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Doma Reports Second Quarter 2023 Financial Results

Unveils new strategy focused on both directly licensing its patented Instant Underwriting technology to largest mortgage originators and secondary market purchasers, and the continued rollout of Instant Underwriting technology for its Independent Agents to serve traditional channels

Continues making progress towards reaching adjusted EBITDA profitability in 2023

Recently divested non-core Local retail business to align with new strategy

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 months ended June 30, 2023(1).

Second Quarter 2023 Business Highlights(2):

  • Total revenues of $89 million, up 19% versus Q1 2023
  • Retained premiums and fees of $31 million, up 22% versus Q1 2023
  • Gross profit of $6 million, up 312% versus Q1 2023
  • Adjusted gross profit of $9 million, up 97% versus Q1 2023
  • Adjusted EBITDA loss of $14 million, compared to a loss of $22 million in Q1 2023
  • Purchase closed orders up 26% versus Q1 2023, Refinance closed orders down 16% versus Q1 2023, and Total closed orders up 12% versus Q1 2023

“We’re excited to unveil a new strategy that will ensure our patented technology helps address the significant home affordability challenge facing millions of Americans. We believe our strengthened focus on deploying our instant underwriting technology on a broader scale, through both licensing our software and working with our independent agent community, will enable us to grow the business in a more capital-efficient manner,” said Max Simkoff, CEO of Doma. “Initially as part of our new licensing strategy, we will focus on licensing our technology directly to several of the largest mortgage originators and secondary market purchasers in the country, so that they can utilize our patented underwriting technologies platform to instantly and safely ensure clear title for their customers while significantly reducing the amount of fees paid by consumers. We are in discussion with several of these parties regarding a commercial framework that would allow us to bring this model to life at a crucial period.”

Simkoff added, “With home affordability still at record lows, there has never been a more critical time for us to realize our bold vision and I can say that with our new go-forward strategy, we have never been more strongly positioned to make a true impact and to make homeownership more affordable. Aligned with this focus on our underwriting business and the licensing of our technology, we have now fully exited all Local retail operations nationwide. I want to thank our local team for their hard work and dedication over the years.”

“We remain focused on reaching our goal of achieving adjusted EBITDA profitability this year and we were pleased to see an $8 million improvement in our adjusted EBITDA loss this quarter,” said Mike Smith, Chief Financial Officer of Doma. “We expect to see a further significant adjusted EBITDA improvement from Q2 to Q3, driven by the continued benefit of the cost reduction actions implemented at the end of 2022, cost savings related to our most recent reductions, the sale of our Local business, and additional savings as we continue to further streamline expenses. We believe the steps we have taken reposition the business to succeed in any macroeconomic environment, and we remain highly focused on successfully executing on implementing our new strategy. We look forward to providing updates over the coming quarters.”

(1)

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 fourth 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.

 

 

(2)

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.”

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, long-lived asset impairment, the change in fair value of warrant and sponsor covered shares liabilities, loss on sale of business, gain on sale of title plant, and accelerated contract expense. 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 today on Tuesday, August 8, to present its second quarter 2023 financial results.

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 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.

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 our ability to offer our technology through, and enter into commercial relationships with, primary and/or secondary mortgage market participants and/or their customers, 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, 2022 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 June 30,

Six Months Ended June 30,

 

2023

2022

2023

2022

 

(Unaudited - in thousands, except for open and closed order

numbers)

Key operating data:

 

 

 

 

Opened orders

 

8,368

 

 

25,231

 

 

18,308

 

 

60,423

 

Closed orders

 

7,036

 

 

18,799

 

 

13,316

 

 

46,146

 

GAAP financial data:

 

 

 

 

Revenue (1)

$

88,853

 

$

123,744

 

$

163,221

 

$

235,951

 

Gross profit (2)

$

5,747

 

$

7,143

 

$

7,143

 

$

14,277

 

Net loss (3)

$

(35,877

)

