Q1 2021 Porch Group Inc Earnings Call
Be assured me that he was here to assist me in any way to help make this transition a lot smoother the comparative rates between I don't even know how many different companies. It was maybe like 15 or 20 different insurance providers I'll get these calls Brian Hey, This is porch and this is just a friendly reminder of the fact of the rocky.
Go back and see was completed and see what I had to move forward to get done that was tremendous they helped me find my new Internet provider of you spoke about home security options of help with movers helped me to cross our T's and dotting of is to make sure the.
The the little things were taken care of connecting to ADT gainer or I'm connecting you to the home insurance personal could help you so really having in the system working on your behalf. So that was the Big Hill, it's really sped up the process, it's kind of taken that load off buyback there just thoughts.
Okay.
I see all of that kind of like the question.
How much easier for us to not have.
All of it we're in in the back.
It's being done for that.
That sound like VITAS had support while moving through that process.
Of Donaldson.
It took a lot of stress.
Yes.
This this move was more organized the giving group I've ever had porch gave me the peace of mind.
So a few things understand.
The first each of these consumers.
For us from a company using our software, which means we do not need to pay marketing dollars for that introduction.
Second the more services, we help the consumer with it actually leads to higher consumer satisfaction and so for us of satisfy consumer is a more valuable consumer.
And the third as we hope these consumers with more services. The company's of core companies that are using our software become increasingly more valuable to us which in turn allows us to be able to sell and provides software to more of them.
So before I turn it over to Marty to discuss our financials I'd love to reiterate versus our previously laid out priorities for 2021.
So for us.
It begins with the company and so we provide software to the our focuses on selling software the more companies, where we become deeply embedded with those companies.
This includes upselling more of SaaS modules into these companies, which we'll cover off more later in the call.
So as more of the company to provide access to their consumers.
Two three the more services, we can provide to those consumers.
As I mentioned earlier, the happy of the consumer the more revenue, we generate which ultimately benefit both parties as well as the software companies look good.
For we focus on insurance with these consumers.
And in particular through the acquisition of homeowners of America. Our HLA. We are now a full stack carrier and a managing general agent complemented with our existing agency is the key focus for us.
We're bringing in brands and advertisers to connect with homebuyers and lastly, we will selectively use strategic M&A to continue to expand our platform.
Our business is performing very well against each of these areas and the results are strong and with that I'll turn it over to Marty Heimbigner, our CFO to discuss Q1 in guidance for 2021.
Thanks, Matt.
Turning now to our financial results for the quarter ended March 31 2021.
For the first quarter of 2021, our total revenue was $26 7 million compared with $15 1 million in the first quarter of 2020, and the increase of 77% year over year.
Adjusted Q1, 2020 revenues for past divestitures.
<unk> revenue increased from $12 6 million in Q1, 2020 pro forma which is the 112% increase year over year.
Our cost of revenue percentage for the first quarter of 2021 was 78%.
And contribution margin was 41% up.
Up materially from 5% in Q1 of 2020.
Our adjusted EBITDA loss improved to negative $9 6 million.
About $2 million better than our initial internal expectations.
Q1 has historically been the seasonally lowest quarter and we remain on track for the full year adjusted EBITDA loss margin guidance, we have provided.
These results would have been even better but for the cold weather crisis in Texas in February of this year, and which fewer monetize services occurred in that part of the country.
Now looking at slide nine.
The $26 7 million.
And the revenue in Q1 2020 was meaningfully ahead of our expectations.
And the $23 million public guidance, we had provided.
On the right hand side of the slide you can see net while we grew 112% year over year versus Q1 2020 pro forma.
Our growth would have been approximately 200% year over year, if our acquisitions homeowners of America and B 12 had occurred on January one 2021.
As a reminder, we closed our acquisition of <unk> 12 on January 12.
And homeowners of America was closed on April 6th.
Looking at our outlook slide 10, given the momentum of our business, we are raising our revenue guidance to $178 million.
Up from $175 million in our prior guidance.
This would be of 147% year over year growth.
We are reiterating guidance related to our contribution margins and our adjusted EBITDA loss margin.
Given the certain transaction revenue has slightly higher cost of revenue.
We see Q2, and Q3 with a bit lower revenue less cost of revenue margins than the full year.
But better EBITDA loss margins for.
For the full year, we expect approximately 72% revenue less cost of revenue.
For the year, we will manage our business to a specific adjusted EBITDA loss percentage target.
So as revenue continues to perform ahead of our guidance, we will use some of the additional revenue gains to find the further key investment in sales and marketing and R&D to support our continued rapid growth.
The team will discuss a few of these investment areas later in this call.
On slide 11 in terms of how to think about the expected $178 million of and.
