Porch Group, Inc.
For the period ended Dec 31, 2025. Filed Feb 20, 2026.
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FY2025 · Filed Feb 20, 2026
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Consolidated Results of Operations
| Year Ended December 31, | ||||
|---|---|---|---|---|
| 2025 | 2024 | $ Change | % Change | |
| (dollar amounts in thousands) | ||||
| Revenue | $482,414 | $437,848 | $44,566 | 10% |
| Cost of revenue | 142,424 | 235,920 | (93,496) | (40)% |
| Gross profit | 339,990 | 201,928 | 138,062 | 68% |
| Operating expenses: | ||||
| Selling and marketing | 139,578 | 122,873 | 16,705 | 14% |
| Product and technology | 53,317 | 48,138 | 5,179 | 11% |
| General and administrative | 105,200 | 95,249 | 9,951 | 10% |
| Provision for doubtful accounts | 5,325 | 239 | 5,086 | 2,128% |
| Total operating expenses | 303,420 | 266,499 | 36,921 | 14% |
| Operating income (loss) | 36,570 | (64,571) | 101,141 | (157)% |
| Other income (expense): | ||||
| Interest expense | (51,572) | (42,536) | (9,036) | 21% |
| Change in fair value of private warrant liability | (4,013) | 691 | (4,704) | (681)% |
| Change in fair value of derivatives | 19,635 | 5,869 | 13,766 | 235% |
| Gain on extinguishment of debt | 395 | 27,436 | (27,041) | (99)% |
| Investment income and realized gains and losses, net of investment expenses | 11,671 | 13,697 | (2,026) | (15)% |
| Other income, net | 14,049 | 28,702 | (14,653) | (51)% |
| Total other income (expense) | (9,835) | 33,859 | (43,694) | (129)% |
| Income (loss) before income taxes | 26,735 | (30,712) | 57,447 | (187)% |
| Income tax provision | (11,417) | (2,117) | (9,300) | 439% |
| Net income (loss) | $15,318 | $(32,829) | $48,147 | (147)% |
| Less: Net income attributable to the Reciprocal | 18,679 | — | 18,679 | N/A |
| Net loss attributable to Porch | $(3,361) | $(32,829) | $29,468 | (90)% |
| Net income (loss) | $15,318 | $(32,829) | $48,147 | (147)% |
| Net loss (income) attributable to the Reciprocal | (18,679) | — | (18,679) | N/A |
| Interest expense | 51,476 | 42,536 | 8,940 | 21% |
| Income tax provision | 366 | 2,117 | (1,751) | (83)% |
| Depreciation and amortization | 20,617 | 25,522 | (4,905) | (19)% |
| Gain on extinguishment of debt | (395) | (27,436) | 27,041 | (99)% |
| Other income, net | (7,483) | (23,208) | 15,725 | (68)% |
| Loss (gain) on reinsurance contract | — | (1,324) | 1,324 | (100)% |
| Stock-based compensation expense | 28,952 | 27,181 | 1,771 | 7% |
| Mark-to-market gains | (15,666) | (10,002) | (5,664) | 57% |
| Restructuring and other costs | 1,761 | 4,185 | (2,424) | (58)% |
| Acquisition and other transaction costs | 337 | 429 | (92) | (21)% |
| Adjusted EBITDA (Loss) | $76,604 | $7,171 | $69,433 | 968% |
| Adjusted EBITDA (Loss) Margin | 16% | 2% | ||
Revenue
Total consolidated revenue including the Reciprocal increased by 10% compared to the prior year. This increase was primarily attributable to lower external reinsurance costs offsetting revenue. In 2025, our captive reinsurer retained a higher proportion of premiums than in the prior year. Revenue related to Porch Shareholder Interest was $418.9 million for the year ended December 31, 2025, as detailed in the tables at the end of this section. Porch Shareholder Interest Revenue is a non-GAAP measure. See Non-GAAP Financial Measures section for definition.
