Porch Group Q2 2025 presentation: Adjusted EBITDA soars as guidance raised

Porch Group Inc. (NASDAQ:PRCH) presented its second-quarter 2025 earnings results on August 5, exceeding analyst expectations across key metrics and raising its full-year guidance. The company’s stock closed at $12.86 before the announcement and gained 2.72% in aftermarket trading, continuing its strong momentum after rising 178% over the past six months.

Quarterly Performance Highlights

Porch Group reported exceptional financial results for Q2 2025, with significant year-over-year improvements across all key metrics for Porch Shareholder Interest. Revenue reached $107.0 million, while gross profit surged 431% year-over-year to $89.2 million, representing an impressive 83% margin. Adjusted EBITDA showed remarkable improvement, increasing by $50.4 million year-over-year to $15.6 million (15% margin). The company also generated $14.9 million in cash flow from operations.

As shown in the following chart of Q2 2025 results:

The company’s Reciprocal Written Premium, a key driver of revenue, reached $120.7 million in the quarter. CEO Matt Ehrlichman emphasized during the presentation that the company’s business model creates a virtuous cycle, where stock price increases drive more fee-based income, enabling faster premium growth and increased Reciprocal surplus.

The following diagram illustrates this flywheel effect:

A particularly notable achievement was the health of the Reciprocal, with surplus combined with non-admitted assets reaching $299 million as of June 30, 2025. This represents a $102 million increase compared to the previous quarter and a $259 million increase year-over-year, providing substantial capacity for future premium growth.

The relationship between Reciprocal surplus growth and potential Adjusted EBITDA is illustrated in this chart:

Segment Analysis

Porch Group’s performance was driven by strong results across its three business segments, with Insurance Services leading the way. The following breakdown shows the contribution of each segment to overall results:

Insurance Services emerged as the standout performer, generating $67.4 million in revenue, $57.9 million in gross profit (86% margin), and $19.7 million in Adjusted EBITDA (29% margin). The segment’s high margins and predictable revenue streams come from multiple sources, including management fees, policy fees, reinsurance, and surplus note coupons.

The components of Insurance Services’ high-margin business model are detailed here:

The Software (ETR:SOWGn) & Data segment showed steady growth, with revenue increasing 4% year-over-year to $24.0 million and gross profit rising 5% to $18.2 million. Adjusted EBITDA for this segment improved by $1.5 million to $5.5 million, representing a 23% margin compared to 17% in the prior year. This improvement was attributed to product innovation, price increases, and strong cost controls, despite the housing market remaining near trough levels.

Consumer Services revenue declined 6% year-over-year to $17.7 million, primarily due to a soft housing market and the closure of corporate relocation in Q3 2024. However, gross profit increased slightly to $15.2 million, with margin expansion from 80% to 86%. Adjusted EBITDA for this segment improved by $0.8 million to $2.0 million, driven by strong cost control measures.

Strategic Initiatives

Porch Group highlighted several strategic initiatives during the presentation. In Insurance Services, the company increased agency sales and account management headcount, added new agencies, secured new large national accounts, and is preparing to launch in Michigan. Product enhancements include adding full home warranty and four hours of moving service for Porch Insurance policyholders.

In the Software & Data segment, Rynoh (a Porch subsidiary) announced two significant wins, including Fidelity National Financial (NYSE:FNF)’s EscrowTRAX and another top-five title insurer. The company’s Home Factors test group is reportedly ahead of plan with strong ROI case studies.

For Consumer Services, the company launched packing service online with HireaHelper.com in Q2, following a phone-based launch in Q1. Additionally, warranty and moving services were approved for inclusion in Porch Insurance as a benefit for members.

CFO Shawn Tabak highlighted the company’s strong cash position, reporting $117.5 million in Porch Shareholder Interest Cash + Investments as of June 30, 2025. The company also made progress on its debt, refinancing approximately $153 million of 2026 unsecured convertible notes and repurchasing about $12 million post-quarter, with approximately $9 million remaining. Tabak noted the company is on path to achieve its leverage goal of 2x-3x.

Forward-Looking Statements

Based on strong Q2 results, Porch Group raised its 2025 guidance across all metrics. The company now projects:

Revenue is expected to reach $405 million to $425 million, representing a $5.0 million increase at the midpoint from prior guidance. Gross profit is projected between $328 million and $342 million, a $7.5 million increase at the midpoint. Adjusted EBITDA guidance was raised by $2.5 million at the midpoint to a range of $65 million to $70 million.

In his closing remarks, CEO Matt Ehrlichman emphasized the company’s strong position and shift to offense:

The company’s performance in Q2 2025 builds on the momentum seen in Q1, when Porch Group reported an EPS of $0.08 (versus an expected loss of $0.10) and revenue of $104.7 million. With continued strong execution and a healthy Reciprocal surplus, Porch Group appears well-positioned to maintain its growth trajectory through the remainder of 2025.

Full presentation:

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