Porch wants investors to focus on policies, not just premium
Porch Group held its Q2 2026 earnings call on July 29. Here are the key takeaways.
Policy count is becoming the key metric
Porch says investors have focused too heavily on reciprocal written premium. Because the company collects fees on every new and renewing policy, management argues that policy count is also a major driver of revenue and earnings.
“I think people have been very focused on just an RWP, but our economic model is driven through both RWP and policies written.”
Porch is now a “Rule of 50” company
Excluding its reciprocal insurer, Porch recorded 23% revenue growth and a 30% adjusted EBITDA margin. Management also expects the company to remain profitable for the full year and beyond.
“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 is driving the business
Insurance Services generated 38% revenue growth and a 48% adjusted EBITDA margin during the quarter. The segment’s adjusted EBITDA more than doubled to $44 million.
“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.”
Policies are growing faster than premium
Reciprocal policies written increased 38% to 59,000, while reciprocal written premium grew 16% to $140 million. The difference reflects rapid new-customer growth and lower premiums for new business.
“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.”
Porch responded to softer pricing
Competitors became more aggressive in May, likely because of lower reinsurance costs. Porch made targeted pricing adjustments, helping conversion rates recover in June.
“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.”
Its margin advantage gives Porch pricing flexibility
Management says lower loss ratios allow Porch to reduce prices selectively without sacrificing its growth or profitability objectives. Premium per new customer declined 4% year over year.
“We’ve effectively put a little bit of the margin back to customers via that 4% decline in premium per new customer.”
Distribution is expanding rapidly
The number of producing agency branches increased 148% year over year, while quote volume grew 87% and increased sequentially for the seventh consecutive 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.”
New-business premium more than tripled
Reciprocal written premium from new customers increased 206% year over year. Porch expects those customers to create a larger and increasingly valuable renewal book.
“It’s a beautiful game, insurance, which customers renew at a really, really high clip.”
Porch has substantial capacity to grow
The reciprocal ended the quarter with $170 million in statutory surplus, an increase of 33% from a year earlier. Management says that capital can support more than $800 million in premium under its current framework.
“Looking ahead, the reciprocal surplus position gives us plenty of room to support our organic and inorganic growth goals.”
M&A could sit on top of organic growth
Porch says its corporate development team is evaluating numerous opportunities. Any acquisitions or book rolls would be incremental to the company’s existing organic targets.
“Our corporate development team has never been busier. It’s part of our playbook.”
The reciprocal added catastrophe-bond protection
Porch completed its first catastrophe-bond transaction for the reciprocal, adding $100 million of protection at the top of its reinsurance tower for very low-probability events.
“It was our inaugural cat bond offering for the reciprocal, and we’re very pleased with the outcome.”
AI is producing measurable efficiency gains
Nearly all Porch engineers are using AI tools. The company reported a 2.4-times increase in lines of code changed, a 73% increase in merge requests and cloud-computing savings approaching 10%.
“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.”
AI also expands Porch’s data advantage
Porch has information on approximately 90% of US residential properties and receives early signals relating to 90% of monthly homebuyers. AI is helping the company extract more underwriting insights from that information.
“Our ability to go model and identify those Home Factors is getting faster.”
Porch can infer risks for homes it hasn’t seen
Management says its property data can help the company estimate characteristics of homes for which it lacks direct information. That could give Porch a head start when entering new states.
“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.”
The housing businesses remain under pressure
Porch’s Software & Data and Consumer Services businesses were relatively flat amid a stagnant US housing market. The company is managing them for profitability while waiting for housing activity to recover.
“Our focus is straightforward, manage these businesses with discipline today while continuing to strengthen the product and partnerships for our future market recovery.”
Profit guidance increased substantially
Porch raised its 2026 adjusted EBITDA guidance to between $119 million and $125 million. The $122 million midpoint represents 59% growth and is more than $20 million above the company’s initial outlook.
Bottom Line: Not every distribution relationship gets a press release: Coverager research found that Porch appointed Texas-based residential lender La Cross Mortgage in June.
