Q2 2025 Performance Highlights - Porch Shareholder Interest revenue reached $107 million[20], with a gross profit of $89.2 million[20] and an 83% gross margin[20] - Adjusted EBITDA for Porch Shareholder Interest was $15.6 million[20], representing a 15% margin[20] - Reciprocal Written Premium (RWP) grew to $120.7 million[20], a $72 million increase or 431% increase year-over-year[20, 21] - Porch Shareholder Interest Cash Flow from Operations was $14.9 million[20] Reciprocal Performance - The Reciprocal's surplus combined with non-admitted assets reached $299 million as of June 30, 2025[27], a $102 million increase compared to the prior quarter[27] and a $259 million increase compared to the prior year[27] - The company estimates that a ~$300M surplus could potentially drive ~$1.5B Reciprocal Written Premium and ~$240M Insurance Services Adjusted EBITDA[29] Segment Performance - Insurance Services revenue was $67.4 million with a gross profit of $57.9 million and Adjusted EBITDA of $19.7 million[42], representing an 86% gross margin and 29% Adjusted EBITDA margin[42, 50] - Software & Data revenue was $24.0 million with a gross profit of $18.2 million and Adjusted EBITDA of $5.5 million[42], representing a 76% gross margin and 23% Adjusted EBITDA margin[42, 54] - Consumer Services revenue was $17.7 million with a gross profit of $15.2 million and Adjusted EBITDA of $2.0 million[42], representing an 86% gross margin and 11% Adjusted EBITDA margin[42, 58] Guidance - The company increased its 2025 revenue guidance to $405 million - $425 million[68], gross profit guidance to $328 million - $342 million[68], and Adjusted EBITDA guidance to $65 million - $70 million[68]

Financial Data and Key Metrics Changes - In the second quarter, adjusted revenue was reported at $1,026 million, reflecting a decline of 1% year over year when excluding Iraq impacts [2][21] - Adjusted earnings per share (EPS) decreased to $0.42 from $0.44 in the same quarter last year [3][22] - Adjusted operating margin remained stable at 19% for both the current and prior year [21][22] Business Line Data and Key Metrics Changes - Consumer money transfer (CMT) transactions declined by 3% in the quarter, with a 2% decline when excluding Iraq [22][23] - The branded digital business saw a 9% increase in transactions and a 6% increase in adjusted revenue [3][23] - Consumer services adjusted revenue grew by 41%, driven by the travel money business and the acquisition of EuroChange [30] Market Data and Key Metrics Changes - Retail business in The Americas faced challenges due to geopolitical factors, while retail in Europe showed mid-single-digit transaction and revenue growth [2][27] - The travel money business is projected to approach $100 million in revenue this year, a significant increase from previous years [2][3] - The U.S. to Mexico corridor, a major revenue driver, experienced a slowdown in both retail and digital transactions [39][45] Company Strategy and Development Direction - The company is focused on its Evolve 2025 strategy, aiming for sustainable, profitable revenue growth and enhancing customer experience [1][19] - There is a commitment to increasing digital transformation and expanding the digital wallet offerings in response to market changes [11][62] - The company is exploring stablecoin opportunities to modernize money movement and improve operational efficiency [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term growth despite current geopolitical challenges affecting transaction volumes [5][19] - The company is adapting to immigration policy changes that have created short-term headwinds, particularly in the U.S. market [6][62] - Future growth is expected to come from digital services and non-remittance products as core remittance growth stabilizes [62] Other Important Information - The company generated $148 million in cash flow from operations year to date, a significant increase from $60 million in the prior year [31] - Capital expenditures were reduced by 15% year over year, indicating a focus on strategic investments [32] - The company returned over $150 million to shareholders through dividends and share repurchases in the second quarter [32] Q&A Session Summary Question: Contribution of EuroChange acquisition to revenue growth - The EuroChange acquisition contributed approximately 2% to revenue growth in the quarter, exceeding initial expectations [36][38] Question: Impact of immigration crackdown on North America - There was no significant shift from retail to digital channels; both experienced a decline in transaction volumes [39] Question: Deceleration in digital transactions - The slowdown in digital transactions is primarily seen in U.S. outbound to Latin America, particularly Mexico [41][43] Question: Demand for stablecoin utilization - There is growing interest in stablecoin infrastructure, particularly in regions with currency controls, indicating potential for future growth [54][56] Question: Visibility into political headwinds affecting business - The impact of political headwinds is volatile, with fluctuations in transaction volumes observed [51][52] Question: Fraud losses in the quarter - Fraud losses were attributed to a duplicate payment issue during the implementation of a new payment network, but it did not significantly impact margins [68][70] Question: Changes in capital allocation strategy - There are currently no changes to the capital allocation strategy regarding buybacks versus dividends [86]