principal and related fees | |
| (150) | |
| (150) |
Proceeds from exercises of warrants | |
| — | |
| 89,771 |
Proceeds from exercises of stock options | | | 473 | | | 355 |
Income tax withholdings paid upon vesting of restricted stock units | | | (712) | | | (16,997) |
Settlement of contingent consideration related to a business acquisition | | | — | | | (400) |
Net cash (used) provided by financing activities | |
| (389) | |
| 72,579 |
Net change in cash, cash equivalents, and restricted cash | | $ | (21,757) | | $ | 25,930 |
Cash, cash equivalents, and restricted cash, beginning of period | | $ | 324,792 | | $ | 207,453 |
Cash, cash equivalents, and restricted cash end of period | | $ | 303,035 | | $ | 233,383 |
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