Before we go further, I'd like to read from the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements.

Today's discussion may contain forward-looking statements, including, but not limited to, statements regarding Porch's expectations or predictions of future financial and business performance or conditions; business strategy and plans; and anticipated impacts from pending or completed acquisitions.

Forward-looking statements are inherently subject to risks, uncertainties, and assumptions, and they are not guarantees for any future performance. You should not put undue reliance on these statements.

You should understand that such forward-looking statements involve risks and uncertainties, including the items discussed under the risk factors in Porch's recent public filings with the SEC.

Such factors may be updated from time to time in Porch's subsequent filings with the SEC, which are available on the SEC website and may cause actual results or performance to differ materially from those indicated by such statements.

Porch is under no obligation and expressly disclaims any obligation to update, alter, or otherwise revise any forward-looking statement, whether as a result of changed circumstances, new information, future events, or otherwise, except as required by law. In today's remarks we'll also refer to certain non-GAAP financial measures.

Definitions of these non-GAAP financial measures are available in the legal disclaimers found on Slide 3 of the presentation. Also, for a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures, please refer to the tables included in the press release located on porchgroup.com.

We also refer you to such legal disclaimers for additional information. I'd like to remind everyone that this webcast will be available for replay shortly after the conclusion of this presentation on the company's website at porchgroup.com.

For those of you who would like to submit a question during today's presentation, please log into the webinar and submit it through the chat function on the Zoom platform. Management will do its best to take all questions within the allotted time.

Porch Group has also made available a slide presentation that will follow along the presenters' commentary. The presentation can be found on the company's website. With that, let me turn it over to Matt Ehrlichman, CEO, Chairman, and Founder of Porch.

Matt?.

number one, sell software and additional modules to more companies or become deeply embedded with these organizations; two, have more of these companies provide access to their consumers; which leads to three, providing more services to these consumers.

As we help with more services, the consumer is happier with our experience, helping companies like home inspectors to look good; four, we focus on insurance as a managing general agent, full-stack carrier, and agency where we can leverage our unique customer acquisition and property data advantages; five, we're bringing in brands and advertisers to connect with homebuyers earlier; and lastly, we use strategic and accretive M&A to continue to expand our platform.

Our business is performing 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 Q3 and our updated guidance for the remainder of 2021.

Marty?.

Thanks, Matt, and good afternoon, everyone. Turning now to our financial results for the quarter ended September 30, 2021. Our total revenue was $62.8 million compared with $21.5 million in Q3 2020, an increase of 192% year-over-year.

As a reminder, of the three recent announced acquisitions, only AHP impacted Q3 as the close of the CEC acquisition is pending regulatory approval, and the Floify acquisition was completed during the current Q4. AHP generated, approximately, $1 million of revenue in Q3.

Typically, we only break out acquisitions as we announce them and do not separate them out ongoing, namely because our platform has consistently created significant incremental organic growth once target companies join Porch.

Case in point, acquisitions from this last year accelerated from, approximately, 7% annual growth for the year prior to being acquired by Porch to, approximately, 32% growth in the year following the acquisition. Looking at Slide 9, in Q3, we clearly performed well with significant upswings in the top line as well as margins.

Revenue increased from $51.3 million in Q2 2021 to $62.8 million in Q3, or a 22% increase quarter-over-quarter. Margins were also strong. As Matt mentioned, we believe that given our strong contribution margins, we could make choices to allow us to be profitable near-term, as demonstrated in Q3 with our first quarter of adjusted EBITDA profitability.

I would reiterate that we do not expect nor desire this to continue short term. There are just too many attractive investments to make. Above the adjusted EBITDA line, the business continues to demonstrate that it is very high margin with 69% revenue less cost of revenue margin and 45% contribution margin.

As you see here on Slide 10, given the organic growth of our business and a $2 million revenue from the Floify acquisition expected in Q4, we are raising our previously stated revenue guidance from $187.5 million to $195 million for the full year. This would be 170% year-over-year growth.

