Doma's Q2 2022 Results Show Resilience Amidst Continued Housing Market Headwinds; Reaffirms 2022 Adjusted EBITDA Guidance and Commitment to Deliver Positive Adjusted EBITDA by the End of 2023
Second Quarter 2022 Business Highlights(1):
-
Total revenue of
$124 million , up 10% versus Q1 2022 -
Retained premiums and fees of
$49 million , down (5)% versus Q1 2022 -
Gross profit of
$7 million , flat versus Q1 2022 -
Adjusted gross profit of
$11 million , up 5% versus Q1 2022 - Purchase closed orders up 16% versus Q1 2022, Refinance closed orders down (47)% versus Q1 2022, and Total closed orders down (31)% versus Q1 2022
"In the face of heightened cyclical challenges within the mortgage and housing market, I am confident Doma will be recognized as one of the most agile companies to adapt to evolving market conditions, while still remaining focused on our vision of making the home closing experience better, faster, and more affordable," said
Doma's financial performance in the second quarter was delivered against the backdrop of a mortgage market that saw overall mortgage demand fall to the lowest level in 22 years, with purchase mortgage applications declining 14% from Q1 2022 to Q2 2022, and where purchase transaction cancellations reached 15% in June, the highest level since April of 2020. Doma's unique value proposition is highlighted by its strong performance in purchase transactions which were up 16% quarter over quarter. In anticipation of further market challenges throughout the remainder of the year, Doma took additional steps in Q2 2022 to protect its path to achieve positive Adjusted EBITDA by the end of 2023. These actions included further cost reductions amidst a narrower focus on a set of strategic home purchase initiatives. Chief among these priorities include the acceleration of additional purchase transactions onto the Doma Intelligence platform (also referred to as Doma for Purchase) and the development of additional product features within Doma for Purchase for select Enterprise referral partners.
"Because of the high degree of volatility in the mortgage market, most of which is being driven by macroeconomic factors outside of Doma's control, we are being strategically selective with our investments and are prudently managing our expenses, including prioritizing profitability and preserving cash over growth," said
Second Quarter 2022 Growth Drivers and Recent Business Highlights
-
Steady progress in the purchase market, demonstrated by purchase orders as of Q2 2022 making up 38% of Doma's direct residential order volume and 66% of its direct Retained Premiums & Fees.
- Added new features and functionality to the Doma Intelligence platform in support of purchase transactions, while ensuring increased quality and efficiency across escrow and fulfillment ahead of an accelerated rollout. Doma expects to have the majority of its purchase transactions on the Doma Intelligence platform by the end of 2023.
- Partnered with several Enterprise referral partners to explore a version of Doma for Purchase that can be offered directly to borrowers as part of the lender's purchase workflow. Doma intends to roll out an initial version of this product with a small group of these Enterprise partners later this year and believes this initiative may unlock an additional distribution channel for Doma for Purchase.
- Continued share gain in the Enterprise channel - which comprises the majority of refinance volumes - evidenced by a net gain in wallet share across Enterprise accounts and the onboarding of several new partners in the quarter.
-
Management reaffirmation of 2022 full year Adjusted EBITDA guidance at the low end of the range, due to continued developing headwinds across the mortgage market that put the Company's previous Retained Premiums & Fees guidance at risk. Management has further affirmed that the Company remains on its previously communicated timeline to achieve positive Adjusted EBITDA by the end of 2023, if not sooner.
-
Took further actions to align cost structure with the commitment to get to positive Adjusted EBITDA by the end of 2023 or earlier, and to reach positive cash flow generation by the end of 2023, including a significant downsizing of corporate support functions and a more streamlined management structure which is expected to result in a third quarter charge of
$3 million and annualized cost savings of$40 million .
