Porch Group (NASDAQ: PRCH) grows Q1 2026 revenue but posts shareholder loss
Filing Impact
Filing Sentiment
Form Type
10-Q
Porch Group, Inc. reported Q1 2026 revenue of $121.1M, up from $104.7M a year earlier, as both insurance and software-related activities grew. Gross profit rose to $90.8M from $65.4M, and operating results improved to an operating income of $11.8M versus a prior-year loss.
At the consolidated level, net income was $1.9M, but net income (loss) attributable to Porch shareholders was a $4.7M loss, compared with $8.4M income in Q1 2025, reflecting a larger share of earnings at the non‑controlling Reciprocal. Basic and diluted EPS attributable to Porch were $(0.04), down from $0.08 and $0.07 respectively.
Cash and cash equivalents at Porch increased to $64.2M from $44.7M at year-end, and total cash, cash equivalents and restricted cash for the consolidated group reached $179.4M. Convertible debt had a carrying value of $399.0M, while total stockholders’ equity rose to $26.3M. About 57% of Q1 2026 revenue came from Texas, and the Reciprocal’s reinsurance program continued to limit catastrophe exposure.
Positive
- None.
Negative
- None.
Insights
Porch shows strong revenue and margin gains, but shareholder earnings swung to a small loss.
Porch Group delivered Q1 2026 revenue of $121.1M with gross profit of $90.8M, both higher than a year ago. Operating income reached $11.8M, reversing the prior operating loss as insurance services and software contributed higher gross margins.
However, net income attributable to Porch shareholders turned to a $4.7M loss while the consolidated Reciprocal generated $6.6M of net income. This mix shift, combined with higher interest expense of $14.6M on $475.1M principal of convertible notes, weighed on equity holders’ bottom line despite better operations.
Liquidity improved with Porch cash balances rising to $64.2M and total consolidated cash and restricted cash at $179.4M. Segment data show Insurance Services Adjusted EBITDA of $27.5M and modest positive Adjusted EBITDA in Software & Data, while Consumer Services was near breakeven. Future filings will clarify whether the current margin and reinsurance performance are sustainable through subsequent 2026 quarters.
Key Figures
Revenue: $121.1M
Gross profit: $90.8M
Operating income: $11.8M
+5 more
8 metrics
Revenue
$121.1M
Three months ended March 31, 2026; vs $104.7M in 2025
Gross profit
$90.8M
Three months ended March 31, 2026; vs $65.4M in 2025
Operating income
$11.8M
Three months ended March 31, 2026; prior-year operating loss of $1.3M
Net income attributable to Porch
-$4.7M
Three months ended March 31, 2026; vs $8.4M income in 2025
Basic EPS attributable to Porch
-$0.04
Three months ended March 31, 2026; vs $0.08 in 2025
Cash and cash equivalents (Porch)
$64.2M
Balance at March 31, 2026; vs $44.7M at December 31, 2025
Total stockholders’ equity
$26.3M
As of March 31, 2026; up from $22.4M at December 31, 2025
Convertible notes principal
$475.1M
2026, 2028 and 2030 convertible notes outstanding at March 31, 2026
Key Terms
variable interest entity, Adjusted EBITDA (Loss), excess-of-loss catastrophe reinsurance, surplus notes, +2 more
6 terms
variable interest entity financial
"The Reciprocal, a variable interest entity (“VIE”) in which the Company is considered the primary beneficiary."
A variable interest entity (VIE) is a company structure where one party controls another company’s operations and economic outcomes through contracts or special arrangements instead of owning a majority of its voting shares. For investors, VIEs matter because the controlling party’s financial results, debts and risks can appear in the controller’s reports even though ownership looks separate, so understanding VIEs helps assess true exposure, governance limits and transparency—like spotting a puppet controlled by strings rather than direct ownership.
Adjusted EBITDA (Loss) financial
"Our segment operating and financial performance measures are gross profit and Adjusted EBITDA (Loss) for the Insurance Services, Software & Data, and Consumer Services segments."
excess-of-loss catastrophe reinsurance financial
"coverage for excess-of-loss catastrophe reinsurance from a panel of third-party reinsurers started at $35.0 million per occurrence"
surplus notes financial
"The Insurance Services segment also holds the surplus notes issued by the Reciprocal"
A surplus note is a special kind of loan an insurance company issues that counts toward its financial cushion; think of it as a secondary safety pad that helps the insurer meet regulators’ capital requirements. It matters to investors because it usually pays higher interest than ordinary bonds but is riskier — interest and principal repayments can be delayed or need regulator approval, so holders sit behind policyholders in claims and face greater uncertainty.
deferred policy acquisition costs financial
"The Reciprocal capitalizes deferred policy acquisitions costs (“DACs”) which consist primarily of commissions, premium taxes and policy underwriting and production expenses"
Deferred policy acquisition costs are upfront sales and onboarding expenses — such as commissions and underwriting costs — that an insurer records as an asset and then spreads out over the life of the insurance policies as the company earns premiums. For investors, these costs matter because how quickly they are written off affects reported profits and the apparent health of an insurer’s balance sheet, similar to spreading the cost of a season ticket over the months you use it.
embedded derivatives financial
"certain features of the 2028 Notes were bifurcated and accounted for separately from the notes. The following features are recorded as derivatives."
An embedded derivative is a hidden financial option or payout rule built into a larger contract—like a bond, loan, or supply agreement—that makes part of the deal behave like a separate financial bet whose value swings with interest rates, currencies, commodity prices, or a company’s stock. Investors care because these built‑in features can change reported assets, liabilities and profits and add unexpected risk or upside, like finding a bonus or penalty clause inside a rental lease.
Earnings Snapshot
Revenue: $121.1M
Q1 2026
Revenue
$121.1M
Net income (consolidated)
$1.9M
Net income attributable to Porch
-$4.7M
Basic EPS attributable to Porch
-$0.04
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________________________
FORM 10-Q
___________________________________________________________
(Mark One)
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2026
or
EXCHANGE ACT OF 1934
For the transition period from ___________ to
Commission File Number: 001-39142
___________________________________________________________
(Exact name of registrant as specified in its charter)
___________________________________________________________
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | ||||
(Address of Principal Executive Offices) (Zip Code)
(855 ) 767-2400
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
___________________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading symbol | Name of Exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
x | Accelerated filer | o | |||||||||||||||
| Non-accelerated filer | o | Smaller reporting company | Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
The number of outstanding shares of the registrant’s common stock as of April 23, 2026, was 127,715,478 . This includes 18,312,208 shares of common stock held by Porch Reciprocal Exchange, the registrant’s affiliate. These shares held by our affiliate are considered treasury shares for GAAP accounting purposes and under Delaware law are not considered outstanding for quorum and are not entitled to vote.
Table of Contents
Table of Contents
Page | |||||
PART I — FINANCIAL INFORMATION | 3 | ||||
Item 1. Financial Statements | 3 | ||||
Condensed Consolidated Balance Sheets (Unaudited) | 3 | ||||
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) | 5 | ||||
Condensed Consolidated Statements of Stockholders’ Equity (Deficit) and Noncontrolling Interest (Unaudited) | 6 | ||||
Condensed Consolidated Statements of Cash Flows (Unaudited) | 7 | ||||
Notes to Condensed Consolidated Financial Statements (Unaudited) | 8 | ||||
Note 1. Description of Business and Summary of Significant Accounting Policies | 8 | ||||
Note 2. Segment Information | 12 | ||||
Note 3. Variable Interest Entity | 16 | ||||
Note 4. Revenue | 17 | ||||
Note 5. Investments | 19 | ||||
Note 6. Fair Value | 23 | ||||
Note 7. Property, Equipment, and Software | 27 | ||||
Note 8. Intangible Assets and Goodwill | 27 | ||||
Note 9. Debt | 28 | ||||
Note 10. Stockholders' Equity | 31 | ||||
Note 11. Stock-Based Compensation | 31 | ||||
Note 12. Reinsurance for the Reciprocal | 32 | ||||
Note 13. Unpaid Losses and Loss Adjustment Reserve | 34 | ||||
Note 14. Other Income (Expense), Net | 34 | ||||
Note 15. Income Taxes | 34 | ||||
Note 16. Commitments and Contingencies | 35 | ||||
Note 17. Net Income (Loss) Attributable To Porch Per Share | 35 | ||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 37 | ||||
Business Overview | 38 | ||||
Recent Developments | 40 | ||||
Results of Operations | 40 | ||||
Consolidated Quarter-to-Date Results | 41 | ||||
Porch Shareholder Interest Quarter-to-Date Results (Non-GAAP) | 46 | ||||
Key Performance Measures and Operating Metrics | 49 | ||||
Liquidity and Capital Resources | 50 | ||||
Non-GAAP Financial Measures | 54 | ||||
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 58 | ||||
Item 4. Controls and Procedures | 59 | ||||
PART II — OTHER INFORMATION | 61 | ||||
Item 1. Legal Proceedings | 61 | ||||
Item 1A. Risk Factors | 61 | ||||
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities | 61 | ||||
Item 3. Defaults Upon Senior Securities | 61 | ||||
Item 4. Mine Safety Disclosures | 61 | ||||
Item 5. Other Information | 61 | ||||
Item 6. Exhibits | 62 | ||||
SIGNATURES | 63 | ||||
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PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
PORCH GROUP, INC.
Condensed Consolidated Balance Sheets (Unaudited)
(all numbers in thousands unless otherwise stated, except per share data)
| March 31, 2026 | December 31, 2025 | |||||||||||||
| Assets | ||||||||||||||
| Current assets | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Accounts receivable, net | ||||||||||||||
| Short-term investments | ||||||||||||||
| Prepaid expenses | ||||||||||||||
| Restricted cash and cash equivalents | ||||||||||||||
| Other current assets | ||||||||||||||
| Total current assets | ||||||||||||||
| Property, equipment, and software, net | ||||||||||||||
| Goodwill | ||||||||||||||
| Long-term investments | ||||||||||||||
| Intangible assets, net | ||||||||||||||
| Other assets | ||||||||||||||
| Assets of Reciprocal: | (1) | |||||||||||||
| Cash and cash equivalents, including restricted | ||||||||||||||
| Accounts receivable, net | ||||||||||||||
| Short-term investments | ||||||||||||||
| Reinsurance balance due | ||||||||||||||
| Prepaid expenses and other current assets | ||||||||||||||
| Deferred policy acquisition costs | ||||||||||||||
| Intangible assets, net | ||||||||||||||
| Long-term investments | ||||||||||||||
| Other assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
______________________________________
(1)Porch Reciprocal Exchange (the “Reciprocal”) is a consolidated variable interest entity not owned by Porch Group, Inc. (see Note 3 in the unaudited Notes to Condensed Consolidated Financial Statements).
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
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PORCH GROUP, INC.
Condensed Consolidated Balance Sheets (Unaudited) - Continued
(all numbers in thousands unless otherwise stated, except per share data)
| March 31, 2026 | December 31, 2025 | |||||||||||||
| Liabilities and Stockholders' Equity | ||||||||||||||
| Current liabilities | ||||||||||||||
| Accounts payable | $ | $ | ||||||||||||
| Accrued expenses and other current liabilities | ||||||||||||||
| Deferred revenue | ||||||||||||||
| Refundable customer deposits | ||||||||||||||
| Current debt | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Long-term debt | ||||||||||||||
| Other liabilities | ||||||||||||||
| Liabilities of Reciprocal: | (1) | |||||||||||||
| Accounts payable and other current liabilities | ||||||||||||||
| Deferred revenue | ||||||||||||||
| Losses and loss adjustment expense reserves | ||||||||||||||
| Other insurance liabilities, current | ||||||||||||||
| Other liabilities | ||||||||||||||
| Total liabilities | ||||||||||||||
| Commitments and contingencies (Note 16) | ||||||||||||||
| Stockholders' equity | ||||||||||||||
Common stock, $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Accumulated other comprehensive income (loss) | ( | |||||||||||||
| Accumulated deficit | ( | ( | ||||||||||||
| Porch stockholders' deficit | ( | ( | ||||||||||||
| Noncontrolling interest related to the Reciprocal | ||||||||||||||
| Total stockholders' equity | ||||||||||||||
| Total liabilities and stockholders' equity | $ | $ | ||||||||||||
______________________________________
(1)The Reciprocal is a consolidated variable interest entity not owned by Porch Group, Inc. (see Note 3 in the unaudited Notes to Condensed Consolidated Financial Statements) .
