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What changed in Porch Group, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Porch Group, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+579 added−531 removedSource: 10-K (2026-02-20) vs 10-K (2025-02-25)

Top changes in Porch Group, Inc.'s 2025 10-K

579 paragraphs added · 531 removed · 375 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

42 edited+24 added−28 removed21 unchanged
Biggest changeWarranty Our warranty business offers various products such as whole-home, 90-day, service line and extended labor warranties in 49 states and Washington, D.C. The warranty business typically acquires customers through direct to consumer marketing and partnerships, including real estate, home inspection, distributors, utilities, and home insurance.
Biggest changeConsumer Services Segment 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. Warranty Our warranty business offers various products such as whole-home, service line, and extended labor warranties in 50 states and Washington, D.C.
Therefore, we have the ability to cross-sell a variety of products at the time they are most needed. The consumer will engage with either the Porch app or our concierge service to receive support in various aspects of their move, such as insurance, warranty, and moving services, utilities, television, internet, and security, including comparing reviews and prices for different providers.
Therefore, we have the ability to cross-sell a variety of products at the time they are most needed. The consumer will engage with either the Porch app or our concierge service to receive support in various aspects of their move, such as insurance, warranty, and moving services, utilities, TV/Internet, and security, including comparing reviews and prices for different providers.
More Protection We provide consumers with more protection through offering home insurance, home warranty for everyday breakdowns, and a home app to provide appliance recall check monitoring. We can be there from move-in to move-out, with a variety of products designed to make sure our consumers’ largest assets are protected.
More Protection We provide consumers with more protection through offering home insurance, home warranty for everyday breakdowns, and a home app to provide appliance recall check monitoring. We can be there from move-in to move-out, with a variety of products designed to make sure our customers’ largest assets are protected.
Government Regulation General We are subject to laws and regulations that affect companies conducting business on the Internet generally and through mobile applications, including laws relating to the liability of providers of online services for their operations and the activities of users.
General We are subject to laws and regulations that affect companies conducting business on the Internet generally and through mobile applications, including laws relating to the liability of providers of online services for their operations and the activities of users.
While not a substitute for any 10 Table of Contents GAAP measure of performance, statutory data frequently is used by industry analysts and other recognized reporting sources to facilitate comparisons of the performance of insurance companies.
While not a substitute for any GAAP measure of performance, statutory data 9 Table of Contents frequently is used by industry analysts and other recognized reporting sources to facilitate comparisons of the performance of insurance companies.
Departure from the usual range on four or more of the ratios could lead to inquiries from individual state insurance departments as to certain aspects of a company's business. In addition to the financial ratios, states also require us to calculate a minimum capital requirement for each of our insurance companies based on individual company insurance risk factors.
Departure from the usual range on four or more of the ratios could lead to inquiries from individual state insurance departments as to certain aspects of a company's business. In addition to the financial ratios, states also require the calculation of a minimum capital requirement for each of our insurance companies based on individual company insurance risk factors.
Insurance companies must provide advance informational notice to the domicile state insurance regulatory authority prior to payment of any dividend or distribution to its shareholders. Prior approval from the state insurance regulatory authority must be obtained before payment of an “extraordinary dividend” as defined under the state's insurance code.
Insurance companies must provide advance informational notice to the domicile state insurance regulatory authority prior to payment of any dividend or distribution to its shareholders. Prior approval from the state insurance regulatory authority must be obtained before payment of an 8 Table of Contents “extraordinary dividend” as defined under the state's insurance code.
Some states prohibit us from withdrawing one or more types of insurance business from the state, except upon prior regulatory approval. Regulations that limit policy cancellation and non-renewal may restrict our ability to exit unprofitable markets.
Some states prohibit withdrawing one or more types of insurance business from the state, except upon prior regulatory approval. Regulations that limit policy cancellation and non-renewal may restrict the Reciprocal’s ability to exit unprofitable markets.
Our appointed actuaries must submit an opinion that our statutory reserves are adequate to meet policy claims-paying obligations and related expenses. Exiting Geographic Markets; Canceling and Non-Renewing Policies Most states regulate our carrier’s ability to exit a market. For example, states limit, to varying degrees, our ability to cancel and non-renew insurance policies.
Its appointed actuaries must submit an opinion that the Reciprocal’s statutory reserves are adequate to meet policy claims-paying obligations and related expenses. Exiting Geographic Markets; Canceling and Non-Renewing Policies Most states regulate the insurance carrier’s ability to exit a market. For example, states limit, to varying degrees, the Reciprocal’s ability to cancel and non-renew insurance policies.
In 2024, the U.S. housing market began to stabilize despite increases in interest rates and rising home sales prices, with industry home sales remaining relatively unchanged from 2023. We primarily focus on movers, where we have unique competitive advantages due to our data insights with this pool of customers.
In 2025, the U.S. housing market began to stabilize despite increases in interest rates and rising home sales prices, with industry home sales remaining relatively unchanged from 2024. We primarily focus on homebuyers, where we have unique competitive advantages due to our data insights with this pool of customers.
Core Differentiation There are three key areas where Porch has differentiation which is core to the strategy - we provide advantaged underwriting, best services for homebuyers, and more home protection: Advantaged Underwriting With insights into more than 90% of U.S. homebuyers and properties, we are able to better model underwriting risk and price policies appropriately.
Core Differentiation There are three key areas where Porch has differentiation which is core to the strategy - we provide advantaged underwriting, best services for homebuyers, and more home protection: Advantaged Underwriting With insights into approximately 90% of U.S. homes, we are able to better model underwriting risk and price policies appropriately.
These “risk-based capital” results are used by state insurance regulators to identify companies that require regulatory attention or the initiation of regulatory action. 9 Table of Contents Restrictions on Shareholder Dividends Our insurance carrier’s capacity to pay dividends to shareholders is limited.
These “risk-based capital” results are used by state insurance regulators to identify companies that require regulatory attention or the initiation of regulatory action. Restrictions on Shareholder Dividends The insurance carrier’s capacity to pay dividends to shareholders is limited.
Industry Trends In 2024, 4.1 million 1 existing homes and 0.7 million 2 newly constructed homes were sold in the U.S. We have relationships with approximately 29 thousand companies that support consumers through the home transaction.
Industry Trends In 2025, 4.1 million 1 existing homes and 0.7 million 2 newly constructed homes were sold in the U.S. We have relationships with approximately 24 thousand companies that support consumers through the home transaction.
The speed with which we can change our rates in response to competition or in response to increasing costs depends, in part, on the willingness of state regulators to allow adequate rates for the business we write. Insurance Reserves State insurance laws require that insurance companies analyze the adequacy of their reserves annually.
The speed with which we can change our rates in response to competition or in response to increasing costs depends, in part, on the willingness of state regulators to allow adequate rates for the business we write. Insurance Reserves State insurance laws require the Reciprocal to analyze the adequacy of its reserves annually.
Investment Regulation Our insurance business is subject to various state regulations requiring investment portfolio diversification and limiting the concentration of investments we may maintain in certain asset categories. Failure to comply with these regulations leads to the treatment of nonconforming investments as non-admitted assets for purposes of measuring statutory surplus.
Investment Regulation The Reciprocal is subject to various state regulations requiring investment portfolio diversification and limiting the concentration of investments it may maintain in certain asset categories. Failure to comply with these regulations leads to the treatment of nonconforming investments as non-admitted assets for purposes of measuring statutory surplus.
Additionally, as we expand into the insurance business, which is highly regulated, we must comply with and maintain various licenses and approvals with individual state departments of insurance, and we are subject to state governmental regulation and supervision. Insurance State Regulation Our insurance business is subject to extensive regulation, primarily at the state level.
Additionally, as we expand into the insurance business, which is highly regulated, we must comply with and maintain various licenses and approvals with individual state departments of insurance, and we are subject to state governmental regulation and supervision.
Further, in some instances, state regulations require us to sell certain nonconforming investments. Insurance Guaranty Associations Each state has insurance guaranty association laws. Membership in a state's insurance guaranty association is generally mandatory for insurers wishing to do business in that state.
Further, in some instances, state regulations require the sale of certain nonconforming investments. Insurance Guaranty Associations Each state has insurance guaranty association laws. Membership in a state's insurance guaranty association is generally mandatory for insurers wishing to do business in that state.
Moreover, the NAIC Accreditation Program requires state regulatory agencies to meet baseline standards of solvency regulation, particularly with respect to regulation of multi-state insurers. In general, such regulation is intended for the protection of those who purchase or use our insurance products, and not our shareholders.
The NAIC Accreditation Program requires state regulatory agencies to meet baseline standards of solvency regulation of insurers, particularly with respect to regulation of multi-state insurers. In general, such regulation is intended for the protection of those who purchase or use insurance products, and not, in the case of the Reciprocal, its operator.
These rules have a substantial effect on our business and relate to a wide variety of matters including: insurance company licensing and examination; the licensing of insurance agents and adjusters; price setting or premium rates; underwriting rules and restrictions; trade practices; approval of policy forms; claims practices; restrictions on transactions between our subsidiaries and their affiliates, including the payment of dividends; investments; underwriting standards; advertising and marketing practices; capital adequacy; and the collection, remittance and reporting of certain taxes, licenses and fees.
These rules have a substantial effect on the Reciprocal’s business and relate to a wide variety of matters including: insurance company licensing and examination; the licensing of insurance agents and adjusters; price setting or premium rates; underwriting rules and restrictions; trade practices; approval of policy forms; claims practices; restrictions on transactions between our subsidiaries and their affiliates, including the payment of dividends and management fees, which are subject to regulatory review and reasonableness standards and may be limited, modified or disallowed by state insurance regulators; investments; underwriting standards; advertising and marketing practices; capital adequacy; and the collection, remittance and reporting of certain taxes, licenses and fees.
They foster a culture of dialogue, collaboration, and recognition that contributes to our long-term success. We are organized in a decentralized operating model, which allows our businesses to move quickly and entrepreneurially leverage a common playbook and infrastructure that benefit from shared best practices as we scale.
They foster a culture of dialogue, collaboration, and recognition that contributes to our long-term success. We are organized in a decentralized operating model, which allows our businesses to move quickly and leverage a common playbook, data platform, and infrastructure.
Expand Access to Consumers By leveraging existing partnerships with moving companies, major utilities, and other other partnerships, we are expanding access to high-value homebuyers early in their journey, and fostering long-term customer relationships.
Expand Access to Consumers By leveraging existing partnerships with moving companies, major utilities, and other partnerships, we are expanding access to high-value homebuyers early in their journey, and fostering long-term customer relationships. Government Regulation Reciprocal State Regulation The Reciprocal Segment is subject to regulation, primarily at the state level.
Item 1. Business Page Company Overview 5 Core Differentiation 7 Industry Trends 7 Strategic Growth Pillars 8 Government Regulation 8 Human Capital Management 11 Available Information 11 Company Overview Introduction to Porch Group Porch Group, Inc., together with its consolidated subsidiaries, (“Porch Group,” “Porch,” the “Company,” “we,” “our,” “us”) is a new kind of homeowners insurance company.
Business Page Company Overview 5 Core Differentiation 6 Industry Trends 7 Strategic Growth Pillars 7 Government Regulation 8 Human Capital Management 10 Available Information 11 Company Overview Introduction to Porch 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.
Scale PIRE Insurance Premiums Our strategy continues to focus on profitable growth, including recruiting a high performing sales team who will increase our quote volumes and therefore insurance gross written premiums by: • Building deeper relationships with existing third party insurance agencies. • Expand the number of third party insurance agency relationships. • Expand our offering within our existing states and into new states.
This includes expanding our offering within our existing states and into new states, and recruiting a high performing sales team who will increase our quote volumes and therefore insurance gross written premiums by expanding the number of third-party insurance agency relationships and building deeper relationships with existing third-party insurance agencies.
In certain states, rate schedules, policy forms, or both, must be approved prior to use. While insurance laws vary from state to state, their objectives are generally the same: an insurance rate cannot be excessive, inadequate, or unfairly discriminatory.
While insurance laws vary from state to state, their objectives are generally the same: an insurance rate cannot be excessive, inadequate, or unfairly discriminatory.
Policies written through these mechanisms may require different underwriting standards and may pose greater risk than those written through our voluntary application process. Statutory Accounting Principles For public reporting, insurance companies prepare financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”).
Policies written through these mechanisms may require different underwriting standards and may pose greater risk than those written through our voluntary application process. Statutory Accounting Principles The Reciprocal’s assets, liabilities and results of operation are included in the consolidated financial statements of Porch and were prepared in accordance with U.S. generally accepted accounting principles (“GAAP”).
We believe that we generally have good relationships with our employees and contractors. Available Information Our main consumer website is www.porch.com , and our corporate and investor relations website is located at www.porchgroup.com .
Available Information Our main consumer website is www.porch.com , and our corporate and investor relations website is located at www.porchgroup.com .
We believe that our largest competition comes from the wide variety of companies focused on reaching consumers to help with key high-value services such as insurance. 1 National Association of Realtors, Existing Home Sales, December 2024 2 U.S.
We believe that our largest competition comes from the wide variety of companies focused on reaching consumers to help with key high-value services such as insurance. Strategic Growth Pillars Following a chapter focused on reaching profitability, we now enter a chapter focused on profitable growth.
We aim to be the best homeowners insurance partner for homebuyers by helping with more than just insurance. We provide moving services and offer a full moving concierge through the Porch app. We help make moving easier and assist with other important services such as security, TV/Internet, and more.
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.
Under these laws, the respective state insurance departments may examine us at any time, require disclosure of material transactions and require prior notice of or approval for certain transactions. All transactions within a holding company system affecting an insurer must have fair and reasonable terms and are subject to other standards and requirements established by law and regulation.
All transactions within a holding company system affecting an insurer must have fair and reasonable terms and are subject to other standards and requirements established by law and regulation.
However, state laws require us to calculate and report certain data according to statutory accounting rules as defined in the NAIC Accounting Practices and Procedures Manual.
In addition, the Reciprocal is required to calculate and report assets, liabilities and net income and other data according to Texas law and statutory accounting rules as defined in the NAIC Accounting Practices and Procedures Manual.
We pride ourselves on our values-driven culture that fosters employee engagement and creates an attractive home for top talent. We were certified as a Great Place to Work in 2023 and 2024. As of December 31, 2024, we had a total of 733 employees, which includes 729 full-time employees. We also utilize independent contractors in the U.S. and other countries.
We were certified as a Great Place to Work 2025, the fourth time in as many years. As of December 31, 2025, we had a total of 803 employees, which includes 799 full-time employees. We also utilize independent contractors in the U.S. and other countries. We believe that we generally have good relationships with our employees and contractors.
The amount of ordinary dividends that may be paid is subject to certain limitations, the amounts of which change each year. Price Regulation Nearly all states have insurance laws requiring our carrier to file rate schedules, policy or coverage forms, and other information within the state's regulatory authority.
We do not anticipate dividends being paid to policyholders in the near term. Price Regulation Nearly all states have insurance laws requiring the Reciprocal to file rate schedules, policy or coverage forms, and other information within the state's regulatory authority. In certain states, rate schedules, policy forms, or both, must be approved prior to use.
Mover and Homeowner Marketing Porch Group Media is leading provider of data solutions, including our Home Factors product. Porch Group Media specializes in movers, homebuyers, and property insights. Other Additional businesses include iRoofing, which provides measurement software for roofers.
Floify is a software company helping mortgage companies and loan officers create a better mortgage and refinancing experience for consumers. iRoofing provides measurement software for roofers. Data Porch Group Media is a leading provider of data solutions, including Home Factors, our unique property insights product.
We expect to launch new products and features to meet the needs of our clients, while increasing prices and maintaining high customer retention rates. Growth of Data Business We intend to add new Home Factors, our property insights product, each quarter and further monetize Home Factors with third parties.
Census Bureau, Monthly New Residential Sales, October 2025 7 Table of Contents Growth of Data Business We intend to add new categories of Home Factors, our property insights product, each quarter and further monetize Home Factors with third parties.
HOA uses Home Factors to create a pricing advantage for well-maintained homes and pricing surcharges for homes that are higher risk. 5 Table of Contents Property insurance claims fluctuate with seasonal weather; the highest exposure to catastrophic weather has historically occurred in the first half of the year.
Property insurance claims fluctuate with seasonal weather; the highest exposure to catastrophic weather for the Reciprocal has historically occurred in the first half of the year. While the Reciprocal retains insurance underwriting risk, a portion of the risk is ceded to third-party reinsurance companies.
The moving business relies on home industry moves which are traditionally higher in the spring and summer months. Inspection Software and Services This business includes the Inspection Support Network (“ISN”), among other brands, which are leading SaaS solutions for inspectors with easy-to-use tools.
Software & Data Segment Software We provide software, on a subscription and predominantly transactional basis, to inspection, mortgage, title, and roofing companies. This segment includes the Inspection Support Network (“ISN”) collection of brands, which are leading SaaS solutions for inspectors with easy-to-use tools.