-
Took further actions to align cost structure with the commitment to get to positive Adjusted EBITDA by the end of 2023 or earlier, and to reach positive cash flow generation by the end of 2023, including a significant downsizing of corporate support functions and a more streamlined management structure which is expected to result in a third quarter charge of
2022 Full Year Outlook (1):
-
Non-GAAP Financial Measures
-
Doma expects Adjusted EBITDA between negative
$120 million and negative$100 million (3) - Doma intends to reach Adjusted EBITDA positive in 2023
-
Doma expects Adjusted EBITDA between negative
Non-GAAP Financial Measures
Some of the financial information and data contained in this press release, such as retained premiums and fees, adjusted gross profit and adjusted EBITDA, have not been prepared in accordance with
| (1) |
Reconciliations of retained premiums and fees, adjusted gross profit, and the other financial measures used in this press release that are not calculated in accordance with generally accepted accounting principles in |
|
| (2) |
Doma completed its business combination with |
|
| (3) |
With respect to our guidance on adjusted EBITDA, the Company is not able to provide a quantitative reconciliation without unreasonable efforts to the most directly comparable GAAP financial measure, which would be net loss, due to the high variability, complexity and low visibility with respect to certain items such as income taxes and changes in the fair value of Warrant and Sponsor Covered shares liabilities. We expect the variability of these items to have a potentially unpredictable and potentially significant impact on future GAAP financial results, and, as such, we also believe that any reconciliations provided would imply a degree of precision that would be confusing or misleading to investors. |
Conference Call Information
Doma will host a conference call at
Dial-in Details: To access the call by phone, please go to this link (registration link), and you will be provided with dial-in details. To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time.
The live webcast of the call will be accessible on the Company’s website at investor.doma.com. Approximately two hours after conclusion of the live event, an archived webcast of the conference call will be accessible from the Investor Relations section of the Company’s website for twelve months.
About
Doma is a real estate technology company that is disrupting a century-old industry by building an instant and frictionless home closing experience for buyers and sellers. Doma uses proprietary machine intelligence technology and deep human expertise to create a vastly more simple and affordable experience for everyone involved in a residential real estate transaction, including current and prospective homeowners, mortgage lenders, title agents, and real estate professionals. With Doma, what used to take days can now be done in minutes, replacing an arcane and cumbersome process with a digital experience designed for today’s world. To learn more visit doma.com.
Forward-Looking Statements Legend
This press release includes “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 may be identified by the use of words such as "estimate," "plan," "project," "forecast," "intend," "will," "expect," "anticipate," "believe," "seek," "target" or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. The absence of these words does not mean that a statement is not forward-looking. Such statements are based on the beliefs of, as well as assumptions made by information currently available to Doma management. These forward-looking statements include, but are not limited to, statements regarding estimates and forecasts of financial and performance metrics, projections of market opportunity, total addressable market ("TAM"), market share and competition. These statements are based on various assumptions, whether or not identified in this press release, and on the current expectation of Doma’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict, will differ from assumptions and are beyond the control of Doma.
These forward-looking statements are subject to a number of risks and uncertainties, including changes in business, market, financial, political and legal conditions; risks relating to the uncertainty of the projected financial information with respect to Doma; future global, regional or local economic, political, market and social conditions, including due to the COVID-19 pandemic; the development, effects and enforcement of laws and regulations, including with respect to the title insurance industry; Doma’s ability to manage its future growth or to develop or acquire enhancements to its platform; the effects of competition on Doma’s future business; the outcome of any potential litigation, government and regulatory proceedings, investigations and inquiries; and those other factors described in Part I, Item 1A - “Risk Factors” of our Annual Report on Form 10-K for the year ended
If any of these risks materialize or Doma’s assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that Doma does not presently know or that Doma currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect Doma’s expectations, plans or forecasts of future events and views as of the date of this press release. Doma anticipates that subsequent events and developments will cause Doma’s assessments to change. However, while Doma may elect to update these forward-looking statements at some point in the future, Doma specifically disclaims any obligation to do so, except as required by law. These forward-looking statements should not be relied upon as representing Doma’s assessment as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements.
