Doma's Q3 2022 Results Show Significant Progress Toward Profitability; Expects to Achieve Positive Adjusted EBITDA Earlier in 2023 than Previously Communicated, Despite Challenging Market Conditions

November 10, 2022 at 4:10 PM EST
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Third Quarter 2022 Business Highlights(1):

  • Total revenue of $108 million, down (13)% versus Q2 2022
  • Retained premiums and fees of $43 million, down (13)% versus Q2 2022
  • Gross profit of $7 million, up 3% versus Q2 2022
  • Adjusted gross profit of $12 million, up 7% versus Q2 2022
  • Purchase closed orders down (11)% versus Q2 2022, Refinance closed orders down (25)% versus Q2 2022, and Total closed orders down (19)% versus Q2 2022

SAN FRANCISCO--(BUSINESS WIRE)--Nov. 10, 2022-- Doma Holdings, Inc. (NYSE: DOMA) ("Doma" or the "Company"), a leading force for disruptive change in the real estate industry, today reported quarterly financial results and key operating data for the three and nine months ended September 30, 2022(2). Doma’s results, while impacted by this year's extraordinarily challenging housing market conditions, demonstrate the Company's ability to adapt the business and drive value for all parties involved in a real estate transaction under even the most challenging of cycles. Doma is now committed to accelerating its path to profitability and achieving positive adjusted EBITDA earlier in 2023 than previously communicated.

"We know how important reaching adjusted EBITDA profitability is, especially as we're facing a set of circumstances that seem to be pointing the housing market toward recession," said Max Simkoff, CEO of Doma. "We believe we are the only company in our space with the proven technology and distribution opportunities to meaningfully drive transactions for homeowners that are better, faster, and cheaper. It is more important now than it ever has been to continue to deliver on our mission and to do so at scale, which is why we are committed to achieving adjusted EBITDA profitability sooner than the late 2023 timeline which we had previously communicated."

Doma's financial performance in the third quarter was challenged by the cumulative effect of four consecutive 75 basis point rate hikes this year, high inflation, broken global supply chains, and broader geopolitical concerns which have all contributed to the near doubling of 30-year fixed mortgage rates versus this time last year. Despite these strong market headwinds, Doma's ability to adapt to even the most difficult external conditions is highlighted by its third quarter $13 million adjusted EBITDA improvement compared to Q2, driven by significant expense reductions in Q2 and Q3. These expense reductions are expected to continue to contribute to an upward trajectory in adjusted EBITDA in Q4, but the Company also anticipates strong market headwinds to continue to challenge its ability to generate Retained Premiums and Fees. As a result, Doma is revising its adjusted EBITDA guidance for the full year 2022, expecting to fall between negative $135 million and negative $140 million, versus the negative $100 million to negative $120 million previously communicated. This revised 2022 guidance will not impact Doma's commitment to become adjusted EBITDA positive in 2023 and the Company is squarely focused on the most scalable and cost effective distribution of its technology solutions to customers in line with how the market continues to evolve.

"Given our laser focus on profitability, we will continue to prioritize investments in areas that we believe will drive the most long-term value for all our stakeholders, while ensuring those investments have a focus on profitability and cash generation, over growth," said Mike Smith, Chief Financial Officer at Doma. "While we are updating our adjusted EBITDA guidance for 2022, we remain committed to adjustments and investment in the business that are not only scalable and will keep us on our path to profitability but that best serve the needs of customers in this difficult housing market."

(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 the United States (“GAAP”) to the nearest measures prepared in accordance with GAAP have been provided in this press release in the accompanying tables. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

(2) 

Doma completed its business combination with Capitol Investment Corp. V ("Capitol") on July 28, 2021. The financial results and key operating data included in this third quarter release include operating results of Doma prior to completion of the business combination and operating results of the combined company subsequent to completion of the business combination.

2022 Full Year Outlook (3):

  • Non-GAAP Financial Measures
    • Doma revises adjusted EBITDA guidance to between negative $135 million and negative $140 million
    • Doma intends to be adjusted EBITDA positive sooner than late 2023

