Porch Group (NASDAQ:PRCH) reported second-quarter results that exceeded its prior expectations, driven by growth in its Insurance Services business, and raised its full-year 2026 outlook for revenue, gross profit and adjusted EBITDA excluding its reciprocal insurance carrier.
The company reported consolidated GAAP revenue of $141 million for the quarter, up 12% from a year earlier. Revenue from Porch-owned segments, which excludes the reciprocal, rose 23% to $132 million. Net income attributable to Porch shareholders was $6 million, which Chief Financial Officer Shawn Tabak described as an important milestone for the business.
Insurance Services Drives Earnings Growth
Insurance Services remained Porch’s largest and fastest-growing business. Segment revenue increased 38% year over year to $93 million, while gross profit rose 40% to $81 million. The segment’s gross margin was 87%, and adjusted EBITDA increased 126% to $44 million, producing a 48% adjusted EBITDA margin compared with 29% in the prior-year quarter.
Tabak said the margin expansion reflected operating leverage as insurance policy and premium volumes increased. He also noted that results included an approximately $3 million benefit from an expense true-up that the company does not expect to recur. In addition, Porch is beginning to benefit from revenue that had been deferred under its reciprocal structure, with some management fees recognized over 18 months.
Reciprocal policies written increased 38% year over year to approximately 59,000 during the quarter, a 500-basis-point acceleration from the first-quarter growth rate. Reciprocal written premium, or RWP, rose 16% to $140 million.
Ehrlichman emphasized that Porch’s insurance economics are tied not only to written premium but also to policy count because it charges policy fees to policyholders. He said the company expects policies written to exceed 70,000 per quarter by the end of the year.
New-customer RWP more than tripled from a year earlier, according to management. RWP per policy was $2,383, declining year over year because of a greater mix of new policies relative to higher-priced renewal policies. Premium per new customer declined 4% year over year in the quarter, which management attributed partly to a softer insurance pricing environment.
Porch said competitors became more aggressive on pricing during May, affecting conversion rates. The company responded with targeted pricing adjustments in selected markets, and Ehrlichman said conversion improved and reaccelerated in June. In Texas, Porch’s largest state, conversion reached high-water marks during the final week of June, he said.
Distribution, Capital and Underwriting Metrics
The company continued to expand its independent-agency distribution network. Producing agency branch locations rose 148% from a year earlier, while quote volumes increased 87%. Quote volume also rose sequentially for the seventh consecutive quarter.
The reciprocal ended the quarter with statutory surplus of $170 million, up 33% year over year and 3% sequentially. The quarter included a $14 million storm event, Tabak said. The reciprocal reported a gross loss ratio of 38% and an attritional loss ratio of 18%.
Porch said the reciprocal’s statutory surplus supports more than $800 million of premium when including non-admitted assets, principally Porch shares owned by the reciprocal. It also cited its ability to support premium approaching $2 billion.
During the quarter, the reciprocal sold 2.1 million Porch shares to Porch Group and retained 16.2 million shares. Tabak said most of the retained share value is treated as non-admitted assets and is incremental to statutory surplus. The company also completed an inaugural $100 million catastrophe bond placement at the top of its reinsurance tower, which Tabak described as fully collateralized reinsurance for low-probability events.
Porch ended the quarter with $127 million in cash and investments, down slightly from the first quarter. The company said the decline reflected the share purchase from the reciprocal, $17 million of interest expense and working-capital timing, partly offset by adjusted EBITDA generation. The reciprocal held $331 million in cash and investments at quarter-end.
Full-Year Outlook Raised
Porch increased its 2026 guidance across its Porch-owned segments. The company now expects:
- Revenue excluding the reciprocal of $506 million to $517 million;
- Gross profit excluding the reciprocal of $419 million to $429 million; and
- Adjusted EBITDA excluding the reciprocal of $119 million to $125 million.
At the midpoint, the updated revenue outlook implies 22% year-over-year growth, while adjusted EBITDA guidance of $122 million implies 59% growth. Porch had generated $59 million in adjusted EBITDA excluding the reciprocal during the first half of the year.
The company maintained its $600 million full-year RWP target. Tabak said Porch generated $255 million in RWP during the first half and expects $345 million in the second half.
Management said it expects its leverage ratio to be below 3 times this year, within the 2-to-3-times target range discussed at its 2024 investor day. Ehrlichman said the company now qualifies as a “Rule of 50” business, citing 23% revenue growth excluding the reciprocal and a 30% adjusted EBITDA margin on the same basis.
AI and Other Business Segments
Chief Operating Officer Matthew Neagle said Porch is using artificial intelligence to accelerate engineering work, reduce cloud-computing costs and improve operations. He said engineering teams recorded a 2.4-fold increase in lines of code changed and a 73% increase in merge requests created, while targeted cloud infrastructure savings were approaching 10%.
Neagle also said Porch’s data platform provides insights on about 90% of U.S. residential properties and early signals on 90% of U.S. home buyers each month. The company has developed approximately 100 “HomeFactors,” or data-derived property attributes intended to help assess insurance risk.
Software & Data revenue was $23 million, with $5 million in adjusted EBITDA. The business was affected by the planned sunset of legacy products serving roughly 4,000 small home-service contractors. Consumer Services generated $18 million in revenue and $3 million in adjusted EBITDA.
Management said both segments continue to operate against a stagnant housing-market backdrop, while Porch focuses on product improvements, partnerships and customer experience.
About Porch Group (NASDAQ:PRCH)
Porch Group, Inc operates a technology-driven home services platform designed to connect homeowners with professional contractors, maintenance providers and home improvement specialists. Through its online marketplace and proprietary software solutions, Porch enables users to research, compare and book services ranging from home repairs and remodeling to maintenance and renovations. The company’s platform integrates detailed provider profiles, customer reviews and real-time appointment scheduling to streamline the process of sourcing and managing home projects.
In addition to its core marketplace, Porch offers software products tailored for service professionals.