|
Key Operating and Financial Indicators |
|||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
(in thousands, except for open and closed order numbers) |
||||||||||||||
|
Key operating data: |
|
|
|
|
|
|
|
||||||||
|
Opened orders |
|
25,231 |
|
|
|
41,491 |
|
|
|
60,423 |
|
|
|
82,575 |
|
|
Closed orders |
|
18,799 |
|
|
|
31,436 |
|
|
|
46,146 |
|
|
|
64,086 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
GAAP financial data: |
|
|
|
|
|
|
|
||||||||
|
Revenue (1) |
$ |
123,744 |
|
|
$ |
129,986 |
|
|
$ |
235,951 |
|
|
$ |
257,782 |
|
|
Gross profit (2) |
$ |
7,143 |
|
|
$ |
26,514 |
|
|
$ |
14,277 |
|
|
$ |
52,930 |
|
|
Net loss (3) |
$ |
(58,652 |
) |
|
$ |
(23,299 |
) |
|
$ |
(108,678 |
) |
|
$ |
(35,057 |
) |
|
Non-GAAP financial data (4): |
|
|
|
|
|
|
|
||||||||
|
Retained premiums and fees |
$ |
49,106 |
|
|
$ |
64,805 |
|
|
$ |
100,711 |
|
|
$ |
122,263 |
|
|
Adjusted gross profit |
$ |
10,890 |
|
|
$ |
29,535 |
|
|
$ |
21,260 |
|
|
$ |
58,657 |
|
|
Ratio of adjusted gross profit to retained premiums and fees |
|
22 |
% |
|
|
46 |
% |
|
|
21 |
% |
|
|
48 |
% |
|
Adjusted EBITDA |
$ |
(43,390 |
) |
|
$ |
(11,903 |
) |
|
$ |
(88,295 |
) |
|
$ |
(15,182 |
) |
_________________
| (1) |
Revenue is comprised of (i) net premiums written, (ii) escrow, other title-related fees and other, and (iii) investment, dividend and other income. |
|
| (2) |
Gross profit, calculated in accordance with GAAP, is calculated as total revenue, minus premiums retained by third-party agents, direct labor expense (including mainly personnel expense for certain employee involved in the direct fulfillment of policies) and direct non-labor expense (including mainly title examination expense, provision for claims, and depreciation and amortization). In our consolidated income statements, depreciation and amortization is recorded under the “other operating expenses” caption. |
|
| (3) |
Net loss is made up of the components of revenue and expenses. |
|
| (4) |
Retained premiums and fees, adjusted gross profit and adjusted EBITDA are non-GAAP financial measures. |
Non-GAAP Financial Measures
Retained premiums and fees
The following table reconciles our retained premiums and fees to our gross profit, the most closely comparable GAAP financial measure, for the periods indicated:
|
|
Three Months Ended |
|
Six Months Ended |
||||||||
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
(in thousands) |
|
(in thousands) |
||||||||
|
Revenue |
$ |
123,744 |
|
$ |
129,986 |
|
$ |
235,951 |
|
$ |
257,782 |
|
Minus: |
|
|
|
|
|
|
|
||||
|
Premiums retained by third-party agents |
|
74,638 |
|
|
65,181 |
|
|
135,240 |
|
|
135,519 |
|
Retained premiums and fees |
$ |
49,106 |
|
$ |
64,805 |
|
$ |
100,711 |
|
$ |
122,263 |
|
Minus: |
|
|
|
|
|
|
|
||||
|
Direct labor |
|
23,890 |
|
|
20,902 |
|
|
51,688 |
|
|
38,881 |
|
Provision for claims |
|
6,310 |
|
|
6,807 |
|
|
10,921 |
|
|
10,055 |
|
Depreciation and amortization |
|
3,747 |
|
|
3,021 |
|
|
6,983 |
|
|
5,727 |
|
Other direct costs (1) |
|
8,016 |
|
|
7,561 |
|
|
16,842 |
|
|
14,670 |
|
Gross Profit |
$ |
7,143 |
|
$ |
26,514 |
|
$ |
14,277 |
|
$ |
52,930 |
__________________
| (1) |
Includes title examination expense, office supplies, and premium and other taxes. |
Adjusted gross profit
The following table reconciles our adjusted gross profit to our gross profit, the most closely comparable GAAP financial measure, for the periods indicated:
|
|
Three Months Ended |
|
Six Months Ended |
||||||||
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
|
(in thousands) |
|
(in thousands) |
||||||||
|
Gross Profit |
$ |
7,143 |
|
$ |
26,514 |
|
$ |
14,277 |
|
$ |
52,930 |
|
Adjusted for: |
|
|
|
|
|
|
|
||||
|
Depreciation and amortization |
|
3,747 |
|
|