$

(58,652

)

$

(78,000

)

$

(108,678

)

Non-GAAP financial data (4):

 

 

 

 

Retained premiums and fees

$

30,689

 

$

49,106

 

$

55,873

 

$

100,711

 

Adjusted gross profit

$

8,818

 

$

10,890

 

$

13,289

 

$

21,260

 

Ratio of adjusted gross profit to retained premiums and fees

 

29

%

 

22

%

 

24

%

 

21

%

Adjusted EBITDA

$

(13,707

)

$

(43,390

)

$

(35,298

)

$

(88,295

)

_________________

(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 June 30,

Six Months Ended June 30,

 

2023

2022

2023

2022

 

(Unaudited - in thousands)

Revenue

$

88,853

 

$

123,744

 

$

163,221

 

$

235,951

 

Minus:

 

 

 

 

Premiums retained by Third-Party Agents

 

58,164

 

 

74,638

 

 

107,348

 

 

135,240

 

Retained premiums and fees

$

30,689

 

$

49,106

 

$

55,873

 

$

100,711

 

Minus:

 

 

 

 

Direct labor

 

9,931

 

 

23,890

 

 

22,868

 

 

51,688

 

Provision for claims

 

5,780

 

 

6,310

 

 

9,739

 

 

10,921

 

Depreciation and amortization

 

3,071

 

 

3,747

 

 

6,146

 

 

6,983

 

Other direct costs (1)

 

6,160

 

 

8,016

 

 

9,977

 

 

16,842

 

Gross Profit

$

5,747

$

7,143

$

7,143

$

14,277

__________________

(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 June 30,

Six Months Ended June 30,

 

2023

2022

2023

2022

 

(Unaudited - in thousands)

Gross Profit

$

5,747

 

$

7,143

 

$

7,143

 

$

14,277

 

Adjusted for:

 

 

 

 

Depreciation and amortization

 

3,071

 

 

3,747

 

 

6,146

 

 

6,983

 

Adjusted Gross Profit

$

8,818

$

10,890

$

13,289

$

21,260

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 June 30,

Six Months Ended June 30,

 

2023

2022

2023

2022

 

(Unaudited - in thousands)

Net loss (GAAP)

$

(35,877

)

$

(58,652

)

$

(78,000

)

$

(108,678

)

Adjusted for:

 

 

 

 

Depreciation and amortization

 

3,071

 

 

3,747

 

 

6,146

 

 

6,983

 

Interest expense

 

5,943

 

 

4,489

 

 

10,932

 

 

8,696

 

Income taxes

 

185

 

 

136

 

 

370

 

 

321

 

EBITDA

$

(26,678

)

$

(50,280

)

$

(60,552

)

$

(92,678

)

Adjusted for:

 

 

 

 

Stock-based compensation

 

1,293

 

 

8,255

 

 

6,990

 

 

19,648

 

Severance and interim salary costs

 

2,730

 

 

3,828

 

 

9,150

 

 

3,828

 

Long-lived asset impairment

 

1,290

 

 

 

 

1,471

 

 

 

Change in fair value of Warrant and Sponsor Covered Shares liabilities

 

(108

)

 

(5,193

)

 

(123

)

 

(19,093

)

Loss on sale of business

 

11,591

 

 

 

 

11,591

 

 

 

Gain on sale of title plant

 

(3,825

)

 

 

 

(3,825

)

 

 

Adjusted EBITDA

$

(13,707

)

$

(43,390

)

$

(35,298

)

$

(88,295

)

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

 

Three Months Ended June 30,

Six Months Ended June 30,

 

2023

2022

2023

2022

 

(Unaudited - in thousands)

(Unaudited - in thousands)

Adjusted Gross Profit

$

8,818

 

$

10,890

 

$

13,289

 

$

21,260

 

Minus:

 

 

 

 

Customer acquisition costs

 

3,748

 

 

14,853

 

 

8,772

 

 

30,778

 

Other indirect costs (1)

 

18,777

 

 

39,427

 

 

39,815

 

 

78,777

 

Adjusted EBITDA

$

(13,707

)

$

(43,390

)

$

(35,298

)

$

(88,295

)

__________________

(1)

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

 

Doma Holdings, Inc.

