Porch Group Inc.

04/28/2026 | Press release | Distributed by Public on 04/28/2026 15:05

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Statements
This quarterly report on Form 10-Q (this "Quarterly Report") and the documents incorporated herein by reference contain 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 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;
•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;
•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 subsequent reports filed with the Securities and Exchange Commission ("SEC"), 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 Quarterly Report on Form 10-Q.
You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q 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 Quarterly Report on Form 10-Q. 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.
Business Overview
Porch Group, Inc., together with its consolidated subsidiaries, ("Porch," the "Company," "we," "our," "us") is a new kind of homeowners insurance company-one designed to stand out in a massive and growing market. Our strategy is built on three differentiators that set us apart.
1.Advantaged Underwriting Through Proprietary Data
Leveraging unique property insights, we can assess risk with greater precision, enabling competitive pricing for low-risk customers and avoiding high-risk customers, while delivering superior underwriting performance.
2.Best Services for Homebuyers
We are committed to being the go-to partner during one of life's most significant transitions-buying a home-by offering services that simplify moving and home setup.
3.More Protection
We combine homeowners insurance with home warranty, filling coverage gaps and reducing unexpected costs for consumers.
Beyond insurance, Porch is a leader in the home software-as-a-service ("SaaS") space, serving approximately 22 thousand companies across industries essential to the home-buying process-home inspectors, title companies, mortgage providers, and more. Our deep relationships and proprietary data give us unique visibility into approximately 90% of U.S. homebuyers and approximately 90% of U.S. homes, enabling superior risk assessment and competitive pricing.
Our mission is to be the best homeowners insurance partner for homebuyers, offering more than just coverage. Through the Porch app, we provide a full moving concierge service, helping customers with moving logistics and essential home services like security, TV/Internet setup, and more.
Finally, we deliver greater home protection by pairing homeowners insurance with full home warranty, additional coverages, and appliance recall monitoring. This approach fills coverage gaps, reduces unexpected costs, and strengthens our value proposition-creating deeper, lasting relationships with our customers.
We utilize artificial intelligence ("AI") and machine learning tools to support and enhance certain operational activities and platform workflows across our businesses, with an emphasis on improving productivity and reducing errors while maintaining appropriate governance and regulatory compliance. For purposes of this document, AI refers to a category of technologies that enable systems to learn from data, identify patterns, automate processes, or augment human decision-making. AI may improve efficiency and accuracy in certain workflows across our software suite and insurance operations (for example, assisting with inspection report quality and speed in our home inspection business; supporting reconciliation, verification, and fraud monitoring in our real estate title and settlement software business; and enhancing insurance pricing, underwriting, claims handling, and customer service workflows). The use of these tools is subject to internal policies designed to address data security, confidentiality, and appropriate use, and outputs are reviewed by employees and are not relied upon as the sole basis for decisions where human judgment is required. Management oversees the evaluation and use of AI tools as part of our broader risk management and information security processes. We continue to evaluate the
appropriate scope of our AI use and related governance as these technologies and applicable regulations evolve. While we believe responsible use of AI may create opportunities for improved efficiency and scalability over time, the development and implementation of these technologies involve risks and uncertainties, including data privacy, cybersecurity, regulatory compliance, model accuracy, and reliance on third-party systems. See 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.
Segments
We operate under four reportable segments that are also our operating segments. Three of these segments are owned by Porch - Insurance Services, Software & Data, and Consumer Services. We collectively call these three segments, along with corporate functions, the "Porch Shareholder Interest." The fourth segment, the Reciprocal Segment, is managed, but not owned, by Porch and, at this time, is consolidated for reporting purposes as described in the basis of presentation section in Note 1 of the unaudited Notes to Condensed Consolidated Financial Statements.
Insurance Services - Our Insurance Services segment manages and operates the Reciprocal, providing services related, but not limited, to underwriting, policy renewal, risk management, insurance portfolio management, financial management, and setting investment guidelines in exchange for commissions and fees. The Insurance Services segment also holds the surplus notes issued by the Reciprocal and includes our captive reinsurer which provides reinsurance support to improve capital efficiency for the Reciprocal. Our captive reinsurer only provides reinsurance coverage for risks with low earnings volatility, such as non-catastrophic weather quota share.
Software & Data - Our Software & Data segment provides, on a subscription and predominantly transactional basis, software to inspection, mortgage, title, and roofing companies and data products to insurance and other types of companies. This segment includes several strategically important businesses, including home inspection software, title and mortgage software, Home Factors (our unique property insights product), and mover marketing products.
Consumer Services - Our Consumer Services segment provides warranty products through Porch Warranty and other warranty brands to protect the whole home. Our Consumer Services segment also provides moving-related services such as movers, TV/Internet, and security.
Reciprocal Segment - The Reciprocal Segment includes HOA and its parent, Porch Reciprocal Exchange, which is a member-owned reciprocal exchange, owned by policyholder members rather than Porch. The Reciprocal Segment provides consumers with insurance to protect their homes, earning revenue primarily through premiums collected on policies.
Relationship with Reciprocal
Porch manages and operates the Reciprocal for its subscribers, providing services related, but not limited, to underwriting, policy renewal, risk management, insurance portfolio management, financial management, and setting investment guidelines. The Reciprocal is a subscriber-owned reciprocal insurance exchange organized under the Texas Insurance Code under which individuals, partnerships, and corporations are authorized to exchange reciprocal or inter-insurance contracts with each other, or with individuals, partnerships, and corporations of other states and countries, providing indemnity among themselves from any loss which may be insured against under any provision of the insurance laws. In exchange for these services, Porch receives policy fees from policyholders and ongoing commissions from the Reciprocal.
Porch Shareholder Interest is, in large part, tied to the growth and financial condition of the Reciprocal. If any events occurred that impaired the Reciprocal's ability to grow or sustain its financial condition, including but not limited to reduced financial strength ratings, disruption in the independent agency relationships, significant catastrophe losses, or products not meeting customer demands, the Reciprocal could find it more difficult to retain its existing business and attract new business. A decline in the business of the Reciprocal almost certainly could have as a consequence a decline in the total premiums paid and a correspondingly adverse effect on the amount of the management fees received by our Insurance Services segment.
Basis of Presentation
The financial information herein should be read in conjunction with the consolidated financial statements for the year ended December 31, 2025, contained in our Annual Report on Form 10-K for the year ended December 31, 2025, and the unaudited Condensed Consolidated Financial Statements included in Item 1 of this Quarterly Report. Unless otherwise noted herein, all numbers are in thousands, except per share amounts.
