PRCH

Image source: The Motley Fool. Wednesday, July 29, 2026 at 5:00 p.m. ET Chief Executive Officer, Chairman, and Founder - Matt Ehrlichman Chief Financial Officer - Shawn Tabak Chief Operating Officer - Matthew Neagle John Campbell: Good afternoon, and thank you for participating in Porch Group's Second Quarter 2026 Conference Call. Earlier today, we issued our press release and filed our related Form 8-K with the SEC. The earnings release and today's presentation are available on our Investor Relations website at ir.porchgroup.com. Before we begin, I'd like to review the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995, which provides important cautions regarding forward-looking statements. Today's discussion, including responses to your questions, reflect management's views as of today, July 29, 2026. We undertake no obligation to update or revise these remarks. We will make forward-looking statements that involve risks and uncertainties, and actual results may differ materially. Please refer to the information on this slide and our SEC filings for additional detail. We will also reference certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures are included in today's earnings release available at ir.porchgroup.com. A replay of this webcast will be available shortly after the call, again, on our Investor Relations site. Joining me here today are Matt Ehrlichman, Porch's CEO, Chairman and Founder; Shawn Tabak, Porch's CFO; and Matthew Neagle, Porch's COO. With that, I'll turn the call over to Matt for his key updates. Matt Ehrlichman: Thank you, John. Good afternoon, everyone. This will be another fun call here today. We are pleased to report a fantastic second quarter where we again delivered results that exceeded expectations and are raising guidance substantially across the board. We generated positive net income attributable to Porch in the quarter and expect that to be true for the full year 2026, 2027 and the years ongoing. I was excited to share this. Overall, now with Q2 revenue growth, excluding the reciprocal, at 23% and adjusted EBITDA margin, excluding the reciprocal, at 30%, we are now a Rule of 50 company. Insurance Services, our core largest and fastest growing business stands out even more with 38% revenue growth and a 48% adjusted EBITDA margin this quarter. Policy growth at our insurance business grew by the same 38% year-over-year. This is a big deal. Our Insurance Service business generates its economics based, yes, on reciprocal written premium volume but also meaningfully based on total number of policies given the policy fees that are charged to each policyholder. We managed to our financial results based both on premium and policy count, which I'm not sure is fully appreciated. Incremental margins at Insurance Services are exceptional, which you can see based on the fact that incremental revenues flowed almost fully into higher adjusted EBITDA. For our entire company, adjusted EBITDA, excluding the reciprocal, grew 2.5x year-over-year. The progress we've made on profitability is strengthening our balance sheet profile. We're announcing today increased 2026 guidance of $122 million of adjusted EBITDA at the midpoint. This puts our leverage below 3x this year. The reciprocal is healthier than it's ever been with statutory surplus growing quarter-over-quarter and loss ratios that continue to be truly exceptional. So the key message is that the system is working. We built a differentiated insurance platform with strong capacity, expanding distribution and proprietary data, which creates a fundamental margin advantage relative to competitors. So Q2 results were strong. Shawn's going to dive in more deeply momentarily, but quickly just a few highlights. Reciprocal written premium, or RWP, was $140 million, up 16% year-over-year. First half RWP landed right in line with our internal targets at the start of the year. We're managing this well toward our $600 million annual target while sustaining strong margin across the system and doing so in a homeowners insurance market that is healthy but has softened. As I mentioned, written policies were up 38% year-over-year. These premium and policy volumes helped drive quarterly consolidated revenue of $141 million, up 12% year-over-year and our revenue, excluding the reciprocal, of $132 million, up 23% year-over-year, with continued strong gross margins of 85% for this quarter. RWP flowed through to Insurance Services adjusted EBITDA at a 32% conversion rate, demonstrating the strong incremental margins of this business. In a new view, RWP flowed through to company adjusted EBITDA, excluding the reciprocal, at a 28% conversion rate. That translated, again, to overall adjusted EBITDA, excluding the reciprocal, of $39 million, up 2.5x the prior year period. Q2 showed the earnings power of the model we built with premium volumes certainly translating into high-margin earnings. Scaling our insurance business is straightforward. Statutory surplus creates capacity. Top of funnel consists of insurance agencies driving quote volume and quotes convert to policies written in RWP. Over the next few slides, I'll walk through each piece of the growth engine and why we believe the foundation continues to strengthen. I'll start here with the result, which is the most important metric. In Q2, again, total reciprocal policies written across new and renewal grew 38% year-over-year to 59,000. We expect a rapid policy growth rate to continue throughout the year, ramping to more than 70,000 per quarter by year-end. We are well ahead of our start-of-year policy count expectations with pricing slightly below due to a softer insurance market with competitors lowering prices. While price can move up or down based on market cycles, policy growth is the key as it's the leading indicator of future growth and as premium for renewing customer naturally increases. There's substantial excess capital to support this level of growth. The reciprocal ended Q2 with statutory surplus of $170 million, up meaningfully versus the prior year period. That's a strong outcome, particularly given Q2 is typically a seasonal period in Texas when weather activity most impacts surplus, and we did see some of that this quarter. The $43 million gained over the last year translates to more than $200 million of additional RWP capacity. Overall, the reciprocal's Q2 statutory surplus supports over $800 million of premium including non-admitted assets, primarily the Porch shares owned by the reciprocal. It has the ability to support what's approaching $2 billion of premium. Looking ahead, the reciprocal surplus position gives us plenty of room to support our organic and inorganic growth goals. So with capacity in place, the next driver is top of funnel through independent insurance agencies. We continue to increase the top of funnel with a land-and-expand strategy. This is a key strategic proof point in the quarter. Producing agency branch locations grew 148% year-over-year, and quote volumes grew 87% year-over-year and increased sequentially for the seventh straight quarter. That means we are significantly expanding the number of opportunities for us to win attractive low-risk business. The distribution engine is expanding and quote volumes continue to build, which sets a strong foundation for sustained premium growth. Looking ahead, we have a fraction of the total agencies even in our largest markets, so we certainly are in the early innings here. Moving down the funnel. Conversion is the lever that turns quote volume into new customers and premium. As shown here, conversion remained meaningfully above prior year levels, but we thought it would be helpful to see the impact when we refer to a softer market and how we can respond given our margin advantages. As you can see here, conversions stepped down a tick in May without actions on our side simply due to competitors being more aggressive in their pricing, likely due to lower reinsurance costs. We responded with targeted pricing adjustments in specific areas, which resulted in improvements and reacceleration of conversion rates in June. In Texas, our largest state, conversion reached high watermarks in the final week of June, with broad-based improvement across the areas where we focus our actions. So the risk for us is less about managing to our medium and even short-term growth goals. In fact, we have a big advantage in our ability to perform across market cycles. The risk is simply, in a given month, the execution and filing time required. The fact that we delivered these results in this market, with premium per new customer only down 4% year-over-year in Q2 means that we are sustaining the well above-market margins that we've demonstrated. So put all that together, we continue to see strong growth in RWP from new customers, which more than tripled year-over-year. We're adding new customers at a rapid rate, building a larger renewal base and keeping premium for new customer relatively stable. With that, I'll turn it over to Shawn to cover the financials and guidance. Shawn Tabak: Thank you, Matt. Good afternoon, everyone. One quick housekeeping item before I dive into the results. Following feedback, we've updated our reporting format to provide more detail on our consolidated GAAP results, which include the reciprocal. We've also renamed Porch shareholder interest to Porch-owned segments for revenue, gross profit and adjusted EBITDA, excluding the reciprocal. We've done that to ensure clarity, and this is a naming change only. Now let's dive into the results. I'll start off with a high-level summary of our financials. In Q2, we saw strong results from the Insurance Services segment, which drove significant growth in adjusted EBITDA. Policies written of 59,000 were up 38% year-over-year, driven by new customer additions. RWP of $140 million drove adjusted EBITDA, excluding the reciprocal, of $39 million. That's growth of 150% year-over-year. Net income attributable to Porch shareholders was $6 million, an important milestone for the business. Overall, these results highlight the strong growth in our Insurance Services business and its operating leverage as RWP and policies scale. As our Insurance Services business has grown, it's become the clear engine of our earnings growth and as such, we'll highlight its performance in today's discussion. Now let's walk through revenue before we move into the segment results. Total consolidated GAAP revenue was $141 million, up 12% year-over-year. Revenue for the Porch-owned segments, excluding the reciprocal, was $132 million, up 23% year-over-year. And within that, Insurance Services delivered $93 million in revenue, up 38% year-over-year. And now let's dive into the segment results. Insurance Services is the segment driving the majority of our adjusted EBITDA and adjusted EBITDA growth. Revenue grew 38% year-over-year to $93 million, driven by higher fee-based revenue with higher policies written, RWP volume and new customer additions. In the quarter, we saw 38% growth in policies written year-over-year, which was a 500 basis point acceleration from the Q1 growth rate. Gross profit was $81 million, up 40% year-over-year. Gross margins in this segment are strong and predictable at 87% for Q2. Insurance Services adjusted EBITDA was $44 million, up 126% year-over-year. Adjusted EBITDA margin was 48% compared to 29% in the prior year period, driven by operating leverage as RWP and policies written scale. Two notes here first, as a reminder, the majority of the high-margin management fee we charge is recognized upfront, but a portion is deferred over 18 months. Thus, while last year was year 1 of operating the reciprocal, 2026 is the first year where we benefit from that deferred revenue and corresponding margin. Second, the margin improvement also reflects a roughly $3 million benefit from an expense true-up in the quarter, which we don't expect to recur. Overall, Insurance Services continues to demonstrate a very high margin profile with even higher incremental margins given the largely fixed cost base. Shifting now to Software & Data and Consumer Services segments, which overall were relatively flat year-over-year against the backdrop of a stagnant U.S. housing market. Starting with Software & Data. Revenue was $23 million. As a reminder, we sunset certain legacy home contractor SMB-focused products, which drove the year-over-year decline. Our inspection and title insurance software businesses remained solid despite the stagnant market. Gross profit was $17 million with gross margin of 75%. Adjusted EBITDA was $5 million. Moving to Consumer Services. Revenue was $18 million. Gross profit was $15 million with gross margin of 84%, and adjusted EBITDA was $3 million. Turning to the reciprocal now. Statutory surplus was better than our expectations, ending the period at $170 million, up 33% year-over-year and up 3% quarter-over-quarter. This is a strong result as the reciprocal typically incurs the most weather claims in Q2, including a $14 million storm in the quarter. Loss ratios remained strong. Gross loss ratio was 38% and attritional loss ratio was 18% in Q2, reflecting continued pricing and underwriting discipline and a meaningful margin advantage. And finally, after selling 2.1 million Porch shares to Porch Group in Q2, the reciprocal now owns 16.2 million Porch shares, of which the majority of the value is considered non-admitted assets and incremental to statutory surplus. Okay. Moving on to the balance sheet. Porch ended Q2 with $127 million in cash and investments, down slightly versus Q1. The decrease reflects the purchase of the 2.1 million Porch shares during the period, along with $17 million in interest expense and timing of working capital and all of that partially offset by adjusted EBITDA generated in the period. As a reminder here, over time, we expect cash generated for Porch to track with adjusted EBITDA, excluding the reciprocal, minus the cash interest on our notes. Q2 was consistent with that framework. Adjusted EBITDA generation largely offset the biannual interest payment and the 2.1 million share purchase from the reciprocal. On the reciprocal side, it held cash and investments of $331 million at the end of Q2. Okay. Shifting now to guidance. We're raising our guidance across the board given the strong 2Q performance and outlook for the remainder of the year, driven by Insurance Services. We're increasing guidance for revenue, excluding the reciprocal, to a range of $506 million to $517 million. The midpoint of $512 million represents a 22% year-over-year growth rate, up from the 22% growth rate that was implied in the prior guidance midpoint. We're increasing guidance for gross profit, excluding the reciprocal, to a range of $419 million to $429 million, now representing 23% growth at the midpoint, up from 18% growth at the prior midpoint. We're increasing our guidance for adjusted EBITDA, which excludes the reciprocal to a range of $119 million to $125 million. The midpoint of $122 million represents a 59% year-over-year growth rate, up from 38% growth at the prior midpoint. Taking a step back. We started the year with adjusted EBITDA guidance of roughly $100 million at the midpoint. Halfway through the year, we've delivered $59 million of adjusted EBITDA, excluding the reciprocal, and in 6 months, we've increased our guidance by more than $20 million at the midpoint. As Matt highlighted, we expect net income attributable to Porch shareholders to be positive for the full year and on a go-forward annual basis. The trend here is clear. Adjusted EBITDA is scaling. Insurance services is driving operating leverage, and the business is moving into a profitable position. Quarter-to-quarter, GAAP net income can still move with mark-to-market adjustments and other noncash items, but that doesn't change the underlying trajectory. This positive net income milestone and overall earnings growth trajectory also translates to a strengthening and more durable financial profile. With our updated guidance, we expect our leverage ratio to be better than 3x this year, consistent with the 2 to 3x target range we discussed in our 2024 Investor Day. Now I'll hand it over to Matthew to provide a strategic update. Matthew Neagle: Thank you, Shawn. I'll provide a brief operating update and walk you through the key KPIs across our segments. Last quarter, we discussed AI, how we're using it at Porch today, how we plan to use it over time and why we believe AI strengthens rather than threatens our position. Today, I want to give a few concrete examples of how that is starting to show up operationally. We believe our proprietary data assets become more valuable as AI capabilities mature. Our data platform gives us unique insights on approximately 90,000 -- sorry, 90% of U.S. residential properties and early signals into 90% of U.S. homebuyers each month. Not only does AI allow us to accelerate the breadth and depth of our data platform, we are able to leverage it to better price and predict risk. In engineering, we are seeing broad adoption of AI tooling and productivity improvements, including a 2.4x increase in lines of code changed and a 73% increase in merge requests created. Nearly all of our engineers leverage available tools to meaningfully accelerate their work. AI is helping identify and reduce underutilized compute resources across targeted cloud compute infrastructure, with net savings approaching 10%. Across the org, AI is improving product and support capabilities. And just one example, in our moving group, we've shifted to AI-assisted call reviews, which is already having a major impact on conversion, and support is becoming faster, cheaper and higher quality. These are just a few of many examples. Our company already looked at Velocity as a competitive advantage versus our competitors, and the tools available will help us accelerate. Shifting gears to the Q2 insurance KPIs. The key operating story is volume growth. We continue to expand the customer base at a strong growth rate with reciprocal policies written of approximately 59,000, growing 38% year-over-year. Reciprocal written premium was $140 million, and RWP per policy written was $2,383. Similar to recent quarters, RWP per policy written was down year-over-year given the mix shift toward a higher percentage of new customers versus higher-priced renewing customers. As Matt mentioned, the premium per new customer in Q2 declined only 4% year-over-year, which is the appropriate apples-to-apples comparison. The progress we've made in our Insurance Services business is clear to see in the financials and KPIs, but there's more to the story. The most important point is that Insurance Services is not just getting bigger. It's becoming more scalable and more efficient. We continue to make progress across the various operations that support the insurance business. On pricing and underwriting, we are continuing to improve the precision of how we select price and manage risk. This matters because it supports disciplined growth, helping us compete for the right policies and maintaining attractive unit economics by avoiding bad risks. Our agency experience continues to improve. Here, we've seen a 30-point improvement in NPS driven by our product investment, better support and responsiveness, and execution by our teams. We're continuing to invest in the technology behind our insurance workflows using automation and AI to improve velocity and increase efficiency across the organization. So when you look at the quarter, the takeaway is more than the strong financial execution, but the deep investments we're making at the same time to set the business up for years of strong performance ahead. Moving to Software & Data and Consumer Services. Both businesses remain tied to the U.S. housing market, which continues to present a challenging backdrop. Our focus is straightforward, manage these businesses with discipline today while continuing to strengthen the product and partnerships for our future market recovery. Starting with the Software & Data KPIs. The total number of companies served was approximately 19,000. The majority of the decline was driven by the previously discussed planned sunset of a legacy product that served roughly 4,000 small home service contractors. Annualized revenue per company increased 24% year-over-year to $4,926, reflecting the higher mix of larger, higher value customers. In Consumer Services, the team continued building partnership momentum in advancing properties such as movingplace.com. For the quarter, Consumer Services had 84,000 monetized services with annualized revenue per monetized service of $216, growing 7% year-over-year driven by upsell and cross-sell efforts. Beyond the KPIs, we continue to make progress on the product and customer experience side of the business. In Software & Data, the Home Factors pipeline is progressing nicely with carriers of all sizes testing the product with successful results. In the quarter, ISN launched a redesigned order form in auto provisioning for new inspectors. And last year, ISN rolled out AI defect detection and usage has doubled across our core inspection software products. Importantly, customer satisfaction for our software products remains strong and improving. The latest NPS was 51 for inspection software, up 14% year-over-year; 61 for our Floify mortgage software, up 23%; and 71 for Rynoh, up 14%. That is encouraging in any environment but especially against a housing market that remains near cyclical trough levels. We see additional opportunity to improve product value and customer experience, which we believe can further strengthen our already strong market positions, including inspection where we serve roughly half of the market, in title where we have roughly 40% share. I'll now pass it back to Matt to wrap this up. Matt Ehrlichman: Thank you, Matthew. Okay. I want to wrap up by briefly reinforcing the most important messages from today. First, we're executing well. We exceeded expectations across the board and raised our outlook. Adjusted EBITDA, excluding the reciprocal is now $122 million at the midpoint and $125 million at top end of guidance, driven by the very high incremental margins of our Insurance Services business. We are ahead of schedule and tracking to our medium-term target of $3 billion in premium, $2.3 billion in revenue and $660 million in adjusted EBITDA, excluding the reciprocal. Second, we are pleased with the progress on growth. As we mentioned, total policies written grew 38% year-over-year. Insurance Services similarly had 38% year-over-year revenue growth. The number of producing agency branches more than doubled, and statutory surplus at the reciprocal is in a very strong position. And third, our financial profile has strengthened. We're now a Rule of 50 company. Our leverage ratio is better than 3x this year, and we delivered positive net income attributable to Porch in Q2 while expecting to remain positive for the full year. With that, John, let's please open the call for questions. Operator: Your first question comes from the line of Dan Kurnos with StoneX. Daniel Kurnos: Thanks for all the additional color tonight, especially Matt refocusing on policy count. Can you just broaden your thoughts a little bit? I mean I really appreciate the slide in terms of sort of the targeted actions you guys took. So just help us think through what you saw, how you guys reacted and to what extent the market is dictating those choices and when you might choose to get more aggressive or not because you guys are in a rather enviable position from a margin perspective and you have a lot of leeway. Matt Ehrlichman: Yes. Thanks. Appreciate it. Yes. The first point that you make is just the point we wanted to lay on, which is I'm not sure if folks have really understood and appreciated. We talked about how we generate revenue in a few different ways, management fees and policy fees as examples. But the policy fees and really the count of policies is really impactful to our financial model. And so we just wanted to make sure