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    PRCH
    Earnings call· Jun 2026(Q2 FY26)

    Porch Group Q2 FY26 earnings call PRCH

    Jul 29, 2026 Source

    Executive summary

    Porch Group Q2 FY26 — Exceeds Expectations, Raises Guidance, Achieves Rule of 50

    Porch Group delivered a strong Q2 FY26, exceeding expectations and significantly raising full-year guidance, driven by exceptional performance in its Insurance Services segment. The company achieved positive net income and a Rule of 50 status, demonstrating the operating leverage of its model. Management highlighted the strategic advantage of its proprietary data and AI integration in navigating a softer insurance market, focusing on policy growth and disciplined capital allocation.

    Highlights

    6

    • Revenue, excluding the reciprocal, grew 23% year-over-year to $132 million.

    • Adjusted EBITDA, excluding the reciprocal, grew 2.5x year-over-year to $39 million.

    • Insurance Services revenue grew 38% year-over-year to $93 million with a 48% adjusted EBITDA margin.

    • Reciprocal policies written grew 38% year-over-year to 59,000.

    • Full-year 2026 adjusted EBITDA guidance raised by over $20 million at the midpoint to $122 million.

    • Achieved positive net income attributable to Porch shareholders of $6 million in Q2 and expect positive for the full year.

    Concerns

    3

    • Software & Data revenue was $23 million, showing a year-over-year decline due to sunsetting legacy products.

    • Premium per new customer declined 4% year-over-year in Q2 due to a softer insurance market and competitors lowering prices.

    • Q2 statutory surplus was impacted by a $14 million storm in Texas.

    Guidance & targets

    10
    CategoryTargetConfidence
    Adjusted EBITDA (excluding reciprocal)
    $119 million to $125 million
    high materiality
    High
    Revenue (excluding reciprocal)
    $506 million to $517 million
    high materiality
    High
    Gross Profit (excluding reciprocal)
    $419 million to $429 million
    medium materiality
    High
    Net Income attributable to Porch shareholders
    positive
    high materiality
    High
    Leverage ratio
    better than 3x
    high materiality
    High
    Reciprocal Written Premium (RWP)
    $600 million
    medium materiality
    High
    Reciprocal policies written
    more than 70,000 per quarter
    medium materiality
    High
    Medium-term target: Premium
    $3 billion
    high materiality
    High
    Medium-term target: Revenue
    $2.3 billion
    high materiality
    High
    Medium-term target: Adjusted EBITDA (excluding reciprocal)
    $660 million
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Insurance Services
    Driving the majority of adjusted EBITDA and growth. Margin improvement reflects a $3M non-recurring benefit from an expense true-up.
    Policies written: 59,000Policies written growth YoY: 38%Gross profit: $81MGross margin: 87%Adjusted EBITDA: $44MAdjusted EBITDA growth YoY: 126%
    		$93M38%—48% adjusted EBITDA margin
    Software & Data
    Relatively flat year-over-year against a stagnant U.S. housing market. Decline in revenue driven by sunsetting certain legacy home contractor SMB-focused products.
    Gross profit: $17MGross margin: 75%Companies served: ~19,000Annualized revenue per company: $4,926Annualized revenue per company growth YoY: 24%
    		$23Mdecline—$5M adjusted EBITDA
    Consumer Services
    Relatively flat year-over-year against a stagnant U.S. housing market. Growth in annualized revenue per monetized service driven by upsell and cross-sell efforts.
    Gross profit: $15MGross margin: 84%Monetized services: 84,000Annualized revenue per monetized service: $216Annualized revenue per monetized service growth YoY: 7%
    		$18M——$3M adjusted EBITDA

    Operational metrics

    25
    Adjusted EBITDA
    $39Mup 150% YoY
    Q2 FY26

    Grew 2.5x year-over-year.

    Adjusted EBITDA
    $44Mup 126% YoY
    Q2 FY26

    Driven by operating leverage as RWP and policies written scale.

    Net income attributable to Porch shareholders
    $6M
    Q2 FY26

    An important milestone for the business.

    Cash and investments balance
    $127Mdown slightly vs Q1
    Q2 FY26

    Decrease reflects purchase of 2.1M Porch shares, $17M interest expense, and timing of working capital, partially offset by adjusted EBITDA.

