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Porch Group Inc. (PRCH)

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  • HAGENS BERMAN, NATIONAL TRIAL ATTORNEYS, Encourages Porch Group (PRCH) Investors with Losses to Contact Its Attorneys Now, Firm Investigating Possible Securities Law Violations
    GlobeNewswire

    HAGENS BERMAN, NATIONAL TRIAL ATTORNEYS, Encourages Porch Group (PRCH) Investors with Losses to Contact Its Attorneys Now, Firm Investigating Possible Securities Law Violations

    SAN FRANCISCO, April 09, 2021 (GLOBE NEWSWIRE) -- Hagens Berman urges Porch Group Inc. (NASDAQ: PRCH) investors with significant losses to submit your losses now. The firm is investigating possible securities law violations and certain investors may have valuable claims. Visit: www.hbsslaw.com/investor-fraud/PRCH Contact An Attorney Now: PRCH@hbsslaw.com 844-916-0895 Porch Group Inc. (NASDAQ: PRCH) Investigation: The investigation is focused on whether Porch Group has misrepresented its actual leverage and inflated its gross margins. On Apr. 8, 2021, analyst Spruce Point Capital Management published a scathing report entitled “A Porch On A Flimsy Foundation.” According to Spruce Point, Porch “is a classic example of a Company that has never found a business model that makes sense and was in technical default with a going concern warning before using the frothy SPAC market as an opportunity to allow insiders to dump shares.” Spruce Point accuses the company of concealing or obscuring numerous business activities from 2017 – 2021 and faking a partnership service that doesn’t exist. Spruce Point also estimates that Porch understates its true leverage by keeping up to $1.1 billion potential exposure to financial guarantees off its books and artificially inflates its gross margins by engaging in barter transactions. In response, the price of Porch shares sharply fell on Apr. 9, 2021. “We’re focused on investors’ losses and whether Porch Group has cooked its books,” said Reed Kathrein, the Hagens Berman partner leading the investigation. If you are a Porch Group investor and have significant losses, or have knowledge that may assist the firm’s investigation, click here to discuss your legal rights with Hagens Berman. Whistleblowers: Persons with non-public information regarding Porch Group should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email PRCH@hbsslaw.com. About Hagens BermanHagens Berman is a national law firm with nine offices in eight cities around the country and eighty attorneys. The firm represents investors, whistleblowers, workers and consumers in complex litigation. More about the firm and its successes is located at hbsslaw.com. For the latest news visit our newsroom or follow us on Twitter at @classactionlaw. Contact: Reed Kathrein, 844-916-0895

  • Porch Group Closes Homeowners of America Acquisition, Creating One of the Largest InsurTech Companies
    GlobeNewswire

    Porch Group Closes Homeowners of America Acquisition, Creating One of the Largest InsurTech Companies

    SEATTLE, April 06, 2021 (GLOBE NEWSWIRE) -- Porch Group, Inc. ("Porch” or “the Company") (NASDAQ: PRCH), a leading vertical software company reinventing the home services industry, successfully completed its previously announced acquisition of Homeowners of America (HOA), making Porch one of the largest Insurance Technology (InsurTech) companies. HOA is a Managing General Agent and insurance carrier hybrid with high margins and a capital efficient reinsurance strategy which limits retained risk. HOA primarily operates in six states, including Texas, Arizona, North Carolina, South Carolina, Virginia, and Georgia. The company was founded in 2006 in Texas, a $10 billion homeowners insurance market, and was the 12th largest home insurer in Texas in 2019. HOA is licensed to operate in 31 states, positioning it for nationwide expansion as part of Porch. Porch acquired HOA for approximately $100 million, subject to customary purchase price adjustments, of which approximately $21.7 million is payable in Porch common stock. “With HOA’s experienced management team and scale of effective insurance operations, combined with Porch’s homebuyer access and unique property data, we are positioned to scale into our InsurTech ambitions,” said Matt Ehrlichman, Porch founder, chairman and CEO. “We are looking to immediately provide value to current HOA agents and customers through our technology platform and expanded offerings to be more than just an insurance carrier, but the partner for the home. We expect HOA’s fit within our unique vertical software platform will provide rapid, scalable, and profitable growth. The InsurTech space is nascent, and this acquisition demonstrates our commitment to industry leadership.”With the acquisition, Porch seeks to create efficient growth with reduced customer acquisition cost through the homebuyers accessed through its vertical software platform, proprietary property data collection and HOA’s current licensure in 31 states. Porch plans to expand HOA’s Insurtech footprint nationwide through its own insurance offering and HOA’s existing independent agent distribution channels.Combining Porch’s vast access to homebuyers and unique property data with HOA’s strong pricing and claims experience, Porch believes it can become one of the largest InsurTech companies with significant advantages to driving rapid, long-term growth. For the full year 2021, the Company expects over $270 million of pro forma gross written premium between HOA and Porch’s existing insurance agency. Agents and customers currently using HOA services should expect enhanced product offering and expanded opportunities through the Porch vertical technology systems and data. About Porch Group Seattle-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 Statements Certain statements in this press 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, 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 filings with the Securities and Exchange Commission (“SEC”), which are available on the SEC’s website at www.sec.gov. Nothing in this press 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 they are made. Porch does not undertake any duty to update these forward-looking statements, except as may be required by law. Porch Press contact:Jordan SchmidtGateway Group(949) 386-6332PRCH@gatewayir.com Porch Investor Relations contact:Cody Slach, Matt Glover Gateway Group(949) 574-3860PRCH@gatewayir.com