2021 revenue, we have layered in $50 million for the HOA and <unk> acquisitions.
On the right side of the slide you can see our anticipated 2021 revenue distribution has not changed.
90% of our business is from SaaS platform and the corresponding move related services.
Only 10% of revenues, we expect will be from post move services.
To help provide color on our <unk> software and services subscription revenue.
Of the $40 million to $45 million expected in 2021.
Which makes up about 25% of our entire revenue.
$20 million was layered in for the 12 and the balance is tied to our core software across our verticals.
As well as revenue from other <unk> modules that Nicole will discuss later in this call.
As you can see here on slide 12, as demonstrated by Q1s, 41% contribution margin, which includes all variable costs. We are in a strong position with our 2021 margin targets.
Before passing the baton.
The two last notes first from a cash use perspective.
Operating cash used largely aligns with our EBITDA loss.
With several million dollars annually of capitalized software costs.
And the interest expense related to our $42 million of outstanding long term debt.
I would like to highlight that in Q4 and Q1, we did have a onetime paydowns of payables then increase the cash used in those periods.
As a private company prior to the spec merger closing, we maintain payables aged out of longer time period.
And as of the end of Q1, we have now paid down and fully normalized our working capital position.
Second consistent with other companies, who have gone public through its back.
We have reacted to the accounting statement by the SEC that came out in mid April and which they now require reporting of liability for private warrants associated with this back and companies who went public through a stack.
For porch.
At this time all of the public warrants and 45% of the private warrants are now exercise of redeemed and are behind us.
And I should note that the exercise of both public and private warrants has resulted in a $126 8 million in equity proceeds coming to the company in Q1 and here in Q2.
We will be filing amended.
2020 form 10-K tomorrow.
Reflecting this change and other immaterial adjustments and then we will file our first quarter 10-Q of day thereafter.
I'll now turn the call over to our Chief operating Officer, Matthew Nagel to provide an update on our key performance indicators for Q1 2021.
Thanks, Marty I'll go ahead and jump in with our public Kpis and commentary.
So if you look at slide 13, our Kpis were very strong in Q1. So on the left you see average number of companies. This jumped to 14000, which is up 28% year over year on the right you'll see the growth in the average revenue per company. This is up to 637 per.
Per month, which is 32% year over year the.
The revenue per company.
Is that because it includes both our <unk> SaaS themes.
<unk> Upselling of additional modules. It also includes more transaction revenue by the companies providing access to consumers.
The number of companies on the left that's growth growing due to a number of factors first we're seeing very strong record software sales.
We had 278 companies that joined from the <unk> acquisition that we announced.
And we are seeing small business owners in particular inspectors returning to work after receiving the COVID-19 vaccination.
The total amount, we don't have a precise number but we do see the economy, starting to reopen and we see that as of one time positive impact that offset some of the slower growth in 2020. If you go to slide 14, we're also seeing strong growth across our monetize.
Services.
We remain very focused on high value move related services, but in Q1, we were pleasantly surprised that we saw an acceleration in our post move services, which generate a lower revenue per service.
This resulted in 20% growth in total monetize services. So we're up to 183000 in Q1 and slight year over year of growth in revenue per monetize services.
We're about 92 in Q1.
I'll note, though that one of our key service providers. This is in security and home automation did go through an internal system transition that had some impact on conversion rate and installation for security.
And given that security is a fairly high value service for US. This did have some impact on the revenue per monetize service in Q1.
But we do continue to expect the average revenue per monetize service increase over time as we focus on high value services.
In particular as we look to Q2, we will note the completion of the HOA acquisition, which happened in early April this will increase our revenue per monetize service because we are now deeper in the value chain and insurance.
And given the recurring nature of insurance, we will see the number of Monotype services grow.
Last year of consumers renew their insurance the following year at high rates.
What I will say we are excited about the early progress with the HOA acquisition of.
Of the gate, it's been exciting the CSL into HOA at a higher percentage and also see a higher overall customer conversion rate as we make improvements to the purchasing process for HOA and I'll pause for let Matt add some color specifically on Q2.
Thanks, Matthew Thanks, Marty.
I do want to add some additional color on Q2 and what we're seeing.
I want to note, though set expectations, we do not plan on providing quarterly guidance going forward just annual guidance. However, as we've listened to investors and in light of market volatility in the stock market I do believe it's appropriate to provide more details this quarter.
So first in terms of revenue too.
To date, so far in the quarter were trending north of $45 million.
Revenue for Q2.
And adjusted EBITDA losses, turning to be better in Q2 versus the Q1.
So our business is ramping nicely and as anticipated.
