Good Afternoon —
Earnings reporting season continued last week with Doma, formerly known as States Title, announcing its fourth quarter and full-year 2021 earnings on a call last Thursday. Unlike "Big Four" members Old Republic, Stewart and First American, 2021 was not a particularly strong financial year for Doma, which posted a $113 million loss for the full year in 2021.
The firm's adjusted gross profit and adjusted EBITDA also fell significantly from the third quarter to the fourth quarter. Adjusted gross profit dropped 10% to $22 million and Doma's adjusted EBITDA recorded a loss of $36.3 million.
Despite such large losses, Doma executives sounded positive on their call with investors. CFO Noaman Ahmad stated: "We finished the year in a position of strength, having consistently outperformed the objectives we set for retained premium and fees and adjusted gross profit since announcing our plans to go public last March."
Ahmad went on to say that the company hopes to expand the use and coverage of its Doma Intelligence platform, which currently covers approximately 83% of the U.S. residential real estate market based on gross written premiums. Through this expansion, the company said it expects to be profitable in 2023.
Doma CEO Max Smikoff has not been shy about discussing his hopes for the company and how he wants Doma to disrupt the cumbersome closing experience. In an interview last fall, Smikoff told me that he wants to make it possible for a homebuyer to sign a contract on their new home on a Friday evening and move in on a Monday morning.
"That is the end goal and what prevents that today is so much of the process being analog and manual," Simkoff said.
But as the title industry switches from a refinance to a purchase transaction market, known for its more complicated and frequently more manual title search processes, it will be interesting to see how the relatively young (at least compared to the roughly 100-year-old "Big Four") and tech-focused Doma navigates this changing market.
Earnings reporting season for the major title insurance providers wraps up later this week with Fidelity's earnings call with investors scheduled for tomorrow morning.
Until Next Week,
Brooklee Han
Real Estate and Title Industry Reporter
bhan@housingwire.com
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