  • Porch Group Reports Strong Fourth Quarter and Full Year 2020 Financial Results
    GlobeNewswire

    Porch Group Reports Strong Fourth Quarter and Full Year 2020 Financial Results

    Company Increases Full Year 2021 Revenue Guidance to $175 Million, Representing 140% Year-over-Year GrowthSEATTLE, March 30, 2021 (GLOBE NEWSWIRE) -- 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, 2020.Fourth Quarter 2020 and Recent Operational HighlightsClosed business combination with PropTech Acquisition Corporation, bringing a leading vertical software and services platform for the home to the public market.Announced four strategic acquisitions (Homeowners of America, V12, PalmTech and iRoofing) that marked the Company’s ambitions in InsurTech and strengthened Porch’s rapidly expanding platform for home service companies and homeowners.Expanded leadership team with key appointments, including Adam Kornick as president of Insurtech, Matthew Cullen as general counsel and secretary, Joshua Steffan as VP and group GM, Inspection and Real Estate, Andrew Beck as head of Contractor Tools SaaS, Malcolm Conner leading Porch’s Home Services group, and Manisha Patel as VP of finance.Fourth Quarter 2020 Financial ResultsTotal revenue for the fourth quarter of 2020 was $19.5 million, an increase of 7% from $18.3 million in the fourth quarter of 2019. When adjusting for past divestitures by the Company, year-over-year growth was 34%, up from $14.5 million in the fourth quarter of 2019 pro forma. The increase in total revenue was driven by selling software to more companies and significantly increasing both the B2B SaaS fees and transaction revenue generated per company.Cost of revenue as a percentage of total revenue for the fourth quarter of 2020 was 22%.Adjusted EBITDA loss, a non-GAAP metric, for the fourth quarter of 2020 totaled $3.2 million (or -17% of total revenue), an improvement from Adjusted EBITDA loss of $9.3 million (or -51% of total revenue) in the fourth quarter of 2019, and an improvement from Adjusted EBITDA loss of $8.1 million (or -56% of total revenue) pro forma adjusted for past divestitures in the fourth quarter of 2019.As of December 31, 2020, cash, cash equivalents, and restricted cash totaled $207.5 million.Full Year 2020 Financial ResultsTotal revenue for the full year 2020 increased 28% to $73.2 million from $56.0 million in 2019 pro forma adjusted for past divestitures. 2019 as-reported total revenue included $77.6 million in revenue contribution from previously divested businesses. The $73.2 million in total revenue for 2020 exceeded the Company’s guidance of $72 million.Cost of revenue as a percentage of total revenue for the full year 2020 was 24%, continuing to demonstrate the high margins of Porch’s vertical software platform.Adjusted EBITDA loss, a non-GAAP metric, for the full year 2020 totaled $17.5 million (or -24% of total revenue), an improvement from Adjusted EBITDA loss of $32.0 million (or -57% of total revenue) in 2019 pro forma adjusted for past divestitures.Fourth Quarter 2020 Key Performance Indicators (KPIs)Software and services to companies:Average number of companies increased to 11,150 from 10,800 in Q3 2020Average revenue per company per month increased 32% to $583 from $450 in Q4 2019Monetized services for consumers:Number of monetized services was approximately 170,000 in Q4 2020, with Porch monetizing insurance on a per sale basis with its in-house insurance agency. This was similar volume of total monetized services in Q4 2019 when Porch was previously monetizing insurance on a per quote basis.Average revenue per monetized service increased 36% to $103 in Q4 2020 from $78 in Q4 2019Management Commentary“The fourth quarter marked a strong finish to a successful and transformative year for Porch,” said Matt Ehrlichman, founder, chairman and CEO. “We delivered strong results for the full year 2020, highlighted by 34% revenue growth when adjusting for past divestitures and a 2x improvement in Adjusted EBITDA margin. Achieving these results in the face of a pandemic and a transformational merger is a testament to our team, our partners, our customers, and the resilience of our operating model.