Q2 2026 Porch Group Inc Earnings Call

July 29, 2026

John Campbell: issued our press release and filed our related Form 8-K with SEC. The earnings release and today's presentation are available on our investor relations website at ir.porchgroup.com. Before we begin, I would like to review the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995, which provides important cautions regarding forward-looking statements.

John Campbell: We issued our press release and filed our related Form 8-K with SEC. The earnings release and today's presentation are available on our investor relations website at ir.porchgroup.com. Before we begin, I would like to review the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995, which provides important cautions regarding forward-looking statements.

Speaker #1: Our press release and filed our related Form 8K with SEC. The earnings release and today's presentation are available on our investor relations website at ir.porchgroup.com.

Speaker #1: Before we begin, I'd like to review the company's Safe Harbor statement within the meeting of the Private Securities Litigation Reform Act of 1995, which provides important cautious cautions regarding forward-looking statements.

Speaker #1: Today's discussion including responses to your questions reflect management's views as of today, July 29, 2026. We undertake no obligation to update or revise these remarks.

John Campbell: Today's discussion, including responses to your questions, reflect management's views as of today, 29 July 2026. We undertake no obligation to update or revise these remarks. We will make forward-looking statements that involve risks and uncertainties, and actual results may differ materially. Please refer to the information on this slide in our SEC filings for additional detail. We will also reference certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures are included in today's earnings release, available at ir.porchgroup.com.

Speaker #1: Good afternoon, and thank you for participating in Porch Group's second quarter 2026 conference call. Earlier today, we issued our press release and filed our related Form 8-K with the SEC.

Speaker #1: We will make forward-looking statements that involve risk and uncertainties and actual results may differ materially. Please refer to the information on this slide in our SEC filings for additional detail.

Speaker #1: The earnings release and today's presentation are available on our investor relations website at ir.porchgroup.com. Before we begin, I'd like to review the company's Safe Harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995, which provides important cautions regarding forward-looking statements.

Speaker #1: We will also reference certain non-GAAP financial measures, reconciliations to the most directly comparable GAAP measures are included in today's earnings release, available at ir.porchgroup.com.

Speaker #1: Replay of this webcast will be available shortly after the call. Again, on our investor relations site. Joining me here today are Matt Ehrlichman, Porch's CEO, Chairman, and Founder; Shawn Tabak, Porch's CFO; and Matthew Neagle, Porch's COO.

John Campbell: A replay of this webcast will be available shortly after the call, again on our investor relations site. Joining me here today are Matt Ehrlichman, Porch's CEO, Chairman and Founder, Shawn Tabak, Porch's CFO, and Matthew Neagle, Porch's COO. With that, I'll turn the call over to Matt for his key updates.

Speaker #1: Today's discussion, including responses to your questions, reflects management's views as of today, July 29, 2026. We undertake no obligation to update or revise these remarks.

Speaker #1: With that, I'll turn the call over to Matt for his key updates.

Speaker #2: Thank you, John. Good afternoon, everyone. Should be another fun call here today. We are pleased to report a fantastic second quarter. We again delivered results that exceeded expectations, and are raising guidance substantially across the board.

Matt Ehrlichman: Thank you, John. Good afternoon, everyone. It should be another fun call here today. We are pleased to report a fantastic Q2, where we again delivered results that exceeded expectations and are raising guidance substantially across the board. We generated positive net income attributable to Porch in the quarter and expect that to be true for the full year of 2026, 2027, and the years ongoing.

Speaker #1: We will also reference certain non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures are included in today's earnings release, available at ir.porchgroup.com.

Speaker #2: We generated positive net income attributed to Porch in the quarter, and expect that to be true for the full year 2026, 2027, and the years ongoing.

Speaker #1: Replay of this webcast will be available shortly after the call. Again, on our investor relations site. Joining me here today are Matt Ehrlichman, Porch's CEO, Chairman, and founder; Shawn Tabak, Porch's CFO; and Matthew Neagle, Porch's COO.

Speaker #2: I was excited to share this overall now with Q2 revenue growth, excluding the reciprocal at 23%, and adjusted EBITDA margin, excluding the reciprocal at 30%.

Matt Ehrlichman: I was excited to share this. Overall now with Q2 revenue growth, excluding the reciprocal at 23% and Adjusted EBITDA margin, excluding the reciprocal at 30%, we are now a Rule of 50 company. Insurance Services, our core, largest, and fastest-growing business stands out even more with 38% revenue growth and a 48% Adjusted EBITDA margin this quarter. Policy growth at our insurance business grew by the same 38% year over year. This is a big deal.

Matt Ehrlichman: I was excited to share this. Overall, now with Q2 revenue growth, excluding the reciprocal at 23% and Adjusted EBITDA margin, excluding the reciprocal at 30%, we are now a Rule of 50 company. Insurance Services, our core, largest, and fastest-growing business, stands out even more with 38% revenue growth and a 48% Adjusted EBITDA margin this quarter. Policy growth at our insurance business grew by the same 38% year over year. This is a big deal.

Speaker #1: With that, I'll turn the call over to Matt for his key updates.

Speaker #2: Thank you, John. Good afternoon, everyone. It should be another fun call here today. We are pleased to report a fantastic second quarter. We again delivered results that exceeded expectations, and are raising guidance substantially across the board.

Speaker #2: We are now a rule of 50 company. Insurance services, our core largest and fastest-growing business, stands out even more, with 38% revenue growth and a 48% adjusted EBITDA margin.

Speaker #2: We generated positive net income attributed to Porch in the quarter, and expect that to be true for the full year 2026, 2027, and the years ongoing.

Speaker #2: This quarter. Policy growth at our insurance business grew by the same 38% year over year. This is a big deal. Our insurance service business generates its economics-based yes on reciprocal written premium volume, but also meaningfully based on total number of policies given the policy fees that are charged to each policyholder.

Speaker #2: I was excited to share this. Overall now, with Q2 revenue growth, excluding the reciprocal, at 23%, and adjusted EBITDA margin, excluding the reciprocal, at 30%, we are now a rule of 50 company.

Matt Ehrlichman: Our Insurance Services business generates its economics based, yes, on reciprocal written premium volume, but also meaningfully based on total number of policies, given the policy fees that are charged to each policyholder. We manage to our financial results based both on premium and policy count, which I'm not sure is fully appreciated.

Speaker #2: Insurance services, our core, largest, and fastest-growing business, stands out even more with 38% revenue growth and a 48% adjusted EBITDA margin this quarter. Policy growth at our insurance business grew by the same 38% year over year.

Speaker #2: We manage to our financial results-based both on premium and policy count, which I'm not sure is fully appreciated. Incremental margins at insurance services are exceptional.

Matt Ehrlichman: Incremental margins at Insurance Services are exceptional, which you can see based on the fact that incremental revenues flowed almost fully into higher Adjusted EBITDA. For our entire company, Adjusted EBITDA, excluding the reciprocal, grew two and a half times year over year. The progress we've made on profitability is strengthening our balance sheet profile. We're announcing today increased 2026 guidance of $122 million of Adjusted EBITDA at the midpoint. This puts our leverage below three times this year.

Speaker #2: Which you can see based on the fact that incremental revenues flowed almost fully into higher adjusted EBITDA. For our entire company, adjusted EBITDA excluding the reciprocal grew 2.5 times year over year.

Speaker #2: This is a big deal. Our insurance service business generates its economics-based yes on reciprocal written premium volume, but also meaningfully based on total number of policies given the policy fees that are charged to each policyholder.

Speaker #2: The progress we've made on profitability is strengthening our balance sheet profile. We're announcing today increased 2026 guidance of 122 million dollars of adjusted EBITDA at the midpoint.

Speaker #2: We manage to our financial results-based both on premium and policy count, which I'm not sure is fully appreciated. Incremental margins at insurance services are exceptional.

Speaker #2: This puts our leverage below 3 times this year. The reciprocal is healthier than it's ever been, with statutory surplus growing quarter over quarter, and loss ratios that continue to be truly exceptional.

Matt Ehrlichman: The reciprocal is healthier than it's ever been, with statutory surplus growing quarter over quarter and loss ratios that continue to be truly exceptional. The key message is that the system is working. We've built a differentiated insurance platform with strong capacity, expanding distribution, and proprietary data, which creates a fundamental margin advantage relative to competitors. Q2 results were strong.

Speaker #2: Which you can see based on the fact that incremental revenues flowed almost fully into higher adjusted EBITDA. For our entire company, adjusted EBITDA, excluding the reciprocal, grew 2.5 times year over year.

Speaker #2: So the key message is that the system is working, we've built a differentiated insurance platform with strong capacity, expanding distribution, and proprietary data which creates a fundamental margin advantage relative to competitors.

Speaker #2: So Q2 results were strong. Shawn's going to dive in more deeply momentarily, but quickly, just a few highlights. Reciprocal written premium, or RWP, was 140 million dollars, up 16% year over year.

Matt Ehrlichman: Shawn's going to dive in more deeply momentarily, but quickly, just a few highlights. Reciprocal written premium or RWP was $140 million, up 16% year over year. H1 RWP landed right in line with our internal targets at the start of the year. We're managing this well toward our $600 million annual target while sustaining strong margin across the system, and doing so in a homeowners insurance market that is healthy but has softened. As I mentioned, written policies were up 38% year over year.

Speaker #2: First half RWP landed right in line with our internal targets at the start of the year. We're managing this well toward our 600 million dollar annual target, while sustaining strong margin across the system, and doing so in a homeowner's insurance market that is healthy but has softened.

Speaker #2: As I mentioned, written policies were up 38% year over year. These premium and policy volumes helped drive quarterly consolidated revenue of 141 million dollars, up 12% year over year, and our revenue excluding the reciprocal of 132 million dollars, up 23% year over year, with continued strong gross margins of 85% for this quarter.

Matt Ehrlichman: These premium and policy volumes helped drive quarterly consolidated revenue of $141 million, up 12% year over year, and our revenue, excluding the reciprocal of $132 million, up 23% year over year, with continued strong growth margins of 85% for this quarter. RWP flowed through to Insurance Services Adjusted EBITDA at a 32% conversion rate, demonstrating the strong incremental margins of this business.

Speaker #2: So Q2 results were strong. Shawn's going to dive in more deeply momentarily, but quickly, just a few highlights. Reciprocal written premium, or RWP, was $140 million, up 16% year over year.

Speaker #2: First half RWP landed right in line with our internal targets at the start of the year. We're managing this well toward our $600 million annual target, while sustaining strong margin across the system, and doing so in a homeowner's insurance market that is healthy but has softened.

Speaker #2: RWP flowed through to insurance services, adjusted EBITDA at a 32% conversion rate, demonstrating the strong incremental margins of this business. And in new view, RWP flowed through to company adjusted EBITDA excluding the reciprocal at a 28% conversion rate.

Matt Ehrlichman: In a new view, RWP flowed through to company Adjusted EBITDA, excluding the reciprocal, at a 28% conversion rate. That translated again to overall Adjusted EBITDA, excluding the reciprocal of $39 million, up two and a half times the prior year period. Q2 showed the earnings power of the model we've built, with premium volumes certainly translating into high margin earnings. Scaling our insurance business is straightforward. Statutory surplus creates capacity.

Speaker #2: That translated, again, to overall adjusted EBITDA excluding the reciprocal of 39 million dollars, up 2.5 times the prior year period. Q2 showed the earnings power of the model we built, with premium volume certainly translating into high margin earnings.

Speaker #2: RWP flowed through to insurance services, adjusted EBITDA, at a 32% conversion rate, demonstrating the strong incremental margins of this business. And a new view, RWP flowed through to company, adjusted EBITDA, excluding the reciprocal, at a 28% conversion rate.

Speaker #2: Scaling our insurance business is straightforward. Statutory surplus creates capacity, top of funnel consists of insurance agencies driving quote volume, and quotes convert to policies written in RWP.

Matt Ehrlichman: Top of funnel consists of insurance agencies driving quote volume, quotes convert to policies written in RWP. Over the next few slides, I'll walk through each piece of the growth engine and why we believe the foundation continues to strengthen. I'll start here with the result, which is the most important metric. In Q2, again, total reciprocal policies written, so across new and renewal, grew 38% year over year to 59,000.

Speaker #2: Over the next few slides, I'll walk through each piece of the growth engine and why we believe the foundation continues to strengthen. I'll start here with the result, which is the most important metric in Q2.

Speaker #2: That translated, again, to overall adjusted EBITDA, excluding the reciprocal, of 39 million dollars, up 2.5 times the prior year period. Q2 showed the earnings power of the model we've built, with premium volume certainly translating into high margin earnings.

Speaker #2: Again, total reciprocal policies written, so across new and renewal, grew 38% year over year to 59,000. We expect a rapid policy growth rate to continue throughout the year, ramping to more than 70,000 per quarter by year-end.

Matt Ehrlichman: We expect a rapid policy growth rate to continue throughout the year, ramping to more than 70,000 per quarter by year-end. We are well ahead of our start of year policy count expectations, with pricing slightly below due to a softer insurance market with competitors lowering prices. While price can move up or down based on market cycles, policy growth is the key, as it's the leading indicator of future growth as premium per renewing customer naturally increases.

Speaker #2: We are well ahead of our start-of-year policy count expectations, with pricing slightly below due to a softer insurance market with competitors lowering prices. While price can move up or down based on market cycles, policy growth is the key as it's the leading indicator of future growth as premium per renewing customer naturally increases.

Speaker #2: Again, total reciprocal policies written—just across new and renewal—grew 38% year over year to 59,000. We expect this rapid policy growth rate to continue throughout the year, ramping to more than 70,000 per quarter by year-end.

Speaker #2: There's substantial excess capital to support this level of growth. The reciprocal ended Q2 with statutory surplus of 170 million dollars, up meaningfully versus the prior year period.