Second in terms of TPI as Matthew noted, we are seeing a strong increase in both monetize services and revenue per monetized service.
Now that we can lead with HOA in certain states and generate significantly more revenue for insurance sales. We do so we're seeing north of $120 per monetize the service in Q2 and significantly higher monetize services both through the HOA, both due to seasonality of our software companies and conversion.
Improvements.
So thats all flow through the companies, where we're seeing so far in Q2 north of $900 and revenue per company per month.
And continued strong gains in the number of companies in our platform and the point I would make is just as that revenue per company goes up.
<unk> of the company goes up.
Which means the unit economics, improve which means the land position to invest more into sales and marketing and product development. So that we can continue to grow the number of companies and then through that the number of monetized services.
Yeah that flywheel of one really important for people to understand the helm.
We will build the continued to drive strong growth.
I think maybe.
Okay, Let's let's talk about a few deep dives in first we do want to start and I'd like to talk about insurance here on slide 16.
So our insure Tech division is and will continue to be the core of our transactional monetization on top of our software platform.
Now we wrap the experience for the consumer with many different services to make sure. We do provide a high satisfaction experience for the consumer but given insurance of the most valuable service in the home given its recurring.
And we have the core advantages related to insurance will talk more about we are focused on providing software to companies and in verticals when insurance if needed.
So as you can see here on the slide top left we're increasing our guidance now to $275 million of gross written premium between homeowners of America and porch for the full year 2021 for both companies.
We're seeing improved insurance conversion rates in the six states HOA is in today.
And the timing of new potential state opening is ahead of schedule.
You can see the states on the top right hand corner, we plan to launch over the next 12 to 18 months.
You know theres a lot of work here and it does take time, even insurances regulated for the team is executing well against that plan.
Bottom line <unk> corner, you can see the HOA seed nearly all of its premiums and corresponding revenue of approximately 90% to third party reinsurance companies and generate the commission and fee income consistent with our high margins.
We're very happy certainly with that low risk high margin model and of maps well of the portrait of economic profile.
So of case in point the right when the make would be in the February storms in Texas, where HOA has the most of its most concentration currently.
So while Yuri occurred ahead of Portugal, hiring HOA and any losses or absorbed by the seller not porch. It.
It is good the pointed out this not seen before event was largely covered through the reinsurance system.
So HOA use excess of loss insurance to recoup payments to cover losses beyond the attachment of only $1 6 million.
Which is what the.
The board.
Bear on their side. This shows the effectiveness of our risk transfer for catastrophes to our reinsurance partners, which is obviously the capability we're really excited about.
So lastly in the bottom right hand corner, the historic 59% gross loss ratio doesn't meaningfully impact the P&L this year, but over time one of the reasons, we want to highlight as it is very important because this type of best in class risk, writing will have huge impact on having a durable relationships and improving economic.
From reinsurers.
Over time, as we integrate our property data into the decision, making around risk and pricing. We believe we will capture even more revenue and profit.
Given we get a large number of consumers who need insurance virtually CAC free and.
And we get a reoccurring stream of property data unique to what anyone else has we have these long term durable advantages that will help us build of massive insure tech business.
With that I'll ask Nicole <unk> VP of product of ports to jump in with a few updates the goal.
Thanks, Matt and Hello, everyone.
As Matt said I lead product reports, including our central platforms like our data platform and consumer experience.
But I'd like to emphasize is that if our software companies Lubbock They don't.
The leave our software and the Great thing is they love us that means we get a very consistent stream of BW SaaS revenue and low cost access to consumers when they are most valuable.
So let me walk you through the updated NPS scores across our companies to provide visibility into how strong our platform. It.
As you can see here on slide 17, the scoring largely speak for themselves both companies and consumers love what we're doing.
I'd like to highlight the latest NPS score from ISS <unk> of <unk> 75, and the latest NPS score from consumers can purchase ensuring south of 75 for <unk>.
Really proud of the experience that we're creating and we're excited because we're just getting started.
As Matt mentioned, one of the areas of our software strategy, that's not well understood is how even when companies choose to get our core software for free in exchange for providing us with customer access we can still rapidly grow <unk> SaaS revenue.
Adding and Upselling additional models.
This is going very well for us.
A few examples of the modules. The operating include our report writing software. So today most of these factors. These our CRM and ERP software to help run their businesses, but we now have the ability to also sell in of module that helps them with our inspection report generation.
A repair estimate report the breakdown and inspect caring for and provide easy and quick estimates. This is something I love and I'm really excited about it not only helps in sectors, but in particular held for real estate agents and consumers save time by not having the contractors out of the home to create estimate.
Now technology can do that for them.
Our premium communication module to help with SMS and E mail communication and automate those.