We are a progressive organization which values environmental, social, and corporate governance (“ESG”) initiatives. Our ESG strategy reflects the relevant issues that are most important to Porch and our stakeholders. We released our second ESG report in December 2024.
Our ESG strategy reflects the relevant issues that are most important to Porch and our stakeholders. We released our third ESG report in December 2025. We pride ourselves on our values-driven culture that fosters employee engagement and creates an attractive home for top talent.
In connection with the formation, we completed the sale of our homeowners insurance carrier, Homeowners of America (“HOA”), to PIRE. Following the sale, HOA became a wholly owned subsidiary of PIRE. Porch will manage and operate PIRE, providing services related, but not limited, to underwriting, policy renewal, risk management, insurance portfolio management, financial management, and setting investment guidelines.
In January 2025, we completed the formation of Porch Reciprocal Exchange (the “Reciprocal”) and, as part of this process, sold our legacy homeowners insurance carrier, Homeowners of America (“HOA”), to the Reciprocal. Following the sale, HOA became a wholly owned subsidiary of the Reciprocal.
Including advanced digital loan application, secure document portal, automated borrower and agent notification platform, fully customizable workflows, and other productivity integrations. Moving Services Porch Moving Group includes the HireAHelper, MovingPlace, SML, and Moving Staffers brands, and is primarily a marketplace offering labor-only moving services which has recently expanded to offer all moving-related services.
The warranty business typically acquires customers through direct-to-consumer marketing and partnerships, including real estate, home inspection, distributors, utilities, and home insurance. Moving Services Porch Moving Group includes the MovingPlace, HireAHelper, SML, and Moving Staffers brands, and is primarily a marketplace offering labor-only moving services which has recently expanded to offer full-service moving services.
As part of an insurance holding company system, HOA, our insurance carrier, is required to register with the Texas Department of Insurance (the insurance supervisory agency of HOA’s state of domicile) and furnish information concerning the operations of companies within the holding company system that may materially affect the operations, management or financial condition of the insurers within the system.
Under the insurance holding company laws and regulations adopted in Texas, the Reciprocal is required to register with the Texas Department of Insurance (the “Texas Department”) and furnish information concerning the operations of companies within the holding company system that includes Porch and all of its subsidiaries.
Insurance Segment Our Insurance segment provides consumers with insurance and warranty products to protect their homes, earning revenue through premiums collected on policies, policy fees and commissions. The Insurance segment includes Homeowners of America (“HOA”), a wholly owned insurance carrier, other insurance-related legal entities, Porch Warranty, and other warranty brands.
Reciprocal Segmen t The Reciprocal Segment includes HOA and its parent, the Reciprocal, which is a member-owned reciprocal exchange, owned by policyholder members rather than Porch. The Reciprocal Segment provides policyholders with insurance to protect their homes, earning revenue primarily through premiums collected on policies. The Reciprocal offers property-related insurance products in 20 states.
Our goal is to positively impact long-term shareholder value by focusing on the the following strategic growth pillars: Porch Insurance Reciprocal Exchange On October 25, 2024, our application to form and license PIRE, a Texas reciprocal exchange, with the Texas Department of Insurance (“TDI”) was approved. In November 2024, we funded PIRE in exchange for a surplus note.
Our goal is to positively impact long-term shareholder value by focusing on the following strategic growth pillars: Scale Insurance Premiums Our strategy continues to focus on profitable growth.
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We differentiate and look to win in the massive and growing homeowners insurance opportunity by 1) advantaged underwriting utilizing unique property data, 2) being the best partner for homebuyers, and 3) providing more home protection. On January 1, 2025, we completed the formation of Porch Insurance Reciprocal Exchange (“PIRE”).
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Our strategy is built on three differentiators that set us apart. 1. Advantaged Underwriting Through Proprietary Data 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. 2.
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In exchange for these services, Porch will receive commissions and fees. As a leader in the home software-as-a-service (“SaaS”) space, we’ve built deep relationships with approximately 29 thousand companies that are key to the home-buying transaction, such as home inspectors, title companies, and mortgage companies. These relationships provide us with early insights to United States (“U.S.”) homebuyers.
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Best Services for Homebuyers We are committed to being the go-to partner during one of life’s most significant transitions—buying a home—by offering services that simplify moving and home setup. 3. More Protection We combine homeowners insurance with home warranty, filling coverage gaps and reducing unexpected costs for consumers.
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In partnership with these companies, we have the ability to help simplify the move for consumers with services such as insurance, warranty, moving and more. We have unique insights into the majority of U.S. properties. This helps us better understand risk and create competitive differentiation in underwriting and pricing.
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Porch continues to manage and operate the Reciprocal, providing critical services such as underwriting, policy renewal, risk and portfolio management, financial oversight, and investment guideline setting. In return, Porch earns commissions and fees for these services.
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We provide more protection for the home by including a variety of home warranty products alongside homeowners insurance. We are able to fill gaps in protection for consumers, minimize surprises, and deepen our relationships and value proposition. In 2024, we had two reportable and operating segments: Insurance and Vertical Software.
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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.
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Insurance Through HOA, we offer property-related insurance products in 22 states. HOA uses Home Factors, our unique property insights product, and other data points to better assess homes, underwrite risk, and effectively price homeowners insurance policies. Information about properties includes features such as type of piping, roof, plumbing, flooring and water heater location.
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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.
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While HOA retains insurance underwriting risk, a portion of the risk is ceded to third party reinsurance companies. Porticus Reinsurance (“Porticus RE”), our Cayman Islands captive reinsurer, reinsures risk from HOA when economically attractive versus using a third-party reinsurer.
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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.
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We offer warranty products predominately through the Porch Warranty, American Home Protect (“AHP”), and Residential Warranty Services (“RWS”) brands. Our warranty business differs from competitors and we believe has a long-term advantage due to several factors. • We offer bundled handyman services, which appeal to customers who maintain their home to prevent future issues.
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Insurance Services Segment Our Insurance Services segment earns management fees from the Reciprocal in exchange for managing and operating its business.
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Customers pay a deductible against services such as gutter or dryer vent cleaning. • Unique channel access, in addition to traditional warranty channels such as real estate and direct-to-consumer, by being part of Porch Group also means products can be cross-sold through inspectors, contractors and other businesses, providing lower customer acquisition costs and increased lifetime value. • Our 90-day warranty product is provided largely through inspectors to homebuyers during the home purchase process to offer protection.
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This segment also receives policy fees from policyholders, lead fees from agencies, earns interest on surplus 5 Table of Contents notes from the Reciprocal, and includes a captive reinsurer to provide reinsurance support to improve capital efficiency for the Reciprocal.
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This provides early access to a high volume of customers. • Utilities partnerships, where we partner with large electric and gas utilities to provide a variety of services to their customers, include targeted and full-home warranties.
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ISN brands provide a range of offerings for inspection businesses, and together represent roughly half of all U.S. home inspections in 2025. Rynoh software helps settlement agents protect the real estate transaction. Rynoh software was utilized in approximately 40% of all real estate closings in 2025.
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Vertical Software Segment Our Vertical Software segment provides software and services to customers, including but are not limited to inspection, mortgage, title, roofing, and contractor companies on a subscription and transactional basis. These accounted for 60% of total Vertical Software segment revenue in 2024.
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With insights into approximately 90% of U.S. homes, Home Factors provides interior and exterior attributes and condition data to help insurance carriers improve underwriting, pricing, and risk selection. Beyond insurance, Home Factor property insights are utilized in other business areas to enhance customer acquisition and retention efforts.
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Additionally, the Vertical Software segment provides move and post-move services, which accounted for 40% of total Vertical Software segment revenue in 2024. The Vertical Software segment operates as several key businesses, offering products including inspection software and services, title insurance software, mortgage software, moving services, mover and homeowner marketing, and measurement software for roofers.
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The Reciprocal uses Home Factors and other data points to better assess homes, underwrite risk, and effectively price homeowners insurance policies, with pricing advantages for well-maintained homes and pricing surcharges for homes that are higher risk.
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Our ISN solution provides a range of offerings for inspection businesses, and represents more than 40% of all U.S. home inspections in 2024. ISN has grown to be the most comprehensive customer relationship management (“CRM”), workflow, and report writer solution in the inspection industry.
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This is a win-win, as it benefits us and our customers.
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It allows inspection companies to accept orders online from their website and helps automate business tasks such as emailing customers, collecting payments, delivering inspection agreements, and collecting signatures. ISN is extensible, offering integrations with the largest number of inspection and technology partners in the industry and prominent report-writing platforms.
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Our unique property data from Home Factors enhances our underwriting models and, where applicable, helps create a pricing advantage for well-maintained homes and prevent adverse selection for poorly maintained homes. 6 Table of Contents This data has enabled us to more accurately underwrite risk, and as a result, we have seen an improvement in the Reciprocal’s Attritional Loss Ratio (see Non-GAAP Financial Measures in Item 7.
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ISN also provides powerful business reporting so that office staff and the business owner can understand how the business is performing at the individual inspector, real estate agent, or office level. Title Insurance Software Rynoh software helps settlement agents protect the real estate transaction. Rynoh software was utilized in approximately 40% of all real estate closings in 2024.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations for definition), which was 17% and 22% for the years ended December 31, 2025, and 2024, respectively. Best Services for Homebuyers We know when homebuyers are moving approximately six weeks before they move due to our unique early insight.
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Through the homebuyer’s settlement agent, Rynoh’s cloud-based financial management system, supports financial protection for each real estate transaction by tracking critical disbursements and automating reconciliations daily. Due to the manual and labor-intensive processes in the industry, settlement agent’s escrow accounts are more vulnerable to the rising risks of fraud, embezzlement, cyberattacks, and unintentional errors.
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Software Innovation to SaaS Businesses We plan to continue increasing utilization of our SaaS products and maintain high customer retention. We expect to launch new products and features to meet the needs of our customers, while increasing prices and maintaining high customer retention rates. 1 National Association of Realtors, Existing Home Sales, December 2025 2 U.S.
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Rynoh’s products intend to save customers time and money while reducing risk. Mortgage Software Floify is a software company helping mortgage companies and loan officers create a better mortgage and refinancing experience for consumers. 6 Table of Contents Floify offers market-leading digital mortgage point-of-sale solutions to mortgage professionals.
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Insurance Holding Company Regulation Most states have enacted legislation that regulates insurance holding company systems, defined as two or more affiliated persons, one or more of which is an insurer. The Reciprocal and Porch, and their wholly owned subsidiaries, meet the definition of an insurance holding company system.
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This is a win-win, as it benefits us and our customers. Our Insurance segment uses our unique property data to create a pricing advantage for well-maintained homes and prevent adverse selection for poorly maintained homes. Best Services for Homebuyers We know when homebuyers are moving approximately six weeks before they move due to our unique early access.
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Under these laws and regulations, the Reciprocal is required to disclose material transactions with other companies in the holding company system and give prior notice of or obtain approval for certain transactions.
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Census Bureau, Monthly New Residential Sales, December 2024 7 Table of Contents Strategic Growth Pillars Following a chapter focused on profitability, we now enter a chapter focused on growth.
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The Texas Department also may require the Reciprocal to produce records, books, or other information papers of or concerning Porch that are in its possession and are necessary to ascertain the financial condition or legality of conduct of the Reciprocal, including the enterprise risk to the insurer by Porch or by any entity or combination of entities within the insurance holding company system, or by the insurance holding company system on a consolidated basis.
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On January 1, 2025, just after PIRE was officially formed, we sold HOA to PIRE for an additional surplus note, bringing the total surplus notes held by Porch to approximately $106 million.
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The amount of ordinary dividends that may be paid is subject to certain limitations, the amounts of which change each year. These limitations only apply to shareholder dividends paid by the Reciprocal’s subsidiaries. The Reciprocal, operating as a reciprocal insurance exchange, does not pay shareholder dividends. The Reciprocal is owned by policyholder members rather than Porch.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAs a result, we may fail to meet or exceed the expectations of the market, including research analysts or investors, which could cause our stock price to decline. • Our quarterly results of operations fluctuate due to seasonality in consumer demand and historical weather trends, in addition to other factors associated with our industry. • We have a history of losses, and we may be unable to achieve or sustain profitability. • Our risk management policies and procedures may prove to be ineffective and leave us exposed to unidentified or unanticipated risk. • We are subject to credit risk arising from the financial soundness of counterparties, including PIRE’s and our reinsurance captive’s reinsurers, which may have a material adverse effect on our business, financial condition, and results of operations. • The insurance businesses we manage and operate are subject to state governmental regulation, which could limit the growth of the insurance businesses and impose additional costs on PIRE and HOA. • The processing, storage, use and disclosure of personal data is subject to a variety of federal and state laws and regulations and could give rise to liabilities and increased costs. • Servicing our indebtedness requires a significant amount of cash, and we may not have sufficient cash flow from our business to make such payments. • The indenture governing our 2028 Notes contains, and instruments governing any future indebtedness of ours would likely contain, restrictions that may limit our flexibility in operating our business, and any default on our 2028 Notes or other future secured indebtedness could result in foreclosure by our secured debtholders on our assets. • We face risks associated with our independent contractors. • We depend on key personnel to operate our business, and if we are unable to retain, attract and integrate qualified personnel, our ability to develop and successfully grow our business could be harmed. • Expansion of our employee base to foreign countries will subject us to additional risks that can adversely affect our business, results of operations, and financial condition. • The price of the Company’s securities may change significantly, and investors could lose all or part of their investment as a result. • Because there are no current plans to pay cash dividends on the Company’s common stock for the foreseeable future, you may not receive any return on investment unless you sell your common stock for a price greater than that which you paid for it.
Biggest changeAs a result, we may fail to meet or exceed the expectations of the market, including research analysts or investors, which could cause our stock price to decline. • Our quarterly results of operations fluctuate due to seasonality in consumer demand and historical weather trends, in addition to other factors associated with our industry. • Prior to the fourth quarter of fiscal 2024, we had a history of losses, and we may be unable to sustain profitability. • Our risk management policies and procedures may prove to be ineffective and leave us exposed to unidentified or unanticipated risk. • We are subject to credit risk arising from the financial soundness of counterparties, including the Reciprocal’s and our reinsurance captive’s reinsurers, which may have a material adverse effect on our business, financial condition, and results of operations. • The insurance businesses we manage and operate are subject to state governmental regulation, which could limit the growth of the insurance businesses and impose additional costs on the Reciprocal and HOA. • The processing, storage, use and disclosure of personal data is subject to a variety of federal and state laws and regulations and could give rise to liabilities and increased costs. • Implementation of artificial intelligence (“AI”) and machine learning technologies may result in legal and regulatory risks, reputational harm or have other adverse consequences to our business. • The indenture governing our 2028 Notes contains, and instruments governing any future indebtedness of ours would likely contain, restrictions that may limit our flexibility in operating our business, and any default on our 2028 Notes or other future secured indebtedness could result in foreclosure by our secured debtholders on our assets.
We face a variety of risks from our expansion into the insurance business, including as a result of higher than expected claims costs and other factors outside of the Company’s control, which may result in an adverse impact on the Company’s financial condition.
We face a variety of risks from our expansion into the insurance business, including as a result of higher than expected claims costs and other factors outside of our control, which may result in an adverse impact on the Company’s financial condition.
Additionally, our collection and use of personal information or property data may cause privacy concerns of the individuals from whom we collect personal information, privacy and reputational concerns of commercial partners that provide us with end customer 16 Table of Contents personal information and property data, and adverse consumer reaction to our marketing practices.
Additionally, our collection and use of personal information or property data may cause privacy concerns of the individuals from whom we 16 Table of Contents collect personal information, privacy and reputational concerns of commercial partners that provide us with end customer personal information and property data, and adverse consumer reaction to our marketing practices.
The number of housing transactions in which certain of the Company’s products and services are purchased have been, and may continue to be, impacted by the following situations, among others: • high, volatile or rising mortgage interest rates; • availability of credit, including commercial and residential mortgage funding; 18 Table of Contents • real estate affordability, housing supply rates, home building rates, housing foreclosures rates, multi-family housing fundamentals, and the pace of home price appreciation or the lack of it; • slow economic growth or recessionary conditions and other macroeconomic conditions, which may be impacted by national or global events; • local, state and federal government intervention in the financial markets; • increased unemployment or declining or stagnant wages; • changes in household debt levels and disposable income; • changing trends in consumer spending; • fewer homebuyers electing to get a home inspection • new or increased tariffs or trade restrictions on imported materials and products used in home building; and • changing expectations for inflation and deflation.
The number of housing transactions in which certain of the Company’s products and services are purchased have been, and may continue to be, impacted by the following situations, among others: • high, volatile or rising mortgage interest rates; • availability of credit, including commercial and residential mortgage funding; • real estate affordability, housing supply rates, home building rates, housing foreclosures rates, multi-family housing fundamentals, and the pace of home price appreciation or the lack of it; • slow economic growth or recessionary conditions and other macroeconomic conditions, which may be impacted by national or global events; • local, state and federal government intervention in the financial markets; • increased unemployment or declining or stagnant wages; • changes in household debt levels and disposable income; • changing trends in consumer spending; • fewer homebuyers electing to get a home inspection • new or increased tariffs or trade restrictions on imported materials and products used in home building; and 18 Table of Contents • changing expectations for inflation and deflation.