Consolidated Statements of Operations

 

 

Three Months Ended June 30,

Six Months Ended June 30,

(Unaudited - in thousands, except share and per share information)

2023

2022

2023

2022

Revenues:

 

 

 

 

Net premiums written (1)

$

78,962

 

$

108,926

 

$

145,732

 

$

204,592

 

Escrow, other title-related fees and other

 

8,292

 

 

14,366

 

 

14,890

 

 

30,479

 

Investment, dividend and other income

 

1,599

 

 

452

 

 

2,599

 

 

880

 

Total revenues

$

88,853

 

$

123,744

 

$

163,221

 

$

235,951

 

 

 

 

 

 

Expenses:

 

 

 

 

Premiums retained by Third-Party Agents (2)

$

58,164

 

$

74,638

 

$

107,348

 

$

135,240

 

Title examination expense

 

4,164

 

 

5,146

 

 

6,164

 

 

11,127

 

Provision for claims

 

5,780

 

 

6,310

 

 

9,739

 

 

10,921

 

Personnel costs

 

27,622

 

 

73,233

 

 

68,191

 

 

151,026

 

Other operating expenses

 

13,924

 

 

23,637

 

 

29,363

 

 

46,391

 

Long-lived asset impairment

 

1,290

 

 

 

 

1,471

 

 

 

Gain on sale of title plant

 

(3,825

)

 

 

 

(3,825

)

 

 

Total operating expenses

$

107,119

 

$

182,964

 

$

218,451

 

$

354,705

 

 

 

 

 

 

Loss from operations

$

(18,266

)

$

(59,220

)

$

(55,230

)

$

(118,754

)

 

 

 

 

 

Other (expense) income:

 

 

 

 

Change in fair value of Warrant and Sponsor Covered Shares liabilities

 

108

 

 

5,193

 

 

123

 

 

19,093

 

Interest expense

 

(5,943

)

 

(4,489

)

 

(10,932

)

 

(8,696

)

Loss on sale of business

 

(11,591

)

 

 

 

(11,591

)

 

 

Loss before income taxes

$

(35,692

)

$

(58,516

)

$

(77,630

)

$

(108,357

)

 

 

 

 

 

Income tax expense

 

(185

)

 

(136

)

 

(370

)

 

(321

)

Net loss

$

(35,877

)

$

(58,652

)

$

(78,000

)

$

(108,678

)

 

 

 

 

 

Earnings per share:

 

 

 

 

Net loss per share attributable to stockholders - basic and diluted

$

(2.69

)

$

(4.51

)

$

(5.88

)

$

(8.38

)

Weighted average shares outstanding common stock - basic and diluted

 

13,324,215

 

 

12,994,869

 

 

13,259,894

 

 

12,975,354

 

__________________

(1)

Net premiums written includes revenues from a related party of $33.5 million and $33.7 million during the three months ended June 30, 2023 and 2022, respectively. Net premiums written includes revenues from a related party of $63.5 million and $61.3 million during the six months ended June 30, 2023 and 2022, respectively.

(2)

Premiums retained by Third-Party Agents includes expenses associated with a related party of $27.1 million and $27.2 million during the three months ended June 30, 2023 and 2022, respectively. Premiums retained by Third-Party Agents includes expenses associated with a related party of $51.2 million and $49.6 million during the six months ended June 30, 2023 and 2022, respectively.

 

Doma Holdings, Inc.