“Overall, our vertical software platform with SaaS and transaction monetization is working extremely well, as evidenced by approximately 85% year-over-year revenue growth rate expected in Q1 2021. We continue to have success generating more revenue per monetized service as we focus on higher value services like insurance. After we close the Homeowners of America acquisition, which is expected to occur in Q2, we plan to expand its footprint beyond the six states it operates in today, which we expect to significantly improve our long-term growth rates and value per monetized service.“We entered 2021 with accelerating momentum, deep competitive moats, a massive $320 billion total addressable market, and a multiple pronged growth strategy, which we expect will enable us to grow rapidly for a long period of time. We believe this is only the beginning of our journey to build a truly great and enduring company.”Full Year 2021 Financial OutlookPorch provides guidance based on current market conditions and expectations. The Company emphasizes that its guidance is subject to various important cautionary factors, including those referenced in the section entitled "Forward-Looking Statements" below. These factors include ongoing risks and uncertainties associated with the COVID-19 pandemic.For the first quarter of 2021, the Company forecasted total revenue to be approximately $23 million, representing approximately 85% growth compared to total revenue in the first quarter 2020 pro forma adjusted for past divestitures.For the full year of 2021, Porch raised its 2021 revenue outlook from $170 million to $175 million, representing 140% 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 expects Adjusted EBITDA margin of -10% to -16% for the full year of 2021, which is an improvement from -24% in 2020 and -57% in 2019 pro forma adjusted for past divestitures.Conference Call Porch management will host a conference call today (March 30, 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 Mobile one-tap:US: +16699006833,,83672374549# or +14086380968,,83672374549# Or Telephone:Dial (for higher quality, dial a number based on your current location): US: +1 669 900 6833 or +1 408 638 0968 or +1 346 248 7799 or +1 253 215 8782 or +1 646 876 9923 or +1 301 715 8592 or +1 312 626 6799 Webinar ID: 836 7237 4549 Passcode: 031990International numbers available: https://gatewayir.zoom.us/u/kbSf25i2nOIf 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 Investor Relations 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.2020 Financial Information; 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 divestitures 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 is not providing reconciliations of expected Adjusted EBITDA, 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 unbailable or dependent on the timing of future events outside of our control.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: Q4 2020 Q4 2019 FY 2020 FY 2019Net loss$(18,060)$(20,480) $(51,609) $(103,319)Interest expense 5,311 6,851 14,734 7,134 Income tax (benefit) expense (1,691) 82 (1,691) 96 Depreciation and amortization 1,623 1,992 6,644 7,377 Other expense, net (4,670) 483 (2,791) 7,966 Non-cash long-lived asset impairment charge 71 1,028 611 1,534 Non-cash stock-based compensation 9,864 359 11,103 34,855 Revaluation of contingent consideration 200 (300) 1,700 (300)Acquisition and related (income) expense 805 697 1,862 7,821 Gain on divestiture of a business — — (1,442) SPAC transaction bonus 3,350 — 3,350 — Adjusted EBITDA (loss)$(3,197)$(9,288) $(17,529) $(36,836)Adjusted EBITDA (loss) from Divested business — (1,176) — (4,807)Proforma Adjusted EBITDA (loss) $(3,197) (8,112) $(17,529) (32,029) FY 2020 FY 2019Revenue$73,216 $77,595 Cost of Revenue 17,562 21,500 Revenue- Cost of Revenue 55,654 56,095 Variable Selling & Marketing and Advertising 32,661 43,942 Contribution Margin$22,993 $12,153 Contribution Margin % of revenue 31% 16%Proforma Contribution Margin — 19%Investor Relations Contact:Gateway Investor RelationsCody Slach, Matt Glover(949) 574-3860PRCH@gatewayir.comPorch Group, Inc. Condensed Consolidated Statements of Operations(In thousands, except share and per share data) 2020 2019 Revenue $73,216 $77,595 Operating expenses(1): Cost of revenue 17,562 21,500 Selling and marketing 41,768 56,220 Product and technology 28,298 30,992 General and administrative 28,387 52,011 (Gain) loss on divestiture of businesses (1,442) 4,994 Total operating expenses 114,573 