If we experience a default under our 2028 Notes indenture, 2026 Notes indenture or instruments governing our future indebtedness, our business, financial condition, and results of operations may be materially adversely affected. Conversion of our 2026 Notes or 2028 Notes may dilute the ownership interest of our stockholders or may otherwise depress the price of our common stock.
If we experience a default under our 2028 Notes indenture, 2026 Notes indenture or instruments governing our future indebtedness, our business, financial condition, and results of operations may be materially adversely affected. Conversion of our Notes may dilute the ownership interest of our stockholders or may otherwise depress the price of our common stock.
As a result, to the extent that we desire to grow through acquisitions, we will need to: • properly identify, value, and complete prospective acquisitions, especially those of companies with limited operating histories; • successfully integrate acquired businesses to the extent and in a manner that aligns with our strategy; • successfully identify and realize potential synergies among acquired and existing business; • retain or hire senior management and other key personnel at acquired businesses; and • successfully manage acquisition-related strain on our management, operations and financial resources.
As a result, to the extent that we desire to grow through acquisitions, we will need to: • properly identify, value, and complete prospective acquisitions, especially those of companies with limited operating histories; • successfully integrate acquired businesses in a manner that aligns with our strategy; • successfully identify and realize potential synergies among acquired and existing business; • retain or hire senior management and other key personnel at acquired businesses; and • successfully manage acquisition-related strain on our management, operations and financial resources.
If we are unable to compete effectively against competitors, services or products or if we are unable to establish or maintain a consumer brand that resonates with customers and/or enhance our existing brands and the brands of our recently acquired companies, or if we are unable to maintain high customer satisfaction or compete with the pricing offered by our competitors, the result could be decreases in the size and level of engagement of our consumer and service provider bases, any of which could adversely affect our business, financial condition and results of operations.
If we are unable to compete effectively against competitors, services or products or if we are unable to establish or maintain a consumer brand that resonates with customers and/or enhance our existing brands and the brands of any acquired companies, or if we are unable to maintain high customer satisfaction or compete with the pricing offered by our competitors, the result could be decreases in the size and level of engagement of our consumer and service provider bases, any of which could adversely affect our business, financial condition and results of operations.
Our businesses are sensitive to events and trends, such as a general economic downturn, health of the housing market, inflation or sudden disruption in business conditions, a recession or fears of a recession, consumer confidence, spending levels and access to credit, which could result in decreases in demand for insurance, home mortgages, warranty, moving and inspection services, home repair, and marketing, financial and other software for home services companies and providers.
Our businesses are sensitive to certain events and trends, such as a general economic downturn, health of the housing market, inflation or sudden disruption in business conditions, a recession or fears of a recession, consumer confidence, spending levels and access to credit, which could result in decreases in demand for insurance, home mortgages, warranty, moving and inspection services, home repair, and marketing, financial and other software for home services companies and providers.
We may be attacked by perpetrators of malicious technology-related events, such as the use of botnets, malware or other destructive or disruptive software, distributed denial of service attacks, phishing, attempts to misappropriate user information and account login credentials, ransomware attempts, and other similar malicious activities including malicious activities from internal bad actors.
We may be attacked by perpetrators of malicious technology-related events, including related to the use of AI, such as the use of botnets, malware or other destructive or disruptive software, distributed denial of service attacks, phishing, attempts to misappropriate user information and account login credentials, ransomware attempts, and other similar malicious activities including malicious activities from internal bad actors.
If a home services company, consumer or service provider is not satisfied with the quality or responsiveness of our customer service, we could incur additional costs to address the situation or the home services company, service provider, or consumer (and commercial partners who provide us with their customers’ data) may choose not to do business with us or we may suffer reputational costs.
If a home services company, consumer, service provider or commercial partner is not satisfied with the quality or responsiveness of our customer service, we could incur additional costs to address the situation or the home services company, consumer, service provider (and commercial partners who provide us with their customers’ data) may choose not to do business with us or we may suffer reputational costs.
We cannot predict the extent to which our home warranty business line may experience future increases in costs of refrigerants, appliances and equipment, parts, raw materials, wages and salaries, employee benefits, healthcare, contractor costs, self-insurance costs and other insurance premiums, as well as various regulatory compliance costs and other operating costs.
We cannot predict the extent to which our home warranty business line may experience future increases in costs of refrigerants, appliances and equipment, parts, raw materials, wages and salaries, employee benefits (including healthcare), contractor costs, self-insurance costs and other insurance premiums, as well as various regulatory compliance costs and other operating costs.
Lastly, the value of goodwill and other intangible assets acquired could be impacted by one or more continuing unfavorable events and/or trends, which could result in significant impairment charges. The occurrence of any of these events could have an adverse effects on our business, financial condition and results of operations.
Lastly, the value of goodwill and other intangible assets acquired could be impacted by one or more continuing unfavorable events and/or trends, which could result in significant impairment charges. The occurrence of any of these events could have adverse effects on our business, financial condition and results of operations.
In 2021, we expanded our insurance operations through the acquisition of HOA, a leading property and casualty insurance company focused on products in the residential homeowner space. Effective January 1, 2025, we sold HOA to PIRE, a newly formed reciprocal insurance exchange.
In 2021, we expanded our insurance operations through the acquisition of HOA, a leading property and casualty insurance company focused on products in the residential homeowner space. Effective January 1, 2025, we sold HOA to the Reciprocal, a newly formed reciprocal insurance exchange.
The failure to accurately and timely pay claims could harm the insurance businesses we manage and operate. Though the insurance businesses historically evaluated and paid claims timely and in accordance with its policies and statutory obligations, they must continue to manage costs and close claims expeditiously.
The failure to accurately and timely pay claims could harm the insurance businesses we manage and operate. Though the insurance businesses has historically evaluated and paid claims timely and in accordance with its policies and statutory obligations, they must continue to manage costs and close claims expeditiously.
A takeover of us may trigger the requirement that we repurchase the notes and/or increase the conversion rate in the case of the 2026 Notes, which could make it more costly for a potential acquirer to engage in such takeover.
A takeover of us may trigger the requirement that we repurchase the Notes and/or increase the conversion rate in the case of the 2026 Notes and 2030 Notes, which could make it more costly for a potential acquirer to engage in such takeover.
We may not succeed in these efforts. • The incidence, frequency and severity of weather events, extensive wildfires, and other catastrophes, particularly occurring where Porch has a concentration of homeowners insurance policyholders, or that adversely impact consumer confidence and spending behavior in the industries we serve, could have a material effect on our results of operations and financial condition. • Our efforts to develop new insurance products, expand in targeted insurance markets, improve business processes and workflows, use Home Factors in underwriting, or make acquisitions may not be successful and may create enhanced risk. • We may not be able to protect our systems, technology and infrastructure from cyberattacks and cyberattacks experienced by third parties may adversely affect us.
We may not succeed in these efforts. • The incidence, frequency and severity of weather events, extensive wildfires, and other catastrophes, particularly occurring where the Porch Reciprocal Exchange (the “Reciprocal”) has a concentration of homeowners insurance policyholders, or that adversely impact consumer confidence and spending behavior in the industries we serve, could have a material effect on our results of operations and financial condition. • Our efforts to develop new insurance products, expand in targeted insurance markets, improve business processes and workflows, use Home Factors in underwriting, or make acquisitions may not be successful and may create enhanced risk. • We may not be able to protect our systems, technology and infrastructure from cyberattacks and cyberattacks experienced by third parties may adversely affect us.
In particular, severe weather events and the effects of climate change, including, tornado and hail events, hurricanes extensive wildfires, drought, storms, flooding, and other catastrophes, and the frequency of such events, as well as the impacts of future global pandemics and other health crises, may harm the insurance business we manage and operate and could result in additional capital being required at PIRE, whether from Porch or a third party investor.
In particular, severe weather events and the effects of climate change, including, tornado and hail events, hurricanes extensive wildfires, drought, storms, flooding, and other catastrophes, and the frequency of such events, as well as the impacts of future global pandemics and other health crises, may harm the insurance business we manage and operate and could result in additional capital being required at the Reciprocal, whether from Porch or a third-party investor.
The process of setting the management fee rate includes, but is not limited to, the evaluation of current year operating results compared to both prior year and industry estimated results for both Porch’s insurance services businesses and PIRE, and consideration of several factors for both entities including, but not limited to: their relative financial strength and capital position; projected revenue, expense and earnings for the subsequent year; future capital needs; as well as competitive position.
The process of setting the management fee rate includes, but is not limited to, the evaluation of current year operating results compared to both prior year and industry estimated results for both Porch’s insurance services businesses and the Reciprocal, and consideration of several factors for both entities including, but not limited to: their relative financial strength and capital position; projected revenue, expense and earnings for the subsequent year; future capital needs; as well as competitive position.
The most significant costs we incur in providing policy issuance and renewal services are employee costs and technology costs. Our largest expense is employee costs, including salaries, healthcare, pension, and other benefit costs.
The most significant costs we incur in providing policy issuance and renewal services are employee costs and technology costs. Our largest expense is employee costs, including salaries, healthcare, and other benefit costs.
Although HOA holds the shares of common stock described in this Annual Report on Form 10-K primarily to strengthen its surplus position and maintain its financial stability rating, and while it is neither our plan nor intent, HOA may sell all or a portion of the shares from time to time in the future as it may deem necessary or appropriate to support the needs of its business, including, for example, to generate additional cash to pay claims and expenses, to improve liquidity and asset diversification, to otherwise meet applicable regulatory requirements and maintain its financial stability rating, or to finance the acquisition of new business.
Although the Reciprocal holds the shares of common stock described in this Annual Report on Form 10-K primarily to strengthen its surplus position and maintain its financial stability rating, and while it is neither its plan nor intent, the Reciprocal may sell all or a portion of the shares from time to time in the future as it may deem necessary or appropriate to support the needs of its business, including, for example, to generate additional cash to pay claims and expenses, to improve liquidity and asset diversification, to otherwise meet applicable regulatory requirements and maintain its financial stability rating, or to finance the acquisition of new business.
The Company’s Charter provides that, subject to limited exceptions, any (1) derivative action or proceeding brought on behalf of the Company, (2) action asserting a claim of breach of a fiduciary duty owed by any director, officer, stockholder or employee to the Company or its stockholders, (3) action asserting a claim arising pursuant to any provision of the Delaware corporate statute or the Company’s Charter or the Company’s Bylaws, or (4) action asserting a claim governed by the internal affairs doctrine shall, to the fullest extent permitted by law, be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, another state or federal court 44 Table of Contents located within the State of Delaware.
The Company’s Charter provides that, subject to limited exceptions, any (1) derivative action or proceeding brought on behalf of the Company, (2) action asserting a claim of breach of a fiduciary duty owed by any director, officer, stockholder or employee to the Company or its stockholders, (3) action asserting a claim arising pursuant to any provision of the Delaware corporate statute or the Company’s Charter or the Company’s Bylaws, or (4) action asserting a claim governed by the internal affairs doctrine shall, to the fullest extent permitted by law, be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, another state or federal court located within the State of Delaware.
Sales of invested assets could result in significant realized losses depending on the conditions of the general market, interest rates, and credit issues with individual securities. Further, losses may impact surplus and require additional capital to fund statutory surplus requirements, which may not be available or available on terms that are not favorable to PIRE and our reinsurance captive.
Sales of invested assets could result in significant realized losses depending on the conditions of the general market, interest rates, and credit issues with individual securities. Further, losses may impact surplus and require additional capital to fund statutory surplus requirements, which may not be available or available on terms that are not favorable to the Reciprocal and our reinsurance captive.
In addition, we and our partners, vendors, and other service providers must comply with laws and regulatory regimes that apply to us directly and our partners, vendors, and other service providers indirectly, such as through certain of our products and/or our contractual relationships with our customers. 33 Table of Contents In particular, certain laws, regulations, and rules our customers are subject to, and with which may or do facilitate compliance, directly or indirectly, include: • the Truth in Lending Act, or TILA, and Regulation Z promulgated thereunder, and similar state laws, which require certain disclosures to borrowers regarding the terms and conditions of their loans and credit transactions, and require creditors to comply with certain lending practice restrictions as well as the TILA-RESPA Integrated Disclosure rule, or TRID, which imposes specific requirements around the collection of information, charging of fees, and disclosure of specific loan terms and costs upon receipt of an application for credit; • the Real Estate Settlement Procedures Act, or RESPA, and Regulation X, which, among other matters, prohibits giving or accepting any fee, kickback or a thing of value for the referral of real estate settlement services or accepting a portion or split of a settlement fee other than for services actually provided; for affiliated business relationships, prohibits receiving anything other than a legitimate return on ownership, requiring use of an affiliate, and failing to provide a disclosure of the affiliate relationship; • the Equal Credit Opportunity Act, or ECOA, and Regulation B promulgated thereunder, and similar state fair lending laws, which prohibit creditors from discouraging or discriminating against credit applicants on the basis of race, color, sex, age, religion, national origin, marital status, the fact that all or part of the applicant’s income derives from any public assistance program or the fact that the applicant has in good faith exercised any right under the federal Consumer Credit Protection Act; • the Fair Credit Reporting Act, or FCRA, and Regulation V promulgated thereunder, which impose certain obligations on consumer reporting agencies, users of consumer reports and those that furnish information to consumer reporting agencies, including obligations relating to obtaining consumer reports, marketing using consumer reports, taking adverse action on the basis of information from consumer reports and protecting the privacy and security of consumer reports and consumer report information; • Section 5 of the Federal Trade Commission Act, or the FTC Act, which prohibits unfair and deceptive acts or practices in or affecting commerce, and Section 1031 of the Dodd-Frank Act, which prohibits unfair, deceptive or abusive acts or practices in connection with any consumer financial product, warranty contract or service, and analogous state laws prohibiting unfair, deceptive or abusive acts or practices; • the Gramm-Leach-Bliley Act, or GLBA, and Regulation P promulgated thereunder, which include limitations on financial services firms’ disclosure of nonpublic personal information about a consumer to nonaffiliated third parties, in certain circumstances requires financial services firms to limit the use and further disclosure of nonpublic personal information by nonaffiliated third parties to whom they disclose such information, and requires financial services firms to disclose certain privacy notices and practices with respect to information sharing with affiliated and unaffiliated entities as well as to safeguard personal borrower information, and other privacy laws and regulations; • the Home Mortgage Disclosure Act, or HMDA, and Regulation C, which require reporting of loan origination data, including the number of loan applications taken, approved, denied and withdrawn; • the Fair Housing Act, or FHA, which prohibits discrimination in housing on the basis of race, sex, national origin, and certain other characteristics; • the Secure and Fair Enforcement for Mortgage Licensing, or the SAFE Act, which imposes state licensing requirements on mortgage loan originators; • the Electronic Signatures in Global and National Commerce Act, or ESIGN Act, and similar state laws, particularly the Uniform Electronic Transactions Act, or UETA, which authorize the creation of legally binding and enforceable agreements utilizing electronic records and signatures and which require financial services firms to obtain a consumer’s consent to electronically receive disclosures required under federal and state laws and regulations; • the Americans with Disabilities Act, or ADA, which has been interpreted to include websites as “places of public accommodations” that must meet certain federal requirements related to access and use; 34 Table of Contents • the Bank Secrecy Act, or BSA, and the USA PATRIOT Act, which relate to compliance with anti-money laundering, borrower due diligence and record-keeping policies and procedures; • the regulations promulgated by the Office of Foreign Assets Control, or OFAC, under the U.S.