And then payment processing.
And I would actually one of the big one on payment processing, because we haven't talked about it.
Much of the group, but.
Inspections of the other industries that we serve are high ticket size of transactions.
So that does make payment processing, a significant and very high margin opportunity as we continue to drive payments online and as the continued to drive payments toward toward credit cards.
Great.
So that's kind of heading cover some product and technology investments.
Having a 40% contribution margins in 2021, 41% already in Q1 has allowed us to aggressively investing product, while still showing very significant improvements in adjusted EBITDA loss margin.
Well there aren't very many investments happening across the business. Some of them are most excited about or what we show here on slide 19.
Our teams are doing great work across our vertical software to make sure we increase our lead and are difficult to compete with.
Our insured tech investments and data platform investments go hand in hand.
How much of the deal and so much opportunity as we create intelligence from our bass and unique property data and begin to use the same pricing underwriting and the purchasing experience for insurance.
Within the next set of years, we expect our own insurance product to be available across the majority of the country and we could present the majority of homebuyers with the proactive and viable insurance boat.
We think that may fundamentally change how easy it can be to get the best insurance.
Lastly, the team they work closely with our charges moving forward on the consumer experience to the technology that helps every member of feel like if the IP.
Going to be a very exciting next couple of years.
Thank you Nicole I appreciate it.
It was a great Q1, certainly as you can see really solid start for 2021.
The great about how Q2 and 2021 is shaping up.
Great about some of the key things, we're working on and about this year ahead.
The more importantly, though we feel excited about future we have the predictable business with deep competitive moats and lots of levers to build the drive growth into the massive market that we're going after.
The strong revenue and margin growth demonstrate what our business model is able to Bruce.
So with that the management team would know love to take questions. So operator, if you can please open up line for Q&A I appreciate it.
Thanks, Matt So we have about 25 minutes for Q&A, we'll start by taking for.
<unk> sell side analyst so for John.
John Campbell from Stephens.
Hey, guys. Good afternoon, great work in the quarter.
John Good.
Likewise, I love the customer testimonials of I don't think Ive seen that on the earnings call. So if you've got a lot of the zoom capability.
We really appreciate the.
Through an era.
Exactly so the growth in the average number of companies that was really impressive I'm guessing you guys, probably got a little bit of a lift from the acquisitions, but what kind of main areas would you call out as the key drivers and then I don't know if <unk> got this but kind of organically what that looked like ex acquisitions.
Sure I mean, the thing that I think we can focus on is we did have a strong quarter, we were up 25% Q4 versus Q1 one.
Of the things we've indicated is that we're going to invest in our go to market because of the attractive LTV that we have and so we're starting to see some acceleration in that engine.
We have record software sales across many of our businesses.
And we are optimistic about our ability to continue to grow. It now I don't think were ready to say, we can grow 25% every quarter.
I think one of the things, that's giving us a little bit of the tailwind is we're certainly feeling of companies coming off the sidelines, we're feeling companies sort of gearing up with expectation of the economy is going to reopen and that's giving us some lift and then as we mentioned we did get some from the the 12 acquisition.
Yeah, Okay. That's helpful and the one one more for me it seems like the HOA dues, just already write offs coming out of the gates pretty pretty impress really for you guys. Thus far.
If you run through some of the numbers you guys gave us as far as what the pro forma revenue would have been it looks like the annualized into a pretty healthy growth rate for those guys.
Just curious of you guys touched on this a little bit, but what are you seeing that strength.
And then what gives you kind of optimism to raise the gross written premium guidance for the year.
Yeah I'll take that yes, we are excited about I mean, we're early days I would say John I mean, clearly we just finished the acquisition April six of it wasn't wasn't too long ago, but yes, I mean insurance of the core core engine for our business, we have such a large opportunity.
With insurance and the HOA is a core part of that one with our with our agency that we've been building out.
Most of the years so no it is exciting.
Talk about a little bit.
At the close we've been building up during the interim period of time the.
The execution plan so as soon as we both enable the start charging for bolt on state expansion and then also on driving more of the consumers that we interact with into our E insurance product and we are seeing in gains are now again the thing I would just want to caution regular clear HOA today is the only in 16 I plugged into our system.
So even if we see higher conversion rates does not the massive amount of synergy overnight the gist.
Take the time with the regulated insurance world to be able to get the traditional state.
We've talked about in the past, we expect by the end of the year of 10 to 15 additional state with the mostly backloaded.
We are I hinted that we are seeing.
Debt to be perhaps a bit ahead of schedule and we will announce the open them as we go but the team was ready to go they've done great work in executing that part of the playbook.
Quickly.
Why do we why are we feel like we're able to raise that debt gross written premium guidance from 278 of $2 75, I mean clearly.
