Financial Analysis

Note 16. Commitments and Contingencies From time to time we are or may become subject to various legal proceedings arising in the ordinary course of business, including proceedings initiated by users, other entities, or regulatory bodies. Estimated liabilities are recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In many instances, we are unable to determine whether a loss is probable or to reasonably estimate the amount of such a loss and, therefore, the potential future losses arising from a matter may differ from the amount of estimated liabilities we have recorded in the financial statements covering these matters. We review our estimates periodically and make adjustments to reflect negotiations, estimated settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular matter Cases under Telephone Consumer Protection Act Porch and/or an acquired entity, GoSmith.com, are party to a legal proceeding alleging violations of the automated calling and/or internal and National Do Not Call restrictions of the Telephone Consumer Protection Act of 1991 and a related Washington state law claim. The proceedings were commenced as thirteen separate mass tort actions brought by a single plaintiffs law firm in December 2019 and April/May 2020 in federal district courts throughout the United States. After an initial round of discovery, in November 2025 the United States Di …

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Note 9. Debt The following tables summarize outstanding debt as of June 30, 2026, and December 31, 2025. Principal Unamortized Debt Issuance Costs & Discount Carrying Value Convertible senior unsecured notes, due 2026 (1) $ 7,799 $ (7) $ 7,792 Convertible senior secured notes, due 2028 333,334 (68,006) 265,328 Convertible senior unsecured notes, due 2030 134,000 (1,837) 132,163 Balance as of June 30, 2026 $ 475,133 $ (69,850) $ 405,283 ______________________________________ (1) The 2026 Notes are included in current debt in the unaudited Condensed Consolidated Balance Sheets as of June 30, 2026. Principal Unamortized Debt Issuance Costs & Discount Carrying Value Convertible senior unsecured notes, due 2026 (1) $ 7,799 $ (27) $ 7,772 Convertible senior secured notes, due 2028 333,334 (80,247) 253,087 Convertible senior unsecured notes, due 2030 134,000 (2,027) 131,973 Balance as of December 31, 2025 $ 475,133 $ (82,301) $ 392,832 ______________________________________ (1) The 2026 Notes are included in current debt in the unaudited Condensed Consolidated Balance Sheets as of June 30, 2026. 2026 Convertible Senior Unsecured Notes In the second quarter of 2025, we completed a series of privately negotiated refinancing transactions with certain holders of our 0.75% Convertible Senior Unsecured Notes due in September 2026 (the 2026 Notes). As part of these refinancing transactions, we: Exchanged $96.8 million aggregate principal amount of 2026 Notes for $83.0 million aggre …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

The following table provides detail of total revenue. Transactional revenue consists of revenue recognized from non-recurring sales or services that do not generate ongoing revenue and primarily includes revenue generated from moving services. Recurring revenue refers to revenue streams that are more predictable and generate revenue from customers on an ongoing basis, including revenue from insurance services management, inspection software, title insurance software, mortgage software, warranty products, and marketing services. Insurance carrier revenue consists of revenue earned through premiums collected on policies, policy fees, and commissions by the Reciprocal. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Transactional $ 9,792 $ 9,174 $ 16,136 $ 15,562 Recurring (1) 124,350 99,879 229,750 180,017 Intercompany revenue (2,330) (2,035) (4,636) (4,015) 131,812 107,018 241,250 191,564 Insurance carrier 59,624 55,409 110,907 95,347 Intercompany revenue (50,554) (36,350) (90,152) (56,089) Total revenue (2) $ 140,882 $ 126,077 $ 262,005 $ 230,822 ______________________________________ (1) Revenue recognized during the three and six months ended June 30, 2026 and 2025, includes revenue that is accounted for in accordance with ASC Topic 460, Guarantees, separately from revenue from contracts with customers. Revenue accounted for under ASC Topic 460 was $8.3 million and $8.3 million for the three months ended June 30, 2026 and 2025, respectively, and $1 …

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Note 11. Stock-Based Compensation Under our 2020 Stock Incentive Plan, employees, directors and consultants are eligible for grants of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards (RSAs), restricted stock units (RSUs), performance restricted stock units (PRSUs), and other stock awards, collectively referred to as Equity Awards. All Equity Awards granted during the six months ended June 30, 2026, were to employees and directors. The following table summarizes the classification of stock-based compensation expense in the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Cost of revenue $ 47 $ 62 $ 89 $ 96 Selling and marketing $ 600 $ 496 $ 980 $ 799 Product and technology 861 966 1,619 1,658 General and administrative 6,354 6,476 12,457 10,357 Total stock-based compensation expense $ 7,862 $ 8,000 $ 15,145 $ 12,910 The following table summarizes Equity Award activity for the six months ended June 30, 2026. Number of Options Number of Restricted Stock Units Number of Performance Restricted Stock Units Balances as of December 31, 2025 2,815 5,661 6,808 Granted 2,080 1,329 Vested (1) (1,640) (2,755) Exercised (172) Forfeited, canceled or expired (1) (186) Balances as of June 30, 2026 2,642 5,915 5,382 ______________________________________ (1) The vested PRSU amount presented in the table reflects target sha …