165,717 Operating loss (41,357) (88,122)Other income (expense): Interest expense (14,734) (7,134)Other income (expense), net 2,791 (7,967)Total other income (expense) (11,943) (15,101)Loss before income taxes (53,300) (103,223)Income tax (benefit) expense (1,691) 96 Net loss $(51,609) $(103,319)Induced conversion of preferred stock (17,284) — Net loss attributable to common stockholders $(68,893) $(103,319) Net loss attributable per share to common stockholders: Basic $(1.90) $(3.31)Diluted $(1.90) $(3.31) Weighted-average shares used in computing net loss attributable per share to common stockholders: Basic 36,344,234 31,170,351 Diluted 36,344,234 31,170,351 Porch Group, Inc.Condensed Consolidated Balance Sheets(In thousands) 2020 2019 Assets Current assets Cash and cash equivalents $196,046 $4,179 Accounts receivable, net 4,661 4,710 Prepaid expenses and other current assets 3,891 1,285 Restricted cash 11,407 — Total current assets 216,005 10,174 Property, equipment, and software, net 4,593 6,658 Goodwill 28,289 18,274 Intangible assets, net 15,961 9,832 Restricted cash, non-current — 3,000 Long-term insurance commissions receivable 3,365 — Other assets 378 530 Total assets $268,591 $48,468 Liabilities and Stockholders’ Equity (Deficit) Current liabilities Accounts payable $8,903 $4,806 Accrued expenses and other current liabilities 9,991 17,071 Accrued acquisition compensation — 8,624 Deferred revenue 4,870 3,333 Refundable customer deposit 2,664 3,167 Current portion of long-term debt (includes $0 and $11,659 at fair value, respectively) 4,746 20,461 Total current liabilities 31,174 57,462 Long-term debt 43,237 40,659 Refundable customer deposit, non-current 529 3,107 Earnout liability, at fair value 50,442 — Other liabilities (includes $3,549 and $6,784 at fair value, respectively) 3,798 7,219 Total liabilities 129,180 108,447 Commitments and contingencies (Note 12) Stockholders’ equity (deficit) Common stock, $0.0001 par value: 8 3 Authorized shares – 400,000,000 and 52,575,160 Issued and outstanding shares – 81,669,151 and 34,197,822 Additional paid-in capital 454,486 203,492 Accumulated deficit (315,083) (263,474)Total stockholders’ equity (deficit) 139,411 (59,979)Total liabilities and stockholders’ equity (deficit) $268,591 $48,468 Porch Group, Inc.Consolidated Statements of Cash Flows (In thousands) 2020 2019 Cash flows from operating activities: Net loss $(51,609) $(103,319)Adjustments to reconcile net loss to net cash used in operating activities Depreciation and amortization 6,644 7,377 Loss on sale and impairment of long-lived assets 895 1,088 Loss (gain) on extinguishment of debt (5,748) 483 Loss on remeasurement of debt 895 6,159 Loss (gain) on divestiture of businesses (1,442) 4,994 Loss on remeasurement of warrants 2,584 2,090 Loss (gain) on remeasurement of contingent consideration 1,700 (300)Stock-based compensation 11,409 35,972 Warrants issued for services — 315 Interest expense (non-cash) 7,488 2,369 Deferred taxes (30) 29 Other (200) 236 Change in operating assets and liabilities, net of acquisitions and divestitures Accounts receivable 16 (1,840)Prepaid expenses and other current assets (2,398) 603 Long-term insurance commissions receivable (3,365) — Accounts payable 3,793 2,361 Accrued expenses and other current liabilities (15,860) 7,704 Deferred revenue 1,868 (803)Refundable customer deposits (3,521) 6,122 Other (1,788) (978)Net cash used in operating activities (48,669) (29,335)Cash flows from investing activities: Purchases of property and equipment (279) (477)Capitalized internal use software development costs (2,601) (4,096)Divestiture of businesses, net of cash disposed — (750)Acquisitions, net of cash acquired (7,791) 116 Net cash used in investing activities (10,671) (5,208)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 66,190 31,300 Repayments of principal and related fees (81,640) (202)Proceeds from issuance of redeemable convertible preferred stock, net of fees 4,714 3,274 Repurchase of stock (42) — Proceeds from exercises of stock options and warrants 911 114 Net cash provided by financing activities 259,614 34,486 Change in cash, cash equivalents, and restricted cash $200,274 $(57)Cash, cash equivalents, and restricted cash, beginning of period $7,179 $7,236 Cash, cash equivalents, and restricted cash end of period $207,453 $7,179