Recent Developments
Porch Insurance
In January 2026, the Reciprocal launched Porch Insurance, a new homeowners insurance offering that expands upon the historical HOA insurance product. While the HOA product is primarily designed to provide standard coverage, Porch Insurance is structured as a more comprehensive home protection solution that combines expanded insurance coverage with a membership-based model. The new Porch Insurance product includes broader protections intended to address common household incidents that can result in unexpected out-of-pocket expenses and is designed to support faster recovery from everyday losses.
In addition to enhanced coverage, Porch Insurance includes membership benefits that extend value beyond traditional insurance by providing ongoing support related to homeownership, including maintenance, repairs, and life events such as product recalls and moving. These benefits are designed to complement the insurance coverage and are fulfilled through other Porch service offerings. Together, the combination of expanded coverage and service-based benefits differentiates Porch Insurance from the legacy HOA product and aligns with our strategy to deliver a more integrated home services experience.
As Porch Insurance grows, this new product may provide opportunities to grow Reciprocal Written Premium ("RWP", see Key Performance Measures and Operating Metrics section for definition), which indirectly affects the Insurance Services segment's results through commissions and fees earned by Porch. Porch Insurance is designed to support faster premium growth by improving conversion through a differentiated product offering and pricing for good risks, alongside continued expansion in agencies and quote volume that drives the top of the funnel.
Results of Operations
Key Factors Affecting Operating Results
The following key factors affected our operating results in the three months ended March 31, 2026:
•Top-of-funnel momentum continued in our insurance business with the number of producing third-party agency branch locations increasing by 181% and quote volumes rising by 69% from the same quarter last year. Activation translated into outcomes as the higher quote volume and stronger conversion drove 196% year-over-year growth in RWP from new customers.
•Reciprocal Policies Written grew 33% year-over-year.
•In Software and Data, we implemented a price increase in our title insurance software.
•In Consumer Services, our warranty business experienced lower claims expense compared to the same period last year.
•Statutory surplus at the Reciprocal rose to $164.6 million as of March 31, 2026, an increase of $9.5 million from December 31, 2025. Capacity continues to build, supporting our ability to scale premiums while maintaining a healthy Reciprocal with $268.8 million of surplus combined with non-admitted assets as of March 31, 2026.
Three Months Ended March 31, 2026, compared to the Three Months Ended March 31, 2025
Consolidated Quarter-to-Date Results
Three Months Ended March 31,
2026 2025 $ Change % Change
(dollar amounts in thousands)
Revenue $ 121,123 $ 104,745 $ 16,378 16 %
Cost of revenue 30,275 39,297 (9,022) (23) %
Gross Profit 90,848 65,448 25,400 39 %
Operating expenses:
Selling and marketing 40,064 29,516 10,548 36 %
Product and technology 13,031 13,201 (170) (1) %
General and administrative 25,938 23,997 1,941 8 %
Total operating expenses 79,033 66,714 12,319 18 %
Operating income (loss) 11,815 (1,266) 13,081 (1,033) %
Other income (expense):
Interest expense (14,606) (11,246) (3,360) 30 %
Change in fair value of private warrant liability - (732) 732 (100) %
Change in fair value of derivatives 1,767 6,673 (4,906) (74) %
Investment income and realized gains and losses, net of investment expenses 3,398 2,810 588 21 %
Other income, net 1,367 8,400 (7,033) (84) %
Total other income (expense) (8,074) 5,905 (13,979) (237) %
Income before income taxes 3,741 4,639 (898) (19) %
Income tax expense (1,805) (903) (902) 100 %
Net income 1,936 3,736 (1,800) (48) %
Less: Net income (loss) attributable to the Reciprocal 6,649 (4,659) 11,308 (243) %
Net income (loss) attributable to Porch $ (4,713) $ 8,395 $ (13,108) (156) %
Net income $ 1,936 $ 3,736 $ (1,800) (48) %
Net loss (income) attributable to the Reciprocal (6,652) 4,659 (11,311) (243) %
Interest expense 14,602 11,195 3,407 30 %
Income tax expense 37 14 23 164 %
Depreciation and amortization 4,115 5,024 (909) (18) %
Other income, net (17) (7,162) 7,145 (100) %
Stock-based compensation expense 7,283 4,910 2,373 48 %
Mark-to-market gains (1,780) (5,969) 4,189 (70) %
Other 178 454 (276) (61) %
Adjusted EBITDA (1) $ 19,702 $ 16,861 $ 2,841 17 %
Adjusted EBITDA Margin
(1) 18 % 20 %
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(1)Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by Porch Shareholder Interest Revenue. Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP measures. See Non-GAAP Financial Measures section for definitions.
Revenue. Total consolidated revenue including the Reciprocal increased by $16.4 million, or 16%, from $104.7 million in the three months ended March 31, 2025, to $121.1 million in the three months ended March 31, 2026. The increase in revenue resulted from more Reciprocal Policies Written, partially offset by a slight reduction in RWP per Policy Written. See Key Performance Measures and Operating Metrics for definition of Reciprocal Policies Written and RWP per Policy Written metrics. Revenue related to the Porch Shareholder Interest was $109.4 million in the three months ended March 31, 2026, as detailed in the following table.
Cost of revenue. Total consolidated cost of revenue including the Reciprocal decreased by $9.0 million, or 23%, from $39.3 million in the three months ended March 31, 2025, to $30.3 million in the three months ended March 31, 2026. The decrease was primarily the result of lower direct losses in the Reciprocal Segment. As a percentage of revenue, cost of revenue represented 25% of revenue in the three months ended March 31, 2026, compared with 38% in the three months ended March 31, 2025. Cost of revenue related to Porch Shareholder Interest was $18.3 million in the three months ended March 31, 2026, as detailed in the table below. Porch Shareholder Interest Cost of Revenue is a non-GAAP measure. See Non-GAAP Financial Measures section for definition.
Selling and marketing. Total consolidated selling and marketing expenses including the Reciprocal increased by $10.5 million, or 36%, from $29.5 million in the three months ended March 31, 2025, to $40.1 million in the three months ended March 31, 2026. The increase is primarily driven by higher commission rates to third-party insurance agencies. As a percentage of revenue, selling and marketing expenses represented 33% of revenue in the three months ended March 31, 2026, compared with 28% in the three months ended March 31, 2025. Selling and marketing expense related to Porch Shareholder Interest was $52.5 million in the three months ended March 31, 2026, as detailed in the table below. Porch Shareholder Interest selling and marketing expense is greater than the consolidated amount because it includes fees and expenses related to reinsurance contracts with the Reciprocal, which are eliminated during the consolidation process. Porch Shareholder Interest Selling and Marketing is a non-GAAP measure. See Non-GAAP Financial Measures section for definition.