that was clear to folks. In terms of conversion rate, I mean, you saw it on the graph, but it is interesting to see, across different market cycles, conversion rates will naturally move up and down slightly. And the advantage that we have is just because we have such better loss ratios than the market, we are able to manage against that. And so I certainly was proud of the team's ability to kind of recognize changes in the elasticity curve of the conversion rates, be able to put new actions in. And again, like I mentioned, really a fairly minor change is that 4% year-over-year change in the premium per new customer but to be able to respond quickly and ensure that we're managing to the outcomes that we want to manage to for this year. I think you're right, Dan. There's a lot of runway ahead. And as I've talked about, we want to just stack year after year after year after year really strong, consistent growth while we're maximizing margin dollars within our growth goals, and that's the playbook that we're executing against. Daniel Kurnos: And then if I could just follow up just 2 secondary pieces, first, just any update on how Michigan is going, learnings there? Obviously, it's going to take a while to sort of prove out the data case, but just love an update. And you mentioned it yourself. You just added a little bit more to the surplus, especially in the statutory side. You had a phenomenal 2Q, especially given timing and seasonality. Book rolls, M&A, any reason to get more aggressive? Or are you -- I know you just finished telling me that you're trying to maximize margin dollars, but those all accrue, Matt, to shareholder interest. So just any thoughts there would be great. Matt Ehrlichman: Well, why don't I take the second one? And Matthew, maybe you can give an update on Michigan. It is your home state after all, so I give you the glory there. The -- I'm not going to answer much of your question on M&A, of course, Dan. But I will say that there are lots of interesting opportunities. Our corporate development team has never been busier. It's part of our playbook. And so like what -- just to be super clear, what we're managing to and what we've talked about in terms of our goals this year, those are our pure organic goals. So if we were to do anything else, that would sit on top, certainly, in terms of what we look to do and more to come as in the right time, certainly, if there's something to share. Matthew, do you want to hit on Michigan? Matthew Neagle: Yes, yes. I think we're excited about Michigan. We're excited about any new state expansion. You're right, it does take time, but our team is focused on growing distribution there. So there's lots of opportunity for us around agencies, and we're getting them appointed. We're starting to see quote flow. The other thing I would say about the data that's interesting is we're now smart enough with our data that even if we don't have data on a home, we have enough data on related homes that we can start to infer things about homes. The reason why that gets important is when you're heading into a new state, there's always an amount of time where you're learning about how risk behaves in those homes, and you accumulate that over time by getting more claims data and working with more customers. We think we'll have sort of an advanced start because of our data based on kind of what we've been seeing in our modeling. Operator: Our next question comes from the line of Jason Helfstein with Oppenheimer. Jason Helfstein: So this is now 2 solid quarters of very nice take rate. Can you just talk about is this the new normal and how mix kind of plays into the take rate? And then secondly, I think that the rest of the industry -- or I guess, in general, right, the industry is losing the pricing tailwind but yet it doesn't seem to kind of impact your efficiency on marketing for a lot of the reasons that you've talked about and we all know. Just maybe talk about how you think like that dynamic, that kind of change in the industry kind of impacts your ability to be efficient adding policies. Matt Ehrlichman: Shawn, why don't you take the first and I can layer in the second? Shawn Tabak: Yes, sure. For the take rate context there for folks, sometimes folks think of the insurance services revenue as a percentage of RWP as effectively the take rate. So I think that was the question there from Jason, that, that percentage was 66% in Q2. It was 65% in Q1. So Jason, I think your commentary there, we have seen it now for a couple of quarters sustain that higher mark. We're pleased with that conversion, both in the Insurance Services revenue and ultimately into adjusted EBITDA given the relatively fixed cost base that's creating a lot of earnings. And so something in that 60% to 65% range is kind of the area we've seen it over the last couple of quarters. And the last thing, I guess, I would just say there, mechanically, just so -- also last year was our -- I mentioned this in the prepared remarks, but we are seeing some deferred revenue flowing through into that, and we expect that to continue ongoing. I mentioned last year it was the first year under the reciprocal structure. And so some of the fees get deferred, and so that's coming in this year. And that will continue. We expect that to continue, obviously, in future years as well. Matt Ehrlichman: And then on the second one, maybe just high level quickly, Jason, fundamentally, what I think this game is around is if one can be able to better assess, predict and price risk, fundamentally, you'll win. And I think we've clearly demonstrated over an extended period of time now that we have abilities to be able to produce lower loss ratios than others do. And with lower loss ratios and low attritional loss ratios, it just means that there's more margin in the system overall. And then you can choose how you want to deploy the margin. You can be able to -- obviously, we have a very healthy flow through in terms of Porch Group EBITDA. We obviously are growing the capital base at the reciprocal really effectively. You're able to allocate to a really healthy reinsurance program to make sure the reciprocal is protected, but you can also use it for growth. And we've effectively put a little bit of the margin back to customers via that 4% decline in premium per new customer, and through that, you're able to control and impact those conversion rates, which, in turn, help us to be able to grow faster, our policy count faster. And so that is a great position to be in, where we can manage this margin advantage that we have to be able to produce the outcomes that are going to create shareholder value over time. Operator: Our next question comes from the line of Matthew VanVliet with Cantor Fitzgerald. Mason Marion: This is Mason Marion on for Matt. So your proprietary data is one of your real competitive advantages. You kind of talked to it on the call, but how is AI helping you further expand this advantage? Are you leveraging your home inspection data in any new or interesting ways today compared to, say, maybe the beginning of the year? Matthew Neagle: Yes. So what... Matt Ehrlichman: Go ahead. I'll layer on. Go ahead. You get it. Matthew Neagle: So we do have a large set of proprietary data, and we continue to look for different attributes or conditions of homes that we think could be predicted of risk, and we call those Home Factors. And so we're now up to 100 Home Factors. So we continue to build out insights from the data that we have. In terms of AI, I would highlight a couple of things. Our ability to go model and identify those Home Factors is getting faster. And so we are able to get through building out all of the different insights we think are within our data more quickly. I think the other things, there are certain types of data, particularly around digital information, which before felt very hard to go and extract insights from, are now becoming much more reachable with AI. And so that just allows us to go deeper into the data to build out these Home Factors that help our business and we think will help other insurance businesses. Mason Marion: Then maybe a modeling one here to follow up. So your EBITDA guide, if I'm doing my math right here, you raised it by about $16 million, while revenue was raised by about $11 million. I mean you have really strong incremental margins. Can you kind of talk to where you're seeing really strong leverage and how that factored into the guidance? Shawn Tabak: Yes, sure. Maybe I'll start with the results in the second quarter here. You could see it really clearly in Insurance Services adjusted EBITDA. If you look at the segment, the costs are relatively fixed. I think this has been part of the story that we've been telling for many quarters now. And I think this quarter was just a great example of where the numbers are clearly showing that also. And we see that in prior quarters as well, but it's 38% growth in policies written and relatively fixed cost. I did mention there's a $3 million nonrecurring benefit in this period, so make sure we account for that. But the margins are phenomenal. And so obviously, we're pleased today to continue to increase our guidance. In the last 6 months, we've increased our adjusted EBITDA guidance by over $20 million and are now guiding to $122 million at the midpoint. We're very pleased with how the year is progressing, and we're excited. Operator: Our next question comes from the line of Ryan Tomasello with KBW. Ryan Tomasello: On the revised guidance, can you say what that is now baking in for reciprocal written premium for the full year and in the second half whether or not we're now talking about something north of $600 million, which is what I believe you initially set out to achieve to start the year? Shawn Tabak: Yes. The target on RWP is $600 million. Let me maybe provide some context and break that down for folks. We're halfway through the year. We've done $255 million of RWP. That means in the second half of the year, we're expecting a $345 million of RWP. We talked about on the call today, policy growth has been fantastic, and we're seeing a lot of volume, and we expect volume to continue to ramp sequentially ending the year with more than 70,000 policies per quarter -- written per quarter. So those are some of the components to it. If you put that in context, in Q2, we wrote just under 60,000 policies, and we'll continue to increase the policies written with the things that are -- have been working very well for us, top-of-funnel distribution, continuing to add agents using our land-and-expand approach, conversion with targeted actions, all the things -- some of the things that we saw today that have been working quite well. Ryan Tomasello: I guess, given the momentum you've seen in the first half, is there potentially some offsets to that, that are reducing the upside to that $600 million for the full year or why the second half isn't baking in more upside? Just trying to understand the moving pieces here just given how strong the results have been thus far and the guide up despite the RWP guide seemingly unchanged. Matt Ehrlichman: Well, again, it's one of the messages I was trying to land, Ryan, just to make sure it's clear. We're obviously managing to our financial results in terms of kind of where we want to -- what we want to deliver. And certainly, you see that just with how we're executing against that, obviously, with both the beat today and the substantial raise. The thing, again, I just don't think -- I think people have been very focused on just an RWP, but our economic model is driven through both RWP and policies written. And we just want to make sure that's clear. We charge policy fees to every new and renewing policyholder. And so that is a way that we generate money. And so you really have to look at both of those 2 things. Policy growth is -- as we talked about today several times, it's growing very, very rapidly. And so we just -- we can balance those 2 things, how fast we want to grow the total premium and how fast we're going to grow the policies, at the end of the day, to be able to accomplish our organic growth goals for our business. And that's the way that we'll approach it. Operator: Our next question comes from the line of Timothy D'Agostino with B. Riley Securities. Timothy D'Agostino: Just quickly on my end. It'd be great to just get some color on the products, the legacy product and the Porch insurance product. RWP from new customers obviously tripled year-over-year. Are you seeing a lot of interest in demand for the new product? Or is it still towards that legacy product? And then as well for the branch growth, do you see new branches that come online? Are they interacting with that new product more? Any color around that would be great. Matt Ehrlichman: Yes. I mean it's -- I mean, by definition, obviously, in the way that just insurance works, the vast majority of policies are going to be with our legacy Homeowners of America product because it has all of the renewing customers on it. And so we are excited about Porch insurance and the value prop. As a reminder, it's only launched in one state as well, and so even in that one state, you have to go and ramp up the number of agencies that are able to sell and distribute it. So when you launch a new product, it does take time to ramp both within that state across more states and then to start building a renewal base. But we continue to be excited about fundamentally offering a different product to consumers, being able to bring a full home warranty, being able to bring 4 hours of moving service. And we do want to be known as providing the best product for a homebuyer, period, full stop. And we've got unique capabilities in our consumer services area to be able to do that. But it's early days just given kind of how the model works like I described. Operator: Our next question comes from the line of Oscar. In the meantime, we'll move on to our next question. Our next question comes from the line of Jason Kreyer with Craig-Hallum. Jason Kreyer: So in the quarter, you kind of had the first transaction to monetize some of the shares held inside of the reciprocal. Just curious, how should we think about the other 16 million shares and what your strategy is going to be there over the coming quarters or the coming years. Matt Ehrlichman: Obviously, we're excited about where the value of a share is going to go over time. As we said before publicly, there is -- our view of intrinsic value is certainly different than where the shares are today. And we think as we just keep stacking quarters and just executing like we are that, that gap shrinks. And so there will be a time in the future where it's going to make sense to start selling some small portion of shares at the reciprocal to move some of the capital from non-admitted assets into statutory surplus. We talked about that being part of the playbook that we have, but we're in no hurry. Obviously, we have so much capital at the reciprocal to be able to support far more premium growth than we're tracking for this year. We want to continue to maintain a nice healthy margin of excess capital. And so we'll just manage the business to make sure that we're accomplishing that. Jason Kreyer: I don't disagree with your assessment on value of shares. Just as a follow-up, Matt. At the end of the quarter, I think the reciprocal secured $100 million cat bond. Can you just talk about what that means for the health of the reciprocal and if there's any anticipated cost savings on reinsurance coming out of that cat bond? Shawn Tabak: Yes, I can cover that one. So -- and just for context for folks, a cat bond is a type of fully collateralized reinsurance. We placed it at the very top of the reinsurance tower, so it's covering very, very low likelihood events. But given the growth that we're seeing at the reciprocal, we thought it was prudent to ensure we were adding that. It was our inaugural cat bond offering for the reciprocal, and we're very pleased with the outcome. We partnered with a very strong slate of investors there. So I want to give a nod to those folks as well. But overall, we think it's an attractive instrument and an attractive way to procure reinsurance. Operator: And our next question comes from the line of Oscar Nieves with Stephens Inc. Oscar Nieves Santana: Sorry about earlier. I was having some technical difficulties. Matt Ehrlichman: No problem. Oscar Nieves Santana: My first question is you highlighted that new customer RWP grew 206% year-over-year, while total RWP grew 16%. So should investors expect that gap to persist? Or will renewal growth become a larger contributor over time? Matt Ehrlichman: Well, we expect new customer growth will continue. Like obviously, we have a really healthy engine as we continue to add more agencies and then have agencies deliver more quotes and be able to have those quotes convert into policies. So like we talked about, we expect new -- the number of new policies to continue to grow here as we continue forward. It's a beautiful game, insurance is, which customers renew at a really, really high clip. And the vast, vast majority of customers pay with escrow, and it's just a very sticky product fundamentally. And so we're not commenting on like the mix and how we expect the mix to transition over time, but certainly, I can give you that comment, which is we certainly expect new customers will continue to grow quickly. And those customers do become long-term customers generally, where the price per customer will tick up year after year after year as they renew. That's quite common. Oscar Nieves Santana: All right. That's super helpful. And then my second one is on statutory surplus, which you mentioned increased to close to $170 million. So how should we think about the relationship between surplus growth and premium growth over the next, say, 12 to 24 months? Shawn Tabak: Yes, I can take that one. So we're quite pleased with where the statutory surplus is, $170 million at the end of Q2. This year, year-to-date, it's up $15 million. And especially just having gone through the quarter with the highest weather claims typically, that's a great place to be and better than what I would have expected starting the year. And so we're certainly pleased with that outcome. The kind of required -- base requirement that we've historically talked about is a 5:1 RWP to surplus, and actually in some of the prior quarters, we've talked about it actually being a little bit better than that now. But those are some of the guardrails that folks can think about there. But I would say very pleased with the statutory surplus and the loss ratios and just the underwriting discipline and how the reciprocal is performing. Operator: And that concludes our Q&A session for today. I would now like to turn the call back over to Matt Ehrlichman for closing remarks. Matt Ehrlichman: I appreciate everybody being on the call. Thanks for the questions. I think you can get a feel for the energy. We remain very confident in where we're at and how we are executing. I mean it is fun now to be a Rule of 50 company. Feel really good about our leverage being better than 3x this year. We're just making strong progress and certainly now being net income positive this year, all great markers for us. We believe -- again, I feel very confident we've constructed a durable model with significant opportunity where we can scale a premium and convert that premium into high-margin earnings and continue to add products and capabilities that set us up to go after this $200 billion TAM with just fundamental advantages. Lastly, core thing we talked about is creating long-term shareholder value for shareholders as part of building a truly great and enduring company. And so certainly, just rest assured that's what we are focused on and I think, making great progress against each day. With that, we'll close the call. Have a great rest of the day. Take care, everybody. Operator: Ladies and gentlemen, that concludes today's call. You may now disconnect. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Porch Group (PRCH) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Porch Group, Inc.? Here are five stocks we like better. Porch Group exceeded its Q2 expectations, reporting $141 million in GAAP revenue, up 12% year over year, and $6 million in net income attributable to shareholders—the company’s first positive quarterly result highlighted on the call. Insurance Services drove growth, with revenue up 38% to $93 million and adjusted EBITDA up 126% to $44 million. Reciprocal policies written increased 38% to approximately 59,000, although pricing pressure and a nonrecurring $3 million expense benefit affected results. Porch raised its 2026 outlook for revenue, gross profit and adjusted EBITDA excluding the reciprocal, with midpoint guidance implying 22% revenue growth and 59% adjusted EBITDA growth. The company maintained its $600 million full-year reciprocal written premium target. 