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Note 6. Fair Value The following tables summarize the fair value measurements of assets and liabilities that are measured at fair value on a recurring basis. Fair Value Measurement as of June 30, 2026 Level 1 Level 2 Level 3 Total Fair Value Assets Money market mutual funds $ 109 $ $ $ 109 Debt securities: U.S. Treasuries 3,949 3,949 Obligations of states, municipalities and political subdivisions 2,263 2,263 Corporate bonds 37,544 37,544 Residential and commercial mortgage-backed securities 21,366 21,366 Other loan-backed and structured securities Assets of Reciprocal (a consolidated variable interest entity): Money market mutual funds 43,895 43,895 Debt securities: U.S. Treasuries 7,157 7,157 Obligations of states, municipalities and political subdivisions 28,795 28,795 Corporate bonds 66,244 66,244 Residential and commercial mortgage-backed securities 75,985 75,985 Other loan-backed and structured securities 18,907 18,907 $ 44,004 $ 262,210 $ $ 306,214 Liabilities Contingent consideration - business combinations (1) $ $ $ $ Embedded derivatives (2) $ $ $ $ _ _____________________________________ (1) We have contingent consideration arrangements related to business combinations. The fair value of the related contingent consideration liability was zero as of June 30, 2026. (2) We have embedded derivatives features associated with our convertible senior secured notes due in 2028. The fair value of the related derivative liability was zero as of June 30, 2026. Fair Value Measu …

FairValueDisclosuresTextBlock · excerpt; the full note is in the filing

Note 8. Intangible Assets and Goodwill Intangible Assets Intangible assets are stated at cost or acquisition-date fair value less accumulated amortization and impairment. The following tables summarize intangible asset balances. As of June 30, 2026 Weighted Average Useful Life (in years) Intangible Assets, Gross Accumulated Amortization and Impairment Intangible Assets, Net Customer relationships (1) 10.0 $ 47,900 $ (27,323) $ 20,577 Acquired technology 8.0 7,980 (5,298) 2,682 Trademarks and tradenames (2) 11.0 22,025 (10,297) 11,728 Non-compete agreements 7.0 180 (109) 71 Renewal rights (3) 6.0 9,734 (6,670) 3,064 Insurance licenses (4) Indefinite 4,960 4,960 Total intangible assets $ 92,779 $ (49,697) $ 43,082 ______________________________________ (1) Balance includes $8.0 million of customer relationships that are included in intangible assets, net, in Assets of Reciprocal section of the Consolidated Balance Sheets as of June 30, 2026. (2) Balance includes $5.8 million of trademarks and tradenames that are included in intangible assets, net, in Assets of Reciprocal section of the Consolidated Balance Sheets as of June 30, 2026. (3) Balance includes $2.7 million of renewal rights that are included in intangible assets, net, in Assets of Reciprocal section of the Consolidated Balance Sheets as of June 30, 2026. (4) The entire insurance licenses balance is included in intangible assets, net, in Assets of Reciprocal section of the Consolidated Balance Sheets as of June 30, 20 …

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Note 15. Income Taxes Benefit or provision for income taxes for the three months ended June 30, 2026, and 2025, was a provision of $0.6 million and $1.1 million benefit, respectively, and the effective tax rates for these periods were (4.3)% and (15.2)%, respectively. Benefit or provision for income taxes for the six months ended June 30, 2026 and 2025, were $2.4 million provision and $0.2 million benefit, respectively, and the effective tax rates for these periods were (24.3)% and (1.6)%, respectively. The difference between our effective tax rates for the six months ended June 30, 2026 and 2025, and the U.S. statutory rate of 21% was attributable to the impact of a full valuation allowance on our net deferred tax assets. Our consolidated effective tax rate decreased for the both the three and six months ended June 30, 2026, compared to the same periods in the prior year primarily due to a change in the mix of income between the Reciprocal and Porch, which are treated as separate reporting entities for income tax accounting purposes, and the sale of Porch common shares by the Reciprocal (see Note 10). Our income tax provision for the six months ended June 30, 2025, includes deferred federal income tax expense of $0.9 million, which was recognized in conjunction with the formation of the Reciprocal and subsequent sale of HOA to the Reciprocal. The deferred tax expense associated with this event is driven by changes to our scheduled reversal of deferred tax liabilities and ass …

