Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil Hydroworld Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Doma's Q2 2022 Results Show Resilience Amidst Continued Housing Market Headwinds; Reaffirms 2022 Adjusted EBITDA Guidance and Commitment to Deliver Positive Adjusted EBITDA by the End of 2023 By: Doma Holdings, Inc. via Business Wire August 09, 2022 at 16:10 PM EDT Second Quarter 2022 Business Highlights(1): Total revenue of $124 million, up 10% versus Q1 2022 Retained premiums and fees of $49 million, down (5)% versus Q1 2022 Gross profit of $7 million, flat versus Q1 2022 Adjusted gross profit of $11 million, up 5% versus Q1 2022 Purchase closed orders up 16% versus Q1 2022, Refinance closed orders down (47)% versus Q1 2022, and Total closed orders down (31)% versus Q1 2022 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 and six months ended June 30, 2022(2). Doma’s results demonstrate the Company's ability to effectively manage the business through a set of macroeconomic and housing industry headwinds that continued to worsen significantly in the first half of 2022. Despite these headwinds, the Company's Q2 results, including strategic investment prioritization, cost restructuring, and a focus on purchase transactions, show that Doma remains on its path to positive Adjusted EBITDA profitability by the end of 2023. "In the face of heightened cyclical challenges within the mortgage and housing market, I am confident Doma will be recognized as one of the most agile companies to adapt to evolving market conditions, while still remaining focused on our vision of making the home closing experience better, faster, and more affordable," said Max Simkoff, CEO of Doma." The re-prioritization of our investments and our focus on purchase orders, which now make up 66% of our direct Retained Premiums and Fees, give us confidence we'll achieve positive Adjusted EBITDA by the end of 2023, if not sooner." Doma's financial performance in the second quarter was delivered against the backdrop of a mortgage market that saw overall mortgage demand fall to the lowest level in 22 years, with purchase mortgage applications declining 14% from Q1 2022 to Q2 2022, and where purchase transaction cancellations reached 15% in June, the highest level since April of 2020. Doma's unique value proposition is highlighted by its strong performance in purchase transactions which were up 16% quarter over quarter. In anticipation of further market challenges throughout the remainder of the year, Doma took additional steps in Q2 2022 to protect its path to achieve positive Adjusted EBITDA by the end of 2023. These actions included further cost reductions amidst a narrower focus on a set of strategic home purchase initiatives. Chief among these priorities include the acceleration of additional purchase transactions onto the Doma Intelligence platform (also referred to as Doma for Purchase) and the development of additional product features within Doma for Purchase for select Enterprise referral partners. "Because of the high degree of volatility in the mortgage market, most of which is being driven by macroeconomic factors outside of Doma's control, we are being strategically selective with our investments and are prudently managing our expenses, including prioritizing profitability and preserving cash over growth," said Mike Smith, Chief Financial Officer at Doma. "We believe that we have taken meaningful actions to guard against the uncertainty in the mortgage market in the back half of this year and to protect our bottom-line results. We are reaffirming our full year 2022 Adjusted EBITDA guidance at the low end of the range and will continue to manage our cost structure and investment prioritization, specifically focused on the purchase market, to ensure that we remain on our near-term path to profitability by the end of 2023." Second Quarter 2022 Growth Drivers and Recent Business Highlights Steady progress in the purchase market, demonstrated by purchase orders as of Q2 2022 making up 38% of Doma's direct residential order volume and 66% of its direct Retained Premiums & Fees. Added new features and functionality to the Doma Intelligence platform in support of purchase transactions, while ensuring increased quality and efficiency across escrow and fulfillment ahead of an accelerated rollout. Doma expects to have the majority of its purchase transactions on the Doma Intelligence platform by the end of 2023. Partnered with several Enterprise referral partners to explore a version of Doma for Purchase that can be offered directly to borrowers as part of the lender's purchase workflow. Doma intends to roll out an initial version of this product with a small group of these Enterprise partners later this year and believes this initiative may unlock an additional distribution channel for Doma for Purchase. Continued share gain in the Enterprise channel - which comprises the majority of refinance volumes - evidenced by a net gain in wallet share across Enterprise accounts and the onboarding of several new partners in the quarter. Management reaffirmation of 2022 full year Adjusted EBITDA guidance at the low end of the range, due to continued developing headwinds across the mortgage market that put the Company's previous Retained Premiums & Fees guidance at risk. Management has further affirmed that the Company remains on its previously communicated timeline to achieve positive Adjusted EBITDA by the end of 2023, if not sooner. Took further actions to align cost structure with the commitment to get to positive Adjusted EBITDA by the end of 2023 or earlier, and to reach positive cash flow generation by the end of 2023, including a significant downsizing of corporate support functions and a more streamlined management structure which is expected to result in a third quarter charge of $3 million and annualized cost savings of $40 million. 2022 Full Year Outlook (1): Non-GAAP Financial Measures Doma expects Adjusted EBITDA between negative $120 million and negative $100 million (3) Doma intends to reach Adjusted EBITDA positive in 2023 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 revenue less premiums retained by third-party agents. Adjusted gross profit is defined as gross profit, plus depreciation and amortization. Adjusted EBITDA is defined as net loss before interest expense, income taxes, depreciation and amortization, stock-based compensation, severance costs and 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. (1) 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.” (2) 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 second 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. (3) With respect to our guidance on adjusted EBITDA, the Company is not able to provide a quantitative reconciliation without unreasonable efforts to the most directly comparable GAAP financial measure, which would be net loss, due to the high variability, complexity and low visibility with respect to certain items such as income taxes and changes in the fair value of Warrant and Sponsor Covered shares liabilities. We expect the variability of these items to have a potentially unpredictable and potentially significant impact on future GAAP financial results, and, as such, we also believe that any reconciliations provided would imply a degree of precision that would be confusing or misleading to investors. Conference Call Information Doma will host a conference call at 5:00 PM Eastern Time on Tuesday, August 9, to present its second quarter 2022 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 estimates and forecasts of financial and performance metrics, projections of market opportunity, total addressable market ("TAM"), market share and competition. 