Executive Summary

Q1 2025 delivered high-margin results under the new reciprocal model: Porch Shareholder Interest revenue $84.5M, gross margin 82%, and Adjusted EBITDA $16.9M; consolidated revenue was $104.7M and gross profit $65.4M .
Results materially beat S&P Global consensus: revenue $104.7M vs $79.4M estimate; EPS (SPGI Primary EPS) $0.039 vs -$0.132 estimate; management raised FY25 guidance for revenue, gross profit, and Adjusted EBITDA, midpoints +$10M/+$10M/+$5M, respectively *.
Structural shift lowered volatility: the Reciprocal’s reinsurance program reduced risk and cost; Porch shareholders no longer bear catastrophic weather claims; Insurance Services converted ~50% of Reciprocal Written Premium ($96.9M) into segment revenue ($49.8M) with 85% gross margin .
Trend context: profitability improved vs prior year and the two preceding quarters (Q3 and Q4 2024), though consolidated operating income dipped sequentially given model transition; guidance raise and debt refi press releases (May) are potential catalysts .

What Went Well and What Went Wrong

What Went Well

High-margin execution: Porch Shareholder Interest gross margin 82% and Adjusted EBITDA margin 20%; Insurance Services gross margin 85% and Adjusted EBITDA margin 52%, demonstrating scalability of fee/commission model .
Guidance raised across the board, despite tariffs/macro uncertainty; FY25 midpoints increased to revenue $410M, gross profit $327.5M, Adjusted EBITDA $65M, signaling confidence in Insurance Services performance and cash generation .
Strong reinsurance renewal: Reciprocal placed its program with 40+ A-rated reinsurers, lowering cost and risk; management emphasized shareholders no longer in catastrophic claims business .

What Went Wrong

Consumer Services softness: revenue down 9% YoY; Adjusted EBITDA loss of $0.7M due to investments for growth in 2026+, highlighting near-term drag as mix realigns post relocation product exits .
Sequential Adjusted EBITDA expected to dip in Q2 by ~$5–$7M vs Q1 due to improved quota share terms to build Reciprocal surplus, tempering near-term margin trajectory even as H2 ramps .
Consolidated operating performance reflects model transition: consolidated operating loss of $(1.3)M in Q1 2025 vs strong Q4 2024 operating income, given new reporting including Reciprocal consolidation mechanics .

Financial Results

Metric	Q1 2024	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$115.4	$111.2	$100.4	$104.7
Gross Profit ($USD Millions)	$37.1	$64.1	$89.3	$65.4
Gross Margin %	32%	58%	89%	62%
Total Operating Expenses ($USD Millions)	$71.7	$113.7	$75.3	$66.7
Adjusted EBITDA ($USD Millions)	$(16.8)	$16.9	$41.8	$16.9

Notes: Consolidated figures; Porch highlights “Porch Shareholder Interest” non-GAAP for Q1 2025 to reflect shareholder-owned businesses .

Segment breakdown (Q1 2025 – Porch Shareholder Interest):

Segment	Revenue ($M)	Gross Profit ($M)	Gross Margin %	Adjusted EBITDA ($M)	Adj EBITDA Margin %
Insurance Services	$49.8	$42.3	85%	$25.8	52%
Software & Data	$22.0	$16.5	75%	$4.6	21%
Consumer Services	$14.7	$12.2	83%	$(0.7)	(5)%
Corporate	$(2.0)	$(1.9)	n/a	$(12.8)	n/a

KPIs (Q1 2025):

KPI	Value
Reciprocal Written Premium (RWP)	$96.9M
Reciprocal Policies Written	36.1K
RWP per Policy Written	$2,683
Avg Number of Companies (Software & Data)	24.1K
Annualized Avg Revenue per Company	$3,644
Monetized Services (Consumer)	71.0K
Avg Revenue per Monetized Service	$207

EPS comparison (GAAP vs SPGI series):

GAAP Basic EPS (Q1 2025): $0.08 .
SPGI “Primary EPS” Actual (Q1 2025): $0.0389*; consensus mean: -$0.132* (beat) [GetEstimates]*.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue (Porch Shareholder Interest)	FY 2025	$390M–$410M	$400M–$420M	Raised (+$10M at midpoint)
Gross Profit (Porch Shareholder Interest)	FY 2025	$310M–$325M	$320M–$335M	Raised (+$10M at midpoint)
Adjusted EBITDA (Porch Shareholder Interest)	FY 2025	$55M–$65M	$60M–$70M	Raised (+$5M at midpoint)