Interest expense. Interest expense increased by $3.4 million, or 30%, from $11.2 million in the three months ended March 31, 2025, to $14.6 million in the three months ended March 31, 2026. The increase was primarily driven by the May 2025 exchange of our 0.75% 2026 Notes for newly issued 9.00% 2030 Notes. The higher coupon rate associated with the 2030 Notes contributed to the overall increase in interest expense during the period. The following table details the components of interest expense on the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss):
Three Months Ended March 31,
2026 2025 $ Change
Contractual interest expense $ 8,655 $ 5,951 $ 2,704
Amortization of debt issuance costs and discount 6,214 5,372 842
Capitalized interest and other (263) (77) (186)
Total interest expense $ 14,606 $ 11,246 $ 3,360
Change in fair value of derivatives. The gain recognized for the change in fair value of derivatives decreased in the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The fair value of derivatives is driven by various factors, including the fair value of the underlying debt, stock price, and assumptions regarding timing of possible repurchase events. See Note 6 in the unaudited Notes to Condensed Consolidated Financial Statements. The change in fair value of derivatives relates entirely to Porch Shareholder Interest.
Other income, net. Total consolidated other income, net, including the Reciprocal, decreased by $7.0 million from $8.4 million in the three months ended March 31, 2025, to $1.4 million in the three months ended March 31, 2026. The decrease is primarily due to non-recurring recovery on reinsurance contracts that occurred in the three months ended March 31, 2025. Other income, net, related to Porch Shareholder Interest was $4.9 million in the three months ended March 31, 2026. Porch Shareholder Interest other income, net, is greater than the consolidated amount because it includes interest income on surplus notes with the Reciprocal, which is eliminated during the consolidation process. Porch Shareholder Interest Other Income is a non-GAAP measure. See Non-GAAP Financial Measures section for definition.
Income tax expense. Income tax provision of $1.8 million and income tax provision of $0.9 million were recognized for the three months ended March 31, 2026 and 2025, respectively, and the effective tax rates for these periods were 48.2% and 19.5%, respectively. The difference between our effective tax rates for the three months ended March 31, 2026 and 2025, and the U.S. statutory rate of 21% was primarily attributable to the impact of a full valuation allowance on our net deferred tax assets. Our consolidated effective tax rate increased for the three months ended March 31, 2026, compared to the same
period in the prior year primarily due to a change in the mix of income between the Reciprocal and Porch, which are treated as separate reporting entities for income tax accounting purposes.
Adjusted EBITDA. Adjusted EBITDA (Loss) for the three months ended March 31, 2026, was $19.7 million, a $2.8 million improvement from Adjusted EBITDA (Loss) of $16.9 million for the same period in 2025. The year-over year improvement in Adjusted EBITDA (Loss) was primarily due to an increase in fee revenue associated with increases in RWP and Reciprocal Policies Written, increased reinsurance premiums from increased ceding from the Reciprocal Segment with the new reinsurance programs beginning on April 1, 2025, and strong cost control across the business including lower legal and accounting professional fees. These increases were offset by a increase in selling and marketing expense resulting from higher commission rates and increased ceding from the Reciprocal Segment following updates to its reinsurance program on April 1, 2025. Adjusted EBITDA (Loss) is a non-GAAP measure. See Non-GAAP Financial Measures section for definition.
The following tables summarize operating results of the four segments as well as corporate expenses and eliminations.
Three Months Ended March 31, 2026
Insurance Services Software & Data Consumer Services Corporate
Eliminations (1)
Porch Shareholder Interest Subtotal (2)
Reciprocal Segment
Eliminations Related to Reciprocal Segment (3)
Consolidated
Revenue $ 74,671 $ 21,932 $ 15,141 $ - $ (2,306) $ 109,438 $ 51,283 $ (39,598) $ 121,123
Cost of revenue 10,887 5,404 1,972 - - 18,263 14,985 (2,973) 30,275
Gross Profit 63,784 16,528 13,169 - (2,306) 91,175 36,298 (36,625) 90,848
Gross Margin 85 % 75 % 87 % - % 100 % 83 % 71 % 92 % 75 %
Less: Operating expenses:
Selling and marketing 35,664 8,565 10,252 370 (2,306) 52,545 7,069 (19,550) 40,064
Product and technology 2,754 4,747 626 4,139 - 12,266 765 - 13,031
General and administrative 4,425 1,837 3,620 14,040 - 23,922 19,088 (17,072) 25,938
Operating income (loss) (18,549) - 2,442 9,376 (3) 11,815
Other expense (income) (5,468) (3) (86) 12,675 - 7,118 956 - 8,074
Income (loss) before income taxes (31,224) - (4,676) 8,420 (3) 3,741
Income tax expense (37) - (37) (1,768) - (1,805)
Net income (loss) $ (31,261) $ - $ (4,713) $ 6,652 $ (3) 1,936
Less: Net income attributable to the Reciprocal 6,649
Net loss attributable to Porch $ (4,713)
Adjusted EBITDA (Loss) Reconciliation:
Net income (loss) $ (31,261) $ (4,713) $ 1,936
Less Reconciling items:
Net income attributable to the Reciprocal - 6,649
Depreciation and amortization (109) (2,529) (851) (626) - (4,115) (4,115)
Stock-based compensation expense (977) (541) (408) (5,357) - (7,283) (7,283)
Interest expense - - - (14,602) - (14,602) (14,602)
Income tax expense - - - (37) - (37) (37)
Mark-to-market gains - - 13 1,767 - 1,780 1,780
Other gains and losses 4 (116) 9 (55) - (158) (158)
Adjusted EBITDA (Loss) (4)
$ 27,491 $ 4,568 $ (6) $ (12,351) $ 19,702 $ 19,702
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(1)The "Eliminations" column represents eliminations of transactions between the Insurance Services segment, Software & Data segment, Consumer Services segment, and Corporate column.
(2)The "Porch Shareholder Interest Subtotal" column includes non-GAAP measures that are used by management to evaluate performance. Porch Shareholder Interest includes the Insurance Services, Software & Data, and Consumer Services segments as well as Corporate expenses and applicable intercompany eliminations. See Non-GAAP Financial Measures section.