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 for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. 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, 2021 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 Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands, except for open and closed order numbers) Key operating data: Opened orders 25,231 41,491 60,423 82,575 Closed orders 18,799 31,436 46,146 64,086 GAAP financial data: Revenue (1) $ 123,744 $ 129,986 $ 235,951 $ 257,782 Gross profit (2) $ 7,143 $ 26,514 $ 14,277 $ 52,930 Net loss (3) $ (58,652 ) $ (23,299 ) $ (108,678 ) $ (35,057 ) Non-GAAP financial data (4): Retained premiums and fees $ 49,106 $ 64,805 $ 100,711 $ 122,263 Adjusted gross profit $ 10,890 $ 29,535 $ 21,260 $ 58,657 Ratio of adjusted gross profit to retained premiums and fees 22 % 46 % 21 % 48 % Adjusted EBITDA $ (43,390 ) $ (11,903 ) $ (88,295 ) $ (15,182 ) _________________ (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 third-party agents, direct labor expense (including mainly personnel expense for certain employee 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 retained premiums and fees to our gross profit, the most closely comparable GAAP financial measure, for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) (in thousands) Revenue $ 123,744 $ 129,986 $ 235,951 $ 257,782 Minus: Premiums retained by third-party agents 74,638 65,181 135,240 135,519 Retained premiums and fees $ 49,106 $ 64,805 $ 100,711 $ 122,263 Minus: Direct labor 23,890 20,902 51,688 38,881 Provision for claims 6,310 6,807 10,921 10,055 Depreciation and amortization 3,747 3,021 6,983 5,727 Other direct costs (1) 8,016 7,561 16,842 14,670 Gross Profit $ 7,143 $ 26,514 $ 14,277 $ 52,930 __________________ (1) Includes title examination expense, office supplies, and premium and other taxes. Adjusted gross profit The following table reconciles our adjusted gross profit to our gross profit, the most closely comparable GAAP financial measure, for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) (in thousands) Gross Profit $ 7,143 $ 26,514 $ 14,277 $ 52,930 Adjusted for: Depreciation and amortization 3,747 3,021 6,983 5,727 Adjusted Gross Profit $ 10,890 $ 29,535 $ 21,260 $ 58,657 Adjusted EBITDA The following table reconciles our adjusted EBITDA to our net loss, the most closely comparable GAAP financial measure, for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) (in thousands) Net loss (GAAP) $ (58,652 ) $ (23,299 ) $ (108,678 ) $ (35,057 ) Adjusted for: Depreciation and amortization 3,747 3,021 6,983 5,727 Interest expense 4,489 4,451 8,696 7,810 Income taxes 136 211 321 336 EBITDA $ (50,280 ) $ (15,616 ) $ (92,678 ) $ (21,184 ) Adjusted for: Stock-based compensation 8,255 3,713 19,648 6,002 Severance costs 3,828 — 3,828 — Change in fair value of Warrant and Sponsor Covered shares liabilities (5,193 ) — (19,093 ) — Adjusted EBITDA $ (43,390 ) $ (11,903 ) $ (88,295 ) $ (15,182 ) The following table reconciles our adjusted gross profit to our adjusted EBITDA, for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) (in thousands) Adjusted Gross Profit $ 10,890 $ 29,535 $ 21,260 $ 58,657 Minus: Customer acquisition costs 14,853 12,192 30,778 22,087 Other indirect costs (1) 39,427 29,246 78,777 51,752 Adjusted EBITDA $ (43,390 ) $ (11,903 ) $ (88,295 ) $ (15,182 ) __________________ (1) Includes corporate support, research and development, and other operating costs. Doma Holdings, Inc. Consolidated Statements of Operations Three Months Ended June 30, Six Months Ended June 30, (In thousands, except share and per share information) 2022 2021 2022 2021 Revenues: Net premiums written (1) $ 108,926 $ 109,271 $ 204,592 $ 217,263 Escrow, other title-related fees and other 14,366 20,065 30,479 38,640 Investment, dividend and other income 452 650 880 1,879 Total revenues $ 123,744 $ 129,986 $ 235,951 $ 257,782 Expenses: Premiums retained by Third-Party Agents (2) $ 74,638 $ 65,181 $ 135,240 $ 135,519 Title examination expense 5,146 5,500 11,127 10,353 Provision for claims 6,310 6,807 10,921 10,055 Personnel costs 73,233 53,954 151,026 97,419 Other operating expenses 23,637 17,181 46,391 31,347 Total operating expenses $ 182,964 $ 148,623 $ 354,705 $ 284,693 Loss from operations $ (59,220 ) $ (18,637 ) $ (118,754 ) $ (26,911 ) Other (expense) income: Change in fair value of Warrant and Sponsor Covered Shares liabilities 5,193 — 19,093 — Interest expense (4,489 ) (4,451 ) (8,696 ) (7,810 ) Loss before income taxes $ (58,516 ) $ (23,088 ) $ (108,357 ) $ (34,721 ) Income tax expense (136 ) (211 ) (321 ) (336 ) Net loss $ (58,652 ) $ (23,299 ) $ (108,678 ) $ (35,057 ) Earnings per share: Net loss per share attributable to stockholders - basic and diluted $ (0.18 ) $ (0.33 ) $ (0.34 ) $ (0.51 ) Weighted average shares outstanding common stock - basic and diluted 324,879,934 69,944,477 324,387,981 68,688,288 __________________ (1) Net premiums written includes revenues from a related party of $33.7 million and $27.0 million during the three months ended June 30, 2022 and 2021, respectively. Net premiums written includes revenues from a related party of $61.3 million and $51.6 million during the six months ended June 30, 2022 and 2021, respectively. (2) Premiums retained by Third-Party Agents includes expenses associated with a related party of $27.2 million and $22.0 million during the three months ended June 30, 2022 and 2021, respectively. Premiums retained by Third-Party Agents includes expenses associated with a related party of $49.6 million and $41.8 million during the six months ended June 30, 2022 and 2021, respectively. Doma Holdings, Inc. Consolidated Balance Sheets (In thousands, except share information) June 30, 2022 December 31, 2021 Assets Cash and cash equivalents $ 226,339 $ 379,702 Restricted cash 2,959 4,126 Investments: Fixed maturities Held-to-maturity debt securities, at amortized cost (net of allowance for credit losses of $443 at June 30, 2022 and $0 at December 31, 2021) 51,307 67,164 Available-for-sale debt securities, at fair value (amortized cost $49,664 at June 30, 2022 and $0 at December 31, 2021) 49,966 — Mortgage loans 1,132 2,022 Other long-term investments 325 325 Total investments $ 102,730 $ 69,511 Receivables (net of allowance for credit losses of $1,332 at June 30, 2022 and $1,082 at December 31, 2021) 12,910 15,498 Prepaid expenses, deposits and other assets 9,250 15,692 Lease right-of-use assets 27,979 — Fixed assets (net of accumulated depreciation of $25,775 at June 30, 2022 and $19,543 at December 31, 2021) 59,474 45,953 Title plants 13,952 13,952 Goodwill 111,487 111,487 Total assets $ 567,080 $ 655,921 Liabilities and stockholders’ equity Accounts payable $ 3,306 $ 6,930 Accrued expenses and other liabilities 36,487 54,149 Lease liabilities 29,222 — Senior secured credit agreement, net of debt issuance costs and original issue discount 148,061 141,769 Liability for loss and loss adjustment expenses 84,936 80,267 Warrant liabilities 2,080 16,467 Sponsor Covered Shares liability 709 5,415 Total liabilities $ 304,801 $ 304,997 Stockholders’ equity: Common stock, 0.0001 par value; 2,000,000,000 shares authorized at June 30, 2022; 325,497,629 and 323,347,806 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively 33 33 Additional paid-in capital 563,265 543,070 Accumulated deficit (301,256 ) (192,179 ) Accumulated other comprehensive income 237 — Total stockholders’ equity $ 262,279 $ 350,924 Total liabilities and stockholders’ equity $ 567,080 $ 655,921 Quarterly Results of Operations and Other Data The following tables set forth our selected unaudited quarterly consolidated statements of operations