4 Recent Earnings Winners Riding Fresh Momentum in May Porch Group (NASDAQ:PRCH) reported second-quarter results that exceeded its prior expectations, driven by growth in its Insurance Services business, and raised its full-year 2026 outlook for revenue, gross profit and adjusted EBITDA excluding its reciprocal insurance carrier. The company reported consolidated GAAP revenue of $141 million for the quarter, up 12% from a year earlier. Revenue from Porch-owned segments, which excludes the reciprocal, rose 23% to $132 million. Net income attributable to Porch shareholders was $6 million, which Chief Financial Officer Shawn Tabak described as an important milestone for the business. → This Tiny AI Supplier Could Be More Important Than the Chipmakers Porch Group Stock Surges 76% in 2 Days – What’s Next? “We generated positive net income attributable to Porch in the quarter and expect that to be true for the full year of 2026, 2027, and the years ongoing,” Chief Executive Officer, Chairman and Founder Matt Ehrlichman said. Insurance Services remained Porch’s largest and fastest-growing business. Segment revenue increased 38% year over year to $93 million, while gross profit rose 40% to $81 million. The segment’s gross margin was 87%, and adjusted EBITDA increased 126% to $44 million, producing a 48% adjusted EBITDA margin compared with 29% in the prior-year quarter. → Refiner Stocks Are Near Record Highs—Can Iran-Driven Margins Keep Them There? Tabak said the margin expansion reflected operating leverage as insurance policy and premium volumes increased. He also noted that results included an approximately $3 million benefit from an expense true-up that the company does not expect to recur. In addition, Porch is beginning to benefit from revenue that had been deferred under its reciprocal structure, with some management fees recognized over 18 months. Reciprocal policies written increased 38% year over year to approximately 59,000 during the quarter, a 500-basis-point acceleration from the first-quarter growth rate. Reciprocal written premium, or RWP, rose 16% to $140 million. → Innovative ETF Strategies That Are Paying Off This Summer Ehrlichman emphasized that Porch’s insurance economics are tied not only to written premium but also to policy count because it charges policy fees to policyholders. He said the company expects policies written to exceed 70,000 per quarter by the end of the year. New-customer RWP more than tripled from a year earlier, according to management. RWP per policy was $2,383, declining year over year because of a greater mix of new policies relative to higher-priced renewal policies. Premium per new customer declined 4% year over year in the quarter, which management attributed partly to a softer insurance pricing environment. Porch said competitors became more aggressive on pricing during May, affecting conversion rates. The company responded with targeted pricing adjustments in selected markets, and Ehrlichman said conversion improved and reaccelerated in June. In Texas, Porch’s largest state, conversion reached high-water marks during the final week of June, he said. The company continued to expand its independent-agency distribution network. Producing agency branch locations rose 148% from a year earlier, while quote volumes increased 87%. Quote volume also rose sequentially for the seventh consecutive quarter. The reciprocal ended the quarter with statutory surplus of $170 million, up 33% year over year and 3% sequentially. The quarter included a $14 million storm event, Tabak said. The reciprocal reported a gross loss ratio of 38% and an attritional loss ratio of 18%. Porch said the reciprocal’s statutory surplus supports more than $800 million of premium when including non-admitted assets, principally Porch shares owned by the reciprocal. It also cited its ability to support premium approaching $2 billion. During the quarter, the reciprocal sold 2.1 million Porch shares to Porch Group and retained 16.2 million shares. Tabak said most of the retained share value is treated as non-admitted assets and is incremental to statutory surplus. The company also completed an inaugural $100 million catastrophe bond placement at the top of its reinsurance tower, which Tabak described as fully collateralized reinsurance for low-probability events. Porch ended the quarter with $127 million in cash and investments, down slightly from the first quarter. The company said the decline reflected the share purchase from the reciprocal, $17 million of interest expense and working-capital timing, partly offset by adjusted EBITDA generation. The reciprocal held $331 million in cash and investments at quarter-end. Porch increased its 2026 guidance across its Porch-owned segments. The company now expects: Revenue excluding the reciprocal of $506 million to $517 million; Gross profit excluding the reciprocal of $419 million to $429 million; and Adjusted EBITDA excluding the reciprocal of $119 million to $125 million. At the midpoint, the updated revenue outlook implies 22% year-over-year growth, while adjusted EBITDA guidance of $122 million implies 59% growth. Porch had generated $59 million in adjusted EBITDA excluding the reciprocal during the first half of the year. The company maintained its $600 million full-year RWP target. Tabak said Porch generated $255 million in RWP during the first half and expects $345 million in the second half. Management said it expects its leverage ratio to be below 3 times this year, within the 2-to-3-times target range discussed at its 2024 investor day. Ehrlichman said the company now qualifies as a “Rule of 50” business, citing 23% revenue growth excluding the reciprocal and a 30% adjusted EBITDA margin on the same basis. Chief Operating Officer Matthew Neagle said Porch is using artificial intelligence to accelerate engineering work, reduce cloud-computing costs and improve operations. He said engineering teams recorded a 2.4-fold increase in lines of code changed and a 73% increase in merge requests created, while targeted cloud infrastructure savings were approaching 10%. Neagle also said Porch’s data platform provides insights on about 90% of U.S. residential properties and early signals on 90% of U.S. home buyers each month. The company has developed approximately 100 “HomeFactors,” or data-derived property attributes intended to help assess insurance risk. Software & Data revenue was $23 million, with $5 million in adjusted EBITDA. The business was affected by the planned sunset of legacy products serving roughly 4,000 small home-service contractors. Consumer Services generated $18 million in revenue and $3 million in adjusted EBITDA. Management said both segments continue to operate against a stagnant housing-market backdrop, while Porch focuses on product improvements, partnerships and customer experience. Porch Group, Inc operates a technology-driven home services platform designed to connect homeowners with professional contractors, maintenance providers and home improvement specialists. Through its online marketplace and proprietary software solutions, Porch enables users to research, compare and book services ranging from home repairs and remodeling to maintenance and renovations. The company's platform integrates detailed provider profiles, customer reviews and real-time appointment scheduling to streamline the process of sourcing and managing home projects. In addition to its core marketplace, Porch offers software products tailored for service professionals. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Porch Group Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

This article first appeared on GuruFocus. Revenue (Excluding Reciprocal): $132 million, up 23% year over year. Insurance Services Revenue: $93 million, up 38% year over year. Consolidated GAAP Revenue: $141 million, up 12% year over year. Gross Profit (Excluding Reciprocal): $81 million for Insurance Services, up 40% year over year. Gross Margin (Insurance Services): 87%. Adjusted EBITDA (Excluding Reciprocal): $39 million, up 150% year over year. Insurance Services Adjusted EBITDA: $44 million, up 126% year over year. Insurance Services Adjusted EBITDA Margin: 48%, compared to 29% in the prior year period. Net Income Attributable to Porch: $6 million. Reciprocal Written Premium (RWP): $140 million, up 16% year over year. Reciprocal Policies Written: 59,000, up 38% year over year. Statutory Surplus (Reciprocal): $170 million, up 33% year over year. Gross Loss Ratio (Reciprocal): 38%. Attritional Loss Ratio (Reciprocal): 18%. Cash and Investments (Porch): $127 million. Cash and Investments (Reciprocal): $331 million. Software and Data Gross Profit: $17 million. Software and Data Adjusted EBITDA: $5 million. Consumer Services Revenue: $18 million. Consumer Services Gross Profit: $15 million. Consumer Services Adjusted EBITDA: $3 million. Guidance - Revenue (Excluding Reciprocal): $506 million to $517 million. Guidance - Gross Profit (Excluding Reciprocal): $419 million to $429 million. Guidance - Adjusted EBITDA (Excluding Reciprocal): $119 million to $125 million. Warning! GuruFocus has detected 4 Warning Signs with PRCH. Is PRCH fairly valued? Test your thesis with our free DCF calculator. Release Date: July 29, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Porch Group Inc (NASDAQ:PRCH) reported positive net income attributable to Porch in Q2 2026 and expects to remain profitable for the full year and beyond. Adjusted EBITDA, excluding the reciprocal, grew 2.5 times year-over-year to $39 million in Q2, driven by strong operating leverage in Insurance Services. Insurance Services revenue grew 38% year-over-year with a 48% adjusted EBITDA margin, demonstrating high incremental margins and scalability. Reciprocal policies written increased 38% year-over-year, with a strong pipeline of new customers and expanding agency distribution (148% growth in producing branches). The reciprocal's statutory surplus reached $170 million, up 33% year-over-year, providing ample capacity to support future premium growth and a healthy balance sheet. The US housing market remains stagnant, negatively impacting the Software and Data and Consumer Services segments, which were relatively flat year-over-year. Premium per new customer declined 4% year-over-year in Q2 due to a softer insurance market and competitive pricing pressures from rivals. The company noted a $3 million non-recurring expense true-up benefit in Q2 that boosted margins, which is not expected to recur in future quarters. Conversion rates experienced a temporary dip in May due to competitors lowering prices, requiring targeted pricing adjustments to reaccelerate growth. The legacy product sunset in Software and Data led to a decline in total companies served, with a planned reduction of roughly 4,000 small home service contractors. Here are the key highlights from Porch Group Inc (NASDAQ:PRCH)'s Q2 2026 earnings call. Q: Can you discuss the impact of a softer insurance market on conversion rates and how Porch is managing its competitive advantage? A: Matt Ehrlichman, CEO: We saw conversion rates dip slightly in May as competitors became more aggressive on pricing, likely due to lower reinsurance costs. However, we responded with targeted pricing adjustments in specific areas, which led to a reacceleration of conversion rates in June. Our fundamental margin advantage, driven by superior loss ratios, allows us to navigate these market cycles effectively. The premium per new customer was only down 4% year-over-year in Q2, demonstrating our ability to sustain above-market margins while managing growth. Q: The company raised its adjusted EBITDA guidance substantially. Can you talk about where you are seeing the strongest operating leverage? A: Shawn Tabak, CFO: The leverage is most evident in our Insurance Services segment, where costs are relatively fixed. As policies and RWP scale, the high incremental margins flow directly to the bottom line. This quarter was a clear example, with strong revenue growth converting into a 2.5x year-over-year increase in adjusted EBITDA. We are now guiding to $122 million in adjusted EBITDA at the midpoint for the full year, up from roughly $100 million at the start of the year. Q: With the strong first-half momentum, is there potential for upside to the $600 million RWP target for the full year? A: Matt Ehrlichman, CEO: We are managing to our financial results, which are driven by both RWP and policy count. Policy growth is very strong, up 38% year-over-year, and we expect it to ramp to over 70,000 per quarter by year-end. We can balance the mix of premium and policy growth to achieve our organic goals. The key takeaway is that our economic model benefits from both metrics, and we are executing well against our plan. Q: How is AI helping to expand Porch's proprietary data advantage, particularly in insurance? A: Matthew Neagle, COO: AI is accelerating our ability to model and identify new "home factors" that are predictive of risk. We are now up to 100 home factors. AI allows us to extract insights from digital information that was previously difficult to use, deepening our data moat. Operationally, we are seeing broad productivity gains, including a 2.4x increase in lines of code changed by engineers and net cloud compute savings approaching 10%. Q: The reciprocal's statutory surplus grew to $170 million. How should we think about the relationship between surplus growth and future premium growth? A: Shawn Tabak, CFO: We are very pleased with the surplus position, especially after a Q2 that typically has the highest weather claims. The surplus supports over $800 million in premium, with the ability to support nearly $2 billion when including non-admitted assets. The historical guardrail is a 5:1 RWP-to-surplus ratio, but we are performing even better than that. This gives us plenty of capacity to support our organic and inorganic growth goals. Q: Can you provide an update on the new Porch Insurance product and how it is contributing to growth versus the legacy product? A: Matt Ehrlichman, CEO: The vast majority of policies are still written through our legacy Homeowners of America product, which holds the renewal base. The Porch Insurance product is only launched in one state, so it takes time to ramp distribution and build a renewal base. We remain excited about its unique value proposition, which bundles a home warranty and moving services, but it is still in the early innings of its growth trajectory. Q: Regarding the shares held by the reciprocal, what is the strategy for monetizing the remaining 16 million shares? A: Matt Ehrlichman, CEO: We believe the intrinsic value of our shares is higher than the current market price. As we continue to execute and close that gap, there will be a time to sell a small portion of shares to move capital from non-admitted assets into statutory surplus. However, we are in no hurry, as the reciprocal already has substantial capital to support our growth plans. Q: The company secured a $100 million cat bond in the quarter. What does this mean for the health of the reciprocal and potential reinsurance cost savings? A: Shawn Tabak, CFO: This was our inaugural cat bond offering, placed at the very top of the reinsurance tower to cover very low-likelihood events. It was a prudent move given the reciprocal's growth and we were pleased with the strong investor interest. It is an attractive and efficient way to procure reinsurance, adding to the overall strength and stability of the reciprocal. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Porch Group, Inc. (PRCH) came out with quarterly earnings of $0.05 per share, beating the Zacks Consensus Estimate of a loss of $0.04 per share. This compares to break-even earnings per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +225.00%. A quarter ago, it was expected that this company would post a loss of $0.1 per share when it actually produced a loss of $0.04, delivering a surprise of +60%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Porch Group, which belongs to the Zacks Internet - Software industry, posted revenues of $131.81 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 8.98%. This compares to year-ago revenues of $107.02 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Porch Group shares have added about 38.3% since the beginning of the year versus the S&P 500's gain of 8.5%. While Porch Group has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Porch Group was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is breakeven on $135.91 million in revenues for the coming quarter and -$0.04 on $500.57 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Software is currently in the bottom 41% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Rigetti Computing, Inc. (RGTI), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This company is expected to post quarterly loss of $0.03 per share in its upcoming report, which represents a year-over-year change of +40%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Rigetti Computing, Inc.'s revenues are expected to be $4.91 million, up 173% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Porch Group, Inc. (PRCH) : Free Stock Analysis Report Rigetti Computing, Inc. (RGTI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Insurance Services Revenue Growth of 38% YoY; Reciprocal Policies Written3 Growth of 38% YoY SEATTLE, July 29, 2026--(BUSINESS WIRE)--Porch Group, Inc. ("Porch," "the Company," "we," "our," "us") (NASDAQ: PRCH), a new kind of homeowners insurance company, today reported second quarter results through June 30, 2026, that exceeded our expectations. As a result, the Company raised guidance for the remainder of the year. CEO Summary "Q2 was a strong quarter and another clear proof point that the model is working. We exceeded expectations, grew Adjusted EBITDA (Excluding Reciprocal)1 meaningfully, delivered positive net income attributable to Porch, and are raising guidance2 across the board. Insurance Services continues to run ahead of schedule, with Reciprocal Written Premium3 scaling, total Reciprocal Policies Written3 up 38% year-over-year, and strong earnings flow-through from premium into Adjusted EBITDA (Excluding Reciprocal)1. With strong capacity, expanding top-of-funnel activity, and rapid policy growth, we believe Porch is increasingly positioned for sustained profitability, a stronger balance sheet profile, and disciplined premium growth over time," said Matt Ehrlichman, Chief Executive Officer, Chairman and Founder. Second Quarter 2026 Key Financial Highlights Consolidated revenue was $140.9 million, up 12% YoY. Porch-Owned Segments Revenue (Excluding Reciprocal)1, representing the revenue contributions across the Porch-owned businesses, was $131.8 million, up 23% YoY, led by Insurance Services revenue of $92.9 million, up 38% YoY. Net income attributable to Porch was $5.6 million. Adjusted EBITDA (Excluding Reciprocal)1 of $39.1 million grew 150% YoY, largely driven by $139.8 million of Reciprocal Written Premium ("RWP"). Consolidated gross profit was $87.6 million. Porch-Owned Segments Gross Profit (Excluding Reciprocal)1, representing the gross profit contributions across the Porch-owned businesses, grew 25% YoY to $111.6 million. Second Quarter 2026 Operational Highlights Top-of-funnel expansion continued, with Q2 2026 producing agency branch locations rising 148% from Q2 2025 and quote volumes rising 87% from Q2 2025. Conversion remained well above prior-year levels, helping drive 206% YoY growth in Q2 2026 RWP3 from new customers, with momentum increasing exiting the quarter. Reciprocal Policies Written3 grew 38% YoY, an acceleration in the rate of year-over-year growth relative to Q1 2026 (33% year-over-year). Capacity continued to build: statutory surplus at the Porch Reciprocal Exchange (the "Reciprocal") ended Q2 2026 at $169.9 million, up 33% versus Q2 2025 and up 3% versus Q1 2026. Surplus combined with non-admitted assets ended at $376.5 million, supporting our ability to scale premiums long into the future while maintaining a healthy Reciprocal. The following table presents the Company’s unaudited segment operating results for the current quarter. The following table reconciles segment Adjusted EBITDA to Adjusted EBITDA (Excluding Reciprocal). The following table presents the Company’s unaudited segment operating results for the same quarter of the prior year. The following table reconciles segment Adjusted EBITDA to Adjusted EBITDA (Excluding Reciprocal). The following table presents the Company’s key performance measures and operating metrics. Definitions are on page 12 of this release. Porch-Owned Segments Full-Year 2026 Financial Outlook Financial guidance represents the businesses owned by Porch, and does not include the future expected results of the Reciprocal which is owned by its policyholder-members and not by Porch. Porch-Owned Segments full-year 2026 guidance is as follows: Porch provides full year 2026 guidance based on current market conditions, assumptions, and expectations as of the date of this release. Actual results may vary due to a number of factors, and there is no guarantee that the Company will be able to achieve these results. Porch is not providing reconciliations of expected Porch-Owned Segments Revenue (Excluding Reciprocal), Porch-Owned Segments Gross Profit (Excluding Reciprocal), or Adjusted EBITDA (Excluding Reciprocal) for future periods to the most directly comparable measures prepared in accordance with GAAP because the Company is unable to provide these reconciliations without unreasonable effort because certain information necessary to calculate such measures on a GAAP basis is unavailable or dependent on the timing of future events outside of the Company’s control. Balance Sheet Information (unaudited) The following table provides the components of cash and cash equivalents, restricted cash and cash equivalents, and investments. At June 30, 2026, the total of cash, cash equivalents, restricted cash and cash equivalents, and investments of Porch-Owned Segments and corporate was $126.8 million. The decrease from March 31, 2026, was primarily driven by the timing of bi-annual cash interest payments and the purchase of 2.1 million shares of Porch common stock from the Reciprocal partially offset by Adjusted EBITDA (Excluding Reciprocal)1 of $39.1 million. Porch also holds $106 million surplus notes from the Reciprocal, which are eliminated in consolidation. The surplus notes bear interest of SOFR +9.75%. At June 30, 2026, the total of the Reciprocal’s cash, cash equivalents, restricted cash and cash equivalents, and investments was $331.0 million. As of June 30, 2026, outstanding principal for convertible debt was $475.1 million. This includes $134.0 million of 9.00% Convertible Senior Unsecured Notes due May 2030 (the "2030 Notes"), $333.3 million of 6.75% Convertible Senior Secured Notes due October 2028 (the "2028 Notes"), and $7.8 million of 0.75% Convertible Senior Unsecured Notes due September 2026 (the "2026 Notes"). Management expects to settle the 2026 Notes at maturity on September 15, 2026. In June 2026, the Reciprocal sold approximately 2.1 million shares of Porch common stock to Porch’s wholly owned captive reinsurance business for an aggregate cash purchase price of approximately $15 million, representing a price per share of $7.17, which was the Nasdaq closing price on March 31, 2026, the date the parties received the requisite corporate approvals for the transaction subject to the receipt of regulatory approvals. The Reciprocal still holds approximately 16.2 million shares of Porch common stock, providing continued upside potential should the share price appreciate. Conference Call Porch management will host a conference call today July 29, 2026, at 5:00 p.m. Eastern time (2:00 p.m. Pacific time). The call will be accompanied by a slide presentation available on the Investor Relations section of the Company’s website at ir.porchgroup.com. A question-and-answer session will follow management’s prepared remarks. All are invited to listen to the event by registering for the webinar, a replay of the webinar will also be available. See the Investor Relations section of Porch’s corporate website at ir.porchgroup.com. About Porch Group Porch Group, Inc. ("Porch") is a new kind of homeowners insurance company. Porch's strategy to win in homeowners insurance is to deploy leading vertical software solutions in select home-related industries, provide the best services for homebuyers including important moving services, leverage unique data for advantaged underwriting, and provide more protection for policyholders. To learn more about Porch, visit ir.porchgroup.com. Forward-Looking Statements Certain statements in this release are considered forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of management. Although we believe that our plans, intentions, and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions, or expectations. Forward-looking statements are inherently subject to risks, uncertainties, and assumptions. Generally, statements that are not historical facts, including statements concerning our financial outlook and guidance, possible or assumed future actions, business strategies, events, or results of operations, are forward-looking statements. These statements may be preceded by, followed by, or include the words "believe," "estimate," "expect," "project," "forecast," "may," "will," "should," "seek," "plan," "scheduled," "anticipate," "intend," or similar expressions. Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements which speak only as of the date hereof. You should understand that the following important factors, among others, could affect our future results and could cause those results or other outcomes to differ materially from those expressed or implied in our forward-looking statements: expansion plans and opportunities, and managing growth, to build a consumer brand; the incidence, frequency, and severity of weather events, extensive wildfires, and other catastrophes; economic conditions, especially those affecting the housing, insurance, and financial markets; expectations regarding revenue, cost of revenue, operating expenses, and the ability to achieve and maintain future profitability; existing and developing federal and state laws and regulations, including with respect to insurance, warranty, privacy, information security, data protection, and taxation, and management’s interpretation of and compliance with such laws and regulations; the structure, availability, and performance of Porch Reciprocal Exchange (the "Reciprocal")’s and Homeowners of America ("HOA")’s reinsurance programs to protect against loss and maintain their financial stability ratings and a healthy surplus, the success of which are dependent on a number of factors outside management’s control; the possibility that a decline in our share price would result in a negative impact to the Reciprocal’s surplus position and may require further financial support to enable the Reciprocal to meet applicable regulatory requirements and maintain financial stability rating; the possibility that a decline in our share price would result in a negative impact to our captive reinsurance business' capital and collateral portfolio, and may require further financial support to enable the captive reinsurance business to meet applicable regulatory requirements; uncertainties related to regulatory approval of insurance rates, policy forms, insurance products, license applications, acquisitions of businesses, or strategic initiative, and other matters within the purview of insurance regulators (including the discount associated with the shares contributed to HOA that were subsequently transferred to the Reciprocal in connection with the closing of the sale of HOA to the Reciprocal); the ability of the Company and its affiliates to successfully operate and manage the Reciprocal and our ability to successfully operate our businesses alongside a reciprocal exchange; our ability to implement our plans, forecasts and other expectations with respect to the Reciprocal and to realize expected synergies and/or convert policyholders from our existing insurance carrier business into policyholders of the Reciprocal; reliance on strategic, proprietary relationships to provide us with access to personal data and product information, and the ability to use such data and information to increase transaction volume and attract and retain customers; the ability to develop new, or enhance existing, products, services, and features and bring them to market in a timely manner; the ability to effectively integrate and leverage artificial intelligence and machine learning technologies; changes in capital requirements, and the ability to access capital when needed to provide statutory surplus; our ability to timely repay our outstanding indebtedness; the increased costs and initiatives required to address new legal and regulatory requirements arising from developments related to cybersecurity, privacy, and data governance and the increased costs and initiatives to protect against data breaches, cyber-attacks, virus or malware attacks, or other infiltrations or incidents affecting system integrity, availability, and performance; retaining and attracting skilled and experienced employees; costs related to being a public company; and other risks and uncertainties discussed in Part II, Item 1A, "Risk Factors," in our Annual Report on Form 10-K for the year ended December 31, 2025, and in our subsequent reports filed with the Securities and Exchange Commission ("SEC"), as well as those discussed elsewhere in this earnings release, all of which are available on the SEC’s website at www.sec.gov. We caution you that the foregoing list may not contain all the risks to forward-looking statements made in this release. You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this release primarily on our current expectations and projections about future events and trends we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors, including those described above and elsewhere in this release. We disclaim any obligation to update publicly any forward-looking statements, whether in response to new information, future events, or otherwise, except as required by applicable law. Non-GAAP Financial Measures This release includes non-GAAP financial measures, such as Porch-Owned Segments Revenue (Excluding Reciprocal), Porch-Owned Segments Gross Profit (Excluding Reciprocal), Adjusted EBITDA (Excluding Reciprocal), Insurance Services Adjusted EBITDA, Insurance Services Adjusted EBITDA Margin, Insurance Services Adjusted EBITDA % of RWP, Software & Data Adjusted EBITDA, and Consumer Services Adjusted EBITDA. Our management uses these non-GAAP financial measures as supplemental measures of our operating and financial performance, for internal budgeting and forecasting purposes, to evaluate financial and strategic planning matters, and to establish certain performance goals for incentive programs. We believe that the use of these non-GAAP financial measures provides investors with useful information to evaluate our operating and financial performance and trends and in comparing our financial results with competitors, other similar companies and companies across different industries, many of which present similar non-GAAP financial measures to investors. However, our definitions and methodology in calculating these non-GAAP measures may not be comparable to those used by other companies. In addition, we may modify the presentation of these non-GAAP financial measures in the future, and any such modification may be material. You should not consider these non-GAAP financial measures in isolation, as a substitute to or superior to financial performance measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude specified income and expenses, some of which may be significant or material, that are required by GAAP to be recorded in our consolidated financial statements. We may also incur future income or expenses similar to those excluded from these non-GAAP financial measures, and the presentation of these measures should not be construed as an inference that future results will be unaffected by unusual or non-recurring items. In addition, these non-GAAP financial measures reflect the exercise of management judgment about which income and expenses are included or excluded in determining these non-GAAP financial measures. You should review the tables accompanying this release for reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measure. We are not providing reconciliations of non-GAAP financial measures for future periods to the most directly comparable measures prepared in accordance with GAAP. We are unable to provide these reconciliations without unreasonable effort because certain information necessary to calculate such measures on a GAAP basis is unavailable or dependent on the timing of future events outside of our control. Porch-Owned Segments We define Porch-Owned Segments as the Insurance Services, Software & Data, and Consumer Services segments. We previously referred to Porch-Owned Segments as "Porch Shareholder Interest." The measures previously defined as "Porch Shareholder Interest Revenue" and "Porch Shareholder Interest Gross Profit" have been renamed to "Porch-Owned Segments Revenue (Excluding Reciprocal)" and "Porch-Owned Segments Gross Profit (Excluding Reciprocal)," respectively, to more clearly reflect their composition. We believe that presenting Porch-Owned Segments Revenue and Porch-Owned Segments Gross Profit provides useful information to investors by illustrating revenue and gross profit for the businesses that Porch owns and whose financial results accrue to the benefit of Porch Group's stockholders. By contrast, the Reciprocal is owned by its policyholder-members, and its financial results do not accrue to Porch Group's stockholders. We define Porch-Owned Segments Revenue as the sum of revenue from the Insurance Services, Software & Data, and Consumer Services segments, less any intersegment eliminations. The following table reconciles Porch-Owned Segments Revenue (Excluding Reciprocal) to consolidated revenue (dollar amounts in thousands). We define Porch-Owned Segments Gross Profit as the sum of gross profit from the Insurance Services, Software & Data, and Consumer Services segments, less any intersegment eliminations. The following table reconciles Porch-Owned Segments Gross Profit (Excluding Reciprocal) to consolidated gross profit (dollar amounts in thousands). .Adjusted EBITDA (Excluding Reciprocal) The measure previously defined as "Adjusted EBITDA (Loss)" has been renamed to "Adjusted EBITDA (Excluding Reciprocal)" to more clearly reflect its composition. We define Adjusted EBITDA (Excluding Reciprocal) as net income (loss) adjusted for net income (loss) attributable to the Reciprocal; interest expense; income taxes; depreciation and amortization; gain or loss on extinguishment of debt; other expense; other income; impairments of intangible assets and goodwill; gain or loss on reinsurance contract; impairments of property, equipment, and software; stock-based compensation expense and employer payroll tax related to PRSU vestings; mark-to-market gains or losses recognized on changes in the value of contingent consideration arrangements, unexercised warrants, and derivatives; restructuring and other costs; acquisition and other transaction costs; and non-cash bonus expense. Beginning in the second quarter of 2026, we revised our definition of Adjusted EBITDA (Excluding Reciprocal) to exclude employer payroll tax expense related to the vesting and settlement of our performance restricted stock units ("PRSUs"). Our PRSUs vest upon the completion of a specified service period and the achievement of distinct multi-year performance goals. The first such vesting and settlement events occurred in 2026. As a result, we incurred employer payroll tax expense related to PRSUs for the first time in 2026, and no comparable expense was present in any prior period. We have historically excluded stock-based compensation expense from Adjusted EBITDA (Excluding Reciprocal), and we believe excluding the associated employer payroll tax expense on PRSUs ongoing is consistent with that treatment. The amount of this expense is driven by the price of our common stock at the time the PRSUs vest and settle and by the episodic timing of those events upon achievement of multi-year performance goals, each of which is subject to unpredictable fluctuations outside of our control. Accordingly, we do not consider this expense to be representative of our core operating results. Because this expense first arose in 2026, no prior-period amounts were recast, and this change had no effect on any prior period presented. The following table reconciles Net income (loss) to Adjusted EBITDA (Excluding Reciprocal) for the periods presented (dollar amounts in thousands). Our segment operating and financial performance measures are Gross Profit and Adjusted EBITDA for the Insurance Services, Software & Data, and Consumer Services segments. Adjusted EBITDA for each segment is defined as Gross Profit less the following expenses associated with each segment: selling and marketing, product and technology, and general and administrative. Adjusted EBITDA also excludes non-cash items or items that management does not consider reflective of ongoing core operations, such as depreciation, amortization, and stock-based compensation expense. Adjusted EBITDA Margin is defined as Adjusted EBITDA for the segment divided by the segment’s revenue. Insurance Services Adjusted EBITDA % of RWP is defined as Insurance Services Adjusted EBITDA divided by RWP. The following table reconciles Gross Profit to Adjusted EBITDA, Gross Margin to Adjusted EBITDA Margin, and Gross Profit as a percentage of RWP to Insurance Services Adjusted EBITDA % of RWP for the Insurance Services segment. The following table reconciles Gross Margin to Adjusted EBITDA Margin for the Software & Data segment. The following table reconciles Gross Margin to Adjusted EBITDA Margin for the Consumer Services segment. Key Performance Measures and Operating Metrics In the management of these businesses, we identify, measure and evaluate various operating metrics. The key performance measures and operating metrics used in managing the businesses are discussed below. These key performance measures and operating metrics are not prepared in accordance with generally accepted accounting principles in the United States ("GAAP") and may not be comparable to or calculated in the same way as other similarly titled measures and metrics used by other companies. Insurance Services & Reciprocal Segments Reciprocal Written Premium ("RWP") — We define RWP as the total premium written by the Reciprocal for the face value of one year’s premium gross of cancellations, plus surplus contributions and policy fees, and before deductions for reinsurance in the period. RWP excludes the impact of cancellations and premiums ceded to reinsurers and includes surplus contributions and policy fees, and, therefore, should not be used as a substitute for revenue. We use RWP to manage the business because we believe it represents the business volume generated by associated customer acquisition activities and is reflective of the competitive market position when evaluated on a per written policy basis and is a key driver of both Porch and the Reciprocal’s growth and profit opportunities. Reciprocal Policies Written — We define Reciprocal Policies Written as the number of new and renewal insurance policies written during the period by the Reciprocal Segment. RWP per Policy Written — We define RWP per Policy Written as the RWP in the period, which is reflective of the total amount a policyholder is expected to pay, divided by the Reciprocal Policies Written in the period. Software & Data Average Number of Companies — We define Average Number of Companies as the average number of companies during the period across all of our Software & Data segment. This only includes the number of companies in our Software & Data segment. Annualized Average Revenue per Company — We define Annualized Average Revenue per Company as the revenue generated across the Software & Data segment in the period over the Average Number of Companies in the period, which is then annualized (for example, for a given quarter, multiplied by 4). Consumer Services Monetized Services — We define Monetized Services as the total number of services from which we generated revenue, including, but not limited to, new and renewing warranty policies, completed moving jobs, sold security, TV/Internet or other home projects, measured over the period. This only includes services from Consumer Services segment and does not include insurance policies sold. Average Revenue per Monetized Service — We define Average Revenue per Monetized Service as total Consumer Services segment revenue generated in the period over the number of Monetized Services. View source version on businesswire.com: https://www.businesswire.com/news/home/20260729739322/en/ Contacts Investor Relations Contact [email protected]

Q1 beat and guidance raised: Porch reported Porch Shareholder Interest RWP of $114M (+18% YoY), revenue $109M (+29% YoY), gross profit $91M (83% margin) and adjusted EBITDA $20M (18% margin), and raised 2026 Porch Shareholder Interest guidance to revenue $495–$507M, gross profit $401–$413M and adjusted EBITDA $103–$109M. Insurance Services is the growth engine: Insurance Services produced $75M revenue (+50% YoY), $64M gross profit (85% margin) and $27M adjusted EBITDA (37% margin), supported by higher statutory surplus ($165M), a 181% increase in producing agency locations, improved quote-to-bind conversion, strong underwriting (24% gross loss ratio, 19% attritional) and ~20% lower excess reinsurance costs. Housing headwinds, balance sheet, and product rollouts: Management expects Software & Data and Consumer Services to remain "trough-like" with flattish YoY results, ended Q1 with $134M cash and investments and exhausted its $2.5M share buyback authorization, while early rollouts of Porch Insurance in Texas and Home Factors are underway with modest early revenue expected in 2026. Interested in Porch Group, Inc.? Here are five stocks we like better. 4 Recent Earnings Winners Riding Fresh Momentum in May Porch Group (NASDAQ:PRCH) reported what CEO and Founder Matt Ehrlichman called a “strong start to 2026,” with first-quarter results coming in ahead of expectations and prompting the company to raise its full-year outlook for Porch Shareholder Interest revenue, gross profit, and adjusted EBITDA. Ehrlichman said Porch has become “a simpler, higher margin fee and commission-based business” designed to compound premium and cash flow over time while avoiding the earnings volatility typical of risk-bearing insurance carriers. He emphasized that 2026 marks the first year with meaningful year-over-year comparisons for Porch Shareholder Interest results following the January 1, 2025 launch of the reciprocal exchange and related reporting changes. → Homebuilder Earnings: D.R. Horton Sticks Out as Pulte & NVR Sales Tank Porch Group Stock Surges 76% in 2 Days – What’s Next? In the first quarter, Porch reported Porch Shareholder Interest reciprocal written premium (RWP) of $114 million, up 18% year-over-year. Porch Shareholder Interest revenue was $109 million, up 29% year-over-year, and gross profit was $91 million for an 83% gross margin. Adjusted EBITDA was $20 million, representing an 18% margin, according to Ehrlichman. CFO Shawn Tabak said the quarter exceeded expectations across RWP, revenue, gross profit, and adjusted EBITDA. Insurance Services drove the quarter, with Tabak noting that the segment benefited from new customer additions, continued agency expansion, rising quote volumes, and improved quote-to-bind conversion. Insurance Services: $75 million revenue (up 50% year-over-year), $64 million gross profit (85% gross margin), and $27 million adjusted EBITDA (37% margin). Software and Data: $22 million revenue, $17 million gross profit (75% gross margin), and $4.6 million adjusted EBITDA, with results “relatively flat year-over-year” amid “near cyclical trough” housing activity. Consumer Services: $15 million revenue (slightly higher year-over-year), $13 million gross profit (87% gross margin), and approximately breakeven adjusted EBITDA. → Meta Platforms Earnings Preview: What to Watch in Q1 2026 Report Tabak also pointed to a year-over-year margin comparison that was affected by prior reinsurance terms. He said Q1 2025 was the final quarter that benefited from legacy captive reinsurance terms by $16 million, making it a “tough comp.” Management highlighted the insurance “growth engine” as a combination of capacity, top-of-funnel expansion, and improved conversion, alongside what it described as strong underwriting performance. → Palantir Is Down 30%: Noise? Or a Signal to Accumulate? Ehrlichman said statutory surplus—described as the key capacity guidepost—was $165 million in Q1, up 59% or $61 million year-over-year. He said that level of surplus supports “north of $800 million in premiums,” above Porch’s $600 million RWP target for 2026. Including “incremental non-admitted assets of a little north of $100 million,” the reciprocal could support “more than $1.25 billion of premium,” he said. On reinsurance, Ehrlichman said the reciprocal completed an April 1 renewal with “a panel of 40-plus A-rated partners” and would benefit from an “approximately 20% decline in costs for excess of loss reinsurance,” which he attributed to strong underwriting results and improved risk performance. In distribution, producing agency branch locations increased 181% year-over-year in Q1, while quote volumes grew 69% year-over-year and improved sequentially for the sixth straight quarter, Ehrlichman said. On conversion, Ehrlichman said actions beginning in November contributed to a step-up starting in Q4, with year-over-year conversion rates “almost doubled.” He added that premium per new customer declined only 5% year-over-year during the period. COO Matthew Neagle said reciprocal policies written were nearly 48,000 in Q1, up 33% year-over-year. RWP per policy written was $2,386, down year-over-year “largely a function of mix shift, not competition or price,” as new customers represented a larger portion of the total. He reiterated that premium per new customer was down only 5% year-over-year, while new customer RWP was “3 times higher versus the prior year.” During the question-and-answer session, Ehrlichman provided loss ratio detail for the quarter, saying gross loss ratio in Q1 was 24% and attritional loss ratio (excluding catastrophic weather) was 19%. He said the company was among “the top handful” of performers nationally and in Texas and characterized its results as consistent across several years compared with peers that may see more volatility. Ehrlichman also referenced AM Best 2025 annual market share data, stating the reciprocal ranked top quartile nationally and in Texas for combined ratios. He noted that combined ratios include fees paid to Porch as part of reciprocal expenses and pointed to Insurance Services’ 2025 adjusted EBITDA-to-RWP margin of 21% as evidence of the broader margin structure. Tabak said Porch maintained its 2026 target of $600 million in organic RWP, which represents 25% year-over-year growth. However, the company raised its 2026 Porch Shareholder Interest guidance for revenue, gross profit, and adjusted EBITDA based on Insurance Services strength. Revenue: raised to $495 million–$507 million (20% year-over-year growth at the midpoint), up 400 basis points versus prior guidance. Gross profit: raised to $401 million–$413 million (81% gross margin at the midpoint). Adjusted EBITDA: raised to $103 million–$109 million (21% adjusted EBITDA margin at the midpoint). From a modeling standpoint, Tabak said the company continues to assume “trough-like” U.S. housing conditions, with “flattish year-over-year results” expected in Software and Data and Consumer Services. Neagle added that Software and Data is largely priced per transaction and should see average revenue per company rise as transaction volumes recover, while Moving Group within Consumer Services would see a tailwind in transaction count as housing activity improves. Porch ended Q1 with cash plus investments of $134 million, up $13 million from December 31, 2025, Tabak said. Porch Shareholder Interest cash flow from operations was $20 million in the quarter, though Tabak noted cash flow timing is seasonal due to interest payments on notes in the second and fourth quarters. Tabak said the company exhausted its board-authorized share repurchase program in March, repurchasing 334,000 shares for $2.5 million at an average of $7.48 per share, which he described as the maximum amount allowed by the 2028 notes indenture. He added that the 2026 notes have a remaining balance of $7.8 million, which Porch expects to settle at maturity on Sept. 15, 2026 with balance sheet cash. On product, Ehrlichman and Neagle discussed the early rollout of Porch Insurance in Texas. Ehrlichman said Porch Insurance is designed to be “give or take 10% higher” in all-in price than the Homeowners of America product, with added consumer value such as a warranty and moving services, as well as higher commissions for agencies. Neagle said agents have shown “a lot of excitement,” highlighting the warranty attachment, free moving services and a moving concierge, and the “premium commission” structure, while noting the product should ramp over time as the book builds. Neagle also addressed Home Factors, saying Porch is using it internally and sees impact in results. Externally, he said there is an “active and increasing pipeline” of carriers testing the product and seeing ROI, though the company expects contracting and revenue to take time due to testing and procurement cycles. He reiterated expectations for a “modest early-stage revenue contribution in 2026” that should build over time. In closing remarks, Ehrlichman said the company is seeing momentum because “capacity, distribution, conversion are all moving in concert” and reiterated Porch’s goal of scaling rapidly while maintaining underwriting performance. “We’ve built the foundation, and now we scale profitably and fast,” he said. Porch Group, Inc operates a technology-driven home services platform designed to connect homeowners with professional contractors, maintenance providers and home improvement specialists. Through its online marketplace and proprietary software solutions, Porch enables users to research, compare and book services ranging from home repairs and remodeling to maintenance and renovations. The company's platform integrates detailed provider profiles, customer reviews and real-time appointment scheduling to streamline the process of sourcing and managing home projects. In addition to its core marketplace, Porch offers software products tailored for service professionals. The article "Porch Group Q1 Earnings Call Highlights" was originally published by MarketBeat.