Cost of revenue
Total consolidated cost of revenue including the Reciprocal decreased by $93.5 million, or 40%, from $235.9 million for the year ended December 31, 2024, to $142.4 million for the year ended December 31, 2025. The decrease was primarily the result of strong underwriting at the Reciprocal and fewer catastrophic weather events impacting the Reciprocal, which limited the number of claims. As a percentage of revenue, cost of revenue represented 30% of revenue for the year ended December 31, 2025, compared with 54% for the year ended December 31, 2024. Cost of revenue related to Porch Shareholder Interest was $75.0 million for the year ended December 31, 2025, as detailed in the tables at the end of this section. Porch Shareholder Interest Cost of Revenue is a non-GAAP measure. See Non-GAAP Financial Measures section for definition.
Selling and marketing
Total consolidated selling and marketing expenses including the Reciprocal increased by $16.7 million, or 14%, from $122.9 million for the year ended December 31, 2024, to $139.6 million for the year ended December 31, 2025. The increase was primarily attributable to incentives to insurance agencies as part of our growth strategy, as well as increased marketing expenses related to new warranty products. As a percentage of revenue, selling and marketing expenses represented 29% of revenue in the current year compared to 28% of revenue in the prior year. Selling and marketing expense related to Porch Shareholder Interest was $195.2 million for the year ended December 31, 2025, as detailed in the tables at the end of this section. Porch Shareholder Interest Selling and Marketing is a non-GAAP measure. See Non-GAAP Financial Measures section for definition.
Product and technology
Total consolidated product and technology expenses including the Reciprocal increased by $5.2 million, or 11%, from $48.1 million for the year ended December 31, 2024, to $53.3 million for the year ended December 31, 2025. The increase was primarily driven by an increase in payroll expenses related to software development and an increase in overall software expense. As a percentage of revenue, product and technology expenses represented 11% of revenue in the current year compared to 11% of revenue in the prior year. Product and technology expense related to Porch Shareholder Interest was $50.3 million for the year ended December 31, 2025, as detailed in the tables at the end of this section. Porch Shareholder Interest Product and Technology is a non-GAAP measure. See Non-GAAP Financial Measures section for definition.
General and administrative
Total consolidated general and administrative expenses including the Reciprocal increased by $10.0 million, or 10%, from $95.2 million for the year ended December 31, 2024, to $105.2 million for the year ended December 31, 2025, primarily due to a one-time agency partnership payment, increased legal expenses, and reduction in the gain recognized from the valuation of contingent consideration (see Note 6 in the Notes to Consolidated Financial Statements). As a percentage of revenue, general and administrative expenses represented 22% of revenue in 2025, compared with 22% in 2024. General and administrative expenses related to Porch Shareholder Interest were $92.8 million for the year ended December 31, 2025, as detailed in the tables at the end of this section. Porch Shareholder Interest General and Administrative is a non-GAAP measure. See Non-GAAP Financial Measures section for definition.
Provision for doubtful accounts
Total consolidated provision for doubtful accounts increased by $5.1 million from $0.2 million for the year ended December 31, 2024, to $5.3 million for the year ended December 31, 2025. This increase was primarily related to an increase in losses expected on a prior year reinsurance contract as well as an increase in average warranty receivables related to higher-priced warranty products commensurate with the increase in the average coverage period. Provision for doubtful accounts related to Porch Shareholder Interest was $4.1 million for the year ended December 31, 2025, as detailed in the tables at the end of this section. Porch Shareholder Interest Provision for Doubtful Accounts is a non-GAAP measure. See Non-GAAP Financial Measures section for definition.
Interest expense
Interest expense increased by $9.0 million, or 21%, from $42.5 million in 2024. The increase was primarily driven by the May 2025 exchange of our 0.75% 2026 Notes for newly issued 9.00% 2030 Notes. The higher coupon rate associated with the 2030 Notes contributed to the overall increase in interest expense during the period. The following table details the components of interest expense, on the Consolidated Statements of Operations and Comprehensive Loss:
| Year Ended December 31, | ||
|---|---|---|
| 2025 | 2024 | |
| Contractual interest expense | $30,263 | $24,046 |
| Amortization of debt issuance costs and discount | 22,060 | 19,081 |
| Capitalized interest and other | (751) | (591) |
| Total interest expense | $51,572 | $42,536 |
Change in fair value of private warrant liability
The change in fair value of the private warrant liability was a loss of $4.0 million for the year ended December 31, 2025, and a gain of $0.7 million in the same period in 2024. The change in the fair value was primarily related to an increase in the market value of our common stock. The change in fair value of the private warranty liability relates entirely to Porch Shareholder Interest.