data for each of the quarters indicated. The information for each quarter has been prepared on a basis consistent with our audited consolidated financial statements, and reflect, in the opinion of management, all adjustments, which consist only of a normal, recurring nature that are necessary for a fair statement of the financial information contained in those financial statements. Our historical results are not necessarily indicative of the results that may be expected in the future. The following quarterly financial data should be read in conjunction with our consolidated financial statements. Consolidated Statements of Operations Three Months Ended (In thousands) June 30, 2020 September 30, 2020 December 31, 2020 March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022 Revenues: Net premiums written $ 86,334 $ 103,587 $ 98,870 $ 107,992 $ 109,271 $ 141,491 $ 116,598 $ 95,666 $ 108,926 Escrow, other title-related fees and other 13,382 16,742 17,977 18,575 20,065 20,452 20,493 16,113 14,366 Investment, dividend and other income 707 743 663 1,229 650 639 588 428 452 Total revenues $ 100,423 $ 121,072 $ 117,510 $ 127,796 $ 129,986 $ 162,582 $ 137,679 $ 112,207 $ 123,744 Expenses: Premiums retained by Third-Party Agents $ 56,006 $ 67,024 $ 64,011 $ 70,338 $ 65,181 $ 91,596 $ 71,330 $ 60,602 $ 74,638 Title examination expense 3,322 4,624 4,393 4,853 5,500 5,289 6,495 5,981 5,146 Provision for claims 3,040 5,242 5,272 3,249 6,807 6,685 4,594 4,611 6,310 Personnel costs 32,737 36,197 38,874 43,464 53,954 62,410 78,306 77,793 73,233 Other operating expenses 10,286 10,210 12,149 14,165 17,181 21,693 26,912 22,754 23,637 Total operating expenses $ 105,391 $ 123,297 $ 124,699 $ 136,069 $ 148,623 $ 187,673 $ 187,637 $ 171,741 $ 182,964 Loss from operations $ (4,968 ) $ (2,225 ) $ (7,189 ) $ (8,273 ) $ (18,637 ) $ (25,091 ) $ (49,958 ) $ (59,534 ) $ (59,220 ) Other income (expense): Change in fair value of warrant and Sponsor Covered Shares liabilities — — — — — (4,478 ) 11,169 13,900 5,193 Interest expense (1,123 ) (1,193 ) (1,151 ) (3,360 ) (4,451 ) (4,531 ) (4,519 ) (4,207 ) (4,489 ) Loss before income taxes $ (6,091 ) $ (3,418 ) $ (8,340 ) $ (11,633 ) $ (23,088 ) $ (34,100 ) $ (43,308 ) $ (49,841 ) $ (58,516 ) Income tax expense (241 ) (204 ) (223 ) (125 ) (211 ) (170 ) (421 ) (185 ) (136 ) Net loss (6,332 ) (3,622 ) (8,563 ) (11,758 ) (23,299 ) (34,270 ) (43,729 ) (50,026 ) (58,652 ) Reconciliation of GAAP to Non-GAAP Measures The following tables present our reconciliation of GAAP measures to non-GAAP measures for the historical periods indicated. Retained premiums and fees Three Months Ended (In thousands) June 30, 2020 September 30, 2020 December 31, 2020 March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022 Revenue $ 100,423 $ 121,072 $ 117,510 $ 127,796 $ 129,986 $ 162,582 $ 137,679 $ 112,207 $ 123,744 Minus: Premiums retained by Third-Party Agents 56,006 67,024 64,011 70,338 65,181 91,596 71,330 60,602 74,638 Retained premiums and fees $ 44,417 $ 54,048 $ 53,499 $ 57,458 $ 64,805 $ 70,986 $ 66,349 $ 51,605 $ 49,106 Minus: Direct labor 13,898 14,892 17,050 17,979 20,902 23,948 26,787 27,798 23,890 Provision for claims 3,040 5,242 5,272 3,249 6,807 6,685 4,594 4,611 6,310 Depreciation and amortization 899 1,221 2,579 2,707 3,021 1,978 2,615 3,236 3,747 Other direct costs(1) 4,898 6,314 4,186 7,109 7,561 10,073 10,322 8,826 8,016 Gross Profit $ 21,682 $ 26,379 $ 24,412 $ 26,414 $ 26,514 $ 28,302 $ 22,031 $ 7,134 $ 7,143 __________________ (1) Includes title examination expense, office supplies, and premium and other taxes. Adjusted gross profit Three Months Ended (in thousands) June 30, 2020 September 30, 2020 December 31, 2020 March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022 Gross Profit $ 21,682 $ 26,379 $ 24,412 $ 26,414 $ 26,514 $ 28,302 $ 22,031 $ 7,134 $ 7,143 Adjusted for: Depreciation and amortization 899 1,221 2,579 2,707 3,021 1,978 2,615 3,236 3,747 Adjusted Gross Profit $ 22,581 $ 27,600 $ 26,991 $ 29,121 $ 29,535 $ 30,280 $ 24,646 $ 10,370 $ 10,890 Adjusted EBITDA Three Months Ended (in thousands) June 30, 2020 September 30, 2020 December 31, 2020 March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022 Net loss (GAAP) $ (6,332 ) $ (3,622 ) $ (8,563 ) $ (11,758 ) $ (23,299 ) $ (34,270 ) $ (43,729 ) $ (50,026 ) $ (58,652 ) Adjusted for: Depreciation and amortization 899 1,221 2,579 2,707 3,021 1,978 2,615 3,236 3,747 Interest expense 1,123 1,193 1,151 3,360 4,451 4,531 4,519 4,207 4,489 Income taxes 241 204 223 125 211 170 421 185 136 EBITDA $ (4,069 ) $ (1,004 ) $ (4,610 ) $ (5,566 ) $ (15,616 ) $ (27,591 ) $ (36,174 ) $ (42,398 ) $ (50,280 ) Adjusted for: Stock-based compensation 282 355 1,550 2,289 3,713 3,004 11,040 11,393 8,255 Severance costs 1,385 — — — — — — — 3,828 Change in fair value of warrant and Sponsor Covered Shares liabilities — — — — — 4,478 (11,169 ) (13,900 ) (5,193 ) Adjusted EBITDA $ (2,402 ) $ (649 ) $ (3,060 ) $ (3,277 ) $ (11,903 ) $ (20,109 ) $ (36,303 ) $ (44,905 ) $ (43,390 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20220809005224/en/Contacts Investor Contact: Beatriz Bartolome | Head of Investor Relations for Doma | ir@doma.com Media Contact: Camilla Whitmore | Lead, Public Relations for Doma | press@doma.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. 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Doma's Q2 2022 Results Show Resilience Amidst Continued Housing Market Headwinds; Reaffirms 2022 Adjusted EBITDA Guidance and Commitment to Deliver Positive Adjusted EBITDA by the End of 2023 By: Doma Holdings, Inc. via Business Wire August 09, 2022 at 16:10 PM EDT Second Quarter 2022 Business Highlights(1): Total revenue of $124 million, up 10% versus Q1 2022 Retained premiums and fees of $49 million, down (5)% versus Q1 2022 Gross profit of $7 million, flat versus Q1 2022 Adjusted gross profit of $11 million, up 5% versus Q1 2022 Purchase closed orders up 16% versus Q1 2022, Refinance closed orders down (47)% versus Q1 2022, and Total closed orders down (31)% versus Q1 2022 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 and six months ended June 30, 2022(2). Doma’s results demonstrate the Company's ability to effectively manage the business through a set of macroeconomic and housing industry headwinds that continued to worsen significantly in the first half of 2022. Despite these headwinds, the Company's Q2 results, including strategic investment prioritization, cost restructuring, and a focus on purchase transactions, show that Doma remains on its path to positive Adjusted EBITDA profitability by the end of 2023. "In the face of heightened cyclical challenges within the mortgage and housing market, I am confident Doma will be recognized as one of the most agile companies to adapt to evolving market conditions, while still remaining focused on our vision of making the home closing experience better, faster, and more affordable," said Max Simkoff, CEO of Doma." The re-prioritization of our investments and our focus on purchase orders, which now make up 66% of our direct Retained Premiums and Fees, give us confidence we'll achieve positive Adjusted EBITDA by the end of 2023, if not sooner." Doma's financial performance in the second quarter was delivered against the backdrop of a mortgage market that saw overall mortgage demand fall to the lowest level in 22 years, with purchase mortgage applications declining 14% from Q1 2022 to Q2 2022, and where purchase transaction cancellations reached 15% in June, the highest level since April of 2020. Doma's unique value proposition is highlighted by its strong performance in purchase transactions which were up 16% quarter over quarter. In anticipation of further market