false000178453500017845352025-02-252025-02-25

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 25, 2025
PORCH GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware001-3914283-2587663
(State or other jurisdiction
of incorporation)
(Commission File Number)
(IRS Employer
Identification No.)
411 1st Avenue S., Suite 501
Seattle, Washington
98104
(Address of principal executive offices)(Zip Code)
(855) 767-2400
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange
on which registered
Common stock, par value $0.0001PRCHThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o


Item 2.02. Results of Operations and Financial Condition.
On February 25, 2025, Porch Group, Inc. (the “Company” or "Porch") issued an earnings release announcing financial results for its fourth quarter and full year ended December 31, 2024. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
On February 25, 2025, the Company will host an earnings call at 5:00 p.m. Eastern time to discuss its financial results for the fourth quarter ended December 31, 2024. Live and archived webcasts of the presentation will also be available on the Company’s investor relations website at https://ir.porchgroup.com.
On February 25, 2025, the Company posted supplemental investor materials on its investor relations website. The Company uses its investor relations website as a means of disclosing material non-public information, announcing upcoming investor conferences and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor the Company’s investor relations website in addition to following the Company’s press releases, SEC filings and public conference calls and webcasts.
The information in Items 2.02 and 7.01 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d)Exhibits.
Exhibit
No.
Description
99.1
104Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
PORCH GROUP, INC.
By:/s/ Shawn Tabak
Name:Shawn Tabak
Title:Chief Financial Officer
Date: February 25, 2025

Exhibit 99.1
Porch Group Reports Fourth Quarter 2024 Results
Exceeds expectations delivering Q4’24 Net Income of $30m and Adjusted EBITDA of $42m
SEATTLE, February 25, 2025 (BUSINESS WIRE) – Porch Group, Inc. (“Porch Group” or “the Company”) (NASDAQ: PRCH), a homeowners insurance and vertical software platform, today reported fourth quarter results through December 31, 2024, with total revenue of $100.4 million. GAAP net income was $30.5 million, an improvement of $33.0 million compared to the prior year, and Adjusted EBITDA was $41.8 million, an improvement of $30.1 million compared to the prior year.
CEO Summary
“We had a strong finish to the year, and delivered our full year positive Adjusted EBITDA target. We delivered record quarterly Adjusted EBITDA in Q4 2024, which we believe marks a pivotal shift toward sustainable profitable growth for Porch Group shareholders,” said Matt Ehrlichman, Chief Executive Officer, Chairman and Founder. “We formed the Porch Insurance Reciprocal Exchange in January 2025, transforming Porch toward a simpler, commission and fee-based, higher margin model. With the strong progress over the last few months, we’re raising our 2025 outlook, including Adjusted EBITDA of $60 million at the mid-point of guidance.”
Fourth Quarter 2024 Financial Results2
•Total revenue of $100.4 million, a decrease of (12)% or $14.3 million compared to prior year (fourth quarter 2023: $114.6 million); the prior year included $26 million of non-recurring revenue due to lower reinsurance ceding following the cancellation of the Vesttoo related reinsurance coverage1. Additionally, Q4 2024 included a $5 million non-recurring year-end adjustment related to the legacy reinsurance complexities following Vesttoo. These factors offset organic growth in the Insurance segment, including a 31% increase in premium per policy.
•Revenue less cost of revenue of $89.3 million, 89% of total revenue (fourth quarter 2023: $79.9 million, 70% of total revenue). Vertical Software Segment revenue less cost of revenue as a percentage of revenue improved ~500bps, driven by SaaS price increases and strong cost control.
•GAAP net income of $30.5 million, compared to a GAAP net loss of $2.5 million for the fourth quarter of 2023.
•Adjusted EBITDA of $41.8 million, a $30.1 million improvement from the prior year (fourth quarter 2023: $11.7 million), ahead of expectations. This was driven by operational excellence and a disciplined focus on profitability across the business.
•Gross written premium for the quarter in our Insurance segment was $112 million with approximately 206 thousand policies in force.
•$350.4 million cash, cash equivalents, and investments at December 31, 2024.
Fourth Quarter 2024 Operational Highlights2
•The Texas Department of Insurance approved the Company’s application to form and license the Porch Insurance Reciprocal Exchange (“PIRE”). Since the period end, the Company solid its insurance carrier, Homeowners of America, into PIRE, resulting in Porch Group now holding $106 million of surplus notes from PIRE which pay interest of 9.75% plus SOFR.
•Gross loss ratio of 21%, an improvement from 36% in the prior year, driven by strong attritional loss ratio performance of 16%, an improvement from 30% in the prior year.
•In Insurance, premium growth has restarted, expanding distribution with reopening of geographies, hiring sales leadership and engaging agency partners. Q4 2024 new business premiums increased 50% compared to the prior year and already in Q1 2025 new business premiums are double versus the prior year.
•Strong pipeline of third-party testing of Home Factors, focused on execution to scale this business.
•Rolled out key software advancements, positioning the software businesses for growth as housing market transaction volumes recover.
•Launched MovingPlace, a marketplace for consumers that simplifies the moving process and longer term provides additional consumer access for insurance.
(1) In Q3 2023 Porch discovered that one of the legacy reinsurance partners, Vesttoo, had committed a global fraud. Therefore Porch terminated that reinsurance contract and pursued replacement reinsurance. During the second half of 2023, Porch had a period of lower reinsurance ceding that resulted in additional Revenue. The impacts to Revenue less Cost of Revenue and Adjusted EBITDA were not as material.
(2) Adjusted EBITDA and attritional loss ratios are non-GAAP financial measures. Please see page 7 and 9 for important disclaimers and information regarding non-GAAP measures.
1

