Afternoon, everyone, and thank you for participating in Porch Group's first quarter 2021 conference call. Joining us today are Matt Ehrlichman, Porch Group's CEO, Chairman, and Founder. Marty Heimbigner, Porch Group's CFO. Matthew Neagle, Porch Group's COO. Nicole Pelley, Porch Group's VP of Product. Before we go further, I'd like to read the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Today's discussion may contain forward-looking statements, including, but not limited to, statements regarding Porch's expectations or predictions of future financial or business performance or conditions, business strategy and plans, and anticipated impacts from pending or completed acquisitions. Forward-looking statements are inherently subject to risks, uncertainties, and assumptions, and they are not guarantees of performance. You should not put undue reliance on these statements.
You should understand that forward-looking statements involve risks and uncertainties, including the items discussed under the risk factors in Porch's recent public filings with the SEC. Such factors may be updated from time to time in Porch's subsequent filings with the SEC, which are available on the SEC website, and may cause actual performance or results or performance to differ materially from those indicated by such statements. Porch is under no obligation and expressly disclaims any obligation to update, alter, or otherwise revise any forward-looking statement, whether as a result of changed circumstances, new information, future events, or otherwise, except as required by law. Today's remarks will also refer to certain non-GAAP financial measures. Definitions of these non-GAAP financial measures are available in the legal disclaimers found on slide two of the presentation.
Also, for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures, please refer to the tables beginning on slide 26 of the presentation. We will also refer you to such legal disclaimers for additional information. I'd like to remind everyone that the webcast will be available for replay shortly after the conclusion of this presentation on the company's website at porchgroup.com. For those of you that would like to submit a question during today's presentation, please log into the webinar and submit it through the chat function on the Zoom platform. Management will do its best to take questions within the allotted time. Porch Group has also made available a slide presentation that will follow along with the presenters' commentary. The presentation can be found on the company's website.
With that, let me turn the call over to Matt Ehrlichman, CEO, Chairman, and Founder of Porch Group. Matt?
I appreciate it, Matt. Good afternoon to everybody that is on the call. Looking at slide four, as many of you know by now, Porch is a leading vertical software company with a software-as-a-service fee plus transaction monetization engine. Our platform helps companies running related businesses, and we help consumers of these software companies move and maintain their homes, with insurance being our core focus. Because we generate revenue not just with the typical SaaS fees, but also with the B2B2C transaction revenues, these small businesses like home inspectors, moving companies, and roofing companies become very valuable to us. This allows us to invest in product development and sales to bring more of these companies into the Porch platform.
I would like to start by highlighting our InsurTech division, as we're already one of the larger InsurTech companies in the industry based on growth rate and premium, and with our growth rates and margins comparing certainly favorably. We believe we have fundamental advantages with early access to virtually tax-free home buyers who need insurance and the reoccurring stream of proprietary property data. This, in turn, can help us understand risk and pricing over time. We'll expand further on our InsurTech business later, but we are certainly in an exciting spot with our unique, durable, and transformational capabilities. While I was telling you what we are, what we do, I would like to show you, next, a little bit more and give you a little more color.
Last week, a few members of our customer-facing teams and a designer delighted our leadership with a compilation of videos from real customers. We thought it'd be fun to be able to share, just to give you that much more of a flavor for how we help consumers with their homes.
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A few things to understand. First, each of these consumers was introduced to us from a company using our software, which means we did not need to pay marketing dollars for that introduction. Second, the more services we help a consumer with, it actually leads to higher consumer satisfaction. For us, a satisfied consumer is a more valuable consumer. Third, as we help these consumers with more services, the companies, the core companies that are using our software, become increasingly more valuable to us, which in turn allows us to be able to sell and provide software to more of them. Before I turn it over to Marty to discuss our financials, I'd love to reiterate first our previously laid out priorities for 2021. For us, it begins with the companies we provide software to.
Our focus is on selling software to more companies where we become deeply embedded with those companies. This includes upselling more SaaS modules into these companies, which we'll cover off more later in the call. Two, as more of these companies provide access to their consumers, it leads to, three, the more services we can provide to those consumers. As I mentioned earlier, the happier the consumer, the more revenue we generate, which ultimately benefits both parties as well as helps the software companies look good. Four, we focus on insurance with these consumers, and in particular, through the acquisition of Homeowners of America, or HOA, we are now a full stack carrier and a managing general agent, complemented with our existing agency is the key focus for us. Five, we're bringing in brands and advertisers to connect with homebuyers.
Lastly, we will selectively use strategic M&A to continue to expand our platform. Our business is performing very well against each of these areas, and the results are strong. For that, I'll turn it over to Marty Heimbigner, our CFO, to discuss Q1 and guidance for 2021.
