Porch Group, Inc.

Note 1. Description of Business and Summary of Significant Accounting Policies

Description of Business

Porch Group, Inc., together with its consolidated subsidiaries, (“Porch,” the “Company,” “we,” “our,” “us”) is a new kind of homeowners insurance company—one designed to stand out in a massive and growing market of more than $100 billion. Our strategy is built on three differentiators that set us apart.

Leveraging unique property insights, we can assess risk with greater precision, enabling competitive pricing for low-risk customers and avoiding high-risk customers, while delivering superior underwriting performance.

Beyond insurance, Porch is a leader in the home software-as-a-service (“SaaS”) space, serving approximately 24 thousand companies across industries essential to the home-buying process—home inspectors, title companies, mortgage providers, and more. Our deep relationships and proprietary data give us unique visibility into approximately 90% of U.S. homes, enabling superior risk assessment and competitive pricing.

Our mission is to be the best homeowners insurance partner for homebuyers, offering more than just coverage. Through the Porch app, we provide a full moving concierge service, helping customers with moving logistics and essential home services like security, TV/Internet setup, and more.

Finally, we deliver greater home protection by pairing homeowners insurance with full home warranty, additional coverages, and appliance recall monitoring. This approach fills coverage gaps, reduces unexpected costs, and strengthens our value proposition—creating deeper, lasting relationships with our customers.

Beginning in January 2025, we operate under four reportable segments that are also our operating segments. Three of these segments are owned by Porch — Insurance Services, Software & Data, and Consumer Services. We collectively call these three segments, along with corporate functions, the “Porch Shareholder Interest.” Our fourth segment, the Reciprocal Segment, is managed, but not owned, by Porch and, at this time, is consolidated for reporting purposes as described in the basis of presentation section below. See Note 2, Segment Information, for additional information on our reportable segments.

The consolidated financial statements and accompanying notes include the accounts of Porch Group, Inc. and its subsidiaries as well as the Reciprocal, a variable interest entity (“VIE”) in which the Company is considered the primary beneficiary. The Reciprocal is managed, but not owned by, Porch and is consolidated at this time as a VIE for reporting purposes. These consolidated financial statements and accompanying notes were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). All significant intercompany accounts and transactions are eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current year’s presentation. Except for per share data or as otherwise indicated, all U.S. dollar amounts presented in the tables in these Notes to Consolidated Financial Statements are in thousands.

In 2025, we elected to begin presenting a subtotal for gross profit on the Consolidated Statements of Operations and Comprehensive Loss. Accordingly, we reclassified into cost of revenue certain amortization expense related to software and acquired intangible assets that are directly related to revenue generation. The related amortization expense was presented in “product and technology” and “general and administrative” in our historical financial statements. Prior period amounts have been reclassified to conform to the current year’s presentation.

Comprehensive Loss

Comprehensive loss consists of adjustments related to unrealized gains and losses on available-for-sale securities.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported of certain assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual results may differ from those estimates and assumptions.

Concentrations

Financial instruments which potentially subject us to credit risk consist principally of cash, money market accounts on deposit with financial institutions, money market funds, certificates of deposit, fixed-maturity securities, and receivable balances in the course of collection.

The Reciprocal has exposure and remains liable in the event of insolvency of its reinsurers. The Reciprocal and its reinsurance intermediary regularly assess the credit quality and ratings of its reinsurer counterparties. As of December 31, 2025, three reinsurers represented more than 10% individually, and 53% in the aggregate, of the total reinsurance balance due line item on the Consolidated Balance Sheets. As of December 31, 2024, two reinsurers represented more than 10% individually, and 59% in the aggregate, of our total reinsurance balance due. There are currently no material receivables on the Consolidated Balance Sheets related to the Reciprocal’s excess of loss catastrophe program. See Note 16, Reinsurance for the Reciprocal, for more information.

Approximately 56%,56% and 52% of consolidated revenue for years ended December 31, 2025, 2024 and 2023, respectively, was derived from customers in Texas and could be adversely affected by economic conditions, an increase in competition, local weather events, or environmental impacts and changes.

No individual customer represented more than 10% of our total consolidated revenue for the years ended 2025, 2024 or 2023. As of December 31, 2025 and 2024, no individual customer accounted for 10% or more of our total accounts receivable, net, on the Consolidated Balance Sheets.

As of December 31, 2025, we held approximately $160.4 million of cash with five U.S. commercial banks. As of December 31, 2024, we held approximately $186.8 million of cash with five U.S. commercial bank.

Cash, Cash Equivalents, and Restricted Cash

We consider all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. We maintain cash balances that exceed the insured limits by the Federal Deposit Insurance Corporation.

The reconciliation of cash, cash equivalents, and restricted cash to amounts presented in the Consolidated Statements of Cash Flows are as follows:

(1)Balance as of December 31, 2024, includes $111.1 million cash and cash equivalents at HOA.

The following table provides the components of restricted cash and cash equivalents on the Consolidated Balance Sheets:

(1)Held by our captive reinsurance business as collateral for the benefit the Reciprocal.

(2)Pledged to the Department of Insurance in certain states as a condition of our Certificate of Authority for the purpose of meeting obligations to policyholders and creditors.

(3)Required under regulatory guidelines in 26 states and 23 states as of December 31, 2025 and December 31, 2024, respectively.

Investments

Our investments, both for Porch and the Reciprocal, are primarily comprised of short-term certificates of deposit, U.S. Treasury, corporate and municipal bonds, and mortgage-backed securities and are classified as available-for-sale and reported at fair value with unrealized gains and losses included in accumulated other comprehensive income (loss). Investments are classified as current or non-current based upon the remaining maturity of the investment. Amortization of premium and accretion of discount are computed using the effective interest method. The accretion or amortization of discounts and premiums on mortgage-backed securities takes into consideration actual and future estimated principal prepayments. We utilize estimated prepayment speed information obtained from published sources. The effects of the yield of a security from changes in principal prepayments are recognized prospectively. The degree to which a security is susceptible to yield adjustments is influenced by the difference between its carrying value and par, the relative sensitivity of the underlying mortgages backing the assets to prepayment in a changing interest rate environment, and the repayment priority for structured securities.

We evaluate whether declines in the fair value of investments have resulted from an expected credit loss. See Note 5, Investments, for additional information about management’s evaluation.

Realized gains and losses on sales of investments are determined using the specific-identification method.

Accounts Receivable and Long-term Insurance Commissions Receivable

Accounts receivable for Porch consist principally of amounts due from businesses, while accounts receivable for the Reciprocal consist of amounts due from individual policyholders. We estimate allowances for credit losses based on the creditworthiness of our customers, historical trend analysis, and macro-economic conditions. Consequently, an adverse change in those factors could affect our estimate of allowance for credit losses. The allowance for credit losses, which relates entirely to Porch, was $2.7 million and $1.7 million as of December 31, 2025, and 2024, respectively. The Reciprocal had no allowance as of either date.

Long-term insurance commissions receivable balance, which relates entirely to Porch, consists of the estimated commissions from policy renewals expected to be collected. We record the amount of renewal insurance commissions expected to be collected in the next twelve months as current accounts receivable.

Deferred Policy Acquisition Costs

We capitalize deferred policy acquisitions costs (“DACs”), which consist primarily of commissions, premium taxes and policy underwriting and production expenses that are directly related to the successful acquisition by the Reciprocal of new or renewal insurance contracts. DACs are amortized on a straight-line basis over the terms of the policies to which they relate, which is generally one year. DACs are also reduced by ceding commissions paid by reinsurance companies which represent recoveries of acquisition costs. DACs are periodically reviewed for recoverability and adjusted if necessary. Future investment income is considered in determining the recoverability of DACs. Amortized DACs included in selling and marketing expense, amounted to $38.2 million, $39.0 million, and $49.2 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Property, Equipment, and Software

Property, equipment, and software are stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets, as follows:

When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in the Consolidated Statements of Operations and Comprehensive Loss in the period of disposition. Maintenance and repairs that do not improve or extend the lives of the respective assets are charged to expense in the period incurred.

We capitalize costs incurred in the development of internal use software. The capitalized costs are amortized over the estimated useful life of the software. If capitalized projects are determined to no longer be in use, they are impaired and the cost and accumulated depreciation are removed from the accounts. The resulting loss on impairment, if any, is included in the Consolidated Statements of Operations and Comprehensive Loss in the period of impairment.

Goodwill

We test goodwill for impairment for each reporting unit on an annual basis or more frequently when events or changes in circumstances indicate the fair value of a reporting unit may be less than its carrying amount. We have the option to perform a qualitative assessment to determine if an impairment is more likely than not to have occurred. Factors that indicate the fair value of a reporting unit may be less than its carrying amount include industry and market considerations such as a deterioration in the economic environment or a decline in market-dependent multiples or metrics, overall financial performance such as negative or declining cash flows or a decline in actual or planned revenue or earnings, increased cost factors that have a negative effect on earnings and cash flows, or a sustained decrease in share price. The process for evaluating potential impairment of goodwill is highly subjective and requires significant judgment. If factors indicate that the fair value of the reporting unit is less than its carrying amount, we perform a quantitative assessment and the fair value of the reporting unit is estimated. If the fair value of a reporting unit is less than its carrying amount, an impairment loss is recorded to the extent that fair value of the reporting unit is less than its carrying amount. We have selected October 1 as the date to perform our annual impairment test.

Determining the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions to evaluate the impact of operating and macroeconomic changes on each reporting unit. The fair value of each reporting unit was estimated using a combination of income and market valuation approaches using publicly traded company multiples in similar businesses. Such fair value measurements are based predominately on Level 3 inputs. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internally developed forecasts, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital, which is risk-adjusted to reflect the specific risk profile of the reporting unit being tested.

Intangible Assets

Intangible assets consist of acquired customer relationships, acquired technology, trademarks and trade names, renewal rights, insurance licenses, non-compete agreements, value of businesses acquired, and related assets that are amortized over their estimated useful lives. Certain intangible assets are considered to have indefinite lives. We test indefinite-lived intangible assets for impairment annually on October 1 and whenever events or circumstances arise that indicate an impairment may exist. See the Impairment of Long-Lived Assets section below.

Impairment of Long-Lived Assets

We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. Events that trigger a test for recoverability include a significant decrease in the market price for a long-lived asset, significant negative industry or economic trends, an accumulation of costs significantly in excess of the amount originally expected for the acquisition, a current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset, or a sustained decrease in share price. When a triggering event occurs, a test for recoverability is performed, comparing projected undiscounted future cash flows to the carrying value of the asset group. If the test for recoverability identifies a possible impairment, the asset group’s fair value is measured relying primarily on an income approach. An impairment charge is recognized for the amount by which the carrying value of the asset group exceeds its estimated fair value. Management identifies the asset group that includes the potentially impaired long-lived asset, at the lowest level at which there are separate, identifiable cash flows. We evaluate corporate assets or other long-lived assets that are not asset group-specific at the consolidated level.

We estimate the fair value of an asset group using the income approach. Such fair value measurements are based predominately on Level 3 inputs. Inherent in our development of cash flow projections are assumptions and estimates derived from a review of our operating results, business plan forecasts, expected growth rates, and cost of capital, similar to those a market participant would use to assess fair value. We also make certain assumptions about future economic conditions and other data. Many of these factors used in assessing fair value are outside the control of management and these assumptions and estimates may change in future periods.

Losses and Loss Adjustment Expenses Reserves

The liability for losses and loss adjustment expenses (“LAE”) is an estimate of the amounts required to cover known incurred losses and LAE and is developed through the review and assessment of loss reports, along with the analysis of known claims. These reserves include the Reciprocal’s estimate of the amounts for losses incurred but not reported (“IBNR”). IBNR is reviewed regularly using a variety of actuarial techniques. The Reciprocal updates the reserve estimates as historical loss experience develops, additional claims are reported and/or settled and new information becomes available. Any changes in estimates are reflected in operating results in the period in which the estimates are changed. Although the Reciprocal believes that the balance of these reserves is adequate, such liabilities are necessarily dependent on estimates, the ultimate expense may be more or less than the amounts presented. The approach and methods for developing these estimates and for recording the resulting liability are continually reviewed. Any adjustments to this reserve are recognized in the Consolidated Statements of Operations and Comprehensive Loss. Losses and LAE, less related reinsurance is charged to expense as incurred.

Reinsurance

In the normal course of business, the Reciprocal monitors return and risk and seeks to reduce the overall exposure to losses that may arise from catastrophes or other events that cause unfavorable underwriting results by reinsuring certain levels of risk with other insurance enterprises or reinsurers. The Reciprocal has entered proportional and non-proportional reinsurance treaties, under which the Reciprocal has ceded some, but not all, of the liabilities to third-party reinsurers including, but not limited to, catastrophe exposure. The amount and type of reinsurance employed is based on the Reciprocal’s analysis of capital as well as its estimates of probable maximum loss and evaluation of the conditions within the reinsurance market.

The Reciprocal remains liable to our policyholders for the portion reinsured to the extent that any reinsurer does not meet the obligations assumed under the reinsurance agreements. To minimize our exposure to significant losses from reinsurer insolvencies, the Reciprocal evaluates the financial condition of its reinsurers and monitors concentrations of credit risk arising from similar geographic regions, activities, or economic characteristics of the reinsurers.