This is our fifth consecutive raise of guidance in our 11 months as a public company, from $120 million at our IPO to now $195 million.

If you were to pro forma the closed 2021 acquisitions we had discussed throughout the year, as if they had been acquired on January 1, 2021, we would anticipate our full year 2021 pro forma revenue to be $226 million. This is our baseline to grow from as we look ahead to 2022. As a reminder, there is some seasonality in revenue for our business.

Q2 and Q3 are typically higher revenue as companies service more homebuyers in those two quarters, which increases our transaction revenue per company.

While we don't set quarterly guidance, we are noting that based on our annual guidance and nine months to date performance, we expect Q4 to be, approximately, $54 million in revenue, which would be our typical seasonal decline.

In terms of margins, we are adjusting guidance for revenue less cost of revenue, which we use instead of gross margin to, approximately, 70% to account for mix shifts of certain transactional revenue, some of which like mover services are slightly lower margin.

Not a meaningful impact to the business as it had no bearing on our contribution margin or profitability targets. We are reiterating our full-year 2021 guidance of contribution margin at, approximately, 40%. Depending on mix, we expect this to finish plus or minus 1% of this guidance we set out at the start of the year.

We also reiterate full-year adjusted EBITDA loss guidance of negative 14% to negative 16%, which implies, approximately, negative 20% adjusted EBITDA margin in Q4, which factors in growth investments we are making.

For our updated guidance of $195 million in 2021, we expect $134 million from Vertical Software segment and $61 million from the Insurance segment. Overall, year-over-year growth is expected to be 170%. On the right side of Slide 10, you can see our anticipated 2021 revenue distribution is largely in line with previous guidance.

Approximately, 90% of our revenue is expected from our recurring and reoccurring revenue streams from our vertical software platform and insurance with only, approximately, 10% of revenues from nonrecurring post move transactional revenue.

B2B SaaS revenue, a subset of our vertical software pricing and monetization has increased from anticipated, approximately, 25% and to, approximately, 28% of total 2021 revenue. We continue to see strong growth in B2B SaaS revenues by upselling additional modules to companies, expansion into new verticals, and software fee pricing increase.

As you can see here on Slide 12, we continue to track to meet our 2021 margin targets and anticipate, approximately, 40% contribution margin and negative 14% to negative 16% adjusted EBITDA loss margin for the year.

I'll now turn the call over to our Chief Operating Officer, Matthew Nagl, to provide an update on our key performance indicators for Q3 2021..

Thanks, Marty. Hello, everyone. I'll jump in with our public KPIs. Here on Slide 14, Q3 KPIs were strong. Beginning with companies, we saw growth in the average number of companies in the quarter to more than 20,000, which is up 90% year-over-year, and also growth in the average revenue per company to $1,022 per month, which is up 54% year-over-year.

We continue to generate more revenue per company in a number of ways. We sell in more B2B SaaS modules. We help these companies grow. We get access to more transaction volume. We help their homebuyers with more services. And we roll out our insurance offerings to more states where we generate more revenue per sale.

We believe growth in new companies will slow down in Q4 and moving forward. There were unusual positive impacts in the 2021 year, such as inspectors coming back online after COVID, and seasonal fluctuations will naturally drive a faster growth rate in Q3 than the upcoming Q4.

We also saw a nice increase in companies from our marketing services division, which is anchored with V12. That division has ramped up the Mover Marketing product for smaller businesses and is adding more companies, albeit with a smaller revenue per company.

In Q4, Floify is expected to add, approximately, 1,500 companies, but their revenue per company is lower than our average. In addition, we expect seasonally lower revenue in Q4. As such, we expect revenue per company to be lower in Q4 than in Q3, roughly in line with our typical seasonal decline.