Thanks, Matt. Turning now to our financial results for the quarter ended March 31, 2021. For the first quarter of 2021, our total revenue was $26.7 million, compared with $15.1 million in the first quarter of 2020, an increase of 77% year-over-year. Adjusting Q1 2020 revenues for past divestitures, total revenue increased from $12.6 million in Q1 2020 pro forma, which is 112% increase year-over-year. Our cost of revenue percentage for the first quarter of 2021 was 78%, and contribution margin was 41%, up materially from 5% in Q1 of 2020. Our adjusted EBITDA loss improved to -$9.6 million, about $2 million better than our initial internal expectations. Q1 has historically been the seasonally lowest quarter, and we remain on track for the full year adjusted EBITDA loss margin guidance we have provided.
These results would have been even better, but for the cold weather crisis in Texas in February of this year, in which fewer monetized services occurred in that part of the country. Now looking at slide nine, the $26.7 million in revenue in Q1 2020 was meaningfully ahead of our expectations and the $23 million public guidance we had provided. On the right-hand side of the slide, you can see that while we grew 112% year-over-year versus Q1 2020 pro forma, our growth would have been approximately 200% year-over-year if our acquisitions, Homeowners of America and V12, had occurred on January 1st, 2021. As a reminder, we closed our acquisition of V12 on January 12th, and Homeowners of America was closed on April 6th. Looking at our outlook, slide 10.
Given the momentum of our business, we are raising our revenue guidance to $178 million, up from $175 million in our prior guidance. This would be 147% year-over-year growth. We are reiterating guidance related to our contribution margins and our adjusted EBITDA loss margin. Given certain transaction revenue and a slightly higher cost of revenue, we see Q2 and Q3 with a bit lower revenue, less cost of revenue margins than the full year, but better EBITDA loss margins. For the full year, we expect approximately 72% revenue less cost of revenue. For the year, we will manage our business to a specific adjusted EBITDA loss percentage target. As revenue continues to perform ahead of our guidance, we will use some of the additional revenue gains to fund further key investment in sales and marketing and R&D to support our continued rapid growth.
The team will discuss a few of these investment areas later in this call. On slide 11, in terms of how to think about the expected $178 million in 2021 revenue, we had layered in $50 million for the HOA and V12 acquisitions. On the right side of the slide, you can see our anticipated 2021 revenue distribution has not changed. 90% of our business is from SaaS platform and the corresponding move-related services. Only 10% of revenues we expect will be from post-move services. To help provide color on our B2B software and services subscription revenue, of the $40 million-$45 million expected in 2021, which makes up about 25% of our entire revenue, $20 million was layered in for V12, and the balance is tied to our core software across our verticals. As well as revenue from other B2B modules that Nicole will discuss later in this call.
As you can see here on slide 12, as demonstrated by Q1's 41% contribution margin, which includes all variable costs, we are in a strong position with our 2021 margin targets. Before passing the baton, two last notes. First, from a cash use perspective, operating cash use largely aligns with our EBITDA loss, with several million dollars annually of capitalized software costs and interest expense related to our $42 million of outstanding long-term debt. I would like to highlight that in Q4 and Q1, we did have one-time paydowns of payables that increased the cash used in those periods. As a private company, prior to the SPAC merger closing, we maintained payables aged at a longer time period. As of the end of Q1, we've now paid down and fully normalized our working capital position.
Second, consistent with other companies who have gone public through a SPAC, we have reacted to the accounting statement by the SEC that came out in mid-April, in which they now require recording a liability for private warrants associated with a SPAC and companies who went public through a SPAC. For Porch, at this time, all of the public warrants and 45% of the private warrants are now exercised or redeemed and are behind us. I should note that the exercise of both public and private warrants has resulted in $126.8 million in equity proceeds coming to the company in Q1 and here in Q2. We will be filing amended 2020 Form 10-K tomorrow to reflect this change and other immaterial adjustments, we will file our first quarter 10-Q a day thereafter.
I'll now turn the call over to our Chief Operating Officer, Matthew Neagle, to provide an update on our key performance indicators for Q1 2021.
Thanks, Marty. I'll go ahead and jump in with our public KPIs and commentary. If you look at slide 13, our KPIs were very strong in Q1. On the left, you see average number of companies. This jumped to 14,000, which is up 28% year-over-year. On the right, you'll see the growth in the average revenue per company. This is up to $637 per month, which is 32% year-over-year. The revenue per company is up because it includes both our B2B SaaS fees, including upselling of additional modules. It also includes more transaction revenue by the companies providing access to consumers. The number of companies on the left, that's growing due to a number of factors. First, we're seeing very strong record software sales.
We had 278 companies that joined from the V12 acquisition that we announced. We are seeing small business owners, in particular inspectors, returning to work after receiving their COVID-19 vaccinations. The total amount, we don't have a precise number. We do see the economy starting to reopen. We see that as a one-time positive impact that offset some of the slower growth in 2020. If you go to slide 14, we're also seeing strong growth across our monetized services. We remain very focused on high-value move-related services. In Q1, we were pleasantly surprised that we saw an acceleration in our post-move services, which generate a lower revenue per service. This resulted in 20% growth in total monetized services, so we're up to 183,000 in Q1, and slight year-over-year growth in revenue per monetized services wer e about $92 in Q1.
