Financial Performance and Growth - Porch Insurance Reciprocal Exchange (PIRE) was approved on October 25, 2024, and funded with approximately $106 million in surplus notes, expected to enhance financial performance and mitigate exposure to seasonality and catastrophic weather [49]. - The strategy focuses on profitable growth by recruiting a high-performing sales team to increase insurance gross written premiums and premium per policy [51]. - The company plans to launch new SaaS products and features while maintaining high customer retention rates and increasing prices [52]. - The company expanded its insurance operations through the acquisition of HOA, a leading property and casualty insurance company, effective January 1, 2025 [91]. - The company operates an insurance business through Porch Insurance Reciprocal Exchange (PIRE), which directly affects its operating revenue and financial health [90]. - The company's future growth depends on managing operations and growing the insurance business by limiting attrition and increasing revenue from home-related services [96]. - The company may not be able to access capital markets when needed, impacting its ability to fund operations and seize business opportunities [87]. - The cyclical nature of the insurance industry may lead to fluctuations in financial performance, affecting premium rates and underwriting capacity [97]. - The company incurred operating losses of $64.6 million, $190.4 million, and $177.0 million for the years ended December 31, 2024, 2023, and 2022, respectively, with an accumulated deficit of $754.9 million as of December 31, 2024 [213]. - The company has experienced net losses in each year since its inception, indicating challenges in achieving and sustaining profitability [213]. Risks and Challenges - Claims costs for PIRE may increase due to inflated material costs, supply chain shortages, and labor cost increases, potentially impacting the company's financial position [92]. - The company faces risks from its expansion into the insurance business, including higher than expected claims costs and external factors affecting financial condition [90]. - PIRE's financial strength ratings could be downgraded, which may adversely affect the company's financial condition [87]. - Severe weather events and climate change may require additional capital for the insurance business, impacting financial stability [102]. - Increased insurance claims and costs could reduce access to reinsurance, negatively affecting the company's operations [103]. - Development of new insurance products and market expansion efforts may require substantial expenditures and carry inherent risks [106]. - The company faces risks related to customer service quality, which could harm its reputation and sales if not maintained [128]. - The company is subject to market volatility affecting raw material prices, which may hinder its ability to pass cost increases to customers [132]. - The company is dependent on reinsurance, and any inability to secure adequate reinsurance could materially impact its business model and profitability [168]. - The company may face litigation risks related to the actions of its service providers, which could divert management's focus and resources [133]. Regulatory and Compliance Issues - The company is subject to various risks related to regulatory compliance, which could limit growth and impose additional costs on PIRE and HOA [87]. - The company is subject to extensive state regulation in its insurance businesses, which could limit growth and impose additional costs [220]. - The company is subject to evolving privacy and data protection regulations, which could increase operational costs and expose it to liabilities [229]. - Compliance with privacy and data protection laws may impose significant costs and burdens on the company, potentially delaying product development and affecting business relationships [232]. - Non-compliance with applicable laws could lead to increased scrutiny from regulatory agencies and result in significant financial penalties [239]. - The company is subject to numerous regulations, including the Truth in Lending Act and the Fair Credit Reporting Act, which impose specific compliance obligations [235]. Employee and Organizational Structure - As of December 31, 2024, the company had a total of 733 employees, including 729 full-time employees, and maintains good relationships with employees and contractors [82]. - The company emphasizes a decentralized operating model to maintain momentum and entrepreneurial culture during acquisitions [78]. - The company was certified as a Great Place to Work in 2023 and 2024, highlighting its commitment to a supportive and inclusive environment [81]. - Employee costs, the largest expense for the company, could increase due to external factors like inflation, impacting profitability [201]. Strategic Partnerships and Market Position - Partnerships with moving companies and utilities are being leveraged to expand access to high-value homebuyers and foster long-term customer relationships [54]. - The company is incorporating AI into its products and services, which presents both opportunities and regulatory risks [147]. - A business collaboration agreement with Aon includes a cash payment of approximately $25 million and additional payments in 2025, contingent on maintaining certain conditions [165]. Financial Management and Capital Structure - Management fees and commissions from PIRE are critical to the company's revenue; any reduction could adversely affect profitability [153]. - The company does not own PIRE but serves as its attorney-in-fact, which subjects it to risks associated with PIRE's financial health [151]. - Changes in the management fee rate could materially affect the company's revenues and profitability, as it is determined at Porch's discretion [160]. - PIRE holds surplus notes totaling $106 million, with payments subject to risk-based capital levels and regulatory approval [157]. - The company has net operating loss carryforwards of $430.4 million for U.S. federal income tax purposes and $289.7 million for state income tax purposes, which may expire if not utilized [219].