Matt Ehrlichman: There's substantial excess capital to support this level of growth. The reciprocal ended Q2 with statutory surplus of $170 million, up meaningfully versus the prior year period. That's a strong outcome, particularly given Q2 is typically the seasonal period in Texas when weather activity most impacts surplus, and we did see some of that this quarter. The $43 million gained over the last year translates to more than $200 million of additional RWP capacity.

Speaker #2: That's a strong outcome, particularly given Q2 is typically the seasonal period in Texas, when weather activity most impacts surplus and we did see some of that this quarter.

Matt Ehrlichman: Overall, the reciprocal's Q2 statutory surplus supports over $800 million of premium. Including non-admitted assets, primarily the Porch shares owned by the reciprocal, it has the ability to support what's approaching $2 billion of premium. Looking ahead, the reciprocal surplus position gives us plenty of room to support our organic and inorganic growth goals. With capacity in place, the next driver is top of funnel through independent insurance agencies.

Speaker #2: Including non-admitted assets, primarily the port shares owned by the reciprocal, it has the ability to support what's approaching 2 billion dollars of premium. Looking ahead, the reciprocal's surplus position gives us plenty of room to support our organic and inorganic growth goals.

Speaker #2: That's a strong outcome, particularly given Q2 is typically the seasonal period in Texas, when weather activity most impacts surplus, and we did see some of that this quarter.

Speaker #2: So with capacity in place, the next driver is top of funnel through independent insurance agencies. We continue to increase the top of funnel with a land and expand strategy.

Speaker #2: The 43 million dollars gained over the last year translates to more than 200 million dollars of additional RWP capacity. Overall, the reciprocal's Q2 statutory surplus supports over 800 million dollars of premium, including non-admitted assets, primarily the port shares owned by the reciprocal, it has the ability to support what's approaching 2 billion dollars of premium.

Matt Ehrlichman: We continue to increase the top of funnel with a land and expand strategy. This is a key strategic proof point of the quarter. Producing agency branch locations grew 148% year-over-year, and quote volumes grew 87% year-over-year, and increased sequentially for the seventh straight quarter. That means we are significantly expanding the number of opportunities for us to win attractive low-risk business. The distribution engine is expanding and quote volumes continue to build, which sets a strong foundation for sustained premium growth. Looking ahead, we have a fraction of the total agencies, even in our largest markets, we certainly are in the early innings here. Moving down the funnel, conversion is the lever that turns quote volume into new customers and premium. As shown here, conversion remained meaningfully above prior year levels.

Speaker #2: This is a key strategic proof point of the quarter. Reducing agency branch locations grew 148% year over year, and quote volumes grew 87% year over year, an increase sequentially for the seventh straight quarter.

Speaker #2: That means we are significantly expanding the number of opportunities for us to win attractive, low-risk business. The distribution engine is expanding and quote volumes continue to build, which sets a strong foundation for sustained premium growth.

Speaker #2: Looking ahead, the reciprocal's surplus position gives us plenty of room to support our organic and inorganic growth goals. So with capacity in place, the next driver is top of funnel through independent insurance agencies.

Matt Ehrlichman: The distribution engine is expanding and quote volumes continue to build, which sets a strong foundation for sustained premium growth. Looking ahead, we have a fraction of the total agencies, even in our largest markets, we certainly are in the early innings here. Moving down the funnel, conversion is the lever that turns quote volume into new customers and premium. As shown here, conversion remained meaningfully above prior year levels.

Speaker #2: Looking ahead, we have a fraction of the total agencies, even in our largest markets, so we certainly are in the early innings here. Moving down the funnel, conversion is the lever that turns quote volume into new customers and premium.

Speaker #2: with a land and expand strategy. This is a key strategic proof point in the quarter. Reducing agency branch locations grew 148% year over year, and quote volumes grew 87% year over year, an increase sequentially for the seventh straight quarter.

Speaker #2: As shown here, conversion remained meaningfully above prior year levels, but we thought it would be helpful to see the impact when we refer to a softer market and how we can respond given our margin advantages.

Matt Ehrlichman: We thought it would be helpful to see the impact when we refer to a softer market, and how we can respond given our margin advantages. As you can see here, conversions stepped down a tick in May without actions on our side, simply due to competitors being more aggressive in their pricing, likely due to lower reinsurance costs. We responded with targeted pricing adjustments in specific areas, which resulted in improvements and re-acceleration of conversion rates in June. In Texas, our largest state, conversion reached high water marks in the final week of June, with broad-based improvement across the areas where we focused our actions. The risk for us is less about managing to our medium and even short-term growth goals. In fact, we have a big advantage in our ability to perform across market cycles.

Speaker #2: As you can see here, conversion stepped down a tick in May without actions on our side, simply due to competitors being more aggressive in their pricing, likely due to lower reinsurance costs.

Speaker #2: We responded with targeted pricing adjustments and specific areas, which resulted in improvements and re-acceleration of conversion rates in June. In Texas, our largest state, conversion reached high watermarks in the final week of June, with broad-based improvement across the areas where we focused our actions.

Speaker #2: So the risk for us is less about managing to our medium and even short-term growth goals. In fact, we have a big advantage in our ability to perform across market cycles.

Speaker #2: The risk is simply in a given month, the execution and filing time required. The fact that we delivered these results in this market with premium per new customer only down 4% year over year, in Q2, means that we are sustaining the well-above market margins that we've demonstrated.

Matt Ehrlichman: The risk is simply in a given month, the execution and filing time required. The fact we delivered these results in this market with premium per new customer only down 4% year-over-year in Q2 means that we are sustaining the well above market margins that we've demonstrated. Put all that together, we continue to see strong growth in RWP from new customers, which more than tripled year-over-year. We're adding new customers at a rapid rate, building a larger renewal base, and keeping premium per new customer relatively stable. With that, I'll turn it over to Shawn to cover the financials and guidance.

Speaker #2: So put all that together, we continue to see strong growth in RWP from new customers, which more than tripled year over year, we're adding new customers at a rapid rate, building a larger renewal base, and keeping premium per new customer relatively stable.

Speaker #2: So the risk for us is less about managing to our medium and even short-term growth goals. In fact, we have a big advantage in our ability to perform across market cycles.

Speaker #2: The risk is simply in a given month, the execution and filing time required. The fact that we delivered these results in this market, with premium per new customer only down 4% year over year, in Q2, means that we are sustaining the well-above market margins that demonstrated.

Speaker #2: With that, I'll turn it over to Shawn to cover the financials and guidance.

Speaker #3: Thank you, Matt. Good afternoon, everyone. One quick housekeeping item before I dive into the results. Following feedback, we've updated our reporting format. To provide more detail on our consolidated gap results, which include the reciprocal, we've also renamed Port Shareholder Interest to Porch Own Segments, for revenue gross profit and adjusted EBITDA, excluding the reciprocal.

Shawn Tabak: Thank you, Matt. Good afternoon, everyone. One quick housekeeping item before I dive into the results. Following feedback, we've updated our reporting format to provide more detail on our consolidated GAAP results, which include the reciprocal. We've also renamed Porch Shareholder Interest to Porch-Owned Segments for revenue, gross profit, and Adjusted EBITDA, excluding the reciprocal. We've done that to ensure clarity, and this is a naming change only. Now let's dive into the results. I'll start off with a high-level summary of our financials. In Q2, we saw strong results from the Insurance Services segment, which drove significant growth in Adjusted EBITDA. Policies written of 59,000 were up 38% year-over-year, driven by new customer additions. RWP of $140 million drove Adjusted EBITDA excluding the reciprocal of $39 million. That's growth of 150% year-over-year.

Speaker #3: We've done that to ensure clarity, and this is a naming change only. Now let's dive into the results. I'll start off with a high-level summary of our financials.

Speaker #2: With that, I'll turn it over to Shawn to cover the financials and guidance.

Speaker #3: In Q2, we saw strong results from the insurance services segment, which drove significant growth in adjusted EBITDA. Policies written a 59,000 were up 38% year over year, driven by new customer additions.

Speaker #3: RWP of 140 million dollars drove adjusted EBITDA excluding the reciprocal of 39 million dollars. That's growth of 150% year over year. Net income attributable to Port Shareholders was 6 million dollars, an important milestone for the business.

Speaker #3: We've done that to ensure clarity, and this is a naming change only. Now let's dive into the results. I'll start off with a high-level summary of our financials.

Shawn Tabak: Net income attributable to Porch shareholders was $6 million, an important milestone for the business. Overall, these results highlight the strong growth in our Insurance Services business and its operating leverage as RWP and policies scale. As our Insurance Services business has grown, it's become the clear engine of our earnings growth, as such, we'll highlight its performance in today's discussion. Now let's walk through revenue before we move into the segment results. Total consolidated GAAP revenue was $141 million, up 12% year over year. Revenue for the Porch-Owned Segments, excluding the reciprocal, was $132 million, up 23% year over year. Within that, Insurance Services delivered $93 million in revenue, up 38% year over year. Now let's dive into the segment results. Insurance Services is the segment driving the majority of our Adjusted EBITDA and Adjusted EBITDA growth.

Speaker #3: In Q2, we saw a strong result from the Insurance Services segment, which drove significant growth in adjusted EBITDA. Policies written at 59,000 were up 38% year over year, driven by new customer additions.

Speaker #3: Overall, these results highlight the strong growth in our insurance services business and its operating leverage as RWP and policies scale. As our insurance services business has grown, it's become the clear engine of our earnings growth, and as such, we'll highlight its performance in today's discussion.

Speaker #3: RWP of 140 million dollars drove adjusted EBITDA excluding the reciprocal up 39 million dollars. That's growth of 150% year over year. Net income attributable to Port Shareholders was 6 million dollars, an important milestone for the business.

Speaker #3: Now let's walk through revenue before we move into the segment results. Total consolidated gap revenue was 141 million dollars. Up 12% year over year.

Speaker #3: Revenue for the Porch Own Segments excluding the reciprocal was 132 million dollars, up 23% year over year. And within that, insurance services delivered 93 million dollars in revenue, up 38% year over year.

Speaker #3: Now, let's walk through revenue before we move into the segment results. Total consolidated GAAP revenue was $141 million, up 12% year over year.

Shawn Tabak: Revenue grew 38% year over year to $93 million, driven by higher fee-based revenue with higher policies written, RWP volume, and new customer additions. In the quarter, we saw 38% growth in policies written year over year, which was a 500 basis point acceleration from the Q1 growth rate. Gross profit was $81 million, up 40% year over year. Gross margins in this segment are strong and predictable at 87% for Q2. Insurance Services Adjusted EBITDA was $44 million, up 126% year over year. Adjusted EBITDA margin was 48%, compared to 29% in the prior year period, driven by operating leverage as RWP and policies written scale. Two notes here. First, as a reminder, the majority of the high margin management fee we charge is recognized upfront, but a portion is deferred over 18 months.

Speaker #3: Driven by higher fee-based revenue, with higher policies written RWP volume and new customer additions. In the quarter, we saw 38% growth in policies written year over year, which was a 500 basis point acceleration from the Q1 growth rate.

Speaker #3: Gross profit was 81 million dollars. Up 40% year over year. Gross margins in this segment are strong, and predictable. At 87% for Q2. Insurance services adjusted EBITDA was 44 million dollars, up 126% year over year.

Speaker #3: And now let's dive into the segment results. Insurance services is the segment driving the majority of our adjusted EBITDA and adjusted EBITDA growth. Revenue grew 38% year over year to 93 million dollars, driven by higher fee-based revenue with higher policies written RWP volume and new customer additions.

Speaker #3: Adjusted EBITDA margin was 48%, compared to 29% in the prior year period. Driven by operating leverage as RWP and policies written scale, two notes here.

Speaker #3: In the quarter, we saw 38% growth in policies written year over year, which was a 500 basis point acceleration from the Q1 growth rate.

Speaker #3: First, as a reminder, the majority of the high-margin management fee we charged is recognized upfront. But a portion is deferred over 18 months. Thus, while last year was year one of operating the reciprocal, 2026 is the first year where we benefit from that deferred revenue in corresponding margin.

Speaker #3: Gross profit was 81 million dollars, up 40% year over year. Gross margins in this segment are strong, and predictable, at 87% for Q2. Insurance services adjusted EBITDA was 44 million dollars, up 126% year over year.

Shawn Tabak: Thus, while last year was year one of operating the reciprocal, 2026 is the first year where we benefit from that deferred revenue and corresponding margin. Second, the margin improvement also reflects a roughly $3 million benefit from an expense true-up in the quarter, which we don't expect to recur. Overall, Insurance Services continues to demonstrate a very high margin profile with even higher incremental margins, given the largely fixed cost base. Shifting now to Software & Data, and Consumer Services segments, which overall were relatively flat year over year against the backdrop of a stagnant US housing market. Starting with Software & Data, revenue was $23 million. As a reminder, we sunset certain legacy home contractor SMB-focused products, which drove the year over year decline. Our inspection and title insurance software businesses remain solid despite the stagnant housing market. Gross profit was $17 million with gross margin of 75%.

Speaker #3: Second, the margin improvement also reflects a roughly 3 million dollar benefit from an expense true-up in the quarter, which we don't expect to recur.

Speaker #3: Adjusted EBITDA margin was 48%, compared to 29% in the prior year period. Driven by operating leverage as RWP and policies written scale, two notes here.

Speaker #3: Overall, insurance services continues to demonstrate a very high margin profile with even higher incremental margins given the largely fixed cost base. Shifting now to software and data and consumer services segments, which overall were relatively flat year over year, against the backdrop of a stagnant US housing market.

Speaker #3: First, as a reminder, the majority of the high-margin management fee we charge is recognized upfront. But a portion is deferred over 18 months. Thus, while last year was year one of operating the reciprocal, 2026 is the first year where we benefit from that deferred revenue in corresponding margin.

Speaker #3: Starting with software and data, revenue was 23 million dollars. As a reminder, we sunset certain legacy home contractor SMB-focused products which drove the year-over-year decline.