I will note, though, that one of our key service providers, this is in security and home automation did go through an internal system transition that had some impact on conversion rate and installation for security. Given that security is a fairly high-value service for us, this did have some impact on the revenue per monetized service in Q1. We do continue to expect the average revenue per monetized service to increase over time as we focus on high-value services. In particular, as we look to Q2, we'll note the completion of the HOA acquisition, which happened in early April. This will increase our revenue per monetized service because we are now deeper in the value chain in insurance. Given the recurring nature of insurance, we will see the number of monetized services grow as past year consumers renew their insurance the following year at high rates.
On that note, I will say we are excited about the early progress with the HOA acquisition. Out of the gate, it's been exciting to see us sell into HOA at a higher percentage and also see a higher overall customer conversion rate as we make improvements to the purchasing process for HOA. I'll pause to let Matt add some color specifically on Q2.
Thanks, Matthew. Thanks, Marty. Yeah, I do want to add some additional color on Q2 and what we're seeing. I want to note, though, on set expectations, we do not plan on providing quarterly guidance going forward, just annual guidance. However, as we listen to investors in light of market volatility in the SaaS market, I do believe it's appropriate to provide more details this quarter. First, in terms of revenue, to date, so far in the quarter, we're trending north of $45 million in revenue for Q2. Adjusted EBITDA loss is trending to be better in Q2 versus Q1. Our business is ramping nicely and as anticipated. Second, in terms of KPIs, as Matthew noted, we are seeing a strong increase in both monetized services and revenue per monetized service.
Now that we can lead with HOA in certain states and generate significantly more revenue per insurance sale to do so, we're seeing north of $120 per monetized service in Q2 and significantly higher monetized services, both due to HOA, seasonality of our software companies, and conversion rate improvements. This all flows through to companies, where we're seeing, so far in Q2, north of $900 in revenue per company per month, and continued strong gains in the number of companies in our platform.
The point I would make is just as that revenue per company goes up, the LTV of that company goes up, which means the unit economics improve, which means we're in a position to invest more into sales and marketing and product development so that we can continue to grow the number of companies, and then through that, the number of monetized services.
Yeah, that flywheel is really important for people to understand in terms of how we'll continue to drive really strong growth for the business. Thanks, Matthew. Okay. Let's talk about a few deep dives. First, we do want to start, and I'd like to talk about insurance here on slide 16. Our InsurTech division is and will continue to be the core transactional monetization on top of our software platform. Now, we wrap the experience for the consumer with many different services to make sure we do provide a high satisfaction experience for the consumer. Given insurance is the most valuable service in the home, given it's recurring, and given we have these core advantages related to insurance we'll talk more about, we have focused on providing software to companies and in verticals when insurance is needed.
As you can see here on the slide, top left, we're increasing our guidance now to $275 million of gross written premium between Homeowners of America and Porch for the full year 2021 for both companies. We're seeing improved insurance conversion rates in the six states HOA is in today, and the timing of new potential state openings is ahead of schedule. You can see the states on the top right-hand corner we plan to launch over the next 12-18 months. There's a lot of work here, and it does take time given insurance is regulated, but the team is executing well against that plan. Bottom left-hand corner, you can see that HOA cedes nearly all of its premiums and corresponding risk, approximately 90%, to third-party reinsurance companies and generates commission and fee income consistent with our high margins.
We're very happy certainly with that low risk, high margin model. It maps well to Porch's economic profile. Case in point that I want to make would be in the February storms in Texas, where HOA has its most concentration currently. While Uri occurred ahead of Porch acquiring HOA, any losses are absorbed by the seller and not Porch, it is good to point out that this not seen before event was largely covered through their reinsurance system. HOA used excess of loss insurance to recoup payments to cover losses beyond their attachment of only $1.6 million, which is what they bore on their side. This shows the effectiveness of our risk transfer for catastrophes to our reinsurance partners, which is obviously a capability we're really excited about.
Lastly, in the bottom right-hand corner, the historic 59% gross loss ratio doesn't meaningfully impact the P&L this year. Over time, one of the reasons we want to highlight it is it is very important because this type of best-in-class risk writing will have huge impact on having these durable relationships and improving economics for reinsurers.
Over time, as we integrate our property data into the decision-making around risk and pricing, we believe we will capture even more revenue and profits. Given we get a large number of consumers who need insurance virtually CAC-free, and we get a reoccurring stream of property data unique to what anyone else has, we have these long-term durable advantages that will help us build a massive InsurTech business. With that, I'll ask Nicole Pelley, VP of Product at Porch, to jump in with a few updates . Nicole?
