Ondo InsurTech PLC (LSE: ONDO), the London-listed leader in claims prevention technology for home insurers, is pleased to announce its unaudited results for the six-month period ended 30 September 2024. A copy of an accompanying Investor Presentation is also available on the Company’s website: www.ondoplc.com.
OPERATIONAL AND STRATEGIC HIGHLIGHTS
· LeakBot strategy for United States expansion on track positioning the U.S. as a key market for near-term growth.
– 5 U.S. insurers deployed 7,500 LeakBots in 4 U.S. states preventing 539 insurance claims valued at an estimated $2 million, compared to an insurer cost of $0.15 million during the six-month period.
– Achieved a Net Promoter Score of +77 and 4.83 / 5 Customer Satisfaction with US partners, creating foundation for insurer expansions announced post-period.
· Group KPIs continue to progress:
– Registered Customers grew by 36%, reaching 114,000 by period end (H1 2023: 84,000). 60% of this growth from Nordics and 27% from U.S. as new contracts start to deliver installed units.
– Addressable Households under contract grew by 128% to 5.7m Households by period end driven by U.S. insurer contract wins (H1 2023: 2.5m). Our U.S. partners make up 3.3m of these addressable households.
– Recurring revenue represents 52% of revenues (H1 2023: 58%). The U.S. is already having disproportionate impact with 16% of recurring revenues from recently acquired U.S. customers that account for only 5% of registered customer base.
· Post-Period, Fortune 100 U.S. insurer Nationwide Mutual signed a contract to expand LeakBot to all new and existing customers in 16 U.S. states, with 4 other insurers now expanding LeakBot into overlapping states
FINANCIAL HIGHLIGHTS
· Revenue grew by 42% to £1.7 million for the six-month period ended 30 September 2024 (H1 2023: £1.2 million)
· £0.9 million from recurring Software and Services 27% growth over 2023 (H1 2023: £0.7 million).
· EBITDA loss of £2.4 million (H1 2023: loss £1 million).
· Cash as at 30 September 2024 of £1.8 million (30 Sept 2023: £0.4 million)
WORKING CAPITAL OPTIMISATION
Key developments have strengthened the Company’s cash flow and balance sheet:
1. Repeat Pre-payment Model Proven
– All U.S. insurers now pre-pay the first 12 months of recurring fees for agreed order volumes.
– Further orders are triggered when previous order volume is fully deployed (not when the advance is fully utilised), which funds working capital for growth.
2. Fundraising complete in May 2024
– Raised £4.2 million in May 2024 through an oversubscribed placing and open offer to support U.S. expansion and growth.
3. Vendor Loan Note Restructured (Post-Period).
– Loan note term extended, new maturity date one year later on 31 March 2030.
– Principal repayments deferred: Commencing one year later on 31 March 2027 and then annually to 31 March 2030.
– Interest roll-up extended: Accruing an additional year to 31 March 2026.
– Interest rate maintained: At 12% until 31 March 2027 increasing to 14% thereafter.
– Restructure designed so obligations can be met from future trading revenues.
OUTLOOK
· Foundation set for U.S. Growth. H2 launches announced with Nationwide Mutual, Selective, Mutual of Enumclaw, Indiana Farm Bureau and with a strong sales pipeline and management look forward to making further announcements in due course. Expectation for United States to be the majority of Registered Customers and Recurring Revenues in the near term.
· Concurrent Growth in Europe. NFU and Alm. Brand Group (announced today) new contract wins have added 0.8m more addressable households in Europe, with more contract wins in the pipeline.
· EBITDA positive trading in sight – without need for further funding. Projecting the revenues from current contracts reaffirms the Board’s expectations in achieving EBITDA positive trading in the second half of next year without the need for further working capital funding.
CHAIRMAN’S STATEMENT
Since I wrote to you twelve months ago our chief executive and his team have delivered against their targets in the UK, Scandinavia and the United States of America while transforming our business’ balance sheet and confirming projections showing ONDO plc delivering positive EBITDA in the second half of next year.
Notwithstanding this impressive performance the delivered target we can take most satisfaction from is not financial but is the consistently impressive net promoter score of +82 coupled with Customer satisfaction rated at 4.9/5. These two measures reflect our remediation of water leaks of which householders have been unaware.