3,021 |
|
|
6,983 |
|
|
5,727 |
|
Adjusted Gross Profit |
$ |
10,890 |
|
$ |
29,535 |
|
$ |
21,260 |
|
$ |
58,657 |
Adjusted EBITDA
The following table reconciles our adjusted EBITDA to our net loss, the most closely comparable GAAP financial measure, for the periods indicated:
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
(in thousands) |
|
(in thousands) |
||||||||||||
|
Net loss (GAAP) |
$ |
(58,652 |
) |
|
$ |
(23,299 |
) |
|
$ |
(108,678 |
) |
|
$ |
(35,057 |
) |
|
Adjusted for: |
|
|
|
|
|
|
|
||||||||
|
Depreciation and amortization |
|
3,747 |
|
|
|
3,021 |
|
|
|
6,983 |
|
|
|
5,727 |
|
|
Interest expense |
|
4,489 |
|
|
|
4,451 |
|
|
|
8,696 |
|
|
|
7,810 |
|
|
Income taxes |
|
136 |
|
|
|
211 |
|
|
|
321 |
|
|
|
336 |
|
|
EBITDA |
$ |
(50,280 |
) |
|
$ |
(15,616 |
) |
|
$ |
(92,678 |
) |
|
$ |
(21,184 |
) |
|
Adjusted for: |
|
|
|
|
|
|
|
||||||||
|
Stock-based compensation |
|
8,255 |
|
|
|
3,713 |
|
|
|
19,648 |
|
|
|
6,002 |
|
|
Severance costs |
|
3,828 |
|
|
|
— |
|
|
|
3,828 |
|
|
|
— |
|
|
Change in fair value of Warrant and Sponsor Covered shares liabilities |
|
(5,193 |
) |
|
|
— |
|
|
|
(19,093 |
) |
|
|
— |
|
|
Adjusted EBITDA |
$ |
(43,390 |
) |
|
$ |
(11,903 |
) |
|
$ |
(88,295 |
) |
|
$ |
(15,182 |
) |
The following table reconciles our adjusted gross profit to our adjusted EBITDA, for the periods indicated:
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
(in thousands) |
|
(in thousands) |
||||||||||||
|
Adjusted Gross Profit |
$ |
10,890 |
|
|
$ |
29,535 |
|
|
$ |
21,260 |
|
|
$ |
58,657 |
|
|
Minus: |
|
|
|
|
|
|
|
||||||||
|
Customer acquisition costs |
|
14,853 |
|
|
|
12,192 |
|
|
|
30,778 |
|
|
|
22,087 |
|
|
Other indirect costs (1) |
|
39,427 |
|
|
|
29,246 |
|
|
|
78,777 |
|
|
|
51,752 |
|
|
Adjusted EBITDA |
$ |
(43,390 |
) |
|
$ |
(11,903 |
) |
|
$ |
(88,295 |
) |
|
$ |
(15,182 |
) |
__________________
| (1) |
Includes corporate support, research and development, and other operating costs. |
|
|
|||||||||||||||
|
Consolidated Statements of Operations |
|||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
(In thousands, except share and per share information) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
Revenues: |
|
|
|
|
|
|
|
||||||||
|
Net premiums written (1) |
$ |
108,926 |
|
|
$ |
109,271 |
|
|
$ |
204,592 |
|
|
$ |
217,263 |
|
|
Escrow, other title-related fees and other |
|
14,366 |
|
|
|
20,065 |
|
|
|
30,479 |
|
|
|
38,640 |
|
|
Investment, dividend and other income |
|
452 |
|
|
|
650 |
|
|
|
880 |
|
|
|
1,879 |
|
|
Total revenues |
$ |
123,744 |
|
|
$ |
129,986 |
|
|
$ |
235,951 |
|
|
$ |
257,782 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Expenses: |
|
|
|
|
|
|
|
||||||||
|
Premiums retained by Third-Party Agents (2) |
$ |
74,638 |
|
|
$ |
65,181 |
|
|
$ |
135,240 |
|
|
$ |
135,519 |
|
|
Title examination expense |
|
5,146 |
|
|
|
5,500 |
|
|
|
11,127 |
|
|
|
10,353 |
|
|
Provision for claims |
|
6,310 |
|
|
|
6,807 |
|
|
|
10,921 |
|
|
|
10,055 |
|
|
Personnel costs |
|
73,233 |
|
|
|
53,954 |
|
|
|
151,026 |
|
|
|
97,419 |
|
|
Other operating expenses |
|
23,637 |
|
|
|
17,181 |
|
|
|
46,391 |
|
|
|
31,347 |
|
|
Total operating expenses |
$ |
182,964 |
|
|
$ |
148,623 |
|
|
$ |
354,705 |
|
|
$ |
284,693 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Loss from operations |
$ |
(59,220 |
) |
|
$ |
(18,637 |
) |
|
$ |
(118,754 |
) |
|
$ |
(26,911 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Other (expense) income: |
|
|
|
|
|
|
|
||||||||
|
Change in fair value of Warrant and Sponsor Covered Shares liabilities |
|
5,193 |
|
|
|
— |
|
|
|
19,093 |
|
|
|
— |
|
|
Interest expense |
|
(4,489 |
) |
|
|
(4,451 |
) |
|
|
(8,696 |
) |
|
|
(7,810 |
) |
|
Loss before income taxes |
$ |
(58,516 |
) |
|
$ |
