Porch(US:PRCH)2025-11-05 22:51Financial Performance - Total consolidated revenue increased by $6.9 million, or 6%, from $111.2 million in Q3 2024 to $118.1 million in Q3 2025[239]. - Gross profit increased by $25.2 million, or 41%, from $61.7 million in Q3 2024 to $86.9 million in Q3 2025[239]. - Operating income improved by $18.8 million, from a loss of $2.5 million in Q3 2024 to a profit of $16.3 million in Q3 2025[239]. - Adjusted EBITDA increased by $3.7 million, or 22%, from $16.9 million in Q3 2024 to $20.6 million in Q3 2025[246]. - Net income attributable to Porch decreased by $25.2 million, from $14.4 million in Q3 2024 to a loss of $10.9 million in Q3 2025[239]. - Porch's total revenue for the three months ended September 30, 2025, was $115.074 million, an increase of $37.382 million compared to $77.692 million in the prior year period[257]. - Gross profit for Porch increased to $94.242 million in Q3 2025, up by $54.127 million from $40.115 million in Q3 2024[257]. - Adjusted EBITDA for Porch improved significantly to $20.626 million in Q3 2025, a positive change of $26.155 million from a loss of $5.529 million in the same quarter last year[257]. - The company reported a significant loss of $15.4 million in net income, compared to a profit of $14.4 million in the same quarter last year[239]. - The company reported a net loss of $64.7 million for the nine months ended September 30, 2025, compared to a loss of $63.3 million in the previous year[306]. Revenue Segments - Insurance Services segment revenue increased by 99% to $73.8 million for the three months ended September 30, 2025, driven by increased ceding from the Reciprocal Segment[264]. - Software & Data segment revenue increased by 7% to $24.6 million for the three months ended September 30, 2025[270]. - Consumer Services segment revenue grew by $1.6 million to $19.4 million for the three months ended September 30, 2025, primarily due to higher fees for third-party services[274]. - Total revenue for the nine months ended September 30, 2025, was $342.122 million, with a breakdown of $191.041 million from Insurance Services, $70.647 million from Software & Data, and $51.738 million from Consumer Services[295]. - Insurance Services segment revenue increased by 61% to $191.0 million for the nine months ended September 30, 2025, up from $118.6 million in the previous year, driven by increased ceding from the Reciprocal Segment[310]. Expenses and Costs - Cost of revenue decreased by $18.3 million, or 37%, from $49.5 million in Q3 2024 to $31.1 million in Q3 2025, representing 26% of revenue compared to 44% in the prior year[240]. - Selling and marketing expenses rose by $2.9 million, or 11%, from $27.2 million in Q3 2024 to $30.2 million in Q3 2025[241]. - General and administrative expenses increased by $2.8 million, or 11%, from $24.3 million in Q3 2024 to $27.1 million in Q3 2025[242]. - Interest expense increased by $3.3 million, or 31%, from $10.6 million in Q3 2024 to $14.0 million in Q3 2025, primarily due to the exchange of notes[243]. - Selling and marketing expenses totaled $54.906 million, representing a significant investment in growth initiatives[1]. - General and administrative expenses increased by $9.0 million, or 12%, to $81.9 million, primarily due to a one-time agency partnership payment[285]. Adjusted EBITDA and Margins - Adjusted EBITDA improved by $87.7 million to $53.1 million in 2025, compared to a loss of $34.6 million in 2024, attributed to a shift in business model[292]. - Adjusted EBITDA (Loss) for the Insurance Services segment improved by $26.2 million to $25.3 million for the three months ended September 30, 2025[260]. - Adjusted EBITDA for the Software & Data segment rose to $15.2 million in 2025, compared to $11.6 million in 2024, driven by strong cost control measures[318]. - Adjusted EBITDA (Loss) for Porch Shareholder Interest improved by $65.6 million, resulting in a loss of $12.4 million for the nine months ended September 30, 2025, compared to a loss of $78 million in the prior year[306]. Surplus and Debt Management - The Reciprocal segment has a surplus of $412.0 million as of September 30, 2025, an increase of $254.0 million from December 31, 2024[236]. - Porch holds $106 million of surplus notes due from the Reciprocal, which pay interest of 9.75% plus SOFR[236]. - The company had $412.0 million in total statutory surplus as of September 30, 2025, which is crucial for meeting regulatory capital requirements[359]. - As of September 30, 2025, the company had $475.1 million in aggregate principal amount outstanding in convertible notes[339]. - The company exchanged $96.8 million of 2026 Notes for $83.0 million of newly issued 2030 Convertible Senior Unsecured Notes, and issued an additional $51.0 million of 2030 Notes for cash[349]. Cash Flow and Investments - Net cash provided by operating activities for the nine months ended September 30, 2025, was $65.2 million, a significant increase from a net cash used of $5.1 million in the same period of 2024[360][361]. - Net cash used in investing activities was $49.4 million for the nine months ended September 30, 2025, primarily due to $104.0 million in investment purchases[363]. - Net cash used in financing activities was $19.8 million for the nine months ended September 30, 2025, mainly related to $68.2 million in repurchases of 2026 Notes[366]. Strategic Initiatives - The company is focusing on market expansion and new product development as part of its strategic initiatives moving forward[296]. - New services, including online packing services for movers, were launched in the Consumer Services segment[236]. - Rynoh implemented a 20% price increase in the first quarter for the Software and Data segment, aligning with strategic pricing goals[236].