These customer ratings coupled with the immediate mitigation of what would otherwise in many cases have been substantial household insurance claims is why Mark Teets of Nationwide Mutual said “the results so far have been remarkable… Our ambition at Nationwide is for all of our customers to benefit from this type of Predict and Prevent technology”. This statement accompanies Nationwide’s announcement expand LeakBot for all their new and existing customers across 16 U.S. States. There are now already 3.2m households in the United States that are insured by carriers deploying the LeakBot solution.
While we have continued to grow in Scandinavia most recently with the number two insurer in Denmark and in the UK most recently with the National Farmers Union insurance company, in the coming year the USA will likely become our largest market by number of units deployed, by number of insurers contracted, and by revenues.
For many early stage insurtech ventures funding for growth has been a constraint. This is not the case for our company. The demonstratable benefits which insurers derive from the customer satisfaction we deliver and the reduced claims costs we secure enables us to agree advanced payments ahead of deployment of LeakBot. As we grow, our balance sheet and cashflow are strengthened by these advanced payments.
Earlier this year we raised what we expect to be the final funding necessary before we reach EBITDA positive trading. That money financed the building out of our US team and created the platform which is now servicing the growth which Craig and the team are delivering.
The successes achieved this year are not easily won. Working with Craig, Kevin, Helen, Jim and all the team is invigorating. I am immensely proud of what our management and our people have delivered.
My thanks go to each of them.
G M Wood CBE DBA FCA BA.
Chairman
CHIEF EXECUTIVE’S STATEMENT
2024 has so far been a defining period for Ondo InsurTech. We are tackling one of the biggest problems for home insurers: the escalating costs of water damage claims, which account for up to 30% of all home insurance claims and over $20 billion in payouts annually in the U.S. alone. Many of these claim’s result from hidden leaks that go undetected until significant damage occurs. What’s more this is a growing problem because of claims inflation. In the UK for example over 4 years the average cost of a water damage claim has increased by 84% to £7,725 in Q3 of 2024. This claims inflation is compressing insurer margins and increasing the urgency to find innovative solutions to reduce claims costs.
At Ondo, we’ve developed a simple yet powerful solution: LeakBot, a unique, low-cost, self-install sensor that detects leaks anywhere in a home’s mains water system. Combined with real-time alerts and an integrated leak repair service, LeakBot delivers measurable savings for insurers while offering homeowners peace of mind. What sets us apart is the proven ROI we deliver to insurers, the ease of adoption for homeowners, and the seamless integration of our service into insurers’ claims prevention strategies.
Executing Our Strategy
In May 2024, we raised £4.2 million through an oversubscribed fundraise to support our expansion plans, particularly in the U.S. To prove out the US opportunity we had a four-point plan:
1. Prove the Product Works in the U.S.: Demonstrate measurable claims savings for insurers and deliver exceptional homeowner satisfaction.
2. Secure a Leading Market Partner to Expand: Scale deployments with a major insurer to drive broader adoption.
3. Attract Additional Insurers to Follow: Leverage proven results to onboard more insurance partners.
4. Establish LeakBot as the Market-Leading Solution: Build recognition as the standard for water damage claims prevention.
I am pleased to report that we have made great progress on all fronts in the United States, which is rapidly emerging as the core of our business.
Delivering for U.S. Insurers
Our U.S. operations have seen remarkable success. Over the past six months, we deployed LeakBot in 7,500 homes across four states in partnership with five leading insurers. The results speak for themselves:
• 539 leaks identified and fixed, preventing an estimated $2 million in claims for insurers at a cost of just $0.15 million in the 6 month period to 30 Sep 2024.
• Achieved a Net Promoter Score of +77 and a Customer Satisfaction Score of 4.83/5 for our in-home service.
Nationwide Mutual, a Fortune 100 insurer, has led the way, making LeakBot available to all new and existing customers in 16 states following what it described as “remarkable” results. Other insurers, including Selective, Indiana Farm Bureau and Mutual of Enumclaw, have quickly followed suit, and are now scaling deployments into overlapping states.
This validation from leading insurers has been critical. It demonstrates that LeakBot delivers real and immediate value, positioning us as the go-to solution for water damage claims prevention in the world’s largest insurance market.