The following tables present financial highlights of the Company’s fourth quarter 2024 results compared to the fourth quarter results of 2023 (dollars are in millions):
Fourth Quarter 2024 (unaudited)InsuranceVertical SoftwareCorporateConsolidated
Revenue(1)$72.0 $29.3 $(0.9)$100.4 
Year-over-year growth(17)%6 %— %(12)%
Revenue less cost of revenue$65.7 $24.6 $(0.9)$89.3 
Year-over-year growth13 %12 %— %12 %
As % of revenue91 %84 %— %89 %
GAAP net income$30.5 
Adjusted EBITDA (Loss) (2)$48.8 $5.0 $(12.0)$41.8 
Adjusted EBITDA (Loss) Margin(3)68 %17 %— %42 %
Fourth Quarter 2023 (unaudited)InsuranceVertical SoftwareCorporateConsolidated
Revenue$86.9 $27.7 $— $114.6 
Revenue less cost of revenue$57.9 $22.0 $— $79.9 
As % of revenue67 %79 %— %70 %
GAAP net loss$(2.5)
Adjusted EBITDA (Loss) (2)$31.6 $(0.3)$(19.7)$11.7 
Adjusted EBITDA (Loss) Margin(3)36 %(1)%— %10 %
Year Ended December 31, 2024 (unaudited)InsuranceVertical SoftwareCorporateConsolidated
Revenue(1)$318.2 $120.6 $(0.9)$437.8 
Year-over-year growth4 %(4 %)— %2 %
Revenue less cost of revenue$112.9 $100.3 $(0.9)$212.2 
Year-over-year growth(2)%5 %— %1 %
As % of revenue35 %83 %— %48 %
GAAP net loss$(32.8)
Adjusted EBITDA (Loss) (2)$43.4 $16.0 $(52.3)$7.2 
Adjusted EBITDA (Loss) Margin(3)14 %13 %— %2 %
Year Ended December 31, 2023 (unaudited)InsuranceVertical SoftwareCorporateConsolidated
Revenue$305.2 $125.1 $— $430.3 
Revenue less cost of revenue$114.7 $95.4 $— $210.1 
As % of revenue38 %76 %— %49 %
GAAP net loss$(133.9)
Adjusted EBITDA (Loss) (2)$12.3 $4.3 $(61.1)$(44.5)
Adjusted EBITDA (Loss) Margin(3)4 %3 %— %(10)%
____________________________________________
(1)Revenue under Corporate represents the elimination of intersegment revenue between the Insurance and Vertical Software segments.
(2)See Non-GAAP Financial Measures section for the definition and Adjusted EBITDA (Loss) table for the reconciliation to GAAP net income (loss)
(3)Adjusted EBITDA (Loss) Margin is calculated as Adjusted EBITDA (Loss) divided by Revenue
2