Change in fair value of derivatives
The derivative liability decreased by $19.6 million for the year ended December 31, 2025, compared to a decrease of $5.9 million for the year ended December 31, 2024. The value is driven by various factors, including the fair value of the underlying debt and the assumptions regarding timing of possible repurchase events. See Note 6 in the Notes to Consolidated Financial Statements.
Gain on extinguishment of debt
In connection with the repurchase of a portion of the 2026 Notes, we recognized a $27.4 million gain on extinguishment of debt during the year ended December 31, 2024, compared to less than $0.4 million during the year ended December 31, 2025. The trading prices of the 2026 Notes have increased since prior year. See Note 9 in the Notes to Consolidated Financial Statements.
Investment income and realized gains and losses, net of investment expenses
Investment income and realized gains, net of investment expenses decreased by $2.0 million from $13.7 million for the year ended December 31, 2024, to $11.7 million for the year ended December 31, 2025. Total investments balance as of December 31, 2025, was $248.7 million compared to $182.8 million as of December 31, 2024. While our investment balance increased year-over-year, we had lower market yields.
Other income, net
Total consolidated other income, net, including the Reciprocal decreased by $14.7 million from $28.7 million for the year ended December 31, 2024, to $14.0 million for the year ended December 31, 2025. The decrease is primarily driven by a $14.9 million gain on settlement of contingent consideration, offset by a $5.3 million loss on sale of our EIG business, both of which occurred during the year ended December 31, 2024, with no comparable events during the year ended December 31, 2025. Additionally, recoveries on reinsurance contracts were approximately $5.0 million lower for the year ended December 31, 2025, compared to the year ended December 31, 2024. A decrease in recoveries over time was expected following the previously disclosed termination of a reinsurance contract in 2023. See Note 18 in the Notes to Consolidated Financial Statements for detail of other income, net, for each period presented. Other income, net, related to Porch Shareholder Interest was $29.0 million for the year ended December 31, 2025. Porch Shareholder Interest Other Income is a non-GAAP measure. See Non-GAAP Financial Measures section for definition.
Income tax provision
Total consolidated income tax provision including the Reciprocal increased by $9.3 million from a $2.1 million provision for the year ended December 31, 2024, to an $11.4 million provision for the year ended December 31, 2025. Our effective tax rate for the year ended December 31, 2025, was 42.7%, compared to (6.9)% for the year ended December 31, 2024. Our effective tax rate was higher in 2025 compared to 2024 and compared to the 21% statutory tax rate primarily due to the change in valuation allowance and write-off of certain net operating losses of HOA.
Adjusted EBITDA (Loss)
Adjusted EBITDA (Loss) for the year ended December 31, 2025, was $76.6 million, a $69.4 million improvement from $7.2 million for 2024. The year-over-year improvement was primarily attributable to the shift in the business model from carrier to the manager of the Reciprocal, producing higher margin management fees. Our Insurance Services segment benefited from the receipt of commissions and fees related to the Reciprocal Segment which began in January 2025 and an increase in interest income from the surplus note due from the Reciprocal Segment. Corporate costs also declined due to reduced workforce, less reliance on third-party consultants, centralizing administrative functions, and shifting hiring to target lower-cost locations. Adjusted EBITDA (Loss) is a non-GAAP measure. See Non-GAAP Financial Measures section for definition.
Refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2024 Annual Report on Form 10-K as filed with the SEC on February 25, 2025, for the comparison of the results of operations for the years ended December 31, 2024 and 2023.