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 United States generally accepted accounting principles ("GAAP"). Retained premiums and fees is defined as revenue less premiums retained by third-party agents. Adjusted gross profit is defined as gross profit (loss), adjusted to exclude the impact of depreciation and amortization. Adjusted EBITDA is defined as net income (loss) before interest, income taxes, depreciation and amortization, and further adjusted to exclude the impact of stock-based compensation, severance costs, goodwill impairment and the change in fair value of warrant and sponsor covered shares liabilities. Doma believes that the use of retained premiums and fees, adjusted gross profit and adjusted EBITDA provides additional tools to assess operational performance and trends in, and in comparing Doma's financial measures with, other similar companies, many of which present similar non-GAAP financial measures to investors. Doma’s non-GAAP financial measures may be different from non-GAAP financial measures used by other companies. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial measures determined in accordance with GAAP. Because of the limitations of non-GAAP financial measures, you should consider the non-GAAP financial measures presented herein in conjunction with Doma’s financial statements and the related notes thereto. Please refer to the non-GAAP reconciliations in this press release for a reconciliation of these non-GAAP financial measures to the most comparable financial measure prepared in accordance with GAAP.

Conference Call Information

Doma will host a conference call at 5:00 PM Eastern Time on Tuesday, November 10, to present its third quarter 2022 financial results.

Dial-in Details: To access the call by phone, please go to this link (https://register.vevent.com/register/BIae0c54666f4949a589c0e4263d178c4b), 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 Holdings, Inc.

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.

(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.

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 December 31, 2021 and any subsequent reports filed by Doma from time to time with the U.S. Securities and Exchange Commission (the “SEC”).

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 September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

(in thousands, except for open and closed order numbers)

Key operating data:

 

 

 

 

 

 

 

Opened orders

 

21,509

 

 

 

52,867

 

 

 

81,932

 

 

 

135,442

 

Closed orders

 

15,302

 

 

 

35,300

 

 

 

61,448

 

 

 

99,386

 

 

 

 

 

 

 

 

 

GAAP financial data:

 

 

 

 

 

 

 

Revenue (1)

$

107,856

 

 

$

162,582

 

 

$

343,807

 

 

$

420,364

 

Gross profit (2)

$

7,355

 

 

$

28,302

 

 

$

21,632

 

 

$

81,232

 

Net loss (3)

$

(84,113

)

 

$

(34,270

)

 

$

(192,791

)

 

$

(69,327

)

Non-GAAP financial data (4):

 

 

 

 

 

 

 

Retained premiums and fees

$

42,715

 

 

$

70,986

 

 

$

143,426

 

 

$

193,249

 

Adjusted gross profit

$

11,606

 

 

$

30,280

 

 

$

32,866

 

 

$

88,937

 

Ratio of adjusted gross profit to retained premiums and fees

 

27

%

 

 

43

%

 

 

23

%

 

 

46

%

Adjusted EBITDA

$

(30,232

)

 

$

(20,109

)

 

$

(118,527

)

 

$

(35,291

)

__________________

(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 employees 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 September 30,

 

 

Nine Months Ended September 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

(in thousands)

 

 

(in thousands)

 

Revenue

$

107,856

 

 

$

162,582

 

 

$

343,807

 

 

$

420,364

 

Minus:

 

 

 

 

 

 

 

 

 

 

 

Premiums retained by third-party agents

 

65,141

 

 

 

91,596

 

 

 

200,381

 

 

 

227,115

 

Retained premiums and fees

$

42,715

 

 

$

70,986

 

 

$

143,426

 

 

$

193,249

 

Minus:

 

 

 

 

 

 

 

 

 

 

 

Direct labor

 

20,220

 

 

 

23,948

 

 

 

71,908

 

 

 

62,829

 

Provision for claims

 

4,665

 

 

 

6,685

 

 

 

15,586

 

 

 

16,741

 

Depreciation and amortization

 

4,251

 

 

 

1,978

 

 

 

11,234

 

 

 

7,705

 

Other direct costs (1)

 

6,224

 

 

 

10,073

 

 

 

23,066

 

 

 

24,742

 

Gross Profit

$

7,355

 

 

$

28,302

 

 

$

21,632

 

 

$

81,232

 

__________________

(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 September 30,

 

 

Nine Months Ended September 30,

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

(in thousands)

 

 

(in thousands)

 

Gross Profit

$

7,355

 

 

$

28,302

 

 

$

21,632

 

 

$

81,232

 

Adjusted for:

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

4,251

 

 

 

1,978

 

 

 

11,234

 

 

 

7,705

 

Adjusted Gross Profit

$

11,606

 

 

$

30,280

 

 

$

32,866

 

 

$

88,937

 

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 September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

(in thousands)

 

(in thousands)

Net loss (GAAP)

$

(84,113

)

 

$

(34,270

)

 

$

(192,791

)

 

$

(69,327

)

Adjusted for:

 

 

 

 

 

 

 

