Porch Group (NASDAQ:PRCH) executives told investors the company capped what they called a “transformational” 2025 with fourth-quarter results that exceeded expectations and a sharp increase in full-year profitability under its reciprocal operating model. Management also outlined a 2026 plan centered on accelerating insurance premium growth, supported by higher agent distribution, rising quote volumes, and improving conversion rates.
2025 profitability and cash generation
CEO Matt Ehrlichman said full-year 2025 adjusted EBITDA reached $77 million, which he characterized as an 11x increase versus 2024. CFO Shawn Tabak reported adjusted EBITDA of $76.6 million for the year and said the company generated $65.4 million of cash provided by operating activities attributable to Porch shareholders, representing an 85% conversion of adjusted EBITDA to operating cash flow. Tabak noted that operating cash flow included $29 million of interest payments on debt.
Insurance growth levers: surplus, quotes, and conversion
Management repeatedly framed premium growth around three drivers: statutory surplus at the reciprocal (capacity), quote volume (top-of-funnel), and conversion rate (new policies). Ehrlichman said statutory surplus at the reciprocal increased about $50 million in 2025 and ended the year almost 50% higher than 2024. He added that the company more than doubled active agencies and nearly tripled quote volumes year-over-year, while conversion rates improved late in 2025 and into early 2026 following pricing and incentive actions.
COO Matthew Neagle said the number of agencies added in Q4 more than doubled year-over-year and increased more than 30% sequentially from Q3. Quote volumes were up nearly 3x year-over-year and rose 9% sequentially, which management highlighted as atypical given normal seasonality.
On conversion, management pointed to a late-year acceleration in new business premiums. Neagle said November new business premiums rose 61% versus the January-to-October monthly average, and December new business premiums were 27% higher than November and 104% above the January-to-October baseline. In response to analyst questions, Ehrlichman said the company was able to “meaningfully increase conversion without dramatic changes,” describing pricing moves as “surgical and targeted” for low-risk customers. Executives also emphasized that they were not seeing competitive changes that were impacting quote volumes or conversion rates.
Fourth-quarter insurance performance and KPIs
In the fourth quarter, reciprocal written premium (RWP) was $125.7 million (also cited as $126 million), which management said was ahead of expectations and reflected stronger-than-normal seasonal performance due to new customer additions. Neagle said the typical Q4 seasonal decline was “much more muted,” citing a $17 million improvement relative to the average Q3-to-Q4 decline over the past three years.
The reciprocal wrote nearly 49,000 policies in the quarter, with RWP per policy written of $2,569. Tabak said Insurance Services segment revenue was $75.7 million and described revenue as coming from commissions based on RWP, policy fees, captive premium, and lead fees from third-party agencies. Segment gross profit was $65.1 million (an 86% gross margin) and segment adjusted EBITDA was $29 million, a 38% margin. He added that adjusted EBITDA as a percent of RWP was 23%, up 465 basis points from Q3, helped by higher revenue while operating expenses were held flat quarter-over-quarter.
Ehrlichman also emphasized underwriting performance at the reciprocal, citing a 27% full-year gross loss ratio and a 17% full-year attritional loss ratio, noting that 2025 was a more normal weather year in Texas compared with what he called historically bad weather years in 2023 and 2024.
Porch Insurance rollout and product strategy
Executives highlighted the launch of Porch Insurance, a homeowners product that was fully rolled out to all agents in Texas at the start of January 2026. Ehrlichman and Neagle said the product is intended to improve conversion rates by giving agents an additional offering alongside HOA coverage. They described the offering as including a full home warranty and other coverages, as well as four hours of movers and additional services for home buyers.
On agent economics, Ehrlichman said agents “make more money” when selling Porch Insurance and that the company can share system margin with agents because of the reciprocal’s margin profile. He also noted that customers pay a 10% surplus contribution, which he said creates additional economics in the system.
Capital position, balance sheet actions, and 2026 outlook
Management highlighted the reciprocal’s capital base as a key enabler of growth. Ehrlichman said the reciprocal ended 2025 with $289 million of surplus combined with non-admitted assets, which includes the value of the 18.3 million Porch shares it owns, and $155 million of statutory surplus. He said that even without additional statutory surplus growth, the reciprocal could support approximately $700 million to $780 million of premium based on a “5-to-1 or better” premium-to-statutory surplus rule of thumb, and he also discussed a longer-range view that the capital base could support approximately $1.5 billion of premiums.
In Q&A, management addressed statutory surplus sensitivity to Porch’s share price. Tabak said that despite a drop in the stock price from around $17 at the end of Q3 to around $9 at the end of Q4, the impact to statutory surplus was “around” $10 million. He added that reciprocal income resulted in tax payments that offset some underwriting profit, while strong underwriting performance supported operating income.
On the balance sheet, Tabak said Porch ended the year with $121.2 million in cash plus investments, up $31.3 million from the start of 2025. He said the company used $17.2 million to reduce debt and expects to settle the remaining $7.8 million balance of its 2026 notes at maturity on September 15, 2026 using balance sheet cash. Tabak also said the board authorized a $2.5 million share repurchase program, which he described as the maximum allowed under the 2028 indenture.
Looking ahead, Porch guided for $600 million of organic RWP in 2026, implying 25% growth. For Porch shareholder interest, management guided to revenue of $475 million to $490 million (13% to 17% growth), gross margin of 81% to 82%, gross profit of $385 million to $400 million, and adjusted EBITDA of $98 million to $105 million (about a 21% margin). Tabak said the company expects Insurance Services revenue growth “north of 20%,” while Software and Data and Consumer Services are expected to grow modestly under an assumption that U.S. housing activity remains at “trough-like levels” in 2026. He also said adjusted EBITDA in Q1 2026 is expected to be modestly lower year-over-year due to a tough comparison with legacy captive reinsurance terms, with sequential improvement expected over the rest of the year.
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.