Image source: The Motley Fool. Tuesday, August 5, 2025 at 5 p.m. ET Chief Executive Officer — Matthew Ehrlichman Chief Financial Officer — Shawn Tabak Chief Operating Officer — Matthew Neagle Matthew Ehrlichman: John estimated that he's listened to almost 1,000 of those statements in his career. John, we're happy to have you reading it on the other side. Good afternoon, everyone. Thanks for joining us. It continues to be an exceptionally exciting time here at Porch, and I'm thrilled to provide an update on strong results, which exceeded expectations across the board, increased guidance and what's ahead. At the start of 2025, we launched the member-owned Porch Reciprocal Exchange, which is a key milestone for both our company and our shareholders. This transformed Porch into a simpler commission and fee-based model. It's designed to deliver predictable and high-margin financial results for Porch Group shareholders. Our go-forward structure is playing out better than expected and positions Porch to benefit from the massive now over $170 billion U.S. homeowners insurance market, which is attractive customer retention and is expected to grow high single digits annually over the next 10 years. So similar to last quarter, our Q2 financial results were ahead of expectations, straightforward and reflective of a business that we believe is in the early innings of long-term sustainable and high-margin growth. To highlight a few key metrics for Porch shareholder interest. Revenue was $107 million, generated predominantly from $121 million of reciprocal written premium. Q2 gross profit came in at a healthy $89 million, a 431% increase and $72 million improvement over the prior year. We're happy to report that our gross margins remain north of 80%. Q2 adjusted EBITDA of $16 million was led again by the strength in insurance services and was an improvement of $50 million versus the prior year and resulted in a 15% margin. As we've said, adjusted EBITDA is largely expected to translate to cash flow. And in Q2, we realized $15 million of cash flow from operations for Porch shareholders. This caps off a strong first half of 2025, where we generated $42 million of operating cash flow for Porch shareholders of $32 million in adjusted EBITDA. Operationally, we continue to be pleased with the progress made to date and are even more excited about how we're set up for the years ahead. Our agency distribution channel is growing nicely. We've scaled our sales team, are ahead of plan and insurance agencies added and have made good progress with new and existing nationwide partners. Our Home factors data business continues to progress. We're ahead of schedule here with a number of third-party carrier tests underway and are pleased with the ROI metrics that are emerging. While U.S. housing conditions remain difficult, we're pleased with the rate of product innovations in our Software and Consumer Services segments and our ability to align price with value. Bringing us quickly back to our December Investor Day, we talked about the flywheel we designed at Porch. As the reciprocal expands surplus, we're able to grow its premiums faster. As we do so, Porch Group's fees, profits and cash flow growth, and we'd expect the Porch stock price would as well. By structuring the reciprocal such that it holds 18.3 million Porch shares, as the Porch share price increases, so does surplus and capital at the reciprocal and the flywheel continues. This strategy is working. We aren't going to go deep into the reciprocal every quarter, but periodically, we do think it's important to highlight the progress we're seeing and its health. After continued positive underwriting results and strong Q2 net income, the reciprocal ended the second quarter with $299 million of surplus combined with non-admitted assets. The growth here is exceptional. This is an increase of $102 million versus just last quarter and an increase of $259 million better versus Q2 2024. The second quarter is historically the seasonally toughest from an insurance claims and loss standpoint. So to have this level of growth with a more attractive Q3 and in particular, Q4 still ahead is exciting. Let's look deeper at the progress at the reciprocal between the close of Q1 to Q2 and see the amount of potential future value created just in this single quarter by growing surplus to the extent we did. So we ended Q1 with roughly $200 million in surplus combined with non-admitted assets. As a reminder, during our December Investor Day, we outlined the 5:1 premium to surplus ratio as a general rule of thumb. This ratio has, in fact, improved further in our new operating model, but we'll stick with the 5:1 for now. Thus, at the end of Q1, the reciprocal had capital, which could support approximately $1 billion, $1 billion in premium. Sean will present Q2 financials shortly, but you'll see in the second quarter, reciprocal written premium translated to Insurance Services adjusted EBITDA at a 16% conversion. Assuming that framework at $1 billion in premium, the reciprocal had the capital to produce $160 million in insurance services adjusted EBITDA. Now, look at Q2. The reciprocal closed this quarter at approximately now $300 million in surplus combined with non-admitted assets. This lift in capital translates to being able to support another $500 million in reciprocal written premium, so $1.5 billion potential overall at this point. This means that the performance by the reciprocal in this quarter alone is exceptionally value creating, providing the capital to support reciprocal written premium that can generate an additional $80 million of adjusted EBITDA or $240 million overall. We'll continue to be measured in how fast we scale the reciprocals premiums to ensure significant buffer, and we'll manage how fast we expand Porch Group's margins to optimize for long-term shareholder value creation. Finally, before turning it over to the team, I want to reemphasize a point I made last quarter when we outlined why we believe that Porch is set up to be resilient investments across all macro cycles. Homeowners need homeowners insurance. Broadly speaking, it's not an optional purchase. And historically, homeowners insurance premiums have grown throughout economic cycles. We continue to expect that tariffs will not impact our business in any meaningful way. We believe our business is well protected and may even benefit should a recession take hold. And if interest rates come down amidst a slowing economy, it could spark a housing market pickup, which would be attractive for nearly all our businesses, including insurance, given our focus on homebuyers. On the other hand, if inflation picks up, homeowners insurance prices should increase, translating to higher premiums and ports revenue. Okay. I'll now turn it over to Shawn to cover our strong financial results and raised guidance. Shawn Tabak: Thank you, Matt, and good afternoon, everyone. Similar to Matt's overview, my comments will address performance of the porch shareholder interest since generating cash for Porch shareholders is our ultimate goal and how we measure our success. As a reminder, under GAAP, we are consolidating the reciprocal exchange financials, which you can find throughout the press release and our 10-Q. With that background, let's get into our Q2 performance. Q2 2025 porch shareholder interest revenue was $107 million with an 83% gross margin, producing $89.2 million in gross profit. Adjusted EBITDA of $15.6 million was ahead of expectations. The GAAP consolidated results are on the right-hand side of this slide. Overall, we saw another quarter of strong performance in our Insurance Services segment, driving total company results above expectations. And while Software and Data and Consumer Services segments continue to provide strategic advantages that help our insurance business succeed, the financial results of these segments continue to be impacted by a soft housing market. Given the outperformance in Insurance Services, we are increasing our outlook for the year, which I'll cover shortly. The port shareholder interest revenue of $107 million was comprised of Insurance Services at 63%, followed by Software and Data at 22% and the remainder from Consumer Services. We continue to see the year-over-year improvements in gross profit and adjusted EBITDA as the clearest way to understand the increases in our results, and we're pleased with the progress. Q2 Porch shareholder interest gross profit was $89.2 million with an 83% gross margin. This was a $72.4 million increase over the prior year, driven by insurance services. Q2 adjusted EBITDA was $15.6 million, a $50.4 million increase over the prior year, driven by the transition to the high-margin insurance services reciprocal operator business model. Now let's move a little deeper into the segment results and starting with Insurance Services. First, as a reminder, there are a number of ways that Porch's Insurance Services business generates economics. management fees paid by the reciprocal based on a percentage of reciprocal written premium, policy fees paid by the policyholders, non-catastrophic weather quota share reinsurance provided by Porch's captive reinsurer, which is used to improve capital efficiency for the reciprocal, fees paid by third-party agencies when we deliver leads of homebuyers interested in purchasing insurance; and finally, an approximately 15% coupon on a $106 million surplus note Porch Group holds from the reciprocal. From the $121 million of reciprocal written premium, Porch Insurance Services generated revenue of $67.4 million, a 56% premium to revenue conversion rate. Associated gross profit was $57.9 million, a gross margin of 86% Segment adjusted EBITDA was $19.7 million, a margin of 29% and a 16% premium to adjusted EBITDA conversion rate. We continue to be pleased with the transition to the reciprocal and the insurance services business model and how we are performing here. Shifting now to Software and Data. Revenue was $24 million, a 4% increase over the prior year, driven by product innovation and corresponding price increases. We continue to see a sluggish underlying housing market and small businesses in our related markets are also seeing softness. Gross profit was $18.2 million, a 76% gross margin. Adjusted EBITDA was $5.5 million, a $1.5 million increase over the prior year, driven by the revenue increase and effective cost control. Shifting now to Consumer Services. Revenue was $17.7 million, a 6% decrease over the prior year, driven by the closure of our lower-margin corporate relocation moving products in the third quarter of 2024. Gross profit was $15.2 million and 86% gross margin. This was a 640 basis point margin improvement over the prior year, driven by the shift toward higher-margin services. Adjusted EBITDA was $2 million, an $800,000 increase over the prior year, driven by cost discipline. Over the last few years, we have reduced corporate expenses as we move to lower-cost locations and reduced G&A back- office costs. In the second quarter, corporate expenses of $11.5 million decreased $700,000 from the prior year. Moving on to the balance sheet. There are several benefits from the shift towards the commission and fee-based insurance services business model. It's simpler, higher margin and asset-light. And as a reminder, our focus is on generating cash for Porch shareholders, which aligns closely with Porch shareholder interest adjusted EBITDA. Porch cash plus investments was $117 million at June 30, 2025. Port shareholder interest cash flow from operations was $14.9 million in the quarter, driven by the $15.6 million in adjusted EBITDA. In Q2, we made notable progress on our capital structure, settling all but $20.5 million of our 2026 convertible notes. We refinanced $153 million of our 2026 unsecured convertible notes with $134 million in 2030 unsecured convertible notes and cash. Additionally, after the end of the quarter, we repurchased an additional $11.8 million of the remaining 2026 notes at approximately 96% of par, bringing the remaining balance to $8.8 million. All in, we believe that our balance sheet is well positioned for our next stage of growth, and we are on track to reach our leverage goal of 2x to 3x adjusted EBITDA in the medium term. Now for our updated 2025 guidance for Porch shareholder interest. We are pleased with our results in the first half of the year and are raising our guidance across the board. We are increasing our 2025 revenue guidance by $5 million, now ranging from $405 million to $425 million. We are increasing our 2025 gross profit guidance by $7.5 million given the higher margins we are seeing, now ranging from $328 million to $342 million. For adjusted EBITDA, we are raising the midpoint by $2.5 million, now at a tightened range of $65 million to $70 million. And now I'll hand over to Matthew to discuss a strategic update and review our KPIs. Matthew Neagle: Thank you, Shawn. I'll start by giving a brief business update and an overview of the KPIs across shareholder interest, 3 operating segments. We are back on offense in insurance and focused on growing premiums while also growing surplus at the reciprocal. Q2 reciprocal written premium grew 25% over Q1 with tremendous capacity for ongoing growth. We believe we are on track to exceed 2025 target of $500 million. Agencies serve as our main distribution channel. So extending and deepening our partner base is a key focus for us. Since the launch of the reciprocal, we've grown our sales account management headcount from just 2 to 26 employees. The investment has led been ahead of schedule pace for the number of independent insurance agencies we're working with. In the quarter, we announced a handful of notable wins, including a renewed partnership with Goosehead as well as new relationships with Romely, Evertree and MastDrive, among other confidential nationwide partners. In addition, we are expanding geographies again, nearing the launch of a new state in Michigan. And as I touched on last call, most of the ZIP codes across our existing states have been reopened at this stage. Additionally, we'll grow with differentiated product. The new Porch insurance product has been designed to be truly differentiated. Like our HOA product, it will leverage our unique property data to provide pricing advantages. But in addition, we are including other important benefits for homebuyers, in particular, such as a full home warranty and 4 hours of moving service. Moving to the insurance KPIs. Reciprocal written premium in Q2 was $191 million. Reciprocal policies written reflects a total number of new and renewal insurance policies driven by the reciprocal during the period. We generated policy fee revenue directly from these policyholders. In the quarter, we wrote nearly 43,000 policies. RWP per policy written is calculated by dividing the reciprocal written premium by the total number of reciprocal policies written. For the second quarter, we posted RWP per policy written of $2,843, which was a 6% increase versus the prior quarter. We'll periodically update on the reciprocals health, which is clearly strong, given its all-time high of $299 million of surplus combined with non-admitted assets. We ensure the reciprocal is healthy in several ways and that there's adequate surplus in capital to support the scaling of premium for many years ahead. To put a finer point on this, the reciprocal has the statutory surplus to support our premium goals through 2026 even if fixed share price was approximately $2 and no shares were sold. This is as of the end of Q2 and as a reminder, on the historic seasonality of the reciprocals business, Q3 and in particular, Q4 are the most profitable quarters. Second, continued exceptional underwriting. In Q2, the reciprocal's underwriting strength was driven by the combination of our data advantage, effective pricing efforts, strong underwriting and more normal weather. Third, downside protection with reinsurance. As we discussed last earnings call, we finalized our reinsurance renewal on April 1st with a great outcome, continuing partnerships within the panel of more than 40 A-rated reinsurance partners. This renewal improved the retention per weather event to $23 million, which reduces the reciprocal's exposure. As a reminder, if Q2 had included major weather events, Porch Group's adjusted EBITDA still would have been the same $15.6 million as the weather claims are paid by the reciprocal. The reciprocal surplus would absorb the associated weather claims losses up to the retention level. Therefore, if a major weather event has occurred in Q2, the reciprocal still would have had approximately $275 million of surplus combined with non-admitted assets and the ability to support approximately $1.375 billion in premium. So you can see how the reciprocals capacity to write premium remains strong and is protected from large weather amendments. Moving to software and data. Our strategic focus area is for this segment are price increases tied to software innovation, continued market expansion and growth of our data business. On the software front, we continue to innovate with urgency, and I'm pleased with the team's efforts in positioning us well for when the market normalizes. One highlight I wanted to share, in particular, was Rynoh securing 2 impactful wins, including the nation's largest [indiscernible] insurance company with Fidelity National Financial's Escrow Trax as well as another top 5 title insurance company. This continues to demonstrate the scalability of Rynoh's enterprise-grade fraud detection and reconciliation tools. Relative to our data business, we have been highly encouraged but not at all surprised by early stage metrics and proof points we were seeing out of a broad group of insurance carriers testing home factors. As it stands today, we are ahead of plan related to the number of carriers testing Home factors and are pleased with the results today. Companies and other industries are testing as well. And in mid- July, we announced that a regional home improvement brand utilized home factors for a marketing campaign and the results were impressive. In terms of the software and data KPIs in Q2, we served approximately 24,000 companies with annualized revenue per company of $3,974 which rose 9% versus Q1. We continue to believe that the number of companies served likely remain as flash until better housing conditions bring more companies back into the market. The biggest update in Consumer Services is a recent TDI approval to include warranty in 4 hours of moving services. It is a member benefit for Porch insurance customers. Our moving business continues to make progress in a variety of ways, including providing additional products and services that can be utilized by customers. Packing services is one of these new offerings, which has been received well. As for the Consumer Services KPIs in Q2, we had 87,000 monetized services with annualized revenue per monetized service of $202. I'll now pass it back to Matt to wrap it up. Matthew Ehrlichman: Thank you, Matthew. I'll wrap up by reinforcing the most important messages from today. So first, certainly, we delivered quarterly adjusted EBITDA of $16 million in Q2 2025, a $50 million increase year-over-year. Again, this translates to $15 million in Porch shareholder interest cash flow from operations in the quarter and $42 million in the first half of the year. Second, we increased our 2025 adjusted EBITDA guidance midpoint to $67.5 million for the year; third, gross margins, which remained north of 80% with $89 million gross profit, up $72 million year-over-year. Next, we are very pleased with the continued increasing health of the reciprocal, as we discussed. From a capacity standpoint, we are at a record level of surplus and have tremendous room to grow premium and Porch profits. Our flywheel is working and is just getting started. And lastly, we've shifted back to offense as we add agencies, and we're excited about what the future holds for our differentiated Porch insurance offering. All right. Thanks for your time today. We're in the early stages of building a truly great company, and we're glad to have you along for the ride. With that, JR, please go ahead and open up the call for questions. Operator: [Operator Instructions] The first question comes from the line of Daniel Kurnos with The Benchmark Company. Daniel Louis Kurnos: Obviously, another fantastic quarter for you guys. Apologies if I missed this one because my phone cut out for a second. But Shawn, did you address why the take rate in insurance went to almost 56% from 51.5% in the quarter and how we should be thinking about that because that's a pretty big step function. Shawn Tabak: Yes, happy to take that one. I guess, overall -- and Dan, great to -- thanks for the question. Overall, we're continuing to be quite pleased with the model and how it's working out. The reciprocal written premium to your -- the basis of your question is very efficiently transferring into porch shareholder interest revenue and better than we expected there in the quarter. So just pleased with how it's working and continue to not only see the revenue flow through, but importantly, the EBITDA and cash flow also flow through from how that's all working out. Daniel Louis Kurnos: It's a good place to follow up, Shawn. I appreciate the color because Matt, I know you're managing to margin here, like sales and marketing is pretty high in insurance. I'm just kind of curious the areas of investment you're making there. You clearly have plenty of cushion to do whatever you want, but just maybe how to think about that because that also ticked up because you're clearly flexing some internal muscle at the moment? Matthew Ehrlichman: We talked a bit last quarter about making additional investments across our insurance business as well as software and consumer services. We are making investments. I mean we are set up, to your point, and we have room to be able to position ourselves well for growth as we look ahead. We also had mentioned that starting April 1, we shifted the quota share program that our captive reinsurer provides to the reciprocal to also pay a bit higher commission back to the reciprocal, and that shows up in the sales and marketing line as well. And that's another way that we can drive more surplus back into the reciprocal. And Dan, to your question, it's why we're really excited about the results because we were able to generate really strong economics at Porch Group for our shareholders. and really strong growth in surplus at the reciprocal, which allows for more growth as we look ahead. But that's the other driver there. Daniel Louis Kurnos: Got it. And just last for me. I know it's super early since you just got TDI approval. We kind of talked about this last time, but just thinking about attach rates to warranty and moving. I don't think we had contemplated that before. Obviously, it's super smart on the flywheel side. But is there any kind of directional color we should be thinking about in terms of additional growth coming now that you have approval there from those vectors? Matthew Ehrlichman: So we'll share more metrics as we go, obviously. But just strategically, it's a big deal for us because we want to not only have fundamental advantages with