Additionally, the insurance contracts are subject to contingent commission adjustments and loss participation features which align our interests with those of our reinsurers.

Ceded premium written is recorded in accordance with the applicable terms of the reinsurance contracts and ceded premium earned is charged against revenue over the period of the reinsurance contracts. Ceded losses incurred reduce net loss and LAE incurred over the applicable periods of the reinsurance contracts with third-party reinsurers.

Accrued Expenses and Other Current Liabilities

The following table details the components of accrued expenses and other current liabilities in the Consolidated Balance Sheets.

(1)Balance as of December 31, 2024, includes$4.3 million accrued expenses and other current liabilities at HOA.

Other Insurance Liabilities, Current

The following table details the components of other insurance liabilities, current, in the Consolidated Balance Sheets. Other insurance liabilities were held by the Reciprocal as of December 31, 2025.

Fair Value of Financial Instruments

Fair value principles require disclosures regarding the manner in which fair value is determined for assets and liabilities and establishes a three-tiered fair value hierarchy into which these assets and liabilities must be grouped, based upon significant levels of inputs as follows:

Level 1 Observable inputs, such as quoted prices (unadjusted) in active markets for identical assets or liabilities at the measurement date;

Level 2 Observable inputs, other than Level 1 prices, such as quoted prices in active markets for similar assets and liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy. Management’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability.

Revenue Recognition

General

In accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers, (“ASC 606”) we identify performance obligations in our contracts with customers (other than insurance policies and warranties), which primarily include providing insurance management services, delivery of homeowner leads, performance of home project and moving services, and providing access to our software platforms and services. The transaction price is determined based on the amount to which we expect to be entitled in exchange for providing the promised services to the customer. The transaction price in the contract is allocated to each distinct performance obligation on a relative standalone selling price basis. Revenue is recognized when or as performance obligations are satisfied.

Contract payment terms vary from due-upon-receipt to net 30 days. Collectability is assessed based on a number of factors including collection history and creditworthiness of the customer. If collectability of substantially all consideration to which we are entitled under the contract is determined to be not probable, revenue is not recorded until collectability becomes probable at a later date.

Revenue is recorded based on the transaction price excluding amounts collected on behalf of third parties, such as sales taxes collected and remitted to governmental authorities.

Insurance Services

Management Fees

Insurance services revenue is primarily generated from the collection of management fees charged to the Reciprocal. The Insurance Services segment manages and operates the Reciprocal for its subscribers, providing critical services such as underwriting, policy renewal, risk and portfolio management, financial oversight, and investment guideline setting.

In exchange for these services, the Insurance Services segment receives ongoing commissions calculated as a contractually defined percentage of the Reciprocal’s written premium. These fees represent consideration for services that are provided continuously through the policy period. Revenue is recognized over time, as premiums are written and related services are performed.

Policy Fees

Policy fees are earned on policies written by the Reciprocal. Premium is traditionally paid in full by the policyholder at the inception of the policy, and we recognize the related policy fees when the policy is written. Policy fees are determined based either on a percentage of written premium or a fixed amount per policy, depending on the state the policy was issued.

Reinsurance Premiums

The Insurance Services segment includes our captive reinsurer which provides reinsurance to the Reciprocal. In accordance with ASC Topic 944, Financial Services - Insurance,(“ASC 944”) revenue from assumed reinsurance premiums is recognized over the period in which insurance risk is assumed by the captive reinsurer. Premiums received from the Reciprocal are earned on a pro-rata basis over the underlying policy term.

Lead Fees

We sell leads for potential homeowner and auto insurance policies to third-party insurance agencies. The transaction price for these arrangements is the estimated lifetime value (“LTV”) of the commissions to be paid by the agency for the policies sold. The LTV represents fixed first-year commission upon sale of the policy as well as the estimated variable future renewal commissions expected. We constrain the transaction price based on our best estimate of the amount which will not result in a significant reversal of revenue in a future period. After a policy is sold, we have no additional or ongoing contractual obligation to the policyholder, agency, or insurance carrier.

We estimate LTV each period by evaluating various factors, including commission rates and estimated average duration based on insurance carrier and market data related to policy renewals for similar insurance policies. Management reviews and monitors changes in the data used to estimate LTV as well as the cash received for each policy type compared to original estimates. If we identify changes that we believe are indicative of an increase or decrease to prior period LTVs, we will update estimates of variable consideration. There were no changes to the estimated variable consideration for the periods presented.

Software and Data

Software revenue is primarily generated from software services provided to home inspectors, roofing companies, title insurance companies, mortgage companies, and other home services companies. We do not provide the customer with the right to take possession of any part of the software supporting the cloud-based application services. Our typical contracts are monthly or annual contracts in which pricing is based on a specified volume of activity. We also provide certain data analytics, transaction monitoring and marketing services. Fees earned for providing access to the software and services are non-refundable, and there is no right of return. Revenue is recognized based on the amount to which we are entitled for providing access to the software and services during the contract term.

Consumer Services

Warranty Revenue

We provide warranty products to homeowners which are sold through various channels including home inspection companies, real estate agents and direct to customers. These products provide customers with product protection that enhances or extends coverage offered by the manufacturer’s warranty and provides additional customer-friendly benefits that go beyond the scope of a manufacturer’s warranty. Typically, our home warranty policies cover aninety-day tothree-year period. Revenue for these policies is recognized ratably over the actual warranty coverage period for each individual policy.

We also offer products that customers may purchase to extend the manufacturer’s covered warranties for a term of up totwenty-five years. Revenue for these policies is recognized in accordance with ASC Topic 460, Guarantees, (“ASC 460”) over the term of the agreement in proportion to our relief from risk we expect to incur in satisfying the contract obligations.

Move-Related Revenue

Move-related revenue is generated when we connect service providers directly to homeowners and includes fees earned from providing primarily moving services directly to the homeowner. We generally invoice for move-related services on a fixed-fee or time-and-materials basis as contractually agreed upon with the end customer. Revenue is generally recognized as services are performed, which is typically on the same day or over a few days. Fees earned for providing move-related services are non-refundable, and there is generally no right of return.

In certain of our move-related product offerings, we act as the principal in the revenue transactions as we are primarily responsible to the end customer for providing the service, we have a level of discretion in establishing pricing, and we control the service prior to providing it to the end customer. This control is evidenced by the ability to identify, select, and direct the service provider that provides the ultimate service to end customers, and we recognize these revenues on a gross basis. In other instances, third-party merchant partners are responsible for delivering the service to the end customer. Revenue for these arrangements is recognized on a net basis.

Post-Move Revenue

Post-move revenue is generated by connecting third-party service providers (“Service Providers”) with homeowners that meet pre-defined criteria and who may be looking for relevant services.

Revenue generated from Service Providers is recognized at a point in time upon the connection of a homeowner to the Service Provider, at which point our performance obligation has been satisfied. The transaction price is generally either a fixed price per qualifying lead or activated service (fixed consideration), or a percentage of the revenue the Service Provider ultimately generates through the homeowner connection (variable consideration). When the transaction price is variable, the transaction price is constrained and limited to an amount we believe is not probable of significant reversal.

Post-move revenue also includes fees earned from providing a variety of services directly to the homeowner, mainly handyman services. We generally invoice for service projects on a fixed fee or time and materials basis as contractually agreed upon with the end customer (i.e., the transaction price). Revenue is recognized as services are performed based on an output measure of progress, which is generally over a short duration. Fees earned for providing service projects are non-refundable, and there is generally no right of return.

Reciprocal Revenue

The Reciprocal is authorized to write various forms of homeowners insurance. Insurance-related revenues are recognized in accordance with ASC 944 and primarily relate to premiums, policy fees, ceding commissions and reinsurance profit share.

Premiums are recognized as revenue over the policy term. The portion of premiums related to the unexpired term of policies in force as of the end of the reporting period and to be earned over the remaining term of these policies, is deferred and reported as deferred revenue.

Excess ceding commissions represent the commissions from reinsurers in excess of the portion which represents the reimbursement of acquisition costs associated with insurance risk ceded to reinsurers and is earned on a pro-rata basis over the life of the reinsurance policy. Reinsurance profit share is additional ceding commissions payable to us based on attaining specified loss ratios within individual treaty years. Reinsurance profit share income is recognized when earned, which includes adjustments to earned reinsurance profit share based on changes in incurred losses.

Cost of Revenue

Cost of revenue primarily consists of insurance losses and loss adjustment expenses, claims personnel costs, warranty claims, third-party providers for executing moving labor and handyman services when we are managing the job, data costs related to marketing campaigns, certain call center costs, credit card processing, and merchant fees. Also included are payroll, employee benefits, stock compensation expense, and amortization related to intangible assets.

Product and Technology Development

Product and technology development costs primarily include payroll, employee benefits, stock-based compensation expense, and other headcount-related costs associated with product development, net of costs capitalized as internally developed software. Also included are cloud computing, hosting and other technology costs, software subscriptions, professional services, and amortization of internally developed software.

Advertising

Advertising costs are expensed as incurred. During the years ended December 31, 2025, 2024, and 2023, we incurred $19.3 million, $13.9 million, and $13.5 million in advertising costs, respectively. Advertising costs are included in selling and marketing expenses in our Consolidated Statements of Operations and Comprehensive Loss.

Income Taxes

We account for income taxes in accordance with ASC Topic 740, Income Taxes(“ASC 740”). Under the asset and liability method specified by ASC 740, deferred tax assets and liabilities are recognized for the future consequences of differences between the carrying amounts of existing assets and liabilities and their respective tax bases (temporary differences). Deferred tax assets and liabilities are measured using tax rates expected to apply to taxable income in the years in which those temporary differences are recovered or settled. Valuation allowances for deferred tax assets are established when it is more likely than not that some or all of the deferred tax assets will not be realized.

In addition, ASC 740 provides comprehensive guidance on the recognition and measurement of tax positions in previously filed tax returns or positions expected to be taken in future tax returns. The benefit from an uncertain tax position must meet a more-likely-than-not recognition threshold and is measured at the largest amount of benefit greater than 50% determined by cumulative probability of being realized upon ultimate settlement with the taxing authority. Our policy is to recognize interest and penalties expense, if any, related to uncertain tax positions as a component of income tax expense.

Stock-Based Compensation

We have issued stock-based compensation to employees in the form of stock options, restricted stock units, and restricted stock awards. The awards are accounted for by expensing the grant-date fair value of the related award over the requisite service period, which is generally the vesting period. Forfeitures are accounted for when they occur.

We have also issued awards which contain performance and/or market conditions. For awards with performance conditions, we recognize compensation expense only if the specified performance condition is probable of achievement. We update our assessment of probability at each reporting period. All compensation expense for performance awards with only market conditions is recognized if the requisite service period is fulfilled, even if the market condition is not satisfied.

The awards are generally expensed on a straight-line basis, except for awards with performance or market conditions which are expensed on a graded vesting basis.

Warrants

We account for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms. For warrants that meet all of the criteria for equity classification, the warrants are recorded as a component of additional paid-in capital at the time of issuance. For warrants that do not meet all the criteria for equity classification, the warrants are recorded as a liability at their initial fair value, and then are remeasured as of each balance sheet date thereafter. Changes in the estimated fair value of the liability for warrants are recognized as a non-cash gain or loss on the Consolidated Statements of Operations and Comprehensive Loss in the period in which the change occurred.

Business Combinations

We account for business acquisitions using the acquisition method of accounting and record any identifiable intangible assets separate from goodwill. Intangible assets are recorded at fair value based on estimates as of the date of acquisition. Goodwill is recorded as the residual amount of the purchase price consideration less the fair value assigned to the individual identifiable assets acquired and liabilities assumed as of the date of acquisition. The accounting estimates associated with acquisitions are complex due to judgments and assumptions involved in determining (1) the total consideration paid because we have used cash, equity, and earnouts and (2) the value of assets acquired and liabilities assumed. We allocate the purchase price of the acquisition to the assets acquired and liabilities assumed based on estimates of the fair value at the dates of the acquisitions. Contingent consideration, which represents an obligation to make additional payments or equity interests to the former owner(s) as part of the purchase price if specified future events occur or conditions are met, is accounted for at the acquisition date fair value either as a liability or as equity depending on the terms of the acquisition agreement.

Leases

We determine if an arrangement is or contains a lease at inception, which is the date on which the terms of the contract are agreed to, and the agreement creates enforceable rights and obligations. Under ASC Topic 842, Leases, a contract is or contains a lease when (i) explicitly or implicitly identified assets have been deployed in the contract and (ii) the customer obtains substantially all of the economic benefits from the use of that underlying asset and directs how and for what purpose the asset is used during the term of the contract. We also consider whether its service arrangements include the right to control the use of an asset.

Operating leases are primarily for office space and are included in operating lease right-of-use assets (“ROU assets”), accrued expenses and other current liabilities, and other liabilities on our Consolidated Balance Sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. The ROU assets also include any initial direct costs incurred and lease payments made at or before the commencement date and are reduced by any lease incentives. ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Payments for terminating a lease are included in the lease payments only when it is probable they will be incurred.

Our leases may include a non-lease component representing additional services transferred to us, such as common area maintenance for real estate. We have made an accounting policy election to account for each separate lease component and the non-lease components associated with that lease component as a single lease component. Non-lease components that are variable in nature are recorded in variable lease expense in the period incurred.

