Porch Raises 2026 Guidance as Q3 Adjusted EBITDA More Than Doubles

Porch Group (NASDAQ: PRCH) raised its 2026 guidance after third-quarter earnings more than doubled on an adjusted basis, as rapid growth in policies written by the Porch Reciprocal Exchange lifted its Insurance Services business. Net income attributable to Porch improved to $12.2 million from a $10.9 million loss a year earlier, while adjusted EBITDA excluding the Reciprocal rose 116% to $44.5 million.

The company now expects 2026 revenue excluding the Reciprocal of $518 million to $523 million, compared with its prior range of $506 million to $517 million. The midpoint implies 24% year-over-year growth. Gross profit excluding the Reciprocal is projected at $438 million to $443 million, up from the previous $419 million to $429 million range.

Porch also increased its adjusted EBITDA guidance excluding the Reciprocal to $135 million to $140 million from $119 million to $125 million. The new midpoint represents expected growth of 79% from 2025.

Insurance Services drives earnings growth

Third-quarter consolidated revenue increased 13% to $143.9 million, while revenue from Porch-owned segments excluding the Reciprocal rose 22% to $140.8 million. Insurance Services was the primary growth engine, with revenue climbing 39% to $102.8 million and gross profit increasing 46% to $91.2 million.

Insurance Services adjusted EBITDA nearly doubled to $50.1 million from $25.3 million. Its adjusted EBITDA margin expanded to 49% from 34%, while gross margin increased to 89% from 84%. Porch said the segment recorded its sixth consecutive “Rule of 80” quarter, a measure combining revenue growth and adjusted EBITDA margin.

The Reciprocal wrote 67,500 policies during the quarter, up 42% from 47,700 a year earlier. Reciprocal written premium rose 17% to $161 million. Written premium per policy declined 17% to $2,384, primarily because new-customer policies—which typically carry lower premiums than renewals—made up a larger share of the mix. Premium per new-customer policy declined 2%.

Porch reported that producing agency branch locations increased 79% year over year, quote volumes rose 114% and conversion rates increased 53%. Written premium from new customers was up 178%.

The Reciprocal’s statutory surplus reached $174.4 million, an increase of about $22 million from the prior year. Its third-quarter gross loss ratio was 24%, and its non-GAAP attritional loss ratio was 18%. Although Porch manages and consolidates the Reciprocal as a variable-interest entity, the exchange is owned by its policyholder-members, and its results are allocated to noncontrolling interests rather than Porch shareholders.

Other segments post lower revenue

Software & Data revenue declined 9% to $22.3 million, with gross profit down 8% to $16.8 million and adjusted EBITDA falling 18% to $4.2 million. The segment’s average number of companies decreased 22% to 18,500, partly offset by a 17% increase in annualized average revenue per company to $4,840.

Consumer Services revenue fell 5% to $18.3 million, while gross profit declined 7% to $15.5 million. Adjusted EBITDA, however, increased 29% to $3.2 million. Monetized services decreased 11% to 83,700, while average revenue per monetized service rose 6% to $219.

At September 30, Porch-owned segments and corporate functions held $165 million in cash and investments, up $38 million from the end of the second quarter. The increase reflected quarterly adjusted EBITDA, partly offset by an $8 million repayment of the remaining 2026 notes. The Reciprocal held $333 million in cash and investments. Porch said it was tracking toward the low end of its targeted leverage range of two to three times.

Allied Trust transaction shapes 2027 targets

Porch said its pending acquisition of Allied Trust would add geographic and agency reach, including entry into Louisiana, which accounted for 42% of Allied Trust’s 2025 premium. Management estimates Allied Trust could contribute about $200 million of reciprocal written premium in the first full year after closing and portfolio optimization.

Assuming a full year of Allied Trust contributions, Porch set initial 2027 combined-company targets of more than $900 million in reciprocal written premium, over 360,000 reciprocal policies written and more than $180 million in adjusted EBITDA excluding the Reciprocal. These figures are management estimates rather than pro forma financial information.

The acquisition remains subject to regulatory approvals and customary closing conditions. Porch cautioned that timing, integration, portfolio optimization and the realization of expected synergies could affect the combined-company targets. Broader risks include catastrophe losses, housing and insurance-market conditions, reinsurance availability and performance, insurance rate approvals, capital requirements, cybersecurity threats and potential effects of changes in Porch’s share price on the capital positions of the Reciprocal and its captive reinsurance business.