Porch Group Reports $104.7 Million Revenue in Q1 2025, Achieves Profitability Turnaround

Porch Group, Inc. reported a revenue of $104.7 million for the first quarter of 2025, a decrease of 9% from $115.4 million in the same period of 2024. The decline in revenue was primarily attributed to increased reinsurance ceding under the 2024 reinsurance program. However, the company achieved a significant improvement in profitability, posting a net income of $3.7 million compared to a net loss of $13.4 million in the prior year. This turnaround was driven by a reduction in operating expenses, which fell by 29% to $106 million, largely due to lower costs associated with claims and marketing.

The company underwent a significant strategic shift with the formation of the Porch Reciprocal Exchange on January 1, 2025, which involved the sale of its legacy homeowners insurance carrier, Homeowners of America. This transaction resulted in Porch Group holding approximately $106 million in surplus notes from the Reciprocal, which are expected to generate management fees as Porch continues to manage the operations of the Reciprocal. The new structure is anticipated to enhance profitability by allowing Porch to focus on higher-margin management services rather than underwriting.

Operationally, Porch Group reported a gross profit of $65.4 million for the quarter, up from $37.1 million a year earlier, reflecting a gross margin improvement from 32% to 62%. The Insurance Services segment, which manages the Reciprocal, generated $49.8 million in revenue, a 5% increase year-over-year, driven by new business premiums and management fees. The Software & Data segment also saw revenue growth, reaching $22 million, while the Consumer Services segment reported a decline in revenue to $14.7 million, impacted by a strategic shift towards longer-term warranty products.

As of March 31, 2025, Porch Group's total assets stood at $802.3 million, with cash and cash equivalents of $65.9 million, down from $167.6 million at the end of 2024. The company’s liabilities decreased to $834.3 million, primarily due to a reduction in current liabilities following the sale of Homeowners of America. Looking ahead, Porch Group aims to leverage its new operational structure to enhance profitability and expand its market share in the homeowners insurance sector, while continuing to manage the Reciprocal effectively.