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Description of Business and Summary of Significant Accounting Policies | 6 Months Ended
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Jun. 30, 2026
Accounting Policies [Abstract] |
Description of Business and Summary of Significant Accounting Policies | Note 1. Description of Business and Summary of Significant Accounting Policies Description of Business Porch Group, Inc., together with its consolidated subsidiaries, (“Porch,” the “Company,” “we,” “our,” “us”) is a new kind of homeowners insurance company—one designed to stand out in a massive and growing market. Our strategy is built on three differentiators that set us apart. 1.Advantaged Underwriting Through Proprietary Data Leveraging unique property insights, we can assess risk with greater precision, enabling competitive pricing for low-risk customers and avoiding high-risk customers, while delivering superior underwriting performance. 2.Best Services for Homebuyers We are committed to being the go-to partner during one of life’s most significant transitions—buying a home—by offering services that simplify moving and home setup. 3.More Protection We combine homeowners insurance with home warranty, filling coverage gaps and reducing unexpected costs for consumers. Beyond insurance, Porch is a leader in the home software-as-a-service (“SaaS”) space, serving approximately 19 thousand companies across industries essential to the home-buying process—home inspectors, title companies, mortgage providers, and more. Our deep relationships and proprietary data give us unique visibility into approximately 90% of U.S. homebuyers and approximately 90% of U.S. homes, enabling superior risk assessment and competitive pricing. Our mission is to be the best homeowners insurance partner for homebuyers, offering more than just coverage. Through the Porch app, we provide a full moving concierge service, helping customers with moving logistics and essential home services like security, TV/Internet setup, and more. Finally, we deliver greater home protection by pairing homeowners insurance with full home warranty, additional coverages, and appliance recall monitoring. This approach fills coverage gaps, reduces unexpected costs, and strengthens our value proposition—creating deeper, lasting relationships with our customers. We operate under four reportable segments that are also our operating segments. Three of these segments are owned by Porch — Insurance Services, Software & Data, and Consumer Services. The fourth segment, the Reciprocal Segment, is managed, but not owned, by Porch and, at this time, is consolidated for reporting purposes as described in the basis of presentation section below. See Note 2, Segment Information, for additional information on our reportable segments. Basis of Presentation The accompanying unaudited condensed consolidated financial statements include the accounts of Porch Group, Inc. and its subsidiaries as well as the Reciprocal, a variable interest entity (“VIE”) in which the Company is considered the primary beneficiary. The Reciprocal is managed, but not owned by, Porch and is consolidated at this time as a VIE for reporting purposes. All significant intercompany accounts and transactions are eliminated in consolidation. Certain information and footnote disclosures normally included in annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, these unaudited condensed consolidated financial statements and notes should be read in conjunction with the Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 20, 2026. The information as of December 31, 2025, included in the unaudited Condensed Consolidated Balance Sheets was derived from our audited consolidated financial statements. Certain prior period amounts have been reclassified to conform to the current year’s presentation. Additionally, the unaudited condensed consolidated financial statements for the three and six months ended June 30, 2025, have been revised to correct certain immaterial prior period errors as discussed in Note 21, “Quarterly Financial Data (Unaudited),” to the consolidated financial statements included in Part II, Item 8, of our Annual Report for the year ended December 31, 2025. Except for per share data or as otherwise indicated, all U.S. dollar amounts presented in the tables in these unaudited Notes to Condensed Consolidated Financial Statements are in thousands. The unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q (this “Quarterly Report”) were prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all adjustments (all of which are of a normal recurring nature) considered necessary to present fairly our financial position, results of operations, comprehensive loss, stockholders’ equity (deficit), and cash flows for the periods and dates presented. The results of operations for the three and six months ended June 30, 2026, are not necessarily indicative of the results that may be expected for the year ending December 31, 2026, or any other interim period or future year due to various factors such as management estimates and the seasonal nature of some portions of our insurance business. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported of certain assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of revenues and expenses. Actual results may differ from those estimates and assumptions. Concentrations Financial instruments which potentially subject us to credit risk consist principally of cash, money market accounts on deposit with financial institutions, money market funds, certificates of deposit and fixed-maturity securities, as well as receivable balances in the course of collection. The Reciprocal has exposure and remains liable in the event of insolvency of its reinsurers. The Reciprocal and its reinsurance intermediary regularly assess the credit quality and ratings of its reinsurer counterparties. As of June 30, 2026, four reinsurers represented more than 10% individually, and 46% in the aggregate, of the total reinsurance balance due line item on the unaudited Condensed Consolidated Balance Sheets. The following table presents the concentration of the reinsurers that individually exceeded 10% of the reinsurance balance due as of June 30, 2026:
