Q1 2024 Porch Group Inc Earnings Call

Participants

Lois Perkins; Head of Investor Relations; Porch Group Inc

Matt Ehrlichman; Chairman of the Board, Chief Executive Officer, Founder; Porch Group Inc

Shawn Tabak; Chief Financial Officer; Porch Group Inc

Matthew Neagle; Chief Operating Officer; Porch Group Inc

Efram Ware; President and General Manager, Homeowners of America; Porch Group Inc

Jonathan Bass; Analyst; Stephens Inc.

Ryan Tomasello; Analyst; Keefe, Bruyette & Woods, Inc.

Mark Schappel; Analyst; Loop Capital Markets, LLC

Presentation

Lois Perkins

Good afternoon, everyone, and thank you for participating in Porch Group's first-quarter 2024 conference. Today, we issued our earnings release and related Form eight K to the SEC. The press release can be found on our Investor Relations website at IR dot PulteGroup.
Joining me here today are Matt Ehrlichman, CEO, Chairman and Founder; Shawn Tabak, Pushpay's CFO; Matthew Neagle, COO; and Efram Ware, President and GM of Homeowners of America, Fortis Insurance.
Before we go further, I'd like to take a moment to read the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1990, because I will caution cautions with that oh little while discussion, including responses to your questions reflects management's views as of today, May eighth, 2020. We do not undertake any obligations to update or revise this information.
Additionally, we will make forward-looking statements about our expected future financial or business performance or conditions, business strategy and plans, including the application of their respective exchange based on current expectations and assumptions. These statements are subject to risks and uncertainties which could cause our actual results to differ materially from these forward-looking at this time. Any obligation to update publicly any forward-looking statements, whether in response to new information, future events, except as required by law, we encourage you to consider the risk factors and other risks and uncertainties described in our SEC as well as respect to inflammation in MS. Additional information concerning factors, what caused our results to differ materially from. Thanks.
We expect GAAP and non-GAAP financial measures on today's call. Please refer to today's press release, reconciliations of non-GAAP measures to the most comparable GAAP measures discussed during this analyst call, which are there financial information provided in today's release, it's not subject to revision upon completion of closing and audit process. As a reminder, this webcast will be available for replay along the presentation shortly after this call on the company's website on the document document.
Now I'll turn the call over to Matt Ehrlichman, CEO, Chairman and Founder, of course. Over to you, Matt.