(3)The "Eliminations Related to Reciprocal Segment" column represents eliminations of transactions between the Reciprocal Segment and other segments or Corporate.
(4)Adjusted EBITDA (Loss) is a non-GAAP measure. See Non-GAAP Financial Measures section for definition.
Three Months Ended March 31, 2025
Insurance Services Software & Data Consumer Services Corporate
Eliminations (1)
Porch Shareholder Interest Subtotal (2)
Reciprocal Segment
Eliminations Related to Reciprocal Segment (3)
Consolidated
Revenue $ 49,806 $ 21,999 $ 14,721 $ - $ (1,980) $ 84,546 $ 39,938 $ (19,739) $ 104,745
Cost of revenue 7,481 5,506 2,490 - (5) 15,472 26,249 (2,424) 39,297
Gross Profit 42,325 16,493 12,231 - (1,975) 69,074 13,689 (17,315) 65,448
Gross Margin 85 % 75 % 83 % - % 100 % 82 % 34 % 88 % 62 %
Less: Operating expenses:
Selling and marketing 15,527 9,169 9,798 408 (1,975) 32,927 7,411 (10,822) 29,516
Product and technology 2,451 4,288 1,131 4,196 - 12,066 1,135 - 13,201
General and administrative 4,377 2,508 3,301 12,701 - 22,887 7,603 (6,493) 23,997
Operating income (loss) (17,305) - 1,194 (2,460) - (1,266)
Other expense (income) (4,994) (9) (93) (2,119) - (7,215) 1,310 - (5,905)
Income (loss) before income taxes (15,186) - 8,409 (3,770) - 4,639
Income tax expense (14) - (14) (889) - (903)
Net income (loss) $ (15,200) $ - $ 8,395 $ (4,659) $ - $ 3,736
Adjusted EBITDA (Loss) Reconciliation:
Net income (loss) $ (15,200) $ 8,395 $ 3,736
Less: Reconciling items:
Net loss attributable to the Reciprocal - (4,659)
Depreciation and amortization (91) (3,479) (885) (569) - (5,024) - - (5,024)
Stock-based compensation expense (679) (556) (388) (3,287) - (4,910) - - (4,910)
Interest expense - (2) - (11,193) - (11,195) - - (11,195)
Income tax expense - - - (14) - (14) - - (14)
Mark-to-market gains - - 28 5,941 - 5,969 - - 5,969
Recoveries of losses on reinsurance contracts - - - 7,100 - 7,100 - - 7,100
Other gains and losses (75) 3 9 (329) - (392) - - (392)
Adjusted EBITDA (Loss) (4)
$ 25,809 $ 4,571 $ (670) $ (12,849) $ 16,861 $ 16,861
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(1)The "Eliminations" column represents eliminations of transactions between the Insurance Services segment, Software & Data segment, Consumer Services segment, and Corporate column.
(2)The "Porch Shareholder Interest Subtotal" column includes non-GAAP measures that are used by management to evaluate performance. Porch Shareholder Interest includes the Insurance Services, Software & Data, and Consumer Services segments as well as Corporate expenses and applicable intercompany eliminations. See Non-GAAP Financial Measures section.
(3)The "Eliminations Related to Reciprocal Segment" column represents eliminations of transactions between the Reciprocal Segment and other segments or Corporate.
(4)Adjusted EBITDA (Loss) is a non-GAAP measure. See Non-GAAP Financial Measures section for definition.
Porch Shareholder Interest Quarter-to-Date Results (Non-GAAP)
Porch shareholders own three segments: Insurance Services, Software & Data, and Consumer Services. Together, these segments-offset by corporate expenses-comprise what we refer to as the "Porch Shareholder Interest." These segments contribute to Net Income Attributable to Porch and are what is expected to generate cash for Porch shareholders. Comparative period amounts in the following table include only the Insurance Services, Software & Data, and Consumer Services segments as well as corporate expenses. Certain amounts presented in the following table are non-GAAP measures and are reconciled to the nearest GAAP measure in the earlier "Consolidated Quarter-to-Date Results" section.
Three Months Ended March 31,
2026 2025 Change
Porch Shareholder Interest Revenue (1) $ 109,438 $ 84,546 $ 24,892
Porch Shareholder Interest Gross Profit (1) 91,175 69,074 22,101
Adjusted EBITDA (1) 19,702 16,861 2,841
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(1)Porch Shareholder Interest Revenue, Gross Profit, and Adjusted EBITDA (Loss) are non-GAAP measures. For the three months ended March 31, 2026, Porch Shareholder Interest Adjusted EBITDA (Loss) is equivalent to total Adjusted EBITDA (Loss) for consolidated Porch, as Porch no longer owns HOA following its sale to the Reciprocal on January 1, 2025. See Non-GAAP Financial Measures section.
For the three months ended March 31, 2026, revenue for Porch Shareholder Interest increased $24.9 million when compared to the prior year period. The increase was primarily due to an increase in fee revenue associated with increases in RWP and Reciprocal Policies Written. In addition, we had increased revenue due to an increase in ceding from the Reciprocal Segment with the new reinsurance programs beginning on April 1, 2025. Porch Shareholder Interest Revenue is a non-GAAP measure. See Non-GAAP Financial Measures section for definition
Porch Shareholder Interest Gross Profit improved by $22.1 million for the three months ended March 31, 2026, when compared to the prior year period. The increase in gross profit was primarily driven by the increase in revenue and was slightly offset by increased ceding activity with the Reciprocal segment following updates to its reinsurance program on April 1, 2025. Porch Shareholder Interest Gross Profit is a non-GAAP measure. See Non-GAAP Financial Measures section for definition.
Porch Shareholder Interest Adjusted EBITDA (Loss) improved by $2.8 million for the three months ended March 31, 2026, compared to the prior year period. The increase was primarily due to increased Adjusted EBITDA in our Insurance Services segment and strong cost control across the business including lower legal and accounting professional fees. The following sections provide more discussion of individual segment results. Porch Shareholder Interest Adjusted EBITDA (Loss) is a non-GAAP measure. See Non-GAAP Financial Measures section for definition.