| June 30, 2026 |  | December 31, 2025
Reinsurer A | 14 | % |  | *
Reinsurer B | 11 | % |  | 16 | %
Reinsurer C | 10 | % |  | 23 | %
Reinsurer D | 10 | % |  | *
Reinsurer E | * |  | 14 | %
| 46 | % |  | 53 | %
______________________________________ *Represents reinsurers that did not individually exceed 10% of the reinsurance balance due as of the period presented. There are currently no material receivables on the unaudited Condensed Consolidated Balance Sheets related to the Reciprocal’s excess-of-loss catastrophe program. See Note 12, Reinsurance for the Reciprocal, for more information. Approximately 56% and 57% of consolidated revenue for the three and six months ended June 30, 2026, respectively, was derived from customers in Texas and could be adversely affected by economic conditions, an increase in competition, local weather events, or environmental impacts and changes. No individual customer represented more than 10% of total consolidated revenue for the three and six months ended June 30, 2026 or 2025. As of June 30, 2026, and December 31, 2025, no individual customer accounted for 10% or more of total accounts receivable, net, on the unaudited Condensed Consolidated Balance Sheets. We maintain cash balances at several financial institutions. Such balances may exceed federally insured limits. As of June 30, 2026, approximately $193.0 million of cash deposits exceeded insured limits. The Company has not experienced losses on such balances. Cash, Cash Equivalents and Restricted Cash and Cash Equivalents We consider all highly liquid investments with original maturities of three months or less at the time of purchase to be cash equivalents. We maintain cash balances that may exceed the insured limits by the Federal Deposit Insurance Corporation. The reconciliation of cash, cash equivalents, and restricted cash and cash equivalents to amounts presented in the unaudited Condensed Consolidated Statements of Cash Flows are as follows:
|  | June 30, 2026 |  | December 31, 2025
Cash and cash equivalents of Porch |  | $ | 54,140 |  | $ | 44,676
Restricted cash and cash equivalents of Porch |  | 7,562 |  | 8,503
Cash and cash equivalents of the Reciprocal |  | 133,321 |  | 115,373
Restricted cash and cash equivalents of the Reciprocal |  | 581 |  | 559
Total cash, cash equivalents, and restricted cash and cash equivalents |  | $ | 195,604 |  | $ | 169,111
The following table provides the components of restricted cash and cash equivalents on the unaudited Condensed Consolidated Balance Sheets:
|  | June 30, 2026 |  | December 31, 2025
Held as collateral by our wholly owned captive reinsurance business for benefit of the Reciprocal |  | $ | 29 |  |  | $ | 7 |
Held for payment of possible warranty claims | (1) |  | 6,533 |  |  | 7,496 |
Other |  | 1,000 |  |  | 1,000 |
Restricted cash and cash equivalents |  | $ | 7,562 |  |  | $ | 8,503 |
Restricted cash and cash equivalents of the Reciprocal: |  |  |  |
Pledged to state departments of insurance | (2) |  | $ | 581 |  |  | $ | 559 |
Total restricted cash and cash equivalents |  | $ | 8,143 |  | $ | 9,062
______________________________________ (1)Required under regulatory guidelines in 25 states and 26 states as of June 30, 2026, and December 31, 2025, respectively. (2)Pledged to the Department of Insurance in certain states as a condition of our Certificate of Authority for the purpose of meeting obligations to policyholders and creditors. Accounts Receivable Accounts receivable for Porch consist primarily of amounts due from businesses, while accounts receivable for the Reciprocal consist of amounts due from individual policyholders. We estimate allowances for credit losses based on the creditworthiness of our customers, historical trend analysis, and macro-economic conditions. Consequently, an adverse change in those factors could affect our estimate of allowance for credit losses. The allowance for credit losses, which relates entirely to Porch, was $2.9 million and $2.7 million as of June 30, 2026, and December 31, 2025, respectively. The Reciprocal had no allowance as of either date. Deferred Policy Acquisition Costs The Reciprocal capitalizes deferred policy acquisitions costs (“DACs”) which consist primarily of commissions, premium taxes and policy underwriting and production expenses that are directly related to the successful acquisition by the Reciprocal of new or renewal insurance contracts. DACs are amortized on a straight-line basis over the terms of the policies to which they relate, which is generally one year. DACs are also reduced by ceding commissions paid by reinsurance companies which represent recoveries of acquisition costs. DACs are periodically reviewed for recoverability and adjusted if necessary. Future investment income is considered in determining the recoverability of DACs. Amortized deferred acquisition costs included in selling and marketing expense amounted to $14.4 million and $10.0 million for the three months ended June 30, 2026 and 2025, respectively and $26.1 million and $17.5 million for the six months ended June 30, 2026 and 2025, respectively. Accrued Expenses and Other Current Liabilities The following table details the components of accrued expenses and other current liabilities on the unaudited Condensed Consolidated Balance Sheets.