(23,088 |
) |
|
$ |
(108,357 |
) |
|
$ |
(34,721 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Income tax expense |
|
(136 |
) |
|
|
(211 |
) |
|
|
(321 |
) |
|
|
(336 |
) |
|
Net loss |
$ |
(58,652 |
) |
|
$ |
(23,299 |
) |
|
$ |
(108,678 |
) |
|
$ |
(35,057 |
) |
|
|
|
|
|
|
|
|
|
||||||||
|
Earnings per share: |
|
|
|
|
|
|
|
||||||||
|
Net loss per share attributable to stockholders - basic and diluted |
$ |
(0.18 |
) |
|
$ |
(0.33 |
) |
|
$ |
(0.34 |
) |
|
$ |
(0.51 |
) |
|
Weighted average shares outstanding common stock - basic and diluted |
|
324,879,934 |
|
|
|
69,944,477 |
|
|
|
324,387,981 |
|
|
|
68,688,288 |
|
__________________
| (1) |
Net premiums written includes revenues from a related party of |
|
| (2) |
Premiums retained by Third-Party Agents includes expenses associated with a related party of |
|
|
|||||||
|
Consolidated Balance Sheets |
|||||||
|
(In thousands, except share information) |
|
|
|
||||
|
Assets |
|
|
|
||||
|
Cash and cash equivalents |
$ |
226,339 |
|
|
$ |
379,702 |
|
|
Restricted cash |
|
2,959 |
|
|
|
4,126 |
|
|
Investments: |
|
|
|
||||
|
Fixed maturities |
|
|
|
||||
|
Held-to-maturity debt securities, at amortized cost (net of allowance for credit losses of |
|
51,307 |
|
|
|
67,164 |
|
|
Available-for-sale debt securities, at fair value (amortized cost |
|
49,966 |
|
|
|
— |
|
|
Mortgage loans |
|
1,132 |
|
|
|
2,022 |
|
|
Other long-term investments |
|
325 |
|
|
|
325 |
|
|
Total investments |
$ |
102,730 |
|
|
$ |
69,511 |
|
|
Receivables (net of allowance for credit losses of |
|
12,910 |
|
|
|
15,498 |
|
|
Prepaid expenses, deposits and other assets |
|
9,250 |
|
|
|
15,692 |
|
|
Lease right-of-use assets |
|
27,979 |
|
|
|
— |
|
|
Fixed assets (net of accumulated depreciation of |
|
59,474 |
|
|
|
45,953 |
|
|
Title plants |
|
13,952 |
|
|
|
13,952 |
|
|
|
|
111,487 |
|
|
|
111,487 |
|
|
Total assets |
$ |
567,080 |
|
|
$ |
655,921 |
|
|
|
|
|
|
||||
|
Liabilities and stockholders’ equity |
|
|
|
||||
|
Accounts payable |
$ |
3,306 |
|
|
$ |
6,930 |
|
|
Accrued expenses and other liabilities |
|
36,487 |
|
|
|
54,149 |
|
|
Lease liabilities |
|
29,222 |
|
|
|
— |
|
|
Senior secured credit agreement, net of debt issuance costs and original issue discount |
|
148,061 |
|
|
|
141,769 |
|
|
Liability for loss and loss adjustment expenses |
|
84,936 |
|
|
|
80,267 |
|
|
Warrant liabilities |
|
2,080 |
|
|
|
16,467 |
|
|
Sponsor Covered Shares liability |
|
709 |
|
|
|
5,415 |
|
|
Total liabilities |
$ |
304,801 |
|
|
$ |
304,997 |
|
|
|
|
|
|
||||
|
Stockholders’ equity: |
|
|
|
||||
|
Common stock, 0.0001 par value; 2,000,000,000 shares authorized at |
|
33 |
|
|
|
33 |
|
|
Additional paid-in capital |
|
563,265 |
|
|
|
543,070 |
|
|
Accumulated deficit |
|
(301,256 |
) |
|
|
(192,179 |
) |
|
Accumulated other comprehensive income |
|
237 |
|
|
|
— |
|
|
Total stockholders’ equity |
$ |
262,279 |
|
|
$ |
350,924 |
|
|
Total liabilities and stockholders’ equity |
$ |
567,080 |
|
|
$ |
655,921 |
|
Quarterly Results of Operations and Other Data
The following tables set forth our selected unaudited quarterly consolidated statements of operations data for each of the quarters indicated. The information for each quarter has been prepared on a basis consistent with our audited consolidated financial statements, and reflect, in the opinion of management, all adjustments, which consist only of a normal, recurring nature that are necessary for a fair statement of the financial information contained in those financial statements. Our historical results are not necessarily indicative of the results that may be expected in the future. The following quarterly financial data should be read in conjunction with our consolidated financial statements.