the data, the differentiated data that lets us price the insurance products more accurately than the market, -- we not only want to have advantages with the structure and the margins that we're able to create, and we're demonstrating that to your earlier question that we're able to simply generate a lot of value out of our insurance business for our shareholders. But we also want to differentiate with the fundamental product that's in the market. And so now having product, just look ahead, where you can have products in the market that it's not only about just providing insurance, but we can provide full protection for your home that includes warranty coverage for all of the Porch insurance customers, but we can also provide moving service for homebuyers. And we really do want Porch insurance to end up being known as the best insurance product for homebuyers. And so that's a big deal for us just strategically to be able to help just extend the long-term advantages that we're going to have there. Operator: Your next question comes from the line of Jason Helfstein with Oppenheimer. Jason Stuart Helfstein: A few. So maybe talk a little bit more just about how you're thinking about growth versus margin expansion. Obviously, you've seen very strong financial performance this year. And just what's the philosophy, I guess, as we're kind of thinking -- I'm not asking for '26 guidance, but kind of growth versus margin. Question number two, again, revenue is not the best proxy, but you beat Tech Motor revenue, at least beat us by $11 million. You're only raising the full year by $5 million. So just -- is there anything you're seeing in third quarter that's giving you pause or again, revenue is not the best way to typically look at insurance? And then lastly, just any commentary on the weather impacts on 2Q, thanks [indiscernible] if it was actually favorable. Matthew Ehrlichman: Perhaps I'll take the first one. Shawn, why don't you take the second and Matthew perhaps take the third. So real quick, just in terms of philosophy. With the model that we have and the business we have now, Jason, we are set up and very optimistic about our ability to be able to consistently grow at a really nice clip. We talked back in the Investor Day, grow north of 20% annually for an extended period of time. We expect to be able to go and do that as we look ahead while also showing margin expansion each year. You can see our gross margins are more than 80%, but you look at the adjusted EBITDA margins, in our view, there's a lot of room to be able to continue to grow our adjusted EBITDA margins over time. But we do want to manage it. We don't need to max out growth this year or max out adjusted EBITDA margin this year. We want to show nice, consistent sequential improvement for both of those 2 metrics for a long, long, long period of time. And that's how we believe we'll be able to create the most value over time for shareholders. Shawn, do you have to take the second question? Shawn Tabak: Yes. The second question was about Q2 revenue and revenue for the second half of the year implied in our guidance. And I think both are strong is the key takeaway there. Q2 was above our expectations. I know it was more above the -- maybe consensus from the Street's expectations. But from our internal, it was above our expectations. And we also increased guidance for the rest of the year. So actually, we feel really good going into the second half of the year. A lot of the things that Matthew talked about on the growth side and continuing to scale premiums at the reciprocal. That's a key driver. Actually, Dan's question was another one. We're seeing the premium convert to revenue and adjusted EBITDA very strongly in Porch Insurance Services. And then I guess the third thing I would just quickly highlight, I know the question is more on revenue, but we're increasing our adjusted EBITDA midpoint by 2.5%. That's while we're continuing to invest in growth within operating expenses for 2026 and beyond. So as a team, we're quite pleased with the performance and happy to be able to raise guidance across the board today. Matthew Neagle: Sure. I'll take the third one. I think I heard comments on Q2 weather. The first thing I'll say is, overall, the weather felt normalized as we compare to 2024 Q2, but what's also important to just emphasize so that everybody who's on the call is clear, is Porch Group shareholders would not have been directly impacted by the weather in Q2 had it been not more normal weather. And then I'd also reiterate comments from the prepared remarks, which is we've done a lot of work with our reinsurance partners to lower our retention, which is the max amount we would pay if there were a large event, and we've lowered that to $23 million. So even if there would have been a significant event in Q2. It wouldn't have impacted Porch Group directly. And to the extent it would have impacted the reciprocal, we would have had a really strong reinsurance protection. The last thing I would say is we have done a lot of work to get the right risk into our portfolio, leveraging our data. And so that has also contributed to the overall performance in Q2 where we felt like we had a really strong underwriting performance quarter. Matthew Ehrlichman: Let me just tack on one more thing real quick because Jason, you might have also been thinking about Q3 weather just so far. Around the 4th of July weekend, there were flash floods in Texas and just so sad and our hearts go out to the families that were impacted by that. It's just terrible. Related to the business and the reciprocal, the volume of claims was not material at all. It was nominal. And just as a reminder, flood is typically not a covered event in homeowners insurance, and it isn't for us. So there's not exposure to events like that. But anyway, if you were thinking about the Q3 weather earlier in July, it was not -- it's not a material event. Obviously, it's not an event for Porch Group, but it's not an event for the reciprocal either. Operator: Next question comes from the line of Jason Kreyer with Craig-Hallum. Cal Bartyzal: Great. This is Cal on for Jason. So maybe to start, good to hear the update on Home factors, but I'm just kind of curious if you can speak to applications of this data outside of just licensing for underwriting. Just curious the opportunity you're seeing in other industries like media campaigns and there's any difference in the sales cycle with these other industries relative to the more elongated sales cycles when you're working with carriers? Matthew Neagle: Sure. I can speak to it. We are -- we see a lot of interesting use cases for the data. We obviously are using it for our own underwriting. We've talked about home factors within the insurance space to help drive underwriting and pricing. When we look beyond that, it is certainly -- there's certainly potential when it comes reaching homeowners who are going through a real estate transaction and if there are homes that have certain conditions that may indicate certain types of work is likely to be needed such as roofing. And so we are working with potential partners and partners around those use cases. I would say the sales cycle is shorter than in insurance because generally there's a shorter testing period. There's still some sales cycle there, but it's something we are excited about. The last thing that I would say is over time, there's also opportunities for us to use that data to power the consumer experience tied to our Porch app and the Porch insurance value because we can bring in that data and help to educate and engage and empower homeowners with more information about their home. Matthew Ehrlichman: I'm just going to tack on because I think it's an interesting one. I think Matthew hit all the key points, and there's lots of use cases outside of insurance. But with carriers, we are finding more and more opportunities for ways to be able to use the data and create value, obviously, for underwriting, obviously, for pricing upstream to be able to have more accurate pricing. We mentioned during our reinsurance renewal, how we're bringing in the data into our reinsurance submission, was able to lower cost materially. So there's opportunities with reinsurance. Carriers that are out there that are marketing to consumers, if we know which consumers are buying homes and which consumers have low-risk homes, clearly, that's valuable. And then lastly, insurance carriers out there spend a lot of money doing their own kind of reviews of homes post underwriting. And if we have that data and they can be able to speed up that process and be able to be more accurate, obviously, that creates a lot of value. So it's been fun as we have more and more tests going on because it's opening up lots of use cases. And again, like we mentioned in the prepared remarks, the results and the ROI so far have been very, very strong. Cal Bartyzal: Great. I appreciate all the color there. And then maybe lastly for me, you announced some new insurance agency partnerships. Just curious if you can update us on the go-to-market agent reception, any additional distribution strategies you might be pursuing? Matthew Neagle: Sure. We are focused on the agency channel. There's massive untapped opportunity for us in terms of how much we've penetrated and how much is out there. We are investing in growth through the agency channel. We built out a team I mentioned we grew from 2 to just as of now, we're up to 26. We're ahead of pace in the number of agencies. And we're excited about the differentiated value product or value that we can bring with our Porch insurance product. Matt mentioned, we now have a set of member benefits that include a full warranty moving services that's on top of our moving concierge. We're in a position given our economics to pay competitive commissions. And so agents are excited to work with us and grow with us. And I would say we're very early stages, both in our outreach to grow the number of agents and to build those relationships with them so that we're a bigger and bigger part of their business. So excited, early, lots of growth ahead for us. Your next question comes from the line of Randy Binner with B. Riley. Randy Binner: I'm kind of picking up actually on the insurance side on the last question there, if that's okay. The -- I guess I'd just be interested to hear -- you've talked about the go-to-market adding agents and sales and distribution, and that's important. But I'd be interested just to hear if there's certain states or kind of broader geographies where you're seeing more success. I think homeowners rates are up a lot across the country. And so is -- are agents viewing the reciprocal as like a new market that has better pricing? Or is there certain areas where you're coming in and large carriers are going on? Just be interested kind of how the reciprocal is being received and where it's finding success so far. Matthew Ehrlichman: Sure. Yes, there's a couple of things to hit on. I think it's a great question. Thanks for it. So first, just to make sure it's clear, in market, we continue to offer our homeowners insurance product. And then Porch Insurance will be a second product that's in market that will have -- and will have differentiated value propositions. We will continue to expand states. So right now, we're in 20 -- just 22 states, but there's a bunch of states that we are not in that we think are really attractive insurance markets. And so we'll expand both the Homeowners of America product and then eventually, over time, the Porch insurance product as we roll that out across the country. But again, very attractive markets that are out there. Within our existing states, some of them, Texas being one, we have seen other carriers exiting that state or slowing down new business. Obviously, that's great for us. Our underwriting results are very, very strong. And obviously, the fact that we know more about properties when we're pricing policies helps us to be able to have very strong underwriting results. And so for us, it creates a really attractive, I'd say, market dynamic because not only do consumers need our product, but agents need our product as well as they're going out to market. So net -- and I mentioned this a bit earlier on, we do think the homeowners insurance category as a whole is a beautiful place to be playing. It is -- to your point, it is growing, and it's expected to continue to grow really fast. And given that we can play in that market without having to take on the weather volatility on a month- to-month or quarter-to-quarter basis, you allow our business to grow with high margins and just participate in what's ahead for the category. Randy Binner: All right. And then just related, and I apologize if I missed this, but did you talk at all about the loss ratio for the reciprocal in the quarter? I know it doesn't accrued it to Porch shareholders. So just curious in kind of a normal or even better cat quarter for Texas if the -- if you can disclose kind of like how good the losses were in the quarter? Shawn Tabak: They were exceptional is the short answer. The gross loss ratio was 34% in the quarter. That to 117% last year. In Q2, remember, Q2 is usually when the majority of the losses come in because of that -- of the weather. And so tremendous result there. You also saw net income in the quarter for the reciprocal of just under $6 million compared to a loss of around $30 million last year. So just a really great quarter. And then I think that's -- as Matt talked about on the call today, that's what's underpinning that increase in surplus combined with non-admitted assets is a really strong underwriting performance there. Matthew Ehrlichman: Yes. I'll just layer on it. attritional loss ratio as well, something we look at, was again just exceptional. And it just goes to show that we really have fundamental advantages with our ability to price and underwrite, but attritional loss ratio was in the second quarter down to 8%, which is a 1,300 basis point improvement versus the same quarter prior year. So again, just very, very strong results for the reciprocal. Operator: Your next question comes from the line of Timothy Greaves with Loop Capital. Timothy Greaves: I guess I want to ask more about the home factors and the conversion there. I know you said that there's a lot more people testing the product. But what is the timeline on, I guess, adoption? And what is the conversion rate you're seeing in like people testing to adopting the product? Matthew Neagle: Sure. I can hit on that. What we're excited about is the interest and engagement across the broad set of carriers that are of all shapes and sizes. I'll just say that kind of the vibe we get from the carriers is very strong. In terms of the selling cycle, we, I would say, are seeing what we expect. These carriers want to test it. They have certain steps they have to take before they can formally introduce it into their pricing, in their underwriting. All of them remain very engaged. From a financial standpoint, we haven't -- we don't need any revenue from home factors to hit our 2025 targets. And I would say the progress is going well. We don't report on a conversion rate. We have shared kind of what we did with Bamboo. We don't expect to release every single new customer that we get. But I'll just reiterate, there's real interest and real excitement. The team is fired up. The vibes are good, and we're pushing really, really hard. Matthew Ehrlichman: Yes. I would just layer on. I do think that carriers has ever they've gone to the test, really you feel like we're hitting the bull's-eye with the product that we have for them. So I concur. I think that it's set up well as we look ahead. Operator: Your next question comes from the line of Graham Bundy with KBW. Ryan John Tomasello: I'm on for Ryan Tomasello today. First, you've had success taking price across many of your software brands over the last year or so. Going forward, will the approach be more consistent with annual price taking on renewals? Or should we expect your price taking to continue to be lumpy with a more multiyear approach? Matthew Neagle: Well, I'll take that. Our strategy is to continue to price the value. Our strategy is to continue to invest in innovation, continue to bring new features and products to the market. I don't want to say exactly when we'll do price increases, but it's certainly our expectation that we'll be able to have ongoing price increases across our businesses. And the upside to that is a lot of those businesses are driven by transaction volume. in the real estate market. And transaction volume is low, both for new home sales and for refinancings. And as the interest rates come down, our expectation is that, that market will get healthier, will get closer to normal. And then all the good work we've done around innovating on products and raising price will be a nice upside that will essentially drop to the bottom line on those businesses. So that's the strategy we're focused on. Ryan John Tomasello: Okay. Awesome. I appreciate the color there. And then my follow-up, which you all have already touched on slightly, but just in terms of EBITDA margins, you've obviously already told us how you're thinking about the longer-term potential. But over the near term, should we expect the pace of the margin expansion to be relatively consistent? Or do we also need to consider the potential for some opportunistic reinvestment that makes annual margin expansion a bit lumpier? Matthew Ehrlichman: Obviously, we haven't provided 2026 guidance as we look ahead, but I'll just give you generally what we've talked about, which is we do expect to be able to show nice margin expansion while also investing in the business to be able to ensure that we're growing at the clips that we want to grow. So we don't expect it's going to need to be -- the improvement is going to need to be lumpy. We think that we are going to be able to manage the business to be able to create a lot of value for shareholders. And we think, again, like I said before, the combination of really nice growth with margin expansion each year for an extended period of time will produce that. Operator: And it seems that we have no further questions for today. I would now like to turn the call back over to Matt Ehrlichman for closing remarks. Matthew Ehrlichman: I just appreciate folks tuned it in and being with us on this journey. I think you can probably hear it come through, hopefully, but the team is fired up. We're in a good spot. The bids across the company are, I would say, excellent. And we're in the early days of building a really big exciting business. So we'll keep you up to speed as we continue to progress, but I appreciate everybody's time. Have a great rest of the day. Operator: This concludes today's conference call. You may now disconnect. 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Image source: The Motley Fool. Tuesday, April 28, 2026, at 5 p.m. ET Chairman and Chief Executive Officer — Matt Ehrlichman Chief Financial Officer — Shawn Tabak President and Chief Operating Officer — Matthew Neagle Need a quote from a Motley Fool analyst? Email [email protected] Matt Ehrlichman: Thank you, John. Good afternoon, everyone. We are pleased to report a strong start to 2026. Q1 results exceeded expectations, and we're raising our full year guidance for Porch shareholder interest revenue, gross profit and adjusted EBITDA. Porch has been a vas simpler, higher-margin fee and commission-based business, one that's built to compound premium and cash flow over time without the earnings volatility, often associated with risk-bearing insurance carriers. Last year, we proved out the profitability of our business model. 2026 is the first year with tangible year-over-year comparables for Porch shareholder interest results, and we demonstrated significant and sustainable growth, especially in Insurance Services, which delivered 50% year-over-year revenue growth in the quarter. From here, our strategy is straightforward, scale rapidly and with discipline and continue to invest in the differentiated assets that strengthen our moat, our data advantage, our underwriting and pricing capabilities and our differentiated products for consumers. Okay. So for the first quarter, we delivered results for Porch shareholder interest that reflected continued strength in Insurance Services and continued discipline across the business. Specifically, you can see here, reciprocal written premium, or RWP, was $114 million, up 18% year-over-year. Revenue was $109 million, up 29% year-over-year. Q1 gross profit was $91 million, resulting in an 83% gross margin. Q1 adjusted EBITDA was $20 million, an 18% margin. Earlier, I said, we intend to scale rapidly and with discipline. The clearest way to see that is through our insurance growth engine, capacity, top-of-funnel and conversion as well as the latest underwriting results. Over the next 4 slides, you'll see the progress we've made. And importantly, after seeing these drivers in sequence, I think it becomes clear why we're confident in continued RWP growth acceleration. So first, here, capacity. Statutory surplus is the key guidepost and you can see the progress over the last year, growth of 59% and $61 million year-over-year. The takeaway is that the capital foundation is far stronger today and supports our growth plans not just this year but well into the future. Q1 statutory surplus of $165 million supports north of $800 million in premiums, well above our $600 million RWP target for this year. When including incremental non-admitted assets of a little north of $100 million, the reciprocal -- then has the ability to support more than $1.25 billion of premium. The Reciprocal's reinsurance program is in place to protect this capital across cycles. On April 1st, the reciprocal wrapped up a very successful renewal of its reinsurance program. Similar to prior years, this included a panel of 40-plus A-rated partners, offering catastrophic weather protection. We're happy to report that the reciprocal will benefit from an approximately 20% decline in costs for excess of loss reinsurance, driven by strong underwriting results and improved risk performance which further bolsters its surplus and overall margin in the system. To have capacity in place, the next driver is distribution, and this starts with agency growth. Think of this as a land and expand strategy. We're growing our agency footprint and expanding production across our existing partners' locations. That's why we highlight producing agency branch locations. It's a metric we use internally to gauge distribution depth as we expand our reach in existing agencies, this translates to quote volumes. For Q1, you can see here producing agency branch locations increased 181% year-over-year, while quote volumes grew 69% year-over-year and improved on an absolute basis for the sixth straight quarter. All in, the funnel is expanding, and we're increasing the pool of potential new customers. Moving down the funnel, conversion is the lever that turns quote volumes into new customers and premium. The Reciprocal's stellar pricing and underwriting results means we have more margin in the system than other carriers. Given that and our understanding of the elasticity