Doma Holdings, Inc.

Good day and thank you for standing by. Welcome to the DOMA's first quarter financial results earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Matt Dunander, Investor Relations for DOMA. Please go ahead.

Thank you, Operator. Good afternoon, everyone, and thank you for joining DOMA's first quarter 2023 earnings conference call. Earlier today, DOMA issued a press release announcing its first quarter results, which is also available at investor.doma.com. Leading today's discussion will be DOMA's founder and Chief Executive Officer, Max Simcoe, and Chief Financial Officer, Mike Smith. Following management's prepared remarks, we will open up the call to questions. Before we begin, I would like to remind you that our discussion will contain predictions, expectations, forward-looking statements, and other information about our business that is based on management's current expectations as of the date of the presentation. Forward-looking statements include but are not limited to DOMA's expectations or predictions of financial and business performance, market conditions, competitive position, and industry outlook. Forward-looking statements are subject to risks, uncertainties, and other factors that could cause our actual results to differ materially from historical results and or from our forecast. including those set forth in DOMA's most recently filed annual report on Form 10-K and subsequent filings with the SEC. For more information, please refer to the risks, uncertainties, and other factors discussed in DOMA's most recently filed annual report on Form 10-K and other SEC filings. All cautionary statements that we make during this call are applicable to any forward-looking statements we make wherever they appear. You should carefully consider the risks and uncertainties and other factors discussed in DOMA's SEC finance. Do not place undue reliance on forward-looking statements, as DOMA is under no obligation and expressly disclaims any responsibility for updating, altering, or otherwise revising any forward-looking statements, whether as a result of new information, future events, or otherwise. except as required by law. Additionally, during this conference call, we will also refer to non-GAAP financial measures, including retained pre-movement fees, adjusted growth profit, adjusted EBITDA, and the other measures described in our earnings release. Our GAAP results and description of our non-GAAP measures with a full reconciliation of GAAP can be found in the first quarter 2023 earnings release, which has been furnished to the SBC and is available on our investor website. And with that, I'll turn the call over to Max Denka, CEO of Doma. Thank you, Matt.