The following tables summarize operating results of the four segments as well as corporate expenses and eliminations.
| Insurance Services · Software & Data · Consumer Services · Corporate · Eliminations (1) · Porch Shareholder Interest Subtotal (2) · Reciprocal Segment · Eliminations Related to Reciprocal Segment (3) · Consolidated | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $266,726 | $92,935 | $68,374 | $— | $(9,144) | $418,891 | $200,463 | $(136,940) | $482,414 | |||||
| Cost of revenue | 39,144 | 25,715 | 10,128 | — | (9) | 74,978 | 71,416 | (3,970) | 142,424 | |||||
| Gross Profit | 227,582 | 67,220 | 58,246 | — | (9,135) | 343,913 | 129,047 | (132,970) | 339,990 | |||||
| Gross Margin | 85% | 72% | 85% | —% | 100% | 82% | 64% | 97% | 70% | |||||
| Less: Operating expenses: | ||||||||||||||
| Selling and marketing | 123,831 | 37,015 | 41,936 | 1,578 | (9,135) | 195,225 | 20,876 | (76,523) | 139,578 | |||||
| Product and technology | 10,354 | 18,545 | 4,582 | 16,849 | — | 50,330 | 2,987 | — | 53,317 | |||||
| General and administrative | 19,936 | 8,741 | 9,698 | 54,442 | — | 92,817 | 68,830 | (56,447) | 105,200 | |||||
| Provision for doubtful accounts | 200 | 1,380 | 2,543 | — | — | 4,123 | 1,202 | — | 5,325 | |||||
| Operating income (loss) | (72,869) | — | 1,418 | 35,152 | — | 36,570 | ||||||||
| Other expense (income) | (21,343) | (32) | (418) | 26,206 | — | 4,413 | 5,422 | — | 9,835 | |||||
| Income (loss) before income taxes | (99,075) | — | (2,995) | 29,730 | — | 26,735 | ||||||||
| Income tax benefit (provision) | (366) | — | (366) | (11,051) | — | (11,417) | ||||||||
| Net income (loss) | $(99,441) | $— | $(3,361) | $18,679 | $— | $15,318 | ||||||||
| Less: Net income attributable to the Reciprocal | 18,679 | |||||||||||||
| Net loss attributable to Porch | $(3,361) | |||||||||||||
| Adjusted EBITDA (Loss) Reconciliation: | ||||||||||||||
| Net income (loss) | $(99,441) | $(3,361) | $15,318 | |||||||||||
| Less Reconciling items: | ||||||||||||||
| Net income attributable to the Reciprocal | — | 18,679 | ||||||||||||
| Depreciation and amortization | (367) | (14,592) | (3,422) | (2,236) | — | (20,617) | (20,617) | |||||||
| Stock-based compensation expense | (4,443) | (2,406) | (1,735) | (20,368) | — | (28,952) | (28,952) | |||||||
| Gain (loss) on extinguishment of debt | — | — | — | 395 | — | 395 | 395 | |||||||
| Interest expense | — | (3) | (9) | (51,464) | — | (51,476) | (51,476) | |||||||
| Income tax provision | — | — | — | (366) | $— | (366) | (366) | |||||||
| Mark-to-market gains (losses) | — | — | 44 | 15,622 | — | 15,666 | 15,666 | |||||||
| Recoveries of Losses on Reinsurance Contracts | — | — | — | 7,100 | — | 7,100 | 7,100 | |||||||
| Other gains and losses | (324) | (330) | 235 | (1,296) | — | (1,715) | (1,715) | |||||||
| Adjusted EBITDA (Loss) (4) | $99,738 | $18,902 | $4,792 | $(46,828) | $76,604 | $76,604 | ||||||||
(1)The “Eliminations” column represents eliminations of transactions between the Insurance Services segment, Software & Data segment, Consumer Services segment, and Corporate column.
(2)The “Porch Shareholder Interest Subtotal” column includes non-GAAP measures that are used by management to evaluate performance. Porch Shareholder Interest includes the Insurance Services, Software & Data, and Consumer Services segments as well as Corporate expenses and applicable intercompany eliminations. See Non-GAAP Financial Measures section.