challenges throughout the remainder of the year, Doma took additional steps in Q2 2022 to protect its path to achieve positive Adjusted EBITDA by the end of 2023. These actions included further cost reductions amidst a narrower focus on a set of strategic home purchase initiatives. Chief among these priorities include the acceleration of additional purchase transactions onto the Doma Intelligence platform (also referred to as Doma for Purchase) and the development of additional product features within Doma for Purchase for select Enterprise referral partners. "Because of the high degree of volatility in the mortgage market, most of which is being driven by macroeconomic factors outside of Doma's control, we are being strategically selective with our investments and are prudently managing our expenses, including prioritizing profitability and preserving cash over growth," said Mike Smith, Chief Financial Officer at Doma. "We believe that we have taken meaningful actions to guard against the uncertainty in the mortgage market in the back half of this year and to protect our bottom-line results. We are reaffirming our full year 2022 Adjusted EBITDA guidance at the low end of the range and will continue to manage our cost structure and investment prioritization, specifically focused on the purchase market, to ensure that we remain on our near-term path to profitability by the end of 2023." Second Quarter 2022 Growth Drivers and Recent Business Highlights Steady progress in the purchase market, demonstrated by purchase orders as of Q2 2022 making up 38% of Doma's direct residential order volume and 66% of its direct Retained Premiums & Fees. Added new features and functionality to the Doma Intelligence platform in support of purchase transactions, while ensuring increased quality and efficiency across escrow and fulfillment ahead of an accelerated rollout. Doma expects to have the majority of its purchase transactions on the Doma Intelligence platform by the end of 2023. Partnered with several Enterprise referral partners to explore a version of Doma for Purchase that can be offered directly to borrowers as part of the lender's purchase workflow. Doma intends to roll out an initial version of this product with a small group of these Enterprise partners later this year and believes this initiative may unlock an additional distribution channel for Doma for Purchase. Continued share gain in the Enterprise channel - which comprises the majority of refinance volumes - evidenced by a net gain in wallet share across Enterprise accounts and the onboarding of several new partners in the quarter. Management reaffirmation of 2022 full year Adjusted EBITDA guidance at the low end of the range, due to continued developing headwinds across the mortgage market that put the Company's previous Retained Premiums & Fees guidance at risk. Management has further affirmed that the Company remains on its previously communicated timeline to achieve positive Adjusted EBITDA by the end of 2023, if not sooner. Took further actions to align cost structure with the commitment to get to positive Adjusted EBITDA by the end of 2023 or earlier, and to reach positive cash flow generation by the end of 2023, including a significant downsizing of corporate support functions and a more streamlined management structure which is expected to result in a third quarter charge of $3 million and annualized cost savings of $40 million. 2022 Full Year Outlook (1): Non-GAAP Financial Measures Doma expects Adjusted EBITDA between negative $120 million and negative $100 million (3) Doma intends to reach Adjusted EBITDA positive in 2023 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 revenue less premiums retained by third-party agents. Adjusted gross profit is defined as gross profit, plus depreciation and amortization. Adjusted EBITDA is defined as net loss before interest expense, income taxes, depreciation and amortization, stock-based compensation, severance costs and 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. (1) 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.” (2) 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 second 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. (3) With respect to our guidance on adjusted EBITDA, the Company is not able to provide a quantitative reconciliation without unreasonable efforts to the most directly comparable GAAP financial measure, which would be net loss, due to the high variability, complexity and low visibility with respect to certain items such as income taxes and changes in the fair value of Warrant and Sponsor Covered shares liabilities. We expect the variability of these items to have a potentially unpredictable and potentially significant impact on future GAAP financial results, and, as such, we also believe that any reconciliations provided would imply a degree of precision that would be confusing or misleading to investors. Conference Call Information Doma will host a conference call at 5:00 PM Eastern Time on Tuesday, August 9, to present its second quarter 2022 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 estimates and forecasts of financial and performance metrics, projections of market opportunity, total addressable market ("TAM"), market share and competition. 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 for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. 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, 2021 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 Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands, except for open and closed order numbers) Key operating data: Opened orders 25,231 41,491 60,423 82,575 Closed orders 18,799 31,436 46,146 64,086 GAAP financial data: Revenue (1) $ 123,744 $ 129,986 $ 235,951 $ 257,782 Gross profit (2) $ 7,143 $ 26,514 $ 14,277 $ 52,930 Net loss (3) $ (58,652 ) $ (23,299 ) $ (108,678 ) $ (35,057 ) Non-GAAP financial data (4): Retained premiums and fees $ 49,106 $ 64,805 $ 100,711 $ 122,263 Adjusted gross profit $ 10,890 $ 29,535 $ 21,260 $ 58,657 Ratio of adjusted gross profit to retained premiums and fees 22 % 46 % 21 % 48 % Adjusted EBITDA $ (43,390 ) $ (11,903 ) $ (88,295 ) $ (15,182 ) _________________ (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 third-party agents, direct labor expense (including mainly personnel expense for certain employee 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 retained premiums and fees to our gross profit, the most closely comparable GAAP financial measure, for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) (in thousands) Revenue $ 123,744 $ 129,986 $ 235,951 $ 257,782 Minus: Premiums retained by third-party agents 74,638 65,181 135,240 135,519 Retained premiums and fees $ 49,106 $ 64,805 $ 100,711 $ 122,263 Minus: Direct labor 23,890 20,902 51,688 38,881 Provision for claims 6,310 6,807 10,921 10,055 Depreciation and amortization 3,747 3,021 6,983 5,727 Other direct costs (1) 8,016 7,561 16,842 14,670 Gross Profit $ 7,143 $ 26,514 $ 14,277 $ 52,930 __________________ (1) Includes title examination expense, office supplies, and premium and other taxes. Adjusted gross profit The following table reconciles our adjusted gross profit to our gross profit, the most closely comparable GAAP financial measure, for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) (in thousands) Gross Profit $ 7,143 $ 26,514 $ 14,277 $ 52,930 Adjusted for: Depreciation and amortization 3,747 3,021 6,983 5,727 Adjusted Gross Profit $ 10,890 $ 29,535 $ 21,260 $ 58,657 Adjusted EBITDA The following table reconciles our adjusted EBITDA to our net loss, the most closely comparable GAAP financial measure, for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) (in