|  | June 30, 2026 |  | December 31, 2025
Accrued expenses |  | $ | 15,213 |  | $ | 15,115
Payroll liabilities |  | 9,654 |  | 8,858
Interest payable |  | 7,183 |  | 7,183
Sales taxes payable |  | 4,306 |  | 4,472
Other current liabilities |  | 2,708 |  | 3,249
Accrued expenses and other current liabilities at Porch |  | $ | 39,064 |  | $ | 38,877
Other Insurance Liabilities, Current The following table details the components of other insurance liabilities, current, on the unaudited Condensed Consolidated Balance Sheets. Other insurance liabilities were held by the Reciprocal as of June 30, 2026.
| June 30, 2026 |  | December 31, 2025
Ceded reinsurance premiums payable | $ | 2,414 |  | $ | 4,191
Commissions payable, reinsurers and agents | 15,766 |  | 11,655
Advance premiums | 8,828 |  | 5,961
Funds held under reinsurance treaty | 1,148 |  | 1,335
General and accrued expenses payable | 3,399 |  | 692
Other insurance liabilities, current | $ | 31,555 |  | $ | 23,834
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, Compensation—Stock Compensation (ASC Topic 718) and Revenue from Contracts with Customers (ASC Topic 606), which clarifies the accounting for share-based payments granted to customers, including classification of performance conditions, treatment of forfeitures, and application of the variable consideration constraint. 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 have not granted any share-based payments to customers. As such, we do not expect ASU 2025-04 to have a material impact on our consolidated financial statements or related disclosures. In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which aims to modernize the accounting for software costs that are accounted for under ASC Subtopic 350-40, Intangibles-Goodwill and Other-Internal-Use Software. The updated guidance removes references to project stages and instead requires software costs to be capitalized when both of the following occur: 1) management has authorized and committed to funding the software project, and 2) it is probable that the project will be completed and the software will be used to perform the function intended (referred to as the “probable-to-complete recognition threshold”). The guidance will first be effective in our interim disclosures beginning with the first quarter of 2028 and may be applied prospectively, retrospectively, or using a modified approach. Early adoption is permitted as of the beginning of an annual reporting period. We are in the process of assessing the impact of ASU 2025-06 on our consolidated financial statements and related disclosures. In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements, which introduces targeted refinements to hedge accounting guidance under ASC Topic 815 to better align financial reporting with the economics of risk management activities. The guidance will first be effective in our first quarter of 2027 and should be applied prospectively. Early adoption is permitted. We do not expect ASU 2025-09 to have a material impact on our consolidated financial statements or related disclosures. In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which aims to clarify and improve the navigability of interim reporting guidance under ASC Topic 270 without changing the fundamental nature or extent of interim disclosure requirements. The guidance will first be effective in our first quarter of 2028 and can be applied prospectively or retrospectively. Early adoption is permitted. We are in the process of assessing the impact of ASU 2025-11 on our consolidated financial statements and related disclosures. In December 2025, the FASB issued ASU 2025-12, Codification Improvements, to make technical corrections, clarifications, and minor improvements across multiple areas of U.S. GAAP. The guidance will first be effective in our first quarter of 2027 and prospective or retrospective application will depend on the specific item being addressed. Early adoption is permitted. We are in the process of assessing the impact of ASU 2025-12 on our consolidated financial statements and related disclosures. Accounting Standards Recently Adopted On January 1, 2026, we adopted ASU 2024-04, Debt - Debt with Conversion and Other Options, which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. We adopted ASU 2024-04 using a prospective method. ASU 2024-04 did not have a material impact on our consolidated financial statements and related disclosures. On January 1, 2026, we adopted ASU 2025-05, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, which introduces a practical expedient related to estimating expected credit losses. The practical expedient allows entities to assume that conditions that exist when expected credit losses are estimated do not change for the remaining life of the asset. We adopted ASU 2025-05 using a prospective method. ASU 2025-05 did not have a material impact on our consolidated financial statements and related disclosures.

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- Definition The entire disclosure for the business description and accounting policies concepts. Business description describes the nature and type of organization including but not limited to organizational structure as may be applicable to holding companies, parent and subsidiary relationships, business divisions, business units, business segments, affiliates and information about significant ownership of the reporting entity. Accounting policies describe all significant accounting policies of the reporting entity. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147483426/235-10-50-1 + Details
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