    Cash and investments balance
    $331M
    Q2 FY26

    Held by the reciprocal.

    Reciprocal Written Premium (RWP)
    $140Mup 16% YoY
    Q2 FY26

    First half RWP landed right in line with internal targets.

    Reciprocal Written Premium (RWP) per policy written
    $2,383down YoY
    Q2 FY26

    Down year-over-year given mix shift toward higher percentage of new customers versus higher-priced renewing customers.

    Reciprocal statutory surplus
    $170Mup 33% YoY, up 3% QoQ
    Q2 FY26

    Better than expectations, particularly given Q2 is typically a seasonal period for weather claims.

    Reciprocal RWP capacity
    $800M
    Q2 FY26

    Has ability to support what's approaching $2 billion of premium.

    Gross loss ratio
    38%
    Q2 FY26

    Reflecting continued pricing and underwriting discipline.

    Attritional loss ratio
    18%
    Q2 FY26

    Reflecting continued pricing and underwriting discipline and a meaningful margin advantage.

    Porch shares owned by reciprocal
    16.2M
    Q2 FY26

    After selling 2.1M shares to Porch Group in Q2; majority of value considered non-admitted assets.

    Cat bond
    $100M
    Q2 FY26

    Fully collateralized reinsurance placed at the very top of the reinsurance tower, covering very low likelihood events.

    Reciprocal policies written
    59,000up 38% YoY
    Q2 FY26

    Driven by new customer additions, 500 basis point acceleration from Q1 growth rate.

    Producing agency branch locations growth
    148%YoY
    Q2 FY26

    Key strategic proof point in the quarter, significantly expanding opportunities for low-risk business.

    Quote volumes growth
    87%YoY
    Q2 FY26

    Increased sequentially for the seventh straight quarter, building a strong foundation for sustained premium growth.

    Premium per new customer
    down 4%YoY
    Q2 FY26

    Due to softer insurance market with competitors lowering prices; managed through targeted pricing adjustments.

    Engineering productivity (lines of code changed)
    2.4x increase
    Q2 FY26

    Driven by broad adoption of AI tooling.

    Engineering productivity (merge requests created)
    73% increase
    Q2 FY26

    Driven by broad adoption of AI tooling.

    Cloud compute infrastructure savings
    approaching 10%
    Q2 FY26

    AI is helping identify and reduce underutilized compute resources.

    NPS (inspection software)
    51up 14% YoY
    Q2 FY26

    Customer satisfaction remains strong and improving.

    NPS (Floify mortgage software)
    61up 23% YoY
    Q2 FY26

    Customer satisfaction remains strong and improving.

    NPS (Rynoh)
    71up 14% YoY
    Q2 FY26

    Customer satisfaction remains strong and improving.

    Market share (inspection)
    roughly half
    Q2 FY26

    Strong market position.

    Market share (title)
    roughly 40%
    Q2 FY26

    Strong market position.

    Industry KPIs

    4
    MetricValueDetails
    Revenue growth$132MUSD
    Customer account count~19,000companies
    Operating FCF margin rule of 40Rule of 50
    Ai product adoption monetization2.4x increase

    Orderbook & backlog

    2
    Reciprocal Written Premium (RWP)$140MQ2 FY26

    up 16% YoY

    Actual RWP for the quarter.

    Reciprocal RWP capacity$800MQ2 FY26

    Based on $170M statutory surplus, including non-admitted assets; potential to support $2B.

    Product announcements

    3
    ProductTypeDetails
    ISN order form and auto provisioningupdate
    AI defect detection (ISN)update
    Home Factors pipelineroadmap

    Risks & headwinds

    4
    Softer homeowners insurance marketQ2 FY26

    Premium per new customer down 4% YoY

    Mitigation: Targeted pricing adjustments in specific areas; leveraging margin advantage from lower loss ratios.

    Seasonal weather claimsQ2 FY26

    $14 million storm in Q2

    Mitigation: Strong statutory surplus of $170 million; disciplined underwriting and loss ratios (38% gross, 18% attritional).