We use our incremental borrowing rate to determine the present value of lease payments, as our leases do not have a readily determinable implicit discount rate. The incremental borrowing rate is the rate of interest we would have to pay to borrow on a collateralized basis over a similar term and amount in a similar economic environment. Judgment is applied in assessing factors such as Company-specific credit risk, lease term, nature and quality of the underlying collateral, currency, and economic environment in determining the incremental borrowing rate to apply to each lease.

For operating leases with a term ofone year or less, we have elected to not recognize a lease liability or ROU asset on our Consolidated Balance Sheets. Instead, we recognize the lease payments as expense on a straight-line basis over the lease term. Short-term lease expenses are immaterial to our Consolidated Statements of Operations and Comprehensive Loss and Consolidated Statements of Cash Flows.

Accounting Standards Not Yet Adopted

In November 2024, the FASB issued Accounting Standards Update (“ASU”) 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures, which requires that public entities disclose, on an annual and interim basis, disaggregated information about specific expense categories (including employee compensation, depreciation, and amortization) presented on the face of the income statement. The guidance will first be effective in annual disclosures for the year ending December 31, 2027. Early adoption is permitted. We are in the process of assessing the impact of ASU 2024-03 on our disclosures.

In November 2024, the FASB issued ASU 2024-04, Debt - Debt with Conversion and Other Options, which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The new guidance will first be effective beginning with our first quarter of 2026 and can be applied either prospectively or retrospectively. Early adoption is permitted. We do not expect ASU 2024-04 to have a material impact on our consolidated financial statements and related disclosures.

In May 2025, the FASB issued ASU 2025-03, Business Combinations (ASC Topic 805) and Consolidation (ASC Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, which updates the guidance for determining the accounting acquirer in certain equity-based acquisitions of variable interest entities (“VIEs”). The guidance removes the presumption that the primary beneficiary is always the acquirer and instead requires the general guidance for identifying the acquirer under ASC Topic 805 to be applied. The guidance will first be effective beginning with our first quarter of 2027 and may be applied prospectively or retrospectively. Early adoption is permitted. We do not expect ASU 2025-03 to have a material impact on our consolidated financial statements or related disclosures.

In May 2025, the FASB issued ASU 2025-04, Compensation—Stock Compensation (ASC Topic 718) and Revenue from Contracts with Customers (ASC Topic 606), which clarifies the accounting for share-based payments granted to customers, including classification of performance conditions, treatment of forfeitures, and application of the variable consideration constraint. The guidance will first be effective beginning with our first quarter of 2027 and may be applied prospectively or retrospectively. Early adoption is permitted. We have not granted any share-based payments to customers. As such, we do not expect ASU 2025-04 to have a material impact on our consolidated financial statements or related disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which introduces a practical expedient related to estimating expected credit losses. The practical expedient allows entities to assume that conditions that exist when expected credit losses are estimated do not change for the remaining life of the asset. The guidance will first be effective beginning with our first quarter of 2026 and should be applied prospectively. Early adoption is permitted. We do not expect ASU 2025-05 to have a material impact on our consolidated financial statements or related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which aims to modernize the accounting for software costs that are accounted for under ASC Subtopic 350-40, Intangibles-Goodwill and Other-Internal-Use Software. The updated guidance removes references to project stages and instead requires software costs to be capitalized when both of the following occur: 1) management has authorized and committed to funding the software project, and 2) it is probable that the project will be completed and the software will be used to perform the function intended (referred to as the “probable-to-complete recognition threshold”). The guidance will first be effective in our interim disclosures beginning with the first quarter of 2028 and may be applied prospectively, retrospectively, or using a modified approach. Early adoption is permitted as of the beginning of an annual reporting period. We are in the process of assessing the impact of ASU 2025-06 on our consolidated financial statements and related disclosures.

In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements, which introduces targeted refinements to hedge accounting guidance under ASC Topic 815 to better align financial reporting with the economics of risk management activities. The guidance will first be effective in our first quarter of 2027 and should be applied prospectively. Early adoption is permitted. We do not expect ASU 2025-09 to have a material impact on our consolidated financial statements or related disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which aims to clarify and improve the navigability of interim reporting guidance under ASC Topic 270 without changing the fundamental nature or extent of interim disclosure requirements. The guidance will first be effective in our first quarter of 2028 and can be applied prospectively or retrospectively. Early adoption is permitted. We are in the process of assessing the impact of ASU 2025-11 on our consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-12, Codification Improvements, to make technical corrections, clarifications, and minor improvements across multiple areas of U.S. GAAP. The guidance will first be effective in our first quarter of 2027 and prospective or retrospective application will depend on the specific item being addressed. Early adoption is permitted. We are in the process of assessing the impact of ASU 2025-12 on our consolidated financial statements and related disclosures.

Accounting Standards Recently Adopted

On January 1, 2024, we adopted ASU No. 2023-07, Segment Reporting--Improvements to Reportable Segment Disclosures, which requires incremental disclosures about a public entity’s reportable segments but does not change the definition of a segment or the guidance for determining reportable segments. The new guidance requires disclosure of significant segment expenses that are (1) regularly provided to (or easily computed from information regularly provided to) the chief operating decision maker and (2) included in the reported measure of segment profit or loss. The new standard also allows companies to disclose multiple measures of segment profit or loss if those measures are used to assess performance and allocate resources. We adopted ASU 2023-07 using a retrospective method. See Note 2, Segment Information, for more details.

On January 1, 2025, we adopted ASU 2023-09, Improvements to Income Tax Disclosures, which requires disaggregated information about our effective tax rate reconciliation as well as information on income taxes paid. We adopted ASU 2023-09 using a prospective method. See Note 12, Income Taxes, for more detail.

Note 2. Segment Information

Reportable segments were identified based on how the chief operating decision-maker (“CODM”) manages the business, makes operating decisions, and evaluates operating and financial performance. Our chief executive officer acts as the CODM and reviews financial and operational information for our reportable segments. Operating segments are components of an enterprise for which separate discrete financial information is available and operational results are regularly evaluated by the CODM for the purposes of making decisions regarding resource allocation and assessing performance.

Beginning in January 2025, there was a change in internal reporting provided to the CODM and a change in the lens through which the CODM makes decisions and allocates resources. As a result, our reportable segments, that are also our operating segments, changed from Vertical Software and Insurance prior to 2025 to Insurance Services, Software & Data, Consumer Services, and the Reciprocal Segment. Three of these segments are owned by Porch — Insurance Services, Software & Data, and Consumer Services. Management references the Insurance Services, Software & Data, and Consumer Services segments, together with corporate expenses, as “Porch Shareholder Interest.” The fourth segment, the Reciprocal Segment, is managed, but not owned, by Porch and is consolidated for reporting purposes.

The changes in reporting were driven by how the CODM views our target customer (e.g. primarily total premium in Insurance Services, primarily businesses in Software & Data, and primarily direct consumers in Consumer Services) and by the shift to a reciprocal exchange model where we are the manager of the Reciprocal rather than the owner of a carrier. In connection with the formation of the Reciprocal in January 2025, we sold our legacy homeowners insurance carrier, Homeowners of America (“HOA”), to the Reciprocal, shifting all premium and policyholders to the member-owned entity. Effective January 1, 2025, the Reciprocal pays all claim costs, all reinsurance costs, and all agency commissions in addition to management fees to Porch. The Reciprocal is a VIE and represents a noncontrolling interest as discussed in Note 3, Variable Interest Entity.

Our Insurance Services segment manages and operates the Reciprocal, providing services related, but not limited, to underwriting, policy renewal, risk management, insurance portfolio management, financial management, and setting investment guidelines in exchange for commissions and fees. The Insurance Services segment also holds the surplus notes issued by the Reciprocal and includes our captive reinsurer which provides reinsurance support to improve capital efficiency for the Reciprocal.

Our Software & Data segment provides, on a subscription and predominantly transactional basis, software to inspection, mortgage, title, and roofing companies and data products to insurance and other types of companies. This segment includes several strategically important businesses, including home inspection software, title and mortgage software, Home Factors (our unique property insights product), and mover marketing products.

Our Consumer Services segment provides warranty products through Porch Warranty and other warranty brands to protect the whole home. Our Consumer Services segment also provides moving related services such as movers, TV/Internet, and security.

The Reciprocal Segment includes HOA and its parent, Porch Reciprocal Exchange, which is a member-owned reciprocal exchange, owned by policyholder members rather than Porch. The Reciprocal Segment provides consumers with insurance to protect their homes, earning revenue primarily through premiums collected on policies.

Our segment operating and financial performance measures are Gross Profit and Adjusted EBITDA (Loss) for the Insurance Services, Software & Data, and Consumer Services segments. Adjusted EBITDA (Loss) is defined as Gross Profit less the following expenses associated with each segment: selling and marketing, product and technology, and general and administrative. Adjusted EBITDA (Loss) also excludes non-cash items or items that management does not consider reflective of ongoing core operations, such as depreciation, amortization, and stock-based compensation expense. The CODM uses gross profit and Adjusted EBITDA (Loss) to allocate resources for these segments (including employees, property, and financial or capital resources) predominately in the annual budget and forecasting process. Both of these measures are also used to provide guidance to investors.

Our segment operating financial performance measures for the Reciprocal Segment are gross profit and Net Income (Loss). These measures are consistent with the information that is regularly provided to and reviewed by the CODM in assessing segment performance and allocating resources. The CODM utilizes Net Income (Loss) rather than Adjusted EBITDA (Loss) for the Reciprocal Segment because Net Income (Loss) includes interest expense associated with the surplus note issued in connection with the formation of the Reciprocal. This interest is a significant component of the Reciprocal Segment’s financial performance, is regularly provided to the CODM, and is therefore considered in his evaluation. Adjusted EBITDA (Loss), by definition, excludes interest expense.

Beginning in 2025, following the formation of the Reciprocal, we began allocating certain expenses to the Insurance Services segment that were historically considered Corporate costs. This allocation is meant to account for fees paid through Corporate shared services on behalf of the Insurance Services segment and related to its management of the Reciprocal. Because this change occurred as a direct result of the formation of the Reciprocal, the allocation is not recast to prior periods.

The following tables present revenue and significant expenses by segment that are regularly provided to the CODM. Other segment items that the CODM does not consider in assessing segment performance are presented to reconcile to each segment’s measure of profit or loss.

The “Corporate” column includes shared expenses that are not allocated to the reportable segments. These consist primarily of selling and marketing, product and technology, accounting, human resources, legal, general and administrative, and other income, expenses, gain and losses.

(1)Revenue includes intersegment revenues of $239.6 million in Insurance Services (which includes fees, commissions, and reinsurance premiums paid by the Reciprocal to Insurance Services), $9.1 million in Software & Data, and $(77.5) million in revenue offsets in the Reciprocal Segment.

(2)Depreciation, amortization, and stock-based compensation are included in Cost of revenue, Selling and marketing, Product and technology, and General and administrative lines above and are excluded from Adjusted EBITDA (Loss).

(1)Revenue includes intersegment revenues of $141.3 million in Insurance Services (which includes fees, commissions, and reinsurance premiums paid by the Reciprocal to Insurance Services), $2.1 million in Software & Data, and $(83.8) million revenue offsets in the Reciprocal Segment.

(2)Depreciation, amortization, and stock-based compensation are included in Cost of revenue, Selling and marketing, Product and technology, and General and administrative lines above and are excluded from Adjusted EBITDA (Loss).

(1)Revenue includes intersegment revenues of $98.7 million in Insurance Services (which includes fees, commissions, and reinsurance premiums paid by the Reciprocal to Insurance Services), $0.8 million in Software & Data, and $(85.8) million revenue offsets in the Reciprocal Segment.

(2)Depreciation, amortization, and stock-based compensation are included in Cost of revenue, Selling and marketing, Product and technology, and General and administrative lines above and are excluded from Adjusted EBITDA (Loss).

The CODM does not review assets on a segment basis. As of December 31, 2025, and 2024, goodwill for the Software & Data segment was $157.4 million and was $34.5 million for the Consumer Services segment (see Note 8, Intangible Assets and Goodwill for additional information).

All of our revenue is generated in the United States, except for an immaterial amount. As of December 31, 2025, and 2024, we did not have material assets located outside of the United States.

Note 3. Variable Interest Entity

A VIE is a legal entity that is structured such that equity investors lack the ability to make significant decisions relating to the entity's operations through voting rights, do not substantively participate in the gains and losses of the entity, or the entity does not have sufficient equity at risk to finance its activities without additional subordinated financial support. We consolidate VIEs in which we are deemed the primary beneficiary. The primary beneficiary is the entity that has both (1) the power to direct the activities of the VIE that most significantly affect that entity's economic performance and (2) the obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE.

In January 2025, we completed the formation of the Reciprocal, a Texas-domiciled reciprocal insurance exchange. In connection with the formation, we completed the sale of our legacy homeowners insurance carrier, HOA, to the Reciprocal. The purchase price was equal to HOA’s estimated surplus at December 31, 2024, of approximately $105 million, less $58 million, which consists of $49 million principal plus $9 million of unpaid interest under a surplus note issued by HOA to Porch in 2023. The completion of the sale brought the total surplus notes held by Porch to approximately $106 million. Following the sale, HOA became a wholly owned subsidiary of the Reciprocal. The $9 million of interest was paid in April 2025.