Thanks, Matt, and hello, everyone. As Matt said, I lead product for Porch, including our central platforms like our data platform and consumer experience. What I'd like to emphasize is that if our software companies love us, they don't leave our software. The great thing is they love us. That means we get a very consistent stream of B2B SaaS revenues and low-cost access to consumers when they're most valuable. Let me walk you through the updated NPS scores across our companies to provide visibility into how strong our platform is. As you can see here on slide 17, the scores largely speak for themselves. Both companies and consumers love what we're doing. I'd like to highlight the latest NPS score from ISN of 75, and the latest NPS score from consumers who purchase insurance is also 75.
We're really proud of the experiences we're creating, and we're excited because we're just getting started. As Matt mentioned, one of the areas of our software strategy that's not well understood is how even when companies choose to get our core software for free in exchange for providing us with customer access, we can still rapidly grow B2B SaaS revenues by adding and upselling additional modules. This is going very well for us. A few examples of the modules we offer today include our report writing software. Today, most inspectors use our CRM and ERP software to help run their businesses, but we now have the ability to also sell in a module that helps them with their inspection report generation. Our repair estimate report to break down an inspection report and provide easy and quick estimates. This is something I love and I'm really excited about.
It not only helps inspectors, but in particular, it helps real estate agents and consumers save time by not having to get contractors out to the home to create estimates. Technology can do that for them. Our premium communication module to help with SMS and email communications and automate those, and then payment processing.
I would actually want to just make one note on payment processing because we haven't talked about it much with the group. Inspections and the other industries that we serve are high ticket size transactions. That does make payment processing a significant and very high margin opportunity as we continue to drive payments online and as we continue to drive payments toward credit cards.
Great. Let's go ahead and cover some product and technology investments. Having 40% contribution margins in 2021, 41% already in Q1, has allowed us to aggressively invest in product while still showing very significant improvements in adjusted EBITDA loss margin. While there are very many investments happening across the business, some that we're most excited about are what we show here on slide 19. Our teams are doing great work across our vertical software to make sure we increase our lead and are difficult to compete with. Our InsurTech investments and data platform investments go hand in hand. There's so much to do and so much opportunity as we create intelligence from our vast and unique property data and begin to use this in pricing, underwriting, and the purchasing experience for insurance.
Within the next set of years, we expect our own insurance product to be available across the majority of the country, and we could present the majority of homebuyers with a proactive and bindable insurance quote. We think this may fundamentally change how easy it can be to get the best insurance. Lastly, the teams I work closely with are charged with moving forward on consumer experience to build technology that helps every mover feel like a VIP. It's going to be a very exciting next couple of years.
Thank you, Nicole. Appreciate it. Yeah, it was a great Q1, certainly, as you can see, really solid start to 2021. We feel great about how Q2 and 2021 is shaping up. We feel great about some of the key things we're working on and about this year ahead. More importantly, though, we feel excited about the future. We have this predictable business with deep competitive moats and lots of levers to be able to drive growth into this massive market that we're going after. The strong revenue and margin growth demonstrate what our business model is able to produce. With that, the management team would now love to take questions. Operator, if you can please open up the line for Q&A, I'd appreciate it.
Thanks, Matt. We have about 25 minutes for Q&A. We'll start by taking Porch's sell-side analysts. First up, John Campbell from Stephens.
Hey, guys. Good afternoon. Great work on the quarter.
John, good to see you.
Yeah, likewise. I love the customer testimonials. I don't think I've seen that on an earnings call, so you got to love the Zoom capabilities. We really appreciate that.
Really, right? Yep.
Exactly. The growth in the average number of companies, that was really impressive. I'm guessing you guys probably got a little bit of lift from acquisitions, but what kind of main areas would you call out as the key drivers? I don't know if you've got this, but kind of organically what that looked like ex acquisitions.
Sure. The thing that I think we can focus on is we did have a strong quarter. We were up 25% Q4 versus Q1. One of the things we've indicated is that we're going to invest in our go-to-market because of the attractive LTV that we have. We're starting to see some acceleration in that engine. We had record software sales across many of our businesses. We're optimistic about our ability to continue to grow it. Now, I don't think we're ready to say we can grow 25% every quarter. I think one of the things that's giving us a little bit of a tailwind is we're certainly feeling companies coming off the sidelines. We're feeling companies sort of gearing up with expectation that the economy is going to reopen, and that's giving us some lift.
As we mentioned, we did get some from the V12 acquisition.
Yeah. Okay. That's helpful. One more from me. It seems like the HOA deal is just already right off, coming out of the gates pretty impressively for you guys thus far. If you run through some of the numbers you guys gave us as far as what the pro forma revenue would've been, it looks like they're annualizing to a pretty healthy growth rate for those guys. Just curious, you guys touched on this a little bit, but where you're seeing that strength, what gives you optimism to raise the gross written premium guidance for the year?