In particular, certain laws, regulations, and rules our customers are subject to, and with which may or do facilitate compliance, directly or indirectly, include: • the Truth in Lending Act, or TILA, and Regulation Z promulgated thereunder, and similar state laws, which require certain disclosures to borrowers regarding the terms and conditions of their loans and credit transactions, and require creditors to comply with certain lending practice restrictions as well as the TILA-RESPA Integrated Disclosure rule, or TRID, which imposes specific requirements around the collection of information, charging of fees, and disclosure of specific loan terms and costs upon receipt of an application for credit; • the Real Estate Settlement Procedures Act, or RESPA, and Regulation X, which, among other matters, prohibits giving or accepting any fee, kickback or a thing of value for the referral of real estate settlement services or accepting a portion or split of a settlement fee other than for services actually provided; for affiliated business relationships, prohibits receiving anything other than a legitimate return on ownership, requiring use of an affiliate, and failing to provide a disclosure of the affiliate relationship; • the Equal Credit Opportunity Act, or ECOA, and Regulation B promulgated thereunder, and similar state fair lending laws, which prohibit creditors from discouraging or discriminating against credit applicants on the basis of race, color, sex, age, religion, national origin, marital status, the fact that all or part of the applicant’s income derives from any public assistance program or the fact that the applicant has in good faith exercised any right under the federal Consumer Credit Protection Act; • the Fair Credit Reporting Act, or FCRA, and Regulation V promulgated thereunder, which impose certain obligations on consumer reporting agencies, users of consumer reports and those that furnish information to consumer reporting agencies, including obligations relating to obtaining consumer reports, marketing using consumer reports, taking adverse action on the basis of information from consumer reports and protecting the privacy and security of consumer reports and consumer report information; • Section 5 of the Federal Trade Commission Act, or the FTC Act, which prohibits unfair and deceptive acts or practices in or affecting commerce, and Section 1031 of the Dodd-Frank Act, which prohibits unfair, deceptive or abusive acts or practices in connection with any consumer financial product, warranty contract or service, and analogous state laws prohibiting unfair, deceptive or abusive acts or practices; • the Gramm-Leach-Bliley Act, or GLBA, and Regulation P promulgated thereunder, which include limitations on financial services firms’ disclosure of nonpublic personal information about a consumer to nonaffiliated third parties, in certain circumstances requires financial services firms to limit the use and further disclosure of nonpublic personal information by nonaffiliated third parties to whom they disclose such information, and requires financial services firms to disclose certain privacy notices and practices with respect to information sharing with affiliated and unaffiliated entities as well as to safeguard personal borrower information, and other privacy laws and regulations; • the Home Mortgage Disclosure Act, or HMDA, and Regulation C, which require reporting of loan origination data, including the number of loan applications taken, approved, denied and withdrawn; • the Fair Housing Act, or FHA, which prohibits discrimination in housing on the basis of race, sex, national origin, and certain other characteristics; • the Secure and Fair Enforcement for Mortgage Licensing, or the SAFE Act, which imposes state licensing requirements on mortgage loan originators; 34 Table of Contents • the Electronic Signatures in Global and National Commerce Act, or ESIGN Act, and similar state laws, particularly the Uniform Electronic Transactions Act, or UETA, which authorize the creation of legally binding and enforceable agreements utilizing electronic records and signatures and which require financial services firms to obtain a consumer’s consent to electronically receive disclosures required under federal and state laws and regulations; • the Americans with Disabilities Act, or ADA, which has been interpreted to include websites as “places of public accommodations” that must meet certain federal requirements related to access and use; • the Bank Secrecy Act, or BSA, and the USA PATRIOT Act, which relate to compliance with anti-money laundering, borrower due diligence and record-keeping policies and procedures; • the regulations promulgated by the Office of Foreign Assets Control, or OFAC, under the U.S.
In these markets, PIRE and HOA may be compelled to underwrite significant amounts of business at lower-than-desired rates, possibly leading to an unacceptable return on equity. Alternatively, as TWIA recognizes a financial deficit, it has the ability to assess participating insurers, adversely affecting our results of operations and financial condition.
In these markets, the Reciprocal and HOA may be compelled to underwrite significant amounts of business at lower-than-desired rates, possibly leading to an unacceptable return on equity. Alternatively, as TWIA recognizes a financial deficit, it has the ability to assess participating insurers, adversely affecting our results of operations and financial condition.
Any of these events could negatively affect the home industries PIRE serves and could adversely affect our business, financial condition and results of operations. Our efforts to develop new insurance products, expand in targeted insurance markets, improve business processes and workflows, use of Home Factors in underwriting, or make acquisitions may not be successful and may create enhanced risk.
Any of these events could negatively affect the home industries the Reciprocal serves and could adversely affect our business, financial condition and results of operations. Our efforts to develop new insurance products, expand in targeted insurance markets, improve business processes and workflows, use of Home Factors in underwriting, or make acquisitions may not be successful and may create enhanced risk.
The incidence, frequency and severity of weather events, extensive wildfires, and other catastrophes, particularly occurring where PIRE has a concentration of homeowners insurance policyholders, or that adversely impact consumer confidence and spending behavior in the industries we serve, could have a material effect on our results of operations and financial condition.
The incidence, frequency and severity of weather events, extensive wildfires, and other catastrophes, particularly occurring where the Reciprocal has a concentration of homeowners insurance policyholders, or that adversely impact consumer confidence and spending behavior in the industries we serve, could have a material effect on our results of operations and financial condition.
As a result of noncompliance, regulators could impose fines or other penalties, including cease-and-desist orders for an individual state, or all states, until the identified noncompliance is rectified. TDI requires PIRE to meet specific conditions related to surplus and capital in order to maintain its certificate of authority.
As a result of noncompliance, regulators could impose fines or other penalties, including cease-and-desist orders for an individual state, or all states, until the identified noncompliance is rectified. TDI requires the Reciprocal to meet specific conditions related to surplus and capital in order to maintain its certificate of authority.
PIRE and our reinsurance captive seek to hold a high-quality portfolio managed by a provider investment advisory firm in accordance with its investment policy and routinely reviewed by the internal management team. Investments, however, are subject to general economic conditions and market risks as well as risks inherent to particular securities.
The Reciprocal and our reinsurance captive seek to hold a high-quality portfolio managed by a provider investment advisory firm in accordance with its investment policy and routinely reviewed by the internal management team. Investments, however, are subject to general economic conditions and market risks as well as risks inherent to particular securities.
Additionally, certain agreements with our commercial partners obligate us to indemnify such commercial partners against third-party claims resulting from the actions and omissions of the service providers we engage to provide services to consumers referred to us by those commercial partners. These claims may be expensive and may divert management’s time away from our operations.
Additionally, certain agreements with our commercial partners obligate us to indemnify such commercial partners against third-party claims resulting from the actions and omissions of the service providers we engage to provide services to customers referred to us by those commercial partners. These claims may be expensive and may divert management’s time away from our operations.
Risks for all types of securities are managed through the application of PIRE’s and our reinsurance captive’s investment policies, which establish investment parameters that include maximum percentages of investment in certain types of securities and minimum levels of credit quality, which they believe are within applicable guidelines established by the National Association of Insurance Commissioners.
Risks for all types of securities are managed through the application of the Reciprocal’s and our reinsurance captive’s investment policies, which establish investment parameters that include maximum percentages of investment in certain types of securities and minimum levels of credit quality, which they believe are within applicable guidelines established by the National Association of Insurance Commissioners.
If PIRE fails to meet these conditions, its certificate of authority may be suspended which means that it would not be authorized to sell insurance in the state of Texas. This would subsequently have a material adverse effect on the Company’s consolidated results of operations and financial condition.
If the Reciprocal fails to meet these conditions, its certificate of authority may be suspended which means that it would not be authorized to sell insurance in the state of Texas. This would subsequently have a material adverse effect on the Company’s consolidated results of operations and financial condition.
Moreover, the payment card networks could adopt new operating rules or interpret or reinterpret existing rules that we or our payment processors might find difficult or even impossible to comply with, or costly to implement. As a result, we could lose our ability to give consumers the option of using payment cards to make their payments.
Moreover, the payment card networks could adopt new operating rules or interpret or reinterpret existing rules that we or our payment processors might find difficult or even impossible to comply with, or costly to implement. As a result, we could lose our ability to give customers the option of using payment cards to make their payments.
TDI requires PIRE to meet specific conditions related to surplus, net written premium, and risk-based capital in order to maintain its certificate of authority. If PIRE fails to meet these conditions, its certificate of authority may be suspended which means that it would not be authorized to sell insurance in the state of Texas.
TDI requires the Reciprocal to meet specific conditions related to surplus, net written premium, and risk-based capital in order to maintain its certificate of authority. If the Reciprocal fails to meet these conditions, its certificate of authority may be suspended which means that it would not be authorized to sell insurance in the state of Texas.
This would subsequently have a material adverse effect on the Company’s consolidated results of operations and financial condition. Similarly, our wholly-owned, Cayman Islands-based captive reinsurer, Porticus Re, is subject to additional capital and other regulatory requirements imposed by the Cayman Islands Monetary Authority (“CIMA”).
This would subsequently have a material adverse effect on the Company’s consolidated results of operations and financial condition. Similarly, our wholly-owned, Cayman Islands-based captive reinsurer is subject to additional capital and other regulatory requirements imposed by the Cayman Islands Monetary Authority (“CIMA”).
Although our current remote work environment facilitates our ability to attract talent across a wider geographic base, we must adopt new techniques and tools to effectively train and integrate new hires and preserve our culture. As we grow and mature as a public company, we may find it difficult to maintain our corporate culture.
Although our current remote work environment facilitates our ability to attract talent across a wider geographic base, we must adopt new techniques and tools to effectively train and integrate new hires and preserve our culture. As we grow and mature as a public company, and expand to new geographies, we may find it difficult to maintain our corporate culture.
The value at which the contributed shares are carried on the statutory financial statements of HOA is subject to ongoing regulatory risks, including the following: Valuation of the contributed shares for purposes of HOA statutory financial statements remains subject to continuing oversight by the TDI, which may in the future require that the shares be recorded at a more steeply discounted value than TDI initially approved depending upon our results of operation and other future events, including excess losses incurred by the HOA insurance business due to severe weather events.
The value at which the contributed shares are carried on the statutory financial statements is subject to ongoing regulatory risks, including the following: Valuation of the contributed shares for purposes of the Reciprocal’s statutory financial statements remains subject to continuing oversight by the TDI, which may in the future require that the shares be recorded at a more steeply discounted value than TDI initially approved depending upon our results of operation and other future events, including excess losses incurred by the Reciprocal insurance business due to severe weather events.
Furthermore, reinsurance subjects PIRE to counterparty risk and may not be adequate to protect it against losses, which could have a material effect on results of our operations and financial condition. • The performance of PIRE’s and our reinsurance captive’s investment portfolios is subject to a variety of investment risks. • The financial strength ratings of PIRE and Homeowners of America (“HOA”), its insurance company subsidiary, could be downgraded. • Increases in parts, appliance and home system prices and other operating costs could adversely impact our business, financial position, results of operations and cash flows. 12 Table of Contents • The effects of emerging claim and coverage issues in the insurance industry are uncertain. • Failure to maintain PIRE’s risk-based capital at the required levels could adversely affect its ability to maintain regulatory authority to conduct business. • PIRE’s and our insurance captive’s loss reserves may be inadequate to cover actual losses. • PIRE and our reinsurance captive could be forced to sell investments to meet liquidity requirements. • Our results of operations and financial condition may be adversely affected due to limitations in the analytical models or changes in accessibility to such models used to assess and predict PIRE’s exposure to catastrophic losses. • A sustained decline in the price of our common stock would negatively impact HOA regulatory surplus, which may require it to raise additional funds to enable HOA to adhere to regulatory requirements and maintain its financial stability rating. • If the costs of providing services to PIRE are not controlled, our profitability could be materially adversely affected. • Our quarterly operating results may fluctuate in the future.
Furthermore, reinsurance subjects the Reciprocal to counterparty risk and may not be adequate to protect it against losses, which could have a material effect on results of our operations and financial condition. • The performance of the Reciprocal’s and our reinsurance captive’s investment portfolios is subject to a variety of investment risks. • The financial strength ratings of the Reciprocal and Homeowners of America (“HOA”), its insurance company subsidiary, could be downgraded. 12 Table of Contents • Increases in parts, appliance and home system prices and other operating costs could adversely impact our business, financial position, results of operations and cash flows. • The effects of emerging claim and coverage issues in the insurance industry are uncertain. • Failure to maintain the Reciprocal’s risk-based capital at the required levels could adversely affect its ability to maintain regulatory authority to conduct business. • The Reciprocal’s and our insurance captive’s loss reserves may be inadequate to cover actual losses. • The Reciprocal and our reinsurance captive could be forced to sell investments to meet liquidity requirements. • Our results of operations and financial condition may be adversely affected due to limitations in the analytical models or changes in accessibility to such models used to assess and predict the Reciprocal’s exposure to catastrophic losses. • Regulatory factors could, and a sustained decline in the price of our common stock would, negatively impact the Reciprocal’s statutory surplus, which may require it to raise additional funds to enable the Reciprocal to adhere to regulatory requirements and maintain its financial stability rating. • If the costs of providing services to the Reciprocal are not controlled, our profitability could be materially adversely affected. • Our quarterly operating results may fluctuate in the future.
In addition, although such agents/agencies are appointed as independent contractors with the authority to solicit and bind insurance policies on PIRE’s behalf, any misconduct on their part could have an adverse effect on our business, financial conditions, reputation and results of operations.
In addition, although such agents/agencies are appointed as independent contractors with the authority to solicit and bind insurance policies on the Reciprocal’s behalf, any misconduct on their part could have an adverse effect on our business, financial conditions, reputation and results of operations.
Reinsurers may become financially unsound by the time that they are called upon to pay amounts due, which may not occur for many years, in which case PIRE may have no legal ability to recover what is due to it under its agreement with such reinsurer.
Reinsurers may become financially unsound by the time that they are called upon to pay amounts due, which may not occur for many years, in which case the Reciprocal may have no legal ability to recover what is due to it under its agreement with such reinsurer.
If the financial strength ratings of PIRE and HOA were to be downgraded, our agents might find it more difficult to market our products or might choose to emphasize the products of other carriers and lenders, and would likely not accept insurance provided by PIRE and HOA as sufficient to protect their collateral.
If the financial strength ratings of the Reciprocal and HOA were to be downgraded, our agents might find it more difficult to market our products or might choose to emphasize the products of other carriers and lenders, and would likely not accept insurance provided by the Reciprocal and HOA as sufficient to protect their collateral.
Certain states require insurers, such as PIRE, to participate in various pools or risk sharing mechanisms or to accept certain classes of risk, regardless of whether such risks meet underwriting guidelines for voluntary business. Some states also limit or impose restrictions on the ability of an insurer to withdraw from certain classes of business.
Certain states require insurers, such as the Reciprocal, to participate in various pools or risk sharing mechanisms or to accept certain classes of risk, regardless of whether such risks meet underwriting guidelines for voluntary business. Some states also limit or impose restrictions on the ability of an insurer to withdraw from certain classes of business.
In addition, our ability to repurchase the 2026 Notes or 2028 Notes or to pay cash upon conversions of the notes may be limited by law, by regulatory authority or by agreements governing our future indebtedness. Our business may not continue to generate cash flow from operations in the future sufficient to service our indebtedness and make necessary capital expenditures.
In addition, our ability to repurchase the Notes or to pay cash upon conversions of the Notes may be limited by law, by regulatory authority or by agreements governing our future indebtedness. Our business may not continue to generate cash flow from operations in the future sufficient to service our indebtedness and make necessary capital expenditures.
If these independent contractors violate applicable law or if our policies and procedures in dealing with home services companies, consumers, service providers or other third parties fail to meet our standards or reflect our culture it could adversely affect our business, financial condition and results of operations.
If these independent contractors violate applicable law or if our policies and procedures in dealing with home services companies, customers, service providers or other third parties fail to meet our standards or reflect our culture it could adversely affect our business, financial condition and results of operations.
In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes, such as research tax credits, to offset its post-change income may be limited.
In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes, such as research tax credits, to offset its post-change income may be 31 Table of Contents limited.
If we require capital but cannot raise it or cannot obtain financing on acceptable terms, our business, financial condition, and results of operations may be materially adversely affected, and we may be unable to execute our long-term growth strategy or, if necessary, obtain the capital necessary to refinance our outstanding notes.
If we require capital but cannot raise it or cannot obtain financing on acceptable terms, our business, financial condition, and results of operations may be materially adversely affected, and we may be unable to execute our long-term growth strategy or, if necessary, obtain the capital necessary to refinance our outstanding debt.
You may not be able to resell your shares at an attractive price due to a number of factors such as those listed in “Risks Relating to Porch’s Business and Industry” and the following: • results of operations that vary from the expectations of securities analysts and investors; • results of operations that vary from those of the Company’s competitors; • changes in expectations as to the Company’s future financial performance, including financial estimates and investment recommendations by securities analysts and investors, and changes in expectations in PIRE’s financial performance; • declines in the market prices of stocks generally; • strategic actions by the Company or its competitors; • announcements by the Company or its competitors of significant contracts, acquisitions, joint ventures, other strategic relationships or capital commitments; • any significant change in the Company’s management; • changes in general economic or market conditions or trends in the Company’s industry or markets; • changes in business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable to the Company’s business; • future sales of the Company’s common stock or other securities; • investor perceptions or the investment opportunity associated with the Company’s common stock relative to other investment alternatives; • the public’s response to press releases or other public announcements by the Company or third parties, including the Company’s filings with the SEC; • litigation involving the Company, the Company’s industry, or both, or investigations by regulators into the Company’s operations or those of the Company’s competitors; • guidance, if any, that the Company provides to the public, any changes in this guidance or the Company’s failure to meet this guidance; • additional dilution caused by the Company issuing additional equity, whether grants related to its Management Incentive Plan, stock provided to acquisitions as some or all of the purchase price, future fundraising events, or other issuances approved by the Company’s Board of Directors; • the sale of our shares held by HOA to unrelated parties or the deconsolidation of PIRE’s financial statements from our financial statements, at which point such shares would no longer be treated as treasury shares for financial reporting purposes, may be dilutive to earnings per share, will be entitled to vote and will count for quorum purposes, and in which case the Company may no longer be able to control the voting or investment decisions with respect to such shares; • the development and sustainability of an active trading market for the Company’s common stock; • actions by institutional or activist stockholders; • changes in accounting standards, policies, guidelines, interpretations or principles; and • other events or factors, including those resulting from natural disasters, war, acts of terrorism, other global health crises and pandemics, or responses to these events.