We wouldn't have had to so we must be seeing underlying strength in the.
The metrics certainly that just that goes a lot of confidence where we are early in the year to be able to early in the HOA experience to be able to raise that guidance, but but we are seeing the.
Certainly the older.
Imagine getting people actually in the office of the state insurance departments is probably the helpful thing of getting those licenses. So good luck on that front and congrats again guys I appreciate it. Thanks.
Thanks, John will now go to the deck for notes with benchmark.
Great. Thanks, Hey, Matt how are you doing.
So maybe just a couple of housekeeping items first.
Could you talk about the contribution from the 12 in the quarter just the way of a sense of maybe what was the organic and what was inorganic and then.
You talked about seeing already some acceleration of the posting of the services would you think of the longer tail goal of the company.
Can you just talk about what kind of services, what's driving that.
And just how we should think about you kept your guidance same in terms of percentages for the year and obviously those are lower revenue contribution.
But just how we think about the momentum you're seeing in that category already.
You bet.
Mathew why don't I take the in vitro question and perhaps you can take the sort of discussion of Myron.
So of the 12 than we had.
The significant acquisitions, we'll do that for at the time of the acquisition, but we'll layer in the revenue.
Into our plan, we will make the clear out of the gate. We are ongoing in the breakout acquired versus versus the separate because we do expect to grow those businesses and certainly that growth is being driven from the porch platform like with both the HOA of N. V. 12 of these are slow growth businesses that within part of.
A portion of it will take a little while but we do expect the able to accelerate that and certainly we want.
That's b assets.
Of course, it's great in terms of value for those businesses.
But for the 12, specifically, we layered in $20 million for the year for the calendar year. It isn't linear across the year. There is some ramp to that business for Q1 is certainly less less than Q4 for that particular businesses that can give you some color in terms of kind of where the impact the <unk>.
Is that how we think about that Matthew do you want to take the services question. Yeah. So we as we mentioned we were pleasantly surprised with the acceleration of the growth of our Postmen of services, which tend to be lower value services, especially because of the.
For the referral model that we use and the monetization rates that we got in general when we see a surge like that its pretty broad base of particular set of services.
And it makes sense to us just that people are spending more time and money in improving and maintaining their homes and theres some optimism because of the market that's free opening.
We remain with our same forward guidance because of high value services remains such a focus for us.
Especially insurance and our insurance part of the business is growing very nicely.
And we expect that going forward as Matt mentioned, even though we don't break out the value of.
Hi, I'm, sorry, the amount of high volume low value services.
We are seeing strong performance so far in Q2.
On our Rev per monetize service right now as of Q2 is about 120.
And we also expect strong growth from the number of monetize services.
So we'll see how much tailwind we got on the lower value, but our you know our focus all of its really for us from how we keep growing the high value part of our business.
Got it fair enough I think it was just kind of incrementals for the story.
Matt again.
Kind of the Q2 the color I think we kind of were on understood sort of the seasonality, but maybe even just over the balance of the year. If you could just kind of talk about I feel like probably keep force lower than Q3, So for Q1 and Q4 of the low in Q2 Q3 is that the.
Right way to think about it.
Yes, Martin if you want to take seasonality, yes, definitely because our when you look at our Pie chart, 65% of our revenue is from move related services.
For the second and third quarter, the when the best weather in the.
Throughout the United States, that's when most of the moves happen and so you will see the seasonally high.
The activity in those for those quarters and less on Q1 and Q4.
Got it and just maybe a little even more color on it.
Previously in 2019, Q1 was 15% of full year revenue in 2020, Q1 was 20% of full year revenue by 2020 was of an unusual year, obviously because of Q2 was so depressed with COVID-19, but.
But yes Q1 of the lowest ramps up in Q2 Q3 would be the highest and then.
Take back down at the Q4.
Okay, Perfect and then I'll take a shot here with the with Nicole good to have you on.
And that obviously feel free to jump in can you give us a sense of what the current attach rates are and how much what the Tam is in terms of of module upsell. You think you have right now.
Sure Matt you want me to take that one.
Happy to <unk>.
Dan we don't break out some of the conversion rates both of the great try and I appreciate it.
The.
You know I'd also I'll give you I'll give you a few different things, which is we are seeing good thing clearly across the diverse in terms of the momentum the team has all.
Obviously, our focus is on insurance the most of the time and energy is figuring out how we can continue to drive more consumers not only in the insurance broadly but into our owned insurance product and we're giving color. There in terms of that we're seeing good things in terms of our ability to drive that one of the surprises, though things were maybe hopeful for the word certain though.