Financial and Operational Highlights
Our operational achievements have focussed on the United States, while our in-period financial results have been driven mostly by our more mature business in the Nordics.
During the first six months of the year, revenue increased by 42% to £1.7 million (H1 2023: £1.2 million). The total number of registered customers has grown by 36%, reaching 114,000 at the period’s end, up from 84,000 in the prior year.
60% of the growth in this reporting period was driven by the Nordics. However, already the United States is starting to impact results. I am particularly pleased to report that 16% of our recurring revenue is now derived from recently onboarded U.S. customers, who make up just 5% of our total registered customer base. This highlights the strong revenue potential of our U.S. operations as penetration deepens over time.
Global Results by Geography
While the U.S. has been a major focus, we have continued to make progress across all key geographies:
• United Kingdom: The UK remains a foundational market for Ondo.
• With 45,000 registered customers primarily with mid-to-high net worth insurers, we have achieved a 49% penetration rate of our addressable households (before recent expansion of the addressable market, as set out below), showing what is possible when the unit economics make sense for carriers and they consistently and programmatically offer LeakBot to customers over a number of years. Similarly, the UK has a gross margin of 49% which reflects the mix of Year 2+ customers with higher gross margins.
• Recent in-period contact wins have expanded our addressable market by 400%, adding approximately 400,000 new households, which provides significant room for future growth in the UK. Near term focus will be in the deployment with new partner NFU, and progression with new partners like Ageas and water companies like Southern Water.
• Nordics:
• Denmark: Strong momentum continues, with 35,000 registered customers and a 7% penetration rate of 450,000 addressable households. We today also announced that one of the largest non-life Danish insurers Alm. Brand Group have signed a contract to introduce LeakBot across their brands including Alm Brand and Codan. Assuming a positive initial launch in January this will more than double the addressable households for LeakBot in Denmark.
• Sweden: Rollout with Länsförsäkringar in Sweden has been slower than we hoped for. Our partner is experimenting with paid-for “smart home bundle” propositions. Ondo’s position is that the optimal model to deploy LeakBot is always for free to the policyholder. While initial expansion has been slower as the partner finds the right model for their needs Sweden still holds long-term potential with 21,000 registered customers and a large addressable market of 1.6 million households.
• United States: The U.S. is fast becoming the engine of our growth, contributing 16% of recurring revenues despite representing just 5% of our total registered customers. At period end we had already achieved a 5% penetration of the addressable households in our signed partners in the 4 states where we had active plumbing services. Our expansion into 18 states has immediately opened up an additional 27 million addressable households in these 18 states, and another 39,000,000 in the remaining 32 states illustrating the size of the opportunity in front of us as we establish LeakBot as the industry-standard solution to predict and prevent water damage claims in the U.S.A.
Looking Ahead
The outlook for Ondo is exciting. In the second half of 2024, we will see an unprecedented level of activity, with new campaigns and partnerships launching across all geographies.
In the U.S. our goal is to establish LeakBot as the industry-standard market leading solution for U.S. insurers to predict and prevent water damage claims. We are particularly focused on sustaining the momentum we’ve built in the U.S., leveraging the repeat prepayment model to fund further growth. This innovative contractual framework ensures that our expansion is largely self-funded, enabling us to deploy LeakBot at scale without the need for additional capital. EBITDA trading is in sight in the second half of 2025 without the need for any additional working capital funding.
The sense of excitement in the team is palpable and I think our belief that Ondo has the potential to be a highly valuable fast-growth technology and services company generating significant recurring revenue and profits is now shared by more and more investors, partners and stakeholders.
Globally, our focus will remain on operational excellence, innovation, and customer satisfaction. By enhancing our technology and delivering exceptional service, we aim to maintain our leadership in claims prevention technology and continue driving measurable value for insurers and homeowners alike.
Conclusion
The first half of 2024 has proven that Ondo is at an inflection point. We have validated our solution in the largest insurance market in the world, strengthened our financial foundation, and built a scalable model that positions us for sustainable growth.
As we look to the future, we are more confident than ever in our ability to transform the insurance industry and create significant value for all stakeholders. Thank you for your continued support as we embark on this next chapter of growth and innovation.
Craig Foster
Chief Executive Officer
3 December 2024