Depreciation and amortization

 

4,251

 

 

 

1,978

 

 

 

11,234

 

 

 

7,705

 

Interest expense

 

4,584

 

 

 

4,531

 

 

 

13,280

 

 

 

12,341

 

Income taxes

 

425

 

 

 

170

 

 

 

746

 

 

 

506

 

EBITDA

$

(74,853

)

 

$

(27,591

)

 

$

(167,531

)

 

$

(48,775

)

Adjusted for:

 

 

 

 

 

 

 

Stock-based compensation

 

7,746

 

 

 

3,004

 

 

 

27,394

 

 

 

9,006

 

Severance costs

 

4,567

 

 

 

—

 

 

 

8,395

 

 

 

—

 

Goodwill impairment

 

33,746

 

 

 

—

 

 

 

33,746

 

 

 

—

 

Change in fair value of Warrant and Sponsor Covered shares liabilities

 

(1,438

)

 

 

4,478

 

 

 

(20,531

)

 

 

4,478

 

Adjusted EBITDA

$

(30,232

)

 

$

(20,109

)

 

$

(118,527

)

 

$

(35,291

)

The following table reconciles our adjusted gross profit to our adjusted EBITDA, for the periods indicated:

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

 

(in thousands)

 

(in thousands)

Adjusted Gross Profit

$

11,606

 

 

$

30,280

 

 

$

32,866

 

 

$

88,937

 

Minus:

 

 

 

 

 

 

 

Customer acquisition costs

 

10,824

 

 

 

14,870

 

 

 

41,602

 

 

 

36,956

 

Other indirect costs (1)

 

31,014

 

 

 

35,519

 

 

 

109,791

 

 

 

87,272

 

Adjusted EBITDA

$

(30,232

)

 

$

(20,109

)

 

$

(118,527

)

 

$

(35,291

)

__________________

(1) 

Includes corporate support, research and development, and other operating costs.

 

Doma Holdings, Inc.

Consolidated Statements of Operations

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

(In thousands, except share and per share information)

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Revenues:

 

 

 

 

 

 

 

Net premiums written (1)

$

94,488

 

 

$

141,491

 

 

$

299,080

 

 

$

358,754

 

Escrow, other title-related fees and other

 

12,627

 

 

 

20,452

 

 

 

43,106

 

 

 

59,092

 

Investment, dividend and other income

 

741

 

 

 

639

 

 

 

1,621

 

 

 

2,518

 

Total revenues

$

107,856

 

 

$

162,582

 

 

$

343,807

 

 

$

420,364

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

Premiums retained by Third-Party Agents (2)

$

65,141

 

 

$

91,596

 

 

$

200,381

 

 

$

227,115

 

Title examination expense

 

3,709

 

 

 

5,289

 

 

 

14,836

 

 

 

15,643

 

Provision for claims

 

4,665

 

 

 

6,685

 

 

 

15,586

 

 

 

16,741

 

Personnel costs

 

60,481

 

 

 

62,410

 

 

 

211,507

 

 

 

159,829

 

Other operating expenses

 

20,656

 

 

 

21,693

 

 

 

67,047

 

 

 

53,038

 

Goodwill impairment

 

33,746

 

 

 

—

 

 

 

33,746

 

 

 

—

 

Total operating expenses

$

188,398

 

 

$

187,673

 

 

$

543,103

 

 

$

472,366

 

 

 

 

 

 

 

 

 

Loss from operations

$

(80,542

)

 

$

(25,091

)

 

$

(199,296

)

 

$

(52,002

)

 

 

 

 

 

 

 

 

Other (expense) income:

 

 

 

 

 

 

 

Change in fair value of Warrant and Sponsor Covered Shares liabilities

 

1,438

 

 

 

(4,478

)

 

 

20,531

 

 

 

(4,478

)

Interest expense

 

(4,584

)

 

 

(4,531

)

 

 

(13,280

)

 

 

(12,341

)

Loss before income taxes

$

(83,688

)

 

$

(34,100

)

 

$

(192,045

)

 

$

(68,821

)

 

 

 

 

 

 

 

 

Income tax expense

 

(425

)

 

 

(170

)

 

 

(746

)

 

 

(506

)

Net loss

$

(84,113

)

 

$

(34,270

)

 

$

(192,791

)

 

$

(69,327

)

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

Net loss per share attributable to stockholders - basic and diluted

$

(0.26

)

 

$

(0.14

)

 

$

(0.59

)

 

$

(0.54

)

Weighted average shares outstanding common stock - basic and diluted

 

326,820,954

 

 

 

245,003,754

 

 

 

325,207,884

 

 

 

128,105,954

 

__________________

(1) 

Net premiums written includes revenues from a related party of $34.8 million and $30.3 million during the three months ended September 30, 2022 and 2021, respectively. Net premiums written includes revenues from a related party of $96.1 million and $81.9 million during the nine months ended September 30, 2022 and 2021, respectively.