Financial Performance - Total revenue for Q4 2024 was $100.4 million, a decrease of 12% compared to Q4 2023, primarily due to $26 million of non-recurring revenue in the prior year[5] - GAAP net income for Q4 2024 was $30.5 million, an improvement of $33 million from a net loss of $2.5 million in Q4 2023[5] - Adjusted EBITDA for Q4 2024 was $41.8 million, a $30.1 million increase from $11.7 million in Q4 2023, driven by operational excellence[5] - Revenue for Q4 2024 was $100,361, a decrease of 12.4% compared to $114,612 in Q4 2023[50] - Operating income for Q4 2024 was $25,080, compared to $7,380 in Q4 2023, indicating a significant improvement[50] - Net income for the year ended December 31, 2024, was a loss of $32,829, an improvement from a loss of $133,933 in 2023[50] - Adjusted EBITDA for the three months ended December 31, 2024, was $41.797 million, with an Adjusted EBITDA margin of 42%, up from 10% in the same period of 2023[35] Insurance Segment Performance - Gross written premium for Q4 2024 was $112 million with approximately 206 thousand policies in force, reflecting a 50% increase in new business premiums compared to the prior year[5] - The Insurance segment achieved an Adjusted EBITDA of $48.812 million for Q4 2024, compared to $31.648 million in Q4 2023, reflecting a strong performance[35] - The gross loss ratio improved to 21% in Q4 2024 from 36% in the prior year, while the attritional loss ratio improved to 16% from 30%[8] - The Gross Loss Ratio for the three months ended December 31, 2024, was 21%, a significant improvement from 36% in 2023, while the Attritional Loss Ratio improved to 16% from 30%[36] - Policies in Force at the end of the period increased, contributing to a higher Annualized Revenue per Policy, which is a key performance indicator for the Insurance segment[39] Strategic Initiatives - Porch Group formed the Porch Insurance Reciprocal Exchange in January 2025, transitioning to a commission and fee-based model[2] - Porch Group's strategy includes leveraging unique data for advantaged underwriting and expanding its market presence in homeowners insurance[21] - The company is focused on developing new products and enhancing existing services to improve customer retention and attract new clients[25] - Porch Group's Premium Retention Rate is calculated based on renewed premiums over the last four quarters, indicating the effectiveness of its customer retention strategies[40] - The company is actively managing growth and expansion opportunities to build a strong consumer brand in the insurance market[25] - Forward-looking statements indicate expectations for improved margins and a more predictable financial profile through the operation of Porch Insurance Reciprocal Exchange[24] Financial Position - The company ended Q4 2024 with cash, cash equivalents, and investments totaling $350.4 million, a decrease of 12% from $397.6 million at the end of 2023[10] - Total current assets decreased from $481,078 in 2023 to $365,127 in 2024, a decline of 24.2%[48] - Total liabilities decreased from $935,076 in 2023 to $857,193 in 2024, a reduction of 8.3%[48] - Cash and cash equivalents at the end of the period were $196,782, down from $297,232 in the previous year[53] - The company reported a total of $75,281 in operating expenses for Q4 2024, down from $107,232 in Q4 2023, a decrease of 29.8%[50] Growth Metrics - Average Monthly Revenue per Account in the quarter is a key growth metric, reflecting the company's focus on increasing revenue from existing customers[44] - The average revenue generated per monetized service is a critical metric for measuring market penetration and service delivery effectiveness[46] - The company has focused on shifting the mix of services toward higher revenue services as part of its growth strategy[46]