Good afternoon, everyone, and thank you for joining us today. In the first quarter of 2023, and as part of a comprehensive review of our business, we made significant progress towards solidifying a more scalable and mission-driven go-forward strategy, while also driving progress toward reaching adjusted EBITDA profitability. We have strengthened our focus on deploying our instant underwriting technology, which we believe is our core value proposition, and what will enable us to deliver a profound impact on the housing affordability pressures that face nearly every American homeowner. There are two themes that I'm going to be focused on today. First, we will discuss the significant progress we've made in finalizing our core go-forward strategy to more efficiently and profitably deploy our proven instant underwriting technology, with the end goal of making homeownership more affordable. Second, I will provide an update on our efforts to get to profitability before turning the call over to our CFO, Mike Smith, who will discuss our financial results in more detail. While the last several years have brought with them a number of challenges to the housing and mortgage markets, DOMA's critical mission has remained focused on making the home buying process better, faster, and more affordable. In support of that mission, the benefits we've proven for mortgage originators using our technology are significant. And in today's market, there is now an even more important stakeholder for us to help alleviate pressure for, homeowners themselves. Just the last few quarters, the home affordability challenge for everyday Americans has gone from bad to severe. The National Association of Home Builders estimates that roughly 73% of all U.S. households cannot afford the current medium-priced new home. According to the Federal Reserve Bank's most recent February 2023 data, the median American household would now have to spend 40% of their income to afford the median priced house. For reference, U.S. households are considered cost burdened when they spend over 30% of income on housing costs, leaving less room for them to purchase necessary items. To make matters worse, homeownership is actually 18% less affordable than just a year ago and 5% less affordable than the peak of the 2008 housing bubble. Unfortunately, the title industry has been contributing to this challenge, with title closing and settlement costs, which according to Fannie Mae, are estimated to make up about 1% of the purchase price in a typical home purchase transaction, averaging upwards of $2,400 per home. In finalizing our go-forward strategy, it became clear that making home buying more affordable needed to be front and center. As discussed on prior earnings calls, we have been actively seeking ways to more efficiently and more profitably deploy our proven and patented infant underwriting technology, as we believe this is our core value proposition and the key to modernizing the greater than $29 billion title insurance market while driving down the significant cost of home ownership. The advances we have established via our instant underwriting technology, show that it is the only proven at-scale tool of its kind. Our patented Decision Engine's multi-component machine learning models have successfully underwritten over 85,000 loans for many of the largest national mortgage originators in the country since it launched in 2017. These lenders have seen that 80% of orders they send to our technology receive instant approval. Our world-class team of machine learning experts have achieved this outcome by training our models on over 20 years of risk data through hundreds of thousands of past title policies. In summary, the technology is able to eliminate the bulk of the title search, exam, and curative process, reduce time to close by up to five days, and enable significantly lower fulfillment costs for mortgage originators, all while exhibiting similar claims rates as the traditional title process. Over the past several months, we have conducted a comprehensive review of our business to evaluate the optimal organizational structure for us to successfully deliver on our mission and to maximize shareholder value. We have identified and are now finalizing a singular transformative core strategy for the business where we would better harness the power and benefits of our instant underwriting technology via the efficient and profitable distribution of our core technology by external partners. With respect to that new strategy, we have made solid progress towards finalizing potential partnerships with some of the largest players in the national mortgage origination market to bring down refinance-specific costs for end consumers associated with title and closing. Expanding our partnership distribution channel remains one of our top priorities. While we are unable to provide further specific details today, we are excited about the profitable and impactful opportunity at hand. As we strengthen our focus on our underwriting technology business, we are taking a hard look at everything in the business that is non-core. Regarding our local division, we previously communicated that we have been moving aggressively to close on profitable branches to refocus our efforts on more profitable opportunities, leading to the closure of an additional 13% of our total branch footprint during the first quarter. As part of our go-forward strategy and refined focus on the distribution of our underwriting technology, our local leadership team also finalized and implemented a strategic plan in the first quarter to ensure that the local division will accelerate the company's path to profitability for the remainder of the year. This brings me to the second key theme of today's call. I'd like to provide a brief update on our focus on getting to adjusted EBIT of profitability by the end of this year. We are still making steady progress toward achieving adjusted EBIT of profitability as quickly and as efficiently as possible, exemplified by the cost-cutting measures we enacted in the second half of 2022, the most recent round of which we expect to be fully visible in our quarterly numbers starting in Q2 of this year. We also believe that our refined strategy will bolster our profitability efforts. Additionally, the business will continue to benefit from the healthy stability provided by our underwriting division as we remain dedicated to the continued success of the underwriter and as we continue rolling out our instant underwriting technology for our independent agents. Despite persistent macro pressures, we do feel adjusted EBITDA profitability is still attainable by the end of 2023. That being said, we remain cautiously optimistic regarding this timeline as we understand the importance of preserving the ability for our new transformative strategy to take shape. Given our revised plans and that we believe our market share is less than 2% of the overall title insurance market today, we foresee a long runway of opportunity ahead of us to grow our business. In closing, DOMA's narrowed focus on a core strategy to provide better, faster, and more affordable homeownership for the majority of Americans has given us a renewed energy to continue executing, even amidst a set of challenging market conditions. To ensure success in our mission, we will continue to re-evaluate and reduce attention to anything non-core to this mission, and we remain focused on achieving adjusted EBITDA profitability by the end of this year. As we are putting the finishing touches on our new strategy, we expect we'll be able to provide more specific and detailed information within a few months. We look forward to updating you on our progress throughout the year. I will now pass the call over to our CFO, Mike Smith, to provide you with further details on our recent financial performance.