Is it as we're now running tests with HOA. They will net to put the put the value prop of HLA really clearly into the consumer in front of the consumer not only we're seeing a higher percentage of insurance buyers.
The purchasing our own insurance product, we've actually seen in certain test of lift in overall conversion rate because we can be able to wrap HOA and provide handyman services. So you can get of $39 per driver of and cleaning and $39 gutter cleaning. The other just the benefits that we can give the the consumer when they buy that particular insurance call.
Let's see.
Theres so much.
Running room ahead, and this is something of the Golar team do spend a lot of time on which is.
We still are accessing only a small fraction of the total opportunity per consumer and this is it.
It's going to be fun.
The business because just the years ahead of just incrementally getting wins and offering more services and providing that much better of experienced for the consumer and the we'll continue to see for a long period of time those conversion rate improvements.
On the company side Matt.
In terms of acquiring new company.
In terms of attach rate for module sales, yeah. So I mean that it depends on the module.
Certain modules.
The payment processing or perhaps a little bit further ahead and some new modules that we just recently of kind of made available like the report writing kind of tool for those for those of inspectors and so some of those modules, we're actually seeing really good uptake and that has an impact we've been talking about in providing color of that.
We are seeing good momentum in terms of the <unk> modules that we're layering in which will drive continued strong growth of <unk> software and services subscription revenue, even as we have more companies choosing to pay with transactions.
We are I mean, you can see it show up for the numbers Youll continue to build cash open the numbers that we're seeing and we're seeing good momentum there.
Perfect Alright, thanks, congrats on the quarter and really like the lay out by the way of the porch looking forward for you guys. The launching the app sooner rather than later.
And at the gym.
Okay, and we'll go to the micron to all with Northland capital markets Mike.
Yes, Thanks, Matt Marty.
Two questions one to.
To go from 11000 of 14000 companies.
Was that all home inspectors could.
Could you talk about some of the other vertical debt or maybe where companies are growing if you could using your software.
Sure.
We certainly see growth in the inspection industry, where we have the largest penetration.
But we also are seeing growth in some of our other areas.
We are half of growing roofing software business, we have the growing report writer of a growing payment processing.
And some of the payment processing for example can extend beyond inspection and then of course, we're excited about the number of companies that the 12, we'll be able to bring some of our data and services to them and they work off.
Even larger set of verticals than what I just indicated.
But like all of it.
I'd say historically inspectors have been around half of the overall customers. So clearly youre going to see the most most growth coming from inspection move.
Moving companies as meaningful and then just kind of comes down from there, but not the is right. We do expect of us.
Again, one of the things that we're excited about certainly is theres. So much running room in those existing markets like even in the inspection industry, 50% give or take of all inspectors arent using backend ERP and CRM software. So there is significant running room for us there are even in that.
History, but if you look at the other industries we're in today.
Like we're just scratching the surface and then there are new markets.
<unk>. So we will look to expand into overtime that are involved in the home buying process for house or have really valuable consumers and data flowing through that kind of a moment in time for those companies are involved with the consumer so theres a lot of ways that we will continue to build the grow the number of companies over time.
Got it and then secondly, just any of them.
Enhancements or modifications to the moving concierge, just trying to get a sense for kind of the direction the penetration is going.
And progress with the moving concierge.
Yeah, I would say theres a lot of things that we're doing there might the continuing to improve the customer experience for investing deeply in product right and making it easier for consumers to be able to engage with us in any way that they want to.
That includes continued build out of our move for.
Dashboard and the ability for people to quickly and easily get quotes into quickly and easily purchase services.
In addition to continuing to build out.
Ways for the the consumer can connect with us in the way that they want to setting up appointments video things along those lines and just really making sure that we can meet the consumer where they are and make sure. We're finding a really great experience for them to be able to help them with the that really painful time of their life.
Two more quick things of anything that's exactly right.
I've mentioned in the past, how we will also be able to layer of very systematically more services into those consumers as we move forward. So those teams that are kind of working out of head and Thats just the very kind of plan playable thing that we'll do over time and then lastly, we've indicated but there are some.
The really interesting step function of opportunities Nicole had mentioned at some some of that during this call even like insurance, where with our own insurance product use that data to be able to put together of.
The buying quote for consumers, we can push out the all homebuyer now that's a lot of work that's not just this year certainly of work. There's a lot that goes in to be able to do that well, but those types of opportunities Nicole and her team are focused on certainly.
Great. Thank you.
But.
Thanks, Mike, we'll go to Jason <unk> with Craig Hallum, Jason.
Thank you.
Couple of on the insurance side, so what is the timeframe or maybe the progress in integrating some of that.
The data and the HLA and then you gave that 90 for Jose on the premiums you've seen in the third party.