Company Overview - Porch Group, Inc. (PRCH) currently holds a Momentum Style Score of B, indicating a positive momentum outlook [2] - The company has a Zacks Rank of 2 (Buy), suggesting strong potential for outperformance in the market [3] Price Performance - PRCH shares have increased by 50.55% over the past week, significantly outperforming the Zacks Internet - Software industry, which rose by 1.93% during the same period [6] - Over the past quarter, PRCH shares have surged by 242.67%, and they have gained 147.12% over the last year, while the S&P 500 has only increased by 10.27% and 32.66%, respectively [7] Trading Volume - The average 20-day trading volume for PRCH is 2,914,973 shares, which serves as a bullish indicator when combined with rising stock prices [8] Earnings Estimates - In the last two months, two earnings estimates for PRCH have been revised upwards, while none have been lowered, leading to an increase in the consensus estimate from -$0.76 to -$0.63 [10] - For the next fiscal year, two estimates have also moved upwards with no downward revisions, indicating a positive earnings outlook [10] Conclusion - Considering the positive momentum indicators and earnings outlook, PRCH is positioned as a 2 (Buy) stock with a Momentum Score of B, making it a potential candidate for investors seeking short-term gains [11]

Company Overview - Porch Group, Inc. (NASDAQ: PRCH) is based in Seattle and operates within the home services and insurance sectors [1] - The company's stock has experienced a significant increase, rising 170% over the past year [1] Market Sentiment - Wall Street analysts believe that Porch Group still has potential for further growth, indicating positive market sentiment towards the company [1] Research Principles - Grassroots Trading focuses on providing objective and unbiased research, particularly on small- to mid-cap companies, while also identifying opportunities in larger companies [1]

Financial Data and Key Metrics Changes - In Q3 2024, Porch Group reported revenue of $111.2 million, a 14% decrease from the prior year, primarily due to the Vesttoo matter [14] - Adjusted EBITDA was $16.9 million, an $8.1 million improvement from the prior year, driven by the insurance segment and strong cost control [14][19] - Net income for Q3 was positive at $14 million, with positive operating cash flow of $12 million [9][20] - The gross loss ratio in Q3 was 57%, with an attritional loss ratio of 21% without catastrophic weather [10][48] Business Line Data and Key Metrics Changes - The insurance segment accounted for 72% of total revenue, generating $79.9 million, a 16% decrease from the prior year [16] - Vertical Software segment revenue was $31.3 million, a decrease of 9% from the prior year, although software and services subscriptions revenue increased by 7% [16] - Gross written premium in the insurance segment decreased by 10% from the prior year, while premium per policy increased by 25% year-over-year [15][46] Market Data and Key Metrics Changes - The company has constrained premium growth to approximately flat until the approval of the reciprocal exchange, with plans to reactivate channel partners and launch a premium growth plan [8] - The annualized premium per policy for HOA increased by 25% to $2,208, with premium retention at 100% [47] Company Strategy and Development Direction - Porch Group is transitioning to a reciprocal insurance model, expected to result in higher margins and more predictable financial results [7][31] - The company plans to launch Porch Insurance in Texas in January 2025, with a focus on enhancing the value proposition for consumers [34] - The new insurance services segment will operate with two business units, focusing on risk management and capital solutions [30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving full-year profitability in 2024, with a focus on delivering positive adjusted EBITDA each quarter [52] - The company anticipates strong growth in 2025, leveraging the new reciprocal model and improved insurance profitability [53] Other Important Information - The company repurchased $43 million of its September 2026 unsecured debt for $20 million in cash, reducing outstanding debt [12][20] - The expected surplus for HOA at the end of the year is approximately $100 million, compared to $50 million at the end of the prior year [23] Q&A Session Summary Question: How does the new value proposition for consumers differ from past offerings? - Management highlighted the integration of moving services and a 90-day warranty as differentiators for homebuyers, aiming to enhance the customer experience [55] Question: What was the decision behind exiting the corporate relocation business? - The company noted a decline in corporate relocations due to remote work trends, making it less viable to focus on that segment [56] Question: How will the reciprocal impact overall corporate revenue and expenses? - Management indicated that the new model would lead to a more fixed expense profile, enhancing profitability [58] Question: What are the plans for growing policies in force post-reciprocal launch? - The focus will be on expanding in Texas and other states, leveraging agent recruitment and Home Factors data for profitable growth [61][65] Question: How stable is the 20% commission fee? - Management suggested that while the 20% rate is a good starting point, there may be opportunities for it to increase in the future [66] Question: What is the current performance of Floify and the embedded insurance marketplace? - Management acknowledged challenges in the mortgage market but expressed optimism about future growth opportunities in the vertical software segment [70][72] Question: What is the potential of Home Factors for Porch Group? - Management expressed excitement about the Home Factors opportunity, indicating it could become a significant pillar of the business due to its unique data and positive feedback from third parties [73][74]

Revenue and Premiums - Gross Written Premium for Q3 2024 was $139 million, a decrease of 10% from $154 million in Q3 2023[113] - Total revenue decreased by $18.4 million, or 14%, from $129.6 million in Q3 2023 to $111.2 million in Q3 2024, primarily due to higher reinsurance ceding and a reduction in policies in force[126] - Insurance segment revenue was $79.9 million, representing 72% of total revenue, down from $95.2 million or 74% of total revenue in the same quarter of 2023, primarily due to a reduction in policies in force[131] - Vertical Software segment revenue decreased to $31.3 million, down 9% from $34.3 million in the prior year, driven by a 33% decline in move-related transactions[130] - Year-to-date revenue for the nine months ended September 30, 2024, was $337.5 million, a 7% increase from $315.7 million in the same period of 2023[136] - Total revenue for the nine months ended September 30, 2024, was $337.5 million, reflecting a 7% increase from $315.7 million in the same period of 2023[141] - Insurance segment revenue increased to $246.1 million for the nine months ended September 30, 2024, up 13% from $218.3 million in the same period of 2023, accounting for 73% of total revenue[141] Policies and Loss Ratios - Policies in Force decreased by 34% to 219,000 from 334,000 year-over-year[113] - Gross Loss Ratio increased to 57% from 39%[115] - Non-catastrophe gross loss ratio improved by 11 percentage points from the prior year, driven by premium per policy increases and non-renewal of higher risk policies[123] Expenses and Cash Flow - Selling and marketing expenses decreased by $12.9 million, or 32%, from $40.1 million in Q3 2023 to $27.2 million in Q3 2024, primarily due to a decrease in variable policy acquisition costs[126] - Interest expense increased by 50% to $31.8 million for the nine months ended September 30, 2024, compared to $21.2 million in the same period of 2023[137] - Net cash used in operating activities was $(5.1) million for the nine months ended September 30, 2024, a decrease of $79.978 million or 107% compared to $74.9 million in the same period of 2023[3] - Net cash used in investing activities increased by 53% to $(52.2) million for the nine months ended September 30, 2024, from $(34.2) million in 2023[4] - The company reported a net cash change of $(80.6) million for the nine months ended September 30, 2024, compared to a positive change of $133.1 million in 2023, reflecting a 161% decrease[8] Debt and Equity - The company repurchased $51.2 million of its 2026 senior convertible notes at an average par value of 45.3%, for $23.2 million during the nine months ended September 30, 2024[123] - A gain of $22.5 million on extinguishment of debt was recognized during Q3 2024 due to the repurchase of a portion of the 2026 Notes[127] - The company repurchased $43.2 million of its 2026 Notes in September 2024, paying an average of 47% of par value, resulting in a $22.5 million gain on extinguishment of debt[5] - The company issued a total of 18.3 million newly issued shares to HOA to support the transition of Porch's insurance underwriting business, enhancing HOA's balance sheet strength[121] - The company contributed a total of 18.3 million newly issued shares to HOA to support its insurance underwriting business transition, which is expected to bolster HOA's balance sheet and support premium growth in 2025[7] Net Loss and Adjusted EBITDA - The company recorded a loss of $5.3 million from the sale of