Matt Ehrlichman

Thanks, Lois, and good afternoon, everybody, and thanks for joining. We're pleased with how the business performed in the first quarter and how we're set up for the 2024 year. We've delivered strong operating execution across our businesses and saw year-over-year improvements of more than 30% revenue growth, a $5 million adjusted EBITDA improvement and continued best in class gross loss and combined ratios versus peers.
We're advancing the work across our data platform successfully. We're very pleased with our April first reinsurance renewals and are seeing continued progress in price increases with our software businesses, all of which we'll discuss today with the reinsurance coverage placed and strong execution across our business, providing increased confidence in the remainder of 2024.
This resulted in us raising our full year adjusted EBITDA guidance today, and this full year guidance raise is despite the Texas spring storm season starting early this year. A [$20 million] Texas hailstorm developed in the second half of March and caused Q1 claims from catastrophic weather events to be $8 million worse than we had expected. If it wasn't for this. The year-over-year improvement in adjusted EBITDA would have been even greater. And we're excited because we expect our reinsurance renewals and operating results to more than make this up Sean will take you through this shortly.
For those new to what we're building for, which is a new kind of homeowners insurance company. What is unique to our strategy is that we power a leading software platform for home inspectors, title agents and loan officers. Maintaining our strong client retention with these companies through ongoing product innovation creates long-term competitive advantages, including valuable introductions to homebuyers and unique insights into properties.
At porch, we are building a homeowners insurance company with lower volatility and higher margins will win with our three differentiators highlighted here in yellow advantage underwriting the ability to price more accurately than others being the best insurance partner for homebuyers by being more than just insurance and helping them with their entire move. And providing a whole home protection with various products designed to protect the consumers largest assets.
So our insurance profitability actions continue to improve our performance year over year. And as we discussed, the first quarter saw seasonally higher claims related to weather. So in the first quarter, revenue grew 32% to $115 million. Revenue less cost of revenue grew 10% to $40 million. This included a 71% gross loss ratio for the quarter, of which approximately half of the claims are from catastrophic weather and the balance from a 33% attritional loss ratio, which improved from 40% in the same quarter prior year.
We continue to demonstrate our ability to achieve best in class loss ratios. Adjusted EBITDA loss was $17 million, a $5 million improvement compared to Q1 2023. The best way to compare the insurance combined ratios is to look at reputable third party data published annually. Today, we're pleased to share that a investor report covering 2023 performance out of the top 50 U.S. homeowners insurance carriers by direct written premium.
We had the fifth best direct combined ratio and we were the top performer in Texas, our largest state. We again outperformed our peers, which is a testament to our risk strategy and insurance profitability actions where we were ahead of the market in implementing price increases. We used our unique data and risk modeling to non-renew higher risk policies and roll out other underwriting actions. All of this equates to strong results.
I want to provide a few highlights across some of our businesses. First, as I mentioned, our reinsurance placements renewed on April first, and we are pleased with the favorable terms we negotiated demonstrating the strength of our underwriting. We secured better terms for our excess of loss reinsurance, which helps protect against significant events. Quota share reinsurance terms were also better than expected, resulting in ceding levels, slightly higher than we had anticipated. Overall is great news and helps tighten the 2024 revenue guidance range and increase adjusted EBITDA guidance given the clarity and contracts now in place.
Next, our software businesses continue to rollout new products and enhancements to maintain our strong client retention, as discussed last quarter via successfully rolled out its latest product, Renault verified and its corresponding price increase of more than 20%. And then our largest inspection software brand launched more than 20 core feature enhancements last year. This included additional report writer capabilities, a Florida wind mitigation inspection, tinplate and flex fund enhancements to allow customers to pay for inspection services at close.
As a note, inspectors that use flex fund typically see increased invoice sizes by 30%-plus as it makes it easier for consumers to purchase more of their services as a result of the product innovations, IS. and increases transaction fees by approximately 20% and increased monthly minimum fees as well.
Next, we received approximately $35 million in cash in the quarter from the Aon business collaboration agreement and the sale of EIG., which we mentioned last quarter. And lastly, we continue to pursue parties in relation to fester related claims. We mentioned previously that we had engaged a top tier contingent fee law firm, and we are vigorously enforcing our rights and pursuing damages. Now over to you, Shawn.