You may not be able to resell your shares at an attractive price due to a number of factors such as those listed in “Risks Relating to Porch’s Business and Industry” and the following: • results of operations that vary from the expectations of securities analysts and investors; • results of operations that vary from those of our competitors; • changes in expectations as to our future financial performance, including financial estimates and investment recommendations by securities analysts and investors, and changes in expectations in the Reciprocal’s financial performance; • declines in the market prices of stocks generally; • strategic actions by us or our competitors; • announcements by us or our competitors of significant contracts, acquisitions, joint ventures, other strategic relationships or capital commitments; • any significant change in our management; • changes in general economic or market conditions or trends in our industry or markets; • changes in business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable to our business; • future sales of our common stock or other securities; • investor perceptions or the investment opportunity associated with our common stock relative to other investment alternatives; • the public’s response to press releases or other public announcements by us or third parties, including our filings with the SEC; • litigation involving us, our industry, or both, or investigations by regulators into our operations or those of our competitors; • guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance; • additional dilution caused by the Company issuing additional equity, whether grants related to our incentive plan, stock provided to acquisitions as some or all of the purchase price, future fundraising events, or other issuances approved by our Board of Directors; • the sale of our shares held by the Reciprocal to unrelated parties or the deconsolidation of the Reciprocal’s financial statements from our financial statements, at which point such shares would no longer be treated as treasury shares for financial reporting purposes, may be dilutive to earnings per share, will be entitled to vote and will count for quorum purposes, and in which case we may no longer be able to control the voting or investment decisions with respect to such shares; • the development and sustainability of an active trading market for our common stock; • actions by institutional or activist stockholders; • changes in accounting standards, policies, guidelines, interpretations or principles; and • other events or factors, including those resulting from natural disasters, war, acts of terrorism, other global health crises and pandemics, or responses to these events.
If personal, confidential, or sensitive user information or property data that we maintain and store is breached or otherwise accessed by unauthorized persons, it may be costly to mitigate, and our reputation could be harmed. • Our brands and businesses are sensitive to general economic events, trends and conditions, including those related to, without limitation, the housing and financial markets, which impacts the demand and costs for a portion of our products and services. • We may be unable to access the capital markets when needed, which could adversely affect the ability to take advantage of business opportunities as they arise and to fund operations in a cost-effective manner. • We may fail to adequately protect our intellectual property rights or may be accused of infringing the intellectual property rights of third parties. • We operate an insurance business through a reciprocal exchange, Porch Insurance Reciprocal Exchange (“PIRE”).
If personal, confidential, or sensitive user information or property data that we maintain and store is breached or otherwise accessed by unauthorized persons, it may be costly to mitigate, and our reputation could be harmed. • Our brands and businesses are sensitive to general economic events, trends and conditions, including those related to, without limitation, the housing and financial markets, which impacts the demand and costs for a portion of our products and services. • We may be unable to access the capital markets when needed, which could adversely affect the ability to take advantage of business opportunities as they arise. refinance our outstanding debt, and fund operations in a cost-effective manner. • We may fail to adequately protect our intellectual property rights or may be accused of infringing the intellectual property rights of third parties. • We operate an insurance business through a reciprocal exchange, the Reciprocal.
If the actual amount of insured losses is greater than the amount reserved for these losses, the profitability of PIRE and our reinsurance captive could suffer. PIRE and our reinsurance captive could be forced to sell investments to meet liquidity requirements. PIRE and our reinsurance captive invest premiums until they are needed to pay policyholder claims.
If the actual amount of insured losses is greater than the amount reserved for these losses, the profitability of the Reciprocal and our reinsurance captive could suffer. The Reciprocal and our reinsurance captive could be forced to sell investments to meet liquidity requirements. The Reciprocal and our reinsurance captive invest premiums until they are needed to pay policyholder claims.
In addition, unfavorable trends in litigation could potentially result in the need to sell investments to fund these liabilities. PIRE and our reinsurance captive may not be able to sell their investments at favorable prices or at all, and such sales may not reflect the intrinsic value of the investment.
In addition, unfavorable trends in litigation could potentially result in the need to sell investments to fund these liabilities. The Reciprocal and our reinsurance captive may not be able to sell their investments at favorable prices or at all, and such sales may not reflect the intrinsic value of the investment.
Other restrictions under Texas law limit the total amount HOA may invest in an affiliate such as Porch Group, Inc., which could limit the portion of the contributed shares’ value that can be included as admitted assets on its statutory financial statements.
Other restrictions under Texas law limit the total amount the Reciprocal may invest in an affiliate such as Porch Group, Inc., which could limit the portion of the contributed shares’ value that can be included as admitted assets on its statutory financial statements.
The availability of reinsurance and its price are generally determined in the reinsurance market by conditions beyond our control and can be negatively impacted by such severe weather events and the effects of climate change, including, tornado 15 Table of Contents and hail events, hurricanes, extensive wildfires, drought, flooding and other catastrophes, and the frequency of such events, as well as the impacts of future global pandemics and other health crises, may harm the insurance business we manage and operate.
The availability of reinsurance and its price are generally determined in the reinsurance market by conditions beyond our control and can be negatively impacted by such severe weather events and the effects of climate change, including, tornado and hail events, hurricanes, extensive wildfires, drought, flooding and other catastrophes, and the frequency of such events, as well as the impacts of future global pandemics and other health crises, may harm the insurance business we manage and operate.
As a Texas domestic property and casualty insurer, HOA is subject to various regulatory requirements, including minimum surplus as regards to policyholders and requirements relating to the credit quality, liquidity and diversification of investments. The amount of surplus and investments maintained by HOA also impacts its financial stability rating.
As a Texas domestic property and casualty insurer, the Reciprocal is subject to various regulatory requirements, including minimum surplus as regards to policyholders and requirements relating to the credit quality, liquidity and diversification of investments. The amount of surplus and investments maintained by the Reciprocal also impacts its financial stability rating.
We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default the notes. The conditional conversion features of the 2026 Notes and 2028 Notes, if triggered, may adversely affect our financial condition and operating results.
We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default the Notes. The conditional conversion features of the Notes, if triggered, may adversely affect our financial condition and operating results.
Our brands and businesses operate in home-related product and service industries, which include insurance, mortgage software, title insurance software, warranty, moving services, inspection software, home repair, and marketing, financial and other software for home services companies; all of which are competitive, evolving, and some of which are highly regulated.
Our brands and businesses operate in home-related product and service industries, which include insurance, mortgage software, title insurance software, warranty, moving services, inspection software, home repair, data and analytics, and marketing, financial and other software for home services companies; all of which are competitive, evolving, and some of which are highly regulated.
Additionally, a significant increase in insurance claims and the cost of the claims by consumers who purchase our insurance could reduce PIRE’s access to reinsurance. These events have in the past and could in the future negatively affect the economy in general, and the housing and home services markets in particular.
Additionally, a significant increase in insurance claims and the cost of the claims by consumers who purchase our insurance could reduce the Reciprocal’s access to reinsurance. These events have in the past and could in the future negatively affect the economy in general, and the housing and home services markets in particular.
Any failure to maintain high-quality or responsive customer service, or a market perception that we do not maintain high-quality or responsive customer service, could harm our reputation, cause us to lose home services companies, consumers or service providers and adversely impact our ability to sell our products and services to prospective consumers.
Any failure to maintain high-quality or responsive customer service, or a market perception that we do not maintain high-quality or responsive customer service, could harm our reputation, cause us to lose home services companies, customers or service providers and adversely impact our ability to sell our products and services to prospective customers.
We may be unable to access the capital markets when needed, which could adversely affect the ability to take advantage of business opportunities as they arise, refinance our outstanding notes, and fund operations in a cost-effective manner.
We may be unable to access the capital markets when needed, which could adversely affect the ability to take advantage of business opportunities as they arise, refinance our outstanding debt, and fund operations in a cost-effective manner.
Further, there is additional risk in our ability to accurately forecast our operational and financial performance and provide earnings guidance as a result of evolving economic downturn, continued inflationary cost increases and uncertainty of frequency and severity of weather events and related claims.
Further, there is additional risk in our ability to accurately forecast our operational and financial performance and provide earnings guidance as a result of evolving economic downturn, continued inflationary cost increases and uncertainty of frequency and severity of catastrophic events and related claims.
If PIRE and HOA are unable to comply with such regulations, they may be precluded or temporarily suspended from carrying on some or all of the activities of their insurance businesses or otherwise be fined or penalized in a given jurisdiction.
If the Reciprocal and HOA are unable to comply with such regulations, they may be precluded or temporarily suspended from carrying on some or all of the activities of their insurance businesses or otherwise be fined or penalized in a given jurisdiction.
For example, the indenture governing the 2026 Notes requires us to repurchase the notes for cash upon the occurrence of a fundamental change (as defined in the indenture governing the 2026 Notes) of us and, in certain circumstances, to increase the conversion rate for a holder that converts their notes in connection with a make-whole fundamental change (as defined in the indenture governing the notes).
For example, the indenture governing the 2026 Notes and the indenture governing the 2030 Notes requires us to repurchase the 2026 Notes and 2030 Notes for cash upon the occurrence of a fundamental change (as defined in the applicable indenture) of us and, in certain circumstances, to increase the conversion rate for a holder that converts their notes in connection with a make-whole fundamental change (as defined in the applicable indenture).
In addition, HOA could be forced to sell shares if insurance regulatory authorities disallow the shares to be recorded as admitted assets on its statutory financial statements or require the shares to be recorded at a greater discount than initially approved by TDI.
In addition, the Reciprocal could be forced to sell shares if insurance regulatory authorities disallow the shares to be recorded as admitted assets on its statutory financial statements or require the shares to be recorded at a greater discount than initially approved by TDI.
Our credit risk may be exacerbated when collateral held by PIRE and our reinsurance captive is not sufficient to offset credit risk, changes in value, cannot be realized upon, or is liquidated at prices not sufficient to recover the full amount of the amount due.
Our credit risk may be exacerbated when collateral held by the Reciprocal and our reinsurance captive is not sufficient to offset credit risk, changes in value, cannot be realized upon, or is liquidated at prices not sufficient to recover the full amount of the amount due.
We cannot predict the extent to which PIRE and our reinsurance captive may experience future increases in claims costs. To the extent such costs increase, PIRE may be prevented, in whole or in part, from passing these cost increases through to our existing and prospective customers.
We cannot predict the extent to which the Reciprocal and our reinsurance captive may experience future increases in claims costs. To the extent such costs increase, the Reciprocal may be prevented, in whole or in part, from passing these cost increases through to our existing and prospective customers.
In addition, regardless of the quality or responsiveness of our customer service efforts, home services companies, consumers, service providers and commercial partners that are not satisfied with outcomes may choose to terminate, or not to renew, their relationships with us.
In addition, regardless of the quality or responsiveness of our customer service efforts, home services companies, customers, service providers and commercial partners that are not satisfied with outcomes may choose to terminate, or not to renew, their relationships with us.
In general, our consumers and our service providers agree to our customer terms and conditions by accessing our services online. However, some consumers or service providers who access our services only by phone, and consumers who come to us from third-party lead sources, may not click through to our terms and conditions.
In general, our customers and our service providers agree to our customer terms and conditions by accessing our services online. However, some customers or service providers who access our services only by phone, and customers who come to us from third-party lead sources, may not click through to our terms and conditions.
If consumers or service providers do not agree to our terms and conditions for any reason, we may face increased litigation risk, which could in turn adversely affect our business, financial condition and results of operations.
If customers or service providers do not agree to our terms and conditions for any reason, we may face increased litigation risk, which could in turn adversely affect our business, financial condition and results of operations.
If we do not keep pace with evolving online, market and industry trends, including the introduction of new and enhanced digital devices, use of artificial intelligence (“AI”), and changes in the preferences and needs of consumers and service providers generally, offer new and/or enhanced products and services in response to such trends that resonate with consumers and service providers, monetize products and services for mobile and other digital devices as effectively as our traditional products and services and/or maintain related systems, technology and infrastructure in an efficient and cost-effective manner, our business, financial condition and results of operations could be adversely affected.
If we do not keep pace with evolving online, market and industry trends, including the introduction of new and enhanced digital devices, use of AI, and changes in the preferences and needs of consumers and service providers generally, offer new and/or enhanced products and services in response to such trends that resonate with consumers and service providers, monetize products and services for mobile and other digital devices as effectively as our traditional products and services and/or maintain related systems, technology and infrastructure in an efficient and cost-effective manner, our business, financial condition and results of operations could be adversely affected.
Loss reserves are estimates of the ultimate cost of claims and do not represent a precise calculation of any ultimate liability of PIRE or our reinsurance captive. These estimates are based on the analysis of historical loss development patterns and on estimates of current labor and material costs.
Loss reserves are estimates of the ultimate cost of claims and do not represent a precise calculation of any ultimate liability of the Reciprocal or our reinsurance captive. These estimates are based on the analysis of historical loss development patterns and on estimates of current labor and material costs.
The current rating agency used for PIRE and HOA could go out of business or become unacceptable to partners of the insurance business we manage and operate, leaving the company without a rating until a new rating could be achieved with a different rating agency.
The current rating agency used for the Reciprocal and HOA could go out of business or become unacceptable to partners of the insurance business we manage and operate, leaving the company without a rating until a new rating could be achieved with a different rating agency.
Pursuant to the contribution transactions described in Note 8 of the Notes to Consolidated Financial Statements in “ Item 8.
Pursuant to the contribution transactions described in Note 10 of the Notes to Consolidated Financial Statements in “ Item 8.
Catastrophe models use historical information and scientific research about natural events, such as hurricanes and earthquakes, as well as detailed information about PIRE’s in-force business. This information is used in connection with pricing and risk management activities. However, since actual catastrophic events vary considerably, there are limitations with respect to its usefulness in predicting losses in any reporting period.
Catastrophe models use historical information and scientific research about natural events, such as hurricanes and earthquakes, as well as detailed information about the Reciprocal’s in-force business. This information is used in connection with pricing and risk management activities. However, since actual catastrophic events vary considerably, there are limitations with respect to its usefulness in predicting losses in any reporting period.
We are subject to credit risk arising from the financial soundness of counterparties, including PIRE’s and our reinsurance captive’s reinsurers, which may have a material adverse effect on our business, financial condition, and results of operations.
We are subject to credit risk arising from the financial soundness of counterparties, including the Reciprocal’s and our reinsurance captive’s reinsurers, which may have a material adverse effect on our business, financial condition, and results of operations.
Such increase in operating expenses, including contract claims costs, could have a material adverse impact on our consolidated business, financial position, results of operations and cash flows. Prices for raw materials, such as steel and fuel, are subject to market volatility and may be negatively affected by the application of tariffs on foreign goods.
Such increase in operating expenses, including contract claims costs, could have a material adverse impact on our business, financial position and results of operations. Prices for raw materials, such as steel and fuel, are subject to market volatility and may be negatively affected by the application of tariffs on foreign goods.
Consequently, PIRE and our reinsurance captive seek to manage the duration of their investment portfolios based on the duration of their losses and loss adjustment expenses payment cycles in order to ensure sufficient liquidity and to avoid having to unexpectedly liquidate investments, including the 18.3 million shares of Porch stock that HOA holds, to fund claims or increase surplus.
Consequently, the Reciprocal and our reinsurance captive seek to manage the duration of their investment portfolios based on the duration of their losses and loss adjustment expenses payment cycles in order to ensure sufficient liquidity and to avoid having to unexpectedly liquidate investments, including the 18.3 million shares of Porch stock that the Reciprocal holds, to fund claims or increase surplus.
Risks Relating to Compliance with Laws and Regulations, and Litigation The insurance businesses we manage and operate are subject to state governmental regulation, which could limit the growth of the insurance businesses and impose additional costs on PIRE and HOA.
Risks Relating to Compliance with Laws and Regulations, and Litigation The insurance businesses we manage and operate are subject to state governmental regulation, which could limit the growth of the insurance businesses and impose additional costs on the Reciprocal and HOA.
The indenture and security agreement and related documents governing our 2028 Notes contain, and instruments governing any future indebtedness of ours would likely contain, a number of covenants that impose significant operating and financial restrictions on us, including restrictions on our ability to, among other things: • create liens on certain assets; • incur or guarantee additional debt or issue redeemable equity; • pay dividends on, repurchase or make distributions on account of capital stock or make other restricted payments (including limiting cash used to make repurchases of our 2026 Notes to $50 million in the aggregate, of which we have $26.8 million remaining to use after repurchases made in fiscal 2024); • make certain unpermitted investments; • consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; and 37 Table of Contents • sell, transfer or otherwise convey certain assets.
