Segment Information

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

Segment Information

Note 16. Segment Information

We have two reportable segments that are also our 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 our 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.

Our Vertical Software segment provides software and services to inspection, mortgage, and title companies on a subscription and transactional basis, which was 62% of total vertical software revenue, and move and post-move services, which was 38% of total vertical software revenue for the three months ended March 31, 2024. The Vertical Software segment operates as several key businesses, including inspection software and services, title insurance software, mortgage software, moving services, mover and homeowner marketing, and measurement software for roofers.

Our Insurance segment provides consumers with insurance and warranty products to protect their homes, earning revenue through premiums collected on policies, policy fees and commissions. The Insurance segment includes Homeowners of America (“HOA”), a wholly owned insurance carrier, Porticus Reinsurance (“Porticus RE”), our Cayman Islands captive reinsurer, and Porch Warranty, among other warranty brands.

The following table summarizes revenue by segment.

	Three Months Ended March 31,
	2024		2023
Vertical Software	$	27,495	$	28,627
Insurance	87,948		58,742
Total revenue	$	115,443	$	87,369

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, selling and marketing, product and technology, and general and administrative. 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 selling 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 “Operating loss” below includes the effects of corporate and other items that the CODM does not consider in assessing segment performance.

	Three Months Ended March 31,
	2024		2023
Segment Adjusted EBITDA (Loss):
Vertical Software	$	1,123	$	(396)
Insurance	(2,885)		(7,185)
Subtotal	(1,762)		(7,581)
Reconciling items:
Corporate and other	(15,026)		(14,301)
Depreciation and amortization	(6,317)		(6,015)
Impairment loss on intangible assets and goodwill	—		(2,021)
Stock-based compensation expense	(5,368)		(6,894)
Other non-operating income	(1,176)		—
Restructuring costs (1)	(157)		(984)
Acquisition and other transaction costs	(167)		(128)
Change in fair value of contingent consideration	(1,051)		154
Investment income and realized gains	(3,644)		(758)
Operating loss	$	(34,668)	$	(38,528)

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(1)Primarily consists of costs related to forming a reciprocal exchange.

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 March 31, 2024, and December 31, 2023, we did not have material assets located outside of the United States.