Yeah, I'll take that. We are excited about it. We're early days, I would say, John. Clearly we just finished the acquisition April 6th, so it wasn't too long ago. Yes, insurance is a core engine for our business. We have just such a large opportunity with insurance, and HOA is a core part of that, along with our agencies that we've been building out over the last seven years. No, it is exciting. Like we had talked about a little bit, as soon as we close, we've been building up during this interim period of time these execution plans. As soon as we close, we're able to start charging forward both on state expansion and also on driving more of the consumers that we interact with into our own insurance products. We are seeing things there now.
The thing I would just want to caution, make this clear, HOA today is only in six states, right, plugged into our system. Even as we see higher conversion rates, there's not this massive amount of synergy overnight. It does take time with the regulated insurance world to be able to get these additional states. We've talked about in the past how we expect by the end of the year, 10-15 additional states, with it mostly back loaded. I hinted that we are seeing that to be perhaps a bit ahead of schedule, and we'll announce states as we open them as we go. The team was ready to go. They've done great work in executing that part of the playbook very quickly. Why do we feel like we're able to raise that gross written premium guidance from $270-$275?
Clearly, we wouldn't have had to, so we must be seeing underlying strength in the metrics certainly. That gives a lot of confidence where we are early in the year to be able to, early in the HOA experience, to be able to raise that guidance. We're seeing some bumpings, certainly.
Yeah. I would imagine getting people actually in the office at the state insurance departments is probably a helpful thing in getting those licenses. Good luck on that front, and congrats again, guys.
I appreciate it, John. Thanks.
Thanks, John. We'll now go to Daniel Kurnos with Benchmark. Daniel?
Great. Thanks. Hey, Matt, how you doing?
Good.
Maybe just a couple housekeeping items first. Just could you talk about the contribution from V12 in the quarter, just so we have a sense of maybe what was organic and what was inorganic? You talked about seeing already some acceleration with the post-move services, which I think is the longer tail goal for the company. Can you just talk about what kind of services, what's driving that, and just how we should think about? You kept your guide same in terms of percentages for the year, and obviously those are lower revenue contributions. Just how we think about the momentum you're seeing in that category already.
You bet. Matthew, why don't I take the V12 question, perhaps you can take the services question and layer in. V12, Dan, when we have significant acquisitions, we'll do that for the time of the acquisition. We'll layer in the revenue into our plan, we'll make that clear out of the gate. We aren't ongoing going to break out acquired versus separate, because we do expect to grow those businesses, certainly that growth is being driven from the Porch platform. Like with both HOA and V12, these are slow growth businesses that within part of Porch, it'll take a little while, we do expect to be able to accelerate that, certainly we want that. That's what Porch was created in terms of value for those businesses.
For V12 specifically, we layered in $20 million for the year, for the calendar year. It isn't linear across the year. There is some ramp to that business. Q1 is certainly less than Q4 for that particular business. That can give you some color in terms of where just the impact of V12 is, and how we think about that. Matthew, do you want to take the services question?
Yeah. As we mentioned, we were pleasantly surprised with the acceleration of the growth of our post-move services, which tend to be lower value services, especially because of the referral model that we use and the monetization rates that we get. In general, when we see a surge like that, it's pretty broad-based. It's not a particular set of services.
It makes sense to us just that people are spending more time and money on improving and maintaining their homes, and there's some optimism because of the market that's reopening. We remain with our same forward guidance because high-value services remain such a focus for us, especially insurance. Our insurance part of the business is growing very nicely. We expect that going forward. Matt mentioned, even though we don't break out the amount of high-value and low-value services, we are seeing strong performance so far in Q2. Our rev per monetized service right now as of Q2 is above $120.
We also expect strong growth in the number of monetized services. We'll see how much tailwind we get on the lower value. Our focus, all eyes really for us are on how we keep growing the high-value part of our business.
Got it. No, fair enough. I think it's just incremental to the story. Matt, appreciate the Q2 color. I think we understood the seasonality, but maybe even just over the balance of the year, if you could just talk about, I feel like probably Q4 is lower than Q3, so it's like Q1 and Q4 are the low and Q2, Q3. Is that the right way to think about it?
Yeah. Marty, do you want to take seasonality?
Yeah, definitely. When you look at our pie chart, 65% of our revenue is from move-related services. The second and third quarter, when the best weather throughout the U.S., that's when most of the moves happen. You will see seasonally high activity in those quarters and less on Q1 and Q4.
Got it.
With that, I'll just give you a little even more color on it. We had indicated previously in 2019, Q1 was 15% of full-year revenue. In 2020, Q1 was 20% of full-year revenue, 2020 was an unusual year, obviously, because Q2 was so depressed with COVID. Yeah, Q1 is the lowest, ramps up in Q2, Q3 would be the highest, and then typically tick back down a bit in Q4.