The following table presents the Company’s key performance indicators(1).
Three Months Ended December 31,
(unaudited)20242023% Change
Gross Written Premium (in millions)(2)$112 $112 — %
Policies in Force (in thousands)206 310 (34)%
Annualized Revenue per Policy (unrounded)$1,396 $1,120 25 %
Annualized Premium per Policy (unrounded)$2,446 $1,861 31 %
Premium Retention Rate105%96%
Gross Loss Ratio21%36%
Attritional Loss Ratio(3)16%30%
Gross Combined Ratio33%49%
Average Companies in Quarter (unrounded)27,063 29,919 (10) %
Average Monthly Revenue per Account in Quarter (unrounded)$1,236 $1,277 (3) %
Monetized Services (unrounded)218,744 219,657 — %
Average Quarterly Revenue per Monetized Service (unrounded)$390 $448 (13) %
_____________________________________
(1)Definitions of the key performance indicators presented in this table are included on page 11 of this release.
(2)Gross Written Premium included our insurance agency, Elite Insurance Group (“EIG”), which was sold in January 2024.
(3)Attritional loss is considered a non-GAAP financial measure. See Non-GAAP Financial Measures section for a description and reconciliation to the comparable GAAP financial measure.
3

Balance Sheet Information (unaudited)
(dollars are in millions)December 31,
2024		December 31, 2023Change
Cash and cash equivalents$167.6 $258.4 (35%)
Investments182.8 139.2 31%
Cash, cash equivalents, and investments$350.4 $397.6 (12%)
The Company ended the fourth quarter of 2024 with cash, cash equivalents, and investments of $350.4 million. Of this amount HOA held cash and cash equivalents of $112.5 million and investments of $167.6 million. At December 31, 2024, excluding HOA, Porch held $70.2 million of cash, cash equivalents, and investments, and a $49 million surplus note from HOA. Following the sale of HOA to PIRE on January 1, 2025, as of month end January cash and investments was $93 million, and the surplus note balance increased to $106 million.

In addition, the Company ended the fourth quarter of 2024 with $29.1 million of restricted cash and cash equivalents, primarily for the captive and warranty businesses.
As of December 31, 2024, outstanding principal for convertible debt was $507.1 million. This includes $333.3 million of the 6.75% Senior Secured Convertible Notes due October 2028 (the “2028 Notes”) and $173.8 million of 0.75% Convertible Senior Notes due September 2026 (the “2026 Notes”).
Post Balance Sheet Events
On January 1, 2025, the Company completed the formation of the Porch Insurance Reciprocal Exchange (“PIRE”) and the sale of Homeowners of America Insurance Company (“HOA”) to PIRE.
The Company sold HOA to PIRE for a purchase price equal to HOA’s December 31, 2024 surplus of $105 million, less the existing 2023 surplus note of $49 million and less $9 million of outstanding interest expected to be paid in 2025. This brings the total surplus notes held by Porch to approximately $106 million, which will bear interest income to Porch of 9.75% plus the Secured Overnight Financing Rate. With this transaction now complete, going forward all insurance policies, premium and related claims, as well as all HOA assets and liabilities will be owned by PIRE. Porch Group will receive commissions and fees for providing operating and other services to PIRE, which is expected to deliver more predictable and higher-margin financial results for Porch Group Shareholders.
4

Porch Group Shareholder Interests Full Year 2025 Financial Outlook
Porch Group provides full year 2025 guidance based on current market conditions and expectations as of the date of this release.
Financial guidance represents Porch Shareholder Interests following the formation of PIRE and sale of HOA to PIRE in January 2025. For the avoidance of doubt, guidance does not include the future results of PIRE or HOA; while we expect to consolidate their results into Porch GAAP financial statements, the PIRE and HOA results will be excluded from Revenue, Gross Profit, Adjusted EBITDA and the associated margins.
Porch Group Shareholder Interest Full year 2025 guidance is as follows:
Porch Shareholder Interests
Full Year 2025 Guidance1
Revenue2
$390m to $410m
Gross Profit2
$310m to $325m
Adjusted EBITDA2
$55m to $65m
(1)The reinsurance program for PIRE and HOA renews on April 1st, 2025. Therefore, the Porch Group captive continues to provide reinsurance coverage under the current program.
(2)Porch Shareholder Interests Revenue, Porch Shareholder Interests Gross Profit, and Adjusted EBITDA are non-GAAP measures.
Porch Group is not providing reconciliations of Porch Group Shareholder Interests expected Revenue, Gross Profit or Adjusted EBITDA for future periods to the most directly comparable measures prepared in accordance with GAAP because the Company is unable to provide these reconciliations without unreasonable effort because certain information necessary to calculate such measures on a GAAP basis is unavailable or dependent on the timing of future events outside of the Company’s control.


