Announces offering of groundbreaking new
Upfront Title product to reduce high title costs for homeowners by
up to 80%
Initial launch of Upfront Title product
announced via pilot with a major mortgage software platform
leader
Continues making progress towards reaching
adjusted EBITDA profitability
Core Underwriting platform continues to perform
well, benefitting from increased operational efficiency and
significant tech upgrades
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 September 30, 2023 (1).
Third Quarter 2023 Business Highlights (2)(3):
- Total revenues of $76 million, down 6% versus Q2 2023
- Retained premiums and fees of $15 million, down 7% versus Q2
2023
- Gross profit of $3 million, up 56% versus Q2 2023
- Adjusted gross profit of $6 million, up 23% versus Q2 2023
- Net loss of $22 million, compared to a net loss of $24 million
in Q2 2023
- Adjusted EBITDA loss of $5 million, compared to a loss of $12
million in Q2 2023
“We’re pleased to announce key new details on our new strategy
that will ensure our proprietary technology helps address the
significant home affordability challenge facing millions of
Americans today. We are launching an innovative new product,
Upfront Title, which will enable Doma to move our instant
underwriting decision closer to the loan underwriting decision
itself, allowing lenders to significantly reduce key areas of cost
and operational activity, all while providing homebuyers with more
affordable title solutions,” said Max Simkoff, CEO of Doma. “We
will be making our Upfront Title product available to both mortgage
software platforms as well as the Government Sponsored Enterprises
as soon as the end of this year. Doma’s Upfront Title will enable
the lender customers of these platforms to receive near-instant
title certainty at the point of deciding whether to underwrite the
loan, as well as being able to provide their homeowner customers a
price meaningfully below current industry standard rates for title
insurance. Additionally, this configuration of our technology will
help Doma shift more of our revenue toward higher-margin software
licensing revenue.”
Mr. Simkoff added, “We are also excited to announce that we will
be launching a pilot program with one of the largest mortgage
software platforms in the country for our initial launch of Upfront
Title in the mortgage software platform channel. Presently, we’re
in the process of onboarding this mortgage software system partner
and working towards finalizing commercial terms in advance of
launching the program. Further, we’ve worked collaboratively with a
major national lender on the mortgage software provider’s platform
to deliver instant underwriting and title certainty, which will
support the lender’s underwriting decisions in the mortgage
software and enable it to offer our discounted rates to its
borrowers. We believe the configuration of this new product will
drive substantial growth in title insurance premium business for
our underwriter as well. We anticipate being able to go live with
the program by early Q1 2024, subject to agreement and
documentation of final commercial terms.” (4)
“We are proud of the continued progress we’ve made towards
profitability, and we were pleased to see a $2 million and $7
million sequential improvement in our net loss and adjusted EBITDA
loss, respectively, this quarter,” said Mike Smith, Chief Financial
Officer of Doma. “While we believe we are within striking distance
of achieving our goal and expect to see continued significant
improvement in our overall adjusted EBITDA in the fourth quarter,
the continued degradation of the housing market means there is
still risk to us achieving full quarter adjusted EBITDA
profitability in Q4, and this risk will likely persist into the
first quarter of 2024. Our team has worked hard to successfully
execute significant cost reduction actions while still enhancing
the customer service levels at our underwriter and our enterprise
division, and at this point we believe our cost-cutting measures
are largely behind us. Going forward we will look toward growing
our revenue and expanding our margins as we seek to meet the
substantial demand for lower cost title solutions.”
(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 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.
(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.”
(3)
Doma has exited the Company’s local retail
operations nationwide. Local and associated operations are
classified as “discontinued operations” and segregated in the
Company’s financial results beginning in the third quarter ended
September 30, 2023. The financial results and key operating data
highlighted today reflect the continuing operations of Doma,
excluding the discontinued Local and associated operations.
(4)
While Doma and our initial mortgage
software system partner are working towards finalizing commercial
terms, there can be no assurance that the parties will be able to
reach a definitive agreement in a timely manner or at all.
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 total revenue
less premiums retained by 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 and depreciation and
amortization, and further adjusted to exclude the impact of net
loss from discontinued operations, stock-based compensation,
severance and interim salary costs, goodwill impairment, long-lived
asset impairment, accelerated contract expense, change in fair
value of local sales deferred earnout, 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 today
on Tuesday, November 7, to present its third 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,
mortgage software providers (including any specific partner
mentioned), 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 and the
fact that while Doma and any specific partner mentioned are working
towards finalizing commercial terms, there can be no assurance that
the parties will be able to reach a definitive agreement in a
timely manner or at all. 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 to allow potential investors the opportunity to
understand management’s beliefs and opinions in respect of the
future so that they may use such beliefs and opinions as one factor
in evaluating an investment. These statements are not guarantees of
future performance and undue reliance should not be placed on them.