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
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PORCH GROUP, INC.
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)
(all numbers in thousands unless otherwise state, except per share data)
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Revenue | $ | $ | |||||||||||||||||||||
| Cost of revenue | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Selling and marketing | |||||||||||||||||||||||
| Product and technology | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Operating income (loss) | ( | ||||||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Interest expense | ( | ( | |||||||||||||||||||||
| Change in fair value of private warrant liability | ( | ||||||||||||||||||||||
| Change in fair value of derivatives | |||||||||||||||||||||||
| Investment income and realized gains and losses, net of investment expenses | |||||||||||||||||||||||
| Other income, net | |||||||||||||||||||||||
| Total other income (expense) | ( | ||||||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Income tax expense | ( | ( | |||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Less: Net income (loss) attributable to the Reciprocal | ( | ||||||||||||||||||||||
| Net income (loss) attributable to Porch | $ | ( | $ | ||||||||||||||||||||
Earnings Per Share - Basic | |||||||||||||||||||||||
| Net income (loss) attributable to Porch per share - basic | $ | ( | $ | ||||||||||||||||||||
| Weighted average shares outstanding used to compute net income (loss) attributable to Porch per share - basic | |||||||||||||||||||||||
Earnings Per Share - Diluted | |||||||||||||||||||||||
| Net income (loss) attributable to Porch per share - diluted | $ | ( | $ | ||||||||||||||||||||
| Weighted average shares outstanding used to compute net income (loss) attributable to Porch per share - diluted | |||||||||||||||||||||||
| Comprehensive Income | |||||||||||||||||||||||
| Net income | $ | $ | |||||||||||||||||||||
| Other comprehensive income (loss): | |||||||||||||||||||||||
| Change in net unrealized loss, net of tax | ( | ||||||||||||||||||||||
| Comprehensive income (loss) | ( | ||||||||||||||||||||||
| Less: Comprehensive income (loss) attributable to the Reciprocal | ( | ||||||||||||||||||||||
| Comprehensive income (loss) attributable to Porch | $ | ( | $ | ||||||||||||||||||||
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
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PORCH GROUP, INC.
Condensed Consolidated Statements of Stockholders’ Equity (Deficit) and Noncontrolling Interest (Unaudited)
(all numbers in thousands unless otherwise stated, except per share data)
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Porch Stockholders' Equity (Deficit) | Noncontrolling Interest Related to the Reciprocal | Total Stockholders' Equity (Deficit) | |||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||
| Balances as of December 31, 2025 | (1) | $ | $ | $ | $ | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | — | — | — | ( | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
| Repurchases of common stock | ( | — | — | — | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Exercise of stock options | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Reciprocal subscriber contributions | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Balances as of March 31, 2026 | (1) | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Porch Stockholders' Equity (Deficit) | Noncontrolling Interest Related to the Reciprocal | Total Stockholders' Equity (Deficit) | |||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||
| Balances as of December 31, 2024 | (2) | $ | $ | $ | ( | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Formation of Reciprocal | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Exercise of stock options | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Income tax withholdings | ( | — | ( | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||
| Balances as of March 31, 2025 | (1) | $ | $ | $ | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||||||||||
______________________________________
(1)Excludes 18.3
(2)Excludes 18.3 million shares of common stock held by HOA as of December 31, 2024.
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements..
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PORCH GROUP, INC.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(all numbers in thousands)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities | |||||||||||
| Depreciation and amortization | |||||||||||
| Provision for doubtful accounts | |||||||||||
| Change in fair value of private warrant liability | |||||||||||
| Change in fair value of derivatives | ( | ( | |||||||||
| Stock-based compensation | |||||||||||
| Non-cash interest expense | |||||||||||
| Other operating activities | ( | ( | |||||||||
| Change in operating assets and liabilities, net of acquisitions and divestitures | |||||||||||
| Accounts receivable | ( | ( | |||||||||
| Reinsurance balance due | ( | ( | |||||||||
| Deferred policy acquisition costs | ( | ||||||||||
| Prepaid expenses and other current assets | ( | ( | |||||||||
| Accounts payable | ( | ||||||||||
| Accrued expenses and other current liabilities | ( | ||||||||||
| Losses and loss adjustment expense reserves | ( | ||||||||||
| Other insurance liabilities, current | ( | ||||||||||
| Deferred revenue | ( | ( | |||||||||
| Refundable customer deposits | ( | ||||||||||
| Other assets and liabilities, net | ( | ||||||||||
| Net cash provided by (used in) operating activities | ( | ||||||||||
| Cash flows from investing activities: | |||||||||||
| Purchases of property and equipment | ( | ( | |||||||||
| Capitalized internal use software development costs | ( | ( | |||||||||
| Purchases of short-term and long-term investments | ( | ( | |||||||||
| Maturities, sales of short-term and long-term investments | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash flows from financing activities: | |||||||||||
| Repayments of principal | ( | ||||||||||
| Repurchase of stock | ( | ||||||||||
| Other financing activities | ( | ||||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Net change in cash, cash equivalents, and restricted cash and cash equivalents | $ | $ | ( | ||||||||
| Cash, cash equivalents, and restricted cash and cash equivalents at beginning of period | |||||||||||
| Cash, cash equivalents, and restricted cash and cash equivalents at end of period | $ | $ | |||||||||
| Supplemental schedule of non-cash investing and financing activities | |||||||||||
| Non-cash additions of internally developed software | $ | $ | |||||||||
| Supplemental disclosures | |||||||||||
| Cash paid for interest | $ | $ | |||||||||
| Income taxes paid | $ | $ | |||||||||
The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.
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PORCH GROUP, INC.
Notes to Condensed Consolidated Financial Statements (Unaudited)
(all numbers in thousands unless otherwise stated, except per share data)
Note 1. Description of Business and Summary of Significant Accounting Policies
Description of Business
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 operate under four
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements include the accounts of Porch Group, Inc. and its subsidiaries as well as the Reciprocal, a variable interest entity (“VIE”) in which the Company is considered the primary beneficiary. The Reciprocal is managed, but not owned by, Porch and is consolidated at this time as a VIE for reporting purposes. All significant intercompany accounts and transactions are eliminated in consolidation. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, these unaudited condensed consolidated financial statements and notes should be read in conjunction with the Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 20, 2026. The information as of December 31, 2025, included in the unaudited Condensed Consolidated Balance Sheets was derived from our audited consolidated financial statements. Certain prior period amounts have been reclassified to conform to the current year’s presentation. Except for per share data or as otherwise indicated, all U.S. dollar amounts presented in the tables in these unaudited Notes to Condensed Consolidated Financial Statements are in thousands.
The unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q (this “Quarterly Report”) were prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments (all of which are of a normal recurring nature) considered necessary to present fairly
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our financial position, results of operations, comprehensive loss, stockholders’ equity (deficit), and cash flows for the periods and dates presented. The results of operations for the three months ended March 31, 2026, are not necessarily indicative of the results that may be expected for the year ending December 31, 2026, or any other interim period or future year due to various factors such as management estimates and the seasonal nature of some portions of our insurance business.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported of certain assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual results may differ from those estimates and assumptions.
Concentrations
Financial instruments which potentially subject us to credit risk consist principally of cash, money market accounts on deposit with financial institutions, money market funds, certificates of deposit and fixed-maturity securities, as well as receivable balances in the course of collection.
The Reciprocal has exposure and remains liable in the event of insolvency of its reinsurers. The Reciprocal and its reinsurance intermediary regularly assess the credit quality and ratings of its reinsurer counterparties. As of March 31, 2026, five reinsurers represented more than 10 79 % in the aggregate, of the total reinsurance balance due line item on the unaudited Condensed Consolidated Balance Sheets. There are currently no material receivables on the unaudited Condensed Consolidated Balance Sheets related to the Reciprocal’s excess-of-loss catastrophe program. See Note 12, Reinsurance for the Reciprocal, for more information.
Approximately 57 % of consolidated revenue for the three months ended March 31, 2026, was derived from customers in Texas and could be adversely affected by economic conditions, an increase in competition, local weather events, or environmental impacts and changes.
No individual customer represented more than 10% of total consolidated revenue for the three months ended March 31, 2026 or 2025. As of March 31, 2026, and December 31, 2025, no individual customer accounted for 10% or more of total accounts receivable, net, on the unaudited Condensed Consolidated Balance Sheets.
As of March 31, 2026, we held approximately $168.3 million of cash with five U.S. commercial banks.
Cash, Cash Equivalents and Restricted Cash and Cash Equivalents
| March 31, 2026 | December 31, 2025 | |||||||||||||
| Cash and cash equivalents of Porch | $ | $ | ||||||||||||
| Restricted cash and cash equivalents of Porch | ||||||||||||||
| Cash and cash equivalents of the Reciprocal | ||||||||||||||
| Restricted cash and cash equivalents of the Reciprocal | ||||||||||||||
| Total cash, cash equivalents, and restricted cash and cash equivalents | $ | $ | ||||||||||||
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The following table provides the components of restricted cash and cash equivalents on the unaudited Condensed Consolidated Balance Sheets:
| March 31, 2026 | December 31, 2025 | |||||||||||||
| Held as collateral by captive reinsurer for benefit of the Reciprocal | (1) | $ | $ | |||||||||||
| Held for payment of possible warranty claims | (2) | |||||||||||||
| Other | ||||||||||||||
| Restricted cash and cash equivalents | $ | $ | ||||||||||||
| Restricted cash and cash equivalents of the Reciprocal: | ||||||||||||||
| Pledged to state departments of insurance | (3) | $ | $ | |||||||||||
| Restricted cash and cash equivalents | $ | $ | ||||||||||||
______________________________________
(1)Held by our captive reinsurance business as collateral for the benefit of the Reciprocal.
(2)Required under regulatory guidelines in 25 states and 26 states as of March 31, 2026, and December 31, 2025, respectively.
(3)Pledged to the Department of Insurance in certain states as a condition of our Certificate of Authority for the purpose of meeting obligations to policyholders and creditors.
Accounts Receivable
Deferred Policy Acquisition Costs
Accrued Expenses and Other Current Liabilities
The following table details the components of accrued expenses and other current liabilities on the unaudited Condensed Consolidated Balance Sheets.
| March 31, 2026 | December 31, 2025 | |||||||||||||
| Accrued expenses | $ | $ | ||||||||||||
| Payroll liabilities | ||||||||||||||
| Interest payable | ||||||||||||||
| Sales taxes payable | ||||||||||||||
| Other current liabilities | ||||||||||||||
| Accrued expenses and other current liabilities at Porch | $ | $ | ||||||||||||
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Other Insurance Liabilities, Current
The following table details the components of other insurance liabilities, current, on the unaudited Condensed Consolidated Balance Sheets. Other insurance liabilities were held by the Reciprocal as of March 31, 2026.
| March 31, 2026 | December 31, 2025 | ||||||||||
| Ceded reinsurance premiums payable | $ | $ | |||||||||
| Commissions payable, reinsurers and agents | |||||||||||
| Advance premiums | |||||||||||
| Funds held under reinsurance treaty | |||||||||||
| General and accrued expenses payable | |||||||||||
| Other insurance liabilities, current | $ | $ | |||||||||
Accounting Standards Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures, which requires that public entities disclose, on an annual and interim basis, disaggregated information about specific expense categories (including employee compensation, depreciation, and amortization) presented on the face of the income statement. The guidance will first be effective in annual disclosures for the year ending December 31, 2027. Early adoption is permitted. We are in the process of assessing the impact of ASU 2024-03 on our disclosures.