thousands) Net loss (GAAP) $ (58,652 ) $ (23,299 ) $ (108,678 ) $ (35,057 ) Adjusted for: Depreciation and amortization 3,747 3,021 6,983 5,727 Interest expense 4,489 4,451 8,696 7,810 Income taxes 136 211 321 336 EBITDA $ (50,280 ) $ (15,616 ) $ (92,678 ) $ (21,184 ) Adjusted for: Stock-based compensation 8,255 3,713 19,648 6,002 Severance costs 3,828 — 3,828 — Change in fair value of Warrant and Sponsor Covered shares liabilities (5,193 ) — (19,093 ) — Adjusted EBITDA $ (43,390 ) $ (11,903 ) $ (88,295 ) $ (15,182 ) The following table reconciles our adjusted gross profit to our adjusted EBITDA, for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) (in thousands) Adjusted Gross Profit $ 10,890 $ 29,535 $ 21,260 $ 58,657 Minus: Customer acquisition costs 14,853 12,192 30,778 22,087 Other indirect costs (1) 39,427 29,246 78,777 51,752 Adjusted EBITDA $ (43,390 ) $ (11,903 ) $ (88,295 ) $ (15,182 ) __________________ (1) Includes corporate support, research and development, and other operating costs. Doma Holdings, Inc. Consolidated Statements of Operations Three Months Ended June 30, Six Months Ended June 30, (In thousands, except share and per share information) 2022 2021 2022 2021 Revenues: Net premiums written (1) $ 108,926 $ 109,271 $ 204,592 $ 217,263 Escrow, other title-related fees and other 14,366 20,065 30,479 38,640 Investment, dividend and other income 452 650 880 1,879 Total revenues $ 123,744 $ 129,986 $ 235,951 $ 257,782 Expenses: Premiums retained by Third-Party Agents (2) $ 74,638 $ 65,181 $ 135,240 $ 135,519 Title examination expense 5,146 5,500 11,127 10,353 Provision for claims 6,310 6,807 10,921 10,055 Personnel costs 73,233 53,954 151,026 97,419 Other operating expenses 23,637 17,181 46,391 31,347 Total operating expenses $ 182,964 $ 148,623 $ 354,705 $ 284,693 Loss from operations $ (59,220 ) $ (18,637 ) $ (118,754 ) $ (26,911 ) Other (expense) income: Change in fair value of Warrant and Sponsor Covered Shares liabilities 5,193 — 19,093 — Interest expense (4,489 ) (4,451 ) (8,696 ) (7,810 ) Loss before income taxes $ (58,516 ) $ (23,088 ) $ (108,357 ) $ (34,721 ) Income tax expense (136 ) (211 ) (321 ) (336 ) Net loss $ (58,652 ) $ (23,299 ) $ (108,678 ) $ (35,057 ) Earnings per share: Net loss per share attributable to stockholders - basic and diluted $ (0.18 ) $ (0.33 ) $ (0.34 ) $ (0.51 ) Weighted average shares outstanding common stock - basic and diluted 324,879,934 69,944,477 324,387,981 68,688,288 __________________ (1) Net premiums written includes revenues from a related party of $33.7 million and $27.0 million during the three months ended June 30, 2022 and 2021, respectively. Net premiums written includes revenues from a related party of $61.3 million and $51.6 million during the six months ended June 30, 2022 and 2021, respectively. (2) Premiums retained by Third-Party Agents includes expenses associated with a related party of $27.2 million and $22.0 million during the three months ended June 30, 2022 and 2021, respectively. Premiums retained by Third-Party Agents includes expenses associated with a related party of $49.6 million and $41.8 million during the six months ended June 30, 2022 and 2021, respectively. Doma Holdings, Inc. Consolidated Balance Sheets (In thousands, except share information) June 30, 2022 December 31, 2021 Assets Cash and cash equivalents $ 226,339 $ 379,702 Restricted cash 2,959 4,126 Investments: Fixed maturities Held-to-maturity debt securities, at amortized cost (net of allowance for credit losses of $443 at June 30, 2022 and $0 at December 31, 2021) 51,307 67,164 Available-for-sale debt securities, at fair value (amortized cost $49,664 at June 30, 2022 and $0 at December 31, 2021) 49,966 — Mortgage loans 1,132 2,022 Other long-term investments 325 325 Total investments $ 102,730 $ 69,511 Receivables (net of allowance for credit losses of $1,332 at June 30, 2022 and $1,082 at December 31, 2021) 12,910 15,498 Prepaid expenses, deposits and other assets 9,250 15,692 Lease right-of-use assets 27,979 — Fixed assets (net of accumulated depreciation of $25,775 at June 30, 2022 and $19,543 at December 31, 2021) 59,474 45,953 Title plants 13,952 13,952 Goodwill 111,487 111,487 Total assets $ 567,080 $ 655,921 Liabilities and stockholders’ equity Accounts payable $ 3,306 $ 6,930 Accrued expenses and other liabilities 36,487 54,149 Lease liabilities 29,222 — Senior secured credit agreement, net of debt issuance costs and original issue discount 148,061 141,769 Liability for loss and loss adjustment expenses 84,936 80,267 Warrant liabilities 2,080 16,467 Sponsor Covered Shares liability 709 5,415 Total liabilities $ 304,801 $ 304,997 Stockholders’ equity: Common stock, 0.0001 par value; 2,000,000,000 shares authorized at June 30, 2022; 325,497,629 and 323,347,806 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively 33 33 Additional paid-in capital 563,265 543,070 Accumulated deficit (301,256 ) (192,179 ) Accumulated other comprehensive income 237 — Total stockholders’ equity $ 262,279 $ 350,924 Total liabilities and stockholders’ equity $ 567,080 $ 655,921 Quarterly Results of Operations and Other Data The following tables set forth our selected unaudited quarterly consolidated statements of operations data for each of the quarters indicated. The information for each quarter has been prepared on a basis consistent with our audited consolidated financial statements, and reflect, in the opinion of management, all adjustments, which consist only of a normal, recurring nature that are necessary for a fair statement of the financial information contained in those financial statements. Our historical results are not necessarily indicative of the results that may be expected in the future. The following quarterly financial data should be read in conjunction with our consolidated financial statements. Consolidated Statements of Operations Three Months Ended (In thousands) June 30, 2020 September 30, 2020 December 31, 2020 March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022 Revenues: Net premiums written $ 86,334 $ 103,587 $ 98,870 $ 107,992 $ 109,271 $ 141,491 $ 116,598 $ 95,666 $ 108,926 Escrow, other title-related fees and other 13,382 16,742 17,977 18,575 20,065 20,452 20,493 16,113 14,366 Investment, dividend and other income 707 743 663 1,229 650 639 588 428 452 Total revenues $ 100,423 $ 121,072 $ 117,510 $ 127,796 $ 129,986 $ 162,582 $ 137,679 $ 112,207 $ 123,744 Expenses: Premiums retained by Third-Party Agents $ 56,006 $ 67,024 $ 64,011 $ 70,338 $ 65,181 $ 91,596 $ 71,330 $ 60,602 $ 74,638 Title examination expense 3,322 4,624 4,393 4,853 5,500 5,289 6,495 5,981 5,146 Provision for claims 3,040 5,242 5,272 3,249 6,807 6,685 4,594 4,611 6,310 Personnel costs 32,737 36,197 38,874 43,464 53,954 62,410 78,306 77,793 73,233 Other operating expenses 10,286 10,210 12,149 14,165 17,181 21,693 26,912 22,754 23,637 Total operating expenses $ 105,391 $ 123,297 $ 124,699 $ 136,069 $ 148,623 $ 187,673 $ 187,637 $ 171,741 $ 182,964 Loss from operations $ (4,968 ) $ (2,225 ) $ (7,189 ) $ (8,273 ) $ (18,637 ) $ (25,091 ) $ (49,958 ) $ (59,534 ) $ (59,220 ) Other income (expense): Change in fair value of warrant and Sponsor Covered Shares liabilities — — — — — (4,478 ) 11,169 13,900 5,193 Interest expense (1,123 ) (1,193 ) (1,151 ) (3,360 ) (4,451 ) (4,531 ) (4,519 ) (4,207 ) (4,489 ) Loss before income taxes $ (6,091 ) $ (3,418 ) $ (8,340 ) $ (11,633 ) $ (23,088 ) $ (34,100 ) $ (43,308 ) $ (49,841 ) $ (58,516 ) Income tax expense (241 ) (204 ) (223 ) (125 ) (211 ) (170 ) (421 ) (185 ) (136 ) Net loss (6,332 ) (3,622 ) (8,563 ) (11,758 ) (23,299 ) (34,270 ) (43,729 ) (50,026 ) (58,652 ) Reconciliation of GAAP to Non-GAAP Measures The