Shawn Tabak

Thanks, Matt, and good afternoon, everyone. Moving to slide 11 to get into the financials here, revenue was $115.4 million in the first quarter of 2024, a 32% increase over the prior year, driven by our insurance segment, which grew 50%. Revenue less cost revenue was $39.6 million with a margin of 34% of revenue, which decreased over the prior year, primarily driven by faster growth in our insurance segment compared to our vertical software segment.
In vertical software revenue less cost of revenue margin increased by approximately 600 basis points to 82% due to price increases and strong cost control. Adjusted EBITDA loss was $16.8 million, a $5.1 million improvement over the prior year, driven by the insurance profitability actions, which Matthew will discuss in more detail shortly.
The quarter included $36 million of net catastrophic weather loss costs, resulting in $8 million of additional cost of revenue for cat weather compared to our expectations. Gross written premium was $83 million, a decrease from the prior year as we reduced risk through non-renewals of higher risk policies in Q1. And after the sale of our in-house agency EIG. in January, any policies purchased by our homeowners book written by third party carriers are now excluded from this number.
The insurance segment was 76% of total revenue in the first quarter, an increase from 67% in the first quarter of 2023. Revenue from our insurance segment was $87.9 million, a 50% increase over the prior year, driven by 33% premium per policy increases and lower reinsurance ceding. Vertical software revenue was $27.5 million, a slight decline compared to the prior year, driven by moving services and lower demand for corporate relocations and offset by software and service subscription revenue, which increased slightly year over year.
Before we move on to adjusted EBITDA, I'll provide additional color on our insurance segment, cost of revenue and claims. Overall, we have two main types of losses arising from insurance claims. The first is attritional losses, which are primarily driven by the Holmes condition and often predictable perils like fire or water damage. These losses are relatively consistent by quarter and over time and typically represent approximately half of annual claims.
Second type is catastrophic weather, which are generally midsize events and most commonly for us, severe convection storms, which drive wind and hail conditions. Cat losses are seasonal, and the Texas spring storm season is a key contributor, although timing can vary from month to month. Overall, cat losses typically average in the mid to low 30% range for the year. And when a large and unusual event does occur. Excess of loss reinsurance kicks in such as we saw in 2021 with Winter Storm Uri, where we were well protected.
On this slide, I've split out cost of revenue for our insurance segment between attritional and other costs and catastrophic weather losses. Cost of revenue for our insurance segment was $71 million with $35 million driven by attritional and other costs and $36 million driven by catastrophic weather losses, the majority of which came from a $20 million gross Texas hailstorm that realized throughout the second half of March. For Q1, we expected $28 million of cat losses based on historic average contracts. So we had approximately $8 million in additional cost of revenue based on the earlier Texas spring storms, net of reinsurance.
Moving to adjusted EBITDA by segment, overall, adjusted EBITDA loss was $16.8 million. The insurance segment adjusted EBITDA loss was $2.9 million in the first quarter of 2024, an improvement of $4.3 million compared to the prior year. Vertical Software adjusted EBITDA was $1.1 million, a $1.5 million improvement over the prior year, driven by price increases and our software and subscriptions businesses. Corporate expenses were $15 million or 13% of total revenue, a 300-basis-point improvement over the prior year.
Operating cash flow was positive $8 million in the first quarter of 2024 and included the cash we received from the Aon deal of approximately $25 million. As of March 31st, 2024, we had $413 million in cash, cash equivalents and investments. Excluding the $301 million at AGOA, Porch held $112 million, an increase from $87 million in the prior quarter.
In addition, incremental to these totals, Porch group held $37 million, restricted cash and cash equivalents, primarily for our captive and warranty businesses. Porch Group also holds $49 million surplus note from HOA. HOA's surplus at March 31 was $36 million, consistent with historic norms, surplus declines in Q1 and Q2. With the seasonality trend and grows again, in the second half of the year with increased profitability.
And lastly, we've been asked about our plans to address the $217 million 2026 unsecured notes the management team and Board certainly discuss options of which we have several, but we don't expect to transact on these until sometime in 12 to 24 months right now, given the exceptionally low coupon, we are remaining patient.
Moving on to guidance today, we are pleased to update our full year 2024 outlook, increasing our revenue, less cost revenue and adjusted EBITDA expectations following strong business execution and increased confidence in the full year performance. The terms available in our reinsurance renewals on April 1 resulted in us placing our quota share ceding slightly higher than anticipated.
Generally, this lowers revenue decreases risk and given the terms increases expected profitability with this reinsurance in place, we are updating revenue guidance and now expect $450 million to $470 million with growth of 5% to 9%. We expect year-over-year revenue growth to be front-end weighted as Q3 2023 in particular had lower reinsurance ceding and thus higher revenue immediately post the best to fraud discovery. We are increasing the lower end of our range of expectations for revenue, less cost of revenue to $230 million to $240 million. We assume a 63% gross loss ratio for the full year, which aligns with our year weighted average.
Of course, any cat events exceeding historical experiences are not included in our guidance and would net it negatively affect the rates. Overall, based on our reinsurance renewals and the performance across the business, we are increasing adjusted EBITDA profit guidance to $2.5 million to $12.5 million. And finally, we expect gross written premiums of $460 million to $480 million. We are managing premiums roughly flat on an apples to apples basis. As a reminder, the prior year includes EIG. our in-house agency and going forward, third party carrier written premiums are excluded.
Thank you all for your time today. And now I'll hand over to Matthew to cover our KPIs.

