Porch Group, Inc.

I'd like to take a moment 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. Today's discussion, including responses to your questions, reflects management reviews as of today, November 5th, 2025. We do not undertake any obligations to update or revise this information. Additionally, we will make forward-looking statements about our expected future financial or business performance or conditions, business strategy and plans. These statements are subject to risk and uncertainties, which could cause actual results to differ materially from these forward-looking statements. Please refer to the information on this slide and in our SEC filings for important disclaimers. We will reference both GAAP and non-GAAP financial measures in today's call. Please refer to today's press release for reconciliations of non-GAAP measures to the most comparable GAAP measures discussed during the earnings call, which are also available on our website. As a reminder, this webcast will be available for replay along with a presentation shortly after this call. on the company's website at ir.porchgroup.com. With that, joining us today here are Matt Ehrlichman, Porch's CEO, Chairman and Founder, Sean Theback, Porch's CFO, and Matthew Nagel, Porch's COO. With that, I'll now turn the call over to Matt for his key updates.

Good afternoon, everyone. Thank you for joining us. We are proud to report another excellent quarter where we once again exceeded expectations. Before diving into Q3 results, I would like to take a moment to reflect on the progress we've made this year. In December 2024, we held an investor day and told you all that we would deliver $50 million of adjusted EBITDA in 2025. I remember getting follow-up questions from investors asking why we were being that aggressive, and I understood where it came from. The year prior, we had posted a $45 million adjusted EBITDA loss, and 2024 was tracking close to breakeven. I responded we were confident in the go-forward model of the fundamental differentiation and margin advantage that our unique data provides to our insurance business and our ability to execute to get our desired results. Despite the level of improvement it represented, we had ambitions to deliver more than the $50 million in adjusted EBITDA, and we thought that $70 million would be a fantastic outcome for the year. Here we are, three quarters through 2025, and I am pleased to announce another strong quarter in which we delivered $21 million in adjusted EBITDA and $29 million in cash flow from operations for port shareholders. This means that in the first nine months of 2025, we've already generated $53.1 million in adjusted EBITDA, surpassing that initial $50 million target. We're proud of the execution this year and the control we're demonstrating over the business, as we now expect to deliver full year performance at that $70 million, which represents a 10 times increase versus the prior year. Our shift to a simpler commission and fee-based model was designed to deliver straightforward, predictable, and high margin results for port shareholders. It has been a resounding success. As an example, year-to-date gross profit rose 119% versus the prior year. And year-to-date adjusted EBITDA improved $88 million versus the prior year. Let me highlight a few key metrics for our Q3 port shareholder interest. Reciprocal written premium, or RWP, was $138 million. Revenue was $115 million. Q3 gross profit was $94 million, resulting in an 82% gross margin. Q3 adjusted EBITDA was $21 million, an 18% margin. And we continue to see high rate of cash conversion with Q3 cash flow from operations for port shareholders of $29 million. Operationally, we are pleased with the progress, in particular with our insurance business. The conversion rate of reciprocal written premium to porch insurance services adjusted EBITDA improved again in Q3, now to 18%. This exceeded our expectations and led to the strong profit results. Our data teams continued their progress this last quarter, launching more new home factors, bringing us to 89 unique property characteristics we know and aren't widely available in the market. Our unique property data and capabilities, such as home warranty and moving services, create sustainable advantages, industry-leading loss ratios, and fundamentally more margin in the system. We see this as a structural advantage as it supports port shareholder interest profitability and the reciprocal surplus expansion. So outside of hitting our profitability goals, the second most important priority for us this year was to position ourselves to scale premium into the future in order to achieve our future profitability goals. The two main components of doing so are one, generating as much surplus as possible at the reciprocal, and two, to grow agent and quote volume such that we can lower price for new low-risk customers when the time's right. We've been able to deliver on this year's adjusted EBITDA guidance without needing to lower prices to scale premium faster. This is a fantastic scenario for us as it results in surplus expanding much more than anticipated. I'm excited to share that at the end of Q3, the reciprocal surplus combined with non-admitted assets increased more than $100 million quarter over quarter to now $412 million. With this capital in place, we have a clear path to scaling premiums which we believe will drive exceptional profit growth at Porch Group. We continue to grow our insurance staff, including welcoming a new chief actuary, head of data science, and ramping up our agency recruiter and engagement teams. Tied to these investments, we're seeing strong levels of agency appointments and quote volumes that Matthew will cover off later in the call. This strength at the top of the funnel and the reciprocal's healthy capital position set us up for an exciting time ahead. Okay, let's go into this in a little more detail by revisiting this slide here from last quarter, where we've updated for capital generated now in Q3. On the left-hand side, as you can see, in the surplus combined with non-admitted assets chart, you'll see the reciprocal ended Q3 with $412 million. Again, this was $113 million improvement from last quarter and a $214 million improvement in just six months. Overall, just exceptional results. As a reminder, we talked about managing to a five to one premium to surplus ratio as a general rule of thumb, though it can be better over time. As you'll see in the middle chart, that this level of capital could support approximately $2 billion of premium as we look ahead. Moving to the right hand side, in Q2, the conversion rate of RWP to insurance services adjusted EBITDA was 16%. this conversion rate improved to 18% in the third quarter. So you can see why we prioritized surplus generation to drive future value creation. In just the third quarter, we added more than $100 million of capital, which based on a rule of thumb supports additional adjusted EBITDA of more than $100 million annually. Overall, with this capital already in place and without further surplus expansion, we can show the path to support more than $350 million in annual insurance services adjusted EBITDA. And we're just getting started. This is exactly the setup we've been working toward, and I couldn't be more energized for the opportunity in front of us. I'll now turn it over to Sean to cover our financial results.

