Good afternoon, everyone. Thank you for participating in Porch Group's Fourth Quarter 2025 conference call. Today, we issued our earnings release and filed our related Form 8-K with SEC. Press release can be found on our Investor Relations website at ir.porchgroup.com. I would like to take a moment to review the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995, which provides important cautions regarding forward-looking statements. Today's discussion, including responses to your questions, reflect management's views as of today, February 11, 2026. We do not undertake any obligations to update or revise this information. Additionally, we will make forward-looking statements about our future financial or business performance or conditions, business strategy and plans. These statements are subject to risks and uncertainties, which could cause our actual results to differ materially from these forward-looking statements. Please refer to the information on this slide and in our SEC filings for important disclaimers. We will reference both GAAP and non-GAAP financial measures on today's call. Please refer to today's press release and the slides, both available on our website for reconciliations for non-GAAP measures to the most directly comparable GAAP measures discussed during this call. As a reminder, this webcast will be available for replay along with the presentation after this call on the company's website at ir.porchgroup.com. So joining me here today are Matt Ehrlichman, Porch CEO, Chairman and Founder; Shawn Tabak, Porch CFO; and Matthew Neagle, Porch COO. With that, I will turn the call over to Matt for his key updates.

All right. Good afternoon, everybody. Thank you for joining us. Q4 capped a transformational year for Porch. Throughout 2025, we delivered results ahead of expectations and made meaningful progress toward building a simpler, higher-margin fee and commission-based business. Full year 2025 adjusted EBITDA ended at $77 million, an 11x increase over 2024. This translated into $65 million in Porch shareholder interest cash flow from operations for the year. . Profitability was a highlight, but 2025 was also about positioning the company for durable profitable growth. Statutory surplus at the reciprocal grew approximately $50 million. Incremental value creation on top of our adjusted EBITDA, and it ended 2025 almost 50% higher than 2024. We strengthened the top of the funnel more than doubling the number of active agencies and nearly tripling quote volumes year-over-year. With some actions we put in the market, we saw new policyholder conversion rates grow substantially at the tail end of 2025 and continue into 2026. With this foundation in place, we're confident in delivering against our 2026 plan, $600 million in organic reciprocal written premium and implied 25% growth rate and $100 million in adjusted EBITDA. We positioned the business for rapid premium growth through multiple levers, growing agency and quote volumes, pricing adjustments in agency incentives to increase conversion rates and the launch of Porch Insurance, which went live for all Texas agents at the start of 2026. So Q4 performance was strong with every metric better than expectation, consistent with the progress we've seen really all year. Reciprocal written premium or RWP, was $126 million, Revenue was $112 million. Q4 gross profit was $91 million, resulting in an 81% gross margin. Q4 adjusted EBITDA was $23 million, a 21% margin. Cash used in operations was negative $5.5 million due to the timing of our…

Thank you, Matt, and good afternoon, everyone. Before we dive into the results, I'll summarize the key financial highlights for Q4 and the full year. One, we delivered a strong Q4, outperforming expectations across each metric. We ended the year with adjusted EBITDA of $76.6 million, an 11-fold increase over the prior year. We are quite pleased with this outcome. . Two, Insurance Services, RWP and revenue exceeded expectations, driven by growth in total customers, including strong performance with new customer additions. As discussed previously in Q4, we updated new customer pricing in agency incentives to accelerate premium. These actions increased the new customer conversion rate. Number three, Reciprocal surplus finished the year in a strong position with $289 million of Circa Plus combined with non-admitted assets and $155 million of statutory surplus. Statutory surplus grew again quarter-over-quarter and increased $49.4 million from the beginning of 2025. We're pleased with this performance because it positions us to the scale RWP effectively. And finally, number four, Looking ahead to 2026, we are accelerating toward our RWP target of $600 million. This was largely driven by an increase in new customer additions, driven by the quote and conversion rate increases we are already seeing. Similar to Matt's overview, my comments will address performance of the Porch shareholder interest, since generating cash for Porch shareholders remains our ultimate goal. Under GAAP, we consolidate the Reciprocal Exchange financials, which are available in the press release and our 10-K when it is filed. Now let's dive into Q4 results. Q4 2025 Porch shareholder interest revenue was $112.3 million, with insurance services generating 67% followed by software and data at 20% with the balance from consumer services. Associated gross profit was $91.4 million with an 81% gross margin, led by our Insurance Services segment, which had…

