Porch Group Inc (PRCH) Surges with 79% Revenue Growth in Q4 2023
Total Revenue: $114.6 million, a 79% increase year-over-year.
GAAP Net Loss: Improved to $2.5 million from $35.5 million year-over-year.
Adjusted EBITDA: $11.7 million, a significant rise from a loss of $13.3 million in the prior year.
Gross Written Premium: $112 million with 310 thousand policies in force.
Cash Position: Strong with $397.6 million in cash, cash equivalents, and investments.
Operational Efficiency: Gross loss ratio improved to 36%, combined loss ratio at 49%.
Porch Group Inc (NASDAQ:PRCH), a leading homeowners insurance and vertical software platform, released its 8-K filing on March 7, 2024, revealing a robust performance for the fourth quarter ended December 31, 2023. The company reported a significant increase in total revenue, which reached $114.6 million, marking a 79% surge compared to the previous year. This growth was primarily driven by the Insurance segment, which saw a substantial increase in premium per policy and strategic underwriting actions.
The company's GAAP net loss showed a notable improvement, shrinking to $2.5 million from a substantial $35.5 million loss in the same quarter of the prior year. Adjusted EBITDA stood at $11.7 million, a remarkable turnaround from a loss of $13.3 million in the fourth quarter of 2022. This performance underscores the company's successful cost control measures and operational efficiency, particularly in the Insurance segment.
Financial Highlights and Operational Efficiency
Porch Group's Insurance segment reported a gross written premium of $112 million for the quarter, with approximately 310 thousand policies in force. The segment's performance was bolstered by a 34% increase in premium per policy and a gross loss ratio that improved to 36%, down from 56% in the prior year. The combined loss ratio also saw an improvement, standing at 49%. These metrics reflect the company's effective underwriting actions and the non-renewal of higher-risk policies.
The company's balance sheet remains strong, with $397.6 million in cash, cash equivalents, and investments as of December 31, 2023. This financial stability is further highlighted by the company's operational highlights, which include being approved in 13 states to use Porch's unique property data in insurance pricing, launching new products such as a title software product, and executing a local full-service moving business with higher margins.
Strategic Developments and Future Outlook
Post the balance sheet date, Porch Group signed a business collaboration agreement with Aon Corp. and Aon Re, Inc., which is expected to result in payments to Porch of approximately $25 million upfront and an estimated $5 million over the following four years. Additionally, the company completed the sale of EIG, its insurance agency, for $12.2 million, which is expected to enhance unit economics and profitability.
Looking ahead, Porch Group provides a full-year 2024 guidance with an Adjusted EBITDA profitability target and assumes a 63% gross loss ratio for the full year. The company's management will host a conference call to discuss the fourth quarter results and provide further insights into the company's strategy and outlook.
Porch Group Inc is a vertical software company that is reinventing the home services and insurance industries. With two reportable segments, the Vertical Software segment and the Insurance segment, Porch Group serves a diverse range of customers, including home services companies, consumers, and service providers, offering software, services, and various property-related insurance policies.
For more detailed information on Porch Group Inc's financial performance and future outlook, investors and interested parties are encouraged to visit the Investor Relations section of the company's website at ir.porchgroup.com.
Investor Relations Contact: Lois Perkins, Head of Investor Relations Porch Group, Inc. Loisperkins@porch.com
Explore the complete 8-K earnings release (here) from Porch Group Inc for further details.
This article first appeared on GuruFocus.