5

Conference Call
Porch Group management will host a conference call today February 25, 2025, at 5:00 p.m. Eastern time (2:00 p.m. Pacific time). The call will be accompanied by a slide presentation available on the Investor Relations section of the Company’s website at ir.porchgroup.com. A question-and-answer session will follow management’s prepared remarks.
All are invited to listen to the event by registering for the webinar, a replay of the webinar will also be available. See the Investor Relations section of the Porch Group’s corporate website at ir.porchgroup.com.
About Porch Group
Porch Group, Inc. (“Porch”) is a new kind of homeowners insurance company. Porch's strategy to win in homeowners insurance is to deploy leading vertical software solutions in select home-related industries, provide the best services for homebuyers including important moving services, leverage unique data for advantaged underwriting, and provide more protection for policyholders.

To learn more about Porch, visit ir.porchgroup.com.
Investor Relations Contact
Lois Perkins, Head of Investor Relations
Porch Group, Inc.
Loisperkins@porch.com
6

Forward-Looking Statements
Certain statements in this release are considered forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements are based on the beliefs and assumptions of management. Although we believe that our plans, intentions, and expectations reflected in or suggested by these forward-looking statements are reasonable, we cannot assure you that we will achieve or realize these plans, intentions, or expectations. Forward-looking statements are inherently subject to risks, uncertainties, and assumptions. Generally, statements that are not historical facts, including statements concerning our financial outlook and guidance, possible or assumed future actions, business strategies, events, or results of operations, are forward-looking statements. Forward-looking statements in this release also include expectations regarding whether the reciprocal is the optimal structure for our insurance business and the benefits financial and otherwise thereof, including any expectations that the reciprocal will result in higher margins and a more predictable financial profile and equip our insurance operations to scale profitably in the future These statements may be preceded by, followed by, or include the words “believe,” “estimate,” “expect,” “project,” “forecast,” “may,” “will,” “should,” “seek,” “plan,” “scheduled,” “anticipate,” “intend,” or similar expressions.
Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements which speak only as of the date hereof. You should understand that the following important factors, among others, could affect our future results and could cause those results or other outcomes to differ materially from those expressed or implied in our forward-looking statements:
•expansion plans and opportunities, and managing growth, to build a consumer brand;
•the incidence, frequency, and severity of weather events, extensive wildfires, and other catastrophes;
•economic conditions, especially those affecting the housing, insurance, and financial markets;
•expectations regarding revenue, cost of revenue, operating expenses, and the ability to achieve and maintain future profitability;
•existing and developing federal and state laws and regulations, including with respect to insurance, warranty, privacy, information security, data protection, and taxation, and management’s interpretation of and compliance with such laws and regulations;
•the structure, availability, and performance of Porch Insurance Reciprocal Exchange (“PIRE”)’s and Homeowners of America (“HOA”)’s reinsurance programs to protect against loss and maintain their financial stability ratings and a healthy surplus, the success of which are dependent on a number of factors outside management’s control;
•the possibility that a decline in our share price would result in a negative impact to HOA’s, surplus position and may require further financial support to enable HOA to meet applicable regulatory requirements and maintain financial stability rating;
•uncertainties related to regulatory approval of insurance rates, policy forms, insurance products, license applications, acquisitions of businesses, or strategic initiative, and other matters within the purview of insurance regulators (including the discount associated with the shares contributed to HOA);
•the ability of the Company and its affiliates to successfully operate and manage PIRE and our ability to successfully operate our businesses alongside a reciprocal exchange;

•our ability to implement our plans, forecasts and other expectations with respect to PIRE and to realize expected synergies and/or convert policyholders from our existing insurance carrier business into policyholders of PIRE;

•reliance on strategic, proprietary relationships to provide us with access to personal data and product information, and the ability to use such data and information to increase transaction volume and attract and retain customers;
•the ability to develop new, or enhance existing, products, services, and features and bring them to market in a timely manner;
•changes in capital requirements, and the ability to access capital when needed to provide statutory surplus;
•our ability to timely repay our outstanding indebtedness;
•the increased costs and initiatives required to address new legal and regulatory requirements arising from developments related to cybersecurity, privacy, and data governance and the increased costs and initiatives to protect against data breaches, cyber-attacks, virus or malware attacks, or other infiltrations or incidents affecting system integrity, availability, and performance;
7