Speaker #3: Second, the margin improvement also reflects a roughly 3 million dollar benefit from an expense true-up in the quarter, which we don't expect to recur.

Speaker #3: Our inspection and title insurance software businesses remain solid, despite the stagnant housing market. Gross profit was 17 million dollars, with gross margin of 75%, adjusted EBITDA was 5 million dollars.

Shawn Tabak: Adjusted EBITDA was $5 million. Moving to Consumer Services, revenue was $18 million. Gross profit was $15 million with gross margin of 84%, and Adjusted EBITDA was $3 million. Turning to the reciprocal now, statutory surplus was better than our expectations, ending the period at $170 million, up 33% year over year and up 3% quarter over quarter. This is a strong result as the reciprocal typically incurs the most weather claims in Q2, including a $14 million storm in the quarter. Loss ratios remain strong. Gross loss ratio was 38%, and attritional loss ratio was 18% in Q2, reflecting continued pricing and underwriting discipline and a meaningful margin advantage. Finally, after selling 2.1 million Porch shares to Porch Group in Q2, the reciprocal now owns 16.2 million Porch shares, of which the majority of the value is considered non-admitted assets and incremental to statutory surplus.

Speaker #3: Moving to consumer services, revenue was 18 million dollars. Gross profit was 15 million dollars, with gross margin of 84%, and adjusted EBITDA was 3 million dollars.

Speaker #3: Starting with software and data, revenue was 23 million dollars, as a reminder, we sunset certain legacy home contractor SMB-focused products which drove the year-over-year decline.

Speaker #3: Turning to the reciprocal now, statutory surplus was better than our expectations, ending the period at 170 million dollars. Up 33% year over year, and up 3% quarter over quarter.

Speaker #3: This is a strong result as the reciprocal typically incurs the most weather claims in Q2. Including a 14 million dollar storm in the quarter.

Speaker #3: Moving to consumer services, revenue was 18 million dollars, gross profit was 15 million dollars, with gross margin of 84%, and adjusted EBITDA was 3 million dollars.

Speaker #3: Loss ratios remain strong, gross loss ratio was 38%, and attritional loss ratio was 18% in Q2, reflected continued pricing and underwriting discipline and a meaningful margin advantage.

Speaker #3: Turning to the reciprocal now, statutory surplus was better than our expectations, ending the period at $170 million, up 33% year over year and up 3% quarter over quarter.

Speaker #3: And finally, after selling 2.1 million Port shares to Porch Group in Q2, the reciprocal now owns 16.2 million Port shares, of which the majority of the value is considered non-admitted assets and incremental to statutory surplus.

Speaker #3: This is a strong result as the reciprocal typically incurs the most weather claims in Q2. Including a 14 million dollar storm in the quarter.

Speaker #3: Okay, moving on to the balance sheet, Porch ended Q2 with 127 million dollars in cash and investments, down slightly versus Q1, the decrease reflects the purchase of the 2.1 million Port shares during the period, along with 17 million dollars in interest expense and timing of working capital.

Shawn Tabak: Okay, moving on to the balance sheet. Porch ended Q2 with $127 million in cash and investments, down slightly versus Q1. The decrease reflects the purchase of the 2.1 million Porch shares during the period, along with $17 million in interest expense and timing of working capital, and all of that partially offset by Adjusted EBITDA generated in the period. As a reminder here, over time, we expect cash generated for Porch to track with Adjusted EBITDA excluding the reciprocal, minus the cash interest on our notes. Q2 was consistent with that framework. Adjusted EBITDA generation largely offset the biannual interest payment and the 2.1 million share purchase from the reciprocal. On the reciprocal side, it held cash and investments of $331 million at the end of Q2. Okay, shifting now to guidance.

Speaker #3: Loss ratios remain strong. Gross loss ratio was 38%, and attritional loss ratio was 18% in Q2, reflecting continued pricing and underwriting discipline and a meaningful margin advantage.

Speaker #3: And finally, after selling 2.1 million Port Shares to Porch Group in Q2, the reciprocal now owns 16.2 million Port Shares, of which the majority of the value is considered non-admitted assets and incremental to statutory surplus.

Speaker #3: And all of that partially offset by adjusted EBITDA generated in the period. As a reminder here, over time we expect cash generated for Port to track with adjusted EBITDA excluding the reciprocal minus the cash interest on our notes.

Speaker #3: Okay, moving on to the balance sheet, Porch ended Q2 with 127 million dollars in cash and investments, down slightly versus Q1, the decrease reflects the purchase of the 2.1 million Port Shares during the period, along with 17 million dollars in interest expense and timing of working capital.

Speaker #3: Q2 was consistent with that framework. Adjusted EBITDA generation largely offset the biannual interest payment and the 2.1 million share purchase from the reciprocal. On the reciprocal side, it held cash and investments of 331 million dollars at the end of shifting now to guidance, we're raising our guidance across the board, given the strong 2Q performance and outlook for the remainder of the year, driven by insurance services.

Speaker #3: And all of that partially offset by adjusted EBITDA generated in the period. As a reminder here, over time we expect cash generated for Ports to track with adjusted EBITDA excluding the reciprocal minus the cash interest on our notes.

Shawn Tabak: We're raising our guidance across the board given the strong Q2 performance and outlook for the remainder of the year driven by Insurance Services. We're increasing guidance for revenue excluding the reciprocal to a range of $506 million to $517 million. The midpoint of $512 million represents a 22% year-over-year growth rate, up from the 22% growth rate that was implied in the prior guidance midpoint. We're increasing guidance for gross profit, excluding the reciprocal, to a range of $419 million to $429 million, now representing 23% growth at the midpoint, up from 18% growth at the prior midpoint. We're increasing our guidance for Adjusted EBITDA, which excludes the reciprocal, to a range of $119 million to $125 million. The midpoint of $122 million represents a 59% year-over-year growth rate, up from 38% growth at the prior midpoint.

Speaker #3: We're increasing guidance for revenue excluding the reciprocal to a range of 506 million dollars to 517 million dollars. The midpoint of 512 million dollars represents a 22% year-over-year growth rate up from the 22% growth rate that was implied in the prior guidance midpoint.

Speaker #3: Q2 was consistent with that framework. Adjusted EBITDA generation largely offset the biannual interest payment and the 2.1 million share purchase from the Reciprocal. On the Reciprocal side, it held cash and investments of $331 million at the end of Q2.

Speaker #3: We're increasing guidance for gross profit excluding the reciprocal to a range of 419 million dollars to 429 million dollars. Now representing 23% growth at the midpoint, up from 18% growth at the prior midpoint.

Speaker #3: Okay, shifting now to guidance. We're raising our guidance across the board, given the strong Q2 performance and outlook for the remainder of the year, driven by insurance services.

Speaker #3: We're increasing our guidance for adjusted EBITDA, which excludes the reciprocal, to a range of 119 million dollars to 125 million dollars. The midpoint of 122 million dollars represents a 59% year-over-year growth rate up from 38% growth at the prior midpoint.

Speaker #3: Taking a step back, we started the year with adjusted EBITDA guidance of roughly 100 million dollars at the midpoint. Halfway through the year, we've delivered 59 million dollars of adjusted EBITDA excluding the reciprocal and in 6 months we've increased our guidance by more than 20 dollars 20 million dollars at the midpoint.

Shawn Tabak: Taking a step back, we started the year with Adjusted EBITDA guidance of roughly $100 million at the midpoint. Halfway through the year, we've delivered $59 million of Adjusted EBITDA excluding the reciprocal, and in six months, we've increased our guidance by more than $20 million at the midpoint. As Matt highlighted, we expect net income attributable to Porch shareholders to be positive for the full year and on a go-forward annual basis. The trend here is clear. Adjusted EBITDA is scaling, Insurance Services is driving operating leverage, and the business is moving into a profitable position. Quarter-to-quarter GAAP net income can still move with mark-to-market adjustments and other non-cash items, but that doesn't change the underlying trajectory. This positive net income milestone and overall earnings growth trajectory also translates to a strengthening and more durable financial profile.

Speaker #3: As Matt highlighted, we expect net income attributable to Port shareholders to be positive for the full year and on a go forward annual basis.

Speaker #3: The trend here is clear. Adjusted EBITDA is scaling, insurance services is driving operating leverage, and the business is moving into a profitable position. Quarter to quarter gap net income can still move with mark-to-market adjustments and other non-cash items, but that doesn't change the underlying trajectory.

Speaker #3: Taking a step back, we started the year with adjusted EBITDA guidance of roughly 100 million dollars at the midpoint. Halfway through the year, we've delivered 59 million dollars of adjusted EBITDA excluding the reciprocal, and in six months we've increased our guidance by more than 20 dollars, 20 million dollars at the midpoint.

Speaker #3: This positive net income milestone and overall earnings growth trajectory also translates to a strengthening and more durable financial profile. With our updated guidance, we expect our leverage ratio to be better than 3 times this year consistent with the 2 to 3 times target range we discussed in our 2024 investor day.

Speaker #3: As Matt highlighted, we expect net income attributable to Porch shareholders to be positive for the full year and on a go-forward annual basis. The trend here is clear.

Shawn Tabak: With our updated guidance, we expect our leverage ratio to be better than three times this year, consistent with the two to three times target range we discussed in our 2024 Investor Day. Now I'll hand it over to Matthew to provide a strategic update.

Speaker #3: Adjusted EBITDA is scaling, insurance services is driving operating leverage, and the business is moving into a profitable position. Quarter to quarter gap net income can still move with mark-to-market adjustments and other non-cash items, but that doesn't change the underlying trajectory.

Speaker #3: Now I'll hand it over to Matthew to provide a strategic update.

Speaker #1: Thank you, Shawn. I'll provide a brief operating update and then walk you through the key KPIs across our segments. Last quarter, we discussed AI, how we're using it at Porch today, how we plan to use it over time, and why we believe AI strengthens rather than threatens our position.

Matthew Neagle: Thank you, Shawn. I'll provide a brief operating update and walk you through the key KPIs across our segments. Last quarter, we discussed AI, how we're using it at Porch today, how we plan to use it over time, and why we believe AI strengthens rather than threatens our position. Today, I want to give a few concrete examples of how that is starting to show up operationally. We believe our proprietary data assets become more valuable as AI capabilities mature. Our data platform gives us unique insights on approximately 90% of US residential properties and early signals into 90% of US home buyers each month. Not only does AI allow us to accelerate the breadth and depth of our data platform, we are able to leverage it to better price and predict risk.

Speaker #3: This positive net income milestone and overall earnings growth trajectory also translates to a strengthening and more durable financial profile. With our updated guidance, we expect our leverage ratio to be better than three times this year consistent with the 2 to 3 times target range we discussed in our 2024 investor day.

Speaker #1: Today, I want to give a few concrete examples of how that is starting to show up operationally. We believe our proprietary data assets become more valuable as AI capabilities mature.

Speaker #1: Our data platform gives us unique insights on approximately 90,000 or sorry, 90% of US residential properties in early signals into 90% of US home buyers each month.

Speaker #3: Now I'll hand it over to Matthew to provide a strategic update.

Speaker #1: Thank you, Shawn. I'll provide a brief operating update, and then walk you through the key KPIs across our segments. Last quarter, we discussed AI—how we're using it at Porch today, how we plan to use it over time, and why we believe AI strengthens, rather than threatens, our position.

Speaker #1: Not only does AI allow us to accelerate the breadth and depth of our data platform, we are able to leverage it to better price and predict risk.

Speaker #1: In engineering, we are seeing broad adoption of AI tooling and productivity improvements, including a 2.4 times increase in lines of code changed and in merge requests created.

Matthew Neagle: In engineering, we are seeing broad adoption of AI tooling and productivity improvements, including a 2.4 times increase in lines of code changed and a 73% increase in merge requests created. Nearly all of our engineers leverage available tools to meaningfully accelerate their work. AI is helping identify and reduce underutilized compute resources across targeted cloud compute infrastructure, with net savings approaching 10%. Across UR, AI is improving product and support capabilities. In just one example, in our Porch Moving Group, we've shifted to AI-assisted call reviews, which is already having a measurable impact on conversion, and support is becoming faster, cheaper, and higher quality. These are just a few of many examples. Our company already looked at velocity as a competitive advantage versus our competitors, and the tools available only help us accelerate. Shifting gears to the Q2 insurance KPIs, the key operating story is volume growth.

Speaker #1: Today, I want to give a few concrete examples of how that is starting to show up operationally. We believe our proprietary data assets become more valuable as AI capabilities mature.

Speaker #1: Nearly all of our engineers leverage available tools to meaningfully accelerate their work. AI is helping identify and reduce underutilized compute resources across targeted cloud compute infrastructure with net savings approaching 10%.

Speaker #1: Our data platform gives us unique insights on approximately 90,000 or sorry, 90% of US residential properties in early signals into 90% of US home buyers each month.

Speaker #1: Not only does AI allow us to accelerate the breadth and depth of our data platform, we are able to leverage it to better price and predict risk.

Speaker #1: Across York, AI is approving product and support capabilities in just one example, and our moving group, we've shifted to AI assisted call reviews, which has already having a major impact on conversion and support is becoming faster cheaper and higher quality.

Speaker #1: In engineering, we are seeing broad adoption of AI tooling and productivity improvements, including a 2.4x increase in lines of code changed and a 73% increase in merge requests created.

Speaker #1: These are just a few of many examples our company already looked at velocity as a competitive advantage versus our competitors in the tools available when we help us accelerate.

Speaker #1: Nearly all of our engineers leverage available tools to meaningfully accelerate their work. AI is helping identify and reduce underutilized compute resources. Across targeted cloud compute infrastructure, we are seeing net savings approaching 10%.