One of your target for that changing all the time I mean do you plan to utilize that data to take on more of it.
Of an idea of where that one the Gulf.
Yeah, Great question, so in terms of.
Bringing all the build in property data.
It's a lot of work. So it is one of those kind of core investment area as we do not at all expect that to be of this year, saying, maybe in 2022 will start to be able to feel the benefit but even as you get that data in and structure in the run through the actuarial team. The data science team you'd still have to go eventually through the regulatory process.
What kind of changes in pricing and some of that again takes.
Take time, so it's a very large opportunity for us is an important part of our strategy, but certainly a year or two at a minimum before we can really start to feel the impact from that.
But it is part of the certainly borrow future and part of what we're investing some of the choices that we can make the company to really go after the massive opportunities ahead of us and we are investing this year against the against that.
In terms of the percent that the seed we do not have plans. The change that you are certainly in many of them in the near.
For the foreseeable future, we think we really like the HOA model, where theyre seeding, 90% and this is a very high margin.
Very low risk very low volatility type model is the kind of expressed in the call of related to the Texas storms. We think that's very attractive for our business of this vertical software company debt is high margin I do think it's a good question, we do talk about it internally where over time, if we can identify the routine red.
Clearly our economics are better if we work at home.
At risk.
Clearly we've made significantly more revenue significantly more profit dollars were to do so but again, we've got time before we have to make that decision and right. Now we're just kind of doing the blocking and tackling the behind the scenes to be able to make that choice in the future. If we want to incrementally hold more.
Oh.
This of course also appreciate you giving us the.
The the snapshot of the footprint and why are you of the footprint to go over the next year or so just wondering how you think about that footprint in terms of buy versus build.
The key opportunity like an HOA out there of that.
The in place and in a comfortable range for that May be something you could pursue other M&A growth.
Yeah, I think from an M&A perspective.
Sure.
There's nothing to announce today, certainly, but as we've talked about in the past it is part of our growth strategy and and.
And we are excited about the work the team for doing the build out of the pipeline.
There's a number of different categories that we would look at from insurance.
Other vertical software companies in our existing verticals or a new vertical kind of expand out there other services that we can layer in to consumers. So there's a variety of things that we would look at yes insurance is one of those two.
<unk>, it's all of that's something that we want to do or if we just do that organically right now the math for you saw as the art the team's organic point of what they are executing right now organically.
We'll roll HOA out across the state.
Thank you. Thank you.
Thanks, Jason Bedford of Lin with Cantor.
Hi, guys. Thanks for taking my question.
So looking at the guidance for 275 million in the gross written premium you had previously disclosed that this was combined estimated premium sales for HOA and AIG can you give us any color on what estimated premium sales for <unk> were in 2020.
We don't break out.
The idea we've not broken out in terms of the path of questions. What we've done for investors. So as we go forward, we would expect the breakout revenues at some point Youre, probably this year in terms of the recurring revenue we get from consumers, which is largely driven from insurance, but we havent done that to date, so nothing to share on that right.
Now obviously, we were very excited about the growth in our agency insurance business ahead of the edge of acquisition. Obviously, the HLA has historically been the really important partners of our agency and the state of the way we operate and we have been an important partner of HOS, we've been driving lots of work.
So I will say as we think about that $275 million gross written premium guide that does the view.
Of that revenue that our agency was driving in the queue HLA, though that is looking at of that from a unified insurance organization.
Great. That's helpful. And then just a quick SEC.
The question have you guys seen any impacts.
From the recent IBSA of changes on the 12 in their business in the last few weeks or any color there would be great.
Let me of coal do you want to take that one yeah I can take that line.
So a couple of things that I would say there <unk>.
The 12 from marketing perspective has always taken a pretty holistic approach and making sure that we are looking at legislation and are paying changes like what the change of Apple's making.
They've done it we've done a lot there.
To help clients deal with the change in cookies and the white ease by implementing robust first party data strategies embracing many common innovation from the market and testing and scaling cookie less targeting and we're constantly and diversifying our supply chain to ask for an SDK is to ensure that we're ahead of the changes such as those announced with iOS for 14.
Okay, great. Thanks, Scott Thanks for that.
Okay.
Good day question submitted from Ken Wong from Guggenheim you saw big sequential uptick in average number of companies to nearly 14000, how should we think about seasonal customer dynamics also was this driven by any changes in go to market pricing of promotional activity that we should be aware of.
Yeah. So I can check excuse me share some of some percent perspective, there. Yes, we did see very strong growth in Q1, as we've mentioned north of 28% year over year of 25%.
In Q4, we.
We do not expect 25% every quarter.