(3)The “Eliminations Related to Reciprocal Segment” column represents eliminations of transactions between the Reciprocal Segment and other segments or Corporate.
(4)Adjusted EBITDA (Loss) is a non-GAAP measure. See Non-GAAP Financial Measures section for definition.
| Insurance Services · Software & Data · Consumer Services · Corporate · Eliminations (1) · Subtotal · Reciprocal Segment · Eliminations Related to Reciprocal Segment (2) · Consolidated | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $157,073 | $89,167 | $69,137 | $— | $(2,102) | $313,275 | $182,090 | $(57,517) | $437,848 | |||
| Cost of revenue | 77,063 | 23,748 | 14,755 | — | (62) | 115,504 | 134,850 | (14,434) | 235,920 | |||
| Gross Profit | 80,010 | 65,419 | 54,382 | — | (2,040) | 197,771 | 47,240 | (43,083) | 201,928 | |||
| Gross Margin | 51% | 73% | 79% | —% | 97% | 63% | 26% | 75% | 46% | |||
| Less: Operating expenses: | ||||||||||||
| Selling and marketing | 52,571 | 40,147 | 33,896 | 2,109 | (981) | 127,742 | 38,214 | (43,083) | 122,873 | |||
| Product and technology | 221 | 16,662 | 4,265 | 20,504 | (1,059) | 40,593 | 7,545 | — | 48,138 | |||
| General and administrative | 6,827 | 13,111 | 8,541 | 56,964 | — | 85,443 | 9,806 | — | 95,249 | |||
| Provision for doubtful accounts | — | 1,189 | 520 | — | — | 1,709 | (1,470) | — | 239 | |||
| Operating income (loss) | (79,577) | — | (57,716) | (6,855) | — | (64,571) | ||||||
| Other expense (income) | (14,968) | (14,948) | (305) | 205 | — | (30,016) | (3,843) | — | (33,859) | |||
| Income (loss) before income taxes | (79,782) | — | (27,700) | (3,012) | — | (30,712) | ||||||
| Income tax benefit (provision) | (2,117) | — | (2,117) | — | — | (2,117) | ||||||
| Net income (loss) | $(81,899) | $— | $(29,817) | $(3,012) | $— | $(32,829) | ||||||
| Adjusted EBITDA (Loss) Reconciliation: | ||||||||||||
| Net income (loss) | $(81,899) | $(29,817) | $(32,829) | |||||||||
| Less: Reconciling items: | ||||||||||||
| Depreciation and amortization | (3,943) | (15,498) | (3,803) | (2,255) | — | (25,499) | (25,522) | |||||
| Stock-based compensation expense | (1,199) | (4,272) | (1,993) | (19,717) | — | (27,181) | (27,181) | |||||
| Gain (loss) on extinguishment of debt | — | — | — | 27,436 | — | 27,436 | 27,436 | |||||
| Interest expense | — | 19 | 19 | (42,685) | — | (42,647) | (42,536) | |||||
| Income tax provision | — | — | — | (2,117) | — | (2,117) | (2,117) | |||||
| Mark-to-market gains (losses) | — | (909) | 4,350 | 6,560 | — | 10,001 | 10,001 | |||||
| Recoveries of Losses on Reinsurance Contracts | 8,811 | — | — | 3,331 | — | 12,142 | 12,142 | |||||
| Other gains and losses | (122) | 14,144 | 93 | (157) | — | 13,958 | 7,777 | |||||
| Adjusted EBITDA (Loss) (3) | $31,812 | $15,774 | $8,799 | $(52,295) | $4,090 | $7,171 | ||||||
(1)The “Eliminations” column represents eliminations of transactions between the Insurance Services segment, Software & Data segment, Consumer Services segment, and Corporate column.
(2)The “Eliminations Related to Reciprocal Segment” column represents eliminations of transactions between the Reciprocal Segment and other segments or Corporate.
(3)Adjusted EBITDA (Loss) is a non-GAAP measure. See Non-GAAP Financial Measures section for definition.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.