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 from Continuing
Operations
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
(Unaudited - in thousands)
GAAP financial data:
Revenue (1)
$
76,240
$
97,915
$
226,331
$
311,103
Gross profit (2)
$
3,079
$
2,329
$
7,152
$
2,703
Net loss (3)
$
(22,239
)
$
(38,904
)
$
(77,725
)
$
(121,016
)
Non-GAAP financial data (4):
Retained premiums and fees
$
15,425
$
22,041
$
46,209
$
72,807
Adjusted gross profit
$
6,021
$
6,335
$
15,865
$
13,267
Ratio of adjusted gross profit to retained
premiums and fees
39
%
29
%
34
%
18
%
Adjusted EBITDA
$
(5,277
)
$
(22,435
)
$
(30,203
)
$
(89,192
)
_________________
(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 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 continuing
operations 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,
2023
2022
2023
2022
(Unaudited - in thousands)
Revenue
$
76,240
$
97,915
$
226,331
$
311,103
Minus:
Premiums retained by agents
60,815
75,874
180,122
238,296
Retained premiums and fees
$
15,425
$
22,041
$
46,209
$
72,807
Minus:
Direct labor
3,289
7,655
10,424
32,186
Provision for claims
3,337
4,167
11,954
13,901
Depreciation and amortization
2,942
4,006
8,713
10,564
Other direct costs (1)
2,778
3,884
7,966
13,453
Gross Profit
$
3,079
$
2,329
$
7,152
$
2,703
__________________
(1)
Includes title examination expense, office
supplies, and premium and other taxes.
Adjusted gross profit
The following table reconciles our continuing
operations 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,
2023
2022
2023
2022
(Unaudited - in thousands)
Gross Profit
$
3,079
$
2,329
$
7,152
$
2,703
Adjusted for:
Depreciation and amortization
2,942
4,006
8,713
10,564
Adjusted Gross Profit
$
6,021
$
6,335
$
15,865
$
13,267
Adjusted EBITDA
The following table reconciles our continuing
operations 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,
2023
2022
2023
2022
(Unaudited - in thousands)
Net loss (GAAP)
$
(25,626
)
$
(84,113
)
$
(103,626
)
$
(192,791
)
Adjusted for:
Depreciation and amortization
2,942
4,006
8,713
10,564
Interest expense
5,495
3,575
14,487
10,331
Income taxes
154
396
466
657
EBITDA
$
(17,035
)
$
(76,136
)
$
(79,960
)
$
(171,239
)
Adjusted for:
Loss from discontinued operations, net of
taxes
3,387
45,209
25,901
71,775
Stock-based compensation
4,659
6,858
12,485
24,107
Severance and interim salary costs
2,118
3,072
9,459
6,696
Long-lived asset impairment
972
—
1,413
—
Change in fair value of Warrant and
Sponsor Covered Shares liabilities
(263
)
(1,438
)
(386
)
(20,531
)
Accelerated contract expense
1,268
—
1,268
—
Change in fair value of Local Sales
Deferred Earnout
(383
)
—
(383
)
—
Adjusted EBITDA
$
(5,277
)
$
(22,435
)
$
(30,203
)
$
(89,192
)
The following table reconciles our continuing
operations adjusted gross profit to our adjusted EBITDA, for the
periods indicated:
Three Months Ended September
30,
Nine Months Ended September
30,
2023
2022
2023
2022
(Unaudited - in thousands)
(Unaudited - in thousands)
Adjusted Gross Profit
$
6,021
$
6,335
$
15,865
$
13,267
Minus:
Customer acquisition costs
1,475
4,800
5,498
16,701
Other indirect costs (1)
9,823
23,970
40,570
85,758
Adjusted EBITDA
$
(5,277
)
$
(22,435
)
$
(30,203
)
$
(89,192
)
__________________
(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,
(Unaudited - in thousands, except share
and per share information)
2023
2022
2023
2022
Revenues:
Net premiums written (1)
$
73,736
$
94,488
$
219,468
$
299,080
Escrow, other title-related fees and
other
844
2,674
2,606
10,340
Investment, dividend and other income
1,660
753
4,257
1,683
Total revenues
$
76,240
$
97,915
$
226,331
$
311,103
Expenses:
Premiums retained by agents (2)
$
60,815
$
75,874
$
180,122
$
238,296
Title examination expense
969
1,810
2,943
6,809
Provision for claims
3,337
4,167
11,954
13,901
Personnel costs
15,521
36,288
58,363
132,124
Other operating expenses
11,479
16,147
34,694
50,532
Long-lived asset impairment
972
—
1,413
—
Total operating expenses
$
93,093
$
134,286
$
289,489
$
441,662
Operating loss from continuing
operations
$
(16,853
)
$
(36,371
)
$
(63,158
)
$
(130,559
