Segment Information

6 Months Ended

Jun. 30, 2023

Segment Information

Segment Information

14. Segment Information

We have two reportable segments that are also operating segments: Vertical Software and Insurance. Reportable segments were identified based on how the chief operating decision-maker (“CODM”) manages the business, makes operating decisions, and evaluates operating and financial performance. Our chief executive officer acts as the CODM and reviews financial and operational information for the two reportable segments. Operating segments are components of an enterprise for which separate discrete financial information is available and operational results are regularly evaluated by the CODM for the purposes of making decisions regarding resource allocation and assessing performance.

The Vertical Software segment primarily consists of a vertical software platform for the home that provides software and services to home services companies such as home inspectors, mortgage companies and loan officers, title companies, moving companies, real estate agents, utility companies, and individuals.

The Insurance segment operates both as an insurance carrier underwriting home insurance policies and as an agent selling home and auto insurance. The Insurance segment also includes warranty service offerings and a captive reinsurance provider.

The following table summarizes revenue by segment.

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Vertical Software	$	34,435	$	42,540	$	63,062	$	76,944
Insurance		64,330		28,375		123,072		57,538
Total revenue	$	98,765	$	70,915	$	186,134	$	134,482

Our segment operating and financial performance measure is Segment Adjusted EBITDA (Loss). Segment Adjusted EBITDA (Loss) is defined as revenue less the following expenses associated with each segment: cost of revenue, sales and marketing, product and technology, general and administrative expenses, and provision for doubtful accounts. Segment Adjusted EBITDA (Loss) also excludes non-cash items or items that management does not consider reflective of ongoing core operations.

We do not allocate shared expenses to the reportable segments. These expenses are included in the “Corporate and other” row in the following reconciliation. “Corporate and other” includes shared expenses such as sales and marketing; certain product and technology; accounting; human resources; legal; general and administrative; and other income, expenses, gains and losses that are not allocated in assessing segment performance due to their function. Such transactions are excluded from the reportable segments’ results but are included in consolidated results.

The reconciliation of Segment Adjusted EBITDA (Loss) to consolidated loss from operations below includes the effects of corporate and other items that the CODM does not consider in assessing segment performance.

The following table provides financial information for the two reportable segments and a reconciliation to consolidated financial information for the periods presented.

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Segment Adjusted EBITDA (Loss):
Vertical Software	$	1,816	$	5,652	$	1,420	$	8,536
Insurance		(31,181)		(5,609)		(38,366)		(5,394)
Subtotal		(29,365)		43		(36,946)		3,142
Reconciling items:
Corporate and other		(13,769)		(15,048)		(28,070)		(28,503)
Depreciation and amortization		(6,214)		(6,416)		(12,229)		(12,899)
Non-cash stock-based compensation expense		(6,404)		(9,702)		(13,298)		(15,556)
Restructuring costs		(1,093)		—		(2,077)		—
Acquisition and other transaction costs		(258)		(357)		(386)		(1,322)
Impairment loss on intangible assets and goodwill		(55,211)		—		(57,232)		—
Loss on reinsurance contract (1)		(48,244)		—		(48,244)		—
Non-cash losses and impairment of property, equipment and software		(254)		—		(254)		(70)
Revaluation of contingent consideration		2,656		(1,481)		2,810		(4,686)
Investment income and realized gains		(1,249)		(243)		(2,007)		(440)
Non-cash bonus expense		—		1,526		—		—
Operating loss	$	(159,405)	$	(31,678)	$	(197,933)	$	(60,334)

⁽¹⁾ See Note 16.

The CODM does not review assets on a segment basis.

All of our revenue is generated in the United States except for an immaterial amount. As of June 30, 2023, and December 31, 2022, we did not have material assets located outside of the United States.