•retaining and attracting skilled and experienced employees;
•costs related to being a public company; and
•other risks and uncertainties discussed in our filings with the SEC, including Part II, Item 1A, “Risk Factors,” in our Annual Report on Form 10-K (“Annual Report”) for the year ended December 31, 2024, as well as those discussed elsewhere in this release and in subsequent reports filed with the Securities and Exchange Commission (“SEC”), all of which are available on the SEC’s website at www.sec.gov.
We caution you that the foregoing list may not contain all the risks to forward-looking statements made in this release.
You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this release primarily on our current expectations and projections about future events and trends we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors, including those described above and elsewhere in this release. We disclaim any obligation to update publicly any forward-looking statements, whether in response to new information, future events, or otherwise, except as required by applicable law.

8

Non-GAAP Financial Measures
This release includes non-GAAP financial measures, such as Adjusted EBITDA (Loss), Adjusted EBITDA (Loss) margin, and Attritional Loss Ratio.
Adjusted EBITDA
We define Adjusted EBITDA (Loss) as net income (loss) adjusted for interest expense; income taxes; depreciation and amortization; gain or loss on extinguishment of debt; other expense (income), net; impairments of intangible assets and goodwill; loss on reinsurance contract; impairments of property, equipment, and software; stock-based compensation expense; mark-to-market gains or losses recognized on changes in the value of contingent consideration arrangements, earnouts, warrants, and derivatives; restructuring costs; acquisition and other transaction costs; and non-cash bonus expense. Adjusted EBITDA (Loss) Margin is defined as Adjusted EBITDA (Loss) divided by total revenue.
Attritional Loss Ratio
The Attritional Loss Ratio is calculated by deducting the Gross Loss Ratio related to catastrophic weather events from total Gross Loss Ratio. Catastrophic weather events include, without limitation, hurricanes, tornados, earthquakes, hailstorms, wildfires, high winds, and winter storms. We believe the Attritional Loss Ratio is useful to investors and use this financial measure to reveal trends in our Gross Loss Ratio that may be obscured by catastrophe losses as such events cannot be accurately predicted and may cause our Gross Loss Ratio to vary significantly between periods as a result of their incidence of occurrence and magnitude. We have adopted the industry-wide catastrophe classifications of storms and other events published by Insurance Services Office, Inc. (“ISO”) to track and report losses related to catastrophes. ISO classifies an event as a catastrophe when the event causes $25 million or more in direct losses.
Disclaimers
Our management uses these non-GAAP financial measures as supplemental measures of our operating and financial performance, for internal budgeting and forecasting purposes, to evaluate financial and strategic planning matters, and to establish certain performance goals for incentive programs. We believe that the use of these non-GAAP financial measures provides investors with useful information to evaluate our operating and financial performance and trends and in comparing our financial results with competitors, other similar companies and companies across different industries, many of which present similar non-GAAP financial measures to investors. However, our definitions and methodology in calculating these non-GAAP measures may not be comparable to those used by other companies. In addition, we may modify the presentation of these non-GAAP financial measures in the future, and any such modification may be material.
You should not consider these non-GAAP financial measures in isolation, as a substitute to or superior to financial performance measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude specified income and expenses, some of which may be significant or material, that are required by GAAP to be recorded in our consolidated financial statements. We may also incur future income or expenses similar to those excluded from these non-GAAP financial measures, and the presentation of these measures should not be construed as an inference that future results will be unaffected by unusual or non-recurring items. In addition, these non-GAAP financial measures reflect the exercise of management judgment about which income and expense are included or excluded in determining these non-GAAP financial measures.
You should review the tables accompanying this release for reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measure. We are not providing reconciliations of non-GAAP financial measures for future periods to the most directly comparable measures prepared in accordance with GAAP. We are unable to provide these reconciliations without unreasonable effort because certain information necessary to calculate such measures on a GAAP basis is unavailable or dependent on the timing of future events outside of our control.
9