In May 2025, the FASB issued ASU 2025-03, Business Combinations (ASC Topic 805) and Consolidation (ASC Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, which updates the guidance for determining the accounting acquirer in certain equity-based acquisitions of variable interest entities (“VIEs”). The guidance removes the presumption that the primary beneficiary is always the acquirer and instead requires the general guidance for identifying the acquirer under ASC Topic 805 to be applied. The guidance will first be effective beginning with our first quarter of 2027 and may be applied prospectively or retrospectively. Early adoption is permitted. We do not expect ASU 2025-03 to have a material impact on our consolidated financial statements or related disclosures.
In May 2025, the FASB issued ASU 2025-04, Compensation—Stock Compensation (ASC Topic 718) and Revenue from Contracts with Customers (ASC Topic 606), which clarifies the accounting for share-based payments granted to customers, including classification of performance conditions, treatment of forfeitures, and application of the variable consideration constraint. The guidance will first be effective beginning with our first quarter of 2027 and may be applied prospectively or retrospectively. Early adoption is permitted. We have not granted any share-based payments to customers. As such, we do not expect ASU 2025-04 to have a material impact on our consolidated financial statements or related disclosures.
In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which aims to modernize the accounting for software costs that are accounted for under ASC Subtopic 350-40, Intangibles-Goodwill and Other-Internal-Use Software. The updated guidance removes references to project stages and instead requires software costs to be capitalized when both of the following occur: 1) management has authorized and committed to funding the software project, and 2) it is probable that the project will be completed and the software will be used to perform the function intended (referred to as the “probable-to-complete recognition threshold”). The guidance will first be effective in our interim disclosures beginning with the first quarter of 2028 and may be applied prospectively, retrospectively, or using a modified approach. Early adoption is permitted as of the beginning of an annual reporting period. We are in the process of assessing the impact of ASU 2025-06 on our consolidated financial statements and related disclosures.
In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements, which introduces targeted refinements to hedge accounting guidance under ASC Topic 815 to better align financial reporting with the economics of risk management activities. The guidance will first be effective in our first quarter of 2027 and should be applied prospectively. Early adoption is permitted. We do not expect ASU 2025-09 to have a material impact on our consolidated financial statements or related disclosures.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which aims to clarify and improve the navigability of interim reporting guidance under ASC Topic 270 without changing the fundamental nature or extent of interim disclosure requirements. The guidance will first be effective in our first quarter of 2028 and can be applied prospectively or retrospectively. Early adoption is permitted. We are in the process of assessing the impact of ASU 2025-11 on our consolidated financial statements and related disclosures.
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In December 2025, the FASB issued ASU 2025-12, Codification Improvements, to make technical corrections, clarifications, and minor improvements across multiple areas of U.S. GAAP. The guidance will first be effective in our first quarter of 2027 and prospective or retrospective application will depend on the specific item being addressed. Early adoption is permitted. We are in the process of assessing the impact of ASU 2025-12 on our consolidated financial statements and related disclosures.
Accounting Standards Recently Adopted
On January 1, 2026, we adopted ASU 2024-04, Debt - Debt with Conversion and Other Options, which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. We adopted ASU 2024-04 using a prospective method. ASU 2024-04 did not have a material impact on our consolidated financial statements and related disclosures.
On January 1, 2026, we adopted ASU 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which introduces a practical expedient related to estimating expected credit losses. The practical expedient allows entities to assume that conditions that exist when expected credit losses are estimated do not change for the remaining life of the asset. We adopted ASU 2025-05 using a prospective method. ASU 2025-05 did not have a material impact on our consolidated financial statements and related disclosures.
Note 2. Segment Information
We have four
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.
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.
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.
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.
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. The CODM uses gross profit and Adjusted EBITDA (Loss) to allocate resources for these segments (including employees, property, and financial or capital resources) predominately in the annual budget and forecasting process. Both of these measures are also used to provide guidance to investors.
Our segment operating financial performance measures for the Reciprocal Segment are gross profit and Net Income (Loss). These measures are consistent with the information that is regularly provided to and reviewed by the CODM in assessing segment performance and allocating resources. The CODM utilizes Net Income (Loss) rather than Adjusted EBITDA (Loss) for the Reciprocal Segment because Net Income (Loss) includes interest expense associated with the surplus note
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issued in connection with the formation of the Reciprocal. This interest is a significant component of the Reciprocal Segment’s financial performance, is regularly provided to the CODM, and is therefore considered in his evaluation. Adjusted EBITDA (Loss), by definition, excludes interest expense.
The following tables present revenue and significant expenses by segment that are regularly provided to the CODM. Other segment items that the CODM does not consider in assessing segment performance are presented to reconcile to each segment’s measure of profit or loss.
The “Corporate” column includes shared expenses that are not allocated to the reportable segments. These consist primarily of selling and marketing, product and technology, accounting, human resources, legal, general and administrative, and other income, expenses, gain and losses.
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| Three Months Ended March 31, 2026 | ||||||||||||||||||||||||||||||||||||||||||||
| Insurance Services | Software & Data | Consumer Services | Corporate | Reciprocal Segment | Eliminations | Total | ||||||||||||||||||||||||||||||||||||||
| Revenue | (1) | $ | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||
| Cost of revenue | ( | |||||||||||||||||||||||||||||||||||||||||||
| Gross Profit | ( | |||||||||||||||||||||||||||||||||||||||||||
| Significant expenses: | ||||||||||||||||||||||||||||||||||||||||||||
| Selling and marketing | ( | |||||||||||||||||||||||||||||||||||||||||||
| Product and technology | ||||||||||||||||||||||||||||||||||||||||||||
| General and administrative | ( | |||||||||||||||||||||||||||||||||||||||||||
| Other segment items: | ||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | (2) | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | (2) | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Interest income on intercompany surplus notes | ( | |||||||||||||||||||||||||||||||||||||||||||
| Change in fair value of contingent consideration | ||||||||||||||||||||||||||||||||||||||||||||
| Other gains and losses | (3) | ( | ||||||||||||||||||||||||||||||||||||||||||
| Other items | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA (Loss) | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||||||||||
| Other income (expense): | ||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Change in fair value of derivatives | ||||||||||||||||||||||||||||||||||||||||||||
| Investment income and realized gains and losses, net of investment expenses | ||||||||||||||||||||||||||||||||||||||||||||
| Other income | ||||||||||||||||||||||||||||||||||||||||||||
| Interest expense on intercompany surplus notes | ( | |||||||||||||||||||||||||||||||||||||||||||
| Income tax expense | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to the Reciprocal | ||||||||||||||||||||||||||||||||||||||||||||
| Net loss attributable to Porch | $ | ( | ||||||||||||||||||||||||||||||||||||||||||
______________________________________
(1)Revenue includes intersegment revenues of $66.4 million in Insurance Services (which includes fees, commissions, and reinsurance premiums paid by the Reciprocal to Insurance Services), $2.3 million in Software & Data, and $(26.8 ) million in revenue offsets in the Reciprocal Segment.
(2)Depreciation, amortization, and stock-based compensation are included in Cost of revenue, Selling and marketing, Product and technology, and General and administrative lines above and are excluded from Adjusted EBITDA (Loss).
(3)Other gains and losses primarily includes investment income and some recoveries of reinsurance losses.
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| Three Months Ended March 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||
| Insurance Services | Software & Data | Consumer Services | Corporate | Reciprocal Segment | Eliminations | Total | ||||||||||||||||||||||||||||||||||||||
| Revenue | (1) | $ | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||
| Cost of revenue | ( | |||||||||||||||||||||||||||||||||||||||||||
| Gross Profit | ( | |||||||||||||||||||||||||||||||||||||||||||
| Significant expenses: | ||||||||||||||||||||||||||||||||||||||||||||
| Selling and marketing | ( | |||||||||||||||||||||||||||||||||||||||||||
| Product and technology | ||||||||||||||||||||||||||||||||||||||||||||
| General and administrative | ( | |||||||||||||||||||||||||||||||||||||||||||
| Other segment items: | ||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | (2) | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | (2) | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Interest income on intercompany surplus notes | ( | |||||||||||||||||||||||||||||||||||||||||||
| Change in fair value of contingent consideration | ||||||||||||||||||||||||||||||||||||||||||||
| Other gains and losses | (3) | ( | ||||||||||||||||||||||||||||||||||||||||||
| Other | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
| Adjusted EBITDA (Loss) | ( | |||||||||||||||||||||||||||||||||||||||||||
| Other income (expense): | ||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Change in fair value of private warrant liability | ( | |||||||||||||||||||||||||||||||||||||||||||
| Change in fair value of derivatives | ||||||||||||||||||||||||||||||||||||||||||||
| Investment income and realized gains and losses, net of investment expenses | ||||||||||||||||||||||||||||||||||||||||||||
| Other income | ||||||||||||||||||||||||||||||||||||||||||||
| Interest expense on intercompany surplus notes | ( | |||||||||||||||||||||||||||||||||||||||||||
| Income tax expense | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | ( | |||||||||||||||||||||||||||||||||||||||||||
| Net loss attributable to the Reciprocal | ( | |||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to Porch | $ | |||||||||||||||||||||||||||||||||||||||||||
______________________________________
(1)Revenue includes intersegment revenues of $45.4 million in Insurance Services (which includes fees, commissions, and reinsurance premiums paid by the Reciprocal Segment to Insurance Services), $2.0 million in Software & Data, and $(25.6 ) million in revenue offsets in the Reciprocal Segment.
(2)Depreciation, amortization, and stock-based compensation are included in Cost of revenue, Selling and marketing, Product and technology, and General and administrative lines above and are excluded from Adjusted EBITDA (Loss).
(3)Other gains and losses primarily includes investment income and some recoveries of reinsurance losses.
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The following table presents a reconciliation of segment profitability measures to consolidated net income (loss).
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| Segment Profitability Measures: | ||||||||||||||||||||||||||
| Insurance Services Adjusted EBITDA | $ | $ | ||||||||||||||||||||||||
| Software & Data Adjusted EBITDA | ||||||||||||||||||||||||||
| Consumer Services Adjusted EBITDA Loss | ( | ( | ||||||||||||||||||||||||
| Reciprocal Segment Net Income (Loss) | ( | |||||||||||||||||||||||||
| Subtotal | ||||||||||||||||||||||||||
| Reconciling items: | ||||||||||||||||||||||||||
| Corporate expenses | ( | ( | ||||||||||||||||||||||||
| Interest expense | ( | ( | ||||||||||||||||||||||||
| Income tax provision | ( | ( | ||||||||||||||||||||||||
| Depreciation and amortization | ( | ( | ||||||||||||||||||||||||
| Other income, net | ||||||||||||||||||||||||||
| Stock-based compensation expense | ( | ( | ||||||||||||||||||||||||
| Mark-to-market gains | ||||||||||||||||||||||||||
| Other | ( | ( | ||||||||||||||||||||||||
| Net income | $ | $ | ||||||||||||||||||||||||
The CODM does not review assets on a segment basis other than the assets of the Reciprocal Segment that are presented on the unaudited Condensed Consolidated Balance Sheets as required for VIE disclosure.
All of our revenue is generated in the United States except for an immaterial amount. As of March 31, 2026, and December 31, 2025, we did not have material assets located outside of the United States.