On Slide 15, we continue to see strong growth across all types of monetized services. We increased to almost 330,000 monetized services for Q2, representing 66% year-over-year growth and saw $144 per monetized service, a 48% increase year-over-year.

Importantly, the growth in monetized services is coming from key services we are focused on, such as insurance, which results in higher revenue per monetized service. As we continue to expand our insurance offerings into more states and grow home warranty, we expect the average revenue per monetized service to continue to increase over time.

We expect a seasonal decline across these two metrics in Q4 as is consistent with previous years. Let's now jump into additional disclosure related to our two operating segments. First, I'll update on Vertical Software, and then Adam Kornick will talk about the Insurance segment. Turning to Slide 16.

As you know, we are a leading provider of software to small and medium-sized home service companies across a variety of strategic and fragmented verticals. This includes our ISN software, which serves home inspectors; Floify in the mortgage space; Rynoh in title; HireAHelper in moving; and iRoofing.

These offerings help small- and medium-sized home services companies grow and run their businesses more efficiently. As we invest in product development, we are able to layer in more modules and offer more products and services, improving our value proposition, and growing our B2B SaaS revenues.

Because our SaaS plus transaction monetization model, these companies are particularly valuable to us. As such, we have strong unit economics, which allow us to continue to invest in sales and marketing and product and technology to drive continued, rapid growth. Turning to Slide 17. We see why our offerings are popular with our customers.

First, we offer best-in-class solutions tailored to the specific vertical, and because of our SaaS plus transaction economic model, we're able to invest more than others in product development. Second, we help these companies stand out, provide a better experience for their customers, and improve their own NPS scores.

We allow these companies to help with more than just their particular service, but to provide our Moving Concierge service to their customers to make the entire move easy. Third, part of our strategy in operating across multiple home service industries is how we link them together.

When we meet consumers from a home inspection company, we're able to drive demand to moving companies. Now when we are introduced at the point of the home loan, we can help the consumer schedule an inspection or find the right title agent.

By driving demand to our software companies, not only does it generate more revenue, it also makes our software very sticky. I'd now like to turn to Slide '18 and discuss the financial performance of the Vertical Software segment. For the third quarter, Vertical Software contributed $42.3 million in revenue.

Of this revenue, only 13% is nonrecurring post-move transaction revenue. Clearly, the revenue in this segment is predominantly recurring and reoccurring revenue.

As a reminder, Floify will be layered into the Vertical Software segment fourth quarter financials, and as noted in our announcement, we expect Floify to contribute, approximately, $2 million of B2B SaaS revenue in Q4.

The margin profile of the segment is also strong, with a healthy 42% contribution margin in Q3, highlighting the strong unit economics of the business. In Q3, Vertical Software had an 18% adjusted EBITDA margin. As we look to 2022, we may allocate more corporate cost based on G&A utilization to each segment.

Based on our preliminary work, including these costs, would have produced a low-double-digit adjusted EBITDA margin in Q3 for Vertical Software despite aggressive product and technology investments. As a reminder, our revenue has a seasonal element where we would expect lower segment revenue in Q4 versus Q3.

And as we continue to make investments, the combination of these two factors would point to a lower adjusted EBITDA margin in Q4. Overall, we are very pleased with the performance of the segment, which highlights our strengths as a vertical software company with rapidly growing, predictable, and recurring revenues.

I'll now turn it over to Adam Kornick, President of our InsurTech division..

roof quality; make, model, age of appliances systems, et cetera. We are investing in our data platform and pricing teams with the goal of better personalizing policies for each customer. This can improve margins and allow us to lower prices for the right customers accelerating growth.

I am excited about our meaningful progress and the size of the opportunity ahead. Back to you, Matt..

Thanks, Adam. Thanks, guys. So I will recap us. But again, it's an excellent third quarter. We delivered strong financial performance, managing costs and delivering our first profitable quarter, while also growing nearly 200% year-over-year.