Speaker #1: Shifting gears to the Q2 insurance KPIs, the key operating story is volume growth. We continue to expand the customer base at a strong growth rate with reciprocal policies written of approximately 59,000, growing 38% year-over-year reciprocal written premium was 140 million dollars and RWP per policy written was 2,383 dollars.

Speaker #1: Across yard, AI is approving product and support capabilities in just one example, and our moving group, we've shifted to AI-assisted call reviews, which has already having a major impact on conversion, and support is becoming faster cheaper and higher quality.

Matthew Neagle: We continue to expand the customer base at a strong growth rate, with reciprocal policies written of approximately 59,000, growing 38% year-over-year. Reciprocal written premium was $140 million, and RWP per policy written was $2,383. Similar to recent quarters, RWP per policy written was down year-over-year, given the mix shift toward a higher percentage of new customers versus higher-priced renewing customers. As Matt mentioned, the premium per new customer in Q2 declined only 4% year-over-year, which is the appropriate apples-to-apples comparison. The progress we've made in our Insurance Services business is clear to see in the financials and KPIs. There's more to the story. The most important point is that Insurance Services is not just getting bigger. It's becoming more scalable and more efficient. We continue to make progress across the various operations that support the insurance business.

Speaker #1: These are just a few of many examples our company already looked at velocity as a competitive advantage. Versus our competitors and the tools available, we help us accelerate.

Speaker #1: Similar to recent quarters, RWP per policy written was down year-over-year given the mix shift toward a higher percentage of new customers versus higher priced renewing customers.

Speaker #1: Shifting gears to the Q2 insurance KPIs, the key operating story is volume growth. We continue to expand the customer base at a strong growth rate, with reciprocal policies written of approximately 59,000, growing 38% year-over-year.

Speaker #1: As Matt mentioned, the premium per new customer in Q2 declined only 4% year-over-year. Which is the appropriate apples to apples comparison. The progress we've made in our insurance services business is clear to see in the financials and KPI.

Speaker #1: Reciprocal written premium was 140 million dollars and RWP per policy written was 2,383 dollars. Similar to recent quarters, RWP per policy written was down year-over-year given the mix shift toward a higher percentage of new customers versus higher priced renewing customers.

Speaker #1: KPIs. But there's more to the story. The most important point is that insurance services is not just getting bigger. It's becoming more scalable and more efficient.

Speaker #1: We continue to make progress across the various operations that support the insurance business. On pricing and underwriting, we are continuing to improve the precision of how we select price and manage risk.

Matthew Neagle: On pricing and underwriting, we are continuing to improve the precision of how we select price and manage risk. This matters because it supports disciplined growth, helping us compete for the right policies and maintaining attractive unit economics by avoiding bad risks. Our agency experience continues to improve. Here, we've seen a 30-point improvement in NPS, driven by our product investment, better support and responsiveness, and execution by our teams. We're continuing to invest in the technology behind our insurance workflows using automation and AI to improve velocity and increase efficiency across the organization. When you look at the quarter, the takeaway is more than the strong financial execution, but the deep investments we're making at the same time to set the business up for years of strong performance ahead.

Speaker #1: This matters because it supports discipline growth, helping us compete for the right policies and maintaining attractive unit economics by avoiding bad risks. Our agency experience continues to improve.

Speaker #1: KPIs. But there's more to the story. The most important point is that insurance services is not just getting bigger—it's becoming more scalable and more efficient.

Speaker #1: Here we've seen a 30 point improvement in NPS driven by our product investment, better support and responsiveness, and execution by our teams. We're continuing to invest in the technology behind our insurance workflows using automation and AI to improve velocity and increase efficiency across the organization.

Speaker #1: This matters because it supports discipline growth, helping us compete for the right policies and maintain attractive unit economics by avoiding bad risk. Our agency experience continues to improve.

Speaker #1: So when you look at the quarter, the takeaway is more than the strong financial execution. But the deep investments we're making at the same time to set the business up for years of strong performance ahead.

Speaker #1: Here, we've seen a 30-point improvement in NPS driven by our product investment, better support and responsiveness, and execution by our teams. We're continuing to invest in the technology behind our insurance workflows, using automation and AI to improve velocity and increase efficiency across the organization.

Speaker #1: Moving to software and data, and consumer services, both businesses remain tied to the US housing market, which continues to present a challenging backdrop. Our focus is straightforward, manage these businesses with discipline today, while continuing to strengthen the product and partnerships for a future market recovery.

Matthew Neagle: Moving to Software & Data and Consumer Services, both businesses remain tied to the US housing market, which continues to present a challenging backdrop. Our focus is straightforward. Manage these businesses with discipline today while continuing to strengthen the product and partnerships for a future market recovery. Starting with the Software & Data KPIs, the total number of companies served is approximately 19,000. The majority of the decline was driven by the previously discussed planned sunset of a legacy product that served roughly 4,000 small home service contractors. Annualized revenue per company increased 24% year over year to $4,926, reflecting the higher mix of larger, higher-value customers. In Consumer Services, the team continued building partnership momentum in advancing properties such as MovingPlace.com. For the quarter, Consumer Services had 84,000 monetized services with annualized revenue per monetized service of $216, growing 7% year over year, driven by upsell and cross-sell efforts.

Speaker #1: Starting with the software and data KPIs, the total number of companies served is approximately 19,000. The majority of the decline was driven by the previously discussed planned sunset of a legacy product that served roughly 4,000 small home service contractors.

Speaker #1: So, when you look at the quarter, the takeaway is more than the strong financial execution, but also the deep investments we're making at the same time to set the business up for years of strong performance ahead.

Speaker #1: Moving to software and data and consumer services, both businesses remain tied to the US housing market, which continues to present a challenging backdrop. Our focus is straightforward, manage these businesses with discipline today, while continuing to strengthen the product and partnerships for a future market recovery.

Speaker #1: Annualized revenue per company increased 24% year-over-year to 4,926 dollars. Reflecting the higher mix of larger higher value customers. In consumer services, the team continued building partnership momentum and advancing properties such as movingplace.com.

Speaker #1: For the quarter, consumer services had 84,000 monetized services, with annualized revenue per monetized service of 216 dollars. Growing 7% year-over-year driven by upsell and cross-sell efforts.

Speaker #1: Beyond the KPIs, we continue to make progress on the product and customer experience side of the business. In software and data, the home factors pipeline is progressing nicely with carriers of all sizes, testing the product with successful results.

Matthew Neagle: Beyond the KPIs, we continue to make progress on the product and customer experience side of the business. In Software & Data, the Home Factors pipeline is progressing nicely with carriers of all sizes, testing the product with successful results. In the quarter, ISN launched a redesigned order form and auto-provisioning for new inspectors. Last year, ISN rolled out AI defect detection, and usage has doubled across our core inspection software products. Importantly, customer satisfaction for our software products remains strong and improving. The latest NPS was 51 for inspection software, up 14% year over year, 61 for our Floify mortgage software, up 23%, and 71 for Rynoh, up 14%. That is encouraging in any environment, but especially against a housing market that remains near cyclical trough levels.

Speaker #1: In the quarter, ISN launched a redesigned order form and auto provisioning for new inspectors, and last year ISN rolled out AI defect detection and uses has doubled.

Speaker #1: Across our core inspection software products. Importantly, customer satisfaction for our software products remains strong and improving. The latest NPS was 51 for inspection software, up 14% year-over-year, 61 for our flow fine mortgage software, up 23%, and 71 for Rhino, up 14%.

Speaker #1: Testing of the product resulted in successful outcomes. In the quarter, ISN launched a redesigned order form and auto provisioning for new inspectors. Last year, ISN rolled out AI defect detection, and usage has doubled.

Speaker #1: That is encouraging in any environment, but especially against a housing market that remains near cyclical trough levels. We see additional opportunity to improve product value and customer experience.

Matthew Neagle: We see additional opportunity to improve product value and customer experience, which we believe can further strengthen our already strong market positions, including inspection, where we serve roughly half of the market, and title, where we have roughly 40% share. I'll now pass it back to Matt to wrap us up.

Speaker #1: Across our core inspection software products. Importantly, customer satisfaction for our software products remains strong and improving. The latest NPS was 51 for inspection software, up 14% year-over-year, 61 for our FloFi mortgage software, up 23%, and 71 for Rhino, up 14%.

Speaker #1: Which we believe can further strengthen our already strong market positions. Including inspection where we serve roughly half of the market and title where we have roughly 40% share.

Speaker #1: I'll now pass it back to Matt to wrap us up.

Speaker #2: Thank you, Matthew. Okay, I want to wrap up by briefly reinforcing the most important messages from today. First, we're executing well. We exceeded expectations across the board.

Matt Ehrlichman: Thank you, Matthew. Okay, I want to wrap up by briefly reinforcing the most important messages from today. First, we're executing well. We exceeded expectations across the board and raised our outlook. Adjusted EBITDA, excluding the reciprocal, is now $122 million at the midpoint and $125 million at the top end of guidance, driven by the very high incremental margins of our Insurance Services business. We are ahead of schedule in tracking to our medium-term target of $3 billion in premium, $2.3 billion in revenue, and $660 million in Adjusted EBITDA, excluding the reciprocal. Second, we are pleased with the progress on growth. As we mentioned, total policies written grew 38% year over year. Insurance Services similarly had 38% year over year revenue growth. The number of producing agency branches more than doubled, and statutory surplus through reciprocal is in a very strong position.

Speaker #2: Raised our outlook. Adjusted EBITDA excluding the reciprocal is now 122 million dollars at the midpoint and 125 million dollars at top end of guidance, driven by the very high incremental margins of our insurance services business.

Speaker #1: Which we believe can further strengthen our already strong market positions, including inspection, where we serve roughly half of the market, and title, where we have roughly a 40% share.

Speaker #2: We are ahead of schedule in tracking to our medium term target of 3 billion dollars in premium, 2.3 billion dollars in revenue, and 660 million dollars in adjusted EBITDA excluding the reciprocal.

Speaker #1: I'll now pass it back to Matt to wrap us up.

Speaker #2: Thank you, Matthew. Okay, I want to wrap up by briefly reinforcing the most important messages from today. First, we're executing well. We exceeded expectations across the board.

Speaker #2: Second, we are pleased with the progress on growth. As we mentioned, total policies written grew 38% year-over-year insurance services similarly had 38% year-over-year revenue growth.

Speaker #2: And raised our outlook. Adjusted EBITDA excluding the reciprocal is now 122 million dollars of the midpoint and 125 million dollars at top end of guidance, driven by the very high incremental margins of our insurance services business.

Speaker #2: The number of producing agency branches more than doubled. And statutory surplus the reciprocal is in a very strong position. And third, our financial profile has strengthened.

Matt Ehrlichman: Third, our financial profile has strengthened. We're now a Rule of 50 company. Our leverage ratio is better than 3x this year, and we delivered positive net income attributable to Porch in Q2, while expecting to remain positive for the full year. With that, John, please open the call for questions.

Speaker #2: We are ahead of schedule in tracking to our medium-term target of 3 billion dollars in premium, 2.3 billion dollars in revenue, and 660 million dollars in adjusted EBITDA, excluding the reciprocal.

Speaker #2: We're now a rule of 50 company. Our leverage ratio is better than 3X this year. And we would we delivered positive net income attributed attributable porch in Q2, while expecting to remain positive for the full year.

Speaker #2: Second, we are pleased with the progress on growth. As we mentioned, total policies written grew 38% year-over-year. Insurance Services similarly had 38% year-over-year revenue growth.

Speaker #2: With that, John was pleased open the call for questions.

Speaker #3: Thank you. Ladies and gentlemen, we'll now begin the question and answer session. At this time, I would like to remind everyone in order to ask a question, please press star followed by the number one on your telephone keypad.

Operator: Thank you. Ladies and gentlemen, we'll now begin the question and answer session. At this time, I would like to remind everyone, in order to ask a question, please press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. We'll pause for a moment to assemble the Q&A roster. Your first question comes from the line of Dan Kurnos with StoneX. Please go ahead.

Speaker #2: The number of producing agency branches more than doubled. And statutory surplus the reciprocal is in a very strong position. And third, our financial profile has strengthened.

Speaker #3: And if you would like to enjoy your question, press star one again. We'll pause for a moment, assemble the Q&A roster. Your first question comes from the line of Dan Kurness with Stonex.

Speaker #2: We're now a rule of 50 company. Our leverage ratio is better than 3X this year. And we delivered positive net income attributed to Porch in Q2, while expecting to remain positive for the full year.

Speaker #3: Please go ahead.

Speaker #1: Great, thanks. Good evening, everyone. Thanks for all the additional color tonight. Especially Matt refocusing on policy count. Can you just broaden your thoughts a little bit?

Dan Kurnos: Great, thanks. Good evening, everyone. Thanks for all the additional color tonight, especially Matt refocusing on policy count. Can you just broaden your thoughts a little bit? I really appreciate the slide in terms of the targeted actions you guys took. Just help us think through what you saw, how you guys reacted, and to what extent the market is dictating those choices and when you might choose to get more aggressive or not. You guys are in a rather enviable position from a margin perspective, and you have a lot of leeway.

Dan Kurnos [Equity Research Analyst: Great, thanks. Good evening, everyone. Thanks for all the additional color tonight, especially Matt refocusing on policy count. Can you just broaden your thoughts a little bit? I really appreciate the slide in terms of the targeted actions you guys took. Just help us think through what you saw, how you guys reacted, and to what extent the market is dictating those choices and when you might choose to get more aggressive or not. You guys are in a rather enviable position from a margin perspective, and you have a lot of leeway.

Speaker #2: With that, John, let's please open the call for questions.

Speaker #1: I mean, I really appreciate the slide in terms of sort of the targeted actions you guys took. So just help us think through what you saw, how you guys reacted, and to what extent, you know, the market is dictating those choices and when you might choose to get more aggressive or not.

Speaker #1: Because you guys are in a rather enviable position from a margin perspective, and you have a lot of leeway.