INSURANCE SERVICES
Three Months Ended March 31,
2026 2025 Change % Change
Revenue $ 74,671 $ 49,806 $ 24,865 50 %
Gross Profit $ 63,784 $ 42,325 $ 21,459 51 %
Gross Margin 85 % 85 %
Adjusted EBITDA (1) $ 27,491 $ 25,809 $ 1,682 7 %
Adjusted EBITDA Margin (1) 37 % 52 %
RWP (in millions) (2) $ 114.5 $ 96.9 $ 17.6 18 %
Reciprocal Policies Written (in thousands) (2) 48.0 36.1 11.9 33 %
RWP per Policy Written (unrounded) (2) $ 2,386 $ 2,683 $ (297) (11) %
Adjusted EBITDA % of RWP (1) 24 % 27 %
______________________________________
(1)Insurance Services Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted EBITDA % of RWP are non-GAAP measures. See Non-GAAP Financial Measures section.
(2)See Key Performance Measures and Operating Metrics for definitions of metrics.
For the three months ended March 31, 2026, Insurance Services segment revenue increased by $24.9 million, or 50%, to $74.7 million compared to $49.8 million for the three months ended March 31, 2025. Our Insurance Services segment generates revenue in several ways: management fees based on a percentage of RWP, policy fees based on the number of Reciprocal Policies Written, captive reinsurance premiums, and lead fees from third-party insurance agencies. The 50% increase in Insurance Services segment revenue was primarily due to an increase in fee revenue associated with the 18% increase in RWP and the 33% increase in Reciprocal Policies Written, driven by an increase in the number of agencies and improved conversion rates from quotes to written policies for new policyholders. In addition, we had increased revenue due to an increase in ceding from the Reciprocal Segment with the new reinsurance programs beginning on April 1, 2025.
For the three months ended March 31, 2026, Insurance Services segment gross profit was $63.8 million. For the three months ended March 31, 2025, Insurance Services segment gross profit was $42.3 million. The increase in gross profit resulted from the $24.9 million increase in revenue as described above. Higher revenue was slightly offset by an increase in cost of revenue due to an increase in ceding activity with the Reciprocal segment following updates to its reinsurance program on April 1, 2025.
Insurance Services Adjusted EBITDA was $27.5 million in the first quarter of 2026, which increased slightly compared to prior year due to the $21.5 million increase in gross profit. This increase was partially offset by a $20.1 million increase in selling and marketing expense resulting from higher commission rates and increased ceding from the Reciprocal Segment following updates to its reinsurance program on April 1,2025. The increase in commissions is reflected in selling and marketing expense in the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).
Insurance Services Adjusted EBITDA Margin decreased to 37% for the three months ended March 31, 2026, due the increase in revenue outpacing the increase in Adjusted EBITDA.
SOFTWARE & DATA
Three Months Ended March 31,
2026 2025 Change
Revenue $ 21,932 $ 21,999 $ (67)
Gross Profit $ 16,528 $ 16,493 $ 35
Gross Margin 75 % 75 %
Adjusted EBITDA (1) $ 4,568 $ 4,571 $ (3)
Adjusted EBITDA Margin 21 % 21 %
Average Number of Companies (in thousands) (2) 22.4 24.1 (1.8)
Annualized Average Revenue per Company (unrounded) (2) $ 3,918 $ 3,644 $ 274
______________________________________
(1)Software & Data Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP measures. See Non-GAAP Financial Measures section.
(2)See Key Performance Measures and Operating Metrics for definitions of metrics. In 2025, metrics are presented on a segment-level basis.
For the three months ended March 31, 2026, Software & Data segment results were relatively stable, with revenue, gross profit, gross margin, Adjusted EBITDA, and Adjusted EBITDA margin all remaining consistent when compared to the three months ended March 31, 2025. Average Number of Companies decreased slightly compared to the same period last year. This slight decrease was expected as we focus our strategy on more profitable products. However, this decrease was offset by an increase in Annualized Average Revenue per Company due to price increases on our title insurance software.
CONSUMER SERVICES
Three Months Ended March 31,
2026 2025 Change
Revenue $ 15,141 $ 14,721 $ 420
Gross Profit $ 13,169 $ 12,231 $ 938
Gross Margin 87 % 83 %
Adjusted EBITDA Loss (1) $ (6) $ (670) $ 664
Adjusted EBITDA Loss Margin - % (5) %
Monetized Services (in thousands) (2) 68.7 71.0 (2.4)
Average Revenue per Monetized Service (unrounded) (2) $ 220 $ 207 $ 13
______________________________________
(1)Consumer Services Adjusted EBITDA Loss and Adjusted EBITDA Loss Margin are non-GAAP measures. See Non-GAAP Financial Measures section.
(2)See Key Performance Measures and Operating Metrics for definitions of metrics. In 2025, metrics are presented on a segment-level basis.
For the three months ended March 31, 2026, Consumer Services segment revenue was relatively stable when compared to the three months ended March 31, 2025. Average Revenue per Monetized Service increased, reflecting our strategic focus on higher value services, which led to a decrease in the number of Monetized Services while maintaining stable revenue year-over-year.There was a slight increase in Average Revenue per Monetized Service, particularly in our warranty businesses. This increase was partially offset by a decrease in the number of Monetized Services which was expected as we focus our strategy on more profitable services.
Consumer Services segment gross profit improved by $0.9 million due to a decrease in warranty claims expense. The stable revenue and improved gross profit resulted in an increase in Consumer Services gross margin from 83% for the three months ended March 31, 2025, to 87% for the three months ended March 31, 2026.
Consumer Services Adjusted EBITDA Loss improved by $0.7 million for the three months ended March 31, 2026, when compared to the three months ended March 31, 2025. The improvement was primarily driven by a decrease in expense for warranty claims offset by increased consumer marketing costs in our warranty businesses.
Consumer Services Adjusted EBITDA Loss Margin improved for the three months ended March 31, 2026, primarily driven by a decrease in expense for warranty claims. This decrease in cost led to a increase of Adjusted EBITDA while revenue remained relatively stable, leading to higher Adjusted EBITDA Loss Margin.
CORPORATE
Three Months Ended March 31,
2026 2025 Change
Selling and marketing $ 370 $ 408 $ (38)
Product and technology 4,139 4,196 $ (57)
General and administrative 14,040 12,701 $ 1,339
Other (6,198) (4,456) $ (1,742)
Adjusted EBITDA Loss (1) $ 12,351 $ 12,849 $ (498)
______________________________________
(1)Adjusted EBITDA Loss is a non-GAAP measure. See Non-GAAP Financial Measures section for definition.
Corporate expenses slightly decreased for the three months ended March 31, 2026, compared to the same period for 2025. The decrease was primarily due to strong cost control across the business including lower legal and accounting professional fees partially offset by increased payroll costs due to organizational realignment and consolidation of headcount from operating segments into Corporate.
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 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.