The following tables reconcile Net loss to Adjusted EBITDA (Loss) for the periods presented (dollar amounts in thousands):
Three Months Ended December 31,Year Ended December 31,
(Unaudited)2024202320242023
Net income (loss)$30,474 $(2,486)$(32,829)$(133,933)
Interest expense10,778 10,598 42,536 31,828 
Income tax provision1,434 588 2,117 622 
Depreciation and amortization6,954 5,914 25,522 24,415 
Gain on extinguishment of debt— — (27,436)(81,354)
Impairment loss on intangible assets and goodwill— — — 57,232 
Loss (gain) on reinsurance contract67 (5,159)(1,324)36,042 
Impairment loss on property, equipment, and software— — — 254 
Stock-based compensation expense7,973 432 27,181 20,709 
Mark-to-market losses (gains)(16,540)774 (10,002)(1,003)
Other income, net(229)(368)(23,208)(3,893)
Restructuring costs (1)
725 1,226 4,185 4,015 
Acquisition and other transaction costs161 144 429 552 
Adjusted EBITDA (Loss)$41,797 $11,663 $7,171 $(44,514)
Adjusted EBITDA (Loss) Margin42 %10 %2 %(10)%
______________________________________
(1)Primarily consists of costs related to forming a reciprocal exchange and share contributions to HOA.
Three Months Ended December 31,Year Ended December 31,
(Unaudited)2024202320242023
Segment Adjusted EBITDA (Loss)
Vertical Software$4,991 $(292)$16,030 $4,307 
Insurance48,812 31,648 43,436 12,320 
Subtotal53,803 31,356 59,466 16,627 
Corporate and other(12,006)(19,693)(52,295)(61,141)
Adjusted EBITDA (Loss)$41,797 $11,663 $7,171 $(44,514)
The following table presents Segment Adjusted EBITDA (Loss) Margin for the periods presented:
Three Months Ended December 31,Year Ended December 31,
(Unaudited)2024202320242023
Segment Adjusted EBITDA (Loss) Margin
Vertical Software17.1 %(1.1 %)13.3 %3.4 %
Insurance67.8 %36.4 %13.7 %4.0 %

The following table reconciles Gross Loss Ratio to Attritional Loss Ratio.
Three Months Ended December 31,
20242023
Gross Loss Ratio21 %36 %
Less: Impact of losses due to catastrophic weather(5)%(6)%
Attritional Loss Ratio16 %30 %
10

Key Performance Indicators
In the management of these businesses, we identify, measure and evaluate various operating metrics. The key performance measures and operating metrics used in managing the businesses are discussed below. These key performance measures and operating metrics are not prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and may not be comparable to or calculated in the same way as other similarly titled measures and metrics used by other companies.
Gross Written Premium — We define Gross Written Premium as the total premium written by our licensed insurance carrier(s) (before deductions for reinsurance); premiums from our home warranty offerings (for the face value of one year’s premium); and premiums of policies placed with third-party insurance companies for which we earn a commission.
Policies in Force — We define Policies in Force as the number of in-force policies at the end of the period for the Insurance segment, including policies and warranties written by us and policies and warranties written by third parties for which we earn a commission.
Annualized Revenue per Policy — We define Annualized Revenue per Policy as quarterly revenue for the Insurance segment, divided by the number of Policies in Force in the Insurance segment, multiplied by four.
Annualized Premium per Policy — We define Annualized Premium per Policy as the total direct earned premium for HOA, our insurance carrier, divided by the number of active insurance policies at the end of the period, multiplied by four.
Premium Retention Rate — We define Premium Retention Rate as the ratio of our insurance carrier’s renewed premiums over the last four quarters to base premiums, which is the sum of the preceding year’s premiums that either renewed or expired.
Gross Loss Ratio — We define Gross Loss Ratio as our insurance carrier’s gross losses divided by the gross earned premium for the respective period on an accident year basis.
Attritional Loss Ratio — We define Attritional Loss Ratio as Gross Loss Ratio excluding the losses due to catastrophic weather. Catastrophic weather events include, without limitation, hurricanes, tornados, earthquakes, hailstorms, wildfires, high winds, and winter storms.
Gross Combined Ratio — We define Gross Combined Ratio as being the sum of the loss ratio including loss adjustment expense and expense ratio. This is on a statutory basis for our insurance carrier.
Average Companies in Quarter — We define Average Companies in Quarter as the straight-line average of the number of companies as of the end of period compared with the beginning of period across all of our home services verticals that (i) generate recurring revenue and (ii) generated revenue in the quarter. For new acquisitions, the number of companies is determined in the initial quarter based on the percentage of the quarter the acquired business is a part of Porch.
Average Monthly Revenue per Account in Quarter — We view our ability to increase revenue generated from existing customers as a key component of our growth strategy. Average Monthly Revenue per Account in Quarter is defined as the average revenue per month generated across all home services company customer accounts in a quarterly period. Average Monthly Revenue per Account in Quarter is derived from all customers and total revenue.
Monetized Services — We connect consumers with home services companies nationwide and offer a full range of products and services where homeowners can, among other things: (1) compare and buy home insurance policies (along with auto, flood and umbrella policies) and warranties with competitive rates and coverage; (2) arrange for a variety of services in connection with their move, from labor to load or unload a truck to full-service, long-distance moving services; (3) discover and install home automation and security systems; (4) compare internet and television options for their new home; (5) book small handyman jobs at fixed, upfront prices with guaranteed quality; and (6) compare bids from home improvement professionals who can complete bigger jobs. We track the number of monetized services performed through our platform each quarter and the revenue generated per service performed in order to measure market penetration with homebuyers and homeowners and our ability to deliver high-revenue services within those groups. Monetized Services is defined as the total number of services from which we generated revenue, including, but not limited to, new and renewing insurance and warranty customers, completed moving jobs, security installations, TV/Internet installations or other home projects, measured over the period.
Average Quarterly Revenue per Monetized Service — We believe that shifting the mix of services delivered to homebuyers and homeowners toward higher revenue services is an important component of our growth strategy. Average Quarterly Revenue per Monetized Service is the average revenue generated per monetized service performed in a quarterly period. When calculating Average Quarterly Revenue per Monetized Service, average revenue is defined as total quarterly service transaction revenues generated from monetized services.
11