Matthew Neagle

Thanks, Shawn. Michelle and hello, everyone. First RKTIs. The average number of companies was 30,000 in the first quarter, broadly unchanged from prior quarters. Average revenue per company per month increased 36%, $1,294 compared to Q1 2023, driven by lower seating and premium per policy increased since we had 241,000 monetized services in the quarter, an increase of 12% despite the 3% lower housing market sales. Finally, average revenue per monetized service was $422, up 29% from prior year due to continued growth in insurance.
Looking at our insurance segment, KPM is as a reminder, and as Sean mentioned, our insurance saving. KPI.s include EIG. in 2023, which we have since divested at the end of 2023, EIG had third party gross written premium of $45 million. Under the new third party agency partner model, these premiums will no longer be included.
So the KPI.'s, gross written premium was $83 million from 253,000 policies in force. For our guidance change I shared we are looking to manage premium to approximately flat on a full year basis in 2024 before beginning to grow nicely in 2025. 2024 non-renewal actions were concentrated in the early part of this year. Annualized revenue per policy was $1,375, an increase of 125% from the prior year, driven by increases in premium and lower ceding.
Focusing now and showing our insurance carrier annualized premium per policy increased 33%, $1,948. Premium retention was 90% lower than prior year, driven by the nonrenewals and the other underwriting actions we've discussed. Our gross loss ratio was 71% in the first quarter.
Our attritional gross loss ratio, which excludes the losses from catastrophic weather events was 33%, a reduction from 40% in the prior year. As Sean mentioned earlier, this type of loss is generally consistent quarter over quarter. This is where we outperform homeowners' insurance peers, which is driven by insurance profitability actions and our ability to assess and price risk affected.
The quarter was impacted by seasonal cat and weather, which resulted in an overall current accident year gross loss ratio of 71%. This is still an improvement of 8% from 79% last year. Average claims cost per policy in the first quarter were $360, an increase of 35% compared to our five year average of $267. Our gross combined ratio in the first quarter was 97%, an improvement from 107% in the prior year.
Digging into our underwriting performance, I'll recap insurance profitability actions, which include the three P's First, this product effective underwriting is critical to insurance profitability. Leveraging our unique data helps us improve our risk segmentation and evaluation by adding factors such as water, either location type of pipes, presence of wasteful flooring and much more second, price.
Hoa has a history of ensuring we price to profitability following the hardening reinsurance markets, inflationary changes and increased catastrophic weather, it was key to adjust rates significantly to ensure we achieve our target margins now and in the future, over the last couple of years, we have taken significant rate where possible to optimize profitability in each state. Our underwriting team reviews state-level pricing monthly. And last quarter, we continued to progress here announcing an 18% increase filed in Texas, which is now effective for both new and renewal policies.
Third portfolio, as indicated by our data and modeling, we have taken action against higher risk policies. In those, we expect to be unprofitable as we refine our advantage, underwriting and pricing, we are choosing to reopen certain geographies and grow our portfolio. And thanks, everyone.
Now I'll hand over to Efram.