Speaker #3: Please go ahead.

Speaker #2: Yeah, thanks. Appreciate it. Yeah, the first point that you make is just a point we wanted to land, which is I'm not sure if, you know, folks have really understood and appreciated, you know, we've talked about how we generate revenue in a few different ways.

Matt Ehrlichman: Thanks. Appreciate it. The first point that you make is just the point we wanted to land, which is I'm not sure if folks have really understood and appreciated. We talked about how we generate revenue in a few different ways. Management fees and policy fees as examples, but the policy fees and really the count of policies is really impactful to our financial model. We just wanted to make sure that was clear to folks. In terms of conversion rate, you saw it on the graph, but it is interesting to see across different market cycles, conversion rates will naturally move up and down slightly. The advantage that we have is just because we have such better loss ratios than the market, we are able to manage against that.

Speaker #1: Great, thanks. Good evening, everyone. Thanks for all the additional color tonight. Especially Matt refocusing on policy count. Can you just broaden your thoughts a little bit?

Speaker #1: I mean, I really appreciate the slide in terms of sort of the targeted actions you guys took. So just help us think through what you saw, how you guys reacted, and to what extent the market is dictating those choices and when you might choose to get more aggressive or not.

Speaker #2: You know, management fees and policy fees as examples. But the policy fees and really the count of policies is really impactful to our financial model.

Speaker #2: And so we just wanted to make sure that was clear to folks. In terms of conversion rate, I mean, you saw it, you know, on the graph, but it is interesting to see, you know, across different market cycles, you know, conversion rates will naturally move up and down slightly.

Speaker #1: Because you guys are in a rather enviable position from a margin perspective, and you have a lot of leeway.

Speaker #2: Yeah, thanks. Appreciate it. Yeah, the first point that you make is just a point we wanted to lay on, which is I'm not sure if folks have really understood and appreciated.

Speaker #2: And the advantage that we have is just because we have such better loss ratios, then the market, you know, we are able to, you know, to manage against that.

Speaker #2: Yeah, we've talked about how we generate revenue in a few different ways—management fees and policy fees, as examples. But the policy fees, and really the count of policies, are really impactful to our financial model.

Speaker #2: And so I certainly was proud of the team's ability to kind of recognize, you know, changes in the elasticity curve of the conversion rates, be able to put new, you know, new actions in.

Matt Ehrlichman: I certainly was proud of the team's ability to recognize changes in the elasticity curve of the conversion rates, be able to put new actions in. Like I mentioned, really a fairly minor change, just that 4% year-over-year change in the premium per new customer, but to be able to respond quickly and ensure that we're managing to the outcomes we want to manage to for this year. I think you're right, Dan. There's a lot of runway ahead, and as I've talked about, we want to just stack year, after year, after year, after year of really strong, consistent growth while we're maximizing margin dollars within our growth goals. That's the playbook that we're executing against.

Speaker #2: And again, like I mentioned, really, I have a fairly minor change just that 4% year-over-year change in the premium per new customer. But to be able to respond quickly and ensure that we're managing to, you know, to the outcomes that we want to manage to, you know, for this year.

Speaker #2: And so we just wanted to make sure that was clear to folks. In terms of conversion rate, I mean, you saw it on the graph, but it is interesting to see across different market cycles, conversion rates will naturally move up and down slightly.

Speaker #2: I think you're right, and there's, you know, there's a lot of runway ahead. And as I've talked about, we want to just stack year after year after year after year, really strong consistent growth while we're maximizing margin dollars within our within our growth goals.

Speaker #2: And the advantage that we have is, just because we have such better loss ratios than the market, we are able to manage against that.

Speaker #2: And so I certainly was proud of the team's ability to kind of recognize changes in the elasticity curve of the conversion rates, be able to put new actions in.

Speaker #2: And that's, you know, that's the playbook that we're executing against.

Speaker #1: And then, if I could just follow up, just two secondary pieces. First, just any update on how Michigan is going, learnings there. You know, obviously, it's going to take a while to sort of prove out the data case, but just love an update.

Speaker #2: And again, like I mentioned, really I have a fairly minor change—just that 4% year-over-year change in the premium per new customer—but to be able to respond quickly and ensure that we're managing to the outcomes that we want to manage to.

Dan Kurnos: If I could just follow up, just two secondary pieces. First, just any update on how Michigan is going, learnings there. Obviously, it's going to take a while to sort of prove out the data case, but just love an update. You mentioned it yourself, you just added a little bit more to the surplus, especially in the statutory surplus, a phenomenal Q2, especially given timing and seasonality. Book rolls, M&A, any reason to get more aggressive or are you. I know you just finished telling me that you're trying to maximize margin dollars, but those all accrue, Matt, to Shareholder Interest. Just any thoughts there would be great.

Dan Kurnos [Equity Research Analyst: If I could just follow up, just two secondary pieces. First, just any update on how Michigan is going, learnings there. Obviously, it's going to take a while to sort of prove out the data case, but just love an update. You mentioned it yourself, you just added a little bit more to the surplus, especially in the statutory surplus, a phenomenal Q2, especially given timing and seasonality. Book rolls, M&A, any reason to get more aggressive or are you. I know you just finished telling me that you're trying to maximize margin dollars, but those all accrue, Matt, to Shareholder Interest. Just any thoughts there would be great.

Speaker #1: And you mentioned it yourself, you just added a little bit more to the surplus, especially in the statutory segment, a phenomenal 2Q, especially given timing and seasonality.

Speaker #2: For this year, I think you're right, Dan; there's a lot of runway ahead. And as I've talked about, we want to just stack year after year after year after year of really strong, consistent growth, while we're maximizing margin dollars within our growth goals.

Speaker #1: Book rolls, M&A, any reason to get more aggressive or are you, you know, I know you just finished telling me that, you know, you're trying to maximize margin dollars, but those all accrue, Matt, to shareholder interest.

Speaker #2: And that's the playbook that we're executing against.

Speaker #1: So just any thoughts there would be great.

Speaker #1: And then if I could just follow up, just two secondary pieces. First, just any update on how Michigan is going, learnings there. Obviously, this can take a while to sort of prove out the data case, but just love an update.

Speaker #2: Well, why don't I take the second one and Matthew, maybe you can give an update on Michigan. Is your home state after all? So give you give you the glory there.

Matt Ehrlichman: Well, why don't I take the second one, and Matthew, maybe you can give an update on Michigan. It is your home state after all, so give you the glory there. I'm not going to answer much of your question on M&A, of course, Dan, but I will say that there are lots of interesting opportunities. Our corporate development team has never been busier. It's part of our playbook. Just to be super clear, what we're managing to and what we've talked about in terms of our goals this year, those are our pure organic goals. If we were to do anything else, that would sit on top, certainly, in terms of what we'd look to do, and more to come in the right time, certainly, if there's something to share. Matthew, you want to hit on Michigan?

Speaker #2: The I'm not going to answer much of your question on M&A, of course, Dan, but I will say that there are lots of interesting opportunities.

Speaker #1: And you mentioned it yourself. You just added a little bit more to the surplus, especially in the statutory segment, a phenomenal 2Q, especially given timing and seasonality.

Speaker #2: You know, our corporate development team is, you know, never been busier. You know, it's part of our playbook. And so, like, what just to be super clear, what we're managing to and what we've talked about in terms of our goals this year those are our pure organic goals.

Speaker #1: Book rolls, M&A—any reason to get more aggressive, or are you—I know you just finished telling me that you're trying to maximize margin dollars, but those all accrue, Matt, to shareholder interest.

Speaker #2: So if we do anything else that would sit on top, you know, certainly in terms of what we'd look to do. And more to come as in the right time, you know, certainly.

Speaker #1: So just any thoughts there would be great.

Speaker #2: Well, why don't I take the second one, and Matthew, maybe you can give us an update on Michigan? It's your home state after all, so I'll give you the glory there.

Speaker #2: There's something to share, but Matthew, you want to hit on Michigan?

Speaker #1: Yeah, yeah. I think we're excited about Michigan. We're excited about any new state expansion. You're right. It does take time. But our team is focused on growing distribution there.

Matthew Neagle: Yeah. I think we're excited about Michigan. We're excited about any new state expansion. You're right, it does take time. Our team is focused on growing distribution there, so there's lots of opportunity for us around agencies, and we're getting them appointed. We're starting to see quote flow. The other thing I would say about the data that's interesting is we're now smart enough with our data that even if we don't have data on a home, we have enough data in related homes that we can start to infer things about homes. The reason why that gets important is when you're heading into a new state, there's always an amount of time where you're learning about how risk behaves in those homes. You accumulate that over time by getting more claims data and working with more customers.

Speaker #2: I'm not going to answer much of your question on M&A, of course, Dan, but I will say that there are lots of interesting opportunities.

Speaker #2: Our corporate development team has never been busier. It's part of our playbook. And so, just to be super clear, what we're managing to and what we've talked about in terms of our goals this year—those are our pure organic goals.

Speaker #1: So there's lots of opportunity for us around agencies and we're getting them appointed. We're starting to see quote flow. You know, the other thing I would say about the data that's interesting is we're now smart enough with our data that even if we don't have data on a home, we have enough data and related homes that we can start to infer things about homes.

Speaker #2: So if we were to do anything else, that would sit on top, certainly in terms of what we'd look to do. And more to come as in the right time, certainly.

Speaker #1: The reason why that gets important is when you're heading into a new state, there's always an amount of time where you're learning about how risk behaves in those homes.

Matthew Neagle: The reason why that gets important is when you're heading into a new state, there's always an amount of time where you're learning about how risk behaves in those homes. You accumulate that over time by getting more claims data and working with more customers. We think we'll have sort of an advanced start because of our data based on kind of what we've been seeing in our modeling.

Speaker #2: There's something to share. But Matthew, you want to hit on Michigan?

Speaker #1: Yeah, yeah. I think we're excited about Michigan. We're excited about any new state expansion. You're right, it does take time, but our team is focused on growing distribution there.

Speaker #1: And you accumulate that over time by getting more claims data and working with more customers. We think we'll have sort of an advanced start because of our data based on kind of what we've been seeing in our in our modeling.

Matthew Neagle: We think we'll have sort of an advanced start because of our data based on kind of what we've been seeing in our modeling.

Speaker #1: So there's lots of opportunity for us around agencies, and we're getting them appointed. We're starting to see quote flow. The other thing I would say about the data that's interesting is we're now smart enough with our data that even if we don't have data on a home, we have enough data on related homes that we can start to infer things about homes.

Speaker #1: Got it. Thank you, guys. Very much. And well done.

Dan Kurnos: Got it. Thank you guys very much, and well done.

Dan Kurnos [Equity Research Analyst: Got it. Thank you guys very much, and well done.

Speaker #2: Thanks, Dan.

Matt Ehrlichman: Thanks, Dan.

Speaker #3: Our next question comes from the line of Jason Helfstein with Oppenheimer. Please go ahead.

Operator: Our next question comes from the line of Jason Helfstein with Oppenheimer. Please go ahead.

Speaker #1: The reason why that gets important is when you're heading into a new state, there's always an amount of time where you're learning about how risk behaves in those homes.

Speaker #4: Thanks. So this is now two solid quarters of very nice take rate. Can you just talk about is this the new normal and how mixed kind of plays into the take rate?

Jason Helfstein: Thanks. This is now two solid quarters of very nice take rate. Can you just talk about, is this the new normal and how mix kind of plays into the take rate? Secondly, I think that the rest of the industry, or I guess in general, the industry is losing the pricing tailwind, but yet it doesn't seem to impact your efficiency on marketing for a lot of the reasons that you've talked about and we all know. Just maybe talk about how you think that dynamic, that kind of change in the industry kind of impacts your ability to be efficient adding policies. Thanks.

Speaker #1: And you accumulate that over time by getting more claims data and working with more customers. We think we'll have sort of an advanced start because of our data, based on what we've been seeing in our modeling.

Speaker #4: And then secondly, you know, I think that the rest of the industry or I guess in general, right, the industry is kind of losing the pricing tailwind, but yet it doesn't seem to kind of impact your efficiency on marketing for a lot of the reasons that you've talked about and we all know.

Speaker #1: Got it. Thank you guys very much. And well done.

Speaker #2: Thanks, Dan.

Speaker #3: Our next question comes from the line of Jason Helfstein with Oppenheimer. Please go ahead.

Speaker #4: Just maybe talk about how you think, you know, like that dynamic, that kind of change in the industry kind of impacts your ability to be efficient adding policies, thanks.

Speaker #4: Thanks. So, this is now two solid quarters of very nice take rate. Can you just talk about if this is the new normal and how mix kind of plays into the take? Secondly, I think that the rest of the industry—or, I guess, in general, right—the industry is kind of losing the pricing tailwind, but yet it doesn't seem to impact your efficiency on marketing for a lot of the reasons that you've talked about and we all know.

Speaker #2: Shawn, why don't you take the first and I can layer in the second?

Matt Ehrlichman: Shawn, why don't you take the first, and I can layer in for the second?

Speaker #5: Yeah, sure. For the take rate context there for folks, sometimes folks think of the insurance services revenue as a percentage of RWP as effectively the take rate.

Shawn Tabak: Yeah, sure. For the take rate context there for folks, sometimes folks think of the Insurance Services revenue as a percentage of RWP as effectively the take rate. I think that was the question there from Jason. That percentage was 66% in Q2. It was 65% in Q1. Jason, I think, your commentary there, we have seen it now for a couple of quarters sustain that higher mark. We're pleased with that conversion, both into Insurance Services revenue and ultimately into Adjusted EBITDA, given the relatively fixed cost base that's creating a lot of earnings. Something in that 60% to 65% range is kind of the area we've seen it over the last couple of quarters.

Speaker #5: So I think that was the question there from Jason. That percentage was 66% in Q2. It was 65% in Q1. So Jason, I think your commentary there you know, we have seen it now for a couple of quarters sustained at higher mark.