Note 3. Variable Interest Entity
A VIE is a legal entity that is structured such that equity investors lack the ability to make significant decisions relating to the entity's operations through voting rights, do not substantively participate in the gains and losses of the entity, or the entity does not have sufficient equity at risk to finance its activities without additional subordinated financial support. We consolidate VIEs in which we are deemed the primary beneficiary. The primary beneficiary is the entity that has both (1) the power to direct the activities of the VIE that most significantly affect that entity's economic performance and (2) the obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE.
In 2025, we completed the formation of the Reciprocal, a Texas-domiciled reciprocal insurance exchange. In connection with the formation, we completed the sale of our legacy homeowners insurance carrier, HOA, to the Reciprocal and formed a management company that acts as the operator for the Reciprocal. The Reciprocal, now the owner of HOA, writes homeowners insurance policies that are sold to its subscribers. Following the sale, HOA became a wholly owned subsidiary of the Reciprocal.
We consolidate the Reciprocal since (1) we have provided surplus notes to the Reciprocal and would absorb any expected losses that could potentially be significant to the Reciprocal, including through the interest associated with surplus notes due to Porch from the Reciprocal and (2) we manage the business operations of the Reciprocal and therefore have the power to direct the activities that most significantly impact the economic performance of the Reciprocal. The Reciprocal’s anticipated economic performance is driven by its underwriting and investment results. We receive a management fee for the services provided to the Reciprocal. The management fee revenues are based upon all premiums written or assumed by the Reciprocal (including HOA).
The assets of the Reciprocal can be used only to settle the obligations of the Reciprocal for which creditors and other beneficial owners have no recourse to Porch. We have no obligation related to any underwriting and/or investment losses experienced by the Reciprocal. There were $106
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derive consolidated net income. However, the management fee income earned is reported in net income (loss) attributable to Porch and is included in basic and diluted earnings per share.
Note 4. Revenue
Disaggregation of Revenue
The following table provides detail of total revenue. Transactional revenue consists of revenue recognized from non-recurring sales or services that do not generate ongoing revenue and primarily includes revenue generated from moving services. Recurring revenue refers to revenue streams that are more predictable and generate revenue from customers on an ongoing basis, including revenue from insurance services management, inspection software, title insurance software, mortgage software, warranty products, and marketing services. Insurance carrier revenue consists of revenue earned through premiums collected on policies, policy fees, and commissions by the Reciprocal.
Three Months Ended March 31, | ||||||||||||||||||||||||||
2026 | 2025 | |||||||||||||||||||||||||
| Transactional | $ | $ | ||||||||||||||||||||||||
| Recurring | (1) | |||||||||||||||||||||||||
| Intercompany revenue | ( | ( | ||||||||||||||||||||||||
| Insurance carrier | ||||||||||||||||||||||||||
| Intercompany revenue | ( | ( | ||||||||||||||||||||||||
Total revenue | (2) | $ | $ | |||||||||||||||||||||||
______________________________________
(1)Revenue recognized during the three months ended March 31, 2026 and 2025, includes revenue that is accounted for in accordance with ASC Topic 460, Guarantees, separately from revenue from contracts with customers. Revenue accounted for under ASC Topic 460 was $8.7 million and $8.2 million for the three months ended March 31, 2026 and 2025, respectively.
(2)Revenue recognized during the three months ended March 31, 2026 and 2025, includes revenue that is accounted for in accordance with ASC Topic 944, Financial Services-Insurance, separately from the revenue from contracts with customers. Revenue accounted for under ASC Topic 944 was $19.6 million and $65.6 million for the three months ended March 31, 2026 and 2025, respectively.
Disclosures Related to Contracts with Customers
Timing may differ between the satisfaction of performance obligations and the invoicing and collection of amounts related to contracts with customers. Liabilities are recorded for amounts that are collected in advance of the satisfaction of performance obligations. To the extent a contract exists, as defined by ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), these liabilities are classified as deferred revenue. To the extent that a contract does not exist, as defined by ASC 606, these liabilities are classified as refundable customer deposits.
Insurance Commissions Receivable
A summary of the activity impacting the contract assets during the three months ended March 31, 2026, is presented below:
Balance at December 31, 2025 | $ | ||||
Estimated lifetime value of commissions on insurance policies sold by carriers | |||||
Cash receipts | ( | ||||
Balance at March 31, 2026 | $ | ||||
As of March 31, 2026, and December 31, 2025, $0.7 million and $0.6 million, respectively, of contract assets were expected to be collected within the immediately following 12 months and therefore were included in accounts receivable, net, on the unaudited Condensed Consolidated Balance Sheets. The remaining $2.8 million and $2.5 million of contract assets as of March 31, 2026, and December 31, 2025, respectively, are expected to be collected after the immediately following 12 months and were included in other assets on the unaudited Condensed Consolidated Balance Sheets.
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Deferred Revenue
A summary of the activity impacting Software & Data segment deferred revenue balances during the three months ended March 31, 2026, is presented below:
Balance at December 31, 2025 | $ | ||||
Revenue recognized | ( | ||||
Additional amounts deferred | |||||
Balance at March 31, 2026 | $ | ||||
Revenue recognized for performance obligations satisfied during the three months ended March 31, 2026, includes $2.7 million that was included in the deferred revenue balances as of December 31, 2025.
Deferred revenue on the unaudited Condensed Consolidated Balance Sheets as of March 31, 2026, and December 31, 2025, includes $215.2 million and $219.6 million, respectively, of deferred revenue related to the Reciprocal Segment. The portion of insurance premiums related to the unexpired term of policies in force as of the end of the reporting period and to be earned over the remaining term of these policies is deferred and reported as deferred revenue.
Remaining Performance Obligations
The amount of the transaction price allocated to performance obligations to be satisfied at a later date, which is not recorded in the unaudited Condensed Consolidated Balance Sheets, is immaterial as of March 31, 2026, and December 31, 2025.
We have applied the practical expedients not to present unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts with variable consideration that is allocated entirely to unsatisfied performance obligations or to a wholly unsatisfied promise accounted for under the series guidance, and (iii) contracts for which we recognize revenue at the amount which it has the right to invoice for services performed.
Warranty Revenue and Related Balance Sheet Disclosures
We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. As of March 31, 2026, and December 31, 2025, we had $0.2 million and $0.2 million, respectively, of capitalized costs in prepaid expenses and other current assets. As of March 31, 2026, and December 31, 2025, we had $0.4 million and $0.5 million, respectively, in other assets on the unaudited Condensed Consolidated Balance Sheets.
Payments received in advance of warranty services provided are included in refundable customer deposits or deferred revenue based upon the cancellation and refund provisions within the respective agreement. The following table provides balances as of the dates shown.
March 31, 2026 | December 31, 2025 | |||||||||||||
Refundable customer deposits | $ | $ | ||||||||||||
Deferred revenue | $ | $ | ||||||||||||
Non-current deferred revenue | (1) | $ | $ | |||||||||||
____________________________________
(1)Non-current deferred revenue is included in other liabilities in the unaudited Condensed Consolidated Balance Sheets.
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Note 5. Investments
The following table summarizes investment income and realized gains and losses on investments during the periods presented.
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Investment income, net of investment expenses | $ | $ | |||||||||||||||||||||
| Realized gains on investments | |||||||||||||||||||||||
| Realized losses on investments | ( | ( | |||||||||||||||||||||
| Investment income and realized gains and losses, net of investment expenses | $ | $ | |||||||||||||||||||||
Investments Held by Porch
The following tables summarize the amortized cost, fair value, and unrealized gains and losses of investment securities.
| March 31, 2026 | ||||||||||||||||||||||||||
| Amortized Cost | Gross Unrealized | Fair Value | ||||||||||||||||||||||||
| Gains | Losses | |||||||||||||||||||||||||
| U.S. Treasuries | $ | $ | $ | $ | ||||||||||||||||||||||
| Obligations of states, municipalities and political subdivisions | ||||||||||||||||||||||||||
| Corporate bonds | ( | |||||||||||||||||||||||||
| Residential and commercial mortgage-backed securities | ( | |||||||||||||||||||||||||
| Other loan-backed and structured securities | ||||||||||||||||||||||||||
| Total investment securities | (1) | $ | $ | $ | ( | $ | ||||||||||||||||||||
____________________________________
(1)Represents total investment securities held by our captive reinsurance business as collateral for the benefit of the Reciprocal.
| December 31, 2025 | |||||||||||||||||||||||
| Amortized Cost | Gross Unrealized | Fair Value | |||||||||||||||||||||
| Gains | Losses | ||||||||||||||||||||||
| U.S. Treasuries | $ | $ | $ | ( | $ | ||||||||||||||||||
| Obligations of states, municipalities and political subdivisions | |||||||||||||||||||||||
| Corporate bonds | ( | ||||||||||||||||||||||
| Residential and commercial mortgage-backed securities | ( | ||||||||||||||||||||||
| Other loan-backed and structured securities | |||||||||||||||||||||||
| Total investment securities | $ | $ | $ | ( | $ | ||||||||||||||||||
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The amortized cost and fair value of securities held by our captive reinsurance business at March 31, 2026, by contractual maturity, are shown in the following table. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
| March 31, 2026 | ||||||||||||||
| Remaining Time to Maturity | Amortized Cost | Fair Value | ||||||||||||
| Due in one year or less | $ | $ | ||||||||||||
| Due after one year through five years | ||||||||||||||
| Due after five years through ten years | ||||||||||||||
| Due after ten years | ||||||||||||||
| Residential and commercial mortgage-backed securities | ||||||||||||||
| Other loan-backed and structured securities | ||||||||||||||
| Total | (1) | $ | $ | |||||||||||
____________________________________
(1)Represents total investment securities held by our captive reinsurance business as collateral for the benefit of HOA.
Securities held by our captive reinsurance business with gross unrealized loss position, aggregated by investment category and length of time the individual securities have been in a continuous loss position, are as follows:
| Less Than Twelve Months | Twelve Months or Greater | Total | ||||||||||||||||||||||||||||||||||||
| As of March 31, 2026 | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | Fair Value | ||||||||||||||||||||||||||||||||
| U.S. Treasuries | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Obligations of states, municipalities and political subdivisions | ||||||||||||||||||||||||||||||||||||||
| Corporate bonds | ( | ( | ||||||||||||||||||||||||||||||||||||
| Residential and commercial mortgage-backed securities | ( | ( | ||||||||||||||||||||||||||||||||||||
| Other loan-backed and structured securities | ||||||||||||||||||||||||||||||||||||||
| Total securities | (1) | $ | ( | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
____________________________________
(1)Represents total investment securities held by our captive reinsurance business as collateral for the benefit of the Reciprocal.
At March 31, 2026, there were 72 securities, held by our captive reinsurance business as collateral for the benefit of the Reciprocal, in an unrealized loss position. Of these securities, none had been in an unrealized loss position for 12 months or longer.
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| Less Than Twelve Months | Twelve Months or Greater | Total | ||||||||||||||||||||||||||||||||||||
| As of December 31, 2025 | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | Fair Value | ||||||||||||||||||||||||||||||||
| U.S. Treasuries | $ | ( | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| Obligations of states, municipalities and political subdivisions | ||||||||||||||||||||||||||||||||||||||
| Corporate bonds | ( | ( | ||||||||||||||||||||||||||||||||||||
| Residential and commercial mortgage-backed securities | ( | ( | ||||||||||||||||||||||||||||||||||||
| Other loan-backed and structured securities | ||||||||||||||||||||||||||||||||||||||
| Total securities | (1) | $ | ( | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||
____________________________________
(1)Represents total investment securities held by our captive reinsurance business as collateral for the benefit of the Reciprocal.
At December 31, 2025, there were thirty-nine securities in an unrealized loss position.
