Doma Holdings Inc. sees drop in second quarter profits

The CEO assured shareholders that several steps have been taken to achieve profitability next year. “In May, we took several actions aimed at preserving our cash position and accelerating our path to profitability,” he said. “These actions included both reprioritizing the deployment of our capital towards home purchase-focused strategic initiatives and a reduction in force that primarily impacted our fulfillment organization.”

Another step taken toward profitability was a “significant downsizing” of its corporate support functions along with a “more streamlined management structure,” the CEO said, noting the actions will result in a $3 million charge in the third quarter but are expected to generate $30 million in annualized cost savings.

But he warned of choppy waters in the immediate future: “Since May, we have continued to observe the deterioration of the housing and mortgage market and we expect it to contract even further over the next 12 to 24 months,” Simkoff said. “These annualized savings are in addition to the expected $30 million of annualized savings from our May reduction in-force,” he said. “We believe that these aggregate expense actions position us well to manage through the current cycle while preserving our differentiated business model so that we can continue pursuing our longer-term strategy.”

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The company previously slashed 310 jobs representing 15% of its workforce, according to multiple media reports. “And as we continue to navigate a very dynamic market environment that has the potential to continue deteriorating in the near term, we are committed to take additional actions as needed in order to remain on our stock stated timeline of profitability,” Simkoff said. “While there are many companies in the mortgage technology space that went public over the last 12 to 24 months, we think that what sets us apart is that the fundamentals and the positive unit economics of our business have already been tested and that we have defined our path to near-term profitability.”