Speaker #4: Just maybe talk about how you think that dynamic—that kind of change in the industry—impacts your ability to be efficient adding policies. Thanks.

Speaker #5: We're pleased with that conversion. Both into insurance services revenue and ultimately into adjusted EBITDA. Given the relatively fixed cost base that's creating a lot of earnings.

Speaker #2: Shawn, why don't you take the first and I can layer in the second?

Speaker #1: Yeah, sure. For context on the take rate there for folks, sometimes people think of the Insurance Services revenue as a percentage of RWP as, effectively, the take rate.

Speaker #5: And so you know, something in that, you know, 60 to 65% range is kind of the area we've seen it over the last couple of quarters.

Speaker #1: So I think that was the question there from Jason. That percentage was 66% in Q2. It was 65% in Q1. So Jason, I think your commentary there we have seen it now for a couple of quarters sustained at higher mark.

Speaker #5: And the last thing I guess I would just say there, mechanically, just to also last year was our first I mentioned this in the prepared marks, but we are seeing you know, some deferred revenue flowing through into that.

Shawn Tabak: The last thing I guess I would just say there mechanically, just also, last year was our first. I mentioned this in the prepared remarks, but we are seeing some deferred revenue flowing through into that, and we expect that to continue ongoing. I mentioned that last year was the first year under the reciprocal structure, some of the fees get deferred, that's coming in this year. That'll continue. We'll expect that to continue, obviously, in future years as well.

Speaker #5: And we expect that to continue ongoing. You know, I mentioned last year was the first year under the reciprocal structure. And so some of the fees get deferred.

Speaker #1: We're pleased with that conversion—both into insurance services revenue and ultimately into adjusted EBITDA. Given the relatively fixed cost base, that's creating a lot of earnings.

Speaker #5: And so that's coming in this year. And that'll continue to expect that to continue obviously in future years as well.

Speaker #1: And so something in that 60 to 65% range is kind of the area we've seen it over the last couple of quarters. And the last thing I guess I would just say there, mechanically, just to also last year was our first I mentioned this in the prepared marks, but we are seeing some deferred revenue flowing through into that.

Speaker #2: And then on the second one, maybe just high level quick as Jason on it is, you know, fundamentally what I think, you know, this game is around is if one can be able to better assess, predict, and price risk, you know, fundamentally, you'll win.

Matt Ehrlichman: On the second one, maybe just high level, quick with Jason on it is, fundamentally what I think this game is around is if one can be able to better assess, predict, and price risk, fundamentally you'll win. I think we've clearly demonstrated over an extended period of time now that we have abilities to be able to produce lower loss ratios than others do. With lower loss ratios and low attritional loss ratios, it just means that there's more margin in the system overall. You can choose how you want to deploy the margin. You can be able to, obviously, we have very healthy flow through in terms of Porch Group EBITDA. We obviously are growing the capital base at the reciprocal really effectively. You're able to allocate to a really healthy reinsurance program to make sure the reciprocal's protected.

Speaker #2: And I think we've clearly demonstrated over a, you know, extended period of time now that, you know, that we have abilities to be able to produce lower loss ratios you know, than others do.

Speaker #1: And we expect that to continue ongoing. I mentioned last year was the first year under the reciprocal structure, and so some of the fees get deferred.

Speaker #1: And so that's coming in this year. And that'll continue to expect that to continue obviously in future years as well.

Speaker #2: And with lower loss ratios and low attritional loss ratios, it just means that there's more margin in the system, you know, overall. And then you can choose, you know, how you want to deploy the margin.

Speaker #2: And then on the second one, maybe just high level quick because Jason on it is fundamentally what I think this game is around is if one can be able to better assess, predict, and price risk fundamentally, you'll win.

Speaker #2: You can be able to obviously we have, you know, very healthy flow through in terms of Porch Group, you know, EBITDA. We obviously are growing the capital base, you know, at the reciprocal.

Speaker #2: You know, really effectively. You know, you're able to allocate to a really healthy reinsurance program to make sure the reciprocal is protected. Then you can also you know, use it for growth.

Speaker #2: And I think we've clearly demonstrated over a extended period of time now that we have abilities to be able to produce lower loss ratios than others do.

Matt Ehrlichman: You can also use it for growth. We've effectively put a little bit of the margin back to customers via that 4% decline in premium per new customer. Through that, you're able to control and impact those conversion rates, which in turn help us to be able to grow faster, grow policy count faster. That is a great position to be in, where we can manage this margin advantage that we have to be able to produce the outcomes that are going to create shareholder value over time.

Speaker #2: You know, and you know, we've effectively put a little bit of the margin back to customers via that 4% decline in premium for new customer.

Speaker #2: And with lower loss ratios and low attritional loss ratios, it just means that there's more margin in the system. Overall. And then you can choose how you want to deploy the margin.

Speaker #2: And through that, you're able to, you know, control and impact those conversion rates, which in turn, you know, help us to be able to grow faster, grow policy count, you know, faster.

Speaker #2: You can obviously see, we have very healthy flow-through in terms of Porch Group EBITDA. We are also growing the capital base at the reciprocal.

Speaker #2: And so, you know, that is a great position to be in, you know, where we can manage this margin advantage that we have to be able to produce the outcomes that are going to create shareholder value over time.

Speaker #2: Really effectively. You're able to allocate to a really healthy reinsurance program to make sure the reciprocal is protected, but then you can also use it for growth.

Speaker #2: And we've effectively put a little bit of the margin back to customers via that 4% decline in premium for new customer and through that, you're able to control and impact those conversion rates, which in turn help us to be able to grow faster, grow policy count.

Speaker #3: Our next question comes from the line of Matt VanVliet with Cantor Fitzgerald. Please go ahead.

Operator: Our next question comes from the line of Matt Bensley to Cantor Fitzgerald. Please go ahead.

Speaker #6: Hi, this is Mason Merrion on for Matt. Thanks for taking our questions here. So your proprietary day is one of your real competitive advantage.

Mason Marion: Hi, this is Mason Marion on for Matt. Thanks for taking our questions here. Your proprietary data is one of your real competitive advantages. You kind of talked it on the call, but how is AI helping you further expand this advantage? Are you leveraging your home inspection data in any new or interesting ways today compared to, say, maybe the beginning of the year?

Speaker #6: You kind of talked it on the call, but how is AI helping you further expand this advantage? Are you leveraging your home inspection data and any new or interesting ways today compared to, say, maybe the beginning of the year?

Speaker #2: Faster. And so that is a great position to be in, where we can manage this margin advantage that we have to be able to produce the outcomes that are going to create shareholder value over time.

Speaker #2: Yeah. So one of the go ahead. I'll layer on. Go ahead. So we do have a large set

Matt Ehrlichman: Yeah. Go ahead, Oleario. Go ahead. You got it.

Matt Ehrlichman: Go ahead. You got it.

Matthew Neagle: We do have a large set of proprietary data, and we continue to look for different attributes or conditions of homes that we think could be predicted of risk, and we call those Home Factors. We are now up to 100 Home Factors. We continue to build out insights from the data that we have. In terms of AI, I would highlight a couple of things. Our ability to go model and identify those Home Factors is getting faster, and so we are able to get through building out all of the different insights we think are within our data more quickly. I think the other thing is there are certain types of data, particularly around visual information, which before felt very hard to go and extract insights from, are now becoming much more reachable with AI.

Speaker #1: of proprietary data and we continue to look for different attributes or conditions of homes that we think could be predicted of risk. And we call those home factors.

Speaker #3: Our next question comes from the line of Matt Wensley to Cantor Fitzgerald. Please go ahead.

Speaker #1: And so we're now up to 100 home factors. So we continue to build out insights from the data that we have. In terms of AI, I would highlight a couple of things.

Speaker #5: Hi, this is Mason Marion on for Matt. Thanks for taking our questions here. So your proprietary data is one of your real competitive advantages.

Speaker #5: You kind of talked it on the call, but how is AI helping you further expand this advantage? Are you leveraging your home inspection data and any new or interesting ways today compared to, say, maybe the beginning of the year?

Speaker #1: Our ability to go model and identify those home factors is getting faster. And so we're able to get through building out all of the different insights we think are within our data more quickly.

Speaker #2: Yeah. So one of the go ahead, I'll layer on. Go ahead. So we do have a large set

Speaker #1: I think the other things there are certain types of data, particularly around digital information, which before felt very hard to go and extract insights from, are now becoming much more reachable with AI.

Matthew Neagle: I think the other thing is there are certain types of data, particularly around visual information, which before felt very hard to go and extract insights from, are now becoming much more reachable with AI. That just allows us to go deeper into the data to build out these Home Factors that help our business and we think will help other insurance businesses.

Speaker #1: of proprietary data, and we continue to look for different attributes or conditions of homes that we think could be predicted of risk. And we call those home factors.

Speaker #1: And so that just allows us to go deeper into the data to build out these home factors. That help our business and we think will help other insurance businesses.

Matthew Neagle: That just allows us to go deeper into the data to build out these Home Factors that help our business and we think will help other insurance businesses.

Speaker #1: And so we're now up to 100 home factors. We continue to build out insights from the data that we have. In terms of AI, I would highlight a couple of things.

Speaker #6: Then maybe a modeling one here to follow up. So your EBITDA guide, if I'm doing my math right here, you raised it by about 16 million while revenue was raised by about 11 million.

Mason Marion: Maybe a modeling one here to follow up. Your EBITDA guide, if I am doing my math right here, you raised it by about $16 million, while revenue was raised by about $11 million. You have really strong incremental margins. Can you kind of talk to where you are seeing really strong leverage and how that factors into the guidance?

Speaker #6: I mean, you have really strong incremental margins. Can you kind of talk to where you're seeing really strong leverage and how that factored into the guidance?

Speaker #1: I think the other things there are certain types of data, particularly around visual information, which before felt very hard to go and extract insights from, are now becoming much more reachable with AI.

Speaker #1: Yeah, sure. Maybe I'll start with the results in the second quarter here. You could see a really clearly in insurance services adjusted EBITDA if you look at the segment, you know, the costs are you know, relatively fixed.

Shawn Tabak: Yeah, sure. Maybe I will start with the results in Q2 here. You could see it really clearly in Insurance Services, Adjusted EBITDA, if you look at the segment. The costs are relatively fixed. I think this has been part of the story that we have been telling for many quarters now, and I think this quarter was just a great example where the numbers are clearly showing that as also. Evidently, we see that in prior quarters as well. It is 38% growth in policies written, and relatively fixed costs. I did mention there is a $3 million non-recurring benefit in this period, so make sure we account for that. The margins are phenomenal. Obviously, we are pleased today to continue to increase our guidance.

Speaker #1: And so that just allows us to go deeper into the data to build out these home factors. That help our business, and we think will help other insurance businesses.

Speaker #1: I think this has been part of the story that we've been telling for many quarters now. And I think this quarter was just a great example where, you know, the numbers are clearly showing that also.

Speaker #5: Then maybe a modeling one here to follow up. So your EBITDA guide, if I'm doing my math right here, you raised it by about 16 million mile revenue was raised by about 11 million.

Speaker #1: And we see that in prior quarters as well. But it's 38% growth in policies written. And relatively fixed cost. I did mention there's a $3 million non-recurring benefit in this period.

Speaker #5: I mean, you have really strong incremental margins. Can you talk about where you're seeing the most leverage, and how that factored into the guidance?

Speaker #1: Yeah, sure. Maybe I'll start with the results and the second quarter here. You could see it really clearly in insurance services. Adjusted EBITDA, if you look at the segment, the costs are relatively fixed.

Speaker #1: So you know, make sure you know, we account for that. But the margins are phenomenal. And so obviously we're pleased today to continue to increase our guidance.

Speaker #1: You know, in the last six months, we've increased our adjusted EBITDA guidance by over 20 million dollars. And are now guiding to 122 million dollars at the midpoint.

Matthew Neagle: In the last 6 months, we have increased our Adjusted EBITDA guidance by over $20 million and are now guiding to $122 million at the midpoint. We are very pleased with how the year is progressing. We are excited.

Shawn Tabak: In the last 6 months, we have increased our Adjusted EBITDA guidance by over $20 million and are now guiding to $122 million at the midpoint. We are very pleased with how the year is progressing. We are excited.

Speaker #1: I think this has been part of the story that we've been telling for many quarters now, and I think this quarter was just a great example where the numbers are clearly showing that as well.

Speaker #1: We're very pleased with how the year is progressing. And you know, we're excited.

Speaker #1: And we've seen that in prior quarters as well. But it's 38% growth in policies written and relatively fixed costs. I did mention there's a $3 million non-recurring benefit in this period.

Speaker #6: Thank you.

Mason Marion: Thank you.

Matt Ehrlichman: Thank you.

Speaker #2: Thank ank you.

Speaker #3: Our next question comes from the line of Ryan Tomasello with KBW. Please go ahead.

Operator: Our next question comes from the line of Ryan Tomasello with KBW. Please go ahead.

Speaker #1: So make sure we account for that. But the margins are phenomenal, and so obviously, we're pleased today to continue to increase our guidance. In the last six months, we've increased our adjusted EBITDA guidance by over $20 million.

Speaker #4: Hi everyone. I'm the revised guidance. Can you say what that is now baking in for reciprocal written premium for the full year and in the second half, whether or not we're now talking about something north of $600 million, which is what I believe you initially set out to achieve to start the year?

Ryan Tomasello: Hi, everyone. On the revised guidance, can you say what that is now baking in for reciprocal written premium for the full year and in H2, whether or not we are now talking about something north of $600 million, which is what I believe you initially set out to achieve to start the year?

Speaker #1: And are now guiding to $122 million at the midpoint. We're very pleased with how the year is progressing, and we're excited.

Speaker #1: Yeah, the target on RWP is $600 million. Let me maybe provide some context and break that down for folks. We're halfway through the year.