We formed a management company that acts as attorney-in-fact for the Reciprocal. The Reciprocal owns HOA and writes homeowners insurance policies that are sold to its subscribers. The establishment of the management company was completed in connection with the formation of the Reciprocal in January 2025.

We consolidate the Reciprocal since (1) we have provided surplus notes to the Reciprocal and would absorb any expected losses that could potentially be significant to the Reciprocal, including through the interest associated with $106 million of surplus notes due to Porch from the Reciprocal and (2) we manage the business operations of the Reciprocal and therefore have the power to direct the activities that most significantly impact the economic performance of the Reciprocal. The Reciprocal’s anticipated economic performance is driven by its underwriting and investment results. We receive a management fee for the services provided to the Reciprocal. The management fee revenues are based upon all premiums written or assumed by the Reciprocal (including HOA).

The assets of the Reciprocal can be used only to settle the obligations of the Reciprocal for which creditors and other beneficial owners have no recourse to Porch. We have no obligations related to any underwriting and/or investment losses experienced by the Reciprocal. As of December 31, 2025, there were $106 million of surplus notes outstanding. The effects of the transactions between Porch and the Reciprocal are eliminated in consolidation to derive consolidated net income (loss). However, the management fee income earned is reported in net loss attributable to Porch and is included in basic and diluted earnings per share.

Note 4. Revenue

Disaggregation of Revenue

The following table provides detail of total revenue. Transactional revenue consists of revenue recognized from non-recurring sales or services that do not generate ongoing revenue and primarily includes revenue generated from moving services. Recurring revenue refers to revenue streams that are more predictable and generate revenue from customers on an ongoing basis, including revenue from insurance services management, inspection software, title insurance software, mortgage software, warranty products, and marketing services. Insurance carrier revenue consists of revenue earned through premiums collected on policies, policy fees, and commissions by the Reciprocal.

(1)Revenue recognized during the years ended December 31, 2025, 2024, and 2023 includes revenue that is accounted for in accordance with ASC 460 separately from revenue from contracts with customers. Revenue accounted for under ASC 460 was $34.2 million, $36.5 million, and $36.6 million for the years ended December 31, 2025, 2024, and 2023, respectively.

(2)Revenue recognized during the years ended December 31, 2025, 2024, and 2023, includes revenue that is accounted for in accordance with ASC 944 separately from the revenue from contracts with customers. Revenue accounted for under ASC 944 was $303.1 million, $259.7 million, and $234.5 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Disclosures Related to Contracts with Customers

Timing may differ between the satisfaction of performance obligations and the invoicing and collection of amounts related to contracts with customers. Liabilities are recorded for amounts that are collected in advance of the satisfaction of performance obligations. To the extent a contract exists, as defined by ASC 606, these liabilities are classified as deferred revenue. To the extent that a contract does not exist, as defined by ASC 606, these liabilities are classified as refundable customer deposits. Refundable customer deposits related to contracts with customers were not material at December 31, 2025 and 2024.

Insurance Commissions Receivable

A summary of the activity impacting insurance commissions receivable is presented below:

As of December 31, 2025 and 2024, $0.6 million and $0.2 million, respectively, of insurance commissions receivable were expected to be collected within the immediately following 12 months and therefore were included in accounts receivable, net, on the Consolidated Balance Sheets. The remaining $2.5 million and $1.2 million as of December 31, 2025 and 2024, respectively, of insurance commissions receivable are expected to be collected after the immediately following 12 months and were included in long-term insurance commissions receivable on the Consolidated Balance Sheets.

Deferred Revenue

A summary of the activity impacting Software & Data segment deferred revenue balances is presented below:

Deferred revenue on our Consolidated Balance Sheets as of December 31, 2025 and 2024, includes $219.6 million and $242.6 million, respectively, of deferred revenue related to the Reciprocal Segment. The portion of insurance premiums related to the unexpired term of policies in force as of the end of the reporting period and to be earned over the remaining term of these policies is deferred and reported as deferred revenue.

Remaining Performance Obligations

The amount of the transaction price allocated to performance obligations to be satisfied at a later date, which is not recorded in the Consolidated Balance Sheets, is immaterial as of December 31, 2025 and 2024.

We have applied the practical expedients not to present unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, (ii) contracts with variable consideration that is allocated entirely to unsatisfied performance obligations or to a wholly unsatisfied promise accounted for under the series guidance, and (iii) contracts for which we recognize revenue at the amount which we have the right to invoice for services performed.

Warranty Revenue and Related Balance Sheet Disclosures

We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. As of December 31, 2025 and 2024, we had $0.2 million and $0.3 million, respectively, of capitalized costs in prepaid expenses and other current assets. As of December 31, 2025 and 2024, we had $0.5 million and $1.0 million, respectively, in other assets on the consolidated balance sheets.

Payments received in advance of warranty services provided are included in refundable customer deposits or deferred revenue based upon the cancellation and refund provisions within the respective agreement. The following table provides balances as of the dates shown:

(1)Non-current deferred revenue is included in other liabilities in the Consolidated Balance Sheets.

We incurred $3.9 million and $7.1 million in expenses related to warranty claims for the years ended December 31, 2025 and 2024, respectively.

Note 5. Investments

The following table summarizes investment income and realized gains and losses on investments during the periods presented.

Investments Held by Porch

The following tables summarize the amortized cost, fair value, and unrealized gains and losses of investment securities.

The amortized cost and fair value of securities held by our captive reinsurance business at December 31, 2025, by contractual maturity, are shown in the following table. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

Investments Held by the Reciprocal (Consolidated VIE)

The following table summarizes the amortized cost, fair value, and unrealized gains and losses of investment securities held by the Reciprocal.

The amortized cost and fair value of securities held by the Reciprocal at December 31, 2025, by contractual maturity, are shown in the following table. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

The following table presents investments pledged to the Department of Insurance in certain states as a condition of the Certificate of Authority for the purpose of meeting obligations to policyholders and creditors.

Pledged obligations of states, municipalities and political subdivisions include $0.1 million in short-term investments and $2.8 million in long-term investments under the Reciprocal section on the accompanying Consolidated Balance Sheets as of December 31, 2025. Pledged U.S. Treasury notes include $3.1 million in long-term investments under the Reciprocal section on the accompanying Consolidated Balance Sheets as of December 31, 2025. Pledged corporate bonds notes include $0.3 million in long-term investments under the Reciprocal section on the accompanying Consolidated Balance Sheets as of December 31, 2025. Pledged obligations of states, municipalities and political subdivisions include $0.3 million in short-term investments and $1.7 million in long-term investments on the accompanying Consolidated Balance Sheets as of December 31, 2024. Pledged U.S. Treasury notes include $0.3 million in short-term investments and $0.7 million in long-term investments on the accompanying Consolidated Balance Sheets as of December 31, 2024.

Expected Credit Losses

We regularly review our individual investment securities for factors that may indicate that a decline in fair value of an investment has resulted from an expected credit loss, including:

•the financial condition and near-term prospects of the issuer, including any specific events that may affect its operations or earnings;

•the extent to which the market value of the security is below its cost or amortized cost;

•general market conditions and industry or sector specific factors;

•nonpayment by the issuer of its contractually obligated interest and principal payments; and

•our intent and ability to hold the investment for a period of time sufficient to allow for the recovery of costs.

Securities held by our captive reinsurance business with gross unrealized loss position, aggregated by investment category and length of time the individual securities have been in a continuous loss position, are as follows:

At December 31, 2025, there were 39 securities, held by our captive reinsurance business as collateral for the benefit of the Reciprocal, in an unrealized loss position. Of these securities, none had been in an unrealized loss position for 12 months or longer.

At December 31, 2024, there were 452 securities in an unrealized loss position.

Securities held by the Reciprocal with gross unrealized loss position, aggregated by investment category and length of time the individual securities have been in a continuous loss position, are as follows:

At December 31, 2025, there were 250 securities in an unrealized loss position held by the Reciprocal. Of these securities,35 had been in an unrealized loss position for 12 months or longer as of December 31, 2025.

We believe there were no fundamental issues such as credit losses or other factors with respect to any of our available-for-sale securities. The unrealized losses on investments in fixed-maturity securities were caused primarily by interest rate changes. We expect that the securities will not be settled at a price less than par value of the investments. Because the declines in fair value are attributable to changes in interest rates or market conditions and not credit quality, and because we have the ability and intent to hold our available-for-sale investments until a market price recovery or maturity, we do not consider any of our investments to have any decline in fair value due to expected credit losses at December 31, 2025 or 2024.

Note 6. Fair Value

The following tables summarize the fair value measurements of assets and liabilities that are measured at fair value on a recurring basis.

(1)The liability for contingent considerations related to business combinations is included in accrued expenses and other current liabilities in the Consolidated Balance Sheets as of December 31, 2025.

(2)The embedded derivatives liability is included in other liabilities in the Consolidated Balance Sheets as of December 31, 2025.

(1)The Consolidated Balance Sheets included less than $0.1 million in accrued expenses and other current liabilities and less than $0.1 million in other liabilities as of December 31, 2024, for contingent consideration related to business combinations.

(2)The private warranty liability is included in accrued expenses and other current liabilities in the Consolidated Balance Sheets as of December 31, 2024. The private warrants expired on December 23, 2025.

(3)The embedded derivatives liability is included in other liabilities in the Consolidated Balance Sheets as of December 31, 2024.

Financial Assets

Money market mutual funds are valued at the closing price reported by the fund sponsor from an actively traded exchange. As the funds are generally maintained at a net asset value which does not fluctuate, cost approximates fair value. These are included with U.S. Treasuries as Level 1 measurements in the table above. The fair values for available-for-sale fixed-maturity securities are based upon prices provided by an independent pricing service and included as Level 2 measurements in the table above. We have reviewed these prices for reasonableness and have not adjusted any prices received from the independent provider. Level 2 securities represent assets whose fair value is determined using observable market information such as previous day trade prices, quotes from less active markets or quoted prices of securities with similar characteristics. There were no transfers between Level 1 and Level 2.

Contingent Consideration – Business Combinations

As part of the acquisition of Floify, LLC (“Floify”) in October 2021, we issued shares as partial closing consideration to the sellers of Floify and guaranteed that the value of those shares would equal or exceed 200% of such price on or prior to December 31, 2024 (the “True-Up Obligation”). The True-Up Obligation could be settled at our option in cash, Porch common stock, or a combination thereof. On March 27, 2024, we entered into a settlement agreement and mutual release of claims with the sellers of Floify to settle a post-closing dispute. As part of the of this agreement, the sellers of Floify agreed to terminate the True-Up Obligation in full and released from restriction approximately $0.9 million of escrowed cash to us. We estimated the fair value of the True-Up Obligation as of the settlement date using the Monte Carlo simulation method. The fair value is based on the simulated market price of our common stock over the maturity date of the True-Up Obligation. As of March 27, 2024, the key inputs used to determine the fair value of $14.9 million included the stock price of $4.13, strike price of $36.00, discount rate of 23.6% and volatility of 95%. Subsequent to the valuation, we recognized a gain on settlement in other income, net, in the Consolidated Statements of Operations and Comprehensive Loss equal to the fair value of $14.9 million.

We estimated the fair value of other business combination contingent consideration based on specific metrics related to the acquisition of Residential Warranty Services (“RWS”) in April 2022, using the discounted cash flow method. The fair value is based on a percentage of revenue over the maturity date of the contingent consideration. As of December 31, 2025, the key input used to determine the fair value of less than $0.1 million were management’s cash flow estimate through the remaining term of less thanone year. As of December 31, 2024, the key inputs used to determine the fair value of $0.1 million were management’s cash flow estimates and the discount rate of 14%.

Private Warrants

We estimated the fair value of the private warrants using the Black-Scholes-Merton option pricing model. The private warrants expired on December 23, 2025. At the time of expiration there were 25 thousand warrants outstanding and we wrote off the remaining liability of $131 thousand. As of December 31, 2024, the key inputs used to determine the fair value included exercise price of $11.50 per share, expected volatility of 67%, remaining contractual term of 0.98 years, and stock price of $4.92 per share.

See Note 10, Stockholders' Equity and Warrants, for detailed information on warrant exercises.

Embedded Derivatives

In connection with the issuance of senior secured convertible notes in April 2023 (the “2028 Notes”) and in accordance with ASC Subtopic 815-15, Derivatives and Hedging – Embedded Derivatives, (“ASC 815-15”) certain features of the 2028 Notes were bifurcated and accounted for separately from the notes. The following features are recorded as derivatives.

•Repurchase option. This derivative had no value at December 31, 2025, because in May 2025 we reduced the outstanding principal of the 2026 Notes (see Note 9, Debt) to below the $30 million threshold described in this paragraph. If more than $30 million aggregate principal amount of the 2026 Notes were to remain outstanding on June 14, 2026, the 2028 Note holders would have the right to require us to repurchase for cash on June 15, 2026, all or any portion of their 2028 Notes, in principal amounts ofone thousand dollars or an integral number thereof, at a repurchase price equal to 106.5% of the principal amount of the 2028 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date.