The indenture and security agreement and related documents governing our 2028 Notes contain, and instruments governing any future indebtedness of ours would likely contain, a number of covenants that impose significant operating and financial restrictions on us, including restrictions on our ability to, among other things: • create liens on certain assets; 37 Table of Contents • incur or guarantee additional debt or issue redeemable equity; • pay dividends on, repurchase or make distributions on account of capital stock or make other restricted payments (including limiting cash used to make repurchases of our 2026 Notes to $50 million in the aggregate, of which we have $6.0 million remaining to use after repurchases made in fiscal 2025); • make certain unpermitted investments; • consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; and • sell, transfer or otherwise convey certain assets.
The conversion of some or all of our 2026 Notes or 2028 Notes may dilute the ownership interests of our stockholders. Upon conversion of the notes, we have the option to pay or deliver, as the case may be, cash, shares of our common stock, or a combination of cash and shares of our common stock.
The conversion of some or all of our Notes may dilute the ownership interests of our stockholders. Upon conversion of the Notes, we have the option to pay or deliver, as the case may be, cash, shares of our common stock, or a combination of cash and shares of our common stock.
The accounting method for reflecting the 2026 Notes and 2028 Notes on our balance sheet, accruing interest expense for the notes and reflecting the underlying shares of our common stock in our reported diluted earnings per share may adversely affect our reported earnings and financial condition.
The accounting method for reflecting the Notes on our balance sheet, accruing interest expense for the Notes and reflecting the underlying shares of our common stock in our reported diluted earnings per share may adversely affect our reported earnings and financial condition.
We also have relationships with commercial partners that provide us with data about consumers who may require a variety of home-related services early and throughout the homebuying and homeownership journey. There can be no assurances that we will continue to receive access to these customers and consumers relative to our competitors.
We also have 20 Table of Contents relationships with commercial partners that provide us with data about consumers who may require a variety of home-related services early and throughout the homebuying and homeownership journey. There can be no assurances that we will continue to receive access to these customers and consumers relative to our competitors.
If PIRE is unable to achieve market acceptance for the brand and product or grow or renew policies, the premium revenue of PIRE could be adversely affected, which could reduce our management fee and commission revenue.
If the Reciprocal is unable to achieve market acceptance for the brand and product or grow or renew policies, the premium revenue of the Reciprocal could be adversely affected, which could reduce our management fee and commission revenue.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeLeadership of these teams are professionals with cybersecurity expertise across multiple industries. Specifically, our Senior Information Security Manager leads our cybersecurity risk management function and is primarily responsible for assessing and managing our cybersecurity risk, with support from our Director of Information Technology and the Senior Director of Engineering.
Biggest changeSpecifically, our Senior Information Security Manager leads our cybersecurity risk management function and is primarily responsible for assessing and managing our cybersecurity risk, with support from our Senior Director of Information Technology, the Senior Director of Engineering, and the Executive Vice President of the Porch Platform.
We also consult with outside counsel as appropriate, including with respect to the materiality analysis for 45 Table of Contents disclosure matters. Our management also apprises our independent registered public accounting firm of cybersecurity incidents and developments.
We also consult with outside counsel as appropriate, including with respect to the materiality analysis for disclosure matters. Our management also apprises our independent registered public accounting firm of cybersecurity incidents and developments.
Item 1C. Cybersecurity Risk Management and Strategy We regularly assess risks from cybersecurity threats; monitor our information systems for potential vulnerabilities; and test those systems pursuant to our cybersecurity policies, processes, and practices, which are integrated into our overall risk management program.
Item 1C. Cybersecurity Risk Management and Strategy We regularly assess risks from cybersecurity threats; monitor our information systems for potential vulnerabilities; and test those systems pursuant to our cybersecurity policies, processes, and practices, which are integrated into our overall risk 44 Table of Contents management program.
These key performance indicators are metrics and measurements designed to assess the effectiveness of our cybersecurity program in the prevention, detection, mitigation, and remediation of cybersecurity incidents. Management is responsible for the day-to-day assessment and management of cybersecurity risks. Teams of IT, engineering, and information security professionals oversee cybersecurity risk management and mitigation, incident prevention, detection, and remediation.
These key performance indicators are metrics and measurements designed to assess the effectiveness of our cybersecurity program in the prevention, detection, mitigation, and remediation of cybersecurity incidents. 45 Table of Contents Management is responsible for the day-to-day assessment and management of cybersecurity risks.
Added
Teams of IT, engineering, and information security professionals oversee cybersecurity risk management and mitigation, incident prevention, detection, and remediation. Leadership of these teams are professionals with cybersecurity expertise across multiple industries.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed3 unchanged
Biggest changeItem 3. Legal Proceedings See Note 17, Commitments and Contingencies, in the notes to the consolidated financial statements included in Part II, “ Item 8. Financial Statements and Supplementary Data ” of this Annual Report, which is incorporated by reference into this Part I, Item 3, for a description of certain litigation and legal proceedings.
Biggest changeItem 3. Legal Proceedings See Note 19, Commitments and Contingencies, in the notes to the consolidated financial statements included in Part II, “ Item 8. Financial Statements and Supplementary Data ” of this Annual Report, which is incorporated by reference into this Part I, Item 3, for a description of certain litigation and legal proceedings.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−1 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosures 46 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 47 Item 6. Reserved 48 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 49 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 63 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 46 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 47 Item 6. Reserved 48 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 49 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 73 Item 8.
Removed
Financial Statements and Supplementary Data 65 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 119 Item 9A. Controls and Procedures 119 Item 9B. Other Information 122

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+4 added−3 removed1 unchanged
Biggest changeThe performance shown in the graph below is not intended to forecast or be indicative of future stock price performance. 47 Table of Contents December 31, 2020 2021 2022 2023 2024 Porch Group, Inc. $ 100 $ 109 $ 13 $ 22 $ 34 SP 500 Index 100 127 102 127 157 SP 500 IT Index 100 134 95 149 202 The performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, or otherwise subject to the liabilities under the Securities Act or Exchange Act, except to the extent that we specifically incorporate it by reference into such filing.
Biggest changeThe performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, nor shall such information be incorporated by reference into any future filing under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, or otherwise subject to the liabilities under the Securities Act or Exchange Act, except to the extent that we specifically incorporate it by reference into such filing.
The payment of cash dividends is subject to the discretion of our Board of Directors and may be affected by various factors, including our future earnings, financial condition, capital requirements, share repurchase activity, current and future planned strategic growth initiatives, levels of indebtedness and other considerations our Board of Directors may deem relevant.
In addition, the payment of cash dividends is subject to the discretion of our Board of Directors and may be affected by various factors, including our future earnings, financial condition, capital requirements, share repurchase activity, current and future planned strategic growth initiatives, levels of indebtedness and other considerations our Board of Directors may deem relevant.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock trades on the Nasdaq Capital Market under the symbol “PRCH.” Holders There were 529 stockholders of record as of February 18, 2025.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock trades on the Nasdaq Capital Market under the symbol “PRCH.” Holders There were 477 stockholders of record as of February 16, 2026.
The completed equity contributions from Porch to HOA were not registered under the Securities Act in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act Performance Graph The following graph depicts the total cumulative stockholder return on our common stock from December 31, 2020, through December 31, 2024, relative to the performance of the Standard & Poor’s 500 Index “S&P 500 ” and S&P 500 Information Technology Sector Index “S&P 500 IT.” The graph assumes an initial investment of $100.00 at the close of trading on December 31, 2020.
Performance Graph The following graph depicts the total cumulative stockholder return on our common stock from December 31, 2020, through December 31, 2025, relative to the performance of the Russell 2000 Index, which is a broad equity market index, and the S&P 500 Information Technology Sector Index (“S&P 500 IT”), which is a published industry index.
Our insurance company subsidiaries are highly regulated and are restricted by statute as to the amount of dividends they may pay without the prior approval of their respective regulatory authorities. Recent Sales of Unregistered Securities During 2024, we completed contributions totaling 18.3 million newly issued shares of our common stock to HOA.
The Reciprocal is highly regulated and is restricted by statute as to the amount of dividends it may pay without the prior approval of regulatory authorities. Recent Sales of Unregistered Securities None, other than as disclosed in the Company’s Form 8-K filed with the SEC on May 28, 2025.
Removed
These contributions supported the transition of Porch’s insurance underwriting business to a reciprocal exchange and helped to bolster HOA’s balance sheet strength and rating after the Texas May 2024 weather impacted surplus.
Added
The indenture and security agreement governing our 2028 Notes contain a number of covenants that impose significant operating and financial restrictions on us, including restrictions on our ability to, among other things, pay dividends on account of capital stock or make other restricted payments.
Removed
In addition, the contribution increased HOA’s long-term surplus position, which better positions HOA for any future third party surplus note capital raise, and is expected to support premium growth in 2025 and beyond. Should Porch’s share price increase going forward, this would increase HOA’s surplus net of regulatory and statutory limitations, thereby supporting higher premium levels.
Added
Previously, we compared the return on our common stock with the Standard & Poor’s 500 Index (“S&P 500”) broad equity market index. During 2025, we determined that the Russell 2000 Index is a more applicable comparison for our common stock due to our market capitalization.
Removed
While this increases HOA’s surplus, there is no impact to the consolidated financial statements for the year ended December 31, 2024.
Added
Due to the change in selected comparative indices, we are presenting the S&P 500 for the final time. The following graph and table assume an initial investment of $100 at the close of trading on December 31, 2020.
Added
The performance shown in the graph below is not intended to forecast or be indicative of future stock price performance. 47 Table of Contents December 31, 2020 2021 2022 2023 2024 2025 Porch Group, Inc. $ 100 $ 109 $ 13 $ 22 $ 34 $ 64 SP 500 Index (1) 100 127 102 127 157 182 SP 500 IT Index 100 133 95 148 201 248 Russell 2000 Index 100 114 89 103 113 126 ______________________________________ (1) Represents legacy comparative index that will be removed in future years.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

77 edited+135 added−76 removed28 unchanged
Biggest changeYear Ended December 31, 2024 2023 Net loss $ (32,829) $ (133,933) Interest expense 42,536 31,828 Income tax provision 2,117 622 Depreciation and amortization 25,522 24,415 Gain on extinguishment of debt (27,436) (81,354) Other income, net (1) (23,208) (3,893) Impairment loss on intangible assets and goodwill — 57,232 Loss (gain) on reinsurance contract (2) (1,324) 36,042 Impairment loss on property, equipment, and software — 254 Stock-based compensation expense 27,181 20,709 Mark-to-market gains (10,002) (1,003) Restructuring costs (3) 4,185 4,015 Acquisition and other transaction costs 429 552 Adjusted EBITDA (Loss) $ 7,171 $ (44,514) Adjusted EBITDA (Loss) Margin 2 % (10) % ______________________________________ (1) Difference from Other Income, net in Consolidated Statements of Operations and Comprehensive Loss is primarily due to a portion of the income resulting from the Aon business collaboration agreement, disclosed in Note 14, that is not a non-GAAP adjustment.
Biggest changeYear Ended December 31, 2025 2024 Amount Margin Amount Margin Net income (loss) $ 15,318 4% $ (32,829) (10)% Net loss (income) attributable to the Reciprocal (18,679) (4)% — —% Interest expense 51,476 12% 42,536 14% Income tax provision 366 —% 2,117 1% Depreciation and amortization 20,617 5% 25,522 8% Gain on extinguishment of debt (395) —% (27,436) (9)% Other income, net (7,483) (2)% (23,208) (7)% Loss (gain) on reinsurance contract — —% (1,324) —% Stock-based compensation expense 28,952 7% 27,181 9% Mark-to-market gains (15,666) (4)% (10,002) (3)% Restructuring and other costs 1,761 —% 4,185 1% Acquisition and other transaction costs 337 —% 429 —% Adjusted EBITDA (Loss) $ 76,604 18% $ 7,171 2% Porch Shareholder Interest Revenue $ 418,891 100% $ 313,275 100% Our segment operating and financial performance measures are Gross Profit and Adjusted EBITDA (Loss) for the Insurance Services, Software & Data, and Consumer Services segments.
The 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.
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.
In connection with the formation, we completed the sale of our homeowners insurance carrier, Homeowners of America (“HOA”), to PIRE for a purchase price equal to HOA’s estimated surplus at December 31, 2024, of approximately $105 million, less $58 million of principal and unpaid interest under a surplus note issued by HOA to Porch in 2023.
In connection with the formation, we completed the sale of our homeowners insurance carrier, Homeowners of America (“HOA”), to the Reciprocal for a purchase price equal to HOA’s estimated surplus at December 31, 2024, of approximately $105 million, less $58 million of principal and unpaid interest under a surplus note issued by HOA to Porch in 2023.
We believe the Attritional Loss Ratio is useful to investors and use this financial measure to reveal trends in our Gross Loss Ratio that may be obscured by catastrophe losses as such events cannot be accurately predicted and may cause our Gross Loss Ratio to vary significantly between periods as a result of their incidence of occurrence and magnitude.
We believe the Attritional Loss Ratio is useful to investors and use this financial measure to reveal trends in the Reciprocal’s Gross Loss Ratio that may be obscured by catastrophe losses as such events cannot be accurately predicted and may cause the Reciprocal’s Gross Loss Ratio to vary significantly between periods as a result of their incidence of occurrence and magnitude.
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 certain circumstances described in Note 7, Debt, of the Notes to Consolidated Financial Statements included in “ Item 8.
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 certain circumstances described in Note 9, Debt, of the Notes to Consolidated Financial Statements included in “ Item 8.
Any changes in estimates are reflected in operating results in the period in which the estimates are changed. Although management 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.
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.
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 53 Table of Contents price.
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.
Adjusted EBITDA We define Adjusted EBITDA (Loss) as net income (loss) adjusted for interest expense; income taxes; depreciation and amortization; gain or loss on extinguishment of debt; other expense (income), net; impairments of intangible assets and goodwill; loss on reinsurance contract; impairments of property, equipment, and software; stock-based compensation expense; mark-to-market gains or losses recognized on changes in the value of contingent consideration arrangements, earnouts, warrants, and derivatives; restructuring costs; acquisition and other transaction costs; and non-cash bonus expense.
Adjusted EBITDA (Loss) We define Adjusted EBITDA (Loss) as net income (loss) adjusted for net income (loss) attributable to the Reciprocal; interest expense; income taxes; depreciation and amortization; gain or loss on extinguishment of debt; other expense; other income; impairments of intangible assets and goodwill; gain or loss on reinsurance contract; impairments of property, equipment, and software; stock-based compensation expense; mark-to-market gains or losses recognized on changes in the value of contingent consideration arrangements, unexercised warrants, and derivatives; restructuring and other costs; acquisition and other transaction costs; and non-cash bonus expense.
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 per one 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 “Conversion Rate”).
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 per one 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”).
Financial Statements and Supplementary Data” of this Annual Report, for more information about recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent we have made one, of their potential impact on our financial condition and our results of operations.
Financial Statements and Supplementary Data” of this Annual Report, for more information about recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent we have made one, of their potential impact on our financial condition and our results of operations. 72 Table of Contents
We have adopted the industry-wide catastrophe classifications of storms and other events published by Insurance Services Office, Inc. (“ISO”) to track and report losses related to catastrophes. ISO classifies an event as a catastrophe when the event causes $25 million or more in direct losses. The following table reconciles Gross Loss Ratio to Attritional Loss Ratio.
The Reciprocal has adopted the industry-wide catastrophe classifications of storms and other events published by Insurance Services Office, Inc. (“ISO”) to track and report losses related to catastrophes. ISO classifies an event as a catastrophe when the event causes $25 million or more in direct losses. The following table reconciles Gross Loss Ratio to Attritional Loss Ratio.
In addition, these non-GAAP financial measures reflect the exercise of management judgment about which income and expense are included or excluded in determining these non-GAAP financial measures.
In addition, these non-GAAP financial measures reflect the exercise of management judgment about which income and expenses are included or excluded in determining these non-GAAP financial measures.
Based on our current operating and growth plan, management believes cash and cash equivalents at December 31, 2024, are sufficient to finance our operations, planned capital expenditures, working capital requirements and debt service obligations for at least the next 12 months.
Based on our current operating and growth plan, management believes cash and cash equivalents and liquid investments at December 31, 2025, are sufficient to finance our operations, planned capital expenditures, working capital requirements and debt service obligations for at least the next 12 months.
As of December 31, 2024, outstanding principal was $173.8 million. The 2026 Notes are redeemable at our option after September 20, 2024.
As of December 31, 2025, the outstanding principal was $7.8 million. The 2026 Notes are redeemable at our option after September 20, 2024.