Liquidity and Capital Resources
As a publicly traded company, we have relied on convertible debt as our primary source of capital. As of March 31, 2026, we had $475.1 million of aggregate principal amount outstanding in convertible notes.
Based on our current operating and growth plan, management believes cash and cash equivalents and liquid investments at March 31, 2026, are sufficient to finance our operations, planned capital expenditures, working capital requirements, and debt service obligations for at least the next 12 months. As our operations evolve and we continue our growth strategy, including through acquisitions, we may elect or need to obtain alternative sources of capital, and we may finance additional liquidity needs in the future through one or more equity or debt financings. We may not be able to obtain equity or additional debt financing in the future when needed or, if available, the terms may not be satisfactory to us or could be dilutive to our stockholders.
We may, at any time and from time to time, seek to retire or purchase our outstanding debt or equity through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions, or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.
We incurred net losses historically, resulting in an accumulated deficit of $655.5 million at March 31, 2026, and $648.3 million at December 31, 2025.
Porch Group, Inc. is a holding company that transacts the majority of its business through operating subsidiaries, including subsidiaries that are involved in providing reinsurance and management services for the Reciprocal which is an insurance carrier. Consequently, our ability to pay dividends and expenses is largely dependent on dividends or other distributions from our subsidiaries. The insurance industry is highly regulated, and insurance businesses are restricted by statute as to the amount of dividends they may pay without the prior approval of regulatory authorities.
Liquidity and Capital Resources of Porch Shareholder Interest
The following table provides the components of cash and cash equivalents, restricted cash and cash equivalents, and investments of Porch Shareholder Interest.
March 31, 2026 December 31, 2025
Cash and cash equivalents of Porch Shareholder Interest $ 64,202 $ 44,676
Short-term investments of Porch Shareholder Interest 4,215 12,616
Long-term investments of Porch Shareholder Interest 57,597 55,412
Unrestricted cash, cash equivalents, and investments of Porch Shareholder Interest
126,014 112,704
Restricted cash and cash equivalents of Porch Shareholder Interest 8,060 8,503
All cash, cash equivalents, investments, and restricted cash and cash equivalents of Porch Shareholder Interest
$ 134,074 $ 121,207
2026 Convertible Senior Unsecured Notes
As of March 31, 2026, the outstanding principal was $7.8 million on our 0.75% Convertible Senior Unsecured Notes due on September 15, 2026 (the "2026 Notes"). We may redeem for cash all or any portion of the 2026 Notes, at our option, if the last reported sale price of the common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide a notice of
redemption, at a redemption price equal to 100% of the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the 2026 Notes. The 2026 Notes are convertible at an initial conversion rate of 39.9956 shares of common stock per one thousand dollars principal amount of 2026 Notes, which is equivalent to an initial conversion price of approximately $25.00 per share of common stock (the "2026 Note Conversion Rate"). The 2026 Note Conversion Rate is subject to customary adjustments for certain events as described in the indenture governing the 2026 Notes. We may settle the conversion option obligation with cash, shares of our common stock, or any combination of cash and shares of our common stock. Holders of the 2026 Notes may convert the 2026 Notes at their option (in whole or in part) on or after June 15, 2026, until the close of business on the second trading day immediately preceding the maturity date of September 15, 2026. In addition, holders of the 2026 Notes may convert the 2026 Notes at their option (in whole or in part) at any time prior to the close of business on the business day immediately preceding June 15, 2026, only under certain circumstances described in our Annual Report for the year ended December 31, 2025.
2028 Convertible Senior Secured Notes
As of March 31, 2026, the outstanding principal was $333.3 million on our 6.75% Convertible Senior Secured Notes due in 2028 (the "2028 Notes"). The 2028 Notes are convertible into cash, shares of common stock, or a combination of cash and shares of common stock at our election at an initial conversion rate of 39.9956 shares of common stock per one thousand dollars principal amount of the 2028 Notes, which is equivalent to an initial conversion price of approximately $25.00 per share. The 2028 Notes will mature on October 1, 2028, unless earlier repurchased, redeemed or converted. Prior to the close of business on the business day immediately preceding July 1, 2028, the 2028 Notes will be convertible at the option of the holders only upon the satisfaction of certain conditions and during certain periods. Thereafter, until the close of business on the second scheduled trading day immediately preceding the maturity date, the 2028 Notes will be convertible at the option of the holders at any time regardless of these conditions.
2030 Convertible Senior Unsecured Notes
As of March 31, 2026, the outstanding principal was $134.0 million on our 9.00% Convertible Senior Unsecured Notes due in 2030 ("2030 Notes"). The 2030 Notes are convertible in cash, shares of common stock, or a combination of cash and shares of common stock at our election at an initial conversion rate of 63.6333 shares of common stock per one thousand dollars principal amount of the 2030 Notes, which is equivalent to an initial conversion price of $15.72 per share (the "2030 Note Conversion Rate"). The 2030 Note Conversion Rate is subject to customary adjustments for certain events as described in the indenture governing the 2030 Notes.
The 2030 Notes will mature on May 15, 2030, unless earlier repurchased, redeemed, or converted. Holders of the 2030 Notes may convert the 2030 Notes at their option (in whole or in part) on or after February 15, 2030, until the close of business on the second trading day immediately preceding the maturity date of May 15, 2030. In addition, holders of the 2030 Notes may convert the 2030 Notes at their option (in whole or in part) at any time prior to the close of business on the business day immediately preceding February 15, 2030, only under certain circumstances described in our Annual Report for the year ended December 31, 2025.
Liquidity and Capital Resources of the Reciprocal (Consolidated VIE)
The following table provides the components of cash and cash equivalents, restricted cash and cash equivalents, and investments of the Reciprocal.
March 31, 2026 December 31, 2025
Cash and cash equivalents of the Reciprocal $ 106,524 $ 115,373
Short-term investments of the Reciprocal 9,483 7,664
Long-term investments of the Reciprocal (1) 171,399 172,978
287,406 296,015
Restricted cash and cash equivalents of the Reciprocal (2) 570 559
$ 287,976 $ 296,574
______________________________________
(1)Excludes 18.3 million shares of common stock held by the Reciprocal.
(2)See Note 1 in the unaudited Notes to Condensed Consolidated Financial Statements for a description of the nature of restrictions.