•Fundamental change option. If we undergo a fundamental change, as defined in the indenture governing the 2028 Notes and subject to certain conditions, holders of the 2028 Notes have the right to require us to repurchase for cash all or any portion of their 2028 Notes, in principal amounts ofone thousand dollars or an integral multiple thereof, at a repurchase price equal to 105.25% of the principal amount of the 2028 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the repurchase date. A fundamental change includes events such as a change in control, recapitalization, liquidation, dissolution, or delisting.

•Asset sale repurchase option. If we sell assets and receive net cash proceeds of $2.5 million in excess of the Asset Sale Threshold (as defined below) (such excess net cash proceeds, the “Excess Proceeds”), we must offer to all holders of 2028 Notes to repurchase their 2028 Notes for an aggregate amount of cash equal to 50% of such Excess Proceeds at a repurchase price per 2028 Note equal to 100% of the principal amount thereof, plus accrued and unpaid interest to, but excluding, the relevant purchase date, if any. “Asset Sale Threshold” means $20.0 million in the aggregate, provided that on and after the date on which the cumulative net cash proceeds received by the Company and its restricted subsidiaries from the sale of assets after April 20, 2023 exceeds $20.0 million in the aggregate, the “Asset Sale Threshold” means $0. As of December 31, 2025, our remaining Asset Sale Threshold was $9.1 million (See Note 14).

In connection with the issuance of senior unsecured convertible notes in May 2025 (the “2030 Notes,” see Note 9) and in accordance with ASC 815-15, certain features of the 2030 Notes were bifurcated and accounted for separately from the notes. The following features are recorded as derivatives.

•Additional interest. If at any time after November 27, 2025 we fail to file all reports required under the Securities Exchange Act of 1934, as amended, (after giving effect to applicable grace periods and other than Form 8-Ks) during the preceding 12-month period, or the 2030 Notes are not otherwise freely tradable under Rule 144 other than with respect to holders that are affiliates, we will be required to pay additional interest at a rate of 0.50% per annum on the outstanding principal amount to noteholders for each day we are out of compliance with these requirements (the “Additional Interest”). The value of the Additional Interest derivative was $0 at the issuance date and $0 as of December 31, 2025.

•Participation feature. If the fair market value of a distribution (arising from a spin-off, distribution of capital stock, other asset or property distribution, or distribution of securities) made to stockholders is equal to or greater than the average of the last reported sale price of our common stock over the ten consecutive trading day period ending on, and including, the trading day immediately preceding the ex-dividend date for such distribution, then each holder of the 2030 Notes will directly receive, in respect of each $1,000 principal amount thereof, the same type and amount of property that they would have received if they had already converted their senior unsecured convertible notes into shares at the then-current conversion rate. This payment will be made at the same time and on the same terms as it is made to common stockholders. If the amount of any cash dividend per share is equal to or greater than the last reported sale price of our common stock immediately before the dividend, then the holders of the 2030 Notes are entitled to receive, for each $1,000 principal amount of notes, a cash payment (without needing to convert the notes) in the amount of cash they would have received as if they owned a number of shares of common stock equal to the number of 2030 Notes held multiplied by the conversion rate on the ex-dividend date for such cash dividend or distribution. The value of the participation feature derivative was $0 at the issuance date and $0 as of December 31, 2025.

The inputs for determining fair value of the embedded derivatives are classified as Level 3 inputs. Level 3 fair value is based on unobservable inputs based on the best information available. These inputs include the probabilities of a repurchase, a fundamental change, qualifying asset sales, maintaining compliance with SEC regulations relative to the notes, and certain distributions to shareholders, ranging from 2% to 58%.

Level 3 Rollforward

Fair value measurements categorized within Level 3 are sensitive to changes in the assumptions or methodology used to determine fair value, and such changes could result in a significant increase or decrease in the fair value.

The changes for Level 3 items measured at fair value on a recurring basis using significant unobservable inputs are as follows:

(1)Settlements of the private warranty liability represent exercises during the period. See Note 10, Stockholders' Equity and Warrants, for a discussion of these exercises.

(2)Changes in fair value of contingent consideration related to business combinations are included in general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Loss operations. Changes in fair value of the private warrant liability and embedded derivatives are disclosed separately in the Consolidated Statements of Operations and Comprehensive Loss.

Fair Value Disclosure

The following table summarizes the fair value of convertible senior notes (see Note 9, Debt, for more information):

The fair value of other notes approximated the unpaid principal balance. All debt, other than the convertible notes which are Level 2, was considered a Level 3 measurement.

Note 7. Property, Equipment, and Software

Property, equipment, and software, net, consists of the following:

Depreciation and amortization expense related to property, equipment, and software was $9.5 million, $7.1 million, and $5.0 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Losses due to impairment of long-lived assets, other than intangible assets, totaled $0.1 million during 2025, were less than $0.1 million during 2024, and totaled $0.3 million during 2023. Losses due to impairment of long-lived assets are included inproduct and technology expense in the Consolidated Statements of Operations and Comprehensive Loss.

Note 8. Intangible Assets and Goodwill

Intangible Assets

Intangible assets are stated at cost or acquisition-date fair value, less accumulated amortization and impairment. The following tables summarize intangible asset balances.

(1)Balance includes $8.8 million of customer relationships that are included in intangible assets, net, in Assets of Reciprocal section of the Consolidated Balance Sheets as of December 31, 2025.

(2)Balance includes $6.4 million of trademarks and tradenames that are included in intangible assets, net, in Assets of Reciprocal section of the Consolidated Balance Sheets as of December 31, 2025.

(3)Balance includes $3.1 million of renewal rights that are included in intangible assets, net, in Assets of Reciprocal section of the Consolidated Balance Sheets as of December 31, 2025.

(4)The entire insurance licenses balance is included in intangible assets, net, in Assets of Reciprocal section of the Consolidated Balance Sheets as of December 31, 2025.

Aggregate amortization expense related to intangibles was $14.9 million, $18.5 million, and $19.4 million for the years ended December 31, 2025, 2024 and 2023, respectively. The following table shows estimated future intangible amortization expense for the next five years and thereafter.

Goodwill

The following table summarizes the changes in the carrying amount of goodwill:

(1)There wereno changes in the carrying amount of goodwill for the years ended December 31, 2024 and 2025.

As of December 31, 2024, the entire $191.9 million goodwill balance was included in our legacy Vertical Software segment. On January 1, 2025, new segments were created per the discussion in Note 2. We performed a quantitative analysis as of January 1, 2025, reallocating the $191.9 million to the Software & Data and Consumer Services segments. We allocated $157.4 million to the Software & Data segment and $34.5 million to the Consumer Services segment on a relative fair value basis. We estimated the fair value of the Software & Data and Consumer Services reporting units using a combination of market and income approaches based on peer performance and discounted cash flow methodologies. The goodwill analysis required significant judgments to reallocate the fair value of the reporting units, including internal forecasts and determination of weighted average cost of capital. The weighted average cost of capital used was risk-adjusted to reflect the specific risk profile of the reporting units and ranged from 11% to 14%. Management considers historical experience and all available information at the time the fair values are estimated. Assumptions are subject to a high degree of judgment and complexity.

During our annual impairment testing as of October 1, 2025, we performed a qualitative assessment and determined that it was not more likely than not that the fair value of each reporting unit was less than its carrying value. Therefore, we did not perform a quantitative assessment as of that date.

We continue to monitor our reporting units at risk of impairment for interim impairment indicators and believe that the estimates and assumptions used in the calculations are reasonable as of December 31, 2025. We also reconcile the fair value of our reporting units to our market capitalization. Should the fair value of either of our reporting units fall below its carrying amount because of reduced operating performance, market declines including a deterioration of the macroeconomic environment in the housing and real estate or insurance industries, changes in the discount rate, or other adverse conditions, goodwill impairment charges may be necessary in future periods.

Note 9. Debt

The following tables summarize outstanding debt as of December 31, 2025 and 2024.

Minimum principal payment commitments as of December 31, 2025, are as follows:

(1)Represents the holders’ option that could require us to repurchase a portion of their outstanding 2028 Notes at certain dates. See “2028 Convertible Senior Notes” section below for further details.

2026 Convertible Senior Notes

In September 2021, we completed a private Rule 144A offering of $425 million aggregate principal amount of 0.75% Convertible Senior Notes due on September 15, 2026, (the “2026 Notes”) at an issue price of 100%, which includes $40 million aggregate principal amount of 2026 Notes issued and sold pursuant to the exercise of the initial purchasers’ option to purchase additional 2026 Notes. The 2026 Notes were offered only to qualified institutional buyers (as defined in the Securities Act of 1933, as amended (the “Securities Act”)), pursuant to Rule 144A under the Securities Act. The net proceeds from the sale of the 2026 Notes were approximately $413.5 million after deducting the initial purchasers’ fees and other estimated expenses.

The 2026 Notes were not redeemable at our option prior to September 20, 2024. Thereafter, we may redeem for cash all or any portion of the 2026 Notes, at our option, if the last reported sale price of the common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide a notice of redemption, at a redemption price equal to 100% of the principal amount of the 2026 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. We have not redeemed any of the 2026 Notes. No sinking fund is provided for the 2026 Notes.

The 2026 Notes are convertible at an initial conversion rate of 39.9956 shares of common stock perone thousand dollars principal amount of 2026 Notes, which is equivalent to an initial conversion price of approximately $25.00 per share of common stock (the “2026 Note Conversion Rate”). The 2026 Note Conversion Rate is subject to customary adjustments for certain events as described in the indenture governing the 2026 Notes. We may settle the conversion option obligation with cash, shares of our common stock, or any combination of cash and shares of our common stock. Holders of the 2026 Notes may convert the 2026 Notes at their option (in whole or in part) on or after June 15, 2026, until the close of business on the second trading day immediately preceding the maturity date of September 15, 2026. In addition, holders of the 2026 Notes may convert the 2026 Notes at their option (in whole or in part) at any time prior to the close of business on the business day immediately preceding June 15, 2026, only under the following circumstances:

•during any fiscal quarter commencing after the calendar quarter ending on December 31, 2021, if our common stock price exceeds 130% of the conversion price for at least 20 trading days during the 30 consecutive trading days at the end of the prior calendar quarter;

•during thefive business days after anyfive consecutive trading days in which the trading price perone thousand dollars of 2026 Notes was less than 98% of the product of the closing sale price of our common stock and the then current conversion rate;

•upon the occurrence of certain corporate actions;

•upon the occurrence of a fundamental change, a make-whole fundamental change or any share exchange event; or

•prior to the related redemption date if we elect to exercise the company call option.

Upon the occurrence of a make-whole fundamental change or the exercise of our redemption option, we will, under certain circumstances, increase the applicable conversion rate for a holder that elects to convert its 2026 Notes in connection with such make-whole fundamental change or exercise of redemption (not to exceed 52.9941 shares of common stock per one thousand dollars principal amount of the 2026 Notes). As of December 31, 2025, none of the conditions of the 2026 Notes to early convert have been met.

We concluded that the 2026 Notes are accounted for as debt, with no bifurcation of the embedded conversion feature. Debt issuance costs were recorded as a direct deduction from the related liability in the Consolidated Balance Sheets and are amortized to interest expense over the term of the 2026 Notes.

During 2023, we repurchased$200.0 million of the 2026 Notes using the proceeds from issuing new convertibles notes as described in the following “2028 Convertible Senior Notes” section.

During 2024, we repurchased $51.2 million aggregate principal amount of our 2026 Notes in a series of private and open market transactions. We paid $23.2 million cash, or an average of 45.3% of par value, plus accrued interest. We recognized a $27.4 million gain on extinguishment of debt, calculated as the difference between the reacquisition price and the net carrying amount of the portion of the 2026 Notes that was extinguished.

On May 27, 2025, we completed a series of privately negotiated refinancing transactions with certain holders of our 0.75% Convertible Senior Unsecured Notes due in September 2026 (the “2026 Notes”). As part of these refinancing transactions, we:

•Exchanged $96.8 million aggregate principal amount of 2026 Notes for $83.0 million aggregate principal amount of newly issued 9.00% Convertible Senior Unsecured Notes due 2030 (the “2030 Notes”),

•Issued an additional $51.0 million aggregate principal amount of 2030 Notes for cash to the same investors that participated in the exchange, and

•Repurchased $47.5 million aggregate principal amount of 2026 Notes for $47.3 million in cash.

After funding the cash portion of the repurchase and related expenses, net cash proceeds were approximately $3.7 million. We used these proceeds, along with existing cash on hand, to repurchase an additional $8.9 million aggregate principal amount of the 2026 Notes for $8.4 million cash in May 2025. We recognized a net gain on extinguishment of debt of less than $0.1 million in the second quarter of 2025. Our Board of Directors authorized management to repurchase the remaining 2026 Notes in cash in the open market or through privately negotiated transactions.

During the third quarter of 2025, we repurchased in a series of privately negotiated transactions $12.8 million in aggregate principal amount of our 2026 Notes for $12.3 million, representing 96.5% par value. As a result, we recognized a gain on extinguishment of debt of $0.4 million during the third quarter.

2028 Convertible Senior Notes

In April 2023, we issued $333.3 million of 6.75% Senior Secured Convertible Notes due in 2028 (the “2028 Notes”) in a private placement transaction. We used a portion of the net proceeds from the 2028 Notes to repurchase $200.0 million of the 2026 Notes and to fund the repayment of the term loan facility, in each case plus accrued and unpaid interest thereon and related fees and expenses. In connection with the partial repurchase of the 2026 Notes, we recognized an $81.4 million gain on extinguishment of debt, calculated as the difference between the reacquisition price and the net carrying amount of the portion of the 2026 Notes that was extinguished.