We raised our full-year revenue outlook as we talked about, continued momentum with our KPIs, and are making strong progress strategically. We've announced the three acquisitions, expanding our vertical software footprint, adding home warranty services, and positioning for continued, fast insurance expansion.

We're creating significant strategic, financial, and shareholder value through these acquisitions and are able to effectively absorb them given how our organization platform is designed. We'll continue to evaluate and execute on our M&A pipeline for the right opportunities.

We're very excited about the remainder of the year and 2022 as well as our future growth potential. We have a predictable business with key competitive advantages and lots of levers to drive growth in this massive market we're going after. So with that, the management team will now take your questions.

Walter, if you can please open up the line for Q&A..

Thanks, Matt. The first question comes from John at Stephens..

I just want to check on the vision behind the nationwide inspection tour. I thought that was a pretty interesting announcement for you guys. Just curious how you define success there. I think last you guys have said was maybe 30% penetration.

So is there a certain kind of market share number you're targeting? And then separately, is there a certain level of conversion you're looking to move people off SaaS pay and onto customer access?.

Yes. So for folks that aren't aware, we announced in the inspection industry launching a hundred pop-up conferences over the course of this year. And so that team is well underway.

One of the thing that Matthew had referenced is, because of our SaaS plus transaction monetization model, it opens up unit economics that allow us to go and deploy dollars into different go-to-market tactics that other pure-play software company just wouldn't be able to afford.

And so for us, John, what we look at is across every one of these different go-to-market tactics at the end of the day what's the LTV to CAC, what's the return on capital that we deploy against it, so we can not only prioritize across our whole Porch Group, but within each business and prioritize deploying money in the right way.

So what we would look for is as we scale up a motion like that, just making sure that we sustain unit economics and the return on capital so we can just keep going. We would like to be able to learn to see if we can take that type of tactic into other verticals as well that we're in to see if it's just a scalable program.

We haven't charted or talked publicly about the number of inspectors that we're looking to add, but certainly expect to continue to grow share in that space.

And then sorry, John, what was your second question?.

About just the conversion, moving over to customer access pay. I would imagine there's some kind of educational element probably baked into these pop-up tours..

What's great is that when you're together with these companies, these small businesses in person, and you're able to spend time educating them and building relationships both, you can make a really big impact in how you're able to help these companies grow. And so we invest that time.

By doing so, you're able to not only help them get set up with our software because it clearly can help these companies grow. You're able to upsell all of these different modules into these companies, including helping them to be able to provide a better experience to their customers through our Moving Concierge. And so you're right.

Now, whatever tactic we're using when we sell it an inspector, the vast majority of those new companies are paying with transactions and SaaS fees. 75% to 95% of new companies still are turning on transactional pay in part. And so I wouldn't say we're beating that through pop-up conferences. It's just that we're able to continue that motion..

Okay, that's helpful. And then one follow-up here, just quickly on Floify. I mean, obviously, you're having the insurance part of that fulfillment process, I guess the closing process for the mortgages you have to have obviously insurance tied into that.

Talk to us about how that handoff looks, basically what that process looks like for consumers going through Floify..

We are very excited about not only getting earlier access to home buyers but in how perfectly positioned we believe we are now with Floify to be able to layer in insurance, because what the Floify software is, it's point-of-sale software for these mortgage companies and loan officers to help digitize that loan application process and help those consumers, those home buyers go through this complicated process in a very easy, digital way.

One of the things you have to do when you're going a loan process is to get insurance. It's a requirement. And so right now, you can upload insurance records, go kind of check one of the boxes in that application. But, for us, it's obvious. Ask the consumer if they already have insurance. If so, great, upload it. But most don't, at that point in time.

And so what we want to do is to be able to just make that very easy for them to say, great, here's your choices. As we continue to build forward eventually with Homeowners of America, we'll have that ready-to-bind quotes that's just available for them.