(2) 

Premiums retained by Third-Party Agents includes expenses associated with a related party of $27.9 million and $24.8 million during the three months ended September 30, 2022 and 2021, respectively. Premiums retained by Third-Party Agents includes expenses associated with a related party of $77.5 million and $66.6 million during the nine months ended September 30, 2022 and 2021, respectively.

 

Doma Holdings, Inc.

Consolidated Balance Sheets

(In thousands, except share information)

September 30, 2022

 

December 31, 2021

Assets

 

 

 

Cash and cash equivalents

$

186,400

 

 

$

379,702

 

Restricted cash

 

2,965

 

 

 

4,126

 

Investments:

 

 

 

Fixed maturities

 

 

 

Held-to-maturity debt securities, at amortized cost (net of allowance for credit losses of $433 at September 30, 2022 and $0 at December 31, 2021)

 

46,132

 

 

 

67,164

 

Available-for-sale debt securities, at fair value (amortized cost $48,399 at September 30, 2022 and $0 at December 31, 2021)

 

47,584

 

 

 

—

 

Mortgage loans

 

302

 

 

 

2,022

 

Other long-term investments

 

325

 

 

 

325

 

Total investments

$

94,343

 

 

$

69,511

 

Receivables (net of allowance for credit losses of $1,428 at September 30, 2022 and $1,082 at December 31, 2021)

 

10,469

 

 

 

15,498

 

Prepaid expenses, deposits and other assets

 

11,558

 

 

 

15,692

 

Lease right-of-use assets

 

27,636

 

 

 

—

 

Fixed assets (net of accumulated depreciation of $29,650 at September 30, 2022 and $19,543 at December 31, 2021)

 

63,558

 

 

 

45,953

 

Title plants

 

14,533

 

 

 

13,952

 

Goodwill

 

77,741

 

 

 

111,487

 

Total assets

$

489,203

 

 

$

655,921

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

Accounts payable

$

3,441

 

 

$

6,930

 

Accrued expenses and other liabilities

 

34,955

 

 

 

54,149

 

Lease liabilities

 

29,089

 

 

 

—

 

Senior secured credit agreement, net of debt issuance costs and original issue discount

 

151,383

 

 

 

141,769

 

Liability for loss and loss adjustment expenses

 

83,791

 

 

 

80,267

 

Warrant liabilities

 

1,040

 

 

 

16,467

 

Sponsor Covered Shares liability

 

312

 

 

 

5,415

 

Total liabilities

$

304,011

 

 

$

304,997

 

 

 

 

 

Stockholders’ equity:

 

 

 

Common stock, 0.0001 par value; 2,000,000,000 shares authorized at September 30, 2022; 327,872,190 and 323,347,806 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively

 

33

 

 

 

33

 

Additional paid-in capital

 

571,167

 

 

 

543,070

 

Accumulated deficit

 

(385,369

)

 

 

(192,179

)

Accumulated other comprehensive income

 

(639

)

 

 

—

 

Total stockholders’ equity

$

185,192

 

 

$

350,924

 

Total liabilities and stockholders’ equity

$

489,203

 

 

$

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 30,
2020

 

December 31,
2020

 

March 31,
2021

 

June 30,
2021

 

September 30,
2021

 

December 31,
2021

 

March 31,
2022

 

June 30,
2022

 

September 30,
2022

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net premiums written

$

103,587

 

 

$

98,870

 

 

$

107,992

 

 

$

109,271

 

 

$

141,491

 

 

$

116,598

 

 

$

95,666

 

 

$

108,926

 

 

$

94,488

 

Escrow, other title-related fees and other

 

16,742

 

 

 

17,977

 

 

 

18,575

 

 

 

20,065

 

 

 

20,452

 

 

 

20,493

 

 

 

16,113

 

 

 

14,366

 

 

 

12,627

 

Investment, dividend and other income

 

743

 

 

 

663

 

 

 

1,229

 

 

 

650

 

 

 

639

 

 

 

588

 

 

 

428

 

 

 

452

 

 

 

741

 

Total revenues

$

121,072

 

 

$

117,510

 