its insurance agency, Elite Insurance Group, for a sale price of $12.2 million[119] - Net loss for the nine months ended September 30, 2024, was $63.3 million, a 52% improvement from a net loss of $131.4 million in the same period of 2023[136] - Adjusted EBITDA loss for the nine months ended September 30, 2024, was $(34.6) million, a $21.6 million improvement from $(56.2) million in the same period of 2023[148] - Segment Adjusted EBITDA for the Insurance segment improved to a loss of $24.8 million, a 30% increase compared to a loss of $19.0 million in the same period last year[133] - Vertical Software segment Adjusted EBITDA increased to a loss of $5.1 million, improving by 62% from a loss of $3.2 million in the prior year[134] - Vertical Software segment Adjusted EBITDA improved to $11.0 million for the nine months ended September 30, 2024, compared to $4.6 million in the same period of 2023, a 140% increase[143] - Insurance segment Adjusted EBITDA loss narrowed to $(5.4) million for the nine months ended September 30, 2024, from $(19.3) million in the same period of 2023, an improvement of 72%[143] Cash and Investments - Cash recoveries on terminated reinsurance contracts amounted to approximately $28 million during the nine months ended September 30, 2024[123] - Cash and cash equivalents as of September 30, 2024, totaled $206.7 million, with an additional $10.0 million in restricted cash[149] - The insurance carrier, HOA, held cash and cash equivalents of $150.5 million and investments of $166.0 million as of September 30, 2024[6] - The company has a $197.8 million portfolio of fixed income securities with an unrealized loss of $(0.9) million as of September 30, 2024[10] - Investment income and realized gains increased to $3.8 million in Q3 2024 from $2.5 million in Q3 2023, attributed to a higher investment balance and reinvested securities at higher interest rates[127] - Investment income and realized gains increased to $11.0 million for the nine months ended September 30, 2024, compared to $4.5 million in the same period of 2023[138] Regulatory and Contractual Developments - The Texas Department of Insurance approved the application to form a reciprocal exchange on October 25, 2024[116] - The terminated reinsurance contract with Vesttoo would have required approximately $20 million in additional premium payments if not terminated[116]

Financial Performance - Total revenue for Q3 2024 was $111.2 million, a decrease of 14% compared to $129.6 million in Q3 2023[4] - GAAP net income improved to $14.4 million from a net loss of $5.7 million in the prior year[4] - Adjusted EBITDA for Q3 2024 was $16.9 million, an increase of $8.1 million from $8.8 million in Q3 2023[4] - Porch Group reported a net income of $14.4 million for the three months ended September 30, 2024, compared to a net loss of $5.7 million for the same period in 2023[31] - Adjusted EBITDA for the three months ended September 30, 2024, was $16.9 million, representing 15% of total revenue, up from $8.8 million or 7% in the same period last year[31] - For the nine months ended September 30, 2024, Porch Group's net loss was $63.3 million, an improvement from a loss of $131.4 million in the same period of 2023[31] - Net loss for the nine months ended September 30, 2024, was $63,303, compared to a net loss of $131,447 for the same period in 2023, representing a 52% improvement[40] Insurance Segment Performance - Gross written premium in the Insurance segment was $139 million, with approximately 219 thousand policies in force, reflecting a 10% decrease from $154 million in Q3 2023[9] - The attritional loss ratio improved to 21% from 32% in the prior year, driven by profitability actions in the insurance business[5] - The Insurance segment reported an Adjusted EBITDA of $24.8 million for the three months ended September 30, 2024, with a margin of 31.1%, up from 20.0% in the same period last year[33] - The company expects a full year 2024 loss ratio of 68%, with potential downside due to catastrophic weather events[18] Strategic Initiatives - Porch Group launched three new Home Factors to enhance risk assessment in its insurance offerings[6] - The Texas Department of Insurance approved the formation of a reciprocal exchange, expected to enhance the insurance business's financial profile[13] - Future growth strategies include the formation of a reciprocal insurance structure, which is expected to