Management noted Q2 2025 Adjusted EBITDA expected to be ~$5–$7M lower than Q1, with growth resuming in Q3/Q4 after quota share changes to build Reciprocal surplus .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2: Q3 2024)	Previous Mentions (Q-1: Q4 2024)	Current Period (Q1 2025)	Trend
Reciprocal Exchange	TDI approved formation; outlined sale of HOA into PIRE; expect more predictable/higher margin profile	Formation completed Jan 2025; sold HOA; surplus note at SOFR+9.75%; set FY25 guidance on Shareholder Interest	First quarter under new model; high margin, predictable; ~50% RWP-to-revenue take-rate	Positive, model transition complete
Reinsurance & Risk	Attritional loss ratio improvements; hurricanes impacted but managed; reinsurance reliance highlighted	Strong underwriting, lower gross loss ratios; reciprocal planned reinsurance renewal	40+ A-rated reinsurers; lower cost; shareholders out of catastrophic claims	Lower risk, improved pricing
Data/Tech (Home Factors)	Launched 3 new Home Factors; targeting advantaged underwriting	Strong pipeline for third-party testing; price increases in SaaS	Expanding Home Factors; carriers testing with claims data; incremental revenue expected in 2026	Building commercialization
Agency/Distribution	Reopening geographies; engaging agency partners	New business premiums +50% YoY in Q4; momentum into Q1	New business premium doubled YoY; scaling growth team and incentives; exploring new states	Accelerating
Tariffs/Macro	Macro caution; improving profitability	Raising FY25 outlook amid transition	Tariffs expected mid-single-digit Adjusted EBITDA impact embedded in guidance; resilient in recession/inflation scenarios	Managed headwinds
Capital & Leverage	Repurchased $43M 2026 notes at discount	$507.1M outstanding converts noted	Post-Q1: retired majority of 2026 notes; added 2030 notes; reduced 2026 maturity to $29M	Deleveraging path improving

Management Commentary

“Our business is now simple, predictable, commission and fee-based, and higher margin… we delivered outstanding Q1 results including an 82% gross margin and 86% year-over-year growth in Gross Profit… and we have raised 2025 guidance…” — Matt Ehrlichman, CEO .
“Q1 2025 Porch shareholder interest revenue was $84.5 million… gross profit $69.1 million with an 82% gross margin… Adjusted EBITDA was $16.9 million, a $33.6 million improvement… driven by the shift to the insurance services business model.” — Shawn Tabak, CFO .
“We now expect the Reciprocal’s written premium to convert to Porch Insurance Services revenue at approximately 50% versus 40% previously… long-term target revenue $2.3B and Adjusted EBITDA $660M at $3B premium.” — Shawn Tabak .
“Porch shareholders are no longer in the catastrophic weather claims business… reinsurance renewals lowered cost and risk.” — Matt Ehrlichman .

Q&A Highlights

Take-rate clarity: RWP-to-revenue conversion ~50% driven by policy fees, management fees, and captive quota share; Reciprocal surplus at a record ~$198M supports growth .
Premium growth levers: expanding agents, new states, product enhancements, data-driven pricing sophistication; new business premium >100% YoY growth .
Replacement value and tariffs: dynamic updates to replacement value feed pricing; data advantage targets lower-risk segments at attractive pricing; tariffs embedded as mid-single-digit Adjusted EBITDA impact .
Reinsurance appetite: retention set at $25M; reinsurers rewarded better pricing given strong underwriting and Home Factors performance .
Surplus mechanics: statutory surplus ~$105M with non-admitted asset value (shares) bringing surplus + non-admitted assets to ~$198M; focus on total net assets for health and growth capacity .

Estimates Context

Metric (Q1 2025)	Actual	S&P Global Consensus	Surprise
Revenue ($USD)	$104,745,000	$79,438,170*	Beat
Primary EPS (SPGI) ($)	$0.0389*	-$0.1320*	Beat
EBITDA ($USD)	$4,691,000*	$5,980,670*	Miss

Notes: Values marked with * retrieved from S&P Global. Company reports Adjusted EBITDA of $16,861,000 (non-GAAP), which is not directly comparable to SPGI’s EBITDA series *.

Where estimates may adjust:

Revenue and margin trajectory likely to be revised higher given higher RWP conversion (~50%), elevated gross margins (~80% for Shareholder Interest), and raised FY25 guidance .
Near-term EBITDA path may reflect Q2 dip due to quota share terms, then H2 ramp; models should incorporate segment mix and non-GAAP vs GAAP differences .

Key Takeaways for Investors

The reciprocal-driven model is delivering: high and more predictable margins, strong cash generation ($27.2M Porch Shareholder Interest CFO in Q1) and reduced weather volatility; core execution in Insurance Services is the engine .
Guidance raise and RWP-to-revenue conversion uplift (to ~50%) support upward estimate revisions; monitor Q2’s expected EBITDA dip and H2 recovery cadence .
Reinsurance renewal with 40+ A-rated counterparties lowers cost and risk; shareholders are insulated from catastrophic claims, reinforcing quality of earnings .
Deleveraging actions post-quarter materially reduced 2026 near-term maturity to ~$29M, improving balance sheet visibility and potential equity narrative .
Software & Data pricing power (e.g., Rynoh +20%) and Home Factors commercialization underpin multi-year incremental growth beyond Insurance Services .
Consumer Services is an investment area near-term; watch for monetization from new offerings and better housing turnover to enhance segment contribution .
Macro sensitivity appears manageable: tariffs impact embedded; insurance fees benefit in inflationary or higher-weather regimes; housing pickup would be beneficial across segments .

S&P Global disclaimer: All values marked with * are retrieved from S&P Global.

Additional Relevant Press Releases (Q2 timing, impacting Q1 narrative)

Retirement of majority of 2026 unsecured notes; added 2030 notes; reduced 2026 maturity to $29M (announced May 19, 2025) .
Closing of the deleveraging transactions (May 28, 2025) .

Cross-reference notes: All quantitative claims are sourced from Q1 2025 8-K press release and consolidated statements, and Q3/Q4 2024 8-Ks; management commentary and Q&A are from the Q1 2025 earnings call transcript – – –.

Porch Group, Inc. (PRCH)·Q1 2025 Earnings Summary