Matthew Neagle: Yeah. The target on RWP is $600 million. Let me maybe provide some context and break that down for folks. We are halfway through the year. We have done $255 million of RWP. That means in H2, we are expecting $345 million of RWP. We talked about on the call today, policy growth has been fantastic. We are seeing a lot of volume, and we expect volume to continue to ramp sequentially, ending the year with more than 70,000 policies written per quarter. Those are some of the components to it. If you put that in context, in Q2, we wrote just under 60,000 policies. We will continue to increase the policies written with the things that have been working very well for us. Top of funnel distribution, continuing to add agents using our land and expand approach, conversion with targeted actions.

Speaker #5: Thank ank you.

Speaker #2: Thank you.

Speaker #3: Our next question. Comes from the line of Ryan Tomasello with KBW. Please go ahead.

Speaker #1: We've done 255 million dollars of RWP. That means in the second half of the year, we're expecting 345 million dollars of RWP. We talked about on the call today, policy growth has been fantastic and we're seeing a lot of volume.

Speaker #6: Hi everyone. I'm the revised guidance. Can you say what that is now baking in for reciprocal written premium for the full year and in the second half, whether or not we're now talking about something north of 600 million, which is what I believe you initially set out to achieve to start the year?

Speaker #1: And we expect volume to continue to ramp sequentially ending the year with 70 more than 70,000 policies per quarter, written per quarter. So those are the some of the components to it.

Speaker #1: Yeah. The target on RWP is 600 million dollars. Let me maybe provide some context and break that down for folks. We're halfway through the year.

Speaker #1: You know, if you put that in context, in Q2, we wrote just under 60,000 policies. And we'll continue to increase the policies written with the things that have been working very well for us, top of funnel distribution, continuing to add agents, using our land and expand approach, conversion with targeted actions, all the things some of the things that we saw today that, you know, are been working quite well.

Matthew Neagle: If you put that in context, in Q2, we wrote just under 60,000 policies. We will continue to increase the policies written with the things that have been working very well for us. Top of funnel distribution, continuing to add agents using our land and expand approach, conversion with targeted actions. Some of the things that we saw today that have been working quite well.

Speaker #1: We've done $255 million of RWP. That means, in the second half of the year, we're expecting $345 million of RWP. We talked about, on the call today, policy growth has been fantastic.

Speaker #1: And we're seeing a lot of volume, and we expect volume to continue to ramp sequentially, ending the year with more than 70,000 policies written per quarter.

Matthew Neagle: Some of the things that we saw today that have been working quite well.

Speaker #1: So those are some of the components to it. If you put that in context, in Q2, we wrote just under 60,000 policies. And we'll continue to increase the policies written with the things that have been working very well for us.

Speaker #4: I guess given the momentum you've seen in the first half, is there potentially some offsets to that that are reducing the upside to that 600 million for the full year?

Ryan Tomasello: I guess, given the momentum you've seen in H1, is there potentially some offsets to that that are reducing the upside to that $600 million for the full year? Why the H2 isn't baking in more upside? Just trying to understand the moving pieces here, just given how strong the results have been thus far and the guide up, despite the RWP guide seemingly unchanged.

Speaker #4: Why the second half isn't baking in more upside? Just trying to understand the moving pieces here, just given how strong the results have been thus far and the guide up despite the RWP guide seemingly unchanged.

Speaker #1: Top of funnel distribution, continuing to add agents, using our land and expand approach, conversion with targeted actions, all the things some of the things that we saw today that have been working quite well.

Speaker #1: Well, again, it's one of the messages I was trying to land on just to make sure it's clear. We're obviously managing to our financial results in terms of kind of where we want to what we want to deliver.

Matt Ehrlichman: Well, again, it's one of the messages I was trying to land, Ryan, just to make sure it's clear. We're obviously managing to our financial results in terms of where we want to, what we want to deliver. Certainly, you see that just with how we're executing against that, obviously, with both the beat today and the substantial raise. The thing, again, I just don't think people have been very focused on just an RWP, but our economic model is driven through both RWP and policies written. We just want to make sure that's clear. We charge policy fees to every new and renewing policyholder. That is a way that we generate money. You really have to look at both of those two things. Policy growth, as we've talked about today several times, is growing very, very rapidly.

Speaker #6: I guess given the momentum you've seen in the first half, is there potentially some offsets to that that are reducing the upside to that 600 million for the full year?

Speaker #1: And certainly you see that just with, you know, with how we're executing, you know, against that obviously with, you know, both the beat today and the substantial raise.

Speaker #1: The thing, again, I just don't think I think people have been very focused on just an RWP, but our economic model is driven through both RWP and policies written.

Speaker #6: Why isn't the second half baking in more upside? I'm just trying to understand the moving pieces here, given how strong the results have been thus far and the guide up, despite the RWP guide seemingly unchanged.

Speaker #1: And we just want to make sure that's clear. We charge policy fees to every new and renewing, you know, policyholder. And so that is a way that we generate money.

Speaker #1: And so you really have to look at the both of those two things. Policy growth is, you know, as we've talked about today, several times, is growing very, very rapidly.

Speaker #1: And so we just we can balance those two things, you know, how fast we want to go, the total premium and how fast we're going to grow the policies.

Matt Ehrlichman: We can balance those two things. How fast we want to grow the total premium and then how fast we're going to grow the policies at the end of the day to be able to accomplish our organic growth goals for our business. That's the way we'll approach it.

Speaker #1: And certainly, you see that just with how we're executing against that, obviously, with both the beat today and the substantial raise. The thing, again, I just don't think I think people have been very focused on just an RWP, but our economic model is driven through both RWP and policies written.

Speaker #1: At the end of the day, to be able to accomplish our organic, you know, growth goals for our business. And that's, you know, that's the way that we'll approach it.

Speaker #4: Okay, that's helpful. Thank you.

Ryan Tomasello: Okay. That's helpful. Thank you.

Speaker #1: Yep.

Matt Ehrlichman: Yeah.

Speaker #1: And we just want to make sure that's clear. We charge policy fees to every new and renewing policy holder. And so that is a way that we generate money.

Speaker #3: Our next question comes from the line of Timothy D'Agostino with BRIE Securities. Please go ahead.

Operator: Our next question comes from the line of Timothy D'Agostino with B. Riley Securities. Please go ahead.

Speaker #1: And so you really have to look at both of those two things. Policy growth is, as we talked about today several times, growing very, very rapidly.

Speaker #5: Hi, good evening. Thanks for taking all the questions. I just quickly on my end, it'd be great to just get some color on the products, the legacy product and the Porch Insurance product.

Timothy D'Agostino: Hi, good evening. Thanks for taking all the questions. Real quickly on my end, it would be great to just get some color on the products, the legacy product, and the Porch Insurance product. For RWP from new customers, obviously tripled year-over-year. Are you seeing a lot of interest and demand for the new product, or is it still towards that legacy product? As well for the branch growth, do you see new branches that come online? Are they interacting with that new product more? Any color around that would be great. Thank you.

Speaker #1: And so we can balance those two things. How fast we want to go, the total premium, and how fast we're going to grow the policies.

Speaker #5: For RWP from new customers, obviously triple deer every year, are you seeing a lot of interest and demand for the new product or is it still towards that legacy product?

Speaker #1: At the end of the day, to be able to accomplish our organic growth goals for our business, and that's the way that we'll approach it.

Speaker #5: And then as well for the branch growth, do you see new branches that come online? Are they interacting with that new product more? Any color around that would be great.

Speaker #6: Okay. That's helpful. Thank you.

Speaker #1: Yep.

Speaker #3: Our next question comes from the line of Timothy DeAgostino with BRIV Securities. Please go ahead.

Speaker #5: Thank you.

Speaker #1: Yeah, I mean, it's I mean, by definition, obviously, in the way that just insurance works, the vast majority of policies are going to be, you know, with our legacy homeowners of America.

Matt Ehrlichman: Yeah, by definition, obviously, in the way that Just Insurance works, the vast majority of policies are going to be with our legacy Homeowners of America product because it has all of the renewing customers on it. We are excited about Porch Insurance and the value prop. As a reminder, it is only launched in one state as well. Even in that one state, you have to go and ramp up the number of agencies that are able to sell and distribute it. When you launch a new product, it does take time to ramp, both within that state, across more states, and then to start building a renewal base. We continue to be excited about fundamentally offering a different product to consumers. Being able to bring a full home warranty, being able to bring four hours of moving service.

Speaker #7: Hi. Good evening. Thanks for taking all the questions. I just quickly on my end, it'd be great to just get some color on the products, the legacy product, and the Porsche insurance product.

Speaker #1: Product because it has all of the renewing customers, you know, on it. And so we are excited about Porch Insurance and the value prop as a reminder, it's only launched in one state.

Speaker #7: For RWP from new customers, obviously, triple-digit growth every year, are you seeing a lot of interest and demand for the new product, or is it still towards that legacy product?

Speaker #1: As well. And so even in that one state, you have to go and ramp up, you know, the number of agencies that are able to sell and distribute it.

Speaker #7: And then as well, for the branch growth, do you see new branches that come online? Are they interacting with that new product more? Any color around that would be great.

Speaker #1: So when you launch a new product, it does take time to ramp both within that state, across more states, and then to start building renewal, you know, base.

Speaker #7: Thank you.

Speaker #1: Yeah. I mean, it's I mean, by definition, obviously, in the way that just insurance works, the vast majority of policies are going to be with our legacy homeowners of America.

Speaker #1: But, you know, we continue to be excited about, you know, fundamentally offering a different product to consumers being able to bring a full home warranty being able to bring four hours of moving service like we do want to be known as providing the best product for a home buyer.

Speaker #1: Product because it has all of the renewing customers on it. And so we are excited about Porsche insurance and the value prop. As a reminder, it's only launched in one state.

Matt Ehrlichman: We do want to be known as providing the best product for a home buyer, period, full stop. We have got unique capabilities in our Consumer Services area to be able to do that. It is early days, just given how the model works, like I described.

Speaker #1: Full stop. And, you know, we've got unique capabilities in our consumer services area to be able to do that. But, you know, it's early days, you know, just given kind of how the model works, like I described.

Speaker #1: As well. And so, even in that one state, you have to go and ramp up the number of agencies that are able to sell and distribute it.

Speaker #1: So when you launch a new product, it does take time to ramp, both within that state, across more states, and then to start building the renewal base.

Speaker #5: All right. Thank you so much.

Timothy D'Agostino: All right. Thank you so much.

Speaker #1: You bet.

Matt Ehrlichman: You bet.

Speaker #1: But we continue to be excited about fundamentally offering a different product to consumers, being able to bring a full home warranty, being able to bring four hours of moving service. We do want to be known as providing the best product for a homebuyer, period. Full stop.

Speaker #3: Our next question comes from the line of Oscar. Go ahead. Mr. Oscar, do you have if your line is open, please go ahead. In the meantime, we'll move on to our next question.

Operator: Our next question comes from the line of Oscar. Go ahead. Mr. Oscar Nieves, your line is open. Please go ahead. In the meantime, we'll move on to our next question. Our next question comes from the line of Jason Kreyer with Craig-Hallum. Please go ahead.

Speaker #1: And we've got unique capabilities in our Consumer Services area to be able to do that. But it's early days, just given kind of how the model works, like I described.

Speaker #3: Our next question comes from the line of Jason Cryer with Craig Helum. Please go ahead.

Speaker #6: Thank you, guys. So in the quarter, you kind of had the first transaction to monetize some of the shares, held inside of the reciprocal.

Jason Kreyer: Thank you, guys. In the quarter, you had the first transaction to monetize some of the shares held inside of the reciprocal. Just curious, how should we think about the other 16 million shares and what your strategy is going to be there over the coming quarters or the coming years?

Speaker #7: All right. Thank you so much.

Speaker #1: You bet.

Speaker #6: Just curious, how should we think about the other 16 million shares and what your strategy is going to be there over the coming quarters of the coming years?

Speaker #3: Our next question comes from the line of Oscar. Go ahead. Mr. Oscar, do you have if your line is open, please go ahead. In the meantime, we'll move on to our next question.

Speaker #1: Obviously, we are we're excited about where the value of a share is going to go, you know, over time. As we said before, publicly there's, you know, our view of intrinsic value is certainly different than where the shares are today.

Matt Ehrlichman: Obviously, we're excited about where the value of a share is going to go over time. As we said before, publicly, our view of intrinsic value is certainly different than where the shares are today. We think if we just keep stacking quarters and just executing like we are, that gap shrinks. There will be a time in the future where it's going to make sense to start selling some small portion of shares at the reciprocal to move some of the capital from non-admitted assets into statutory surplus. We've talked about that being part of the playbook that we have, but we're in no hurry. Obviously, we have so much capital at the reciprocal to be able to support far more premium growth than we're tracking for this year. We want to continue to maintain a nice, healthy margin of excess capital.

Speaker #1: And we think as we just keep stacking quarters and just executing like we are, you know, that gap shrinks. And so you know, there will be a time in the future where it's going to make sense to start selling some small portion of shares, you know, at the reciprocal to move, you know, some of the capital from non-admitted assets into statutory surplus we've talked about that being part of the playbook.

Speaker #3: Our next question comes from the line of Jason Cryer with Craig-Hallum. Please go ahead.

Speaker #8: Thank you, guys. So, in the quarter, you kind of had the first transaction to monetize some of the shares held inside of the Reciprocal.

Speaker #8: Just curious, how should we think about the other 16 million shares, and what your strategy is going to be there over the coming quarters or the coming years?

Matt Ehrlichman: We've talked about that being part of the playbook that we have, but we're in no hurry. Obviously, we have so much capital at the reciprocal to be able to support far more premium growth than we're tracking for this year. We want to continue to maintain a nice, healthy margin of excess capital. We'll just manage the business to make sure that we're accomplishing that.