enhance margins and provide a more predictable financial profile[25] - The company is focusing on leveraging unique data for advantaged underwriting in homeowners insurance, aiming to protect the whole home and enhance service offerings for homebuyers[23] - Porch Group maintains strategic relationships with approximately 30,000 companies in the home-buying transaction ecosystem, which is critical for its competitive advantage[23] - Porch Group is committed to developing new products and enhancing existing services to increase transaction volume and customer retention[26] Financial Position and Cash Flow - Total current assets decreased from $481,078 thousand as of December 31, 2023, to $406,870 thousand as of September 30, 2024, a decline of approximately 15.4%[36] - Total liabilities increased slightly from $935,076 thousand as of December 31, 2023, to $944,307 thousand as of September 30, 2024, an increase of approximately 1.5%[36] - Total operating expenses for the nine months ended September 30, 2024, were $427,138 thousand, down from $513,424 thousand for the same period in 2023, a reduction of approximately 16.8%[37] - Cash flows from operating activities resulted in a net cash used of $5,080 for the nine months ended September 30, 2024, compared to a net cash provided of $74,898 in 2023[40] - Total cash and cash equivalents at the end of the period decreased to $216,678 from $361,714 in the previous year, reflecting a decline of 40%[40] - Purchases of short-term and long-term investments amounted to $98,148, up from $59,851 in the prior year, indicating a 64% increase[40] - The company reported a gain on extinguishment of debt amounting to $22,545 thousand for the three months ended September 30, 2024[37] - The company recorded a gain on the extinguishment of debt of $27,436 for the nine months ended September 30, 2024, compared to a gain of $81,354 in 2023[40] - Net cash used in investing activities was $52,209, compared to $34,203 in the previous year, reflecting a 53% increase in cash outflow[40] - Net cash provided by (used in) financing activities was $(23,265), a significant decrease from $92,414 in the prior year[40] Key Metrics - Average Monthly Revenue per Account in Quarter is a key growth metric, reflecting the revenue generated from existing customers[34] - The company achieved a Premium Retention Rate, which measures the ratio of renewed premiums over the last four quarters to base premiums, indicating customer loyalty[34] - Average Quarterly Revenue per Monetized Service is a focus area for growth, emphasizing the shift towards higher revenue services[34] - The company reported a Gross Loss Ratio, which is calculated as gross losses divided by gross earned premium, indicating the efficiency of its insurance operations[34] - Stock-based compensation expenses were $19,208, slightly down from $20,277 in the previous year[40] - The change in fair value of derivatives resulted in a gain of $7,772, compared to a gain of $2,440 in the same period last year, showing a significant increase[40] - The company reported a loss on divestiture of business amounting to $5,331, with no comparable figure in the previous year[40]

Group 1: Porch Group - Porch Group shares surged nearly 73%, contributing to a 7.6% increase in the Live segment [1] - The Texas Department of Insurance approved Porch's application to form Porch Insurance Reciprocal Exchange, aimed at increasing profitability and stabilizing earnings by reducing exposure to claims and weather risks [2] Group 2: Fiverr - Fiverr shares gained 34.6%, boosting the Work Pillar by 2.8%, driven by programs encouraging buyers to spend more on complex projects [3] - The company's revenues were up 8% year over year to $99.6 million, despite a 9% decline in active buyers to 3.8 million, with spending per buyer increasing by 9% to $296 [4] Group 3: Roblox - Roblox shares increased by 22%, with daily active users growing 27% to 88.9 million, marking the highest growth rate in around two years [6] - The company has captured 3% of its total addressable market in the gaming space, with total hours engaged on the platform rising by 29% [6] Group 4: Visa and Mastercard - Visa's payment volume grew 8% year over year, with U.S. payment volume up 5% and international volume up 10% [8] - Mastercard reported a revenue growth of 14% to $7.4 billion, driven by healthy consumer spending and a 17% increase in cross-border volume year over year [9] Group 5: Xerox - Xerox shares fell 16.7% as quarterly revenue of $1.5 billion missed analysts' estimates of $1.6 billion, representing a 7.5% year-over-year decline [11]