Okay, perfect. I'll take a shot here with Nicole, good to have you on. Matt, obviously, feel free to jump in. Can you give us a sense of what the current attach rates are and what the TAM is in terms of module upsell you think you have right now?
Sure. Matt, you want to take that one?
I'm happy to. You know, Dan, that we don't break out the conversion rates, but it's a great try, and I appreciate it. I'll give you a few different things, which is we are seeing good things clearly across the business in terms of the momentum the team has. Obviously, our focus is on insurance, and so most of the time and energy is figuring out how we can continue to drive more consumers not only into insurance broadly, but into our own insurance product. If we're giving color there in terms of that, we're seeing good things in terms of our ability to drive that.
One of the surprises, though, things we were maybe hopeful for, but we're certain of, is that as we're now running tests with HOA, being able to put the value prop of HOA really clearly in front of the consumer, not only are we seeing a higher percentage of insurance buyers purchasing our own insurance product, we've actually seen in certain tests a lift in overall conversion rates because we can be able to wrap HOA and provide handyman services. You can get a $39 dryer vent cleaning and $39 gutter cleaning. Those are just benefits that we can give to the consumer when they buy that particular insurance policy. There's so much running room ahead, and this is something that Nicole and her team do spend a lot of time on, which is we still are accessing only a small fraction of the total opportunity per consumer.
It isn't just going to be fun as a leader of the business because just years ahead of just incrementally getting wins and offering more services and providing a much better experience for the consumer. We'll continue to see for a long period of time those conversion rate improvements.
What about on the company side, Matt?
In terms of acquiring new companies?
No, in terms of attach rate per module upsell.
Yeah. It depends on the module. Certain modules, payment processing are perhaps a little bit further ahead than some of the modules that we just recently have made available, like the report writing tool for those inspectors. Some of those modules, we're actually seeing really good uptake, and that has an impact. We've been talking about and providing color that we are seeing good momentum in terms of these B2B modules that we're layering in, which will drive continued strong growth in B2B software and services subscription revenues, even as we have more companies choosing to pay with transactions. Yeah, you can see it show up in the numbers. You'll continue to be able to see it show up in the numbers, and we're seeing good momentum there.
Perfect. All right. Thanks. Congrats on the quarter. Really like the layout, by the way, of the Porch. Looking forward to you guys launching the app sooner rather than later.
Thanks, Dan. Appreciate it.
Okay, we'll go to Mike Grondahl with Northland Capital Markets. Mike?
Thanks, Matt, Marty, and team. Two questions. One, to go from 11,000 to 14,000 companies, was that all home inspectors? Could you talk about some of the other verticals that are maybe where companies are growing, if you could, using your software?
Sure. We certainly see growth in the inspection industry where we have the largest penetration. We also are seeing growth in some of our other areas. We have a growing roofing software business. We have a growing report writer. We have a growing payment processing. Some of the payment processing, for example, can extend beyond the inspection. Then, of course, we're excited about the number of companies that V12 will be able to bring some of our data and services to, and they work off an even larger set of verticals than what I just indicated.
I would say historically, inspectors have been around half of the overall customers. Clearly, you're going to see most growth coming from inspection.
Moving companies is meaningful and then just comes down from there. Matthew is right. We do expect, and again, one of the things that we are excited about certainly is there's so much running room in those existing markets. Even in the inspection industry, 50%, give or take, of all inspectors aren't using back-end ERP and CRM software. There's significant running room for us there, even in that industry. You look at the other industries we're in today, we feel like we're just scratching the surface. There are new markets, there are verticals that we will look to expand into over time that are involved in the home buying process perhaps, or have really valuable consumers and data flowing through at that moment in time those companies are involved with the consumer.
There's a lot of ways that we will continue to be able to grow the number of companies over time.
Got it. Secondly, any enhancements or modifications to the moving concierge? Just trying to get a sense for the direction that penetration is going and progress with the moving concierge.
Yeah. I would say there's a lot of things that we're doing there, Mike, to continue to improve the customer experience. We're investing deeply in product, right? Making it easier for consumers to be able to engage with us in any way that they want to. That includes continued build-out of our Mover dashboard and the ability for people to quickly and easily get quotes and to quickly and easily purchase services. In addition to continuing to build out ways for the consumer to connect with us in the way that they want to, setting up appointments, video, things along those lines, and just really making sure that we can meet the consumer where they are and make sure we're providing a really great experience for them to be able to help them with that really painful time of their life.
Sure.
Then two more quick things, and then I think that's exactly right. We have mentioned in the past how we will also be able to layer very systematically more services into those consumers as we move forward. There's teams that are working out ahead, and that's just a very planful thing that we'll do over time. Lastly, we've indicated that there are some really interesting step function opportunities. Nicole had mentioned it during this call even, like insurance, where with our own insurance product, use that data to be able to put together a ready-to-buy quote for consumers we can push out to all home buyers. Now, that's a lot of work. That's not just this year, certainly at work. There's a lot that goes in to be able to do that well. Those types of opportunities Nicole and her team are focused on, certainly.