The 2028 Notes are convertible into cash, shares of common stock, or a combination of cash and shares of common stock at our election at an initial conversion rate of 39.9956 shares of common stock perone thousand dollars principal amount of the 2028 Notes, which is equivalent to an initial conversion price of approximately $25.00 per share.

The 2028 Notes are senior secured obligations, accrue interest at a fixed rate of 6.75%, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2023, and were initially issued at 95% of par value. The 2028 Notes will mature on October 1, 2028, unless earlier repurchased, redeemed or converted. Each note holder has the right to require us to repurchase for cash at 100% of par value, plus accrued and unpaid interest, all of such holder’s notes on each of September 15, 2027, and March 15, 2028; provided, however, that the aggregate principal amount repurchased on each such date by all holders shall not exceed the lesser of (1) $15.0 million and (ii)5.0% of the aggregate principal amount of the 2028 Notes outstanding on such date.

Prior to the close of business on the business day immediately preceding July 1, 2028, the 2028 Notes will be convertible at the option of the holders only upon the satisfaction of certain conditions and during certain periods. Thereafter, until the close of business on the second scheduled trading day immediately preceding the maturity date, the 2028 Notes will be convertible at the option of the holders at any time regardless of these conditions.

2030 Convertible Senior Unsecured Notes

The 2030 Notes are convertible in cash, shares of common stock, or a combination of cash and shares of common stock at our election at an initial conversion rate of 63.6333 shares of common stock per one thousand dollars principal amount of the 2030 Notes, which is equivalent to an initial conversion price of $15.72 per share (the “2030 Note Conversion Rate”). The conversion price is subject to adjustment based on the 2030 Note Conversion Rate then in effect. If all outstanding 2030 Notes were converted in full at this initial conversion price as of the closing date of the 2030 Notes issuance, this would have equated to approximately 8.5 million shares of common stock. These shares, along with 2030 Note Conversion Rate, are subject to customary adjustments for certain events as described in the indenture governing the 2030 Notes. Holders of the 2030 Notes may convert the 2030 Notes at their option (in whole or in part) on or after February 15, 2030, until the close of business on the second trading day immediately preceding the maturity date of May 15, 2030. In addition, holders of the 2030 Notes may convert the 2030 Notes at their option (in whole or in part) at any time prior to the close of business on the business day immediately preceding February 15, 2030, only under the following circumstances:

•during any fiscal quarter commencing after the calendar quarter ending September 30, 2025, if our common stock price exceeds 120% (or $18.85) of the conversion price for at least 20 trading days during the 30 consecutive trading days at the end of the prior calendar quarter;

•during five business days after anyfive consecutive trading days in which the trading price perone thousand dollars of 2030 Notes was less than 98% of the product of the closing sale price of our common stock and the then current conversion rate;

•upon the occurrence of certain corporate actions;

•upon the occurrence of a fundamental change, a make-whole fundamental change or any share exchange event; or

•prior to the related redemption date if we elect to exercise the company call option.

Upon the occurrence of a make-whole fundamental change or the exercise of our redemption option as described below, we would, under certain circumstances, increase the applicable conversion rate for a holder that elects to convert its 2030 Notes in connection with such make-whole fundamental change or exercise of redemption (not to exceed 101.8132 shares of common stock per one thousand dollars of principal amount of the 2030 Notes). As of December 31, 2025, none of the conditions of the 2030 Notes to early convert were met.

The 2030 Notes are also redeemable at the option of the Company on or after November 20, 2026, if the last reported sale price of Porch’s common stock has been at least 120% (or $18.85) of the conversion price for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period.

The 2030 Notes are senior unsecured obligations, accrue interest at a rate of 9.00%, payable semi-annually in arrears on May 15 and November 15 of each year, beginning on November 15, 2025. The 2030 Notes mature on May 15, 2030, unless earlier converted, redeemed, or repurchased.

In connection with the issuance of the 2030 Notes, we recognized a premium of $13.4 million in excess of the principal amount of the notes. In accordance with ASC Subtopic 470-20, Debt - Debt with Conversion and Other Options, we bifurcated the 2030 Notes financial instrument into its liability and equity components. The principal amount, net of the associated debt issuance costs, of the 2030 Notes was recorded as long-term debt in the Consolidated Balance Sheets. The premium was recorded as an increase to additional paid-in capital in the Consolidated Balance Sheets. When issuing convertible debt at a substantial premium, our accounting policy is to allocate all debt issuance costs to the debt component.

Interest on Convertible Senior Notes

Interest expense for our convertible senior notes includes both contractual interest expense and amortization of debt issuance costs and discount. The following table details interest expense recognized for our convertible senior notes.

The effective interest rates for the 2026 Notes, 2028 Notes, and 2030 Notes are 1.3%,17.9%, and 9.2% respectively.

Beginning in 2024, we capitalized interest expense related to our convertible senior notes related to internally developed software projects. We capitalized interest of $0.8 million and $0.5 million during the years ended December 31, 2025 and 2024, respectively.

Capped Call Transactions

In connection with the offering of the 2026 Notes, we purchased capped calls from certain financial institutions with respect to our common stock. The capped calls each have an initial strike price of approximately $25.00 per share of our common stock, which corresponds to the initial conversion price of the 2026 Notes. The capped calls each have an initial cap price of $37.74 per share and expire in incremental components on each trading date beginning on September 13, 2021, and ending on September 15, 2026. The capped calls are intended to offset potential dilution to our common stock or offset any cash payments we are required to make in excess of the principal amount, as the case may be, with such reduction or offset subject to a cap. The capped calls are subject to adjustments for certain corporate events and standard antidilution provisions.

We paid an aggregate amount of $52.9 million for the capped calls in 2021. The maximum number of shares of our common stock that we can purchase under the capped call (assuming no adjustment event) is approximately 0.2 million. The capped call transactions do not meet the criteria for accounting as a derivative as they are indexed to our own stock. As such, the cost of the capped calls was recorded as a reduction to additional paid-in capital on the Consolidated Balance Sheets and Consolidated Statements of Stockholders’ Equity (Deficit).

Other Notes

In connection with an acquisition in 2020, we issued a promissory note payable to the founder of the acquired entity. The promissory note had an initial principal balance of $0.8 million and a stated interest rate of 0.38% per annum. The promissory note was paid infive equal annual installments. During 2025, we made the final installment payment, and as of December 31, 2025, the promissory note had been fully repaid and all obligations under the note have been satisfied.

Note 10. Stockholders' Equity and Warrants

Shares Authorized

As of December 31, 2025, we had authorized 400 million shares designated as common stock, and 10 million shares designated as preferred stock for issuance.

Common Shares Outstanding and Common Stock Equivalents

The following table shows the number of our common shares that could be issued for each component of our capital structure.

(1)Represents shares of common stock held by Homeowners of America (“HOA”) as of December 31, 2024, and held by the Reciprocal as of December 31, 2025 (following the distribution of such shares to the Reciprocal in connection with the sale of HOA to the Reciprocal in the first quarter of 2025).

(2)In connection with the September 16, 2021 issuance of the 2026 Notes, we used a portion of the proceeds to pay for the capped call transactions, which are expected to generally reduce the potential dilution to our common stock. The capped call transactions impact the number of shares that may be issued by effectively increasing our conversion price from $25 per share to approximately $37.74, which would result in approximately 0.2 million potentially dilutive shares instead of the shares reported in this table as of December 31, 2025.

During 2024, we completed contributions totaling 18.3 million newly issued shares of our common stock to HOA. The intent of these contributions was to support the transition of Porch’s insurance underwriting business to a reciprocal exchange and help bolster HOA’s balance sheet strength and rating after the Texas May 2024 weather impacted surplus. In addition, the contribution increased HOA’s long-term surplus position, which better positioned HOA for any future third-party surplus note capital raise, and is expected to support premium growth. In connection with the formation of the Reciprocal in January 2025 (see Note 3), HOA distributed all of the 18.3 million shares to the Reciprocal.

Repurchases of Common Stock

During 2023, we repurchased and canceled 1.4 million shares with a total cost of $3.1 million (including commissions). The cost paid to repurchase shares in excess of the par value is charged to accumulated deficit in the Consolidated Balance Sheets.

Warrants

Upon completion of the merger with PropTech Acquisition Corporation (“PTAC”) on December 23, 2020, we assumed 8.6 million public warrants and 5.7 million private warrants to purchase an aggregate 14.3 million shares of common stock, which were outstanding as of December 31, 2020. Each warrant entitled the registered holder to purchaseone share of common stock at a price of $11.50 per share, subject to adjustment, commenced 30 days after the completion of the merger, and expired on December 23, 2025, which wasfive years after the merger.

During 2025, approximately 1.8 million warrants were exercised, primarily on a cashless basis, resulting in the issuance of approximately 0.5 million net shares of common stock, based on the fair market value of our common stock at the time of exercise. An inconsequential number of warrants were exercised for cash, generating gross proceeds of approximately $0.1 million.

There were zero and 1.8 million private warrants outstanding as of December 31, 2025, and 2024. The exercise price of these private warrants was $11.50, and they expired on December 23, 2025. At the time of expiration, there were 25 thousand warrants outstanding which were subsequently written off. The private warrants were liability classified financial instruments measured at fair value, with periodic changes in fair value that were recognized through earnings and were included in the change in fair value of private warrant liability in the Consolidated Statements of Operations and Comprehensive Loss. See Note 6, Fair Value, for more information.

Detail related to private warrant activity is as follows:

There wereno exercises or cancellations of warrants during 2024 or 2023.

Note 11. Stock-Based Compensation

2020 and 2012 Equity Incentive Plans

In 2020, the Board of Directors and stockholders approved the Porch Group, Inc. 2020 Stock Incentive Plan (the “2020 Plan”). As of December 31, 2025, the aggregate number of shares of common stock reserved for future issuance under the 2020 Plan is 10.9 million. The number of shares of common stock available under the 2020 Plan increases annually on the first day of each calendar year until (and including) the calendar year ending December 31, 2030, with such annual increase equal to the lesser of (i)5% of the number of shares of common stock issued and outstanding on December 31st of the immediately preceding fiscal year, excluding shares held by the Reciprocal, and (ii) an amount determined by the Board of Directors.

Under the 2020 Plan, employees, directors, and consultants are eligible for grants of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards (“RSAs”), restricted stock units (“RSUs”), performance restricted stock awards (“PRSUs”), and other stock awards, collectively referred to as “Equity Awards.” All Equity Awards granted during the year ended December 31, 2025, were to employees and directors. Some unexercised options awarded under our 2012 Equity Incentive Plan (the “2012 Plan”) remain outstanding.

The following table summarizes the classification of stock-based compensation expense in the Consolidated Statements of Operations and Comprehensive Loss.

Stock Options

Options granted under the 2020 Plan and 2012 Plan to employees typically vest 25% of the sharesone year after the options’ vesting commencement date and the remainder ratably on a monthly basis over the following three years. Other vesting terms are permitted and are determined by the Board of Directors or the Compensation Committee of the Board of Directors. Options have a term of no more thanten years from the date of grant, and vested options are generally cancelled three months after termination of employment.

No employee stock options were granted in 2025, 2024, or 2023. The following table summarizes stock option activity for the year ended December 31, 2025.

The total amount of unrecognized stock-based compensation expense for options granted to employees and non-employees as of December 31, 2025, is approximately less than $0.1 million and is expected to be recognized over a weighted-average period of 0.4 years.

RSUs

During 2025, 2024, and 2023 we granted RSUs under various equity award programs. RSUs granted to employees typically vest 25% of the sharesone year after the vesting commencement date and the remainder ratably on a quarterly or semi-annual basis over the following three years. The fair value of RSUs is determined using the closing price of our common stock on the grant date.

The following table summarizes the activity of RSUs for the year ended December 31, 2025.

(1)Includes 0.9 million RSUs that were granted and canceled during the same period. Subsequent to the original grant date, we identified an inadvertent error related to the number of RSUs granted. The original awards were canceled and concurrently replaced with a corrected lower number of RSUs. The cancellation and concurrent replacement is accounted for as the modification of an award. The fair value of the replacement awards did not exceed that of the original awards for thethirteen impacted individuals, and therefore, no incremental compensation cost was recognized.

In 2024, we granted 5.3 million RSUs with a weighted average grant date fair value of $3.68, while in 2023, we granted 6.4 million RSUs with a weighted average grant date fair value of $1.39.

The total amount of unrecognized stock-based compensation expense for RSUs granted to employees and non-employees as of December 31, 2025 is approximately $20.2 million and is expected to be recognized over a weighted-average period of 2.2 years.

RSAs

During 2025, 2024, and 2023, we granted 0.2 million,0.1 million, and 0.8 million RSAs, respectively, under various equity award programs with weighted average grant date fair values of $5.66, $3.17, and $1.46, respectively. RSAs granted to employees vest immediately upon the employee accepting the award. The fair value of RSAs is determined using the closing price of our common stock on the grant date.

PRSUs

All PRSUs granted during 2023, 2024, and 2025, vest based on both the employee’s service period and the independent achievement of three distinct performance metrics.