Efram Ware

Thanks, Matthew, and hello, everyone, I'm everywhere President and General Manager of Homeowners of America have been a leader in HLA for almost 10 years. And my background is in the large carriers such as Allstate Safeco Insurance. I have worked in product operations and underwriting, but worked closely with Adam coordinate in leading our insurance business and that HOA and Adam led the insurance segment until his departure after the sale of BIGE.
Through HY., we offer property related insurance products in 22 states combined Porch's unique data and HLA.'s 18 years of claims history to assess property risks, underwrite and effectively priced homeowners insurance policies. We couldn't be prouder of a of the A.M. Best data that Matt mentioned earlier. I will share insights into our unique data, which we have labeled hold factors and information on the reinsurance renewals we just secure. As a reminder, we are rated A. exceptional by Dymatize for our financial stability rating.
Slide 24 highlights our advantage when predicting in pricing risk. There are two key risk insight that we and many insurance companies use to evaluate and price policy personal information such as past claims history, consumers' insurance score and the number of people in the household and geographic information such as the zip code of the haul distance to coast to potential wildfire risk and historical weather patterns in that area. Carriers also consider construction and inflation costs, which can vary geographically interior and exterior insights where we use our unique property data combined with historical claims information to provide advantages and advantages with all of these home factors.
We have a clearer picture of the risks and can price more accurate with our data. We have verified insights into a large number of properties. We have so much data that we can then effectively model and predict whole factors on virtually all properties across the US. For example, if we know the type of typing roof material and location of the water heater for particular home, a similar nearby mall was built in the same year by the same builder with high confidence we can curate pull factors for those other properties, expanding our data advantages exponentially to date, we have only used there are five property insights in our underwriting models moving forward, there are opportunities for us to expand our advantages to every property week flow, providing discount for lower risk policies and surcharges for high-risk clients. We are still early in the journey, and I'm excited about the year ahead.
We have built the data platform between ports and HOA, where we can now create and test a new home factor every few weeks and expect to accelerate our work and evaluate approximately 20 new home factors in 2024 began with insights and different confidence levels applying to virtually every U.S. property. We anticipate our books mix continuing to trend towards lower risk customers who receive home factor discounts. We are just starting to reopen ZIP codes that we have paused as we managed our premiums are flat year over year.
Our 2025 expectation is to grow nicely and importantly to grow profitably. As mentioned previously, we had a successful April first reinsurance renewal, placing the right partners for excess of loss, also known as XOL and quota share reinsurance reinsurance provide us as a carrier, the ability to share risk in exchange for premiums in return related to extra well, we realized one reduced weather risk and in particular, lowering exposure to significant catastrophic events and to more stable results.
While there will be a level of seasonality, at least until the reciprocal exchanges launch XOL reinsurance and minimizes some volatility it related to quota share reinsurance. We first receive a commission which helped offset expenses, including underwriting sales and claims related to expenses. Secondly, decreased risk by passing a percentage of premiums and losses along to the reinsurer. And lastly, we have received surplus support, reducing the capital required by the carrier even after the reciprocal exchanges launch, when Porch Group's results were less exposed to volatility and seasonality.
We will continue to manage through reinsurance purchases of the reciprocal to ensure it is well protected and have long term stability. This year's reinsurance program has a simplified structure and improved year over year term. This is a testament to our industry-leading underwriting results. We now have approximately 50 reinsurers who are A. rated with whom we have long-term relationships.
But additionally, our profitability actions have effectively reduce our risk in catastrophe exposed areas and on other high risk policies, probable maximum loss or PML, the industry term for the modeled maximum loss for a given return period for. Our model 2020 for PML, reduce 50% compared to 2022. Under the reinsurance covers third-party quota share perspective, seeding is approximately 27.5%, which is a little higher than we had anticipated given the more favorable term. In addition, we secured better excess of loss 'coverage at better rates than 2023.
Thanks, everyone. I'll hand it over to Matt to wrap up.

Matt Ehrlichman

I think that from thanks to you and the team for their continued great work and execution insurance remains at the center of our strategy that the team is committed is committed to continuous improvement in our underwriting performance, and this will remain our priority in 2024 as we position ourselves for the reciprocal exchange head. We expect approval later this year, at which point we'll host an Investor Day to provide more information about financials and our move towards becoming a less volatile and higher margin business.
Looking into our planned future after launching the reciprocal reporting on whether on a quarter to quarter basis would be a focus given claims and losses will be paid by a different entity that is not owned by ports. Until then, we'll certainly continue to provide visibility as it's our largest contract and Fran shared more today on home factors. We will continue to expand these capabilities across more insights and states and build on its positive impact on our underwriting. It's early days, but there will be ways to monetize home factors in states where we do not write policies ourselves. We remain focused on profitability and achieving our full year adjusted EBITDA profitable target. This will be a key milestone, and we are well positioned to deliver for that.
We'll wrap the prepared remarks and pass the call to the operator. Rob, please go ahead and open the call for Q&A.

Question and Answer Session

Operator

Thank you. We will now begin the question-and-answer session. (Operator Instructions)
John Campbell, Stephens.

Jonathan Bass

This is Jonathan Bass on for John Campbell. Thanks for taking my questions. So obviously, you guys raised it pricing with the Rhino Enyce and the first part of the year. Can you guys maybe dig in on how you think about pulling the pricing lever for your software businesses? And do you guys see more pricing opportunities elsewhere in the software offerings?