IncomeTaxDisclosureTextBlock · excerpt; the full note is in the filing

Accounting Standards Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures, which requires that public entities disclose, on an annual and interim basis, disaggregated information about specific expense categories (including employee compensation, depreciation, and amortization) presented on the face of the income statement. The guidance will first be effective in annual disclosures for the year ending December 31, 2027. Early adoption is permitted. We are in the process of assessing the impact of ASU 2024-03 on our disclosures. In May 2025, the FASB issued ASU 2025-03, Business Combinations (ASC Topic 805) and Consolidation (ASC Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity , which updates the guidance for determining the accounting acquirer in certain equity-based acquisitions of variable interest entities (VIEs). The guidance removes the presumption that the primary beneficiary is always the acquirer and instead requires the general guidance for identifying the acquirer under ASC Topic 805 to be applied. The guidance will first be effective beginning with our first quarter of 2027 and may be applied prospectively or retrospectively. Early adoption is permitted. We do not expect ASU 2025-03 to have a material impact on our consolidated financial statements or related disclosures. In May 2025, the FASB issued ASU 2025-04, Compensa …

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Note 4. Revenue Disaggregation of Revenue The following table provides detail of total revenue. Transactional revenue consists of revenue recognized from non-recurring sales or services that do not generate ongoing revenue and primarily includes revenue generated from moving services. Recurring revenue refers to revenue streams that are more predictable and generate revenue from customers on an ongoing basis, including revenue from insurance services management, inspection software, title insurance software, mortgage software, warranty products, and marketing services. Insurance carrier revenue consists of revenue earned through premiums collected on policies, policy fees, and commissions by the Reciprocal. Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Transactional $ 9,792 $ 9,174 $ 16,136 $ 15,562 Recurring (1) 124,350 99,879 229,750 180,017 Intercompany revenue (2,330) (2,035) (4,636) (4,015) 131,812 107,018 241,250 191,564 Insurance carrier 59,624 55,409 110,907 95,347 Intercompany revenue (50,554) (36,350) (90,152) (56,089) Total revenue (2) $ 140,882 $ 126,077 $ 262,005 $ 230,822 ______________________________________ (1) Revenue recognized during the three and six months ended June 30, 2026 and 2025, includes revenue that is accounted for in accordance with ASC Topic 460, Guarantees, separately from revenue from contracts with customers. Revenue accounted for under ASC Topic 460 was $8.3 million and $8.3 million for the three months ended Ju …

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Note 2. Segment Information We have four reportable segments that are also our operating segments: Insurance Services, Software & Data, Consumer Services, and Reciprocal Segment. The Reciprocal Segment, is managed, but not owned, by Porch and is consolidated for reporting purposes in accordance with ASC Topic 810, Consolidation . Reportable segments were identified based on how the chief operating decision-maker (CODM) manages the business, makes operating decisions, and evaluates operating and financial performance. Our chief executive officer acts as the CODM and reviews financial and operational information for our reportable segments. Operating segments are components of an enterprise for which separate discrete financial information is available and operational results are regularly evaluated by the CODM for the purposes of making decisions regarding resource allocation and assessing performance. Our Insurance Services segment manages and operates the Reciprocal, providing services related, but not limited, to underwriting, policy renewal, risk management, insurance portfolio management, financial management, and setting investment guidelines in exchange for commissions and fees. The Insurance Services segment also holds the surplus notes issued by the Reciprocal and includes our captive reinsurer which provides reinsurance support to improve capital efficiency for the Reciprocal. Our captive reinsurer only provides reinsurance coverage for risks with low earnings vo …

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Note 10. Stockholders' Equity Common Shares Outstanding and Common Stock Equivalents The following table shows the number of our common shares that could be issued for each component of our capital structure. June 30, 2026 December 31, 2025 Outstanding common shares, excluding shares held by the Reciprocal and our wholly owned captive reinsurance business 113,205 105,809 Outstanding common shares held by the Reciprocal 16,220 18,312 Outstanding common shares held by our wholly owned captive reinsurance business 2,092 Outstanding common shares, total 131,517 124,121 Common shares reserved for future issuance: Stock options 2,642 2,815 Restricted and performance stock units and awards (Note 11) 11,297 12,469 2020 Equity Plan pool reserved for future issuance (Note 11) 12,602 10,931 Convertible senior unsecured notes, due 2026 (1) 312 312 Convertible senior secured notes, due 2028 13,332 13,332 Convertible senior unsecured notes, due 2030 8,527 8,527 Total shares of common stock outstanding and reserved for future issuance 180,229 172,507 ______________________________________ (1) In connection with the September 16, 2021, issuance of the 2026 Notes, we used a portion of the proceeds to pay for the capped call transactions, which are expected to generally reduce the potential dilution to our common stock. The capped call transactions impact the number of shares that may be issued by effectively increasing our conversion price from $25 per share to approximately $37.74, which wou …

StockholdersEquityNoteDisclosureTextBlock · excerpt; the full note is in the filing