Consolidated Balance Sheets

 

(Unaudited - in thousands, except share information)

June 30, 2023

December 31,

2022

Assets

 

 

Cash and cash equivalents

$

77,610

 

$

78,450

 

Restricted cash

 

4,934

 

 

2,933

 

Investments:

 

 

Fixed maturities

 

 

Held-to-maturity debt securities, at amortized cost (net of allowance for credit losses of $254 at June 30, 2023 and $440 at December 31, 2022)

 

41,578

 

 

90,328

 

Available-for-sale debt securities, at fair value (amortized cost $58,106 at June 30, 2023 and $59,191 at December 31, 2022)

 

57,021

 

 

58,254

 

Mortgage loans

 

46

 

 

297

 

Total investments

$

98,645

 

$

148,879

 

Trade and other receivables (net of allowance for credit losses of $1,428 at June 30, 2023 and $1,488 at December 31, 2022)

 

24,963

 

 

21,292

 

Prepaid expenses, deposits and other assets

 

5,468

 

 

8,124

 

Lease right-of-use assets

 

13,424

 

 

18,634

 

Fixed assets (net of accumulated depreciation of $26,998 at June 30, 2023 and $24,532 at December 31, 2022)

 

36,497

 

 

39,383

 

Title plants

 

2,716

 

 

14,533

 

Goodwill

 

27,009

 

 

46,280

 

Total assets

$

291,266

 

$

378,508

 

 

 

 

Liabilities and stockholders’ equity

 

 

Accounts payable

$

2,128

 

$

2,909

 

Accrued expenses and other liabilities

 

19,478

 

 

28,892

 

Lease liabilities

 

21,740

 

 

27,489

 

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

 

153,164

 

 

154,790

 

Liability for loss and loss adjustment expenses

 

83,660

 

 

82,070

 

Warrant liabilities

 

347

 

 

347

 

Sponsor Covered Shares liability

 

96

 

 

219

 

Total liabilities

$

280,613

 

$

296,716

 

 

 

 

Commitments and contingencies

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock, 0.0001 par value; 80,000,000 shares authorized at June 30, 2023; 13,350,733 and 13,165,919 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

$

1

 

$

1

 

Additional paid-in capital

 

584,525

 

 

577,515

 

Accumulated deficit

 

(572,787

)

 

(494,787

)

Accumulated other comprehensive income

 

(1,086

)

 

(937

)

Total stockholders’ equity

$

10,653

 

$

81,792

 

Total liabilities and stockholders’ equity

$

291,266

 

$

378,508

 

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

(Unaudited - in thousands)

June 30,

2021

September

30, 2021

December

31, 2021

March 31,

2022

June 30,

2022

September

30, 2022

December

31, 2022

March 31,

2023

June 30,

2023

Revenues:

 

 

 

 

 

 

 

 

 

Net premiums written

$

109,271

 

$

141,491

 

$

116,598

 

$

95,666

 

$

108,926

 

$

94,488

 

$

86,173

 

$

66,770

 

$

78,962

 

Escrow, other title-related fees and other

 

20,065

 

 

20,452

 

 

20,493

 

 

16,113

 

 

14,366

 

 

12,627

 

 

8,902

 

 

6,598

 

 

8,292

 

Investment, dividend and other income

 

650

 

 

639

 

 

588

 

 

428

 

 

452

 

 

741

 

 

1,299

 

 

1,000

 

 

1,599

 

Total revenues

$

129,986

 

$

162,582

 

$

137,679

 

$

112,207

 

$

123,744

 

$

107,856

 

$

96,374

 

$

74,368

 

$

88,853

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

Premiums retained by Third-Party Agents

$

65,181

 

$

91,596

 

$

71,330

 

$

60,602

 

$

74,638

 

$

65,141

 

$

61,095

 

$

49,184

 

$

58,164

 

Title examination expense

 

5,500

 

 

5,289

 

 

6,495

 

 

5,981

 

 

5,146

 

 

3,709

 

 

3,425

 

 

2,000

 

 

4,164

 

Provision for claims

 

6,807

 

 

6,685

 

 

4,594

 

 

4,611

 