of the conversion rate curve, we can take targeted actions like those we started in November to bring in more low-risk consumers and grow premium at our targeted rates while maintaining the Reciprocal's exceptional underwriting outcomes and profitability. In the chart here, you can see the clear step-up in conversion that began in Q4 following the activation actions. That improvement continued into Q1 and year-over-year conversion rates have almost doubled. Note that we've only seen a 5% year-over-year decline in premium per new customer, while producing these Q1 gains. At the start of 2026, we launched Porch Insurance in Texas. Over time, Porch Insurance will serve as another tailwind for conversion as its product differentiation helps open us up to new segments of consumers. All right. So now the results. And this is probably the most important message today, when capacity top-of-funnel and conversion improved together, it shows up in new customer growth. As this chart shows, RWP, from new customers stepped up meaningfully, approximately tripling year-over-year, which is the clearest proof that the growth engine is working. We're certainly excited about continuing this momentum. We've reached an inflection point for growth. But what's notable is the way we are driving this growth. In Q1, total policies written across new and renewal grew 33% year-over-year, another clear proof point that the growth engine is on track. Matthew will cover this in more detail later in the call. All right. So we just walked through the premium drivers and now -- and how the system is designed to deliver rapid growth, and now we move into the discipline and sustainability side of it, which you can see through the Reciprocal's underwriting results. These charts depict the 2025 AM Best Annual Market Share data. The takeaway is simple. The Reciprocal continues to perform among the best in its peer set, top quartile nationally and in Texas for the combined ratios. Here's what's so exciting about these combined ratios. This includes all of the margin paid via fees to Porch Group as part of the Reciprocal's expenses. In 2025, Porch Insurance Services segment saw a margin of adjusted EBITDA to RWP of 21%. So you can do the math. If you were to reduce the expenses, and thus the combined ratio, by this amount, it truly is exceptional combined ratio results. Putting all this together, our goal is simple. We aim to drive compounded Porch shareholder interest earnings growth while maintaining strong health at The Reciprocal. As we deliver on those two key objectives, we can scale this business rapidly and profitably for decades to come. With that, I'll turn it over to Shawn to cover the financials and guidance. Shawn Tabak: Thank you, Matt. Good afternoon, everyone. I'll start off with a high-level summary of our financials. Overall, we're pleased with our first quarter results. which exceeded expectations across Reciprocal written premium, revenue, gross profit and adjusted EBITDA. We raised our outlook for the year, driven by our Insurance Services segment. Insurance Services delivered strong Q1 results, particularly in RWP, driven by new customer additions. The team continues to add agencies and quotes and we saw higher quote-to-bind conversion rates, as Matt noted. Two quick housekeeping items before we dive deeper into the results. First, as a reminder, we launched the Reciprocal on January 1, 2025, and we updated our segment reporting at that time. As a result, this Q1 2026 represents the first period with tangible year-over-year comps for RWP, as well as port shareholder interest and insurance services financials. And second, related to that, Q1 2025 was the final quarter of the legacy captive reinsurance terms that benefited the prior year quarter by $16 million. So while adjusted EBITDA still grew nicely this quarter, Q1 2025 is our last tough comp. Okay. Similar to Matt's remarks, my comments focus on Porch shareholder interest since generating cash for shareholders remains our ultimate objective. Under GAAP, we consolidate the Reciprocal exchange financials, which are included in the press release and our 10-Q. Q1 2026 Porch shareholder interest revenue was $109 million. Insurance Services contributed 68%, software and data 20% with the remainder from Consumer Services. Associated gross profit was $91 million with an 83% gross margin, driven by Insurance Services 85% gross margin. Adjusted EBITDA was $20 million, ahead of expectations with Insurance Services, delivering a 37% adjusted EBITDA margin. Okay, now let's move a little deeper into the segment results, starting with Insurance Services. Insurance Services revenue was $75 million, growth of 50% over the prior year and exceeding expectations, driven by higher fee-based revenue with higher RWP volume and new customer additions. As Matt highlighted, premium from new customers almost tripled year-over-year, and we saw a 33% increase in total reciprocal policies written. Gross profit was $64 million, delivering a strong 85% gross margin. Adjusted EBITDA was $27 million, or a 37% margin. While we continue to see strong incremental EBITDA margins from revenue growth, particularly the fee revenue that has a relatively fixed cost base, the year-over-year margin decline simply reflects the changes to our captive reinsurance terms that I mentioned. Overall adjusted EBITDA as a percentage of RWP, was 24% in Q1, reflecting a strong margin as we scale RWP, and continued operating leverage in insurance services. On a trailing 12-month basis, adjusted EBITDA as a percentage of RWP, was 20%. Okay, shifting to software and data. As a reminder, most of our Vertical Software businesses charge per transaction. So results do remain tied to U.S. housing activity, which continues to be at near cyclical trough levels. And we do expect tailwinds as housing recovers. In the first quarter of 2026, results were relatively flat year-over-year. Software and data revenue was $22 million. Gross profit was $17 million with a 75% gross margin. Adjusted EBITDA was $4.6 million. Consumer Services also reflects softer housing conditions. Segment revenue was $15 million, increasing slightly over the prior year. Gross profit was $13 million, an 87% gross margin and up 390 basis points year-over-year, driven by mix shift to higher quality revenue. And finally, adjusted EBITDA was approximately breakeven. Moving now to the balance sheet. We ended Q1 with cash plus investments of $134 million, up $13 million from December 31, 2025. Porch shareholder interest cash flow from operations was $20 million in the quarter. As a reminder, cash flow timing is seasonal, we pay interest on our notes in the second and fourth quarters of each year. In March, we exhausted the share repurchase authorized by the Board and repurchased 334,000 shares for $2.5 million or an average of $7.48 per share. And as a reminder, this was the maximum amount allowed by our 2028 notes indenture. Our 2026 notes have a remaining balance of $7.8 million, which we expect to settle at maturity on September 15, 2026, with cash from the balance sheet. Okay. And shifting to our 2026 guidance for Porch shareholder interest. Our 2026 target of $600 million organic RWP represents 25% year-over-year growth. Given the strong start to the year, we are raising our guidance for revenue, gross profit and adjusted EBITDA. We are raising our revenue guidance to a range of $495 million to $507 million, representing 20% year-over-year growth at the midpoint, up 400 basis points versus prior guidance. We are raising our gross profit guidance to a range of $401 million to $413 million, still with an 81% gross margin at the midpoint. We are raising our adjusted EBITDA guidance to a range of $103 million to $109 million, still a 21% adjusted EBITDA margin at the midpoint. From a modeling perspective, we continue to expect trough-like U.S. housing conditions and thus, flattish year-over-year results in Software and Data and Consumer Services, with the guidance increase attributable to strength in insurance services. And I'll now hand over to Matthew to provide a strategic update and the KPI review. Matthew Neagle: Thank you, Shawn. I'll start by giving a brief business update, and then dig into our KPIs. I first want to touch briefly on AI, both how we're using it and why we believe it strengthens rather than threatens our position. Across Porch, AI is meaningfully improving our engineering velocity and our operations. Our engineers are shipping faster and with higher quality, and we are seeing productivity gains that are fundamentally changing how we build software. In customer support, AI is now handling a significant share of initial customer contacts, reducing costs and improving response times. We are seeing real productivity gains across the business. On the disruption question, let me be clear. In insurance, AI does not change the fundamental nature of what we do. Insurance is a balance sheet promise. It is regulated, capital-intensive and requires real financial backing. AI will make underwriting claims and customer interaction more efficient, and we are investing aggressively to lead there, but it does not alter the structure of the industry or eliminate the need for the product. We think we are well positioned here. So why do we think our Vertical Software businesses are well positioned in an AI world? Well, these are systems of records built on decades of real transaction data inside regulated industries where compliance audit trails and security are nonnegotiable. They are the bones of a home purchase or a refinance transaction and are not optional tools. Our customers rely on them deeply, which shows up in high NPS scores, and we wrap meaningful services around the software itself. For inspectors, that includes payment processing, warranties, recall check monitoring and a call center, making us much harder to displace in a stand-alone SaaS product, and we are not standing still. We are investing and innovating faster than we ever have. In our inspection software, we're using AI to improve report quality and speed, defect detection, narrative assistance embedded directly into the workflow inspectors already use. In Rynoh, our title insurance software, we're applying AI to high-stakes workflows like reconciliation, verification and fraud monitoring, where accuracy and auditability are everything. In Floify, our mortgage point-of-sale platform, we're moving towards letting a borrower generate a preapproval letter from their phone in just a few clicks. Lender customers are expressing real excitement and willingness to pay for this as a premium feature. Finally, we believe AI will disproportionately benefit companies with unique data assets like ours. Underlying our entire business is our data platform with proprietary data covering approximately 90% of U.S. residential properties and early insight into 90% of homebuyers each month. Simply put, AI is additive to Porch's long-term position. Let's move to Q1 insurance KPIs. Reciprocal written premium was $114 million, ahead of expectations, and up 18% versus prior year. Reciprocal policies written was nearly 48,000 policies, up 33% year-over-year and continuing the momentum we saw in Q4. RWP per policy written was $2,386. This was down on a year-over-year basis, but I want to be clear on what's driving this. It is largely a function of mix shift, not competition or price. The premium per new customer is always less than premium per renewing customer. As new customer growth has accelerated, they represent a larger share of the mix, which pulls the average down. To put a number on it, premium per new customer was only 5% lower on a year-over-year basis, meaning that we have been able to increase conversion rates without meaningful decreases in price or profitability. In total, when you pair the top-of-funnel strength, with the conversion rate improvements we've put in place, you arrive at a very strong outcome in new customer RWP, which was 3x higher versus the prior year. Moving to Software and Data. The housing market remains challenging, but that's not slowing our pace of innovations. At the start of the new year, we launched Rynoh product hub, the new central home for all Rynoh products and services. In March, Floify released Dynamic Apps 2.0 to allow mortgage teams to tailor borrower applications. We continue to see strong interest in home factors and compelling new data customers, and we'll share more here when we are able to. In terms of Software and Data KPIs. In Q1, we served approximately 22,000 companies with annualized revenue per company of $3,918. As a reminder, as part of our strategy to focus on larger customers, we sunset certain legacy software products that serve very small contractors, which is expected to lead to a few million dollar revenue headwind, but a slight positive effect to segment profitability. For Q1, the wind-down resulted in roughly 1,800 less companies in the quarter, however, as you can see from the 8% year-over-year increase in annualized average revenue per company, there was a fairly limited effect on segment revenue. In Consumer Services, our moving group focus is twofold: drive better monetization per move today and build a scalable demand engine for the next leg of growth. In Q1, moving group's upsell and cross-sell efforts drove a 9% year-over-year increase in average revenue per move. On the demand side, we're investing in exciting new partnerships, direct-to-consumer expansion and the moving Place platform. Like Software and Data, we feel our targeted investments and lean cost structure positions us well for when the housing cycle turns. As for the KPIs, in Q1, we had 69,000 monetized services with annualized revenue per monetized service of $220. I'll now pass it back to Matt to wrap us up. Matt Ehrlichman: Thank you, Matthew. For closing the call, I do want to comment briefly on the macro environment. It's useful to re-anchor on why the homeowners insurance industry remains durable across cycles and why our operating model is built for the long term. First, demand is structurally embedded. The majority of U.S. households have a mortgage where homeowners insurance is required by the lender, regardless of the economy. More broadly, homeowners insurance is carried by nearly 90% of U.S. homes on an annual basis, not surprising, given the home is often a family's largest financial asset. Second, the homeowners insurance premium pool has grown through cycles. You can see on the chart on the left, it makes it clear, and it has natural tailwinds. Inflation tends to scale premiums over time. And if the weather gets worse, it only means the homeowners' insurance industry will grow faster. In the current environment, there's talk of a softening market and competition, but we're really not seeing that in any meaningful way in our Q1 results and strengthening funnel demonstrate that. Third, what's important for Porch is our model. We're able to participate in that growing industry premium pool, while separating Porch's financial results and profitability from weather volatility and risk. And lastly, like Matthew just talked about, we don't see AI disruption risk as it relates to the foundational elements of the insurance industry. Again, insurance is a balance sheet promise, not a workflow while regulation and capital requirements create real moats. We see AI enhancing the advantages for companies with unique data, and we've built our entire business around our data platform. I want to wrap up by briefly reinforcing the most important messages from today. First, we're off to a strong start in 2026. There's no doubt. Second, we've raised our outlook meaningfully for the year. Third, we're seeing momentum because the insurance growth engine is working. Capacity, distribution, conversion are all moving in concert and in the right direction. Overall policy count is growing rapidly as is premium from new customers, and we're accomplishing this while maintaining some of the top underwriting results in the entire homeowners insurance industry. This creates differentiated margins and as a result, a stronger growth engine as we look ahead. Thanks, everybody, for your time today. I just want to thank, in particular, my fellow shareholders for their support and belief in our organization. We can't control market volatility, but we can -- we will control our focus, strategy and execution. In just a little over a year, we've transformed Porch into a simpler high-margin cash-generative business. We've built the foundation, and now we scale profitably and fast. With that, John, please open the call for questions. Operator: [Operator Instructions] Our first question comes from the line of Dan Kurnos with StoneX. Daniel Kurnos: The results obviously speak for themselves, guys. It's a hell of a quarter. I guess the kind of question, I just want to anchor to, Matt, a little bit either Matt or Matthew, is there any thoughts on kind of the RWP guide for the year? Is that a little bit higher now just given the increase in revenue and given what you guys put up in Q1? And to sort of unpack what you guys are talking about, and I appreciate the color on the premium per new policy written. Obviously, we've all been excited for Porch Insurance to kind of get launched into the market. But if your blended policy, premium per policy is down because of mix and Porch Insurance is kind of a higher price point, and obviously, you guys can correct me if I'm wrong on that. Do we think that like the initial start to this year is actually driven by real strength in the legacy products even across agents as you turn them back on and Porch Insurance is then going to be incrementally on top of that, and we should see the premium per policy start to blend up as that comes into the market, or am I thinking about that wrong? Matt Ehrlichman: Yes, I'll just take the second one first. It's a good question. Porch Insurance will make a bigger, bigger impact as we go throughout the year and it is ongoing as we have more and more agencies activated and turned on using it. I do think as you look forward, yes, the Porch Insurance products designed to be, give or take, 10% higher all-up price than the homeowners of America product and that includes a lot more value for the consumer, right? The warranty, the moving services, and then actually higher commission as well for the agencies to have additional incentive. And so -- and as an aside, it does also create more margin. So you're right, as Porch insurance becomes -- just continues really through its journey, and we're very excited about what's ahead there. Yes, I think that can create tailwinds to your question, Dan, on the premium per new policy. Overall, though, obviously, you heard us emphasize it, we are very pleased with the gains in conversion rates, and how we've been able to just drive premium growth without meaningful decreases in the premium per new customer, that's a big deal. And again, it just emphasizes that we're going to be able to continue to grow margin across the system in really attractive ways, second question. On the first one, Shawn, maybe you can take the RWP guide question. Shawn Tabak: Yes. I mean, I'd say a couple of things. First of all, Dan, thanks for the remarks. I'd say a couple of things. One, it's early in the year, so I'll just note that. Two, I'd say we were quite pleased with the funnel performance in the first quarter. I think as we talked about throughout each of the metrics, agents, quotes, conversion, we saw outperformance. And so that gives us confidence. Now we did today, increase the revenue guidance 4 percentage points of growth at the midpoint. So now the revenue guidance is a 20% year-over-year growth. And again, that's all driven by just adding -- continuing to add in new customers and the increased confidence that we see there. And sorry, maybe I'll just leave it there. And... Matt Ehrlichman: Thanks, Dan. Daniel Kurnos: That's fine, Shawn. Thanks. Yes. I appreciate it. And Matt, I think the point I was trying to make is that you guys did this without really Porch Insurance filtering into the market yet. So obviously, stellar results at the start of the year. Operator: Our next question comes from the line of Jason Kreyer with Craig-Hallum Capital Group. Jason Kreyer: And I'll echo congrats on an excellent quarter here. Wondering if you could talk about loss ratios or combined ratio trends for Q1, and just how that compares to historic quarters? Matt Ehrlichman: Yes. I mean, we continue just to perform exceptionally well. Gross loss ratios in Q1 was 24%. Attritional loss ratios, which, as a reminder, for those on the call, is losses not including catastrophic weather. That was 19%. And -- so just exceptional results. Actually, the team have gone looked, we're in the top handful across the country and Texas in terms of top performers as it relates to loss ratios. Actually a little titbit, Jason, that was interesting to us. Some of the areas carries attractive loss ratios, and then we'll have really bad loss ratios the next year as it bounced around with some volatility. We are the only company in the homeowners insurance industry that's been in the top handful each of the last several years. We think that's really telling. Just there's that consistency of having just exceptional loss ratio and attritional loss ratio results. Jason Kreyer: Impressive stuff. When you look at the levers that you can pull, just in terms of price and promotion, agency commission, and stuff like that. I wanted to ask about those levers in terms of existing customers. Any changes to the strategy of the existing customer base and any changes to the trend as far as retention or attrition rates. Matthew Neagle: I can speak to that. We've taken a number of steps across our distribution strategy and our product strategy to position ourselves for growth. And as Matt said in his remarks, we think we have a growth engine built and now it's time to scale. We are still early in building out our distribution when you consider the number of agents that we have and the number of agents that are available. We always have the lever to tweak price to drive up conversion rate. And I do think there is room there when you look at our cost and our margin structure. We haven't had to be that aggressive so far to be able to hit our growth numbers. And then as Dan mentioned earlier, we are excited about what Porch Insurance could do. So in terms of the biggest product strategy, being able to have a premium product in the market that has higher commissions that has the wraparound value of a warranty and moving services and other things to the consumer, we think gives us another lever to drive growth. Matt Ehrlichman: Let me just layer one thing on just to make sure that it landed clearly just on this topic. Fundamentally, what the whole advantage comes down to is that we have more margin across the entire system than other carriers do. And it's because we have unique insights about properties, which allow us to be able to win more low-risk customers and not win higher-risk customers, they're going to have lots of losses. Fundamentally, those insights allow us to create more margin. And you can see that showing up in both the private margins at Porch Group plus how much surplus is growing at