Investments Held by the Reciprocal (Consolidated VIE)
The following tables summarize the amortized cost, fair value, and unrealized gains and losses of investment securities held by the Reciprocal.
| March 31, 2026 | |||||||||||||||||||||||
| Amortized Cost | Gross Unrealized | Fair Value | |||||||||||||||||||||
| Gains | Losses | ||||||||||||||||||||||
| U.S. Treasuries | $ | $ | $ | ( | $ | ||||||||||||||||||
| Obligations of states, municipalities and political subdivisions | ( | ||||||||||||||||||||||
| Corporate bonds | ( | ||||||||||||||||||||||
| Residential and commercial mortgage-backed securities | ( | ||||||||||||||||||||||
| Other loan-backed and structured securities | ( | ||||||||||||||||||||||
| Total investment securities held by the consolidated VIE | $ | $ | $ | ( | $ | ||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||
| Amortized Cost | Gross Unrealized | Fair Value | |||||||||||||||||||||
| Gains | Losses | ||||||||||||||||||||||
| U.S. Treasuries | $ | $ | $ | ( | $ | ||||||||||||||||||
| Obligations of states, municipalities and political subdivisions | ( | ||||||||||||||||||||||
| Corporate bonds | ( | ||||||||||||||||||||||
| Residential and commercial mortgage-backed securities | ( | ||||||||||||||||||||||
| Other loan-backed and structured securities | ( | ||||||||||||||||||||||
| Total investment securities | $ | $ | $ | ( | $ | ||||||||||||||||||
The amortized cost and fair value of securities held by the Reciprocal at March 31, 2026, by contractual maturity, are shown in the following table. Actual maturities may differ from contractual maturities because borrowers may have the
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right to call or prepay obligations with or without call or prepayment penalties.
| March 31, 2026 | ||||||||||||||
| Remaining Time to Maturity | Amortized Cost | Fair Value | ||||||||||||
| Due in one year or less | $ | $ | ||||||||||||
| Due after one year through five years | ||||||||||||||
| Due after five years through ten years | ||||||||||||||
| Due after ten years | ||||||||||||||
| Residential and commercial mortgage-backed securities | ||||||||||||||
| Other loan-backed and structured securities | ||||||||||||||
| Total | $ | $ | ||||||||||||
Securities held by the Reciprocal with gross unrealized loss position, aggregated by investment category and length of time the individual securities have been in a continuous loss position, are as follows:
| Less Than Twelve Months | Twelve Months or Greater | Total | ||||||||||||||||||||||||||||||||||||
| As of March 31, 2026 | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | Fair Value | ||||||||||||||||||||||||||||||||
| U.S. Treasuries | $ | ( | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||
| Obligations of states, municipalities and political subdivisions | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Corporate bonds | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Residential and commercial mortgage-backed securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Other loan-backed and structured securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
| Total securities held by the consolidated VIE | $ | ( | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||
At March 31, 2026, there were 253 securities in an unrealized loss position held by the Reciprocal. Of these securities, 186 had been in an unrealized loss position for 12 months or longer as of March 31, 2026.
| Less Than Twelve Months | Twelve Months or Greater | Total | ||||||||||||||||||||||||||||||||||||
| As of December 31, 2025 | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | Fair Value | Gross Unrealized Loss | Fair Value | ||||||||||||||||||||||||||||||||
| U.S. Treasuries | $ | ( | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| Obligations of states, municipalities and political subdivisions | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||||
| Corporate bonds | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||||
| Residential and commercial mortgage-backed securities | $ | ( | $ | $ | ( | $ | ( | |||||||||||||||||||||||||||||||
| Other loan-backed and structured securities | $ | ( | $ | $ | $ | ( | ||||||||||||||||||||||||||||||||
| Total securities held by the consolidated VIE | $ | ( | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||
At December 31, 2025, there were 250 securities in an unrealized loss position.
We believe there were no fundamental issues, such as credit losses or other factors, with respect to any of our available-for-sale securities. The unrealized losses on investments in fixed-maturity securities were caused primarily by interest rate changes. We expect that the securities will not be settled at a price less than par value of the investments. Because the declines in fair value are attributable to changes in interest rates or market conditions and not credit quality, and because
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we have the ability and intent to hold our available-for-sale investments until a market price recovery or maturity, we do not consider any of our investments to have any decline in fair value due to expected credit losses at March 31, 2026.
Note 6. Fair Value
The following tables summarize the fair value measurements of assets and liabilities that are measured at fair value on a recurring basis.
| Fair Value Measurement as of March 31, 2026 | ||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total Fair Value | |||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
| Money market mutual funds | $ | $ | $ | $ | ||||||||||||||||||||||
| Debt securities: | ||||||||||||||||||||||||||
| U.S. Treasuries | ||||||||||||||||||||||||||
| Obligations of states, municipalities and political subdivisions | ||||||||||||||||||||||||||
| Corporate bonds | ||||||||||||||||||||||||||
| Residential and commercial mortgage-backed securities | ||||||||||||||||||||||||||
| Other loan-backed and structured securities | ||||||||||||||||||||||||||
| Asset of Reciprocal (a consolidated variable interest entity): | ||||||||||||||||||||||||||
| Money market mutual funds | ||||||||||||||||||||||||||
| Debt securities: | ||||||||||||||||||||||||||
| U.S. Treasuries | ||||||||||||||||||||||||||
| Obligations of states, municipalities and political subdivisions | ||||||||||||||||||||||||||
| Corporate bonds | ||||||||||||||||||||||||||
| Residential and commercial mortgage-backed securities | ||||||||||||||||||||||||||
| Other loan-backed and structured securities | ||||||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
| Contingent consideration - business combinations | (1) | $ | $ | $ | $ | |||||||||||||||||||||
| Embedded derivatives | (2) | |||||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||
______________________________________
(1)The liability for contingent considerations related to business combinations is included in accrued expenses and other current liabilities in the unaudited Condensed Consolidated Balance Sheets as of March 31, 2026.
(2)The embedded derivatives liability is included in other liabilities in the unaudited Condensed Consolidated Balance Sheets as of March 31, 2026.
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| Fair Value Measurement as of December 31, 2025 | ||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total Fair Value | |||||||||||||||||||||||
| Assets | ||||||||||||||||||||||||||
| Money market mutual funds | $ | $ | $ | $ | ||||||||||||||||||||||
| Debt securities: | ||||||||||||||||||||||||||
| U.S. Treasuries | ||||||||||||||||||||||||||
| Obligations of states, municipalities and political subdivisions | ||||||||||||||||||||||||||
| Corporate bonds | ||||||||||||||||||||||||||
| Residential and commercial mortgage-backed securities | ||||||||||||||||||||||||||
| Other loan-backed and structured securities | ||||||||||||||||||||||||||
| Asset of Reciprocal (a consolidated variable interest entity): | ||||||||||||||||||||||||||
| Money market mutual funds | ||||||||||||||||||||||||||
| Debt securities: | — | |||||||||||||||||||||||||
| U.S. Treasuries | ||||||||||||||||||||||||||
| Obligations of states, municipalities and political subdivisions | ||||||||||||||||||||||||||
| Corporate bonds | ||||||||||||||||||||||||||
| Residential and commercial mortgage-backed securities | ||||||||||||||||||||||||||
| Other loan-backed and structured securities | ||||||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
| Contingent consideration - business combinations | (1) | $ | $ | $ | $ | |||||||||||||||||||||
| Embedded derivatives | (2) | |||||||||||||||||||||||||
| $ | $ | $ | $ | |||||||||||||||||||||||
______________________________________
(1)The liability for contingent considerations related to business combinations is included in accrued expenses and other current liabilities in the unaudited Condensed Consolidated Balance Sheets as of December 31, 2025.
(2)The embedded derivatives liability is included in other liabilities in the unaudited Condensed Consolidated Balance Sheets as of December 31, 2025.
Financial Assets
Money market mutual funds are valued at the closing price reported by the fund sponsor from an actively traded exchange. As the funds are generally maintained at a net asset value which does not fluctuate, cost approximates fair value. These are included as a Level 1 measurement in the table above. The fair values for available-for-sale fixed-maturity securities are based upon prices provided by an independent pricing service. We have reviewed these prices for reasonableness and have not adjusted any prices received from the independent provider. Level 2 securities represent assets whose fair value is determined using observable market information such as previous day trade prices, quotes from less active markets or quoted prices of securities with similar characteristics. There were no transfers between Level 1 and Level 2.
Contingent Consideration – Business Combinations
We estimated the fair value of the business combination contingent consideration based on specific metrics related to the acquisition of Residential Warranty Services (“RWS”) in April 2022, using the discounted cash flow method. The fair value is based on a percentage of revenue of the contingent consideration through the maturity date of August 2026. As of March 31, 2026, the key inputs used to determine the fair value of less than $0.1 million were management’s cash flow estimate through the remaining term of less than one year . As of December 31, 2025, the key inputs used to determine the fair value of $0.1 million were management’s cash flow estimate through the remaining term of less than one year .
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Embedded Derivatives
In connection with the issuance of senior secured convertible notes in April 2023 (the “2028 Notes”) and in accordance with Accounting Standards Codification 815-15, Derivatives and Hedging – Embedded Derivatives, (“ASC 815-15”) certain features of the 2028 Notes were bifurcated and accounted for separately from the notes. The following features are recorded as derivatives.
•Repurchase option. This derivative had no value at March 31, 2026 or December 31, 2025, because in May 2025 we reduced the outstanding principal of the 2026 Notes (see Note 9, Debt) to below the $30 million threshold described in this paragraph. If more than $30 million aggregate principal amount of the 2026 Notes were to remain outstanding on June 14, 2026, the 2028 Note holders would have the right to require us to repurchase for cash on June 15, 2026, all or any portion of their 2028 Notes, in principal amounts of one thousand dollars or an integral number thereof, at a repurchase price equal to 106.5 % of the principal amount of the 2028 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date.
•Fundamental change option. If we undergo a fundamental change, as defined in the indenture governing the 2028 Notes and subject to certain conditions, holders of the 2028 Notes have the right to require us to repurchase for cash all or any portion of their 2028 Notes, in principal amounts of one thousand dollars or an integral multiple thereof, at a repurchase price equal to 105.25 % of the principal amount of the 2028 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date. A fundamental change includes events such as a change in control, recapitalization, liquidation, dissolution, or delisting.
•Asset sale repurchase option. If we sell assets and receive net cash proceeds of $2.5 million in excess of the Asset Sale Threshold (as defined below) (such excess net cash proceeds, the “Excess Proceeds”), we must offer to all holders of 2028 Notes to repurchase their 2028 Notes for an aggregate amount of cash equal to 50 % of such Excess Proceeds at a repurchase price per 2028 Note equal to 100 % of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the relevant purchase date, if any. “Asset Sale Threshold” means $20.0 million in the aggregate, provided that on and after the date on which the cumulative net cash proceeds received by the Company and its restricted subsidiaries from the sale of assets after April 20, 2023, exceeds $20.0 million in the aggregate, the “Asset Sale Threshold” means $0 . As of March 31, 2026, our remaining Asset Sale Threshold was $9.1 million.
In connection with the issuance of senior unsecured convertible notes in May 2025 (the “2030 Notes,” see Note 9) and in accordance with ASC 815-15, certain features of the 2030 Notes were bifurcated and accounted for separately from the notes. The following features are recorded as derivatives.
•Additional interest. If at any time after November 27, 2025, we fail to file all reports required under the Securities Exchange Act of 1934, as amended, (after giving effect to applicable grace periods and other than Form 8-Ks) during the preceding 12-month period, or the 2030 Notes are not otherwise freely tradable under Rule 144 other than with respect to holders that are affiliates, we will be required to pay additional interest at a rate of 0.50 % per annum on the outstanding principal amount to noteholders for each day we are out of compliance with these requirements (the “Additional Interest”). The value of the Additional Interest derivative was $0 at the issuance date and $0 as of March 31, 2026.