 

6,310

 

 

4,665

 

 

1,154

 

 

3,959

 

 

5,780

 

Personnel costs

 

53,954

 

 

62,410

 

 

78,306

 

 

77,793

 

 

73,233

 

 

60,481

 

 

48,432

 

 

40,569

 

 

27,622

 

Other operating expenses

 

17,181

 

 

21,693

 

 

26,912

 

 

22,754

 

 

23,637

 

 

20,656

 

 

26,172

 

 

15,439

 

 

13,924

 

Goodwill impairment

 

 

 

 

 

 

 

 

 

 

 

33,746

 

 

31,461

 

 

 

 

 

Long-lived asset impairment

 

 

 

 

 

 

 

 

 

 

 

 

 

32,027

 

 

181

 

 

1,290

 

Gain on sale of title plant

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,825

)

Total operating expenses

$

148,623

 

$

187,673

 

$

187,637

 

$

171,741

 

$

182,964

 

$

188,398

 

$

203,766

 

$

111,332

 

$

107,119

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

$

(18,637

)

$

(25,091

)

$

(49,958

)

$

(59,534

)

$

(59,220

)

$

(80,542

)

$

(107,392

)

$

(36,964

)

$

(18,266

)

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Change in fair value of warrant and Sponsor Covered Shares liabilities

 

 

 

(4,478

)

 

11,169

 

 

13,900

 

 

5,193

 

 

1,438

 

 

786

 

 

15

 

 

108

 

Interest expense

 

(4,451

)

 

(4,531

)

 

(4,519

)

 

(4,207

)

 

(4,489

)

 

(4,584

)

 

(4,800

)

 

(4,989

)

 

(5,943

)

Loss on sale of business

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(11,591

)

Loss before income taxes

$

(23,088

)

$

(34,100

)

$

(43,308

)

$

(49,841

)

$

(58,516

)

$

(83,688

)

$

(111,406

)

$

(41,938

)

$

(35,692

)

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

(211

)

 

(170

)

 

(421

)

 

(185

)

 

(136

)

 

(425

)

 

1,988

 

 

(185

)

 

(185

)

Net loss

$

(23,299

)

$

(34,270

)

$

(43,729

)

$

(50,026

)

$

(58,652

)

$

(84,113

)

$

(109,418

)

$

(42,123

)

$

(35,877

)

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

(Unaudited - in thousands)

June 30,

2021

September

30, 2021

December

31, 2021

March 31,

2022

June 30,

2022

September

30, 2022

December

31, 2022

March 31,

2023

June 30,

2023

Revenue

$

129,986

 

$

162,582

 

$

137,679

 

$

112,207

 

$

123,744

 

$

107,856

 

$

96,374

 

$

74,368

 

$

88,853

 

Minus:

 

 

 

 

 

 

 

 

 

Premiums retained by Third-Party Agents

 

65,181

 

 

91,596

 

 

71,330

 

 

60,602

 

 

74,638

 

 

65,141

 

 

61,095

 

 

49,184

 

 

58,164

 

Retained premiums and fees

$

64,805

 

$

70,986

 

$

66,349

 

$

51,605

 

$

49,106

 

$

42,715

 

$

35,279

 

$

25,184

 

$

30,689

 

Minus:

 

 

 

 

 

 

 

 

 

Direct labor

 

20,902

 

 

23,948

 

 

26,787

 

 

27,798

 

 

23,890

 

 

20,220

 

 

14,665

 

 

12,937

 

 

9,931

 

Provision for claims

 

6,807

 

 

6,685

 

 

4,594

 

 

4,611

 

 

6,310

 

 

4,665

 

 

1,154

 

 

3,959

 

 

5,780

 

Depreciation and amortization

 

3,021

 

 

1,978

 

 

2,615

 

 

3,236

 

 

3,747

 

 

4,251

 

 

4,785

 

 

3,075

 

 

3,071

 

Other direct costs (1)