Matthew Neagle

Yes, I can take that. And the first thing I'll say is that what we're focused on is delivering value to our software customers. And we feel when we can deliver value, we have the opportunity to get price increases. And so we've been very focused on the velocity of our product innovation and have been able to do a number of price increases over the last year or so across our different businesses. And the other thing that all I'll share is that as we have done that, our retention has remained very stable and we do see some opportunity going forward.
And in the last earnings release, we shared a little bit about the product road map of rail and how we see additional rollouts of products that we think could merit price increases and help really drive the profitability of that business. And the last thing that I'll just share on that is because of the price increases and cost controls and product innovation, our software businesses have been relatively stable from a revenue perspective, even though there's been pretty significant market declines, both in the number of transactions and the number of providers. And so that makes us very optimistic about how those businesses are positioned as the market recovers.

Matt Ehrlichman

And I'll just add just because for folks that weren't on the call last quarter, we like Mathews, noting we did do provide a deep dive on one of our core software businesses right now this year, even with the depressed housing market, Rhino's expected $8 million of adjusted EBITDA. So it's a nice high-margin business for us.
But to your question, there's a multiyear roadmap of additional major products that we're going to be launching across each of these core software businesses, and we'll couple of price increases with those. And so between that, the just the transaction volume coming even somewhere close to what it's been in the past, along with those price increases.
We talked last quarter about how we'd expect in 2028. Renault to be go from $8 million in EBITDA now to about $35 million in EBITDA at that point. So it's going to be the fun multiyear run we expect to have with the tailwinds we have.

Operator

Ryan Tomasello, KBW.

Ryan Tomasello

Hi, everyone. Thanks for taking the questions. I'm just diving back into some of the deep dive on on each away, you talked about the different levers you pull to improve underwriting between unit data and price increases and the derisking the higher risk policies during the third, you're able to really parse out how much of the benefit and underwriting you're actually getting on the data side. You know, if there is any quantification of that from a gross loss ratio perspective, just to be helpful to frame how impactful that and to date?

Matt Ehrlichman

Yes, I would say we've not provided a specific breakout, although we have provided some of the feedback, Ryan, as I'm sure you can attract on the different tests of how the impact to current risk accuracy prediction impacted to a metric and a track record Genie coefficient kind of measures. The accuracy of our pricing. And we've mentioned it, yes, significant in terms of what our proprietary data has.
It is, of course, mixed in to all the other underwriting actions that we're taking pricing, deductibles, non-renewals like you mentioned, and there's not not one of those that is the dominant driver of the results that we're seeing. We do believe long term, especially just given how our view early, we are in using our proprietary data that is going to continue to make a bigger and bigger impact for us. It's fun to look at because we can see multiple years ahead of just continuing to be able to use more of that data and billing it into rate filings and furthering the advantage we have there.
Last comment is I do expect and we've talked internally right at some at some point, we will be having in our backlog to do a deep dive in one of these calls around the data specifically. And so I would say more to come certainly on that as we go.

Matthew Neagle

Ryan, the one additional thing I would just highlight is there are different ways we can take advantage of that. So one way could be by underwriting, lower risk and driving a better gross loss ratio. The other way is by offering a lower price and taking more market share and supporting our growth. And so there will be different ways. We take advantage of that and so a bit differently in our numbers.

Ryan Tomasello

Okay, great. Thanks for that. And just two more follow-ups on the insurance side. Carriers broadly have obviously begun to reopen additional markets and get back into growth mode here. Profitability gets back into shape, but are you seeing any impact in your core markets just from a competitive standpoint? And then in terms of HA.'s surplus position of I think you said 37 million do you feel like that's in a strong enough place to efficiently the reciprocal transaction done at this stage and in general, how does HRAs surplus position play into the timing of the reciprocal and just how that is being evaluated from a regulator's? Thanks.

Matt Ehrlichman

Efram, why don't of you take what you're seeing on the first question, just growth and what we've seen from other carriers and I can take the second one was the reciprocal.

Efram Ware

Sure, thanks for the question. We are like many others have done a lot of work for us towards profitability, both in underwriting and deductible work, as Matt mentioned earlier, as well as pricing given all that work, Ryan, we are in a position where we can evaluate and reopen in very specific geographies. Competition in our space is always entering coming and going.
But given that we're the 11th largest carrier in the state of Texas as a prime example, we still have a relatively small market share hovering around a little bit over 2%. So just in our home state, we still have plenty of room to grow despite the competition, and we continue to look at other geographies where we can reopen in grow our business.