•Participation feature. If the fair market value of a distribution (arising from a spin-off, distribution of capital stock, other asset or property distribution, or distribution of securities) made to stockholders is equal to or greater than the average of the last reported sale price of our common stock over the ten consecutive trading day period ending on, and including, the trading day immediately preceding the ex-dividend date for such distribution, then each holder of the 2030 Notes will directly receive, in respect of each $1,000 principal amount thereof, the same type and amount of property that they would have received if they had already converted their senior unsecured convertible notes into shares at the then-current conversion rate. This payment will be made at the same time and on the same terms as it is made to common stockholders. If the amount of any cash dividend per share is equal to or greater than the last reported sale price of our common stock immediately before the dividend, then the holders of the 2030 Notes are entitled to receive, for each $1,000 principal amount of notes, a cash payment (without needing to convert the notes) in the amount of cash they would have received as if they owned a number of shares of common stock equal to the number of 2030 Notes held multiplied by the conversion rate on the ex-dividend date for such cash dividend or distribution. The value of the participation feature derivative was $0 at the issuance date and $0 as of March 31, 2026.
The inputs for determining fair value of the embedded derivatives are classified as Level 3 inputs. Level 3 fair value is based on unobservable inputs based on the best information available. These inputs include the probabilities of a
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repurchase, a fundamental change, qualifying asset sales, maintaining compliance with SEC regulations relative to the notes, and certain distributions to shareholders, ranging from 1 59
Level 3 Rollforward
Fair value measurements categorized within Level 3 are sensitive to changes in the assumptions or methodology used to determine fair value, and such changes could result in a significant increase or decrease in the fair value.
The changes for Level 3 items measured at fair value on a recurring basis using significant unobservable inputs are as follows:
| Contingent Consideration - Business Combinations | Embedded Derivatives | |||||||||||||||||||
| Fair value as of December 31, 2025 | $ | $ | ||||||||||||||||||
| Change in fair value, loss (gain) included in net income | (1) | ( | ( | |||||||||||||||||
| Fair value as of March 31, 2026 | $ | $ | ||||||||||||||||||
| Contingent Consideration - Business Combinations | Embedded Derivatives | Private Warrant Liability | ||||||||||||||||||
| Fair value as of December 31, 2024 | $ | $ | $ | |||||||||||||||||
| Change in fair value, loss (gain) included in net income | (1) | ( | ( | |||||||||||||||||
| Fair value as of March 31, 2025 | $ | $ | $ | |||||||||||||||||
______________________________________
(1)Changes in fair value of contingent consideration related to business combinations are included in general and administrative expenses in the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) operations. Changes in fair value of the private warrant liability and embedded derivatives are disclosed separately in the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).
Fair Value of Fixed Rate Debt
The following table summarizes the fair value of convertible senior notes (see Note 9, Debt, for more information):
| March 31, 2026 | December 31, 2025 | ||||||||||
| Convertible senior unsecured notes, due 2026 | $ | $ | |||||||||
| Convertible senior secured notes, due 2028 | $ | $ | |||||||||
| Convertible senior unsecured notes, due 2030 | $ | $ | |||||||||
The fair value of the other notes approximate the unpaid principal balance. All debt, other than the convertible notes which are Level 2, is considered a Level 3 measurement.
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Note 7. Property, Equipment, and Software
Property, equipment, and software, net, consists of the following:
| March 31, 2026 | December 31, 2025 | ||||||||||
| Software and computer equipment | $ | $ | |||||||||
| Furniture, office equipment, and other | |||||||||||
| Internally developed software | |||||||||||
| Leasehold improvements | |||||||||||
| Less: Accumulated depreciation and amortization | ( | ( | |||||||||
| Property, equipment, and software, net | $ | $ | |||||||||
Depreciation and amortization expense related to property, equipment, and software was $2.4 million and $1.6 million for the three months ended March 31, 2026 and 2025, respectively.
Note 8. Intangible Assets and Goodwill
Intangible Assets
Intangible assets are stated at cost or acquisition-date fair value less accumulated amortization and impairment. The following tables summarize intangible asset balances.
| As of March 31, 2026 | Weighted Average Useful Life (in years) | Intangible Assets, Gross | Accumulated Amortization and Impairment | Intangible Assets, Net | ||||||||||||||||||||||
| Customer relationships | (1) | $ | $ | ( | $ | |||||||||||||||||||||
| Acquired technology | ( | |||||||||||||||||||||||||
| Trademarks and tradenames | (2) | ( | ||||||||||||||||||||||||
| Non-compete agreements | ( | |||||||||||||||||||||||||
| Renewal rights | (3) | ( | ||||||||||||||||||||||||
| Insurance licenses | (4) | Indefinite | — | |||||||||||||||||||||||
| Total intangible assets | $ | $ | ( | $ | ||||||||||||||||||||||
______________________________________
(1)Balance includes $8.4 million of customer relationships that are included in intangible assets, net, in Assets of Reciprocal section of the Consolidated Balance Sheets as of March 31, 2026.
(2)Balance includes $6.1 million of trademarks and tradenames that are included in intangible assets, net, in Assets of Reciprocal section of the Consolidated Balance Sheets as of March 31, 2026.
(3)Balance includes $2.9 million of renewal rights that are included in intangible assets, net, in Assets of Reciprocal section of the Consolidated Balance Sheets as of March 31, 2026.
(4)The entire insurance licenses balance is included in intangible assets, net, in Assets of Reciprocal section of the Consolidated Balance Sheets as of March 31, 2026.
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| As of December 31, 2025 | Weighted Average Useful Life (in years) | Intangible Assets, Gross | Accumulated Amortization and Impairment | Intangible Assets, Net | ||||||||||||||||||||||
| Customer relationships | (1) | $ | $ | ( | $ | |||||||||||||||||||||
| Acquired technology | ( | |||||||||||||||||||||||||
| Trademarks and tradenames | (2) | ( | ||||||||||||||||||||||||
| Non-compete agreements | ( | |||||||||||||||||||||||||
| Renewal rights | (3) | ( | ||||||||||||||||||||||||
| Insurance licenses | (4) | Indefinite | — | |||||||||||||||||||||||
| Total intangible assets | $ | $ | ( | $ | ||||||||||||||||||||||
______________________________________
(1)Balance includes $8.8 million of customer relationships that are included in intangible assets, net, in Assets of Reciprocal section of the unaudited Condensed Consolidated Balance Sheets as of December 31, 2025.
(2)Balance includes $6.4 million of trademarks and tradenames that are included in intangible assets, net, in Assets of Reciprocal section of the unaudited Condensed Consolidated Balance Sheets as of December 31, 2025.
(3)Balance includes $3.1 million of renewal rights that are included in intangible assets, net, in Assets of Reciprocal section of the unaudited Condensed Consolidated Balance Sheets as of December 31, 2025.
(4)The entire insurance licenses balance is included in intangible assets, net, in Assets of Reciprocal section of the unaudited Condensed Consolidated Balance Sheets as of December 31, 2025.
The aggregate amortization expense related to intangibles was $2.6 million and $4.4 million for the three months ended March 31, 2026 and 2025, respectively.
Goodwill
The following table summarizes goodwill balances by segment as of March 31, 2026.
| March 31, 2026 | |||||
| Software & Data | $ | ||||
| Consumer Services | |||||
| Total | $ | ||||
We had no changes in the carrying amount of goodwill for the three months ended March 31, 2026.
Note 9. Debt
The following tables summarize outstanding debt as of March 31, 2026, and December 31, 2025.
| Principal | Unamortized Debt Issuance Costs & Discount | Carrying Value | ||||||||||||||||||
| Convertible senior unsecured notes, due 2026 | (1) | $ | $ | ( | $ | |||||||||||||||
| Convertible senior secured notes, due 2028 | ( | |||||||||||||||||||
| Convertible senior unsecured notes, due 2030 | ( | |||||||||||||||||||
| Balance as of March 31, 2026 | $ | $ | ( | $ | ||||||||||||||||
______________________________________
(1)The 2026 Notes are included in current debt in the unaudited Condensed Consolidated Balance Sheets as of March 31, 2026.
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| Principal | Unamortized Debt Issuance Costs & Discount | Carrying Value | ||||||||||||||||||
| Convertible senior unsecured notes, due 2026 | $ | $ | ( | $ | ||||||||||||||||
| Convertible senior secured notes, due 2028 | ( | |||||||||||||||||||
| Convertible senior unsecured notes, due 2030 | ( | |||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | ( | $ | ||||||||||||||||
2026 Convertible Senior Unsecured Notes
As of March 31, 2026, the outstanding principal on our 0.75 % Convertible Senior Unsecured Notes due on September 15, 2026 (the “2026 Notes”) was $7.8 million and is included in current debt on the unaudited Condensed Consolidated Balance Sheets. 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 are senior secured obligations, accrue interest at a fixed rate of 6.75 %, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2023, and were initially issued at 95 % of par value. The 2028 Notes will mature on October 1, 2028, unless earlier repurchased, redeemed or converted. Each note holder has the right to require us to repurchase for cash at 100 % of par value, plus accrued and unpaid interest, all of such holder’s notes on each of September 15, 2027, and March 15, 2028; provided, however, that the aggregate principal amount repurchased on each such date by all holders shall not exceed the lesser of (i) $15.0 million and (ii) 5.0 % of the aggregate principal amount of the 2028 Notes outstanding on such date.
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 (the “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.
Interest on the 2030 Notes is payable semi-annually in arrears on May 15 and November 15 of each year. 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
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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 120 % (or $18.85 ) of the conversion price for at least 20 trading days during the 30 consecutive trading days at the end of the prior calendar quarter;
•during five business days after any five consecutive trading days in which the trading price per one thousand dollars of 2030 Notes was less than 98 % of the product of the closing sale price of our common stock and the then current conversion rate;
•upon the occurrence of certain corporate actions;
•upon the occurrence of a fundamental change, a make-whole fundamental change or any share exchange event; or
•prior to the related redemption date if we elect to exercise the company call option.
Upon the occurrence of a make-whole fundamental change or the exercise of our redemption option as described below, we would, under certain circumstances, increase the applicable conversion rate for a holder that elects to convert its 2030 Notes in connection with such make-whole fundamental change or exercise of redemption (not to exceed 101.8132 shares of common stock per one thousand dollars of principal amount of the 2030 Notes). As of March 31, 2026, none of the conditions of the 2030 Notes to early convert were met.
The 2030 Notes are also redeemable at the option of the Company on or after November 20, 2026, if the last reported sale price of Porch’s common stock has been at least 120 % (or $18.85 ) of the conversion price for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period.
Interest on Convertible Notes
Interest expense for our convertible senior notes includes both contractual interest expense and amortization of debt issuance costs and discount. The following table details interest expense recognized for our convertible senior notes.
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Contractual interest expense for 2026 Notes | $ | $ | |||||||||||||||||||||
| Contractual interest expense for 2028 Notes | |||||||||||||||||||||||
| Contractual interest expense for 2030 Notes | |||||||||||||||||||||||
| Amortization of debt issuance costs and discount for 2026 Notes | |||||||||||||||||||||||
| Amortization of debt issuance costs and discount for 2028 Notes | |||||||||||||||||||||||
| Amortization of debt issuance costs for 2030 Notes | |||||||||||||||||||||||
| $ | $ | ||||||||||||||||||||||
The effective interest rates for the 2026 Notes, 2028 Notes, and 2030 Notes are 1.3 %, 17.9 %, and 9.2 %, respectively.
