Executive Summary

Record profitability despite lower reported revenue: Q4 2024 Adjusted EBITDA was $41.8m (42% margin) and GAAP net income was $30.5m, both sharply improved vs prior year, while revenue declined 12% due to prior-year Vesttoo-related non-recurring reinsurance effects and a $5m year-end adjustment in Q4 2024 .
Business model transformation completed: Formation of Porch Insurance Reciprocal Exchange (PIRE) on Jan 1, 2025 and sale of HOA into PIRE shifts Porch to a higher-margin, commission-and-fee model with expected ~80% gross margins in 2025; management raised FY2025 guidance (Revenue $390–$410m, Gross Profit $310–$325m, Adjusted EBITDA $55–$65m) and reaffirmed 2026 $100m EBITDA target .
Operational outperformance: Insurance segment attritional loss ratio improved to 16% (from 30%), gross loss ratio to 21% (from 36%); premium per policy up 31%; new business premiums +50% in Q4 and “double” early in Q1 2025 as agencies re-engage post-PIRE approval .
Balance sheet positioning: $350.4m cash, cash equivalents, and investments at 12/31/24; post-sale, Porch holds ~$106m surplus notes bearing 9.75% + SOFR and expects ~ $7m Vesttoo bankruptcy cash later in Q1 2025, supporting interest income that substantially offsets debt service .

What Went Well and What Went Wrong

What Went Well

Record quarterly Adjusted EBITDA ($41.8m) and GAAP net income ($30.5m) driven by “operational excellence,” advantaged underwriting, SaaS pricing, and cost control; CEO: “pivotal shift toward sustainable profitable growth” .
Insurance KPIs improved: attritional loss ratio 16% vs 30% prior year; gross loss ratio 21% vs 36%; premium retention 105%; premium per policy +31% .
Strategic restructuring completed: Formation of PIRE and sale of HOA to PIRE; CFO: model becomes simpler, higher margin, asset-light; raised FY2025 guidance and confirmed 2026 $100m EBITDA target .

What Went Wrong

Reported revenue decreased 12% YoY to $100.4m due to prior-year non-recurring Vesttoo-related reinsurance effects ($26m uplift in Q4’23) and a $5m non-recurring year-end adjustment; absent these, management cites ~20% organic growth trends (29% in Insurance) .
Policies in force declined 34% YoY to 206k given targeted non-renewals and EIG divestiture; management expects PIF growth to be mostly flat in 2025, picking up in 2026 .
Q4 included legacy reinsurance complexities and continued hurricane impacts across 2024; management highlighted the transition away from direct weather risk via PIRE to reduce volatility .

Financial Results

Consolidated Performance vs Prior Quarter and Prior Year, and Estimates

Metric	Q2 2024	Q3 2024	Q4 2024	Vs Est.
Revenue ($USD Millions)	$110.8	$111.2	$100.4	N/A – S&P Global consensus unavailable
Revenue less Cost of Revenue ($USD Millions)	$19.2	$64.1	$89.3	N/A – S&P Global consensus unavailable
Revenue less Cost of Revenue Margin (%)	17%	58%	89%	N/A – S&P Global consensus unavailable
GAAP Net Income (Loss) ($USD Millions)	$(64.3)	$14.4	$30.5	N/A – S&P Global consensus unavailable
Adjusted EBITDA ($USD Millions)	$(34.8)	$16.9	$41.8	N/A – S&P Global consensus unavailable
Adjusted EBITDA Margin (%)	(31)%	15%	42%	N/A – S&P Global consensus unavailable
Diluted EPS ($USD)	$(0.65)	$0.12	Not disclosed in 8-K/PR	N/A – S&P Global consensus unavailable

Note: Consensus estimates via S&P Global Capital IQ were unavailable at time of analysis (tool limit error). Company stated results were “ahead of expectations” and record Adjusted EBITDA .

Segment Breakdown – Q4 2024 vs Q4 2023

Metric	Insurance Q4’23	Insurance Q4’24	Vertical Software Q4’23	Vertical Software Q4’24	Corporate Q4’23	Corporate Q4’24	Consolidated Q4’23	Consolidated Q4’24
Revenue ($mm)	$86.9	$72.0	$27.7	$29.3	$0.0	$(0.9)	$114.6	$100.4
Rev. less Cost of Rev. ($mm)	$57.9	$65.7	$22.0	$24.6	$0.0	$(0.9)	$79.9	$89.3
Rev. less Cost of Rev. Margin (%)	67%	91%	79%	84%	—	—	70%	89%
Adjusted EBITDA ($mm)	$31.6	$48.8	$(0.3)	$5.0	$(19.7)	$(12.0)	$11.7	$41.8
Adjusted EBITDA Margin (%)	36%	68%	(1)%	17%	—	—	10%	42%

KPIs – Trajectory Across the Last Three Quarters

KPI	Q2 2024	Q3 2024	Q4 2024
Gross Written Premium ($mm)	$117	$139	$112
Policies in Force (000s)	232	219	206
Annualized Revenue per Policy ($)	$1,348	$1,460	$1,396
Annualized Premium per Policy ($)	$2,059	$2,208	$2,446
Premium Retention Rate (%)	88%	100%	105%
Gross Loss Ratio (%)	117%	57%	21%
Attritional Loss Ratio (%)	21%	21%	16%
Avg Companies in Quarter	29,494	28,125	27,063
Monetized Services (units)	231,209	245,226	218,744