Thank you, Shawn. I'll start by giving a brief business update and then dig into our KPIs. Our 2026 RWP target implies organic premium growth of 25%. In order to achieve that type of lift, we knew we'd need to scale agents and quotes, increase conversion rates and grow statutory surplus. This is what we got done in a major way in 2025. Last quarter, we spoke to the strong progress we made at the top of the insurance funnel, and we're excited to report that the momentum continued in Q4. The number of agencies we added in the quarter more than doubled year-over-year and grew more than 30% sequentially from an already strong Q3 base. This is fantastic, but still only a very small fraction of the total number of agencies in our existing states. Beyond the increase in agency count, the quality of our partnerships continues to improve. In Q4, we deepened our relationship with Ballan Group and prepared for a Q1 launch with SmartChoice, one of the nation's premier agent networks. More agencies mean more agents, more agents mean more quotes. This is reflected clearly in the right-hand chart. Relative to the prior year period, quote volumes were up nearly 3x and unlike typical seasonal declines, quotes increased 9% sequentially from Q3. In November, pricing adjustments for low-risk customers began to hit. We understand the elasticity of the conversion rate curve, given we have more margin in the system than other carriers, we were able to effectively control conversion rates and therefore, growth. We experienced triple-digit growth in Q4 new business premiums, but it's worth double-clicking on the monthly results given progress from our work really began to show up in November. The combination of higher quotes volumes and greater conversion drove November new business premiums up…

Thanks, Matthew. I'll wrap by just reinforcing the most important messages from today. So first, we beat expectations and raised guidance in every quarter in 2025. Q4 adjusted EBITDA of $23 million resulted in full year adjusted EBITDA of $77 million, again, 11x 2024 and well above our initial guidance of $50 million. Cash generation was strong at $65 million for the full year. Clearly, it's a great first year under our new operating model. Second, we successfully bolstered the Reciprocal's capital position, with Q4 statutory surplus of $155 million, again, rising $49 million or 47% versus the end of 2024. This positions us for years of profitable growth ahead. Third, we've demonstrated our ability to manage the growth of premium and are pleased with the quote and conversion rate improvements. The 2026 RWP target of $600 million represents, again, 25% year-over-year organic growth. This will steepen our growth trajectory in 2026 and in turn, puts us on a direct path to reach our medium-term target of $660 million of adjusted EBITDA from $3 billion of premium, which would make us a top 10 homeowners insurance company. We have a mousetrap that's uniquely profitable, where earnings isn't impacted by the volatility of weather and has long term differentiate. I've been transformative and our culture and values is the reason we're now positioned to build what I believe will be a truly great and enduring company. So thank you all for your time today. We do appreciate it. To my fellow shareholders, thanks for your support, and we look forward to continuing this journey with you. With that, John, please go ahead and open up the call for questions.

Thank you. [Operator Instructions]Our first question comes from the line of Ryan Tomasello with KBW.

Nice to see the top of funnel, a new customer momentum. I guess in terms of pricing, obviously, the elasticity curve is quite steep. But can you give us a sense of the magnitude of price actions you've taken to drive the acceleration so far and whether more is needed on the pricing side or agent distribution to hit that target of $600 million for the year. And just overall, how much more flexibility do you think you have to continue to lean into pricing to drive higher conversion if you see that opportunity just given where loss ratios are today?

Yes. I mean on the second point first. I mean, you can see based on where our loss ratios are that we have just tremendous amounts of margin in the system, right? And that is fundamentally a core advantage of what we're able to do and so if we wanted to tick down prices for low-risk new customers, right, the right particular segment of new customers that we want to win, we can do that. . But to your first question, Ryan, like you said it exactly right, which is the slope of the curve of that elasticity curve for new customers is quite steep in certain places. And so you can and we have been able to meaningfully increase conversion without dramatic changes without giving so much price. And you can see that really in some of the metrics that Matthew shared in the KPIs where you see not that big of changes in terms of reciprocal written premium per policy, as an example, so we're able to get the gains that we want with, I would say, very surgical and targeted moves there to the right segment of customers. Obviously, our unique data helps us identify who are those right customers that we want to win and who are the customers that we want to not win and where we're going to be a much higher priced than the rest of the market. And so yes, we feel like we're in control of being able to drive to the right outcomes while still making sure that the reciprocal is very healthy and continuing to perform really well.

And then in terms of the RWP EBITDA conversion, that came in at 23% in the quarter, which was obviously really strong relative to high teens last quarter. How should we think about the operating leverage in that EBITDA conversion as you scale RWP from here? And then for the guidance specifically, can you give us any color on what you're baking in for that WPD EBITDA conversion for the outlook in 2026?