 

7,561

 

 

10,073

 

 

10,322

 

 

8,826

 

 

8,016

 

 

6,224

 

 

5,478

 

 

3,817

 

 

6,160

 

Gross Profit

$

26,514

$

28,302

$

22,031

$

7,134

$

7,143

$

7,355

$

9,197

$

1,396

$

5,747

__________________

(1)

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

Adjusted gross profit

 

Three Months Ended

(Unaudited - in thousands)

June 30,

2021

September

30, 2021

December

31, 2021

March 31,

2022

June 30,

2022

September

30, 2022

December

31, 2022

March 31,

2023

June 30,

2023

Gross Profit

$

26,514

 

$

28,302

 

$

22,031

 

$

7,134

 

$

7,143

 

$

7,355

 

$

9,197

 

$

1,396

 

$

5,747

 

Adjusted for:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

3,021

 

 

1,978

 

 

2,615

 

 

3,236

 

 

3,747

 

 

4,251

 

 

4,785

 

 

3,075

 

 

3,071

 

Adjusted Gross Profit

$

29,535

$

30,280

$

24,646

$

10,370

$

10,890

$

11,606

$

13,982

$

4,471

$

8,818

Adjusted EBITDA

 

Three Months Ended

(Unaudited - in thousands)

June 30,

2021

September

30, 2021

December

31, 2021

March 31,

2022

June 30,

2022

September

30, 2022

December

31, 2022

March 31,

2023

June 30,

2023

Net loss (GAAP)

$

(23,299

)

$

(34,270

)

$

(43,729

)

$

(50,026

)

$

(58,652

)

$

(84,113

)

$

(109,418

)

$

(42,123

)

$

(35,877

)

Adjusted for:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

3,021

 

 

1,978

 

 

2,615

 

 

3,236

 

 

3,747

 

 

4,251

 

 

4,785

 

 

3,075

 

 

3,071

 

Interest expense

 

4,451

 

 

4,531

 

 

4,519

 

 

4,207

 

 

4,489

 

 

4,584

 

 

4,800

 

 

4,989

 

 

5,943

 

Income taxes

 

211

 

 

170

 

 

421

 

 

185

 

 

136

 

 

425

 

 

(1,988

)

 

185

 

 

185

 

EBITDA

$

(15,616

)

$

(27,591

)

$

(36,174

)

$

(42,398

)

$

(50,280

)

$

(74,853

)

$

(101,821

)

$

(33,874

)

$

(26,678

)

Adjusted for:

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

3,713

 

 

3,004

 

 

11,040

 

 

11,393

 

 

8,255

 

 

7,746

 

 

6,293

 

 

5,697

 

 

1,293

 

Severance and interim salary costs

 

 

 

 

 

 

 

 

 

3,828

 

 

4,567

 

 

11,218

 

 

6,420

 

 

2,730

 

Goodwill impairment

 

 

 

 

 

 

 

 

 

 

 

33,746

 

 

31,461

 

 

 

 

 

Long-lived asset impairment

 

 

 

 

 

 

 

 

 

 

 

 

 

32,027

 

 

181

 

 

1,290

 

Change in fair value of warrant and Sponsor Covered Shares liabilities

 

 

 

4,478

 

 

(11,169

)

 

(13,900

)

 

(5,193

)

 

(1,438

)

 

(786

)

 

(15

)

 

(108

)

Accelerated contract expense

 

 

 

 

 

 

 

 

 

 

 

 

 

5,221

 

 

 

 

 

Loss on sale of business

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

11,591

 

Gain on sale of title plant

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,825

)

Adjusted EBITDA

$

(11,903

)

$

(20,109

)

$

(36,303

)

$

(44,905

)

$

(43,390

)

$

(30,232

)

$

(16,387

)

$

(21,591

)

$

(13,707

)

 

Contacts

Investor Contact: Carlee Herzog | Head of Investor Relations for Doma | ir@doma.com

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