following tables present our reconciliation of GAAP measures to non-GAAP measures for the historical periods indicated. Retained premiums and fees Three Months Ended (In thousands) June 30, 2020 September 30, 2020 December 31, 2020 March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022 Revenue $ 100,423 $ 121,072 $ 117,510 $ 127,796 $ 129,986 $ 162,582 $ 137,679 $ 112,207 $ 123,744 Minus: Premiums retained by Third-Party Agents 56,006 67,024 64,011 70,338 65,181 91,596 71,330 60,602 74,638 Retained premiums and fees $ 44,417 $ 54,048 $ 53,499 $ 57,458 $ 64,805 $ 70,986 $ 66,349 $ 51,605 $ 49,106 Minus: Direct labor 13,898 14,892 17,050 17,979 20,902 23,948 26,787 27,798 23,890 Provision for claims 3,040 5,242 5,272 3,249 6,807 6,685 4,594 4,611 6,310 Depreciation and amortization 899 1,221 2,579 2,707 3,021 1,978 2,615 3,236 3,747 Other direct costs(1) 4,898 6,314 4,186 7,109 7,561 10,073 10,322 8,826 8,016 Gross Profit $ 21,682 $ 26,379 $ 24,412 $ 26,414 $ 26,514 $ 28,302 $ 22,031 $ 7,134 $ 7,143 __________________ (1) Includes title examination expense, office supplies, and premium and other taxes. Adjusted gross profit Three Months Ended (in thousands) June 30, 2020 September 30, 2020 December 31, 2020 March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022 Gross Profit $ 21,682 $ 26,379 $ 24,412 $ 26,414 $ 26,514 $ 28,302 $ 22,031 $ 7,134 $ 7,143 Adjusted for: Depreciation and amortization 899 1,221 2,579 2,707 3,021 1,978 2,615 3,236 3,747 Adjusted Gross Profit $ 22,581 $ 27,600 $ 26,991 $ 29,121 $ 29,535 $ 30,280 $ 24,646 $ 10,370 $ 10,890 Adjusted EBITDA Three Months Ended (in thousands) June 30, 2020 September 30, 2020 December 31, 2020 March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022 Net loss (GAAP) $ (6,332 ) $ (3,622 ) $ (8,563 ) $ (11,758 ) $ (23,299 ) $ (34,270 ) $ (43,729 ) $ (50,026 ) $ (58,652 ) Adjusted for: Depreciation and amortization 899 1,221 2,579 2,707 3,021 1,978 2,615 3,236 3,747 Interest expense 1,123 1,193 1,151 3,360 4,451 4,531 4,519 4,207 4,489 Income taxes 241 204 223 125 211 170 421 185 136 EBITDA $ (4,069 ) $ (1,004 ) $ (4,610 ) $ (5,566 ) $ (15,616 ) $ (27,591 ) $ (36,174 ) $ (42,398 ) $ (50,280 ) Adjusted for: Stock-based compensation 282 355 1,550 2,289 3,713 3,004 11,040 11,393 8,255 Severance costs 1,385 — — — — — — — 3,828 Change in fair value of warrant and Sponsor Covered Shares liabilities — — — — — 4,478 (11,169 ) (13,900 ) (5,193 ) Adjusted EBITDA $ (2,402 ) $ (649 ) $ (3,060 ) $ (3,277 ) $ (11,903 ) $ (20,109 ) $ (36,303 ) $ (44,905 ) $ (43,390 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20220809005224/en/Contacts Investor Contact: Beatriz Bartolome | Head of Investor Relations for Doma | ir@doma.com Media Contact: Camilla Whitmore | Lead, Public Relations for Doma | press@doma.com
Second Quarter 2022 Business Highlights(1): Total revenue of $124 million, up 10% versus Q1 2022 Retained premiums and fees of $49 million, down (5)% versus Q1 2022 Gross profit of $7 million, flat versus Q1 2022 Adjusted gross profit of $11 million, up 5% versus Q1 2022 Purchase closed orders up 16% versus Q1 2022, Refinance closed orders down (47)% versus Q1 2022, and Total closed orders down (31)% versus Q1 2022
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 and six months ended June 30, 2022(2). Doma’s results demonstrate the Company's ability to effectively manage the business through a set of macroeconomic and housing industry headwinds that continued to worsen significantly in the first half of 2022. Despite these headwinds, the Company's Q2 results, including strategic investment prioritization, cost restructuring, and a focus on purchase transactions, show that Doma remains on its path to positive Adjusted EBITDA profitability by the end of 2023. "In the face of heightened cyclical challenges within the mortgage and housing market, I am confident Doma will be recognized as one of the most agile companies to adapt to evolving market conditions, while still remaining focused on our vision of making the home closing experience better, faster, and more affordable," said Max Simkoff, CEO of Doma." The re-prioritization of our investments and our focus on purchase orders, which now make up 66% of our direct Retained Premiums and Fees, give us confidence we'll achieve positive Adjusted EBITDA by the end of 2023, if not sooner." Doma's financial performance in the second quarter was delivered against the backdrop of a mortgage market that saw overall mortgage demand fall to the lowest level in 22 years, with purchase mortgage applications declining 14% from Q1 2022 to Q2 2022, and where purchase transaction cancellations reached 15% in June, the highest level since April of 2020. Doma's unique value proposition is highlighted by its strong performance in purchase transactions which were up 16% quarter over quarter. In anticipation of further market challenges throughout the remainder of the year, Doma took additional steps in Q2 2022 to protect its path to achieve positive Adjusted EBITDA by the end of 2023. These actions included further cost reductions amidst a narrower focus on a set of strategic home purchase initiatives. Chief among these priorities include the acceleration of additional purchase transactions onto the Doma Intelligence platform (also referred to as Doma for Purchase) and the development of additional product features within Doma for Purchase for select Enterprise referral partners. "Because of the high degree of volatility in the mortgage market, most of which is being driven by macroeconomic factors outside of Doma's control, we are being strategically selective with our investments and are prudently managing our expenses, including prioritizing profitability and preserving cash over growth," said Mike Smith, Chief Financial Officer at Doma. "We believe that we have taken meaningful actions to guard against the uncertainty in the mortgage market in the back half of this year and to protect our bottom-line results. We are reaffirming our full year 2022 Adjusted EBITDA guidance at the low end of the range and will continue to manage our cost structure and investment prioritization, specifically focused on the purchase market, to ensure that we remain on our near-term path to profitability by the end of 2023." Second Quarter 2022 Growth Drivers and Recent Business Highlights Steady progress in the purchase market, demonstrated by purchase orders as of Q2 2022 making up 38% of Doma's direct residential order volume and 66% of its direct Retained Premiums & Fees. Added new features and functionality to the Doma Intelligence platform in support of purchase transactions, while ensuring increased quality and efficiency across escrow and fulfillment ahead of an accelerated rollout. Doma expects to have the majority of its purchase transactions on the Doma Intelligence platform by the end of 2023. Partnered with several Enterprise referral partners to explore a version of Doma for Purchase that can be offered directly to borrowers as part of the lender's purchase workflow. Doma intends to roll out an initial version of this product with a small group of these Enterprise partners later this year and believes this initiative may unlock an additional distribution channel for Doma for Purchase. Continued share gain in the Enterprise channel - which comprises the majority of refinance volumes - evidenced by a net gain in wallet share across Enterprise accounts and the onboarding of several new partners in the quarter. Management reaffirmation of 2022 full year Adjusted EBITDA guidance at the low end of the range, due to continued developing headwinds across the mortgage market that put the Company's previous Retained Premiums & Fees guidance at risk. Management has further affirmed that the Company remains on its previously communicated timeline to achieve positive Adjusted EBITDA by the end of 2023, if not sooner. Took further actions to align cost structure with the commitment to get to positive Adjusted EBITDA by the end of 2023 or earlier, and to reach positive cash flow generation by the end of 2023, including a significant downsizing of corporate support functions and a more streamlined management structure which is expected to result in a third quarter charge of $3 million and annualized cost savings of $40 million. 