Thank you, Matt, and good afternoon, everyone. Similar to Matt's overview, my comments will address performance of the port shareholder interest, since generating cash for port shareholders is our ultimate goal. Under GAAP, we are consolidating the reciprocal exchange financials, which you can find throughout the press release and our 10Q. Q3 performance was strong, driven by insurance services. Q3 2025 port shareholder interest revenue was $115.1 million with an 82% gross margin producing $94.2 million in gross profit. Adjusted EBITDA of $20.6 million was ahead of expectations driven by insurance services. Cashflow from operations for port shareholders was $28.8 million. The port shareholder interest revenue of $115.1 million was comprised of insurance services at 64%, followed by software and data at 21%, and the remainder from consumer services. Q3 port shareholder interest gross profit was $94.2 million, with an 82% gross margin led by our insurance services segment which had an 84% gross margin. We are pleased with the high margin profile we are seeing across all of our businesses. Q3 adjusted EBITDA was $20.6 million with an 18% adjusted EBITDA margin overall. This was driven by our insurance services segment posting a 34% adjusted EBITDA margin and good profitability overall across our other two core segments, despite a continued challenging housing market. Now let's move a little deeper into the segment results, starting with insurance services. Overall, we are pleased with the conversion rate of reciprocal written premium, or RWP, to insurance services adjusted EBITDA. In Q3, the rate accelerated to 18%, 200 basis points higher than Q2. We are seeing good operating leverage here and are focused on driving efficiency. In the next quarter, RWP was $137.5 million and insurance services revenue was $73.8 million, which is a premium to revenue conversion rate of 54%. As a reminder, there are five economic drivers for this segment. Management fees, policy fees, quota share reinsurance, lead fees to agencies, and surplus noted interest. Segment gross profit was $62.3 million, with a gross margin of 84%. Segment adjusted EBITDA was $25.3 million, a margin of 34%. As a quick reminder on seasonality for the reciprocal, RWP is typically highest in Q2 and Q3 when consumers are buying their homes and therefore buying or renewing their homeowner's insurance. Therefore, we expect the reciprocal to experience its typical seasonal decrease in RWP from Q3 to Q4 as there are less renewals. Shifting now to software and data. As a backdrop, most of our software businesses charge per transaction, and we continue to see a trough U.S. housing market. With that, segment revenue was $24.6 million, a 7% increase over the prior year, driven by product innovation and corresponding price increases. Gross profit was $18.2 million, a 74% gross margin. Adjusted EBITDA was $5.1 million, relatively flat with the prior year. We continue to invest in product innovation in our software business, including incorporating AI into our product suite and the go-to-market and sales organization in our data business. We believe these businesses are set up to grow nicely as the housing market recovers. Okay, shifting now to consumer services, which is also impacted by the trough Housing market revenue was $19.4 million, a 9% increase over the prior year. Gross profit was $16.6 million, an 86% gross margin. And adjusted EBITDA for this segment was $2.5 million. Over the last few years, we've reduced corporate expenses as we move to lower cost locations and reduced G&A back office costs. While most of the heavy lifting has been done, we continue to pursue operational efficiencies. In the third quarter, corporate expenses of $12.3 million decreased $700,000 from the prior year. Now moving on to the balance sheet. We continue to be pleased with the cash flow profile of the insurance services operating model. Year to date, Porch shareholder cash flow from operations was $71 million, driven by $53 million in adjusted EBITDA and favorable working capital. For Q3, we ended the quarter with Porch cash plus investments of $132 million. Port shareholder interest cash flow from operations was $28.8 million in the quarter, driven by $28.6 million in adjusted EBITDA. Throughout the year, we've made notable progress on our capital structure. In Q3, we repurchased an additional $12.8 million of our 2,026 convertible notes, which resulted in a gain of approximately $400,000. and which leaves a remaining balance of $7.8 million. The board has authorized management to repurchase these remaining notes with cash from the balance sheet. And lastly, shifting to our updated 2025 guidance for poor shareholder interest. As we've discussed, our primary goal is to generate cash flow for poor shareholders, and adjusted EBITDA is the key proxy for that metric. As Matt said, we thought that $70 million of adjusted EBITDA would be an excellent outcome for this year. And we're proud that we are right on track to deliver this result. And we are updating our guidance accordingly. This is a $63 million or a 10 times increase versus the prior year. And a result that will put us amongst the top performing companies in the S&P small cap index. It is also $20 million better than the guidance at the beginning of the year. Given where we are against our adjusted EBITDA target, in Q4, we'll continue to prioritize surplus generation at the reciprocal over the scaling of premium, which we believe will create the most long-term value. As Matt discussed, we've delivered a step function change in the reciprocal's capital position year to date, and we expect continued progress here in Q4. This foundation gives us the ability to scale RWP faster as we enter 2026. With that background, we are also raising our gross profit midpoint by $2.5 million with a new range of $335 million to $340 million. Our revenue midpoint remains the same with a tightened range $410 million to $420 million. I'll now hand over to Matthew to provide a strategic update and KPI review. Thank you, Sean.