Financial Data and Key Metrics Changes - Revenue grew 12% to $111 million in Q2 2024, with revenue less cost of revenue increasing 10% to $19 million [7][14] - Adjusted EBITDA loss was $34.8 million, an improvement of $8.4 million over the prior year [15][19] - Gross written premium was $117 million, a decrease from the prior year as the company focused on profitability and nonrenewal of higher-risk policies [15][25] Business Line Data and Key Metrics Changes - The insurance segment accounted for 71% of total revenue, increasing from 65% in Q2 2023, with revenue of $78.3 million, a 22% increase year-over-year [16] - Vertical software segment revenue was $32.6 million, a decrease of 5% over the prior year, although software and services subscription businesses increased 4% [16][24] - The insurance segment's adjusted EBITDA loss was $27.3 million, an improvement of $3.9 million over the prior year [17] Market Data and Key Metrics Changes - The housing market declined 3% year-over-year in Q2, impacting the company's vertical software segment [12] - The average number of companies served was 29,000, slightly lower due to pressures in the mortgage title and inspection industries [24] - Average revenue per company per month increased 17% to $1,253, driven by lower seating and premium increases [24] Company Strategy and Development Direction - The company has refiled the reciprocal exchange application to optimize its structure and reduce exposure to unusual weather events [6][9] - The launch of Home Factors data products aims to improve risk assessment and marketing for third parties [6][10] - The company is focused on controlling operating expenses and improving profitability through price increases and strong cost control [15][19] Management's Comments on Operating Environment and Future Outlook - Management highlighted strong execution in underwriting and cost control despite macro headwinds and rare weather events impacting results [6][8] - The company expects to grow premiums nicely in 2025 and beyond, leveraging unique data for insurance profitability [27][35] - Management reiterated a commitment to achieving positive adjusted EBITDA for the full year 2024, despite the impact of catastrophic weather events [23][35] Other Important Information - The company has been recertified as a great place to work, with year-over-year improvements in key metrics [12] - The contribution of 18.3 million Porch shares to HOA is expected to bolster its balance sheet and support future premium growth [10][11] - The company is pursuing legal action related to the Vesttoo fraud discovered in 2023 [12] Q&A Session Summary Question: Thoughts on investing in growth versus derisking the portfolio until TDI approval - Management believes recent catastrophic events do not change their growth plans and they are ready to unlock growth opportunities [37][38] Question: Expectations for vertical software revenue in a housing recovery - Management expects vertical software revenue to outpace the national market recovery due to improved profitability and scalability [45][46] Question: Consideration of exiting markets like Houston due to weather events - Management does not plan to exit Houston, viewing it as a historically attractive market despite recent events [49][50] Question: Update on the reciprocal application and housing market assumptions - The reciprocal application was updated to reflect actual performance and milestones achieved, with a conservative outlook on the housing market [52][54] Question: Clarification on the $18 million share contribution to HOA - The share contribution was strategic to strengthen HOA's balance sheet and support future premium growth [56][58]

APorch Group Q2 2024 Earnings Presentation August 6, 2024 Copyright 2024 Porch Group, Inc. All rights reserved Presenters Matt Ehrlichman CEO, Chairman & Founder Shawn Tabak Chief Financial Officer Matthew Neagle Chief Operating Officer Michelle Taves GM Porch Group Media, Data & Marketing Copyright 2024 Porch Group, Inc. All rights reserved 2 Disclaimer Forward-Looking Statements Certain statements in this presentation may be considered forward-looking statements as defined by the Private Securities Litiga ...