the Reciprocal because the margin is the combination of those two things. And that's a big deal because like Matthew just noted, because you have more margin in the system, if we wanted to, we could tweak pricing down, still create tremendous margin and be able to grow conversion rate and premium faster. Right now, we're very pleased with the outputs that we're seeing in terms of premium growth, but it is certainly nice to be in that position and have those controls. Operator: Our next question comes from the line of Jason Helfstein with Oppenheimer. Jason Helfstein: I guess two questions. Just when -- to start with the less exciting one. But -- so like the Reciprocal looks like you burned, I guess, cash flow from operations like about $7 million in the quarter. How do you think about like where that comment potentially shakes out, I guess, annually? And just like broadly, I guess the point is like over time, right? Obviously, you have a cushion, but that should number become positive over time? And then any update on home factors, we kind of haven't really heard you talk about it in a little while. Is it still a business opportunity, or are you more focused on using the data for first-party underwriting? Matt Ehrlichman: Why don't, Shawn, you take the first one, and Matthew, maybe the second? Shawn Tabak: Yes, cash flow timing for the Reciprocal is just seasonal. It's just working capital inflows and outflows. The thing I would point to there is the statutory surplus at the Reciprocal increased $10 million from the end of Q4 to the end of Q1. And that's with the value of the Porch shares coming down. So the operating profit from the Reciprocal was in the mid-teens there in terms of millions of dollars. That's a big deal in Q1 for the Reciprocal. Typically, we're a little -- we're around breakeven in the first quarter. And then obviously, Q2 is when many of the claims come. So to generate incremental statutory surplus in Q1 is a great result for the Reciprocal. It means that the statutory surplus is even stronger to support growth in future years. And so we feel well positioned from that perspective. As a reminder, since I'm talking about the Reciprocal surplus, Q2 is typically when we see most of the weather, just as a reminder, and that results in more claims and put some pressure on statutory. We do expect that, and we plan for it. And if it doesn't come, that's great. But we do diligently plan for it and expect that. Matt Ehrlichman: Ongoing, I'd be more focused on that, the stat surplus and there's lots of cash in the Reciprocal. But really, we are focused on that stat surplus number that Shawn is noting there. Shawn Tabak: Yes, over $300 million of cash and investments at the Reciprocals. So it's definitely cash, I would say. Matthew Neagle: And then on home factors, you pointed out two opportunities for us. One is how we leverage it internally, and then be able to commercialize it externally. Just firstly on internally, we are using it and do see a significant impact, and you're seeing that showing up in our results. And we are bullish on the midterm opportunity. The thing that I would point to that gives us confidence we have a very active and increasing pipeline of carriers, who are in the testing process. And the test results are showing in ROI. And I think what we're seeing, which is what we expected is just that the sales cycle because you have to go through testing and procurement in some of these carriers that it will take time to be able to bring those into a formal contract and revenue. With all that said, we remain optimistic that we can build up a business, tied to home factors. What we've said in the past remains true, which is we do expect modest early-stage revenue contribution in 2026 back on track, and then we expect it to build over time. The last thing that I would just mention is there are faster ways we could go to market, so we could partner with certain providers in the space. We've intentionally chosen not to take that route because we're convicted in the long-term opportunity of being able to go direct, and we want to make sure we maintain kind of control over how the data is distributed in the market. Operator: Our next question comes from the line of Adam Hotchkiss with Goldman Sachs. Adam Hotchkiss: Matt or Shawn, I would love to just go back to price. Matt, I know you took some pricing action, I think, late last year and possibly again in the beginning of this year. Obviously, the conversion rates have improved. Could you maybe parse out for us how much of the conversion rate improvement was things like agency branch location increases in the 181% year-over-year increase that you showed versus the pricing action? And maybe just any learnings from the pricing action itself and in the sort of visibility that gives you to the conversion curve. That would be helpful. Matt Ehrlichman: Yes. I mean the growth in agencies really doesn't impact the conversion rate. I mean, certainly, as you build and deepen your relationships with those agencies, yes, they will lead with you more or -- and so it does have influence, but I would say the largest impact in terms of conversion rate is being able to take certain actions to be able to be more attractive for the right customers. And that's really the key is through our data, and through our insights into where the conversion rate curve is steep, and where are those attractive sets of customers. You can be surgical with being able to increase conversion rate for the right customers that we want and you saw the results, which is -- and we can do that without having meaningful changes in the price per new customer overall. Again, like you highlight, it's a big deal because the system is going to be very, very healthy, very, very profitable, and we doubled conversion rate year-over-year. But yes, those actions that we've taken have been the primary drivers, I would say, tied to conversion rate, but all the work that the distribution team has done with agencies certainly has been a tailwind in health there. Adam Hotchkiss: Okay. Yes, that's really helpful color. And then, Shawn, just on RWP seasonality, I think the $600 million does imply that things do accelerate a bit year-over-year into the last three quarters, sort of what gives you confidence there? And then when we think about just premium seasonality through the last three quarters. Should we expect that curve to look a lot like last year, or any changes that you would expect? I appreciate it. Shawn Tabak: Yes. The seasonality of RWP, some of that is -- a lot of that was driven by when customer homeowners buy their homes and therefore, either buy homeowners insurance or in subsequent years, renew their homeowners insurance. And so obviously, most folks are buying their homes, therefore, owners insurance and renewals in Q2 and in Q3. And then I'd say from there, probably Q4, and then lease them out in Q1, actually. So I guess, seasonally adjusted, this is the lowest quarter Q1 is. What gives us confidence in the ramp is the funnel. We talked about in Q1, we were pleased that really, we exceeded expectations -- our own expectations even throughout each metric in the funnel. So we -- agency additions was really strong, not driving quotes and the conversion. And so all of those things also bolster future quarters, RWP. And so that's the key thing that we saw in Q1. Operator: Our next question comes from the line of Ryan Tomasello with KBW. Unknown Analyst: This is Juan on for Ryan. Congrats again on the print. Thanks for walking through the productivity gains from AI earlier, and how the insurance itself is insulated from AI disruption. But what do you think about that potential top-of-funnel disruption from AI on the insurance side. On the one hand, these tools could affect that great high-intent funnel that you have at closing. But on the other, it also could expand distribution to a broader audience. So do you see Porch is like a net AI beneficiary here? Matt Ehrlichman: So yes, for us, it doesn't really matter where the consumer is buying homeowners insurance. We want to be plugged into those channels. And so if digital agencies or our existing agency partners as they will get integrated into the various AI systems, that's great. We're just one of the options that's there for the consumers and because we have more insights about that consumer's home. If it's a lower-risk consumer, we're going to be a very attractive option for them. And so we are focused on partnering with all of these different great agencies that are out there, having really deep relationships and partnerships with them being a great partner for them in helping these agencies to grow their business. And we believe insurance as a product that is a complex product to buy and that consumers need and want a licensed agent to work with them. And if consumer behavior changes, we're going to be where those consumers are, whether it's digital agencies or other. But being the actual insurance product for us in this role is a great place to be and being an insurance product that has differentiated data and therefore, differentiated pricing is a really great place to be because at the end of the day, insurance -- consumers need insurance, and we're going to be a really good option for them. Unknown Analyst: Got it. Yes, that makes a lot of sense. And are there any changes in your appetite to deploy the excess surplus at the Reciprocal for M&A? Matt Ehrlichman: Perhaps. I mean, we mentioned last quarter that -- actually, we really mentioned several quarters ago that we're turning on the M&A engine and starting to build the pipeline. And so certainly, we're executing against that part of the strategy. We do expect over time that when there is the right opportunity, that we will take advantage of it. Certainly, the capital exists, as we talked about today, at the Reciprocal to be able to execute against the right opportunities. We're excited about that. We're excited about our capabilities to do some really good things there. But we're going to be very disciplined and pragmatic about it and make sure that the first things we do are right down the middle of the fairway. So but yes, I do -- it's certainly an opportunity, and we'll share more when it's the right time. Operator: Our next question comes from the line of Timothy D'Agostino with B. Riley Securities. Timothy D'Agostino: Congrats on the quarter. Do you want to touch back on the rollout of the Porch Insurance product? And you all have provided really helpful commentary. But I guess, at the start of 2Q, so in the sample time line, compared to January when it originally rolled out, could you maybe provide some more color to us on are you seeing more agents interact with it? Are you getting better feedback just overall just color, as we enter the second quarter with this product, what agents are saying and maybe what homeowners you're saying? That would be great color. Matthew Neagle: Sure. We remain excited about the Porch Insurance offering that we just rolled out here a little while ago to agents. And what I would say is, there's a lot of excitement from the agents. We're learning a lot from having the product in market. And we do expect it to ramp over time, both as we get new policies in, and then we get renewal policies there. Some of what agents are excited about, it is the only product in the market that has a warranty attached to it. It is also a product that is designed for home buyers, in that we provide free moving services and a moving concierge. Agents are also excited about the premium commission that we can afford to pay as part of the Porch Insurance product. And so all of that has generated energy and excitement in the industry. And I think it will just take time as we build up our book. The HOA book, we've built up over 15 years now. And so we're going to start building and that has already started to happen. Timothy D'Agostino: Okay. Great. And then I just wanted to turn to software and data and consumer services. I know there was some color about kind of the go-forward plan there. But I guess, when we do start to see an unthawing in the housing market, should we expect like the annualized average revenue per company and revenue per monetized transaction to continue to increase? Just kind of getting a better understanding of how we should think about these KPIs when we get to a point when the housing market starts to unfold a little bit. Matthew Neagle: Sure. The -- so I'll separate from software and data KPIs versus consumer services. The software and data is more closely tied to transaction volumes in the housing market. As Shawn mentioned in the comments, most of those software services are priced on a per-transaction basis. And so we do expect that as housing market activity picks up, you would see an increase in the average revenue per company because each of those -- on average, those companies will do more transactions. We have taken steps over the last couple of years as the market has been slow to position those companies for growth. And so we've invested in innovation. We've invested in pricing. And so we do believe that as the marketing -- or the housing activity picks up, we will see top line growth and that most of that top line growth can flow to the bottom. On the consumer services side, there are some parts of that business that are tied to housing market activity, most notably our moving group. And so you would see some tailwind in moving as housing activity picks up? And we see that in a number of transactions, not necessarily in the revenue per transaction. Operator: Our next question comes from the line of Matt VanVliet with Cantor. Matthew VanVliet: Maybe I wanted to narrow in on the forward trajectory of the metric around agency branch locations. I know that was a big driver over the last several quarters to build that number, but where are we in terms of saturation in your key markets? How much more room does that have to grow as a near-term driver? Matthew Neagle: Yes. So the -- I'll take that, and Matt, you can add on if there's anything there. I would say we're still relatively early. We have invested in building out the distribution team. It's only been fairly recently that we've been at kind of the full capacity as we've built up that team. We've also invested in senior leadership there. And we can foresee several years of runway with the team that we have. Some of that is still in our core market of Texas, but there's a lot of room in the geographies outside Texas. And then you also have to think that over time, we can expand into additional geographies beyond the ones where we are today. And so I don't see any near-term constraints on our ability to grow agent distribution. Matt Ehrlichman: I'm going to just delve down on the last point to make sure it stuck, which is Texas, our largest most mature market, still has a long way to go, like we have just a fraction of the total agencies. The other states that are newer as very early in the number of agencies versus the total. And then like Matthew just talked about, there's lots of other states we want to expand into. And we're getting to that point where we can start to be able to reopen more states, and that will be an exciting time, certainly for us because that just opens up big new pools of opportunities. But there's give or take, almost 40,000, I think it is independent agents. And so there's a lot of opportunity out there. Matthew VanVliet: All right. Very helpful. And you drove very nice growth in the conversion rates, and it sounds like that was a big driver in the quarter, but you mentioned to one of the questions earlier that you really haven't necessarily used some of the levers you have there to drive maybe even greater quote, and then conversion rates. So what would you want to see in the market? What would you want to hear from maybe the agents to start using that lever a little bit more aggressively, whether that's through commission rates or just pure pricing or policies? Curious on what you're watching and when or if that might be a greater lever to pull? Matt Ehrlichman: Yes. I mean, I think, the key thing there -- it's a really good question. The key thing there is that we and just personally me, I just want to do this for a long, long time. This is the last thing I'm going to do. And so to your question, it's a good one. Could we grow much, much faster this year? Yes. I mean there's plenty of capital, there's plenty of quote volume, plenty of margin in the system. We could grow much faster this year. But we really want to be able to stack year after year after year after year of really attractive growth, expanding margins each year at Porch Group for shareholders, and then also continuing to grow statutory surplus. And so for us to be able to grow like we are, while also growing statutory surplus and seeing the margin expansion that we're going to be demonstrating here this year, that combination, we believe, if you just stack those years, it becomes really, really valuable here over time, and we'll just prove through the results, that we're able to go and deliver that. But for us, we think that turns into a really exceptional and very sustainable outcome over time. And so that's really what we're trying to solve to. Yes, we could grow much faster. Yes, there may be opportunities in the market where we would pull that lever harder. But right now, I mean, you can see we're certainly pleased with kind of the type of growth. Without really having to move the price per new customer that much and be able to get the kind of results that we are. Operator: And at this time, we have no further questions. That concludes our Q&A session. I will now turn the call back over to Matt Ehrlichman, for closing remarks. Matt Ehrlichman: I'll just say I appreciate first of all the questions. Thank you all. I appreciate those that are along in this journey with us. This is an exciting time for the company. The feel of the company is fantastic. The energy is great. I do think the teams are executing really well and are excited about where we're going. It's clear to us these next several years are going to be really fun years, and I appreciate those that are with us on that ride. Have a great day, everybody. Talk to you soon. Operator: This concludes today's conference call. You may now disconnect your lines. Have a pleasant day. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Porch (PRCH) Q1 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Revenue: $109 million, up 29% year over year. Gross Profit: $91 million, resulting in an 83% gross margin. Adjusted EBITDA: $20 million, an 18% margin. Reciprocal Written Premium (RWP): $114 million, up 18% year over year. Insurance Services Revenue: $75 million, growth of 50% over the prior year. Statutory Surplus: $165 million, supporting over $800 million in premiums. Cash and Investments: $134 million, up $13 million from December 31, 2025. Software & Data Revenue: $22 million, with a 75% gross margin. Consumer Services Revenue: $15 million, with an 87% gross margin. Annualized Revenue per Company (Software & Data): $3,918. Annualized Revenue per Monetized Service (Consumer Services): $220. 2026 Revenue Guidance: Raised to $495 million to $507 million, representing 20% year-over-year growth at the midpoint. 2026 Gross Profit Guidance: Raised to $401 million to $413 million, with an 81% gross margin at the midpoint. 2026 Adjusted EBITDA Guidance: Raised to $103 million to $109 million, with a 21% adjusted EBITDA margin at the midpoint. Warning! GuruFocus has detected 6 Warning Signs with PRCH. Is PRCH fairly valued? Test your thesis with our free DCF calculator. Release Date: April 28, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Porch Group Inc (NASDAQ:PRCH) reported a strong start to 2026, exceeding expectations in Q1 results and raising full-year guidance for revenue, gross profit, and adjusted EBITDA. Insurance Services segment delivered 50% year-over-year revenue growth, showcasing significant and sustainable growth. The company achieved an 83% gross margin in Q1, with a gross profit of $91 million, indicating strong profitability. Porch Group Inc (NASDAQ:PRCH) has a robust capital foundation with a Q1 statutory surplus of $165 million, supporting over $800 million in premiums. The company is leveraging AI to improve engineering velocity and operations, enhancing productivity and efficiency across the business. The housing market remains challenging, impacting the Software & Data and Consumer Services segments, which are tied to US housing activity. Q1 2025 had a $16 million benefit from legacy captive reinsurance terms, creating a tough comparison for Q1 2026 adjusted EBITDA growth. The premium per policy written decreased due to a mix shift, although it was not driven by competition or price reductions. The company faces a seasonal cash flow timing issue, with Q2 typically seeing more claims due to weather, which could pressure statutory surplus. The sales cycle for commercializing Home Factors data is lengthy, requiring testing and procurement processes with carriers, delaying revenue realization. Q: Is there any update on the Reciprocal Written Premium (RWP) guidance for the year given the strong Q1 results? A: Matt Ehrlichman, CEO, explained that Porch Insurance will have a growing impact as the year progresses, potentially increasing the premium per new policy. Shawn Tabak, CFO, noted that while it's early in the year, the strong funnel performance in Q1 gives confidence. They raised revenue guidance by 4 percentage points, now expecting 20% year-over-year growth. Q: Can you discuss the loss ratios or combined ratio trends for Q1 and how they compare to historic quarters? A: Matt Ehrlichman, CEO, stated that the gross loss ratio was 24% and the attritional loss ratio was 19%, which are exceptional results. Porch Group has consistently been among the top performers in the industry for loss ratios, maintaining stability over several years. Q: How are you leveraging AI in your operations, and do you see any disruption risk from AI in the insurance industry? A: Matthew Neagle, COO, explained that AI is improving engineering velocity and customer support efficiency. AI does not change the fundamental nature of insurance, which requires financial backing and regulation. Porch is using AI to enhance underwriting and customer interactions but sees no disruption risk to the core insurance model. Q: What is the status of the Porch Insurance product rollout, and what feedback are you receiving from agents and homeowners? A: Matthew Neagle, COO, reported excitement from agents about the Porch Insurance product, which includes unique features like a warranty and moving services. The product offers higher commissions, generating positive feedback and energy in the market. The rollout is expected to ramp up over time. Q: How do you view the potential for M&A using the excess surplus at the Reciprocal? A: Matt Ehrlichman, CEO, mentioned that they are building an M&A pipeline and are prepared to execute when the right opportunities arise. They have the capital to support growth through acquisitions but will approach it with discipline and pragmatism. For the complete transcript of the earnings call, please refer to the full earnings call transcript.