Segment Information

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Segment Information

Note 17. 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.

The Vertical Software segment provides software and services to inspection, mortgage, and title companies on a subscription and transactional basis, which was 54% of total vertical software revenue in 2023, and move and post-move services, which was 46% of total vertical software revenue in 2023. 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.

	Year Ended December 31,
	2023		2022		2021
Vertical Software	$	125,116	$	154,915	$	137,150
Insurance	305,186		121,033		55,283
Total revenue	$	430,302	$	275,948	$	192,433

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, general and administrative, 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 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.

	Year Ended December 31,
	2023		2022		2021
Segment Adjusted EBITDA (Loss):
Vertical Software	$	4,307	$	14,678	$	20,733
Insurance	12,320		(5,499)		9,007
Subtotal	16,627		9,179		29,740
Reconciling items:
Corporate and other	(61,141)		(58,780)		(53,760)
Depreciation and amortization	(24,415)		(27,930)		(16,386)
Impairment loss on intangible assets and goodwill	(57,232)		(61,386)		—
Impairment loss on property, equipment and software	(254)		(637)		(550)
Stock-based compensation expense	(20,709)		(27,041)		(38,592)
Restructuring costs (1)	(4,015)		(647)		—
Acquisition and other transaction costs	(552)		(1,687)		(5,360)
Loss on reinsurance contract (see Note 14)	(36,042)		—		—
Change in fair value of contingent consideration	5,664		(6,944)		2,244
Investment income and realized gains	(8,285)		(1,174)		(701)
Operating loss	$	(190,354)	$	(177,047)	$	(83,365)

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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. As of December 31, 2023, goodwill for the Vertical Software segment was $191.9 million and was zero for the Insurance segment which was fully impaired during 2023 (see Note 6, Intangible Assets and Goodwill, for additional information). As of December 31, 2022, goodwill for the Vertical Software segment and the Insurance segment was $191.9 million and $52.8 million, respectively.

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