)
Other (expense) income:
Change in fair value of Warrant and
Sponsor Covered Shares liabilities
263
1,438
386
20,531
Interest expense
(5,495
)
(3,575
)
(14,487
)
(10,331
)
Loss from continuing operations before
income taxes
$
(22,085
)
$
(38,508
)
$
(77,259
)
$
(120,359
)
Income tax expense
(154
)
(396
)
(466
)
(657
)
Loss from continuing operations, net of
taxes
$
(22,239
)
$
(38,904
)
$
(77,725
)
$
(121,016
)
Loss from discontinued operations, net
of taxes
(3,387
)
(45,209
)
(25,901
)
(71,775
)
Net loss
$
(25,626
)
$
(84,113
)
$
(103,626
)
$
(192,791
)
Earnings per share:
Net loss from continuing operations per
share attributable to stockholders - basic and diluted
$
(1.66
)
$
(2.98
)
$
(5.84
)
$
(9.30
)
Net loss per share attributable to
stockholders - basic and diluted
$
(1.91
)
$
(6.43
)
$
(7.79
)
$
(14.82
)
Weighted average shares outstanding common
stock - basic and diluted
13,395,010
13,072,471
13,305,428
13,008,082
__________________
(1)
Net premiums written includes revenues
from a related party of $35.1 million and $34.8 million during the
three months ended September 30, 2023, and 2022, respectively. Net
premiums written includes revenues from a related party of $98.5
million and $96.1 million during the nine months ended September
30, 2023, and 2022, respectively.
(2)
Premiums retained by agents includes expenses associated with a
related party of $28.3 million and $27.9 million during the three
months ended September 30, 2023, and 2022, respectively. Premiums
retained by agents includes expenses associated with a related
party of $79.5 million and $77.5 million during the nine months
ended September 30, 2023, and 2022, respectively.
Doma Holdings, Inc.
Consolidated Balance
Sheets
(Unaudited - in thousands, except share
information)
September 30, 2023
December 31, 2022
Assets
Cash and cash equivalents
$
75,074
$
78,450
Restricted cash
5,214
2,933
Investments:
Fixed maturities
Held-to-maturity debt securities, at
amortized cost (net of allowance for credit losses of $207 at
September 30, 2023 and $440 at December 31, 2022)
24,243
90,328
Available-for-sale debt securities, at
fair value (amortized cost $58,311 at September 30, 2023 and
$59,191 at December 31, 2022)
57,327
58,254
Mortgage loans
46
297
Total investments
$
81,616
$
148,879
Trade and other receivables (net of
allowance for credit losses of $1,601 at September 30, 2023 and
$1,413 at December 31, 2022)
26,827
20,541
Prepaid expenses, deposits and other
assets
6,843
6,687
Lease right-of-use assets
3,976
4,724
Fixed assets (net of accumulated
depreciation of $23,937 at September 30, 2023 and $16,685 at
December 31, 2022)
32,883
37,024
Title plants
2,716
2,716
Goodwill
23,413
23,413
Assets held for disposal
4,614
53,141
Total assets
$
263,176
$
378,508
Liabilities and stockholders’
equity
Accounts payable
$
1,464
$
2,407
Accrued expenses and other liabilities
12,385
20,139
Lease liabilities
9,038
10,793
Senior secured credit agreement, net of
debt issuance costs and original issue discount
155,477
147,374
Liability for loss and loss adjustment
expenses
82,515
81,873
Warrant liabilities
81
347
Sponsor Covered Shares liability
98
219
Liabilities held for disposal
12,406
33,564
Total liabilities
$
273,464
$
296,716
Commitments and contingencies
Stockholders’ equity:
Common stock, 0.0001 par value; 80,000,000
shares authorized at September 30, 2023; 13,409,543 and 13,165,919
shares issued and outstanding as of September 30, 2023 and December
31, 2022, respectively
$
1
$
1
Additional paid-in capital
589,107
577,515
Accumulated deficit
(598,413
)
(494,787
)
Accumulated other comprehensive income
(983
)
(937
)
Total stockholders’ equity
$
(10,288
)
$
81,792
Total liabilities and stockholders’
equity
$
263,176
$
378,508
SOURCE Doma Holdings, Inc.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231107231640/en/
Investor Contact: Dave DeHorn | Chief Strategy Officer
and Interim Head of Investor Relations for Doma | ir@doma.com
Grafico Azioni Doma (NYSE:DOMA)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni Doma (NYSE:DOMA)
Storico
Da Gen 2024 a Gen 2025