2023 Grants

PRSUs granted in 2023 had the following distinct performance metrics:

•Closing Share Price: The PRSUs subject to this metric are earned if, during the 36 months following the grant date, the closing price of a share of our common stock reaches a level greater than or equal to various target prices as defined in the award terms.

•Adjusted EBITDA: The PRSUs subject to this metric are earned based on the Company’s achievement of Adjusted EBITDA in the year ended December 31, 2025, compared to specific performance goals.

•Revenue: The PRSUs subject to the Revenue metric are earned based on the Company’s achievement of Revenue in the year ended December 31, 2025, compared to specified performance goals.

For each metric above, the number of shares of common stock to be issued to each award recipient at the end of the vesting period will be between 0% and 200% of the target number of PRSUs based on actual performance achieved. For the Adjusted EBITDA and Revenue metrics, the number of shares to be issued will be interpolated between minimum threshold (50% achievement) and maximum achievement (200%). PRSUs vest based on the performance achieved at each metric, independent from the performance achieved at other metrics.

As of December 31, 2025, all three metrics achieved the maximum achievement thresholds. As such, each participant will receive the maximum number of shares of common stock if they remain employed as of April 7, 2026.

2024 Grants

PRSUs granted in 2024 had the following distinct performance metrics:

•Relative Total Shareholder Return (“TSR”): The PRSUs subject to the TSR metric are earned based on the Company’s total shareholder return relative to the total shareholder return of companies in the S&P SmallCap 600 Index, as a percentile rank, over a performance period beginning on January 1, 2024, and ending December 31, 2026.

•Adjusted EBITDA: The PRSUs subject to the Adjusted EBITDA metric are earned based on the Company’s achievement of Adjusted EBITDA in the year ending December 31, 2026, compared to specified performance goals.

•Revenue: The PRSUs subject to the Revenue metric are earned based on the Company’s achievement of Revenue in the year ending December 31, 2026, compared to specified performance goals.

For each metric, the number of shares of common stock to be issued to each award recipient at the end of the vesting period will be interpolated between a threshold and maximum payout level based on the actual performance achieved. A participant will earn 50% of the target number of PRSUs for “Threshold Performance,”100% of the target number of PRSUs for “Target Performance,” and 200% of the target number of PRSUs for “Base Maximum Performance.” PRSUs vest based on the performance achieved at each metric, independent from the performance achieved at other metrics.

2025 Grants

PRSUs granted in 2025 had the following distinct performance metrics:

•Relative Total Shareholder Return (“TSR”): The PRSUs subject to the TSR metric are earned based on the Company’s total shareholder return relative to the total shareholder return of companies in the S&P SmallCap 600 Index, as a percentile rank, over a performance period beginning on April 1, 2025, and ending December 31, 2027.

•Adjusted EBITDA: The PRSUs subject to the Adjusted EBITDA metric are earned based on the Company’s achievement of Adjusted EBITDA in the year ending December 31, 2027, compared to specified performance goals.

•Revenue: The PRSUs subject to the Revenue metric are earned based on the Company’s achievement of Revenue in the year ending December 31, 2027, compared to specified performance goals.

For each metric, the number of shares of common stock to be issued to each award recipient at the end of the vesting period will be interpolated between a threshold and maximum payout level based on the actual performance achieved, except for two special performance goals. A participant will earn 50% of the target number of PRSUs for “Threshold Performance,”100% of the target number of PRSUs for “Target Performance,” and 200% of the target number of PRSUs for “Base Maximum Performance.” In addition, participants may earn 350% or 500% of the target number of PRSUs upon achievement of truly exceptional Adjusted EBITDA or TSR performance compared to performance goals. PRSUs vest based on the performance achieved at each metric, independent from the performance achieved at other metrics.

Grant Date Fair Value

The Closing Share Price and TSR metrics above meet the definition of a market condition. The grant-date fair value of these market condition awards is determined using a Monte Carlo simulation model that utilizes significant assumptions, including volatility, that determine the probability of satisfying the market condition stipulated in the award to calculate the fair value of the award. The Adjusted EBITDA and Revenue metrics above are considered performance condition awards. The grant-date fair value of performance condition awards is based on the closing stock price on the grant date.

The table below summarizes the specific assumptions used in the Monte Carlo simulation for the awards granted during 2025.

Activity

The following table summarizes the activity of PRSUs for the year ended December 31, 2025.

(1)Includes 1.9 million PRSUs that were granted and canceled during the same period. Subsequent to the original grant date, we identified an inadvertent error related to the number of PRSUs granted. The original awards were canceled and concurrently replaced with a corrected lower number of PRSUs. The cancellation and concurrent replacement is accounted for as the modification of an award. The fair value of the replacement awards did not exceed that of the original awards for thethirteen impacted individuals, and therefore, no incremental compensation cost was recognized.

(2)The balance of PRSUs as of December 31, 2025, includes the following types of awards:

•1.4 million awards based on Closing Share Price targets with a weighted average grant date fair value of $0.49,

•1.4 million awards based on TSR targets with a weighted average grant date fair value of $15.12,

•2.0 million awards based on revenue targets with a weighted average grant date fair value of $3.92, and

•2.0 million awards based on Adjusted EBITDA targets with a weighted average grant date fair value of $3.92.

The total amount of unrecognized stock-based compensation expense for PRSUs as of December 31, 2025, is approximately $24.8 million and is expected to be recognized over a weighted-average period of 1.1 years.

Note 12. Income Taxes

On January 1, 2025, we adopted ASU 2023-09, Improvements to Income Tax Disclosures, which requires disaggregated information about our effective tax rate reconciliation as well as information on income taxes paid. Because we adopted ASU 2023-09 in 2025 using a prospective method, disclosures for historical periods were not revised to conform to this ASU.

The following table summarizes the components of income before taxes.

The following table summarizes the components of the income tax provision.

The tax effects of cumulative temporary differences that give rise to significant deferred tax assets and deferred tax liabilities are presented below. The valuation allowance relates to deferred tax assets for which it is more likely than not that the tax benefit will not be realized.

(1)As of December 31, 2025, there were $1.8 million of net deferred tax liabilities included in other liabilities in the Consolidated Balance Sheets, and $0.8 million included in other liabilities of the Liabilities of Reciprocal: section of the Consolidated Balance Sheets.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial accounting purposes and the amounts used for income tax purposes and the tax effect of the tax loss carryforwards. We have recorded a valuation allowance due to the uncertainty surrounding the ultimate realizability or recoverability of such assets. Management evaluates, on an annual basis, both the positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable and the amount of the valuation allowance. In our evaluation, we considered our cumulative losses as significant negative evidence. Based upon a review of the four sources of income identified within ASC 740, we determined that the negative evidence outweighed the positive evidence. At such time as it is determined that it is more likely than not the deferred tax assets are realizable, the valuation allowance will be reduced. The valuation allowance increased by $1.5 million for the year ended December 31, 2025, from $148.1 million at December 31, 2024, to $149.6 million at December 31, 2025.

As of December 31, 2025, we had net operating loss carryforwards for federal tax purposes of approximately $438.8 million and $310.6 million for state income tax purposes, which may be used to offset future taxable income. The net operating loss carryforwards for federal tax purposes generated prior to January 1, 2018, will begin to expire in 2032, and the net operating loss carryforwards for state tax purposes will begin to expire in 2026. Net operating loss carryforwards with an unlimited carryforward period are $346.8 million for federal tax purposes and $78.4 million for state tax purposes. Utilization of net operating loss and tax credit carryforwards are subject to certain limitations under Sections 382–384 of the Internal Revenue Code of 1986, as amended, in the event of a change in our ownership, as defined in current income tax regulations. We have determined that we have experienced a limited number of ownership changes in our history. The sale of HOA to the Reciprocal in January 2025 was an ownership change with respect to HOA and resulted in its separate net operating losses being deemed not utilizable. Additional ownership changes may occur in the future.

The following tables provide reconciliations of the income tax provision to the amounts computed by applying the statutory federal income tax rate to earnings before income taxes.

(1)This amount is primarily comprised of state taxes from Texas.

The U.S. federal statutory tax rate is 21%, while our effective tax rate for 2025, 2024, and 2023 was 42.7%, (6.9)%, and (0.5)%, respectively. The difference for all years is due primarily to the tax benefit of pre-tax book losses being offset by the valuation allowance.

The 2017 Tax Cuts and Jobs Act subjects a U.S. shareholder to tax on Global Intangible Low-Taxed Income (“GILTI”) earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in the future years or provide for tax expense related to GILTI in the year the tax is incurred. We elected to recognize tax expense related to GILTI in the year the tax is incurred. GILTI tax in each of the years ended December 31, 2025, 2024, and 2023, was less than $0.1 million.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted which introduced a series of federal income tax changes effective in 2025. Among other provisions, OBBBA changes how the interest expense limitation is calculated and provides taxpayers with options regarding the treatment of research and experimental (“R&E”) expenditures for federal income tax purposes. Due to the interplay of these items, along with net operating losses and valuation allowances, we do not expect OBBBA to have a material impact on our financial statements. We will continue to evaluate the available options under OBBBA and finalize our elections in connection with the filing of our 2025 federal income tax return.

We file U.S. federal income tax returns as well as income tax returns in various state, local, and foreign jurisdictions. The statute of limitations in those jurisdictions generally ranges from 3 to 4 years. We are not currently under income tax examination in any jurisdiction, but we are generally open to examination by tax authorities for tax years beginning in 2012 due to the availability of net operating loss carryforwards. As of December 31, 2025, there are no penalties or accrued interest recorded in the financial statements for any potential examinations.

We hadno uncertain tax position reserves as of December 31, 2025 and 2024.

The following table shows tax payments, net of refunds received, during the year ended December 31, 2025.

Note 13. 401(k) Savings Plan

We have multiple defined contribution savings plans under Section 401(k) of the Internal Revenue Code. These plans cover substantially all domestic employees who meet minimum age and service requirements and allow participants to defer a portion of their annual compensation on a pre-tax basis. Employer contributions to the plans may be made at the discretion of the Board. For the years ended December 31, 2025, 2024 and 2023 we made $1.6 million, $1.0 million, and $0.3 million of contributions, respectively.

Note 14. Business Disposition

On January 31, 2024, we sold our insurance agency, Elite Insurance Group (“EIG”). The sale price was $12.2 million of which we have received $10.9 million in cash and recorded a receivable of $1.2 million as of December 31, 2025. We recorded a loss on sale of $5.3 million inother income, net, in the Consolidated Statements of Operations and Comprehensive Loss.

Note 15. Leases

We lease office facilities from unrelated parties under operating lease agreements that have initial terms ranging from 1 to 8 years. Some leases include one or more options to renew, generally at our sole discretion, with renewal terms that can extend the lease term up to 10 additional years. In addition, certain leases contain termination options, where the rights to terminate are held by either us, the lessor, or both parties. These options to extend or terminate a lease are included in the lease terms when it is reasonably certain that we will exercise that option. Our leases generally do not contain any material restrictive covenants.

Operating lease cost is recognized on a straight-line basis over the lease term. The components of lease expense are as follows:

Supplemental cash flow information related to leases is as follows:

The following table presents lease-related assets and liabilities recorded on the balance sheet.

Other information related to operating leases is as follows:

Future undiscounted cash flows for each of the next five years and thereafter and reconciliation to the lease liabilities recognized on the Consolidated Balance Sheets as of December 31, 2025, is as follows:

Note 16. Reinsurance for the Reciprocal

Certain premiums and benefits are ceded to other insurance companies under various reinsurance agreements. The reinsurance agreements provide the Reciprocal with increased capacity to write larger risks and maintain its exposure to loss within its capital resources. Ceded reinsurance contracts do not relieve the Reciprocal from its obligations to policyholders. The Reciprocal remains liable to its policyholders for the portion reinsured to the extent that any reinsurer does not meet the obligations assumed under the reinsurance agreements.

2025 Program

As of April 1, 2025, coverage for excess of loss catastrophe reinsurance starts at $25.0 million per occurrence up to a loss of $410.0 million. Additionally, the third-party quota share reinsurance contracts start immediately at 7.5% of property and casualty (“P&C”) losses, which includes catastrophe events, bringing the effective retention for the Reciprocal from $25.0 million per occurrence to $23.1 million per occurrence. We also placed reinstatement premium protection to cover any reinstatement premiums due on the second through fourth layers.

Additionally, our captive reinsurance entity provides reinsurance coverage for risks with low earnings volatility, such as non-catastrophic weather quota share, in order to create more capital efficiency at the Reciprocal. This contract was approved for an initial period of 10 years but can be cancelled by Porch or the Reciprocal each year. The specific structure and scope of reinsurance provided by the captive may vary over time as the Reciprocal evaluates its risk transfer strategy and capital requirements.

2024 Program

From April 1, 2024, to March 31, 2025, our third-party quota share program consisted ofone combined program covering all business in all states and was placed at 27.5% of P&C losses. All programs were effective for the period April 1, 2024, through March 31, 2025, and were subject to certain limits and exclusions, which vary by participating reinsurer.

Coverage for catastrophe events started immediately within the quota share contracts and at $45.0 million per occurrence within the property catastrophe excess of loss treaties placed on April 1, 2024. Losses were shared at various levels up to $75.0 million. Over $75.0 million losses were covered up to a loss of $465.0 million. We also placed reinstatement premium protection to cover any reinstatement premiums due on the first five layers.

