Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $107 million, primarily from $12.121 billion of reciprocal written premium, with a gross profit of $89 million, reflecting a 431% increase year-over-year [6][16] - Adjusted EBITDA for Q2 was $16 million, an improvement of $50 million compared to the prior year, resulting in a 15% margin [6][16] - Cash flow from operations for Q2 was $15 million, contributing to a total of $42 million for the first half of 2025 [7][37] Business Line Data and Key Metrics Changes - Insurance services generated $67.4 million in revenue from $121 million of reciprocal written premium, with a gross profit of $57.9 million and a gross margin of 86% [20] - Software and data revenue was $24 million, a 4% increase year-over-year, with a gross profit of $18.2 million and a 76% gross margin [21] - Consumer services revenue decreased by 6% to $17.7 million, with a gross profit of $15.2 million and an 86% gross margin [22] Market Data and Key Metrics Changes - The reciprocal ended Q2 with $299 million in surplus, an increase of $102 million from the previous quarter and $259 million from Q2 2024 [10][11] - The homeowners insurance market is projected to grow at high single digits annually over the next ten years, with Porch Group positioned to benefit from this growth [5] Company Strategy and Development Direction - The company has transitioned to a commission and fee-based model, aiming for predictable and high-margin financial results [5] - The focus is on growing premiums while also increasing surplus at the reciprocal, with a target of $500 million in reciprocal written premium for 2025 [27] - The company is expanding its agency distribution channel and has increased its sales team from 2 to 26 employees [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business across macroeconomic cycles, noting that homeowners insurance is a necessary purchase [14] - The company anticipates that a potential recession could benefit its business, as lower interest rates may stimulate the housing market [15] - Management highlighted strong underwriting performance and a favorable loss ratio of 34% for the reciprocal in Q2, compared to 117% the previous year [84] Other Important Information - The company has settled most of its 2026 convertible notes and is on track to reach a leverage goal of 2 to 3 times adjusted EBITDA in the medium term [25] - The company raised its 2025 revenue guidance by $5 million, now ranging from $420 million to $425 million, and increased adjusted EBITDA guidance midpoint to $67.5 million [26] Q&A Session Summary Question: Why did the take rate in insurance increase from 51.5% to almost 56%? - Management noted that the reciprocal written premium is efficiently converting into revenue, exceeding expectations [41][42] Question: How is the company managing growth versus margin expansion? - Management emphasized a balanced approach, aiming for consistent growth while also expanding margins over time [53][54] Question: What was the impact of weather on Q2 results? - Management indicated that weather conditions were normalized, and the company has strong reinsurance protection in place [58][59] Question: Can you provide insights on the HomeFactors data applications beyond underwriting? - Management highlighted various use cases for the data, including marketing campaigns and enhancing consumer experience through the Porch app [66][68] Question: How is the reception of new insurance agency partnerships? - Management reported positive reception and excitement among agents due to competitive commissions and differentiated product offerings [73]

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]