PORCH GROUP, INC.
Condensed Consolidated Balance Sheets (Unaudited)
(all numbers in thousands)
December 31, 2024December 31, 2023
Assets
Current assets
Cash and cash equivalents$167,643 $258,418 
Accounts receivable, net19,106 24,288 
Short-term investments24,099 35,588 
Reinsurance balance due92,303 83,582 
Prepaid expenses and other current assets15,295 13,214 
Deferred policy acquisition costs17,542 27,174 
Restricted cash and cash equivalents29,139 38,814 
Total current assets365,127 481,078 
Property, equipment, and software, net22,542 16,861 
Goodwill191,907 191,907 
Long-term investments158,652 103,588 
Intangible assets, net68,746 87,216 
Other assets6,994 18,743 
Total assets$813,968 $899,393 
Liabilities and Stockholders' Deficit
Current liabilities
Accounts payable$4,538 $8,761 
Accrued expenses and other current liabilities41,245 59,396 
Deferred revenue248,669 248,683 
Refundable customer deposits12,629 17,980 
Current debt150 244 
Losses and loss adjustment expense reserves67,785 95,503 
Other insurance liabilities, current39,140 31,585 
Total current liabilities414,156 462,152 
Long-term debt403,788 435,495 
Other liabilities39,249 37,429 
Total liabilities857,193 935,076 
Commitments and contingencies
Stockholders' deficit
Common stock10 10 
Additional paid-in capital717,066 690,223 
Accumulated other comprehensive loss(5,446)(3,860)
Accumulated deficit(754,855)(722,056)
Total stockholders' deficit(43,225)(35,683)
Total liabilities and stockholders' deficit$813,968 $899,393 