We placed a parametric reinsurance contract to cover aggregate severe convective storm losses from January 1, 2024, to January 1, 2025. This contract would have provided up to $30.0 million in recovery over $85.0 million in modeled losses.

2023 Program

Our 2023 third-party quota share reinsurance program was split into three separate placements to maximize coverage and cost efficiency. The 2023 Coastal Program covered our business in certain Texas coastal regions and the Houston metropolitan area and was placed at 42% of subject property and casualty losses (“P&C losses”), as well as all business in South Carolina which was placed at 7% of P&C losses. The 2023 Core Program, which covered the portion of our business not in the Coastal Program, was placed at 9.5% of P&C losses of our remaining business in Texas and 8% of P&C losses of our business in other states. In addition, the Combined Program covered all of our business and was placed at 5% of P&C losses. All programs were effective for the period January 1, 2023, through December 31, 2023, or March 31, 2024, and were subject to certain limits and exclusions, which vary by participating reinsurer.

Property catastrophe excess of loss treaties were placed on April 1, 2023, and were updated in August 2023 after the events described in the “Terminated Reinsurance Contract” section below. Coverage for wind storms started at $20 million per occurrence. Losses were shared between $20 million and $80 million. Over $80 million, losses were covered up to a net loss of $440 million. We also placed reinstatement premium protection to cover any reinstatement premiums due on the first four layers.

Financial Impacts

The effects of reinsurance on premiums written by the Reciprocal and earned were as follows:

The effects of reinsurance on incurred losses and LAE were as follows:

The detail of reinsurance balances due is as follows:

Terminated Reinsurance Contract

During 2023, HOA discovered that Vesttoo Ltd (“Vesttoo”), which arranged capital for one of our reinsurance contracts, faced allegations of fraudulent activity in connection with collateral it provided to HOA and certain other third parties, which allegations have since been confirmed. We have communicated and met with regulators and other key stakeholders regarding the evolving situation. This reinsurance agreement provided partial quota share coverage as well as up to approximately $175 million in a catastrophic event.

As a result of its findings, and in accordance with the terms of the reinsurance agreement, HOA terminated the associated contract on August 4, 2023, with an effective date of July 1, 2023. Had the contract not been terminated, the contract would have expired on December 31, 2023, and HOA would have been contracted to pay approximately $20 million in additional premium payments during July through December 2023. Following the effective date of the termination, HOA seized available liquid collateral in the amount of approximately $47.6 million from a reinsurance trust, of which HOA was the beneficiary, and recognized a charge of $36.0 million in provision for doubtful accounts in the Consolidated Statements of Operations and Comprehensive Loss. In 2023, the Company purchased all rights from HOA for potential claims related to the fraud connected to Vesttoo and others. Subsequently, we were appointed to the statutory committee of unsecured creditors in the Chapter 11 bankruptcy of Vesttoo. After confirmation of the Chapter 11 reorganization plan, the bankruptcy proceedings transitioned to a liquidating trust, of which we are a member. We are pursuing all available legal claims and remedies to enforce our rights under the $300 million letter of credit required by the reinsurance agreement, and seeking recovery of all losses and damages incurred as a result of terminating the reinsurance agreement due to fraud committed by third parties.

On January 19, 2024, we entered intoa five-year business collaboration agreement with Aon Corp. and Aon Re, Inc. (“Aon”), resulting in payments to us of approximately$25 million in January 2024 and additional cash payments through the end of the contract term. Of the cash payments that we have or will receive through the end of the contract term, $8.7 million is non-refundable and immediately recognized inother income, net in the Consolidated Statements of Operations and Comprehensive Loss. A portion of the remaining amount is potentially refundable to Aon if we breach the agreement, including if wedirectly or indirectly place reinsurance with brokers unaffiliated with Aon, subject to customary cure rights. The remaining amount will be recognized inother income, net, over the term of the agreement. As part of this agreement, Aon and Porch also signed a mutual release of claims arising from the Vesttoo fraud. Porch has not released any claims against non-Aon parties related to these matters and intends to vigorously pursue recovery. In addition to this arrangement, we have also received cash recoveries from other parties in the amount of$3.0 million during the year ended December 31, 2024.

Note 17. Unpaid Losses and Loss Adjustment Reserve

The following table summarizes the changes in the reserve balances for unpaid losses and LAE, gross of reinsurance, for the year ended December 31, 2025.

(1)Includes $1.6 million of provisions from 2020 and prior.

The following table summarizes the changes in reserve balances for unpaid losses and LAE, gross of reinsurance for the year ended December 31, 2024:

(1)Also includes certain charges related to Vesttoo (see Note 16, Reinsurance for the Reciprocal, for more information).

As a result of additional information on claims occurring in prior years becoming available to management, changes in estimates of provisions of losses and loss adjustment expenses were made resulting in an increase of $5.9 million and a decrease of $4.9 million for the years ended December 31, 2025 and 2024, respectively.

The claim counts in the following tables are cumulative reported claim counts as of December 31, 2025, and are equal to the sum of cumulative open and cumulative closed claims, including claims closed without payment. The following supplementary information presents incurred and paid losses by accident year, net of reinsurance ($ in thousands, except for number of claims):

Payments for losses, net of reinsurance, related to accident year 2020 and prior was $1.8 million for the year ended December 31, 2025.

Average annual percentage payout of accident year incurred claims by age, net of reinsurance (unaudited supplementary information) as of December 31, 2025:

Note 18. Other Income (Expense), Net

The following table details the components ofother income, net, on the Consolidated Statements of Operations and Comprehensive Loss:

Note 19. Commitments and Contingencies

Purchase Commitments

The following table summarizes non-cancelable purchase commitments as of December 31, 2025,

Litigation

From time to time we are or may become subject to various legal proceedings arising in the ordinary course of business, including proceedings initiated by users, other entities, or regulatory bodies. Estimated liabilities are recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In many instances, we are unable to determine whether a loss is probable or to reasonably estimate the amount of such a loss and, therefore, the potential future losses arising from a matter may differ from the amount of estimated liabilities we have recorded in the financial statements covering these matters. We review our estimates periodically and make adjustments to reflect negotiations, estimated settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular matter.

Cases under Telephone Consumer Protection Act

Porch and/or an acquired entity, GoSmith.com, are party to a legal proceeding alleging violations of the automated calling and/or internal and National Do Not Call restrictions of the Telephone Consumer Protection Act of 1991 and a related Washington state law claim. The proceedings were commenced asthirteen separate mass tort actions brought by a single plaintiffs’ law firm in December 2019 and April/May 2020 in federal district courts throughout the United States. After an initial round of discovery, in November 2025 the United States District Court for the Western District of Washington granted the parties’ motion to dismiss 589 of the original plaintiffs, leaving approximately 350 plaintiffs remaining. This is the only remaining case, and it is subject to ongoing procedural matters. A stipulation of dismissal was filed in February 2026 voluntarily dismissing the case in the United States District Court for the Northern District of California.

Plaintiffs in both cases seek actual, statutory, and/or treble damages, and reasonable attorneys’ fees and costs from the respective Defendants.

Other

In addition, in the ordinary course of business, we and our subsidiaries are (or may become) parties to litigation involving property, personal injury, contract, intellectual property and other claims, stockholder derivative actions, class action lawsuits and other matters. The amounts that may be recovered in such matters may be subject to insurance coverage. Although the results of legal proceedings and claims cannot be predicted with certainty, neither we nor any of our subsidiaries are currently a party to any legal proceedings the outcome of which, we believe, if determined adversely to us, would individually or in the aggregate have a material adverse effect on our business, financial condition or results of operations.

Regulatory Requirements and Restrictions

The Reciprocal is subject to the laws and regulations of the State of Texas and the regulations of any other states in which the Reciprocal conducts business. State regulations cover all aspects of the Reciprocal’s business and are generally designed to protect the interests of insurance policyholders, as opposed to the interests of stockholders. The Texas Insurance Code requires all property and casualty insurers to have a minimum of $2.5 million in capital stock and $2.5 million in surplus. The Reciprocal has capital and surplus in excess of this requirement.

As of December 31, 2025, the Reciprocal’s total statutory surplus is $155.1 million (surplus notes of $105.8 million and unassigned surplus of $49.3 million). As of December 31, 2024, the Reciprocal’s total statutory surplus was $105.7 million (capital stock of $3.0 million and surplus of $102.7 million).

As of December 31, 2025 and 2024, the Reciprocal had restricted cash and investments totaling $5.8 million and $3.9 million, respectively, pledged to the Department of Insurance in certain states as a condition of its Certificate of Authority for the purpose of meeting obligations to policyholders and creditors. See Note 1, Description of Business and Summary of Significant Accounting Policies, for additional disclosures.

The Texas Insurance Code limits dividends from insurance companies to their stockholders to net income accumulated in the insurance company’s surplus account, or “earned surplus.” The maximum dividend that may be paid without approval of the Insurance Commissioner is limited to the greater of 10% of the statutory surplus at the end of the preceding calendar year or the statutory net income of the preceding calendar year. No dividends were paid by the Reciprocal to its members in 2025 or by HOA in 2024. In 2026, the Reciprocal is permitted to pay up to $1.7 million without prior approval from the Texas Department of Insurance (“TDI”).

The Reciprocal prepares its statutory-based financial statements in conformity with accounting practices prescribed or permitted by the Texas Department of Insurance. Prescribed statutory accounting practices primarily include those published as statements of Statutory Accounting Principles by the National Association of Insurance Commissioners, as well as state laws, regulations and general administrative rules. Permitted statutory accounting practices encompass all accounting practice not so prescribed. As of December 31, 2025, there were no material permitted statutory accounting practices utilized by the Reciprocal.

Note 20. Net Income (Loss) Per Share

Earnings per share (“EPS”) is calculated using the two-class method unless the treasury stock method results in lower EPS. Basic EPS is calculated by dividing net income or loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. To calculate diluted EPS, basic EPS is further adjusted to include the effect of potentially dilutive stock options, RSUs, PRSUs, convertible notes, and warrants using the more dilutive result of the treasury stock method or the if-converted method. All potentially dilutive securities are antidilutive to periods with net losses, and basic EPS equals diluted EPS in those periods.

The following table summarizes the computation of basic and diluted net loss per share attributable to common stockholders for the years ended December 31, 2025, 2024 and 2023.

The following table discloses securities that were not included in the computation of diluted net loss per share because to do so would have been antidilutive for the periods presented.

(2)In connection with the September 16, 2021, issuance of the 2026 Notes, we used a portion of the proceeds to pay for the capped call transactions, which are expected to generally reduce the potential dilution to our common stock. The capped call transactions impact the number of shares that may be issued by effectively increasing our conversion price from $25 per share to approximately $37.74 per share, which would result in approximately 0.2 million potentially dilutive shares instead of the shares reported in this table as of December 31, 2025.

(3)In connection with the acquisition of Floify, we issued shares as partial closing consideration and guaranteed that the value of those shares would equal or exceed 200% of such price on or prior to December 31, 2024. If the value of those shares did not equal or exceed 200% of their value, we would have been obligated to settle any differences in cash, Porch common stock, or combination thereof. On March 27, 2024, we entered into a settlement agreement to settle a post-closing dispute. As part of this agreement, the sellers of Floify agreed to terminate this obligation in full.

See Note 10, Stockholders' Equity and Warrants, for additional information regarding the terms of warrants. See Note 11, Stock-Based Compensation, for additional information regarding stock options and restricted stock units and awards. See Note 9, Debt, for additional information regarding convertible debt.

Note 21. Quarterly Financial Data (Unaudited)

We identified certain immaterial errors in previously reported quarterly financial information for the second and third quarters of 2025 related to the elimination of certain intercompany transactions between the Reciprocal and Porch under the reinsurance program. These errors have been corrected in this Annual Report on Form 10-K. The revisions had no impact on net income (loss) or segment financial results during the periods. Management evaluated the errors and concluded they were not material to any previously issued financial statements.

As of June 30, 2025, and September 30, 2025, the revisions increased prepaid expenses and other current assets of the Reciprocal, total assets, deferred revenue of the Reciprocal, and total liabilities. The amount of the adjustment for each balance sheet item was $11.3 million as of June 30, 2025, and $12.5 million as of September 30, 2025.

Revenue and gross profit for the second and third quarters of 2025 increased as a result of the corrections. For the three and six months ended June 30, 2025, revenue and gross profit each increased by $6.8 million, with a corresponding increase to selling and marketing expense of the same amount. For the three and nine months ended September 30, 2025, revenue and gross profit increased by $9.2 million and $16.0 million, respectively, with a corresponding increase to selling and marketing expense. These revisions did not change net income (loss) or net income (loss) attributable to Porch.

On the statements of cash flows, the adjustments resulted in a decrease of $11.3 million and $12.5 million in the change in deferred policy acquisition costs for the six months ended June 30, 2025, and the nine months September 30, 2025, respectively. The adjustments also resulted in an increase of $11.3 million and $12.5 million in the change in deferred revenue for the six months ended June 30, 2025, and the nine months September 30, 2025, respectively. These adjustments did not change net cash provided by operating activities.

The revisions will be reflected in the comparative financial statements included in future filings of our 2026 unaudited condensed consolidated financial statements within our Quarterly Reports on Form 10-Q.