Speaker #1: You know, that we have, but we're in no hurry. Obviously, we have so much capital at the reciprocal to be able to support far more premium growth than we're tracking for this year.

Speaker #1: Obviously, we are excited about where the value of a share is going to go. Over time, as we said before publicly, our view of intrinsic value is certainly different than where the shares are today.

Speaker #1: We want to continue to maintain a nice, healthy, margin of excess capital. And so we'll just manage the business to make sure that we're accomplishing that.

Speaker #1: And we think as we just keep stacking quarters and just executing like we are, that gap shrinks. And so there will be a time in the future where it's going to make sense to start selling some small portion of shares at the reciprocal, to move some of the capital from non-admitted assets into statutory surplus. We've talked about that being part of the playbook that we have, but we're in no hurry.

Matt Ehrlichman: We'll just manage the business to make sure that we're accomplishing that.

Speaker #6: Don't disagree with your assessment on value of shares. Just as a follow-up, Matt, you know, at the end of the quarter, I think the reciprocal secured $100 million cap bond.

Jason Kreyer: Don't disagree with your assessment on the value of shares. Just as a follow-up, Matt, at the end of the quarter, I think the reciprocal secured a $100 million cat bond. Can you just talk about what that means for the health of the reciprocal, and if there's any anticipated cost savings on reinsurance coming out of that cat bond? Thanks.

Speaker #6: You just talk about what that means for the health of the reciprocal. And if there's any anticipated cost savings on reinsurance coming out of that cap bond.

Speaker #1: Obviously, we have so much capital at the reciprocal to be able to support far more premium growth than we're tracking for this year. We want to continue to maintain a nice, healthy margin of excess capital, and so we'll just manage the business to make sure that we're accomplishing that.

Speaker #6: Thanks.

Speaker #1: Yeah, I can cover that one. So and just for context for folks, a cap bond is a type of fully collateralized reinsurance. We placed it at the very top of the reinsurance tower.

Shawn Tabak: Yeah, I can cover that one. Just for context for folks, a cat bond is a type of fully collateralized reinsurance. We placed it at the very top of the reinsurance tower. It's covering very, very low likelihood events. Given the growth that we're seeing at the reciprocal, we thought it was prudent to ensure we were adding that. It was our inaugural catastrophe bond offering for the reciprocal, we're very pleased with the outcome. We partnered with a very strong slate of investors there, I want to give a nod to those folks as well. Overall, we think it's an attractive instrument and an attractive way to procure reinsurance.

Speaker #1: So it's covering very, very low likelihood events. But given the growth that we're seeing at the reciprocal, we thought it was prudent to ensure we were adding that.

Speaker #8: I don't disagree with your assessment on the value of shares. Just as a follow-up, Matt, at the end of the quarter, I think the Reciprocal secured a $100 million cap bond.

Speaker #8: Can you just talk about what that means for the health of the reciprocal, and if there's any anticipated cost savings on reinsurance coming out of that cap bond?

Speaker #1: It was our inaugural cap bond offering for the reciprocal. And we were very pleased with the outcome. We partnered with a very strong slate of investors there.

Speaker #8: Thanks.

Speaker #1: Yeah, I can cover that one. So, and just for context for folks, a cap bond is a type of fully collateralized reinsurance. We placed it at the very top of the reinsurance tower.

Speaker #1: So I want to give a nod to those folks as well. But overall, we think it's an attractive instrument. And an attractive way to procure reinsurance.

Speaker #1: So it's covering very, very low-likelihood events. But given the growth that we're seeing at the reciprocal, we thought it was prudent to ensure we were adding that.

Speaker #6: All right. Thank you.

Operator: All right. Thank you. Our next question comes from the line of Oscar Nieves with Stephens Inc. Please go ahead.

Speaker #3: And our next question comes from the line of Oscar. Do you have if it's Timothy, please go ahead.

Speaker #1: It was our inaugural cap bond offering for the reciprocal, and we were very pleased with the outcome. We partnered with a very strong slate of investors there.

Speaker #6: Hey guys, sorry about earlier. I was having some technical difficulties. My first question is, you highlighted that new customer RWP grew 206% year over year, while total RWP grew 16%.

Oscar Nieves: Hey, guys. Sorry about earlier. I was having some technical difficulties.

Matt Ehrlichman: No problem.

Oscar Nieves: My first question is, you highlighted that new customer RWP grew 206% year-over-year, while total RWP grew 16%. Should investors expect that gap to persist, or will renewal growth become a larger contributor over time?

Speaker #1: So I want to give a nod to those folks as well. But overall, we think it's an attractive instrument and an attractive way to procure reinsurance.

Speaker #6: So should investors expect that gap to persist or will renewal growth become a larger contributor over time?

Speaker #1: Well, we expect new customer growth will continue. Like obviously, we have a really healthy engine as we continue to add more agencies and then you have agencies deliver more quotes and be able to have those quotes convert into policies.

Matt Ehrlichman: Well, we expect new customer growth will continue. Obviously, we have a really healthy engine as we continue to add more agencies, then you'll have agencies deliver more quotes and be able to have those quotes convert into policies. Like we talked about, we expect the number of new policies to continue to grow here as we continue forward. It's a beautiful game, insurance, which customers renew at a really, really high clip. The vast majority of customers pay with escrow, and it's just a very sticky product, fundamentally. I'm not commenting on the mix and how we expect the mix to transition over time.

Speaker #8: All right. Thank you.

Speaker #7: And our next question comes from the line of Oscar. Do we have Mr. Stevenson? Please go ahead.

Speaker #8: Hey, guys. Sorry about earlier—I was having some technical difficulties.

Speaker #1: No problem.

Speaker #8: My first question is, you highlighted that new customer RWP grew 206% year over year, while total RWP grew 16%. So should investors expect that gap to persist, or will renewal growth become a larger contributor over time?

Speaker #1: So like we talked about, we expect new the number of new policies to continue to grow here as we continue, you know, forward. It's a beautiful game insurances, which customers renew at a really, really high clip.

Speaker #1: And you know, the vast majority of customers, you know, pay with escrow and it's just a very sticky product, you know, fundamentally. And so we're not commenting on like the mix and how we expect the mix to transition, you know, over time.

Speaker #1: Well, we expect new customer growth will continue. Obviously, we have a really healthy engine as we continue to add more agencies and then have agencies deliver more quotes.

Speaker #1: But you know, but certainly I can give you that comment, which is, you know, we certainly expect new customers will continue to grow quickly.

Matt Ehrlichman: Certainly I can give you that comment, which is, we certainly expect new customers will continue to grow quickly, those customers do become long-term customers, generally, where the price per customer will tick up year after year as they renew. That's quite common.

Speaker #1: And be able to have those quotes convert into policies. So, like we talked about, we expect the number of new policies to continue to grow here as we continue.

Speaker #1: And those customers do become long-term customers, you know, generally, where the price per customer will tick up, you know, year after year after year as they renew.

Speaker #1: Forward, it's a beautiful game—insurance—which customers renew at a really, really high clip. The vast majority of customers pay with escrow, and it's just a very sticky product, fundamentally.

Speaker #1: That's quite common.

Oscar Nieves: All right. That's super helpful. My second one is on statutory surplus, which you mentioned increased to close to $170 million. How should we think about the relationship between surplus growth and premium growth over the next, say, 12 to 24 months?

Speaker #6: All right. That's super helpful. And then my second one is on statutory surplus, which you mentioned increased to close to $170 million. So how should we think about the relationship between surplus growth and premium growth over the next, say, 12 to 24 months?

Speaker #1: And so we're not commenting on the mix and how we expect the mix to transition over time, but certainly I can give you that comment, which is we certainly expect new customers will continue to grow quickly.

Speaker #1: Yeah, I can take that one. So we're quite pleased with where the statutory surplus is. $170 million at the end of Q2. This year, year to date, it's up 15 million dollars.

Shawn Tabak: Yeah, I can take that one. We're quite pleased with where the statutory surplus is, $170 million at the end of Q2. This year to date, it's up $15 million. Especially just having gone through the quarter with the highest weather claims, typically, that's a great place to be and better than what I would have expected starting the year. We're certainly pleased with that outcome. The base requirement that we've historically talked about is a 5 to 1 RWP to surplus, actually in some of the prior quarters, we've talked about it actually being a little bit better than that now. Those are some of the guardrails that folks can think about there. I would say, very pleased with the statutory surplus and the loss ratios and just the underwriting discipline and how the reciprocal is performing.

Speaker #1: And those customers do become long-term customers. Generally, the price per customer will tick up year after year as they renew. That's quite common.

Speaker #1: And especially just having gone through the quarter with, you know, the highest weather claims typically, you know, that's a great place to be and better than what I would have expected starting the year.

Speaker #8: All right. That's super helpful. And then my second one is on statutory surplus, which you mentioned increased to close to $170 million. So, how should we think about the relationship between surplus growth and premium growth over the next, say, 12 to 24 months?

Speaker #1: And so we're certainly pleased with that outcome. The kind of require, you know, base requirement that we've historically talked about is, you know, a 5 to 1 RWP to surplus.

Speaker #1: Yeah, I can take that one. So we're quite pleased with where the statutory surplus is—$170 million at the end of Q2. This year, year to date, it's up $15 million.

Speaker #1: And actually, in some of the prior quarters, we've talked about it actually being a little bit better than that now. But you know, those are some of the guardrails that folks can think about there.

Speaker #1: And especially just having gone through the quarter with the highest weather claims, typically that's a great place to be and better than what I would have expected starting the year.

Speaker #1: But I would say, you know, very pleased with the statutory surplus and the loss ratios and just the underwriting discipline and how the reciprocal is performing.

Speaker #1: And so we're certainly pleased with that outcome. The kind of base requirement that we've historically talked about is a 5-to-1 RWP to surplus.

Speaker #6: Thank you. Very helpful.

Oscar Nieves: Thank you. Very helpful.

Speaker #3: Thank you. And that concludes our Q&A session for today. I would now like to turn the call back over to Matt Erlichman for closing remarks.

Matt Ehrlichman: Thank you. That concludes our Q&A session for today. I would now like to turn the call back over to Matt Ehrlichman for closing remarks. I appreciate everybody being on the call. Thanks for the questions. I think you can get a feel for the energy. We remain very confident in where we're at and how we are executing. It is fun now to be a Rule of 50 company. Feel really good about our leverage, being better than 3x this year. We're just making strong progress and certainly now being net income positive this year, all great markers for us.

Operator: Thank you. That concludes our Q&A session for today. I would now like to turn the call back over to Matt Ehrlichman for closing remarks.

Speaker #1: And actually, in some of the prior quarters, we've talked about it actually being a little bit better than that now. But those are some of the guardrails that folks can think about there.

Speaker #1: I appreciate everybody being on the call. Thanks for the questions. I think you can get a feel for the energy. We remain very confident in where we're at and how we are executing.

Matt Ehrlichman: I appreciate everybody being on the call. Thanks for the questions. I think you can get a feel for the energy. We remain very confident in where we're at and how we are executing. It is fun now to be a Rule of 50 company. Feel really good about our leverage, being better than 3x this year. We're just making strong progress and certainly now being net income positive this year, all great markers for us.

Speaker #1: I mean, it is fun now to be a rule of 50 company, you know, feel really good about our leverage, you know, being better than 3X, you know, this year.

Speaker #1: But I would say I'm very pleased with the statutory surplus, the loss ratios, and just the underwriting discipline, and how the reciprocal is performing.

Speaker #1: We're just making, you know, making strong progress. And certainly now being net income, you know, positive, you know, this year, all great, great markers, you know, for us.

Speaker #8: Thank you. Very helpful.

Speaker #7: Thank you. And that concludes our Q&A session for today. I would now like to turn the call back over to Matt Ehrlichman for closing remarks.

Speaker #1: We believe and again, feel very confident we've constructed a durable model with significant opportunity where we can scale premium and convert that premium into high margin earnings.

Matt Ehrlichman: We believe, and again, feel very confident we've constructed a durable model with significant opportunity where we can scale premium and convert that premium into high margin earnings and continue to add products and capabilities that set us up to go after this $200 billion TAM with just fundamental advantages. Lastly, core thing we talk about is creating long-term shareholder value for shareholders as part of building a truly great and enduring company. Certainly just rest assured that's what we are focused on and I think making great progress against each day. That will close the call. Have a great rest of the day. Take care, everybody. Ladies and gentlemen, that concludes today's call. You may now disconnect.

Speaker #1: I appreciate everybody being on the call. Thanks for the questions. I think you can get a feel for the energy. We remain very confident in where we're at and how we are executing.

Speaker #1: And continue to add products and capabilities, you know, that set us up to go after this $200 billion TAM, you know, with just fundamental advantages.

Speaker #1: I mean, it is fun now to be a Rule of 50 company. We feel really good about our leverage being better than 3x this year.

Speaker #1: Lastly, core thing we talk about is creating long-term shareholder value for shareholders as part of building a truly great and enduring company. And so certainly just rest assured that that's what we are our focus on.

Speaker #1: We're just making strong progress and certainly now being net income positive this year—all great, great markers for us. We believe, and again feel very confident, we've constructed a durable model with significant opportunity where we can scale premium and convert that premium into high-margin earnings.

Speaker #1: I think making great progress against each day. But that will close the call. Have a great rest of the day. Take care, everybody.

Operator: Ladies and gentlemen, that concludes today's call. You may now disconnect.

Speaker #1: And continue to add products and capabilities that set us up to go after this $200 billion TAM with just fundamental advantages. Lastly, the core thing we talk about is creating long-term shareholder value for shareholders as part of building a truly great and enduring company.

Speaker #1: And so certainly, just rest assured that that's what we are focused on. I think we're making great progress against that each day. With that, we'll close the call.

Speaker #1: Have a great rest of the day. Take care, everybody.

Q2 2026 Porch Group Inc Earnings Call

Request DemoDemo

Porch Group

Earnings