Matt Ehrlichman

In terms of the reciprocal, I'd say around where we're on track with where we would anticipate being from a surplus. As we noted, surplus does generally go down first and second quarter, and then it goes up meaningfully in the third and fourth quarter. And that's what we would expect this year. I mean, we've through this whole process over the last year, we built a strong relationship with the TDI. They understand our business well, we provided them all of the forecast. And so I think we're in a good spot in terms of executing our plans here for later this year.

Operator

(Operator Instructions) Mark Schappel, Loop Capital Markets.

Mark Schappel

Hi. Thank you for taking my question. Matt, I was wondering if you could walk through some of the puts and takes in your vertical software business this quarter specifically with respect to are the products in that segment that are doing well and maybe the ones that are struggling a little bit?

Matthew Neagle

Sure. Let me take a first first kind of thing and we have shares in kind of our currently same market. Yes, overall, we're assuming the market is flat for this year. But if you look historically, the number of transactions have dropped over 30%. The number of mortgage loan officers has jumped over 40%, but our businesses have held up fairly well despite pretty significant declines in transactions and providers.
And we're very excited about some of the products we talked to them last quarter with our Rhino software, which provides now a suite of solutions to title companies and is really becoming the platform for title companies to on many parts of their business. And so we recently launched on Rhino verify, which automatically ensures that when you are processing payment as part of the title closing that the identity of that recipient is the right identity.
And within our inspection space, we have a whole platform of software and services to power the entire business. And we are excited to launch a new report writer under the IS. and brand, which is sort of the first piece of software that you need as an inspector to help us better target all parts of the journey. As Inspector owning business, we actually had a variety of launches. In fact, over 20 of the top requested features we were able to get out in the last three to six months.
And then we're uniquely positioned in the and with low sign loan officer space and especially with some of the competitive one of our competitors was acquired and created an opportunity for us in the marketplace. And all of these things, though, I think position us extremely well for when the market comes back and there's more transactions and more providers who are coming back into the space or at least ramping up their business.

Mark Schappel

Great. Thank you. And then one, if you could just give us a quick update on the uptake rate you're seeing with the Porch Concierge app?

Matt Ehrlichman

Yeah we're not provide any specific metrics on recently, but again, it's a possibility, though in the future, but I would say it continues to go well. So across our software businesses, we continue to execute on the strategy, get access and introduced to more homebuyers, and we continue to work with those homebuyers to help them with a variety of services.
Some of the things that I have been excited about, for example, we are moving services business certainly has been under pressure just as the market is never tracked over the last couple of years, but they really use that time to be able to build out a new local full service offering. That is a really great product for consumers that we really didn't have before. We really focused on labor only moves.
So that's something we're now able to bring into these consumers to help add another product to those customers. Obviously, insurance and warranty continue to be our focuses with consumers, and we're seeing obviously very good growth in those two areas.

Operator

There are no further phone questions at this time. I will now pass it over to Lois for any written web questions.

Lois Perkins

Thanks, Rob. First question we have is what will build momentum in HOA over the next year?

Efram Ware

Sure. Thank you for the question. Two of the things that I'm really excited about our own one, the work that we're doing with home factors, we truly believe and expect that that will continue to be an advantage as we build upon that a competitive advantage.
Now the team is digging in and we have made great progress. And Mitch, as we mentioned in the prepared remarks, we've got are expecting to have 20 additional factors this year to add to our pricing and segmentation through model.
And the second is the reciprocal exchange. I do believe it is the right business model for us. I will relieve some of the volatility that we see as an insurance carrier. So I'm excited about both of those two opportunities. Personally, for me is really just executing on both of those focus areas.

Lois Perkins

Thanks, Efram. That's all of the recent questions we have.

Matt Ehrlichman

Perfect. And I'll just conclude, which I'll just say thanks to everybody for joining. We do look forward to updating you on our progress as we move towards full year profitability, milestone for the company and toward approval of the reciprocal exchange, another milestone. We'd certainly appreciate the continued support. Look forward to speaking to you guys again in our Q2 earnings call in August. Until then, take care.