Doma Holdings, Inc. (DOMA)·Q4 2023 Earnings Summary

Executive Summary

• Q4 2023 showed sequential improvement: revenue rose 11% q/q to $84.6M, adjusted gross profit increased 29% to $7.8M, and adjusted EBITDA loss narrowed to $(2.8)M; management fell “just shy” of adjusted EBITDA breakeven due to the rate environment .
• Strategic launch: Doma piloted its new Upfront Title product with a major mortgage software platform and a national lender, positioning for potential scale-up in 2H 2024; early results are “encouraging,” though revenue impact is not expected to be material in 1H 2024 .
• Policy tailwind potential: FHFA’s lender’s title acceptance pilot could reduce closing costs in low‑risk refinances; Doma believes it is uniquely positioned to participate, citing proven technology and underwriting capabilities .
• No explicit numerical guidance provided; focus remains on revenue growth and margin expansion through operational improvements—key narrative driver alongside policy developments and Upfront Title progress .

What Went Well and What Went Wrong

What Went Well

• Sequential improvement across key metrics: revenue up 11% q/q to $84.6M, gross profit up 56% to $4.8M, adjusted gross profit up 29% to $7.8M, and adjusted EBITDA loss improved to $(2.8)M from $(5.3)M in Q3 .
• Upfront Title pilot launched with a top mortgage tech platform and a national lender; early results validate potential savings and benefits to consumers and lenders, setting up possible geographic and product expansion in 2H 2024 .
• Management executed cost reductions and streamlined operations (including exiting Local retail), bringing adjusted EBITDA to within “striking distance” of breakeven in Q4; focus shifts to revenue growth and margin expansion .

What Went Wrong

• Still loss-making: net loss of $17.6M in Q4 (management referenced “$18M”), and adjusted EBITDA did not reach breakeven, primarily due to continued rate headwinds .
• YoY pressure remains: Q4 2023 revenue ($84.6M) and adjusted gross profit ($7.8M) were below Q4 2022 ($96.4M and $14.0M, respectively), reflecting macro/housing affordability challenges .
• EPS detail for Q4 was not disclosed in the press release tables (quarterly per‑share figures are available for Q2/Q3 but not Q4), limiting per‑share comparisons and consensus benchmarking .

Financial Results

Quarterly progression (sequential)

Year-over-year (Q4 2022 vs Q4 2023)

Segment breakdown

• Reported segments: Underwriting and Corporate & Other (no quarterly revenue/EBIT detail provided in Q4 press materials) .

KPIs (operating focus)

Notes: Doma’s non‑GAAP metrics exclude specified items; reconciliations provided in the press releases .

Guidance Changes

In light of the pending TRG merger announced subsequently (Mar 28, 2024), Q1/Q2 2024 releases noted no guidance and no earnings calls, but this does not affect Q4 2023 guidance disclosure .

Earnings Call Themes & Trends

Note: The Q4 2023 earnings call transcript could not be retrieved due to a database inconsistency. Themes below reflect management’s Q4 press comments and prior quarter press releases.

Management Commentary

• CEO (Max Simkoff): “We are pleased to have successfully launched our Upfront Title pilot… We are already seeing encouraging results… we would be in a position to expand our partnership in the second half of the year… We do not expect revenue from this pilot program to be material in the first half of the year” .
• CEO on policy: “We believe that Doma is one of the only companies in our space who has the proven technology and underwriting capabilities to participate in the [FHFA] pilot program… we share a desire and a sense of urgency to reduce closing costs for borrowers by a wide margin” .
• CFO (Mike Smith): “While our results fell just shy of our ambitious goal of reaching adjusted EBITDA profitability in Q4… our adjusted EBITDA loss for continuing operations was $3 million in Q4, an improvement from… $5 million in Q3 2023 and $11 million in Q4 2022… Looking ahead, our focus… is on growing our revenue and expanding our margins through realization of operational improvements” .

Q&A Highlights

• The Q4 2023 earnings call transcript was not retrievable due to a database inconsistency, so Q&A specifics are unavailable. Doma hosted the call on March 12, 2024 at 5:00 PM ET, with an archived webcast available via the Investor Relations site .

Estimates Context

• Wall Street consensus (S&P Global) for Q4 2023 EPS and revenue was unavailable through the S&P Global integration due to missing CIQ mapping for DOMA; attempts to fetch estimates for Q4/Q3/Q2 2023 failed. We cannot assess beat/miss vs consensus based on SPGI data in this instance [SpgiEstimatesError in tool].

Key Takeaways for Investors

• Sequential momentum: Q4 delivered across-the-board improvement vs Q3 (revenue, gross profit, adjusted GP, adjusted EBITDA), indicating core efficiency gains are flowing through despite macro pressure .
• Structural catalysts: Upfront Title pilot and FHFA’s title acceptance pilot could structurally lower closing costs and shift revenue toward higher‑margin software licensing over time; watch for scale‑up announcements in 2H 2024 .
• Profitability trajectory: Adjusted EBITDA improved materially y/y and q/q; with continued operational discipline, the breakeven narrative remains credible if macro stabilizes—monitor rate environment sensitivity .
• Valuation/estimates monitoring: With SPGI consensus unavailable via tool integration here, focus near term on company‑specific milestones (pilot success metrics, lender/platform adoption, underwriting margin trajectory) rather than headline EPS beats/misses.
• Risk factors: A prolonged high‑rate environment and housing affordability constraints continue to pressure top‑line and gross profit; execution on licensing and underwriting efficiency remains critical .
• Data gaps: Quarterly EPS for Q4 was not disclosed in press tables; for benchmarking, use adjusted EBITDA and adjusted gross profit trends until per‑share data is available .