But we are optimistic about our ability to continue to grow the number of companies as we've indicated we have a very attractive LTV that allows us to make investments into sales and marketing, which were starting to see some of the impact of.
With some of our record sales performance this quarter, but also some longer term investments around product development, which should allow us to gain market share in both the midterm and long term, because we're going to be able to invest more aggressively for longer than our competitors.
And we had a strong quarter debt, we attribute at least somewhat to momentum and optimism about the reopening of the economy.
No for sure that certain companies are coming off the sidelines of gearing up in order to take advantage of.
The reopening so.
All of those factors in combination with <unk>.
The increase from the 12 allowed us to of a very strong quarter in the Q1.
If part of the question is around some of the pop up conferences and trade shows we've talked about on the path for our business leaders of use those tactics very effectively and largely that was all pause during the pandemic, we have not yet kicked that engine back into gear, but the teams are now doing the prep work now that the vaccines the distributor.
They are kind of gearing up to be able to kind of re re engage their through those tactics. So so more to come probably in the second half of the year.
We have bought from Dan Kronos of benchmark Yeah go ahead.
Yes, just to piggyback on that a little bit I know, we're still super early days here and I kind of left you with the App.
But.
How close are we to getting to the point, where you really wanted to get the brand name out in front of consumers more obviously youre doing a great job.
Good day Incentivising your.
The company customers to push the porch product and you want to touch on that a little bit I think.
That might be helpful but.
Whether it's your partnership which we haven't talked about it at all whether it's through <unk>.
Direct advertising so people get the better understanding of the when this thing kind of really ramps. The consumer is yeah, no I know who fortunate the set of op check us out of that are kind of bearish thing Thats really sweet. So maybe just some color there would be really helpful. Yeah Im happy too.
Our strategy is pretty well laid out in terms of the kind of the.
Things that were in right now we are squarely in the go deeply embed ourselves in the businesses by being the software company.
The very low churns and they've been very predictable reoccurring engine not only of the staff.
The consumer can flow that's the key.
Key moment of time in really early so to begin the layer in transactions in the not related to the bulk of this year of the continuing and you can see of the metric, but adding more companies opening up more verticals. We can run our playbook and then when you have this.
The math and you can go into what the goal.
That is clearly the priority for US right now as you do that though.
Of that aside if we were to have gone in and tried to go direct to consumer and go into the build the brand who wouldn't be even remotely close to be able to access the the number of homebuyers that we do especially as early as we can and so we've been able to build the really significant moat through the.
And that part of the strategy.
Now if you look forward two.
Two or three years, there will be a transition where as we roll the HOA out across all of.
Allstate for virtually all states.
At some point that could make good sense for us to be able to provide a porch brand experienced pushed out.
So that is part of the journey ahead, but if not if not 2021 certainly and it's not probably going to be a core focus for us to make money true even but it is one of those additional levers that we have out there to go try to build a really big company, which is certainly what we're what we're trying to build.
So yes more to come there as we go.
Do you want to talk maybe a little bit about in sensitization, maybe on the company side kind of push it. So people are aware of it because obviously kind of higher attach rates when they do that yeah. No. It is really interesting.
The company's debt when they when they are that much more engaged and the experience and they're really talking with our customer about this great moving experience that the consumer gets when they use our inspection service, we see the conversion rates of the consumer's materially above those on the inside of a dozen mentioned it.
Brian sort of put it out as one of the levers that we're working through adjusting is how do we get the company to want to make sure of the consumers know of no all of our service and appreciate it and are really keyed up effectively and Thats just one of those levers that we can then drive drive good good growth from.
Great. Thanks for squeezing me back in like the.
And we have time for one more question I'm going to take one that we got submitted from the Investor can you clarify of the $45 million referenced for Q2 is at $45 million in revenue to date in Q2.
I E $45 million of revenue up to may 15th or is it $45 million for guidance for total revenue in Q2.
Go ahead, Marty yes, that's.
The guidance for the entire quarter, we wouldnt provide.
Quarter to date number, but that's what we're looking.
For the full Q2 and to make sure of it was clear on what we said, which is you know so far based on how we're trending it's trending north of $45 million.
For for the second quarter.
Great well thanks, everyone.
And then of our Q&A session I'll turn it back from that early meant for closing remarks.
Thank you for already for the questions.
Great to be underway.
In two of this should be of very very solid 2021.
Clearly the team is executing.
On an on all cylinders.
We are excited I'm excited about the performance that we're seeing across the board lots of work to do you know of course.
But that's that's what's fun is deciding it's such a massive tam and such a massive opportunity.
And we're excited about how we're pursuing it and the strategy that we have thanks, everybody for the time I appreciate it and well see you soon.
Okay.