Great. Thank you.
Thanks, Mike.
Thanks, Mike. We'll go to Jason Kreyer with Craig-Hallum. Jason?
Great. Thank you. Good to see you guys. A couple on the insurance side. What is the timeframe or maybe your progress in integrating some of that ISN inspection data into HOA? Then you gave that 90% figure on the premiums you're ceding to third parties. What is your target for that changing over time? Do you plan to utilize that data to take on more risk and have an idea of where that number goes?
Yeah, great question. In terms of being able to build in property data, it's a lot of work. It is one of those core investment areas. We do not at all expect that to be a this year thing. Maybe in 2022, we'll start to be able to feel the benefit, but even if you get that data in and structured, and you run it through the actuarial teams and data science teams, you still then have to go eventually through the regulatory process with changes in pricing. That, again, takes time. It's a very large opportunity for us. It's an important part of our strategy, but certainly it's a year or two at minimum before we can really start to feel the effects from that. It is certainly part of our future and part of what we're investing in.
These are some of the choices that we can make as a company to really go after this massive opportunity that's ahead of us, and we are investing this year against that. In terms of the percent that we cede, we do not have plans to change that here certainly in any time in the near term, the foreseeable future. We really like the HOA model, where they're ceding 90%, and it's just this very high margin, very low risk, very low volatility type model, as we expressed in the call as related to the Texas storms. We think that's very attractive for our just business as a vertical software company that is high margin. I do think it's a good question.
We do talk about it internally that over time, if we can identify and not feel pristine risk, clearly our economics are better if we were to hold that risk and not cede it. Clearly, we make significantly more revenue, significantly more profit dollars if we were to do so. Again, we've got time before we have to make that decision, and right now we're just doing the blocking and tackling behind the scenes to be able to make that choice in the future if we want to implement it at one point.
Just a quick follow-up. Appreciate you giving us the snapshot of the footprint and where you expect the footprint to go over the next year or so. Just wondering how you think about that footprint in terms of buy versus build, and if you see opportunities like an HOA out there that in price is in a comfortable range where that may be something you could pursue on an M&A basis.
Yeah, I think from an M&A perspective, there's nothing to announce today, certainly. As we've talked about in the past, it is part of our growth strategy, and we are excited about the work the teams are doing to build out the pipeline. There's a number of different categories that we would look at from insurance
To other vertical software companies in our existing verticals or in new verticals, kind of standard fare. Other services that we can layer in to consumers. There's a variety of things that we look at. Yes, insurance is one of those. Too soon to tell if that's something that we want to do or if we just do that organically. Right now, the map that you saw is the team's organic plan, what they're executing on right now organically as they roll HOA across many more states.
Thank you.
Thank you.
We'll go to Ben Sherlund with Cantor.
Hi, guys. Thanks for taking my question. Looking at the guidance for $275 million in gross written premium, you had previously disclosed that this was combined estimated premium sales for HOA and EIG. Can you give us any color on what estimated premium sales for EIG were in 2020?
We don't break out EIG. We've not broken out insurance in the past. It is a question that we've gotten from investors. As we go forward, we would expect to break out revenue at some point here, probably this year, in terms of the recurring revenue that we get from consumers, which is largely driven from insurance. We haven't done that to date, so nothing to share on that right now. Obviously, we were very excited about the growth in our agency insurance business ahead of the HOA acquisition. Obviously, HOA has historically been a really important partner of our agency in the state the way we operate, and we have been an important partner of HOA, so we've been driving lots of work.
I will say, as we think about that $275 million gross written premium guide, that does dedupe that revenue that our agency was driving into HOA. That is looking at that from a unified insurance organization.
Okay, great. That's helpful. Just a quick second question. Have you guys seen any impacts from the recent IDFA changes on V12 in the business in the last few weeks? Any color there would be great.
Nicole, do you want to take that one?
Yeah, I can take that one. A couple things that I would say there. V12, from a marketing perspective, has always taken a pretty holistic approach in making sure that we are looking at legislation and upcoming changes like the change that Apple's making. We've done a lot there to help clients deal with the change in cookies and the IDs by implementing robust first-party data strategies, embracing many common ID innovations in the market, and testing and scaling cookieless targeting. We're constantly diversifying our supply chain to apps and SDKs to ensure that we're ahead of the changes such as those announced with iOS 14.
Okay, great. Thanks, guys.
Thanks, Ben.
We've got a question submitted from Ken Wong from Guggenheim. You saw big sequential uptick in average number of companies to nearly 14,000. How should we think about seasonal customer dynamics? Also, was this driven by any changes in go-to-market pricing or promotional activity that we should be aware of?