 

$

127,796

 

 

$

129,986

 

 

$

162,582

 

 

$

137,679

 

 

$

112,207

 

 

$

123,744

 

 

$

107,856

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premiums retained by Third-Party Agents

$

67,024

 

 

$

64,011

 

 

$

70,338

 

 

$

65,181

 

 

$

91,596

 

 

$

71,330

 

 

$

60,602

 

 

$

74,638

 

 

$

65,141

 

Title examination expense

 

4,624

 

 

 

4,393

 

 

 

4,853

 

 

 

5,500

 

 

 

5,289

 

 

 

6,495

 

 

 

5,981

 

 

 

5,146

 

 

 

3,709

 

Provision for claims

 

5,242

 

 

 

5,272

 

 

 

3,249

 

 

 

6,807

 

 

 

6,685

 

 

 

4,594

 

 

 

4,611

 

 

 

6,310

 

 

 

4,665

 

Personnel costs

 

36,197

 

 

 

38,874

 

 

 

43,464

 

 

 

53,954

 

 

 

62,410

 

 

 

78,306

 

 

 

77,793

 

 

 

73,233

 

 

 

60,481

 

Other operating expenses

 

10,210

 

 

 

12,149

 

 

 

14,165

 

 

 

17,181

 

 

 

21,693

 

 

 

26,912

 

 

 

22,754

 

 

 

23,637

 

 

 

20,656

 

Goodwill impairment

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

33,746

 

Total operating expenses

$

123,297

 

 

$

124,699

 

 

$

136,069

 

 

$

148,623

 

 

$

187,673

 

 

$

187,637

 

 

$

171,741

 

 

$

182,964

 

 

$

188,398

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

$

(2,225

)

 

$

(7,189

)

 

$

(8,273

)

 

$

(18,637

)

 

$

(25,091

)

 

$

(49,958

)

 

$

(59,534

)

 

$

(59,220

)

 

$

(80,542

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in fair value of warrant and Sponsor Covered Shares liabilities

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(4,478

)

 

 

11,169

 

 

 

13,900

 

 

 

5,193

 

 

 

1,438

 

Interest expense

 

(1,193

)

 

 

(1,151

)

 

 

(3,360

)

 

 

(4,451

)

 

 

(4,531

)

 

 

(4,519

)

 

 

(4,207

)

 

 

(4,489

)

 

 

(4,584

)

Loss before income taxes

$

(3,418

)

 

$

(8,340

)

 

$

(11,633

)

 

$

(23,088

)

 

$

(34,100

)

 

$

(43,308

)

 

$

(49,841

)

 

$

(58,516

)

 

$

(83,688

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

(204

)

 

 

(223

)

 

 

(125

)

 

 

(211

)

 

 

(170

)

 

 

(421

)

 

 

(185

)

 

 

(136

)

 

 

(425

)

Net loss

$

(3,622

)

 

$

(8,563

)

 

$

(11,758

)

 

$

(23,299

)

 

$

(34,270

)

 

$

(43,729

)

 

$

(50,026

)

 

$

(58,652

)

 

$

(84,113

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 30,
2020

 

 

December 31,
2020

 

 

March 31,
2021

 

 

June 30,
2021

 

 

September 30,
2021

 

 

December 31,
2021

 

 

March 31,
2022

 

 

June 30,
2022

 

 

September 30,
2022

 

Revenue

$

121,072

 

 

$

117,510

 

 

$

127,796

 

 

$

129,986

 

 

$

162,582

 

 

$

137,679

 

 

$

112,207

 

 

$

123,744

 

 

$

107,856

 

Minus:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premiums retained by Third-Party Agents

 

67,024

 

 

 

64,011

 

 

 

70,338

 

 

 

65,181

 

 

 

91,596

 

 

 

71,330

 

 

 

60,602

 

 

 

74,638

 

 

 

65,141

 

Retained premiums and fees

$

54,048

 

 

$

53,499

 

 

$

57,458

 

 

$

64,805

 

 

$

70,986

 

 

$

66,349

 

 

$

51,605

 

 

$

49,106

 

 

$

42,715

 

Minus:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct labor

 

14,892

 

 

 

17,050

 

 

 

17,979

 

 

 

20,902

 

 

 

23,948

 

 

 

26,787

 

 

 

27,798

 

 

 

23,890

 

 

 

20,220

 

Provision for claims

 

5,242

 

 

 

5,272

 

 

 

3,249

 

 

 

6,807

 

 

 

6,685

 

 

 