12

PORCH GROUP, INC.
Condensed Consolidated Statements of Operations (Unaudited)
(all numbers in thousands except per share amounts)
Three Months Ended December 31,Year Ended December 31,
2024202320242023
Revenue$100,361$114,612$437,848$430,302
Operating expenses:
Cost of revenue11,06134,677225,627220,243
Selling and marketing28,49536,950122,873144,307
Product and technology12,06414,61155,27458,502
General and administrative22,90225,92598,406103,192
Provision for (recovery of) doubtful accounts
759(4,931)23937,180
Impairment loss on intangible assets and goodwill———57,232
Total operating expenses75,281107,232502,419620,656
Operating income (loss)
25,0807,380(64,571)(190,354)
Other income (expense):
Interest expense(10,778)(10,598)(42,536)(31,828)
Change in fair value of earnout liability—44—44
Change in fair value of private warrant liability(385)(1,064)691(444)
Change in fair value of derivatives13,641(1,821)5,869(4,261)
Gain on extinguishment of debt——27,43681,354
Investment income and realized gains and losses, net of investment expenses2,7403,79313,6978,285
Other income, net1,61036828,7023,893
Total other income6,828(9,278)33,85957,043
Loss before income taxes31,908(1,898)(30,712)(133,311)
Income tax provision
(1,434)(588)(2,117)(622)
Net income (loss)$30,474$(2,486)$(32,829)$(133,933)
The following table summarizes the classification of stock-based compensation expense in the unaudited consolidated statements of operations.
Three Months Ended December 31,Year Ended December 31,
2024202320242023
Selling and marketing$351 $323 $2,487 $3,351 
Product and technology824 154 4,758 4,804 
General and administrative6,800 (45)19,936 12,554 
Total stock-based compensation expense$7,975 $432 $27,181 $20,709 
13

PORCH GROUP, INC.
Condensed Consolidated Statements of Cash Flows (Unaudited)
(all numbers in thousands)
Year Ended December 31,
20242023
Cash flows from operating activities:
Net loss$(32,829)$(133,933)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities
Depreciation and amortization25,522 24,415 
Provision for doubtful accounts239 37,180 
Impairment loss on intangible assets and goodwill— 57,232 
Gain on extinguishment of debt(27,436)(81,354)
Loss on divestiture of business5,331 — 
Change in fair value of private warrant liability(691)444 
Change in fair value of contingent consideration(3,442)(5,664)
Change in fair value of derivatives(5,869)4,217 
Stock-based compensation27,181 20,709 
Non-cash interest expense27,294 20,756 
Gain on settlement of contingent consideration(14,930)— 
Other operating activities(4,054)1,057 
Change in operating assets and liabilities, net of acquisitions and divestitures
Accounts receivable(155)1,030 
Reinsurance balance due(7,397)179,436 
Deferred policy acquisition costs9,632 (18,458)
Accounts payable(4,223)2,491 
Accrued expenses and other current liabilities(10,663)(1,386)
Losses and loss adjustment expense reserves(27,718)(5,129)
Other insurance liabilities, current7,555 (30,125)
Deferred revenue(437)(21,583)
Refundable customer deposits(5,445)(13,925)
Other assets and liabilities, net10,853 (3,481)
Net cash provided by (used in) operating activities(31,682)33,929 
Cash flows from investing activities:
Purchases of property and equipment(523)(851)
Capitalized internal use software development costs(12,272)(9,245)
Purchases of short-term and long-term investments(110,925)(91,015)
Maturities, sales of short-term and long-term investments67,789 46,832 
Proceeds from sale of business10,870 — 
Acquisitions, net of cash acquired— (1,974)
Net cash used in investing activities(45,061)(56,253)
Cash flows from financing activities:
Proceeds from advance funding— 319 
Repayments of advance funding— (4,133)
Proceeds from issuance of debt— 116,667 
Repayments of principal(23,368)(10,150)
Cash paid for debt issuance costs— (4,694)
Repurchase of stock— (5,608)
Other financing activities(339)(1,450)
Net cash provided by (used in) financing activities(23,707)90,951 
Net change in cash and cash equivalents & restricted cash and cash equivalents$(100,450)$68,627 
Cash and cash equivalents & restricted cash and cash equivalents, beginning of period297,232 228,605 
Cash and cash equivalents & restricted cash and cash equivalents, end of period$196,782 $297,232 
14
v3.25.0.1
Document and Entity Information
Feb. 25, 2025
Cover [Abstract]  
Document Type 8-K
Document Period End Date Feb. 25, 2025
Entity Registrant Name PORCH GROUP, INC.
Entity Incorporation, State or Country Code DE
Entity File Number 001-39142
Entity Tax Identification Number 83-2587663
Entity Address, Address Line One 411 1st Avenue S.
Entity Address, Address Line Two Suite 501
Entity Address, City or Town Seattle
Entity Address, State or Province WA
Entity Address, Postal Zip Code 98104
City Area Code 855
Local Phone Number 767-2400
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, par value $0.0001
Trading Symbol PRCH
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0001784535
Porch (NASDAQ:PRCH)
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