So, hey, here's your price, and make it as easy as possible for them to simply check a box and be all set. And so as you start to link this together, and there's a lot of work for us certainly to be able to bring that to life. But as we do, that will create a very seamless process. It should be, in our view, very highly converting over time..

Next question comes from Dan at Benchmark..

Obviously, an excellent quarter and year. I guess maybe I'll just start with -- you have bought a few things, Matt, this year. So I hope my math is right here, but actually, if you look at your updated guidance, it's basically implying that the guidance this year, all of the improvements have been entirely organic.

So can you just talk through kind of the underlying trends, sort of, what you're seeing going into next year, sort of, how you see that growth continuing? And then I have a follow-up..

Yes. So we'll provide next quarter our 2022 numbers and formal guidance. So we're still kind of finalizing right now a few different things; what investments do we want to make across all the different businesses, both in terms of sales and marketing and in terms of product and technology.

And so some of the choices that we make each year is, okay, how many points of margin improvement do we want to manage the business to offset versus what kind of investments do we want to make. So growth versus profitability trade-off.

Now we talked about, we want to continue -- certainly, we're going to show continued and very consistent progress in our adjusted EBITDA margin each year, but then we're going to invest aggressively as we can up to that constraint. So we'll be able to share more in terms of kind of the specific numbers here next quarter..

Okay. Fair enough. And then just kind of a follow-up to John's question. The other perhaps incentive tool you might have is just around pricing. It's something we've talked about before.

And given the strength of the underlying platform and some of the education you're now putting in the marketplace, it feels like that is a lever that you now have potentially across multiple verticals? So maybe talk about that a little bit would be helpful..

Matt, do you want to take it?.

Say that again?.

You want to take it, Matthew? Yes, go for it..

Yes. So we do have a strong value proposition to our companies. We have a very high customer satisfaction. We can offer things that others are not able to do. So we have started to move pricing in certain verticals. So some of the growth that we're seeing in revenue and company per revenue is from that.

And I think we also have a few more opportunities out there. And then obviously, given our ability to invest aggressively in product and development. We have opportunities to add modules and expand our value prop to where we think price can be one of those levers over time to help us to grow..

The next question comes from Jason Helfstein from Oppenheimer..

Maybe just a follow-up and then just a question about insurance. So I think if you do the math and tell me this right, for a full -- on a full-year basis, organic growth would be about 27%.

Is that right? And just -- I mean, any reason -- and kind of probably early in this year, you didn't see as much home inspection as you would have liked because of that market.

So maybe just talk about how that 20% [indiscernible] this year could have been influenced by the lack of home inspection and what that means going into next year for top of funnel. And then second, I appreciate the added disclosure.

Do you think you'll be able to help us kind of get from -- on the insurance side from gross written premium kind of like down to revenue? So I think you told us $180 million of revenue. I think reinsurance is 93%. That implies like COGS of $87 million, but yet you don't get to 21%. So if you can help us on this quarter, that would be great.

Otherwise, if we can get the step-through in a future period, that would be super helpful..

I'll take the first, and then, Adam or Marty, if you want to take the second on insurance, that's great. So real quick on the organic growth. We don't break, Jason, the organic quarter-by-quarter because, again, companies that we acquire end up growing much--.

That was full year. The 27% math is the full year, off of the base of $85 million..

Yes. So on this, yes, it depends on what number you want to use for 2020, obviously. We did $72 million of revenue in 2020. We think that $85 million is a reasonable peg for last year because obviously 2020 was such a strange year with COVID. Actual revenue last year was $72 million.

This is the best slide here to be able to break out where we kind of highlight, here is the revenue that we have layered in from -- you see on the right-hand side, Homeowners of America, AHP up in the Insurance segment, so $33.5 million of that $61 million was layered in from those acquisitions.

And then $26 million of the $134 million from Vertical Software layered in from V12 right now down to Floify. So that's the disclosure. As we do next quarter, we will be highlighting not only just year-over-year growth all up, but also off of our 2021 pro forma.