We capitalized interest expense related to our convertible senior notes for internally developed software projects. During the three months ended March 31, 2026, and 2025, we capitalized interest of $0.3 million and $0.1 million, respectively.
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Note 10. Stockholders' Equity
Common Shares Outstanding and Common Stock Equivalents
The following table shows the number of our common shares that could be issued for each component of our capital structure.
| March 31, 2026 | December 31, 2025 | |||||||||||||
| Outstanding common shares, excluding shares held by the Reciprocal | ||||||||||||||
| Outstanding common shares held by the Reciprocal | ||||||||||||||
| Outstanding common shares, total | ||||||||||||||
| Common shares reserved for future issuance: | ||||||||||||||
| Stock options | ||||||||||||||
| Restricted and performance stock units and awards (Note 11) | ||||||||||||||
| 2020 Equity Plan pool reserved for future issuance (Note 11) | ||||||||||||||
| Convertible senior unsecured notes, due 2026 | (1) | |||||||||||||
| Convertible senior secured notes, due 2028 | ||||||||||||||
| Convertible senior unsecured notes, due 2030 | ||||||||||||||
| Total shares of common stock outstanding and reserved for future issuance | ||||||||||||||
______________________________________
(1)In connection with the September 16, 2021, issuance of the 2026 Notes, we used a portion of the proceeds to pay for the capped call transactions, which are expected to generally reduce the potential dilution to our common stock. The capped call transactions impact the number of shares that may be issued by effectively increasing our conversion price from $25 per share to approximately $37.74 , which would result in approximately 0.2 million potentially dilutive shares instead of the shares reported in this table as of March 31, 2026. The capped calls expire on September 15, 2026.
Repurchase of Common Shares
As previously disclosed on February 11, 2026, our Board of Directors authorized us to repurchase shares of our common stock in 2026, up to an aggregate amount not to exceed $2.5 million. This is the maximum annual amount permitted under the 2028 Notes indenture.
During the three months ended March 31, 2026, we exhausted the amount authorized by our Board of Directors. We repurchased and retired 0.3 million common shares with a total cost of $2.5 million (including commissions). The cost paid in excess of the par value is included in accumulated deficit in the unaudited Condensed Consolidated Balance Sheets as of March 31, 2026.
Note 11. Stock-Based Compensation
Under our 2020 Stock Incentive Plan, employees, directors and consultants are eligible for grants of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance restricted stock units (“PRSUs”), and other stock awards, collectively referred to as “Equity Awards.” All Equity Awards granted during the three months ended March 31, 2026, were to employees and directors.
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The following table summarizes the classification of stock-based compensation expense in the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Cost of revenue | $ | $ | |||||||||||||||||||||
| Selling and marketing | $ | $ | |||||||||||||||||||||
| Product and technology | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Total stock-based compensation expense | $ | $ | |||||||||||||||||||||
The following table summarizes Equity Award activity for the three months ended March 31, 2026.
| Number of Options | Number of Restricted Stock Units | Number of Performance Restricted Stock Units | ||||||||||||||||||
| Balances as of December 31, 2025 | ||||||||||||||||||||
| Granted | ||||||||||||||||||||
| Vested | ( | |||||||||||||||||||
| Exercised | ( | |||||||||||||||||||
| Forfeited, canceled or expired | ( | ( | ||||||||||||||||||
| Balances as of March 31, 2026 | ||||||||||||||||||||
The weighted-average grant date fair value of RSUs granted during the three months ended March 31, 2026, was $8.24 .
Note 12. Reinsurance for the Reciprocal
2026 Program
As of April 1, 2026, coverage for excess-of-loss catastrophe reinsurance from a panel of third-party reinsurers started at $35.0 million for per occurrence for all perils, up to a loss of $365.0 million. We also purchased reinstatement premium protection for the first three layers of our third-party placed excess-of-loss program. In addition, our captive reinsurance entity provides reinsurance support to improve capital efficiency for the Reciprocal. Our captive reinsurer provides reinsurance coverage for risks with low earnings volatility.
2025 Program
As of April 1, 2025, coverage for excess-of-loss catastrophe reinsurance started at $25.0 million per occurrence up to a loss of $410.0 million. Additionally, the third party quota share reinsurance contracts started at 7.5 % of property and casualty losses, which includes catastrophe events, bringing the effective retention for the Reciprocal from $25.0 million per occurrence to $23.1 million per occurrence. We also placed reinstatement premium protection to cover any reinstatement premiums due on the second through fourth layers.
Additionally, our captive reinsurance entity provided reinsurance support to improve capital efficiency for the Reciprocal. Our captive reinsurer only provided reinsurance coverage for risks with low earnings volatility, such as non-catastrophic weather quota share. This contract was approved for an initial period of 10 years but can be cancelled by Porch or the Reciprocal each year.
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Reinsurance Impact
The effects of reinsurance on premiums written by the Reciprocal and earned for the three months ended March 31, 2026 and 2025, were as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Written | Earned | Written | Earned | ||||||||||||||||||||
| Direct premiums | $ | $ | $ | $ | |||||||||||||||||||
| Ceded premiums | ( | ( | ( | ( | |||||||||||||||||||
| Net premiums | $ | $ | $ | $ | |||||||||||||||||||
The effects of reinsurance on incurred losses and loss adjustment expense (“LAE”) for the three months ended March 31, 2026 and 2025, were as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Direct losses and LAE | $ | $ | |||||||||||||||||||||
| Ceded losses and LAE | ( | ( | |||||||||||||||||||||
| Net losses and LAE | $ | $ | |||||||||||||||||||||
The detail of reinsurance balances due is as follows:
| March 31, 2026 | December 31, 2025 | ||||||||||
| Ceded unearned premium | $ | $ | |||||||||
| Losses and LAE reserve | |||||||||||
| Reinsurance recoverable | |||||||||||
| Other | ( | ||||||||||
| Reinsurance balance due | $ | $ | |||||||||
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Note 13. Unpaid Losses and Loss Adjustment Reserve
The following table summarizes the changes in the reserve balances for unpaid losses and LAE, gross of reinsurance, for the three months ended March 31, 2026:
| Reserve for unpaid losses and LAE at December 31, 2025 | $ | ||||
| Plus: Reinsurance recoverables on losses and LAE at December 31, 2025 | ( | ||||
| Reserve for unpaid losses and LAE reserve, net of reinsurance recoverables at December 31, 2025 | |||||
| Add provisions (reductions) for losses and LAE occurring in: | |||||
| Current year | |||||
| Prior years | ( | ||||
| Net incurred losses and LAE during the current year | |||||
| Deduct payments for losses and LAE occurring in: | |||||
| Current year | ( | ||||
| Prior years | ( | ||||
| Net claim and LAE payments during the current year | ( | ||||
| Reserve for losses and LAE, net of reinsurance recoverables at March 31, 2026 | |||||
| Less: Reinsurance recoverables on losses and LAE at March 31, 2026 | ( | ||||
| Reserve for unpaid losses and LAE at March 31, 2026 | $ | ||||
As a result of additional information on claims occurring in prior years becoming available to management, changes in estimates of provisions of losses and loss adjustment expenses were made resulting in a decrease of $1.4 million for the three months ended March 31, 2026.
Note 14. Other Income (Expense), Net
The following table details the components of other income, net, on the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss):
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Interest income | $ | $ | |||||||||||||||||||||
| Recoveries of losses on reinsurance contracts | |||||||||||||||||||||||
| Other, net | ( | ||||||||||||||||||||||
| Other income, net | $ | $ | |||||||||||||||||||||
Note 15. Income Taxes
Benefit or provision for income taxes for the three months ended March 31, 2026, and 2025, was a provision of $1.8 million and $0.9 million, 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.
Our income tax provision for the three months ended March 31, 2025, includes deferred federal income tax expense of $0.9 million, which was recognized in conjunction with the formation of the Reciprocal and subsequent sale of HOA to the Reciprocal. The deferred tax expense associated with this event is driven by changes to our scheduled reversal of deferred
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tax liabilities and assets, which is a function of the underlying impact the event has on our Federal consolidated income tax filing group.
Note 16. Commitments and Contingencies
From time to time we are or may become subject to various legal proceedings arising in the ordinary course of business, including proceedings initiated by users, other entities, or regulatory bodies. Estimated liabilities are recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In many instances, we are unable to determine whether a loss is probable or to reasonably estimate the amount of such a loss and, therefore, the potential future losses arising from a matter may differ from the amount of estimated liabilities we have recorded in the financial statements covering these matters. We review our estimates periodically and make adjustments to reflect negotiations, estimated settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular matter
Cases under Telephone Consumer Protection Act
Porch and/or an acquired entity, GoSmith.com, are party to a legal proceeding alleging violations of the automated calling and/or internal and National Do Not Call restrictions of the Telephone Consumer Protection Act of 1991 and a related Washington state law claim. The proceedings were commenced as thirteen separate mass tort actions brought by a single plaintiffs’ law firm in December 2019 and April/May 2020 in federal district courts throughout the United States. After an initial round of discovery, in November 2025 the United States District Court for the Western District of Washington granted the parties’ motion to dismiss 589 of the original plaintiffs, leaving approximately 350 plaintiffs remaining. This is the only remaining case, and it is subject to ongoing procedural matters. Plaintiffs seek actual, statutory, and/or treble damages, and reasonable attorneys’ fees and costs from the respective Defendants.
Other
In addition, in the ordinary course of business, we and our subsidiaries are (or may become) parties to litigation involving property, personal injury, contract, intellectual property and other claims, stockholder derivative actions, class action lawsuits and other matters. The amounts that may be recovered in such matters may be subject to insurance coverage. Although the results of legal proceedings and claims cannot be predicted with certainty, neither we nor any of our subsidiaries are currently a party to any legal proceedings the outcome of which, we believe, if determined adversely to us, would individually or in the aggregate have a material adverse effect on our business, financial condition or results of operations.
Note 17. Net Income (Loss) Attributable To Porch Per Share
Earnings per share (“EPS”) is calculated using the two-class method unless the treasury stock method results in lower EPS. Basic EPS is calculated by dividing net income or loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. To calculate diluted EPS, basic EPS is further adjusted to include the effect of potentially dilutive stock options, RSUs, PRSUs, convertible notes, and warrants using the more dilutive result of the treasury stock method or the if-converted method. All potentially dilutive securities are antidilutive to periods with net losses, and basic EPS equals diluted EPS in those periods.
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The following table summarizes the computation of basic and diluted net income (loss) attributable to Porch per share for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net income (loss) attributable to Porch used to compute net income (loss) attributable to Porch per share - basic | $ | ( | $ | ||||||||||||||||||||
| Net income (loss) attributable to Porch used to compute net income (loss) attributable to Porch per share - diluted | $ | ( | $ | ||||||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted average shares outstanding used to compute net income (loss) attributable to Porch per share - basic | |||||||||||||||||||||||
| Effect of dilutive securities: | |||||||||||||||||||||||
| Stock Options | |||||||||||||||||||||||
| RSUs | |||||||||||||||||||||||
| PRSUs | |||||||||||||||||||||||
| Weighted average shares outstanding used to compute net income (loss) attributable to Porch per share - diluted | |||||||||||||||||||||||
| Net income (loss) attributable to Porch per share - basic | $ | ( | $ | ||||||||||||||||||||
| Net income (loss) attributable to Porch per share - diluted | $ | ( | $ | ||||||||||||||||||||
The following table discloses securities that were not included in the computation of diluted net loss per share
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| Stock options | ||||||||||||||||||||||||||
| Restricted stock units and awards | ||||||||||||||||||||||||||
| Performance restricted stock units | (1) | |||||||||||||||||||||||||
| Private warrants | ||||||||||||||||||||||||||
| Convertible debt - 2026 Notes | (2) | |||||||||||||||||||||||||
| Convertible debt - 2028 Notes | ||||||||||||||||||||||||||
| Convertible debt - 2030 Notes | ||||||||||||||||||||||||||
______________________________________.
(1)For the three months ending March 31, 2026 and March 31, 2025, this represents the number of performance restricted stock units at the end of the period that were excluded from the computation of diluted earnings per share because the performance conditions associated with these awards were not met assuming the end of the reporting period was the end of the performance period.