2022 Full Year Outlook (1): Non-GAAP Financial Measures Doma expects Adjusted EBITDA between negative $120 million and negative $100 million (3) Doma intends to reach Adjusted EBITDA positive in 2023 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 revenue less premiums retained by third-party agents. Adjusted gross profit is defined as gross profit, plus depreciation and amortization. Adjusted EBITDA is defined as net loss before interest expense, income taxes, depreciation and amortization, stock-based compensation, severance costs and 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. (1) 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.” (2) 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 second 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. (3) With respect to our guidance on adjusted EBITDA, the Company is not able to provide a quantitative reconciliation without unreasonable efforts to the most directly comparable GAAP financial measure, which would be net loss, due to the high variability, complexity and low visibility with respect to certain items such as income taxes and changes in the fair value of Warrant and Sponsor Covered shares liabilities. We expect the variability of these items to have a potentially unpredictable and potentially significant impact on future GAAP financial results, and, as such, we also believe that any reconciliations provided would imply a degree of precision that would be confusing or misleading to investors. Conference Call Information Doma will host a conference call at 5:00 PM Eastern Time on Tuesday, August 9, to present its second quarter 2022 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 estimates and forecasts of financial and performance metrics, projections of market opportunity, total addressable market ("TAM"), market share and competition. 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 for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. 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, 2021 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 Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands, except for open and closed order numbers) Key operating data: Opened orders 25,231 41,491 60,423 82,575 Closed orders 18,799 31,436 46,146 64,086 GAAP financial data: Revenue (1) $ 123,744 $ 129,986 $ 235,951 $ 257,782 Gross profit (2) $ 7,143 $ 26,514 $ 14,277 $ 52,930 Net loss (3) $ (58,652 ) $ (23,299 ) $ (108,678 ) $ (35,057 ) Non-GAAP financial data (4): Retained premiums and fees $ 49,106 $ 64,805 $ 100,711 $ 122,263 Adjusted gross profit $ 10,890 $ 29,535 $ 21,260 $ 58,657 Ratio of adjusted gross profit to retained premiums and fees 22 % 46 % 21 % 48 % Adjusted EBITDA $ (43,390 ) $ (11,903 ) $ (88,295 ) $ (15,182 ) _________________ (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 third-party agents, direct labor expense (including mainly personnel expense for certain employee 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 retained premiums and fees to our gross profit, the most closely comparable GAAP financial measure, for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) (in thousands) Revenue $ 123,744 $ 129,986 $ 235,951 $ 257,782 Minus: Premiums retained by third-party agents 74,638 65,181 135,240 135,519 Retained premiums and fees $ 49,106 $ 64,805 $ 100,711 $ 122,263 Minus: Direct labor 23,890 20,902 51,688 38,881 Provision for claims 6,310 6,807 10,921 10,055 Depreciation and amortization 3,747 3,021 6,983 5,727 Other direct costs (1) 8,016 7,561 16,842 14,670 Gross Profit $ 7,143 $ 26,514 $ 14,277 $ 52,930 __________________ (1) Includes title examination expense, office supplies, and premium and other taxes. Adjusted gross profit The following table reconciles our adjusted gross profit to our gross profit, the most closely comparable GAAP financial measure, for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) (in thousands) Gross Profit $ 7,143 $ 26,514 $ 14,277 $ 52,930 Adjusted for: Depreciation and amortization 3,747 3,021 6,983 5,727 Adjusted Gross Profit $ 10,890 $ 29,535 $ 21,260 $ 58,657 Adjusted EBITDA The following table reconciles our adjusted EBITDA to our net loss, the most closely comparable GAAP financial measure, for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) (in thousands) Net loss (GAAP) $ (58,652 ) $ (23,299 ) $ (108,678 ) $ (35,057 ) Adjusted for: Depreciation and amortization 3,747 3,021 6,983 5,727 Interest expense 4,489 4,451 8,696 7,810 Income taxes 136 211 321 336 EBITDA $ (50,280 ) $ (15,616 ) $ (92,678 ) $ (21,184 ) Adjusted for: Stock-based compensation 8,255 3,713 19,648 6,002 Severance costs 3,828 — 3,828 — Change in fair value of Warrant and Sponsor Covered shares liabilities (5,193 ) — (19,093 ) — Adjusted EBITDA $ (43,390 ) $ (11,903 ) $ (88,295 ) $ (15,182 ) The following table reconciles our adjusted gross profit to our adjusted EBITDA, for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 (in thousands) (in thousands) Adjusted Gross Profit $ 10,890 $ 29,535 $ 21,260 $ 58,657 Minus: Customer acquisition costs 14,853 12,192 30,778 22,087 Other indirect costs (1) 39,427 29,246 78,777 51,752 Adjusted EBITDA $ (43,390 ) $ (11,903 ) $ (88,295 ) $ (15,182 ) __________________ (1) Includes corporate support, research and development, and other operating costs. Doma Holdings, Inc. Consolidated Statements of Operations Three Months Ended June 30, Six Months Ended June 30, (In thousands, except share and per share information) 2022 2021 2022 2021 Revenues: Net premiums written (1) $ 108,926 $ 109,271 $ 204,592 $ 217,263 Escrow, other title-related fees and other 14,366 20,065 30,479 38,640 Investment, dividend and other income 452 650 880 1,879 Total revenues $ 123,744 $ 129,986 $ 235,951 $ 257,782 Expenses: Premiums retained by Third-Party Agents (2) $ 74,638 $ 65,181 $ 135,240 $ 135,519 Title examination expense 5,146 5,500 11,127 10,353 Provision for claims 6,310 6,807 10,921 10,055 Personnel costs 73,233 53,954 151,026 97,419 Other operating expenses 23,637 17,181 46,391 31,347 Total operating expenses $ 182,964 $ 148,623 $ 354,705 $ 284,693 Loss from operations $ (59,220 ) $ (18,637 ) $ (118,754 ) $ (26,911 ) Other (expense) income: Change in fair value of Warrant and Sponsor Covered Shares liabilities 5,193 — 19,093 — Interest expense (4,489 ) (4,451 ) (8,696 ) (7,810 ) Loss before income taxes $ (58,516 ) $ (23,088 ) $ (108,357 ) $ (34,721 ) Income tax expense (136 ) (211 ) (321 ) (336 ) Net loss $ (58,652 ) $ (23,299 ) $ (108,678 ) $ (35,057 ) Earnings per share: Net loss per share attributable to stockholders - basic and diluted $ (0.18 ) $ (0.33 ) $ (0.34 ) $ (0.51 ) Weighted average shares outstanding common stock - basic and diluted 324,879,934 69,944,477 324,387,981 68,688,288 __________________ (1) Net premiums written includes revenues from a related party of $33.7 million and $27.0 million during the three months ended June 30, 2022 and 2021, respectively. Net premiums written includes revenues from a related party of $61.3 million and $51.6 million during the six months ended June 30, 2022 and 2021, respectively. (2) Premiums