Consequently, our ability to pay dividends and expenses is largely dependent on dividends or other distributions from our subsidiaries. Our insurance company subsidiaries are highly regulated and are restricted by statute as to the amount of dividends they may pay without the prior approval of their respective regulatory authorities.
Consequently, our ability to pay dividends and expenses is largely dependent on dividends or other distributions from our subsidiaries. The insurance industry is highly regulated, and insurance businesses are restricted by statute as to the amount of dividends they may pay without the prior approval of regulatory authorities.
These reserves include management’s estimate of the amounts for losses incurred but not reported (“IBNR”). IBNR is reviewed regularly using a variety of actuarial techniques. We update the reserve estimates as historical loss experience develops, additional claims are reported and/or settled and new information becomes available.
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.
Financial Statements and Supplementary Data” of this Annual Report. As disclosed in Note 1, Description of Business and Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements, the preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.
As disclosed in Note 1, Description of Business and Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements, the preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.
Net cash used in investing activities is primarily related to purchases of investments of $110.9 million and investments to develop internal use software of $12.3 million. This was partly offset by the cash inflows related to maturities and sales of investments of $67.8 million. Net cash used in investing activities was $56.3 million for the year ended December 31, 2023.
Net cash used in investing activities is primarily related to purchases of investments of $110.9 million and investments to develop internal-use software of $12.3 million. This was partly offset by the cash inflows related to maturities and sales of investments of $67.8 million.
We used a portion of the net proceeds from these 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.
We used a portion of the net proceeds from these 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. As of December 31, 2025, the outstanding principal was $333.3 million.
The 2028 Notes will mature on October 1, 2028, unless earlier repurchased, redeemed or converted. 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.
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.
These outflows of cash were partially offset by positive cash flow from the non-recurring cash receipt of $25 million related to the Aon agreement (see Note 14 in the Notes to the Consolidated Financial Statements). Net cash provided by operating activities was $33.9 million for the year ended December 31, 2023.
These outflows of cash were partially offset by positive cash flow from the non-recurring cash receipt of $25 million related to the Aon agreement (see Note 16 in the Notes to the Consolidated Financial Statements). Investing Cash Flows Net cash used in investing activities was $71.9 million for the year ended December 31, 2025.
These key performance measures and operating metrics are not prepared in accordance with GAAP and may not be comparable to or calculated in the same way as other similarly titled measures and metrics used by other companies. 49 Table of Contents The following table summarizes operating metrics for each of the periods indicated.
These key performance measures and operating metrics are not prepared in accordance with GAAP and may not be comparable to or calculated in the same way as other similarly titled measures and metrics used by other companies.
Monetized Services is defined as the total number of services from which we generated revenue, including, but not limited to, new and renewing insurance and warranty customers, completed moving jobs, security installations, TV/Internet installations or other home projects, measured over the period.
Consumer Services Monetized Services — We define Monetized Services as the total number of services from which we generated revenue, including, but not limited to, new and renewing warranty policies, completed moving jobs, sold security, TV/Internet or other home projects, measured over the period. This only includes services from Consumer Services segment and does not include insurance policies sold.
Segment Adjusted EBITDA (Loss) Segment Adjusted EBITDA (Loss) is defined as revenue less the following expenses associated with each segment: cost of revenue, selling and marketing, product and technology, general and administrative expenses, and provision for doubtful accounts. Segment Adjusted EBITDA (Loss) also excludes non-cash items or items that management does not consider reflective of ongoing core operations.
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.
Insurance regulators in the states in which we operate have a risk-based capital standard designed to identify property and casualty insurers that may be inadequately capitalized based on inherent risks of the insurer’s assets and liabilities and its mix of net written premium. Insurers falling below a calculated threshold may be subject to varying degrees of regulatory action.
Insurance regulators in the states in which the Reciprocal operates have a risk-based capital standard designed to identify property and casualty insurers, or reinsurers, that may be inadequately capitalized based on inherent risks of the insurer’s assets and liabilities and its mix of net written premium.
Actual results could differ materially from those estimates and assumptions, and those differences could be material to the consolidated financial statements. We believe that the following discussion addresses our most critical accounting estimates, which are those that are most important to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective, and complex judgments.
We believe that the following discussion addresses our most critical accounting 50 Table of Contents estimates, which are those that are most important to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective, and complex judgments.
Investment income and realized gains and losses, net of investment expenses Investment income and realized gains, net of investment expenses increased by $5.4 million from $8.3 million for the year ended December 31, 2023, to $13.7 million for the year ended December 31, 2024.
Investment income and realized gains and losses, net of investment expenses Investment income and realized gains, net of investment expenses decreased by $2.0 million from $13.7 million for the year ended December 31, 2024, to $11.7 million for the year ended December 31, 2025.
Contractual Obligations and Commitments In addition to debt service payments, our principal commitments consist of obligations under leases for office space. For more information regarding our lease obligations, see Note 13, Leases, of the Notes to Consolidated Financial Statements included in “ Item 8. Financial Statements and Supplementary Data” of this Annual Report.
For more information regarding our lease obligations, see Note 15, Leases, of the Notes to Consolidated Financial Statements included in “ Item 8. Financial Statements and Supplementary Data” of this Annual Report. In addition, we have a substantial level of debt. For more information regarding our debt service obligations, see Note 9, Debt, of the Notes to Consolidated Financial Statements.
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.
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.
The purchase price was financed by a surplus note issued by PIRE to Porch, bringing the total surplus notes held by Porch to approximately $106 million. Following the sale, HOA became a wholly owned subsidiary of PIRE.
The purchase price was financed by a surplus note issued by the Reciprocal to Porch, bringing the total surplus notes held by Porch to approximately $106 million.
However, our definitions and methodology in calculating these non-GAAP measures may not be comparable to those used by other companies. In addition, we may modify the presentation of these non-GAAP financial measures in the future, and any such modification may be material.
However, our definitions and methodology in calculating these non-GAAP measures may not be comparable to those used by other companies.
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.
Thereafter, until the 65 Table of Contents 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 Notes In May 2025, we completed a series of privately negotiated refinancing transactions.
See Note 14 in the Notes to the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data” of this Annual Report. We may, at any time and from time to time, seek to retire or purchase our outstanding debt or equity through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise.
We may, at any time and from time to time, seek to retire or purchase our outstanding debt or equity through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise.
While this increases HOA’s surplus, there is no impact to the consolidated financial statements for the year ended December 31, 2024. Critical Accounting Estimates Our significant accounting policies, including the assumptions and judgment underlying them, are disclosed in Note 1, Description of Business and Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements in “ Item 8.
Critical Accounting Estimates Our significant accounting policies, including the assumptions and judgment underlying them, are disclosed in Note 1, Description of Business and Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements in “ Item 8. Financial Statements and Supplementary Data” of this Annual Report.
We expect to fund these obligations with cash flows from operations and cash on our balance sheet. We have made and expect to continue to make additional investments in our infrastructure to scale our operations and increase productivity.
For more information regarding our purchase commitments, see Note 19, Commitments and Contingencies, of the Notes to Consolidated Financial Statements. We expect to fund these obligations with cash flows from operations and cash on our balance sheet. We have made and expect to continue to make additional investments in our infrastructure to scale our operations and increase productivity.
Porch will manage and operate PIRE, providing services related, but not limited, to underwriting, policy renewal, risk management, insurance portfolio management, financial management, and setting investment guidelines. In addition, Porch will maintain PIRE’s books and records and be responsible for its accounting and financial reporting. In exchange for these services, Porch will receive commissions and fees.
Porch 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 addition, Porch maintains the Reciprocal’s books and records and is responsible for its 52 Table of Contents accounting and financial reporting. In exchange for these services, Porch receives commissions and fees.
In connection with the partial repurchase of the 2026 Notes in the year ended December 31, 2023, we recognized an $81.4 million gain on extinguishment of debt. See Note 7, Debt, of the Notes to Consolidated Financial Statements.
See Note 6 in the Notes to Consolidated Financial Statements. Gain on extinguishment of debt In connection with the repurchase of a portion of the 2026 Notes, we recognized a $27.4 million gain on extinguishment of debt during the year ended December 31, 2024, compared to less than $0.4 million during the year ended December 31, 2025.
Net cash used in investing activities is primarily related to purchases of investments of $91.0 million and investments to develop internal use software of $9.2 million. This was partly offset by the cash inflows related to maturities and sales of investments of $46.8 million.
Net cash used in investing activities is primarily related to purchases of investments of $148.3 million and investments to develop internal-use software of $13.9 million. This was partly offset by the cash inflows related to maturities and sales of investments of $89.6 million. Net cash used in investing activities was $45.1 million for the year ended December 31, 2024.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2023 Annual Report on Form 10-K as filed with the SEC on March 15, 2024, for the comparison of the results of operations for the years ended December 31, 2023 and 2022.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2024 Annual Report on Form 10-K as filed with the SEC on February 25, 2025, for the comparison of the results of operations for the years ended December 31, 2024 and 2023. 57 Table of Contents The following tables summarize operating results of the four segments as well as corporate expenses and eliminations.
We may not be able to obtain equity or additional debt financing in the future when needed or, if available, the terms may not be satisfactory to us or could be dilutive to its stockholders. Porch Group, Inc. is a holding company that transacts a majority of its business through operating subsidiaries, including insurance subsidiaries.
We may not be able to obtain equity or additional debt financing in the future when needed or, if available, the terms may not be satisfactory to us or could be dilutive to its stockholders.
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. Impairment of Goodwill We test goodwill for impairment annually or more frequently when events or changes in circumstances indicate the fair value of a reporting unit may be less than its carrying amount.
Impairment of 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 plan to enhance the consumer experience, our app and digital platform and integration of data platform across Porch, to invest in development of additional modules across all vertical software businesses and to enhance our corporate systems. 62 Table of Contents Recent Accounting Pronouncements See Note 1, Description of Business and Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements included in “ Item 8.
We plan to enhance the consumer experience, our app and digital platform and integration of data platform across Porch, to invest in development of additional modules across all vertical software businesses and to enhance our corporate systems.
You should not consider these non-GAAP financial measures in isolation, as a substitute to or superior to financial performance measures determined in accordance with GAAP.
In addition, we may modify the presentation of these non-GAAP financial measures in the future, and any such modification may be material. 68 Table of Contents You should not consider these non-GAAP financial measures in isolation, as a substitute to or superior to financial performance measures determined in accordance with GAAP.
Attritional Loss Ratio The Attritional Loss Ratio is calculated by deducting the Gross Loss Ratio related to catastrophic weather events from total Gross Loss Ratio. Catastrophic weather events include, without limitation, hurricanes, tornados, earthquakes, hailstorms, wildfires, high winds, and winter storms.
Catastrophic weather events include, without limitation, hurricanes, tornados, earthquakes, hailstorms, wildfires, high winds, and winter storms.
We aim to be the best homeowners insurance partner for homebuyers by helping with more than just insurance. We provide moving services and offer a full moving concierge through the Porch app. We help make moving easier and assist with other important services such as security, TV/Internet, and more.
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.
As of December 31, 2024, HOA held cash and cash equivalents of $112.5 million and investments of $167.6 million. Insurance companies in the United States are also required by state law to maintain a minimum level of policyholder’s surplus.
Insurance companies in the United States are required by state law to maintain a minimum level of policyholder’s surplus.
Since the date of our incorporation, we have not engaged in any off-balance sheet arrangements, as defined in the rules and regulations of the SEC. 61 Table of Contents The following table provides a summary of cash flow data for the years ended December 31, 2024 and 2023.
Since the date of our incorporation, we have not engaged in any off-balance sheet arrangements, as defined in the rules and regulations of the SEC. 64 Table of Contents Liquidity and Capital Resources of Porch Shareholder Interest The following table provides the components of cash and cash equivalents, restricted cash and cash equivalents, and investments of Porch Shareholder Interest.
As of December 31, 2024, our other contractual commitments associated with agreements that are enforceable and legally binding and that specify all significant terms were payments of $10.4 million due in the next 12 months and $3.8 million due thereafter. For more information regarding our purchase commitments, see Note 17, Commitments and Contingencies, of the Notes to Consolidated Financial Statements.
We also have certain non-cancellable purchase commitments primarily for data purchases. As of December 31, 2025, our other contractual commitments associated with agreements that are enforceable and legally binding and that specify all significant terms were payments of $5.6 million due in the next 12 months and $9.3 million due thereafter.
All significant intercompany accounts and transactions are eliminated in consolidation. Key Performance Measures and Operating Metrics In the management of these businesses, we identify, measure and evaluate various operating metrics. The key performance measures and operating metrics used in managing the businesses are discussed below.
Our cost control measures included centralizing administrative functions and shifting hiring to target lower-cost locations. Key Performance Measures and Operating Metrics In the management of these businesses, we identify, measure and evaluate various operating metrics. The key performance measures and operating metrics used in managing the businesses are discussed below.
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.
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.
The following table details the components of interest expense, on the Consolidated Statements of Operations and Comprehensive Loss: Year Ended December 31, 2024 2023 Contractual interest expense $ 24,047 $ 18,242 Amortization of debt issuance costs and discount 19,094 12,952 Capitalized Interest and Other (605) 634 Total interest expense $ 42,536 $ 31,828 Change in fair value of derivatives The derivative liability decreased by $5.9 million for the year ended December 31, 2024, compared to an increase of $4.3 million for the year ended December 31, 2023.
The following table details the components of interest expense, on the Consolidated Statements of Operations and Comprehensive Loss: Year Ended December 31, 2025 2024 Contractual interest expense $ 30,263 $ 24,046 Amortization of debt issuance costs and discount 22,060 19,081 Capitalized interest and other (751) (591) Total interest expense $ 51,572 $ 42,536 Change in fair value of private warrant liability The change in fair value of the private warrant liability was a loss of $4.0 million for the year ended December 31, 2025, and a gain of $0.7 million in the same period in 2024.
Financing Cash Flows Net cash used in financing activities was $23.7 million for the year ended December 31, 2024. Net cash used in financing activities is primarily related to the repurchase of the 2026 Notes of $23.4 million. Net cash provided by financing activities was $91.0 million for the year ended December 31, 2023.
These outflows were partially offset by $51.0 million in proceeds from the issuance of the 2030 Notes. Net cash used in financing activities was $23.7 million for the year ended December 31, 2024.
As a percentage of revenue, selling and marketing expenses represented 28% of revenue in the current year compared to 34% of revenue in the prior year.
The increase was primarily attributable to incentives to insurance agencies as part of our growth strategy, as well as increased marketing expenses related to new warranty products. As a percentage of revenue, selling and marketing expenses represented 29% of revenue in the current year compared to 28% of revenue in the prior year.
We have the option to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is 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.
Adjusted EBITDA (Loss) Margin is defined as Adjusted EBITDA (Loss) divided by total revenue. 58 Table of Contents The following table reconciles net loss to Adjusted EBITDA (Loss) for the periods presented (dollar amounts in thousands).
Adjusted EBITDA (Loss) Margin is defined as Adjusted EBITDA (Loss) divided by revenue. Adjusted EBITDA % of RWP is defined as Insurance Services Adjusted EBITDA divided by RWP. The following table reconciles Net income (loss) to Adjusted EBITDA (Loss) and Net income (loss) as a percentage of Porch Shareholder Interest Revenue to Adjusted EBITDA (Loss) Margin.
As a publicly traded company, we have relied on convertible debt as our primary source of capital.
As a publicly traded company, we have relied on convertible debt as our primary source of capital. As of December 31, 2025, and 2024, we had $475.1 million and $507.3 million, respectively, of aggregate principal amount outstanding in convertible notes and promissory notes.
Year Ended December 31, 2024 2023 $ Change % Change Net cash provided by (used in) operating activities $ (31,682) $ 33,929 $ (65,611) (193) % Net cash used in investing activities (45,061) (56,253) 11,192 (20) % Net cash provided by (used in) financing activities (23,707) 90,951 (114,658) (126) % Change in cash, cash equivalents and restricted cash and cash equivalents $ (100,450) $ 68,627 $ (169,077) (246) % Operating Cash Flows Net cash used in operating activities was $31.7 million for the year ended December 31, 2024.
Year Ended December 31, 2025 2024 $ Change % Change Net cash provided by (used in) operating activities $ 66,419 $ (31,682) $ 98,101 (310) % Net cash used in investing activities (71,921) (45,061) (26,860) 60 % Net cash used in financing activities (22,169) (23,707) 1,538 (6) % Change in cash, cash equivalents and restricted cash and cash equivalents $ (27,671) $ (100,450) $ 72,779 (72) % Operating Cash Flows Net cash provided by operating activities was $66.4 million for the year ended December 31, 2025.
The value is driven by various factors, including the fair value of the underlying debt and the assumptions regarding timing of possible repurchase events. See Note 4 in the Notes to Consolidated Financial Statements.
Change in fair value of derivatives The derivative liability decreased by $19.6 million for the year ended December 31, 2025, compared to a decrease of $5.9 million for the year ended December 31, 2024. The value is driven by various factors, including the fair value of the underlying debt and the assumptions regarding timing of possible repurchase events.