|
Consolidated Statements of Operations |
|||||||||||||||||||||||||||||||||||
|
|
Three Months Ended |
||||||||||||||||||||||||||||||||||
|
(In thousands) |
|
|
September
|
|
December
|
|
|
|
|
|
September
|
|
December
|
|
|
|
|
||||||||||||||||||
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Net premiums written |
$ |
86,334 |
|
|
$ |
103,587 |
|
|
$ |
98,870 |
|
|
$ |
107,992 |
|
|
$ |
109,271 |
|
|
$ |
141,491 |
|
|
$ |
116,598 |
|
|
$ |
95,666 |
|
|
$ |
108,926 |
|
|
Escrow, other title-related fees and other |
|
13,382 |
|
|
|
16,742 |
|
|
|
17,977 |
|
|
|
18,575 |
|
|
|
20,065 |
|
|
|
20,452 |
|
|
|
20,493 |
|
|
|
16,113 |
|
|
|
14,366 |
|
|
Investment, dividend and other income |
|
707 |
|
|
|
743 |
|
|
|
663 |
|
|
|
1,229 |
|
|
|
650 |
|
|
|
639 |
|
|
|
588 |
|
|
|
428 |
|
|
|
452 |
|
|
Total revenues |
$ |
100,423 |
|
|
$ |
121,072 |
|
|
$ |
117,510 |
|
|
$ |
127,796 |
|
|
$ |
129,986 |
|
|
$ |
162,582 |
|
|
$ |
137,679 |
|
|
$ |
112,207 |
|
|
$ |
123,744 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Premiums retained by Third-Party Agents |
$ |
56,006 |
|
|
$ |
67,024 |
|
|
$ |
64,011 |
|
|
$ |
70,338 |
|
|
$ |
65,181 |
|
|
$ |
91,596 |
|
|
$ |
71,330 |
|
|
$ |
60,602 |
|
|
$ |
74,638 |
|
|
Title examination expense |
|
3,322 |
|
|
|
4,624 |
|
|
|
4,393 |
|
|
|
4,853 |
|
|
|
5,500 |
|
|
|
5,289 |
|
|
|
6,495 |
|
|
|
5,981 |
|
|
|
5,146 |
|
|
Provision for claims |
|
3,040 |
|
|
|
5,242 |
|
|
|
5,272 |
|
|
|
3,249 |
|
|
|
6,807 |
|
|
|
6,685 |
|
|
|
4,594 |
|
|
|
4,611 |
|
|
|
6,310 |
|
|
Personnel costs |
|
32,737 |
|
|
|
36,197 |
|
|
|
38,874 |
|
|
|
43,464 |
|
|
|
53,954 |
|
|
|
62,410 |
|
|
|
78,306 |
|
|
|
77,793 |
|
|
|
73,233 |
|
|
Other operating expenses |
|
10,286 |
|
|
|
10,210 |
|
|
|
12,149 |
|
|
|
14,165 |
|
|
|
17,181 |
|
|
|
21,693 |
|
|
|
26,912 |
|
|
|
22,754 |
|
|
|
23,637 |
|
|
Total operating expenses |
$ |
105,391 |
|
|
$ |
123,297 |
|
|
$ |
124,699 |
|
|
$ |
136,069 |
|
|
$ |
148,623 |
|
|
$ |
187,673 |
|
|
$ |
187,637 |
|
|
$ |
171,741 |
|
|
$ |
182,964 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Loss from operations |
$ |
(4,968 |
) |
|
$ |
(2,225 |
) |
|
$ |
(7,189 |
) |
|
$ |
(8,273 |
) |
|
$ |
(18,637 |
) |
|
$ |
(25,091 |
) |
|
$ |
(49,958 |
) |
|
$ |
(59,534 |
) |
|
$ |
(59,220 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Change in fair value of warrant and Sponsor Covered Shares liabilities |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(4,478 |
) |
|
|
11,169 |
|
|
|
13,900 |
|
|
|
5,193 |
|
|
Interest expense |