retained by Third-Party Agents includes expenses associated with a related party of $27.2 million and $22.0 million during the three months ended June 30, 2022 and 2021, respectively. Premiums retained by Third-Party Agents includes expenses associated with a related party of $49.6 million and $41.8 million during the six months ended June 30, 2022 and 2021, respectively. Doma Holdings, Inc. Consolidated Balance Sheets (In thousands, except share information) June 30, 2022 December 31, 2021 Assets Cash and cash equivalents $ 226,339 $ 379,702 Restricted cash 2,959 4,126 Investments: Fixed maturities Held-to-maturity debt securities, at amortized cost (net of allowance for credit losses of $443 at June 30, 2022 and $0 at December 31, 2021) 51,307 67,164 Available-for-sale debt securities, at fair value (amortized cost $49,664 at June 30, 2022 and $0 at December 31, 2021) 49,966 — Mortgage loans 1,132 2,022 Other long-term investments 325 325 Total investments $ 102,730 $ 69,511 Receivables (net of allowance for credit losses of $1,332 at June 30, 2022 and $1,082 at December 31, 2021) 12,910 15,498 Prepaid expenses, deposits and other assets 9,250 15,692 Lease right-of-use assets 27,979 — Fixed assets (net of accumulated depreciation of $25,775 at June 30, 2022 and $19,543 at December 31, 2021) 59,474 45,953 Title plants 13,952 13,952 Goodwill 111,487 111,487 Total assets $ 567,080 $ 655,921 Liabilities and stockholders’ equity Accounts payable $ 3,306 $ 6,930 Accrued expenses and other liabilities 36,487 54,149 Lease liabilities 29,222 — Senior secured credit agreement, net of debt issuance costs and original issue discount 148,061 141,769 Liability for loss and loss adjustment expenses 84,936 80,267 Warrant liabilities 2,080 16,467 Sponsor Covered Shares liability 709 5,415 Total liabilities $ 304,801 $ 304,997 Stockholders’ equity: Common stock, 0.0001 par value; 2,000,000,000 shares authorized at June 30, 2022; 325,497,629 and 323,347,806 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively 33 33 Additional paid-in capital 563,265 543,070 Accumulated deficit (301,256 ) (192,179 ) Accumulated other comprehensive income 237 — Total stockholders’ equity $ 262,279 $ 350,924 Total liabilities and stockholders’ equity $ 567,080 $ 655,921 Quarterly Results of Operations and Other Data The following tables set forth our selected unaudited quarterly consolidated statements of operations data for each of the quarters indicated. The information for each quarter has been prepared on a basis consistent with our audited consolidated financial statements, and reflect, in the opinion of management, all adjustments, which consist only of a normal, recurring nature that are necessary for a fair statement of the financial information contained in those financial statements. Our historical results are not necessarily indicative of the results that may be expected in the future. The following quarterly financial data should be read in conjunction with our consolidated financial statements. Consolidated Statements of Operations Three Months Ended (In thousands) June 30, 2020 September 30, 2020 December 31, 2020 March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022 Revenues: Net premiums written $ 86,334 $ 103,587 $ 98,870 $ 107,992 $ 109,271 $ 141,491 $ 116,598 $ 95,666 $ 108,926 Escrow, other title-related fees and other 13,382 16,742 17,977 18,575 20,065 20,452 20,493 16,113 14,366 Investment, dividend and other income 707 743 663 1,229 650 639 588 428 452 Total revenues $ 100,423 $ 121,072 $ 117,510 $ 127,796 $ 129,986 $ 162,582 $ 137,679 $ 112,207 $ 123,744 Expenses: Premiums retained by Third-Party Agents $ 56,006 $ 67,024 $ 64,011 $ 70,338 $ 65,181 $ 91,596 $ 71,330 $ 60,602 $ 74,638 Title examination expense 3,322 4,624 4,393 4,853 5,500 5,289 6,495 5,981 5,146 Provision for claims 3,040 5,242 5,272 3,249 6,807 6,685 4,594 4,611 6,310 Personnel costs 32,737 36,197 38,874 43,464 53,954 62,410 78,306 77,793 73,233 Other operating expenses 10,286 10,210 12,149 14,165 17,181 21,693 26,912 22,754 23,637 Total operating expenses $ 105,391 $ 123,297 $ 124,699 $ 136,069 $ 148,623 $ 187,673 $ 187,637 $ 171,741 $ 182,964 Loss from operations $ (4,968 ) $ (2,225 ) $ (7,189 ) $ (8,273 ) $ (18,637 ) $ (25,091 ) $ (49,958 ) $ (59,534 ) $ (59,220 ) Other income (expense): Change in fair value of warrant and Sponsor Covered Shares liabilities — — — — — (4,478 ) 11,169 13,900 5,193 Interest expense (1,123 ) (1,193 ) (1,151 ) (3,360 ) (4,451 ) (4,531 ) (4,519 ) (4,207 ) (4,489 ) Loss before income taxes $ (6,091 ) $ (3,418 ) $ (8,340 ) $ (11,633 ) $ (23,088 ) $ (34,100 ) $ (43,308 ) $ (49,841 ) $ (58,516 ) Income tax expense (241 ) (204 ) (223 ) (125 ) (211 ) (170 ) (421 ) (185 ) (136 ) Net loss (6,332 ) (3,622 ) (8,563 ) (11,758 ) (23,299 ) (34,270 ) (43,729 ) (50,026 ) (58,652 ) Reconciliation of GAAP to Non-GAAP Measures The following tables present our reconciliation of GAAP measures to non-GAAP measures for the historical periods indicated. Retained premiums and fees Three Months Ended (In thousands) June 30, 2020 September 30, 2020 December 31, 2020 March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022 Revenue $ 100,423 $ 121,072 $ 117,510 $ 127,796 $ 129,986 $ 162,582 $ 137,679 $ 112,207 $ 123,744 Minus: Premiums retained by Third-Party Agents 56,006 67,024 64,011 70,338 65,181 91,596 71,330 60,602 74,638 Retained premiums and fees $ 44,417 $ 54,048 $ 53,499 $ 57,458 $ 64,805 $ 70,986 $ 66,349 $ 51,605 $ 49,106 Minus: Direct labor 13,898 14,892 17,050 17,979 20,902 23,948 26,787 27,798 23,890 Provision for claims 3,040 5,242 5,272 3,249 6,807 6,685 4,594 4,611 6,310 Depreciation and amortization 899 1,221 2,579 2,707 3,021 1,978 2,615 3,236 3,747 Other direct costs(1) 4,898 6,314 4,186 7,109 7,561 10,073 10,322 8,826 8,016 Gross Profit $ 21,682 $ 26,379 $ 24,412 $ 26,414 $ 26,514 $ 28,302 $ 22,031 $ 7,134 $ 7,143 __________________ (1) Includes title examination expense, office supplies, and premium and other taxes. Adjusted gross profit Three Months Ended (in thousands) June 30, 2020 September 30, 2020 December 31, 2020 March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022 Gross Profit $ 21,682 $ 26,379 $ 24,412 $ 26,414 $ 26,514 $ 28,302 $ 22,031 $ 7,134 $ 7,143 Adjusted for: Depreciation and amortization 899 1,221 2,579 2,707 3,021 1,978 2,615 3,236 3,747 Adjusted Gross Profit $ 22,581 $ 27,600 $ 26,991 $ 29,121 $ 29,535 $ 30,280 $ 24,646 $ 10,370 $ 10,890 Adjusted EBITDA Three Months Ended (in thousands) June 30, 2020 September 30, 2020 December 31, 2020 March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022 Net loss (GAAP) $ (6,332 ) $ (3,622 ) $ (8,563 ) $ (11,758 ) $ (23,299 ) $ (34,270 ) $ (43,729 ) $ (50,026 ) $ (58,652 ) Adjusted for: Depreciation and amortization 899 1,221 2,579 2,707 3,021 1,978 2,615 3,236 3,747 Interest expense 1,123 1,193 1,151 3,360 4,451 4,531 4,519 4,207 4,489 Income taxes 241 204 223 125 211 170 421 185 136 EBITDA $ (4,069 ) $ (1,004 ) $ (4,610 ) $ (5,566 ) $ (15,616 ) $ (27,591 ) $ (36,174 ) $ (42,398 ) $ (50,280 ) Adjusted for: Stock-based compensation 282 355 1,550 2,289 3,713 3,004 11,040 11,393 8,255 Severance costs 1,385 — — — — — — — 3,828 Change in fair value of warrant and Sponsor Covered Shares liabilities — — — — — 4,478 (11,169 ) (13,900 ) (5,193 ) Adjusted EBITDA $ (2,402 ) $ (649 ) $ (3,060 ) $ (3,277 ) $ (11,903 ) $ (20,109 ) $ (36,303 ) $ (44,905 ) $ (43,390 ) View source version on businesswire.com: https://www.businesswire.com/news/home/20220809005224/en/
Investor Contact: Beatriz Bartolome | Head of Investor Relations for Doma | ir@doma.com Media Contact: Camilla Whitmore | Lead, Public Relations for Doma | press@doma.com