Porch(PRCH) - 2025 Q1 - Quarterly Results

First Quarter 2025 Financial & Operational Highlights Financial Performance Summary Porch Group's shareholder-owned businesses achieved strong Q1 2025 results, reporting $84.5 million revenue, $8.4 million net income, and an 82% gross margin Q1 2025 Financial Highlights for Porch Shareholder Interest ($ in millions) | Metric | Q1 2025 | YoY Change | Gross Margin | | :--- | :--- | :--- | :--- | | Revenue | $84.5 | n/a | n/a | | Gross Profit | $69.1 | +86% | 82% | | Net Income (attributable to Porch) | $8.4 | n/a | n/a | | Adjusted EBITDA | $16.9 | +$33.6M | 20% | - Effective January 2, 2025, Porch Group sold its insurance carrier (HOA) to the newly formed Porch Reciprocal Exchange, shifting focus to 'Porch Shareholder Interest' results for predictability and cash flow alignment[2] CEO Summary CEO Matt Ehrlichman highlighted the success of the new commission and fee-based business model, emphasizing strong Q1 results and increased full-year 2025 guidance - The business model is now described as simple, predictable, commission and fee-based, and higher margin[3] - Full-year 2025 guidance for Porch Shareholder Interest was raised to a midpoint of $410 million in Revenue, $327.5 million in Gross Profit, and $65 million in Adjusted EBITDA[3] - The Reciprocal successfully placed its new reinsurance program at a lower cost, marking the moment Porch Shareholders are no longer in the catastrophic weather claims business[3] Operational Highlights & Key Performance Indicators (KPIs) The company completed the sale of its insurance carrier, implemented strategic price increases, and launched new consumer offerings, showing solid Q1 2025 performance - Porch sold its insurance carrier, Homeowners of America, to the Reciprocal and now holds a $106 million surplus note with an interest rate of 9.75% plus SOFR[4] - In the Software and Data segment, Rynoh implemented a 20% price increase, aligning with strategic pricing goals[4] Q1 2025 Key Performance Indicators | Segment | KPI | Value | | :--- | :--- | :--- | | Insurance Services | Reciprocal Written Premium | $96.9 million | | | Reciprocal Policies Written | 36.1 thousand | | Software & Data | Average Number of Companies | 24.1 thousand | | | Annualized Avg. Revenue per Company | $3,644 | | Consumer Services | Monetized Services | 71.0 thousand | | | Average Revenue per Monetized Service | $207 | Financial Condition Balance Sheet and Liquidity Porch Shareholder Interest's cash and investments increased to $113.8 million as of March 31, 2025, driven by strong operating cash flow Porch Shareholder Interest Cash & Investments ($ in millions) | Category | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Unrestricted cash, equivalents, & investments | $96.6 | $61.6 | | Restricted cash and cash equivalents | $17.2 | $28.2 | | Total | $113.8 | $89.9 | - The increase in cash position was primarily driven by Porch Shareholder Interest cash flow from operations of $27.2 million[9] - As of March 31, 2025, the outstanding principal for convertible debt was $507.1 million, split between 2028 and 2026 notes[11] Post Balance Sheet Events The Reciprocal successfully secured its 2025 reinsurance program, reducing risk and costs, and removing catastrophic weather risk from Porch Shareholders - The Reciprocal secured its 2025 reinsurance placements with over 40 A-Rated reinsurers[12] - The new program lowers the Reciprocal's risk and reduces its cost of reinsurance compared to the prior year, meaning Porch Shareholders are no longer in the catastrophic weather claims business[12] Full Year 2025 Financial Outlook Porch Group raised its full-year 2025 financial guidance for its Shareholder Interest businesses, reflecting confidence in its new model and strong Q1 performance Updated 2025 Guidance The company increased its full-year 2025 guidance for Porch Shareholder Interest, raising revenue, gross profit, and Adjusted EBITDA at the midpoint Full Year 2025 Guidance for Porch Shareholder Interest | Metric | New 2025 Guidance | Previous 2025 Guidance | Increase at Midpoint | | :--- | :--- | :--- | :--- | | Revenue | $400m - $420m | $390m - $410m | $10m | | Gross Profit | $320m - $335m | $310m - $325m | $10m | | Adjusted EBITDA | $60m - $70m | $55m - $65m | $5m | - The financial guidance represents only the Porch Shareholder Interest and does not include the future results of the Reciprocal[14] Appendix: Detailed Financials & Non-GAAP Reconciliations Segment Financial Results This section details unaudited Q1 2025 financial results by segment, showing Insurance Services as the largest contributor to revenue and Adjusted EBITDA Q1 2025 Segment Results ($ in thousands) | Segment | Revenue | Gross Profit | Adjusted EBITDA (Loss) | | :--- | :--- | :--- | :--- | | Insurance Services | $49,806 | $42,325 | $25,809 | | Software & Data | $21,999 | $16,493 | $4,571 | | Consumer Services | $14,721 | $12,231 | $(670) | | Corporate | n/a | n/a | $(12,849) | Reconciliation of Non-GAAP Measures This section reconciles Q1 2025 consolidated Net Income of $3.7 million to Adjusted EBITDA of $16.9 million, detailing cash flow components for shareholder interest versus consolidated entity Reconciliation of Net Income (Loss) to Adjusted EBITDA (Loss) ($ in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income (loss) | $3,736 | $(13,362) | | Adjustments (Interest, D&A, etc.) | $13,125 | $(3,426) | | Adjusted EBITDA (Loss) | $16,861 | $(16,788) | - Porch Shareholder Interest generated $27.2 million in cash from operating activities, while the consolidated entity used $11.2 million in cash from operating activities in Q1 2025[43] Key Performance Indicator Definitions This section defines the key performance indicators used to evaluate business performance across the Insurance Services, Software & Data, and Consumer Services segments - Insurance Services KPIs include Reciprocal Written Premium (total premium written by the Reciprocal) and Reciprocal Policies Written[48] - Software & Data KPIs include Average Number of Companies and Annualized Average Revenue per Company[50][51] - Consumer Services KPIs include Monetized Services (total number of services generating revenue) and Average Revenue per Monetized Service[51][52] Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements for Porch Group, Inc., including Balance Sheets, Statements of Operations, and Cash Flows Condensed Consolidated Balance Sheets The balance sheet shows total assets of $802.3 million and total liabilities of $834.3 million as of March 31, 2025, with a total stockholders' deficit of $32.0 million Key Balance Sheet Items ($ in thousands) | Item | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $802,283 | $813,968 | | Total Liabilities | $834,332 | $857,193 | | Total Stockholders' Deficit | $(32,049) | $(43,225) | Condensed Consolidated Statements of Operations For Q1 2025, consolidated revenue was $104.7 million, with net income attributable to Porch shareholders of $8.4 million, a significant improvement year-over-year Q1 Statement of Operations Highlights ($ in thousands) | Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Revenue | $104,745 | $115,443 | | Gross Profit | $65,448 | $37,077 | | Operating Loss | $(1,266) | $(34,668) | | Net Income (Loss) | $3,736 | $(13,362) | | Net Income (Loss) Attributable to Porch | $8,395 | $(13,362) | Condensed Consolidated Statements of Cash Flows The company reported a consolidated net cash outflow from operating activities of $11.2 million in Q1 2025, resulting in a net decrease in cash of $30.8 million for the quarter Q1 Cash Flow Highlights ($ in thousands) | Cash Flow From | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Operating Activities | $(11,178) | $8,465 | | Investing Activities | $(19,368) | $12,697 | | Financing Activities | $(229) | $(2,501) | | Net Change in Cash | $(30,775) | $18,661 |