(2)In connection with the September 16, 2021, issuance of the 2026 Notes, we used a portion of the proceeds to pay for the capped call transactions, which are expected to generally reduce the potential dilution to our common stock. The capped call transactions impact the number of shares that may be issued by effectively increasing our conversion price from $25 per share to approximately $37.74 , which would result in approximately 0.2 million potentially dilutive shares instead of the shares reported in this table as of March 31, 2026. The capped calls expire on September 15, 2026.
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Item 2. 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;
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•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
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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.
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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.
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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 | % | |||||||||||||||||||||
______________________________________
(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.
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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
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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.
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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 | ||||||||||||||||||||||||||||||||||||||||||||
______________________________________
(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.
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| 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 | ||||||||||||||||||||||||||||||||||||||||||||
______________________________________
(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.
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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 | ||||||||||||||||
______________________________________
(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.
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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.
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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.
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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).
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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
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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 | |||||||||||
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(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.
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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.
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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 | ||||||||||||||||||||||
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| 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 | ||||||||||||||||||
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(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
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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.
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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 | % | ||||||||||||||||||
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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
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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”).
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to a variety of market and other risks, including the effects of changes in interest rates, inflation, availability of funding sources, hazard events, and specific asset risks.
Interest Rate Risk
Debt
The market risk inherent in our financial instruments and financial position represents the potential loss arising from adverse changes in interest rates. As of March 31, 2026, and December 31, 2025, we had interest-bearing debt of $475.1 million and $475.1 million, respectively. Our 0.75% Convertible Senior Notes due in September 2026 (the “2026 Notes”) have a principal balance of $7.8 million as of March 31, 2026, a fixed coupon rate of 0.75%, and an effective interest rate of 1.3%. Our 6.75% Senior Secured Convertible Notes due in October 2028 (the “2028 Notes”) have a principal balance of $333.3 million as of March 31, 2026, a fixed coupon rate of 6.75%, and an effective interest rate of 17.9%. Our 9.00% Convertible Senior Notes due in May 2030 (the “2030 Notes”) have a principal balance of $134.0 million as of March 31, 2026, a fixed coupon rate of 9.00%, and an effective interest rate of 9.2%. Interest expense includes both contractual interest expense and amortization of debt issuance costs and discount. The following table provides details of interest expense.
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Contractual interest expense for 2026 Notes | $ | 15 | $ | 326 | |||||||||||||||||||
| Contractual interest expense for 2028 Notes | 5,625 | 5,625 | |||||||||||||||||||||
| Contractual interest expense for 2030 Notes | 3,015 | — | |||||||||||||||||||||
| Total contractual interest expense | 8,655 | 5,951 | |||||||||||||||||||||
| Amortization of debt issuance costs and discount for 2026 Notes | 10 | 235 | |||||||||||||||||||||
| Amortization of debt issuance costs and discount for 2028 Notes | 6,110 | 5,137 | |||||||||||||||||||||
| Amortization of debt issuance costs for 2030 Notes | 94 | — | |||||||||||||||||||||
| Total amortization of debt issuance costs and discount | 6,214 | 5,372 | |||||||||||||||||||||
| Capitalized interest and other | (263) | (77) | |||||||||||||||||||||
| Total interest expense | $ | 14,606 | $ | 11,246 | |||||||||||||||||||
Because the coupon rates are fixed, interest expense on our debt will not change if market interest rates increase.
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Investments
As of March 31, 2026, Porch has a $61.8 million portfolio of fixed income securities and an unrealized gain (loss) of $(0.2) million while the Reciprocal has a $180.9 million portfolio of fixed income securities and an unrealized gain (loss) of $(1.7) million, as described in Note 5 in the unaudited Notes to Condensed Consolidated Financial Statements included in Part I, Item 1, of this Quarterly Report. In a rising interest rate environment, the portfolio would result in unrealized losses.
Surplus Note
As of March 31, 2026, Porch held approximately $106 million of surplus notes due from the Reciprocal which pay interest of 9.75% plus SOFR. These surplus notes are included in the Reciprocal’s statutory surplus and are eliminated in Porch’s consolidated financial statements for GAAP reporting. A one-percent decrease in SOFR would have resulted in a net decrease in interest income to Porch of $1.1 million on an annualized basis.
Other
As of March 31, 2026, accounts receivable balances were $12.1 million and $10.4 million for Porch and the Reciprocal, respectively, and reinsurance balance due for the Reciprocal was $38.4 million. These are not interest-bearing assets and are generally collected in less than 180 days. As such, we do not consider these assets to have material interest rate risk.
Inflation Risk
General economic factors beyond our control and changes in the global economic environment, specifically fluctuations in inflation, including access to credit under favorable terms, could result in lower revenues, higher costs, and decreased margins and earnings in the foreseeable future. While we take action wherever possible to reduce the impact of the effects of inflation, in the case of sustained inflation across several of the markets in which we operate, it could become increasingly difficult to effectively mitigate the increases to costs. In addition, the effects of inflation on consumers’ budgets could result in the reduction of consumer spending habits, specifically in the move and post-move markets. If unable to take actions to effectively mitigate the effect of the resulting higher costs, our profitability and financial position could be materially and adversely impacted.
Foreign Currency Risk
There was no material foreign currency risk for the three months ended March 31, 2026. Our activities to date have been conducted primarily in the United States.
Other Risks
We are exposed to a variety of market and other risks, including risks to the availability of funding sources, reinsurance providers, weather and other catastrophic hazard events, and specific asset risks. As the manager of the Reciprocal, our results of operations are tied to the growth and financial condition of the Reciprocal. If any events occur that impair 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 we receive. We also have an exposure to a concentration of credit risk related to the unsecured receivables due from the Reciprocal for net management fee and other reimbursements.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures to ensure that information required to be disclosed in reports we file or submit under the Exchange Act is (i) recorded, processed, summarized, evaluated and reported, as applicable, within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures were effective as of March 31, 2026.
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Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on Effectiveness of Controls and Procedures
Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgments and assumptions and cannot provide absolute assurance that its objectives will be met.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings
See Note 16 in the unaudited Notes to Condensed Consolidated Financial Statements included in Part I, Item 1, of this Quarterly Report, which is incorporated by reference into this Part II, Item 1, for a description of certain litigation and legal proceedings.
In addition, in the ordinary course of business, we and our subsidiaries are (or may become) parties to litigation involving property, personal injury, contract, intellectual property and other claims, stockholder derivative actions, class action lawsuits and other matters. The amounts that may be recovered in such matters may be subject to insurance coverage. Although the results of legal proceedings and claims cannot be predicted with certainty, neither we nor any of our subsidiaries are currently a party to any legal proceedings the outcome of which, we believe, if determined adversely to us, would individually or in the aggregate have a material adverse effect on the business, financial condition or results of operations.
Item 1A. Risk Factors
As of the date of this Quarterly Report on Form 10-Q, there have been no material changes from the risk factors disclosed in Part 1, Item 1A, of the Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on February 20, 2026.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
The following table summarizes our common stock repurchase program activity for the quarter ended March 31, 2026 (amounts in thousands, except share and per share amounts):
| Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Program | Approximate Dollar Value the May Yet Be Purchased Under the Program (in thousands) | ||||||||||||||
| January 1, 2026 - January 31, 2026 | — | $ | — | — | $ | 2,500 | |||||||||||
| February 1, 2026 - February 28, 2026 | — | — | — | 2,500 | |||||||||||||
| March 1, 2026 - March 31, 2026 | 333,688 | 7.48 | 333,688 | 6 | |||||||||||||
| Total for 2026 First Quarter | (1) | 333,688 | $ | 7.48 | 333,688 | $ | 6 | ||||||||||
______________________________________
(1)As previously disclosed on February 11, 2026, our Board of Directors authorized us to repurchase shares of our common stock in 2026, up to an aggregate amount not to exceed $2.5 million. This is the maximum annual amount permitted under the 2028 Notes indenture. See Note 10 in the unaudited Notes to Condensed Consolidated Financial Statements for additional information.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
No director or officer (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted terminated
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Item 6. Exhibits
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| Exhibit No. | Description | ||||
| 3.1 | Third Amended and Restated Certificate of Incorporation of Porch Group, Inc., as filed with the Secretary of State of the State of Delaware on June 9, 2022 (incorporated by reference to Exhibit 3.1 of the Company's Form 8-K (File No. 001-39142), filed with the SEC on June 10, 2022). | ||||
| 3.2 | Amended and Restated By-Laws of the Company, dated December 23, 2020 (incorporated by reference to Exhibit 3.2 of the Company’s Form 8-K (File No. 001-39142), filed with the SEC on December 29, 2020). | ||||
10.1* | Amended and Restated Attorney-in-Fact Agreement, dated January 1, 2026, by and between Porch Insurance Reciprocal Exchange and Porch Risk Management Services LLC | ||||
| 31.1* | Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||
| 31.2* | Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||
| 32.1** | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||||
| 32.2** | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||||
| 101.INS* | XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | ||||
| 101.SCH* | XBRL Taxonomy Extension Schema Document | ||||
| 101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document | ||||
| 101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document | ||||
| 101.LAB* | XBRL Taxonomy Extension Label Linkbase Document | ||||
| 101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document | ||||
| 104* | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) | ||||
______________________________________
*Filed herewith.
**These certifications are furnished to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, duly authorized.
Date: April 28, 2026 | ||||||||
| PORCH GROUP, INC. | ||||||||
| By: | /s/ Shawn Tabak | |||||||
| Name: | Shawn Tabak | |||||||
| Title: | Chief Financial Officer and Duly Authorized Officer | |||||||
| (Principal Financial Officer) | ||||||||
63
FAQ
How did Porch Group (PRCH) perform financially in Q1 2026?
Porch Group generated $121.1 million in revenue and $90.8 million in gross profit in Q1 2026. Consolidated net income was $1.9 million, but net income attributable to Porch shareholders was a $4.7 million loss, reflecting stronger earnings at the non-controlling Reciprocal.
What were Porch Group (PRCH) earnings per share in Q1 2026?
Basic and diluted earnings per share attributable to Porch were $(0.04) in Q1 2026. This compares with basic EPS of $0.08 and diluted EPS of $0.07 in Q1 2025, showing a swing from profit to loss for common shareholders.
How strong is Porch Group (PRCH) liquidity and cash position?
Porch held $64.2 million in cash and cash equivalents at March 31, 2026. Including restricted cash and the Reciprocal, total cash, cash equivalents and restricted cash were $179.4 million, up from $169.1 million at December 31, 2025, providing a larger liquidity cushion.
What is Porch Group’s (PRCH) debt structure as of Q1 2026?
Porch reported $475.1 million of principal on convertible notes: $7.8 million due 2026, $333.3 million due 2028, and $134.0 million due 2030. The combined carrying value was $399.0 million after unamortized discounts and issuance costs.
How concentrated is Porch Group (PRCH) revenue by geography?
Approximately 57% of consolidated revenue for the three months ended March 31, 2026, came from customers in Texas. Management notes that results could be affected by economic conditions, competition, or local weather and environmental events in that state.
How did the Reciprocal impact Porch Group (PRCH) Q1 2026 results?
The Reciprocal, a consolidated variable interest entity, generated $6.6 million of net income in Q1 2026. After allocating this noncontrolling interest, net income attributable to Porch shareholders was a $4.7 million loss, even though total consolidated net income remained positive.