Yeah. I can, excuse me, share some perspective there. Yeah, we did see very strong growth in Q1. As we had mentioned, 28% year-over-year, 25% in Q4. We do not expect 25% every quarter. We are optimistic about our ability to continue to grow the number of companies. As we've indicated, we have a very attractive LTV that allows us to make investments into sales and marketing, which we're starting to see some of the impact of with some of our record sales performance this quarter. Also some longer-term investments around product and development, which should allow us to gain market share both midterm and long-term, because we're going to be able to invest more aggressively for longer than our competitors. We had a strong quarter that we attribute at least somewhat to momentum and optimism about the reopening of the economy.
We know for sure that certain companies are coming off the sidelines or gearing up in order to take advantage of the reopening. I think all of those factors in combination with the increase from V12 allowed us to have a very strong quarter in Q1.
As far as the question is around some of the pop-up conferences and trade shows we've talked about in the past. Our business leaders have used those tactics very effectively, and largely that was all paused during the pandemic. We've not yet kicked that engine back into gear, but the teams are now doing the prep work. Now that the vaccines are distributed, they are gearing up to be able to re-engage there through those tactics. More to come probably in the second half of the year.
We have a follow from Daniel Kurnos with Benchmark. Daniel, go ahead.
Yeah. Just to piggyback on that, Matt, a little bit. I know we're still super early days here, and I left you with the app comment, but how close are we to getting to the point where you really want to get the brand name out in front of consumers more? Obviously, you're doing a great job, I would say, incentivizing your company customers to push the Porch products, and if you want to touch on that a little bit, I think that that might be helpful. Whether it's through partnership, which we haven't talked about at all, whether it's through direct advertising so people get a better understanding. When does this thing really ramp?
The consumer is, "Yeah, no, I know who Porch is," instead of, "Check this out. I've got a concierge thing that's really sweet." Maybe just some color there would be really helpful.
Yeah. I'm happy to. Our strategy is pretty well laid out in terms of the kind of the things that we're in. Right now, we are squarely in go deeply embed ourselves into businesses by being their software company. Have these very low churn, very predictable reoccurring engines, not only of SaaS fees, but a consumer-facing flow that's at the key moment in time really early, so that we can then layer in transactions. That really is the focus this year of just continuing. You can see it in the metrics, but adding more companies, opening up more verticals where we can run our playbook. What you have is this just mathematical engine, right? You can go and build a goal off of. That is clearly the priority still for us right now.
As you do that, though, and as an aside, if we were to have gone and tried to go direct to consumer and go and just build a brand, we wouldn't be even remotely close to being able to access the number of home buyers that we do, especially as early as we can. We've been able to build a really significant moat through that part of the strategy. Now, if you look forward two, three years, there will be a transition where as we roll HOA out across all states or virtually all states. At some point, that can make good sense for us to be able to provide a Porch ranking experience and be able to push that out. That is part of the journey ahead, but it's not 2021, certainly.
It's not probably going to be a core focus for us in 2022, even. It is one of those additional levers that we have out there to go try to build a really big company, which is certainly what we're trying to build. Yeah, more to come there as we go.
Do you want to talk maybe a little bit about the incentivization maybe on the company side then to push it just so people are aware of it? Obviously you have higher attach rates when you do that.
Yeah, no, it is really interesting that we see companies that when they are that much more engaged in the experience and they're really talking to their customer about this great moving experience that a consumer gets when they use our inspection service, we see the conversion rates of those consumers materially above those when the inspector just doesn't mention it, right? Clearly that is one of the levers that we're working through and testing is how do we get these companies to want to make sure that those consumers know of our service and appreciate it and are really teed up effectively. That's just one of those levers that we can then drive good growth on.
Great. Thanks for squeezing me back in.
Thank you.
We have time for one more question. I'm going to take one that we got submitted from an investor. Can you clarify the $45 million reference for Q2? Is it $45 million in revenue to date in Q2, i.e., $45 million of revenue up to May 15th, or is it $45 million in your guidance for total revenue in Q2?
Go ahead, Marty.
Yeah. That's the guidance for the entire quarter. We wouldn't provide a quarter- to- date number, but that's what we're looking for the full Q2.
To make sure that it was clear on what we said, which is, so far based on how we're trending, it's trending north of $45 million for the second quarter.
Great. Well, thanks everyone. That's the end of our Q&A session. I'll turn it back to Matt Ehrlichman for closing remarks.
Thanks, everybody, for the questions. It's great to be underway into what should be a very solid 2021. Clearly the team is executing on all cylinders. We are excited. I'm excited about the performance that we're seeing across the board. Lots of work to do. Clearly, but that's what's fun, that's what's exciting. It's such a massive TAM and such a massive opportunity. We're excited about how we're pursuing it and the strategy that we have. Thanks, everybody, for the time. I appreciate it, and we'll see you soon.