As of March 31, 2026, the Reciprocal had $164.6 million in total statutory surplus and $268.8 million in total statutory surplus combined with non-admitted assets. Insurance companies in the United States are required by state law to maintain a minimum level of policyholder's surplus. Insurance regulators in the states in which the Reciprocal operates have a risk-based capital standard designed to identify property and casualty insurers, or reinsurers, that may be inadequately capitalized based on inherent risks of the insurer's assets and liabilities and its mix of net written premium. Insurers falling below a calculated threshold may be subject to varying degrees of regulatory action. See Note 12 in the unaudited Notes to Condensed Consolidated Financial Statements for a description of our reinsurance programs.
Cash Flow Information
The following table provides a summary of consolidated cash flow information for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31,
2026 2025 $ Change % Change
Net cash provided by (used in) operating activities $ 13,022 $ (11,178) $ 24,200 (216) %
Net cash used in investing activities (390) (19,368) 18,978 (98) %
Net cash used in financing activities (2,387) (229) (2,158) 942 %
Change in cash, cash equivalents and restricted cash and cash equivalents $ 10,245 $ (30,775) $ 41,020 (133) %
Operating Cash Flows
Net cash provided by operating activities was $13.0 million for the three months ended March 31, 2026. Net cash provided by operating activities was primarily driven by cash received for policies fees and an 18% increase in Reciprocal Written Premium.
Net cash used in operating activities was $11.2 million for the three months ended March 31, 2025. Net cash used in operating activities was primarily driven by and timing changes in working capital, particularly ceded insurance premiums payable as settlement terms with reinsurance partners changed from quarterly to monthly.
Investing Cash Flows
Net cash used in investing activities was $0.4 million for the three months ended March 31, 2026. Net cash used in investing activities is primarily related to purchases of investments of $30.1 million and investments in developing internal-use software of $3.6 million, partially offset by proceeds from maturities and sales of investments of $33.4 million.
Net cash used in investing activities was $19.4 million for the three months ended March 31, 2025. Net cash used in investing activities was primarily related to purchases of investments of $40.9 million and investments in developing internal-use software of $3.3 million, offset by proceeds from maturities and sales of investments of $24.9 million.
Financing Cash Flows
Net cash used in financing activities was $2.4 million for the three months ended March 31, 2026. Net cash used in financing activities primarily relates to $2.5 million of common share repurchases.
Net cash used in financing activities was $0.2 million for the three months ended March 31, 2025. Net cash used in financing activities was primarily related to payment of a promissory note of $0.2 million.
Supplemental Cash Flow Information
The following tables provide further detail of cash flows of Porch and cash flows of the Reciprocal Segment for the three months ended March 31, 2026, and 2025.
Three Months Ended March 31, 2026 Consolidated Reciprocal Segment Eliminations
Porch Shareholder Interest (1)
Net cash provided by (used in) operating activities $ 13,022 $ (6,825) $ - $ 19,847
Cash flows from investing activities:
Purchases of property and equipment and capitalized software development costs (3,731) - - (3,731)
Maturities, sales, (purchases) of investments, net 3,341 (2,019) - 5,360
Net cash provided by (used in) investing activities (390) (2,019) - 1,629
Cash flows from financing activities:
Repurchase of stock (2,511) - - (2,511)
Other financing activities 124 6 - 118
Net cash provided by (used in) financing activities (2,387) 6 - (2,393)
Net change in cash and cash equivalents & restricted cash and cash equivalents 10,245 (8,838) - 19,083
Cash and cash equivalents & restricted cash and cash equivalents, beginning of period 169,111 115,932 - 53,179
Cash and cash equivalents & restricted cash and cash equivalents, end of period $ 179,356 $ 107,094 $ - $ 72,262
Supplemental disclosures
Income tax refunds received (tax paid) (8,259) (8,450) - 191
Three Months Ended March 31, 2025 Consolidated Reciprocal Segment Eliminations
Porch Shareholder Interest (1)
Net cash provided by (used in) operating activities $ (11,178) $ (38,357) $ - $ 27,179
Cash flows from investing activities:
Purchases of property and equipment and capitalized software development costs (3,346) (6) - (3,340)
Maturities, sales, (purchases) of investments, net (16,022) (754) - (15,268)
Issuance of surplus note to Reciprocal - - 46,813 (46,813)
Sale of HOA to the Reciprocal - (46,813) - 46,813
Net cash provided by (used in) investing activities (19,368) (47,573) 46,813 (18,608)
Cash flows from financing activities:
Proceeds from surplus note with Porch - 46,813 (46,813) -
Repayments of principal (150) - - (150)
Other financing activities (79) - - (79)
Net cash provided by (used in) financing activities (229) 46,813 (46,813) (229)
Net change in cash and cash equivalents & restricted cash and cash equivalents (30,775) (39,117) - 8,342
Cash and cash equivalents & restricted cash and cash equivalents, beginning of period 196,782 122,012 - 74,770
Cash and cash equivalents & restricted cash and cash equivalents, end of period $ 166,007 $ 82,895 $ - $ 83,112
______________________________________
(1)Porch Shareholder Interest net cash provided by (used in) operating, investing, and financing activities are non-GAAP measures. See Non-GAAP Financial Measures section. This table reconciles these non-GAAP measures to the nearest GAAP measures in the "Consolidated" column.
Non-GAAP Financial Measures
This Quarterly Report includes non-GAAP financial measures, such as Adjusted EBITDA (Loss), Adjusted EBITDA (Loss) Margin, and certain amounts related to Porch Shareholder Interest.
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.
Adjusted EBITDA (Loss)
We define Adjusted EBITDA (Loss) 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; 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. Adjusted EBITDA (Loss) Margin is defined as Adjusted EBITDA (Loss) divided by revenue. Adjusted EBITDA % of RWP is defined as Insurance Services Adjusted EBITDA divided by RWP.
The following table reconciles Net income to Adjusted EBITDA and Net income (loss) as a percentage of Porch Shareholder Interest Revenue to Adjusted EBITDA (Loss) Margin.
Three Months Ended March 31,
2026 2025
Amount Margin Amount Margin
Net income $ 1,936 2% $ 3,736 4%
Net loss (income) attributable to the Reciprocal (6,649) (6)% 4,659 6%
Interest expense 14,602 13% 11,195 13%
Income tax provision 37 -% 14 -%
Depreciation and amortization 4,115 4% 5,024 6%
Other income, net (17) -% (7,162) (8)%
Stock-based compensation expense 7,283 7% 4,910 6%
Mark-to-market gains (1,780) (2)% (5,969) (7)%
Other 175 -% 454 1%
Adjusted EBITDA $ 19,702 18% $ 16,861 20%
Porch Shareholder Interest Revenue $ 109,438 100% $ 84,546 100%
Our segment operating and financial performance measures are Gross Profit and Adjusted EBITDA (Loss) for the Insurance Services, Software & Data, and Consumer Services segments. Adjusted EBITDA (Loss) 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 (Loss) 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 (Loss) Margin for each segment is defined as Adjusted EBITDA (Loss) for the segment divided by the segment's revenue. Adjusted EBITDA % of RWP is defined as Insurance Services Adjusted EBITDA divided by RWP.