So if all the acquisitions had closed January 1, 2021, what we're looking at from a growth for next year, and we feel good about how the business is set up for strong underlying organic growth.

Adam and Marty, do you want to take the second question?.

Yes, sure, Matt, it's Adam. I can talk about that. So we don't break down any of the details in Insurance below the segment level. And, obviously, the different businesses are slightly different. But I believe Matt mentioned that about 20% of -- revenue is about 20% of gross written premium. And it obviously varies.

That's a combination of both commission and fees. But I think that's a good way to think about it is that with the way we operate, around 20% of gross written premium is what tends to flow through as premium plus fees to us..

How does that tie back to reinsurance? That's what I'm asking..

So right now, when we sell as an agency, sell insurance as an agency, we've talked about how we get around 13% to 14% commissions. So part of our business on the 40 states that we are not operating our own insurance products today, we'll sell third-party carrier insurance products and that's our average commission rate.

In the 10 states that we sell our own insurance product, here we get about twice that in terms of our commission..

So it's mixed. The point is, the 13% to 14%--.

That's all out Insurance segment..

And it shakes out and that's that. Okay..

Yes. So all of our Insurance segment we're getting around 20% of gross written premium flowing through revenue.

And the reason, Jason, that's something we just wanted to highlight is, occasionally we still get questions on the revenue and the economic model tied to insurance and the key thing we want to stress and highlight is our revenue is this distribution, commission, and fee revenue, this high-margin revenue that flows through from that gross written premium that ends up on our P&L..

Now we'll head to Jason Kreyer from Craig-Hallum..

Two questions for me on just the segment disclosure. So in regard to the contribution margin, can you just talk about where -- as contribution margin goes up over time, how does that impact the two segments the Vertical Software and Insurance? And then you also gave the disclosure on EBITDA margin on each segment.

Curious if you can talk about where those two figures can go over the long term?.

You can actually get a sense for the two segments right now that the contribution margin for both is fairly similar. Now Insurance in this particular quarter, as Adam talked about, the third quarter tends to have a bit higher margin just from seasonality. So this will be a higher point from a margin perspective for the Insurance segment.

But all up, we expect both of them to continue to be strong. Obviously, as a company, we're guiding to 40% contribution margins for the full year, and that's fairly well balanced across those two segments. From an EBITDA margin perspective, our long-term guide is 25%, long-term EBITDA margin targets.

We think that could have been opportunity for us to set even a higher bar, but what we're trying to communicate based on those long-term targets is that we want to, even long term, continue to invest aggressively in product and technology to be able to drive growth and win, at the end of the day.

And so for both of those, I mean, you can get a sense for the Insurance segment right now, it's almost 27% adjusted EBITDA margin. We talked about how we will have some additional kind of shared expense flow through as we look to 2022. But even adjusted and normalized for that, would have been around 22% adjusted EBITDA margin.

We haven't broke out and kind of broken up our long-term margin targets yet from each of those two segments. Perhaps it's something we'll do over time, but we haven't done that yet..

Okay. And then a follow-up for me, maybe this is better for Adam. But you're six, seven months into HOA now. Just curious if you can talk about kind of the findings over the first couple quarters with HOA now in the fold? And then I know you talked about layering a lot of the data kind of exiting 2022.

But curious if you can give us any insights into what data you're already leveraging in that insurance business..

I can talk about that. So, Jason, we are really excited about the data. So first, I'd say the acquisition has been going great. It's wonderful to have the HOA team on board.

And you can see that come out in the geographic expansion as well as the growth rate you see in our gross written premium, that's probably the most useful top line metric to think about for that business.

When I think about the data, one thing to keep in mind is that to use the data and pricing, we need to file it in every state with a regulator and get regulatory approval to use it, which is something we're very familiar with doing it. So we have some exciting data.