    Stagnant U.S. housing marketQ2 FY26

    Software & Data and Consumer Services segments relatively flat YoY

    Mitigation: Managing businesses with discipline; strengthening product and partnerships for future market recovery.

    Execution and filing time for pricing adjustmentsshort-term

    Risk in a given month

    Mitigation: Quick response to market changes and ability to impact conversion rates.

    What to watch in Q3 FY26

    5

    Reciprocal Policy Growth

    by year-end
    Current59,000 policies written in Q2 (up 38% YoY)
    Target>70,000 policies per quarter

    Why it matters

    Policy count is a key driver of the financial model (policy fees) and a leading indicator of future premium growth.

    We expect a rapid policy growth rate to continue throughout the year, ramping to more than 70,000 per quarter by year-end.

    Q&A highlights

    6

    How does Porch Group's focus on policy count impact its financial model, and how does the company respond to market changes, particularly in a softer insurance market, given its margin advantages?

    Matt Ehrlichman emphasized that policy fees and the total count of policies are highly impactful to their financial model, not just RWP. He explained that their superior loss ratios provide a margin advantage, allowing them to make targeted pricing adjustments to manage conversion rates and balance growth with margin maximization, even when competitors lower prices.

    “The first point that you make is just the point we wanted to lay on, which is I'm not sure if folks have really understood and appreciated. We talked about how we generate revenue in a few different ways, management fees and policy fees as examples. But the policy fees and really the count of policies is really impactful to our financial model.”

    asked by Dan Kurnos · answered by Matt Ehrlichman

    2 min read6 chapters

    Detailed Narrative

    01

    Insurance Services Performance

    The Insurance Services segment is the primary driver of Porch Group's growth and profitability, delivering 38% year-over-year revenue growth to $93 million and achieving a 48% adjusted EBITDA margin in Q2. Policy growth of 38% year-over-year to 59,000 is highlighted as a key metric, significantly impacting the financial model through policy fees. The business demonstrates strong operating leverage, with high incremental margins contributing substantially to overall adjusted EBITDA growth.

    02

    Reciprocal Health and Capacity

    The reciprocal's statutory surplus reached $170 million at the end of Q2, marking a 33% increase year-over-year and 3% quarter-over-quarter, despite a $14 million storm in Texas during the quarter. This surplus supports over $800 million of premium capacity, with potential to support up to $2 billion. Loss ratios remained strong at 38% gross and 18% attritional, reflecting disciplined pricing and underwriting, which provides a meaningful margin advantage.

    03

    Distribution and Conversion Strategies

    Porch Group continues to expand its top-of-funnel distribution, with producing agency branch locations growing 148% year-over-year and quote volumes increasing 87% year-over-year. The company effectively manages conversion rates through targeted pricing adjustments in response to a softer market where competitors are lowering prices. This ability to respond quickly and leverage its margin advantage allows Porch to sustain growth in policy count while maintaining profitability.

    04

    AI Integration and Productivity Gains

    AI is being strategically leveraged across the organization to enhance proprietary data assets, accelerate engineering productivity, and optimize operational efficiency. Engineering teams have seen a 2.4x increase in lines of code changed and a 73% increase in merge requests created. AI is also contributing to nearly 10% net savings in cloud compute infrastructure and improving product and support capabilities, such as AI-assisted call reviews in the moving group.

    05

    Software & Data and Consumer Services Segments

    These segments experienced relatively flat year-over-year performance due to a stagnant U.S. housing market. Software & Data revenue was $23 million, impacted by the planned sunsetting of certain legacy products, though annualized revenue per company increased 24% to $4,926, reflecting a shift to higher-value customers. Consumer Services generated $18 million in revenue, with 84,000 monetized services and annualized revenue per monetized service growing 7% to $216.

    06

    Strengthening Financial Profile and Shareholder Value

    The company achieved 'Rule of 50' status, combining 23% revenue growth and 30% adjusted EBITDA margin (excluding reciprocal). Porch Group expects its leverage ratio to be better than 3x by year-end, aligning with its target range. The achievement of positive net income attributable to Porch shareholders in Q2, with expectations for it to remain positive for the full year, underscores a strengthening and more durable financial profile, aimed at creating long-term shareholder value.

    AI-generated summary of the company’s earnings call. Not investment advice.