We believe that presenting Adjusted EBITDA % of RWP provides useful information to investors by illustrating the profitability and operating efficiency of the Insurance Services segment relative to insurance premium volume. Because the Insurance Services segment earns economics primarily through fees, commissions, and ceding arrangements rather than underwriting risk, management uses this measure to facilitate evaluation of unit economics, scalability, and comparability across periods.
The following table reconciles Gross Profit to Adjusted EBITDA, Gross Margin to Adjusted EBITDA Margin, and Gross Profit as a percentage of RWP to Adjusted EBITDA % of RWP for the Insurance Services segment.
Three Months Ended March 31,
2026 2025
INSURANCE SERVICES Amount Margin
As a % of RWP
Amount Margin
As a % of RWP
Gross Profit $ 63,784 85 % 56% $ 42,325 85 % 44 %
Selling and marketing (35,664) (48) % (31)% (15,527) (31) % (16) %
Product and technology (2,754) (4) % (2)% (2,451) (5) % (3) %
General and administrative (4,425) (6) % (4)% (4,377) (9) % (5) %
Other income (expense) 5,468 7 % 5% 4,994 10 % 5 %
Add: Reconciling items:
Depreciation and amortization 109 - % -% 91 - % - %
Stock-based compensation expense 977 1 % 1% 679 1 % 1 %
Other gains and losses (4) - % -% 75 - % - %
Adjusted EBITDA $ 27,491 37 % 24% $ 25,809 52 % 27 %
Revenue $ 74,671 100 % $ 49,806 100 %
Reciprocal Written Premium $ 114,488 100 % $ 96,900 100 %
The following table reconciles Gross Profit to Adjusted EBITDA and Gross Margin to Adjusted EBITDA Margin for the Software & Data segment.
Three Months Ended March 31,
2026 2025
SOFTWARE & DATA Amount Margin Amount Margin
Gross Profit $ 16,528 75 % $ 16,493 75 %
Selling and marketing (8,565) (39) % (9,169) (42) %
Product and technology (4,747) (22) % (4,288) (19) %
General and administrative (1,837) (8) % (2,508) (11) %
Other income (expense) 3 - % 9 - %
Add: Reconciling items:
Depreciation and amortization 2,529 12 % 3,479 16 %
Stock-based compensation expense 541 2 % 556 3 %
Interest expense - - % 2 - %
Other gains and losses 116 1 % (3) - %
Adjusted EBITDA $ 4,568 21 % $ 4,571 21 %
Revenue $ 21,932 100 % $ 21,999 100 %
The following tables reconcile Gross Profit to Adjusted EBITDA and Gross Margin to Adjusted EBITDA Margin for the Consumer Services segment.
Three Months Ended March 31,
2026 2025
CONSUMER SERVICES Amount Margin Amount Margin
Gross Profit $ 13,169 87 % $ 12,231 83 %
Selling and marketing (10,252) (68) % (9,798) (67) %
Product and technology (626) (4) % (1,131) (8) %
General and administrative (3,620) (24) % (3,301) (22) %
Other income (expense) 86 1 % 93 1 %
Add: Reconciling items:
Depreciation and amortization 851 6 % 885 6 %
Stock-based compensation expense 408 3 % 388 3 %
Mark-to-market gains (losses) (13) - % (28) - %
Other gains and losses (9) - % (9) - %
Adjusted EBITDA (Loss) $ (6) - % $ (670) (5) %
Revenue $ 15,141 100 % $ 14,721 100 %
The impact of corporate expenses on Adjusted EBITDA (Loss) is also a non-GAAP financial measure. Reconciliations of these non-GAAP financial measures to the nearest GAAP measure are included in the Consolidated Results sections.
Porch Shareholder Interest
Certain amounts related to Porch Shareholder Interest are non-GAAP financial measures. We define Porch Shareholder Interest as the Insurance Services, Software & Data, and Consumer Services segments, together with corporate expenses.
The operating results of these segments comprise "Net income (loss) attributable to Porch" in our unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Reconciliations of the following non-GAAP financial measures to the nearest GAAP measure are included in the Consolidated Results sections:
•Porch Shareholder Interest Adjusted EBITDA (Loss)
•Porch Shareholder Interest Cost of Revenue
•Porch Shareholder Interest Depreciation and Amortization
•Porch Shareholder Interest General and Administrative
•Porch Shareholder Interest Gross Margin
•Porch Shareholder Interest Gross Profit
•Porch Shareholder Interest Income (Loss) Before Income Taxes
•Porch Shareholder Interest Income Tax Benefit (Provision)
•Porch Shareholder Interest Interest Expense
•Porch Shareholder Interest Mark-to-Market Losses (Gains)
•Porch Shareholder Interest Operating Income (Loss)
•Porch Shareholder Interest Other Expense (Income)
•Porch Shareholder Interest Other Gains and Losses
•Porch Shareholder Interest Product and Technology
•Porch Shareholder Interest Revenue
•Porch Shareholder Interest Selling and Marketing
•Porch Shareholder Interest Stock-based Compensation Expense
Reconciliations of the following non-GAAP financial measures to the nearest GAAP measure are included in the Liquidity and Capital Resources section:
•Porch Shareholder Interest net cash provided by (used in) financing activities
•Porch Shareholder Interest net cash provided by (used in) investing activities
•Porch Shareholder Interest net cash provided by (used in) operating activities
Critical Accounting Estimates
Our critical accounting policies, including the assumptions and judgments underlying them, are disclosed in the Annual Report for the year ended December 31, 2025, including those policies as discussed in Note 1 to the Notes to Consolidated Financial Statements included in the Annual Report for the year ended December 31, 2025. There have been no material changes to these policies during the three months ended March 31, 2026.
Off-Balance Sheet Arrangements
Since the date of incorporation, we have not engaged in any off-balance sheet arrangements, as defined in the rules and regulations of the Securities and Exchange Commission (the "SEC").
Porch Group Inc. published this content on April 28, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on April 28, 2026 at 21:14 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]