|
(1,123 |
) |
|
|
(1,193 |
) |
|
|
(1,151 |
) |
|
|
(3,360 |
) |
|
|
(4,451 |
) |
|
|
(4,531 |
) |
|
|
(4,519 |
) |
|
|
(4,207 |
) |
|
|
(4,489 |
) |
|
Loss before income taxes |
$ |
(6,091 |
) |
|
$ |
(3,418 |
) |
|
$ |
(8,340 |
) |
|
$ |
(11,633 |
) |
|
$ |
(23,088 |
) |
|
$ |
(34,100 |
) |
|
$ |
(43,308 |
) |
|
$ |
(49,841 |
) |
|
$ |
(58,516 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Income tax expense |
|
(241 |
) |
|
|
(204 |
) |
|
|
(223 |
) |
|
|
(125 |
) |
|
|
(211 |
) |
|
|
(170 |
) |
|
|
(421 |
) |
|
|
(185 |
) |
|
|
(136 |
) |
|
Net loss |
|
(6,332 |
) |
|
|
(3,622 |
) |
|
|
(8,563 |
) |
|
|
(11,758 |
) |
|
|
(23,299 |
) |
|
|
(34,270 |
) |
|
|
(43,729 |
) |
|
|
(50,026 |
) |
|
|
(58,652 |
) |
Reconciliation of GAAP to Non-GAAP Measures
The following tables present our reconciliation of GAAP measures to non-GAAP measures for the historical periods indicated.
|
Retained premiums and fees |
||||||||||||||||||||||||||
|
|
Three Months Ended |
|||||||||||||||||||||||||
|
(In thousands) |
|
|
September
|
|
December
|
|
|
|
|
|
September
|
|
December
|
|
|
|
|
|||||||||
|
Revenue |
$ |
100,423 |
|
$ |
121,072 |
|
$ |
117,510 |
|
$ |
127,796 |
|
$ |
129,986 |
|
$ |
162,582 |
|
$ |
137,679 |
|
$ |
112,207 |
|
$ |
123,744 |
|
Minus: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Premiums retained by Third-Party Agents |
|
56,006 |
|
|
67,024 |
|
|
64,011 |
|
|
70,338 |
|
|
65,181 |
|
|
91,596 |
|
|
71,330 |
|
|
60,602 |
|
|
74,638 |
|
Retained premiums and fees |
$ |
44,417 |
|
$ |
54,048 |
|
$ |
53,499 |
|
$ |
57,458 |
|
$ |
64,805 |
|
$ |
70,986 |
|
$ |
66,349 |
|
$ |
51,605 |
|
$ |
49,106 |
|
Minus: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Direct labor |
|
13,898 |
|
|
14,892 |
|
|
17,050 |
|
|
17,979 |
|
|
20,902 |
|
|
23,948 |
|
|
26,787 |
|
|
27,798 |
|
|
23,890 |
|
Provision for claims |
|
3,040 |
|
|
5,242 |
|
|
5,272 |
|
|
3,249 |
|
|
6,807 |
|
|
6,685 |
|
|
4,594 |
|
|
4,611 |
|
|
6,310 |
|
Depreciation and amortization |
|
899 |
|
|
1,221 |
|
|
2,579 |
|
|
2,707 |
|
|
3,021 |
|
|
1,978 |
|
|
2,615 |
|
|
3,236 |
|
|
3,747 |
|
Other direct costs(1) |
|
4,898 |
|
|
6,314 |
|
|
4,186 |
|
|
7,109 |
|
|
7,561 |
|
|
10,073 |
|
|
10,322 |
|
|
8,826 |
|
|
8,016 |
|
Gross Profit |
$ |
21,682 |
|
$ |
26,379 |
|
$ |
24,412 |
|
$ |
26,414 |
|
$ |
26,514 |
|
$ |
28,302 |
|
$ |
22,031 |
|
$ |
7,134 |
|
$ |
7,143 |
__________________
| (1) |
Includes title examination expense, office supplies, and premium and other taxes. |
|
Adjusted gross profit |
||||||||||||||||||||||||||