Non-GAAP Financial Measures This Annual Report includes non-GAAP financial measures, such as Adjusted EBITDA (Loss), Adjusted EBITDA (Loss) as a percent of revenue, and Attritional Loss Ratio.
See Non-GAAP Financial Measures section. This table reconciles these non-GAAP measures to the nearest GAAP measures in the “Consolidated” column. Non-GAAP Financial Measures This Annual Report includes non-GAAP financial measures, such as Adjusted EBITDA (Loss), Adjusted EBITDA (Loss) Margin, Adjusted EBITDA % of RWP, Attritional Loss Ratio, and certain amounts related to Porch Shareholder Interest.
Our Vertical Software segment’s Adjusted EBITDA (Loss) was $16.0 million for the year ended December 31, 2024, which improved compared to prior year due to pricing increases and strong cost control, including a reduction in workforce and stronger emphasis on our more profitable services in our moving business.
The gross profit improvement correlated with the increase in Software & Data segment revenue. Software & Data Adjusted EBITDA was $18.9 million for the year ended December 31, 2025, which improved compared to prior year due to strong cost control, including a reduction in workforce, lower professional fees, and lower rent expense.
Vertical Software — Our Vertical Software segment provides software and services to customers, including but are not limited to inspection, mortgage, title, roofing, and contractor companies on a subscription and transactional basis. These accounted for 60% of total Vertical Software segment revenue in 2024.
Software & Data — 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.
Policies in Force — We define Policies in Force as the number of in-force policies at the end of the period for the Insurance segment, including policies and warranties written by us and policies and warranties written by third parties for which we earn a commission.
Reciprocal Policies Written — We define Reciprocal Policies Written as the number of new and renewal insurance policies written during the period by the Reciprocal Segment.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Business Overview Porch Group, Inc., together with its consolidated subsidiaries, (“Porch Group,” “Porch,” the “Company,” “we,” “our,” “us”) is a new kind of homeowners insurance company.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Page Business Overview 49 Basis of Presentation 50 Critical Accounting Estimates 50 Recent Developments 52 Results of Operations 53 Consolidated Results of Operations 54 Porch Shareholder Interest Results (Non-GAAP) 60 Key Performance Measures and Operating Metrics 63 Liquidity and Capital Resources 64 Non-GAAP Financial Measures 68 Contractual Obligations and Commitments 72 Recent Accounting Pronouncements 72 Business Overview 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.
Adjusted EBITDA (Loss) for the year ended December 31, 2024, was $7.2 million, a $51.7 million improvement from Adjusted EBITDA (Loss) of $(44.5) million for the same period in 2023.
Adjusted EBITDA (Loss) Adjusted EBITDA (Loss) for the year ended December 31, 2025, was $76.6 million, a $69.4 million improvement from $7.2 million for 2024. The year-over-year improvement was primarily attributable to the shift in the business model from 56 Table of Contents carrier to the manager of the Reciprocal, producing higher margin management fees.
Additionally, if more than $30.0 million aggregate principal amount of 2026 Notes remain outstanding on June 14, 2026, the holders of the 2028 Notes have the right to require us to repurchase for cash on June 15, 2026, all or any portion of the 2028 Notes, in principal amounts of $1,000 or an integral multiple 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.
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.
Gross Written Premium — We define Gross Written Premium as the total premium written by our licensed insurance carrier(s) (before deductions for reinsurance); premiums from our home warranty offerings (for the face value of one year’s premium); and premiums of policies placed with third-party insurance companies for which we earn a commission.
Insurance Services Reciprocal Written Premium (“RWP”) — We define RWP as the total premium written by the Reciprocal for the face value of one year’s premium gross of cancellations, plus surplus contributions and policy fees, and before deductions for reinsurance in the period.
Business,” Strategic Growth Pillars, for more information about changes to our business in 2025. Basis of Presentation The consolidated financial statements and accompanying notes include the accounts of Porch Group, Inc., and its wholly owned subsidiaries and were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).
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.
Insurance segment revenue was $318.2 million for the year ended December 31, 2024, and represented 73% of total revenue for the same period. For the year ended December 31, 2023, Insurance segment revenue was $305.2 million or 71% of total revenue for the same period. The increase was mainly driven by increases in Annualized Premium per Policy of 31%.
The increase in revenue was driven by additional transaction volume of our Home Factors product and price increases of our title insurance software. For the year ended December 31, 2025, Software & Data segment gross profit was $67.2 million. For the year ended December 31, 2024, Software & Data segment gross profit was $65.4 million.
Other income, net Other income, net, increased by $24.8 million from $3.9 million for the year ended December 31, 2023, to $28.7 million for the year ended December 31, 2024. The increase is due to recoveries of losses on reinsurance contract of $15.7 million and gain on settlement of contingent consideration of $14.9 million.
Other income, net Total consolidated other income, net, including the Reciprocal decreased by $14.7 million from $28.7 million for the year ended December 31, 2024, to $14.0 million for the year ended December 31, 2025.
Total investments balance as of December 31, 2024, was $182.8 million compared to $139.2 million as of December 31, 2023. A higher investment balance was the primary reason for the increase in investment income.
Total investments balance as of December 31, 2025, was $248.7 million compared to $182.8 million as of December 31, 2024. While our investment balance increased year-over-year, we had lower market yields.
See Note 14 in the Notes to Consolidated Financial Statements for tabular presentation of premiums and net losses.
The trading prices of the 2026 Notes have increased since prior year. See Note 9 in the Notes to Consolidated Financial Statements.
As of December 31, 2024, and 2023, we had $507.3 million and $558.7 million, respectively, of aggregate principal amount outstanding in convertible notes, promissory notes, line of credit, term loan facility, and advance funding arrangement. 2026 Convertible Senior Notes In September 2021, we completed a private offering of $425.0 million aggregate principal amount of 0.75% Convertible Senior Notes due on September 15, 2026 (the “2026 Notes”).
December 31, 2025 December 31, 2024 Cash and cash equivalents of Porch Shareholder Interest $ 44,676 $ 46,526 Short-term investments of Porch Shareholder Interest 12,616 1,613 Long-term investments of Porch Shareholder Interest 55,412 13,509 Unrestricted cash, cash equivalents, and investments of Porch Shareholder Interest 112,704 61,648 Restricted cash and cash equivalents of Porch Shareholder Interest 8,503 28,244 All cash, cash equivalents, investments, and restricted cash and cash equivalents of Porch Shareholder Interest $ 121,207 $ 89,892 2026 Convertible Senior Notes In September 2021, we completed a private offering of $425.0 million aggregate principal amount of 0.75% Convertible Senior Notes due on September 15, 2026 (the “2026 Notes”).
Annualized Revenue per Policy — We define Annualized Revenue per Policy as quarterly revenue for the Insurance segment, divided by the number of Policies in Force in the Insurance segment, multiplied by four.
Annualized Average Revenue per Company — We define Annualized Average Revenue per Company as the revenue generated across the Software & Data segment in the period over the Average Number of Companies in the period, which is then annualized (for example, for a given quarter, multiplied by 4).
(2) See Note 14, Reinsurance, of the Notes to Consolidated Financial Statements included in “ Item 8. Financial Statements and Supplementary Data ” of this Annual Report. (3) Primarily consists of costs related to forming a reciprocal exchange.
Recent Accounting Pronouncements See Note 1, Description of Business and Summary of Significant Accounting Policies, of the Notes to Consolidated Financial Statements included in “ Item 8.
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. These repurchases reduced the outstanding principal on the 2026 Notes from $225.0 million as of December 31, 2023 to $173.8 million as of December 31, 2024.
As of December 31, 2025, the outstanding principal was $134.0 million. We used a portion of the net proceeds from these 2030 Notes to repurchase $47.5 million aggregate principal amount of 2026 Notes for $47.3 million in cash.
Year Ended December 31, 2024 2023 Gross Loss Ratio 65 % 69 % Less: Impact of losses due to catastrophic weather (43) % (35) % Attritional Loss Ratio 22 % 34 % 59 Table of Contents Liquidity and Capital Resources In our early years, we raised capital primarily through equity investments.
Year Ended December 31, 2025 2024 Gross Loss Ratio 27 % 65 % Less: Impact of losses due to catastrophic weather (10) % (43) % Attritional Loss Ratio 17 % 22 % Porch Shareholder Interest Certain amounts related to Porch Shareholder Interest are non-GAAP financial measures.
Insurance — Our Insurance segment provides consumers with insurance and warranty products to protect their homes, earning revenue through premiums collected on policies, policy fees and commissions. The Insurance segment includes Homeowners of America (“HOA”), a wholly owned insurance carrier, other insurance-related legal entities, Porch Warranty, and other warranty brands.
The Reciprocal Segment provides consumers with insurance to protect their homes, earning revenue primarily through premiums collected on policies. Porch manages and operates the Reciprocal for its subscribers, providing services related, but not limited, to underwriting, policy renewal, risk management, insurance portfolio management, financial management, and setting investment guidelines.
Removed
We differentiate and look to win in the massive and growing homeowners insurance opportunity by 1) advantaged underwriting utilizing unique property data, 2) being the best partner for homebuyers, and 3) providing more home protection.
Added
Our strategy is built on three differentiators that set us apart. 1. Advantaged Underwriting Through Proprietary Data 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. 2.
Removed
As a leader in the home software-as-a-service (“SaaS”) space, we’ve built deep relationships with approximately 29 thousand companies that are key to the home-buying transaction, such as home inspectors, title companies, and mortgage companies. These relationships provide us with early insights to United States (“U.S.”) homebuyers.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

10 edited+6 added−1 removed2 unchanged
Biggest changeThe following table details the interest expense recognized for both the 2026 and 2028 Notes: Year Ended December 31, 2024 2023 2022 Contractual interest expense for 2026 Notes $ 1,546 $ 2,142 $ 3,188 Contractual interest expense for 2028 Notes 22,500 15,688 — Amortization of debt issuance costs and discount for 2026 Notes 1,116 1,515 2,227 Amortization of debt issuance costs and discount for 2028 Notes 17,965 10,604 — Because the coupon rates are fixed, interest expense on the 2026 Notes and the 2028 Notes will not change if market interest rates increase.
Biggest changeYear Ended December 31, 2025 2024 2023 Contractual interest expense for 2026 Notes $ 594 $ 1,546 $ 2,142 Contractual interest expense for 2028 Notes 22,500 22,500 15,688 Contractual interest expense for 2030 Notes 7,169 — — Total contractual interest expense 30,263 24,046 17,830 Amortization of debt issuance costs and discount for 2026 Notes 428 1,116 1,515 Amortization of debt issuance costs and discount for 2028 Notes 21,453 17,965 10,604 Amortization of debt issuance costs for 2030 Notes 179 — — Total amortization of debt issuance costs and discount 22,060 19,081 12,119 Capitalized interest and other (751) (591) 1,879 Total interest expense $ 51,572 $ 42,536 $ 31,828 Because the coupon rates are fixed, interest expense on our debt will not change if market interest rates increase.
Our 0.75% Convertible Senior Notes due 2026 (the “2026 Notes”) had a principal balance of $173.8 million as of December 31, 2024, a fixed coupon rate of 0.75%, and an effective interest rate of 1.3%.
Our 0.75% Convertible Senior Notes due 2026 (the “2026 Notes”) had a principal balance of $7.8 million as of December 31, 2025, a fixed coupon rate of 0.75%, and an effective interest rate of 1.3%.
General economic factors beyond our control and changes in the global economic environment, specifically fluctuations in inflation, including access to credit under favorable terms, could result in lower revenues, higher costs, and decreased margins and earnings in the foreseeable future.
Inflation Risk General economic factors beyond our control and changes in the global economic environment, specifically fluctuations in inflation, including access to credit under favorable terms, could result in lower revenues, higher costs, and decreased 73 Table of Contents margins and earnings in the foreseeable future.
Interest Rate Risk The market risk inherent in our financial instruments and financial position represents the potential loss arising from adverse changes in interest rates. As of December 31, 2024, and 2023, we had interest-bearing debt of $507.3 million and $558.7 million, respectively.
Interest Rate Risk Debt The market risk inherent in our financial instruments and financial position represents the potential loss arising from adverse changes in interest rates. As of December 31, 2025, and 2024, we had interest-bearing debt of $475.1 million and $507.3 million, respectively.
Our 6.75% Senior Secured Convertible Notes due 2028 (the “2028 Notes”) had a principal balance of $333.3 million as of December 31, 2024 and 2023, a fixed coupon rate of 6.75%, and an effective interest rate of 17.9%. Interest expense includes both contractual interest expense and amortization of debt issuance costs and discount.
Our 6.75% Senior Secured Convertible Notes due 2028 (the “2028 Notes”) had a principal balance of $333.3 million as of December 31, 2025 and 2024, a fixed coupon rate of 6.75%, and an effective interest rate of 17.9%.
Other debt as of December 31, 2024, totaled $0.2 million and is variable-rate. As of December 31, 2024, our insurance segment has a $182.8 million portfolio of fixed income securities and an unrealized gain (loss) of $(5.4) million, as described in Note 3, Investments, of the Notes to Consolidated Financial Statements included in “ Item 8.
Investments As of December 31, 2025, Porch had a $68.0 million portfolio of fixed income securities and an unrealized gain (loss) of $0.7 million while the Reciprocal had a $180.6 million portfolio of fixed income securities and an unrealized gain (loss) of $0.2 million, as described in Note 5, Investments, of the Notes to Consolidated Financial Statements included in “ Item 8.
Our activities to date have been conducted in the United States. Other Risks We are exposed to a variety of market and other risks, including risks to the availability of funding sources, reinsurance providers, weather and other catastrophic hazard events, and specific asset risks. 64 Table of Contents
Other Risks We are exposed to a variety of market and other risks, including risks to the availability of funding sources, reinsurance providers, weather and other catastrophic hazard events, and specific asset risks. As the manager of the Reciprocal, our results of operations are tied to the growth and financial condition of the Reciprocal.
In addition, the effects of inflation on consumers’ budgets could result in the reduction of consumer spending habits, specifically in the move and post-move markets.
In addition, the effects of inflation on consumers’ budgets could result in the reduction of consumer spending habits, specifically in the move and post-move markets. If unable to take actions to effectively mitigate the effect of the resulting higher costs, our profitability and financial position could be materially and adversely impacted.
Financial Statements and Supplementary Data” of this Annual Report. In a rising interest rate environment, the portfolio would result in unrealized losses. As of December 31, 2024, accounts receivable and reinsurance balances due were $19.1 million and $92.3 million, respectively, were not interest-bearing assets, and are generally collected in less than 180 days.
Other As of December 31, 2025, accounts receivable balances were $11.3 million and $9.1 million for Porch and the Reciprocal, respectively, and reinsurance balance due for the Reciprocal was $37.7 million. These are not interest-bearing assets and are generally collected in less than 180 days. As such, we do not consider these assets to have material interest rate risk.
If unable to take actions to effectively mitigate the effect of the resulting higher costs, our profitability and financial position could be materially and adversely impacted. 63 Table of Contents Foreign Currency Risk There was no material foreign currency risk for the years ended December 31, 2024, 2023 and 2022.
Foreign Currency Risk There was no material foreign currency risk for the years ended December 31, 2025, 2024 and 2023. Our activities to date have been conducted in the United States.
Removed
As such, we do not consider these assets to have material interest rate risk. Inflation Risk We believe our operations have been negatively affected by inflation and the change in the interest rate environment.
Added
Our 9.00% convertible senior unsecured notes due in May 2030 (the “2030 Notes”) have a principal balance of $134.0 million as of December 31, 2025, a fixed coupon rate of 9.00%, and an effective interest rate of 9.2%. Interest expense includes both contractual interest expense and amortization of debt issuance costs and discount. The following table details the interest expense.
Added
Financial Statements and Supplementary Data” of this Annual Report. In a rising interest rate environment, the portfolio would result in unrealized losses. Surplus Note As of December 31, 2025, Porch held approximately $106 million of surplus notes due from the Reciprocal which pay interest of 9.75% plus SOFR.
Added
These surplus notes are included in the Reciprocal’s statutory surplus and are eliminated in Porch’s consolidated financial statements for GAAP reporting. A one-percent decrease in SOFR would have resulted in a net decrease in interest income to Porch of $1.1 million on an annualized basis.
Added
If any events occur that impair the Reciprocal's ability to grow or sustain its financial condition, including but not limited to reduced financial strength ratings, disruption in the independent agency relationships, significant catastrophe losses, or products not meeting customer demands, the Reciprocal could find it more difficult to retain its existing business and attract new business.
Added
A decline in the business of the Reciprocal almost certainly could have as a consequence a decline in the total premiums paid and a correspondingly adverse effect on the amount of the management fees we receive.
Added
We also have an exposure to a concentration of credit risk related to the unsecured receivables due from the Reciprocal for net management fee and other reimbursements. 74 Table of Contents

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