I think one of the examples we talk a lot about when we talked about loss, we talked about both roofing. So the roof is on the surface of the home. It's a common way that a peril enters the home and we have a loss. The other is escape of water and water heaters can often be the cause of escape of water. And so we have data about those.

We're really excited about using them, but we're not using them yet because we have to go through that process to work with regulator to get that approved and then implemented in the state. But those are some examples of things we're excited about. We want to get to market as quickly as we can..

The next question comes from Mike from Northland..

Congrats on the quarter and progress. two questions. One, I think it was Slide 14 that had the average number of companies really up nicely year-over-year again. Anything to call out there? And then secondly, Matt, you've done some acquisitions clearly.

Is there any acquisitions that's not integrated with Moving Concierge yet that you're kind of excited about and looking forward to getting that integrated?.

Yes, why don't you take the first part, and I'll take the second part..

Yes. Thanks, Mike. We are seeing the acceleration of the number of companies. That's obviously exciting. That growth is exciting to us. We talk a lot about how we're able to invest in sales and marketing to acquire new companies.

And I did mention one of the areas we did see a nice increase in companies engaging with our Mover Marketing group, and we do expect good ongoing growth. We do expect, as an example, Floify will bring on another 1,500 companies in Q4. But as we have said before, we don't expect to see the same rate that we have been seeing.

There's been a number of tailwinds for us this quarter. But we do expect it to continue to grow, and we're excited about it..

And then in terms of some of the acquisitions, Mike, yes, there are a few things where we have not yet launched the key revenue synergies. So for the Rynoh software acquisition in the title space, we have not yet turned on transaction monetization.

The teams are working on that to be able to layer in, closing checklist to be able to connect with those homebuyers, but that's not yet launched, but still is in front of us. Obviously, the Floify acquisition just closed recently, and so we've not yet launched embedded insurance into that loan application.

But the teams are already starting their kickoffs and planning process there. From a services perspective, American Home Protect and the home warranty, that is something that we will be integrating as another offering to the homebuyers, but we've not yet launched warranties. But again, teams are working through that..

Next question is from Ben from Cantor..

Thanks for the segment disclosures. It's super helpful. So maybe I was wondering if you could help us walk through the revenue ramp and the expense rollout as you break into new states on HOA.

Should we be expecting any significant revenue in 2022 from the states that have already launched in 2021?.

I'll take it briefly. Adam, I don't know if you want to layer anything, please do. But it's a great question, Ben, so I just want to set expectations. When we do launch a new state insurance business, we will start in that state with conservative pricing. And so we want to be able to get flow coming through at the right pace that we can learn.

And then as we are getting that kind of data feedback loop, we start to be able to normalize the pricing down to where we think is the expected optimal place to be able to price based on our models. And that then starts to turn on more volume and you start to grow that.

I'd say, generally, that process takes six months or so after we launch, but it's not black and white. It's based on when you get appropriate learnings in to make sure that the models are correct for that particular state before you really increase the pace. So it will vary, I would say, state by state.

Yes, we do expect some of those new states that we've launched this last year to certainly help and impact 2022. So yes, certainly, I wouldn't say that would be the case and additional states, some of those states, like we talked about, we'll continue to launch more states here as we wrap up this year and we look into next year.

And so depending on how quick that feedback loop is, we'll see an impact from some of those new states also..

Okay. Great. That's helpful. And then on the insurance revenue, it's clear that you guys are kind of exceeding your initial expectations there.

Do you have anything to add on kind of the lost EIG revenue in the two quarters since HOA acquisition has closed? Is that still kind of in line with the $1 million a quarter you were expecting initially?.

Yes. I don't know if we ever broke it out specifically in terms of what it was going to be. This is the first time, obviously, actually breaking out insurance revenues. I would say, EIG continues to perform well. Obviously, in 40 states, all we have is our insurance agency. We don't have our own insurance product.