|
|
Three Months Ended |
|||||||||||||||||||||||||
|
(in thousands) |
|
|
September
|
|
December
|
|
|
|
|
|
September
|
|
December
|
|
|
|
|
|||||||||
|
Gross Profit |
$ |
21,682 |
|
$ |
26,379 |
|
$ |
24,412 |
|
$ |
26,414 |
|
$ |
26,514 |
|
$ |
28,302 |
|
$ |
22,031 |
|
$ |
7,134 |
|
$ |
7,143 |
|
Adjusted for: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
Depreciation and amortization |
|
899 |
|
|
1,221 |
|
|
2,579 |
|
|
2,707 |
|
|
3,021 |
|
|
1,978 |
|
|
2,615 |
|
|
3,236 |
|
|
3,747 |
|
Adjusted Gross Profit |
$ |
22,581 |
|
$ |
27,600 |
|
$ |
26,991 |
|
$ |
29,121 |
|
$ |
29,535 |
|
$ |
30,280 |
|
$ |
24,646 |
|
$ |
10,370 |
|
$ |
10,890 |
Adjusted EBITDA
|
|
Three Months Ended |
||||||||||||||||||||||||||||||||||
|
(in thousands) |
|
|
September
|
|
December
|
|
|
|
|
|
September
|
|
December
|
|
|
|
|
||||||||||||||||||
|
Net loss (GAAP) |
$ |
(6,332 |
) |
|
$ |
(3,622 |
) |
|
$ |
(8,563 |
) |
|
$ |
(11,758 |
) |
|
$ |
(23,299 |
) |
|
$ |
(34,270 |
) |
|
$ |
(43,729 |
) |
|
$ |
(50,026 |
) |
|
$ |
(58,652 |
) |
|
Adjusted for: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Depreciation and amortization |
|
899 |
|
|
|
1,221 |
|
|
|
2,579 |
|
|
|
2,707 |
|
|
|
3,021 |
|
|
|
1,978 |
|
|
|
2,615 |
|
|
|
3,236 |
|
|
|
3,747 |
|
|
Interest expense |
|
1,123 |
|
|
|
1,193 |
|
|
|
1,151 |
|
|
|
3,360 |
|
|
|
4,451 |
|
|
|
4,531 |
|
|
|
4,519 |
|
|
|
4,207 |
|
|
|
4,489 |
|
|
Income taxes |
|
241 |
|
|
|
204 |
|
|
|
223 |
|
|
|
125 |
|
|
|
211 |
|
|
|
170 |
|
|
|
421 |
|
|
|
185 |
|
|
|
136 |
|
|
EBITDA |
$ |
(4,069 |
) |
|
$ |
(1,004 |
) |
|
$ |
(4,610 |
) |
|
$ |
(5,566 |
) |
|
$ |
(15,616 |
) |
|
$ |
(27,591 |
) |
|
$ |
(36,174 |
) |
|
$ |
(42,398 |
) |
|
$ |
(50,280 |
) |
|
Adjusted for: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Stock-based compensation |
|
282 |
|
|
|
355 |
|
|
|
1,550 |
|
|
|
2,289 |
|
|
|
3,713 |
|
|
|
3,004 |
|
|
|
11,040 |
|
|
|
11,393 |
|
|
|
8,255 |
|
|
Severance costs |
|
1,385 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,828 |
|
|
Change in fair value of warrant and Sponsor Covered Shares liabilities |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4,478 |
|
|
|
(11,169 |
) |
|
|
(13,900 |
) |
|
|
(5,193 |
) |
|
Adjusted EBITDA |
$ |
(2,402 |
) |
|
$ |
(649 |
) |
|
$ |
(3,060 |
) |
|
$ |
(3,277 |
) |
|
$ |
(11,903 |
) |
|
$ |
(20,109 |
) |
|
$ |
(36,303 |
) |
|
$ |
(44,905 |
) |
|
$ |
(43,390 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220809005224/en/
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