Porch Group, Inc.

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 8K with SEC. 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. 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. 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. 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.portsgroup.com. 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.

Thank you, John. Good afternoon, everyone. Should be another fun call here today. We are pleased to report a fantastic second quarter where we again delivered results that exceeded expectations and are raising guidance substantially across the board. We generated positive net income attributed to Porch in the quarter and expect that to be true for the full year of 2026, 2027, and the years ongoing. 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. 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. We managed 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, 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. 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. So the key message is that the system is working. We built a differentiated insurance platform with strong capacity, expanding distribution and proprietary data, which creates a fundamental margin advantage relative to competitors. 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. 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. As I mentioned, written policies were up 38% year over year. 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 gross 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. 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 built with premium volumes certainly translating into high margin earnings. 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. 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 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. 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. There's substantial excess capital to support this level of growth. The reciprocal ended Q2 with statutory surplus of $170 million, 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. Overall, the reciprocal's Q2 statutory surplus supports over $800 million 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 of premium. 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. We continue to increase the top of funnel with a land and expand strategy. This is a key strategic proof point in 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, 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. 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. 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 watermarks in the final week of June with broad-based improvement across the areas where we focused our actions. 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. 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. 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. With that, I'll turn it over to Shawn to cover the financials and guidance.

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 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. We'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. Net income attributable to port 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, and as such, will highlight its performance in today's discussion. Now let's walk through revenue before we move into the segment results. Total consolidated gap 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. And within that, insurance services delivered $93 million in revenue, up 38% year-over-year. 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, 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. 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 and 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 and 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%. 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. 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. 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 port 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 ports 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, 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. 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. 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 port 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 gap 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. 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.