And so clearly, that is the only offering to consumers in those states. And even sometimes in states where we have Homeowners of America, we want to lead with our own insurance product. But often, consumers will still want or at least sometimes consumers will still want comparison, and we'll use our agency.

Today, Homeowners of America does not offer auto or umbrella or other policies. So when you're trying to offer multiple products, we'll lean on our agency, talk for multiple products. So yes, it continues to grow nicely, for sure..

Next question comes from Ahmad at Guggenheim..

So I wanted to touch on some of the softening of the reinsurance market you guys expect to see next year.

I guess, how do we -- how should we expect that to impact some of the KPIs you guys presented here this quarter on the Insurance segment?.

Adam, you want to take?.

Yes, I can take that. So as we mentioned, I think Matt night have talked about this, So we're well positioned. Reinsurance is an annual negotiation. And through HOA, we have a long track record of 15-plus years of successful negotiation and strong partnerships, but reinsurers had experienced losses.

They are not losses that affect us at HOA, but there have been hurricanes outside of our footprint, floods in Europe, other events. And these effect for reinsurance market.

So basically, what we expect to see is just a hardening of that market where reinsurers are focused on the exact kind of risks they want, what their appetite is, and so that will take some effort from the team.

But we think we're really well positioned to work through that because we have these deep partnerships and we have a track record of growing HOA profitably, and that's what we're doing right now as we work up through the negotiation process.

So it's just too early to fundamentally say the exact financial outcomes, but we think we're as well positioned as we can be, and I feel great about the team we have working on it..

And on to the second part of your question, where could that -- you see that showing up. Well, we believe, over time, that we're positioned to be able to increase our commissions from reinsurers. But that's where you would see any potential headwinds. It's just what our reinsurer is willing to pay for that ceded commission.

And so that's still TBD in terms of how that all plays out for next year..

And then second part or I guess alternate question here. You guys also mentioned that your acquired companies saw 32% growth year after the acquisition.

How should we think about that year two and beyond after they're integrated and into the B2B2C transaction pipeline?.

Yes. Thanks for that question because that's a key point that I would want to make sure didn't get missed. If there's people asking about a proof point on is the model working well, I think that's a really great one. These companies, again, we're growing 7% annually in the year prior to being acquired by Porch and then 32% in the year after.

And that's inclusive of some of the acquisitions like Rynoh I mentioned. We've not yet layered on transactional monetization. So we haven't turned on any revenue synergies yet for a company like that.

We've talked about as we've gone public, that 30 to 35 kind of percent long-term growth rate, and that just being the growth rate that we would expect to be able to sustain. I think that I would expect to be able to sustain that growth rate.

So I would not expect it's a one-year jump and then kind of settles back into slower growth or anything like that. Fundamentally, I think we're able to change the revenue curve of those businesses as being part of the Porch platform..

We have one in from the audience.

Marty, can you give an update on the capital level of the company as well as the captive?.

Yes. So as you're all aware, we closed on our $425 million of convertible debt right before the end of the quarter. So we ended the quarter with $415 million in cash. And then we announced the Floify acquisition on October 27, which used, approximately, $76 million of cash.

So we feel we're in a really good position for continued execution of our organic growth strategy as well as our M&A pipeline into 2022. And that's exactly why we did that debt raise in the third quarter.

With respect to our share count, we've got full disclosure of that in our 10-Q, but we ended the quarter with $97.3 million of common shares outstanding. There still is $1.8 million of private warrants outstanding, and we did see a significant number of the private warrants exercised during the third quarter on a cash less exercise basis..

Thanks, Marty. Matt, I think we are wrapping on questions now, and you can wrap us up..

I will do so. I just would want to say thanks, everybody, for joining the call today. Again, another great quarter for the company. The key point is, though, we feel like we're just getting started, everything feels very much in front of us. But the team is fired up. We're making great progress, and we appreciate the support and the interest.

With that, have a great day. Take care..