4,594

 

 

 

4,611

 

 

 

6,310

 

 

 

4,665

 

Depreciation and amortization

 

1,221

 

 

 

2,579

 

 

 

2,707

 

 

 

3,021

 

 

 

1,978

 

 

 

2,615

 

 

 

3,236

 

 

 

3,747

 

 

 

4,251

 

Other direct costs(1)

 

6,314

 

 

 

4,186

 

 

 

7,109

 

 

 

7,561

 

 

 

10,073

 

 

 

10,322

 

 

 

8,826

 

 

 

8,016

 

 

 

6,224

 

Gross Profit

$

26,379

 

 

$

24,412

 

 

$

26,414

 

 

$

26,514

 

 

$

28,302

 

 

$

22,031

 

 

$

7,134

 

 

$

7,143

 

 

$

7,355

 

__________________

(1) 

Includes title examination expense, office supplies, and premium and other taxes

Adjusted gross profit

 

Three Months Ended

 

(in thousands)

September 30,
2020

 

 

December 31,
2020

 

 

March 31,
2021

 

 

June 30,
2021

 

 

September 30,
2021

 

 

December 31,
2021

 

 

March, 31,
2022

 

 

June 30,
2022

 

 

September 30,
2022

 

Gross Profit

$

26,379

 

 

$

24,412

 

 

$

26,414

 

 

$

26,514

 

 

$

28,302

 

 

$

22,031

 

 

$

7,134

 

 

$

7,143

 

 

$

7,355

 

Adjusted for:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

1,221

 

 

 

2,579

 

 

 

2,707

 

 

 

3,021

 

 

 

1,978

 

 

 

2,615

 

 

 

3,236

 

 

 

3,747

 

 

 

4,251

 

Adjusted Gross Profit

$

27,600

 

 

$

26,991

 

 

$

29,121

 

 

$

29,535

 

 

$

30,280

 

 

$

24,646

 

 

$

10,370

 

 

$

10,890

 

 

$

11,606

 
 

Adjusted EBITDA

 

Three Months Ended

(in thousands)

September 30,
2020

 

December 31,
2020

 

March 31,
2021

 

June 30,
2021

 

September 30,
2021

 

December 31,
2021

 

March, 31,
2022

 

June 30,
2022

 

September 30,
2022

Net loss (GAAP)

$

(3,622

)

 

$

(8,563

)

 

$

(11,758

)

 

$

(23,299

)

 

$

(34,270

)

 

$

(43,729

)

 

$

(50,026

)

 

$

(58,652

)

 

$

(84,113

)

Adjusted for:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

1,221

 

 

 

2,579

 

 

 

2,707

 

 

 

3,021

 

 

 

1,978

 

 

 

2,615

 

 

 

3,236

 

 

 

3,747

 

 

 

4,251

 

Interest expense

 

1,193

 

 

 

1,151

 

 

 

3,360

 

 

 

4,451

 

 

 

4,531

 

 

 

4,519

 

 

 

4,207

 

 

 

4,489

 

 

 

4,584

 

Income taxes

 

204

 

 

 

223

 

 

 

125

 

 

 

211

 

 

 

170

 

 

 

421

 

 

 

185

 

 

 

136

 

 

 

425

 

EBITDA

$

(1,004

)

 

$

(4,610

)

 

$

(5,566

)

 

$

(15,616

)

 

$

(27,591

)

 

$

(36,174

)

 

$

(42,398

)

 

$

(50,280

)

 

$

(74,853

)

Adjusted for:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

355

 

 

 

1,550

 

 

 

2,289

 

 

 

3,713

 

 

 

3,004

 

 

 

11,040

 

 

 

11,393

 

 

 

8,255

 

 

 

7,746

 

Severance costs

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,828

 

 

 

4,567

 

Goodwill impairment

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

33,746

 

Change in fair value of warrant and Sponsor Covered Shares liabilities

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

4,478

 

 

 

(11,169

)

 

 

(13,900

)

 

 

(5,193

)

 

 

(1,438

)

Adjusted EBITDA

$

(649

)

 

$

(3,060

)

 

$

(3,277

)

 

$

(11,903

)

 

$

(20,109

)

 

$

(36,303

)

 

$

(44,905

)

 

$

(43,390

)

 

$

(30,232

)

 

Investor Contact: Beatriz Bartolome | Head of Investor Relations for Doma | ir@doma.com
Media Contact: Camilla Whitmore | Lead, Public Relations for Doma | press@doma.com

Source: Doma Holdings, Inc.