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue (Porch Shareholder Interests)	FY 2025	$380m (Investor Day target)	$390m to $410m	Raised
Gross Profit (Porch Shareholder Interests)	FY 2025	$297m (Investor Day target)	$310m to $325m	Raised
Adjusted EBITDA (Porch Shareholder Interests)	FY 2025	$50m (Investor Day target)	$55m to $65m	Raised
Adjusted EBITDA (Porch Shareholder Interests)	FY 2026	$100m (target reiterated)	$100m (reaffirmed)	Maintained

Note: Porch expects ~80% gross margins in FY 2025 under the resegmented shareholder interest basis; reconciliations not provided as future-period non-GAAP .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3 2024)	Current Period (Q4 2024)	Trend
PIRE / Insurance Restructuring	Filed updated reciprocal application in Q2; TDI approved formation in Q3; plan to sell HOA to PIRE	PIRE formed Jan 1, 2025; sale of HOA completed; move to commissions/fees and higher margins; guidance based on “Porch Shareholder Interests”	Structural shift complete; margin uplift and volatility reduction
Underwriting & Loss Ratios	Improved attritional loss ratio; hurricane impacts (Houston event; Beryl)	Gross loss ratio 21%; attritional 16% in Q4; sets industry benchmark per COO	Sustained improvement; resilience despite catastrophe season
Agency Distribution & Premium Growth	Managing premiums near flat; prep for growth post-approval	Geographies reopened; new agency leadership; new business premiums +50% in Q4 and “double” early Q1 2025	Growth reaccelerating post-restructuring
Home Factors (Data)	Launched with strong early momentum	Robust third-party testing pipeline; adding Factors quarterly; go-to-market leader hired; modest 2025 revenue assumed	Building pipeline; monetization ramps 2026+
Vertical Software / AI	Price increases; retention strong	AI assistant for inspection report building; reporting upgrades; SaaS margin +500bps YoY	Product innovation continues; margin expansion
Capital & Debt	Repurchased $43m of 2026 notes in Q3	~$106m surplus notes at 9.75%+SOFR; ~$93m cash/investments ex-HOA in Jan; potential ~$7m Vesttoo bankruptcy cash	Interest income offsets debt service; improving cash profile

Management Commentary

CEO: “We delivered record quarterly Adjusted EBITDA in Q4 2024, which we believe marks a pivotal shift toward sustainable profitable growth… With the strong progress… we’re raising our 2025 outlook, including Adjusted EBITDA of $60 million at the mid-point” .
CEO: “We completed the formation of the Porch Insurance Reciprocal Exchange… transforms the financial results… to be more predictable and higher margin” .
CFO: “Adjusted EBITDA was $41.8m… ahead of our expectations, driven by strong execution, risk selection, capital allocation and cost control” .
COO: “We saw 50% growth in new business premium in Q4. And already in Q1, we are seeing new business double versus the prior year” .

Q&A Highlights

Guidance raise rationale: Momentum post-PIRE formation, early progress in insurance services conversion rate and high-margin profile; maintaining prudence on 2026 target while lifting 2025 .
Agency ramp and distribution: Reopened geographies, updated incentives, hired a growth leader from Farmers; agencies “excited” about PIRE; onboarding ramp in progress .
Home Factors monetization: Engaging multiple carriers; adding Factors rapidly; modest 2025 revenue with more meaningful ramp in 2026–2028; go-to-market build underway .
M&A stance: Opportunistic and incremental to organic plan; capabilities exist to integrate and accelerate, but current guidance is organic .
PIF cadence: Mostly flat in 2025, accelerating into 2026 as rate increases flow through and growth investments take hold .

Estimates Context

Wall Street consensus via S&P Global Capital IQ was unavailable at time of analysis due to data access limits; therefore, explicit beats/misses vs consensus cannot be determined. Company characterized Q4 Adjusted EBITDA and net income as “ahead of expectations” and reported record profitability .
Implications: Street models likely need upward revisions to FY2025 Revenue ($390–$410m), Gross Profit ($310–$325m), and Adjusted EBITDA ($55–$65m) to reflect PIRE-driven margin mix and the raised guidance .

Key Takeaways for Investors

Porch has executed a structural pivot: PIRE formation and HOA sale shift the business to a higher-margin, fee-based profile with ~80% expected gross margins in 2025; reduced weather volatility risk should support more predictable earnings quality .
Profitability inflection: Record Q4 Adjusted EBITDA ($41.8m; 42% margin) and net income ($30.5m) with strong segment margins (Insurance adj. EBITDA margin 68%; Vertical Software 17%) indicate the operating model is scalable .
Insurance growth reaccelerating: Agency reopenings, leadership hires, and premium per policy increases drove new business premiums +50% in Q4 and “double” early Q1; management targets $500m GWP in 2025 and $600m in 2026 .
Data monetization optionality: Home Factors testing pipeline is robust; while 2025 revenue is modest, management expects increasing contribution from 2026 onward as carrier adoption expands .
Balance sheet support: ~$106m surplus notes at 9.75%+SOFR and expected Vesttoo bankruptcy receipts bolster interest income and liquidity; ex-HOA cash/investments ~$93m as of Jan post-transaction .
Near-term trading setup: Raised FY2025 guidance and record Q4 profitability are catalysts; investor focus likely on pace of agency activation, gross profit trajectory under new segments, and stability of loss ratios into 2025 .
Medium-term thesis: Reaffirmed $100m 2026 Adjusted EBITDA target with continued margin expansion across Insurance Services, Software & Data, and Consumer Services; execution on Home Factors and distribution remains key .

Porch Group, Inc. (PRCH)·Q4 2024 Earnings Summary