Yes. Happy to take that. So to your point, Ryan, I think you hit the nail on the head, the RWP to adjusted EBITDA conversion again accelerated in the quarter. It improved quarter-over-quarter sequentially. It also improved Q3 versus Q2. And a lot of that is operating discipline. You could see that even we had higher revenue and we kept the operating expenses relatively fixed quarter-over-quarter sequentially. So we're quite pleased with that outcome. And as I mentioned, that comes from cost control being very diligent in how we're running that business and containing those costs. With respect to the guidance for next year, we don't break out guidance by segment. Overall, for the year, obviously, we guided to $102 million at the midpoint, which would be an increase in the overall adjusted EBITDA margin for the company by about just over 300 basis points. So we're excited to provide not only that top line growth, but also the acceleration, an improvement in the adjusted EBITDA margin. The last thing I'll just say on adjusted EBITDA, if I can also, the cash conversion is another thing that we're quite pleased with. Matt mentioned it, I think I mentioned that this year in 2025, rather, we had $65 million of cash flow from operations on $77 million of adjusted EBITDA. So again, quite pleased that it's a very high conversion rate. And I think it just shows the quality of the adjusted EBITDA that we're generating for shareholders.

Our next question comes from the line of Jason Helfstein with Oppenheimer.

Two questions. The first on Porch Insurance and the second, just about the fourth quarter. So on the Porch Insurance, I guess you've already highlighted for us it's coming out as a more premium product, you get more call like a chub like, but you get more functionality with it. I guess just talk about how you're also able to make it a better deal for agents and then kind of perhaps how the relationship, I think, is with Goose that plays into that? And then secondly, just talk about like why you alluded to, but why was the fourth quarter insurance results kind of better than you guided. And if you recall, there was a pretty steep reaction last quarter. Just maybe talk about do you have improved visibility now as you kind of enter first quarter and just broadly how you think about visibility in the insurance business for the year.

Maybe I'll take the first. Matthew later on, if there's things you want to add, Shawn, you can take the second. We are excited about Porch insurance. We've been working on this for a long time. And if you look back in years from now, we do think it is going to be a cornerstone of building a household brand, which we fully intend to be able to do. We talked about how it's better for consumers. You're exactly right. Just on we're they get additional coverage, full home warranty. We want Porch insurance to be definitively known as the best insurance product for a home buyer because they get full moving service as well. So we've built these capabilities out in our company for this specific moment so that we are just dramatically differentiated for the consumer. Agents, obviously, therefore, want to sell it because it convert well for them. It's the right product for their customers. But to your question, because there's more margin in our system just overall, we can be able to deploy that. Yes, for more surplus, yes, for more profit at Porch Group, but we're also providing some of that to agents to make sure that they are compensated better than the market, better than their alternatives with bringing Porch insurance out to the market. And so that's obviously great for them. We want to be able to be a true partnership with these agents and help them to be able to prosper as our business also grows. Lastly consumers do pay a 10% surplus contribution, which again creates just more economics in the system. And so that allows us again to be able to share some of that with agents. You mentioned Goosehead specifically, a great partner, great relationship. Just to be clear, Porch insurance is a product we brought out to all Texas agencies just to make sure that, that point was clear. John, do you want to take Q4 results and versus kind of expectations?

Yes, definitely happy to. And at the top level, on each metric we performed better than expected, really across from RWP all the way down to adjusted EBITDA. I think the question was specifically for insurance services results and RWP there and revenue. And I think over there, it's really new customer additions that's driving that. We talked about the acceleration there. that we saw in the quarter with the agency incentives and the pricing that we -- adjustments that we made due to the elasticity curve that drove new customer additions, new customers into the book of policies at the reciprocal. The thing I'll just highlight there, too, Matthew included in his remarks, and I think I talked about it a little bit too, typically, we would expect a seasonal decline in Q4 versus Q3 that was much steeper, like homeowners typically don't buy as many homes in Q4 and don't buy home insurance and therefore at the same clip in Q4 as they do in Q3 and Q2. And so we more than offset the typical seasonal decline with those new customer additions. So it's just another way to think about the progress that we made there. And I think as Matthew talked about, and Matt, like we continue to add even more agents that we work with. We're still really just scratching the surface there. And so that team that goes out and recruits new agents and brings them in the door to sell the products continues to exceed expectations, do a phenomenal job. And that just leads to more quotes. And then at our conversion rates, that leads to more new customers.

Our next question comes from the line of Dan Kurnos with Stone. .

Great. Matt, let me stick the landing in Q4, definitely better tone on the messaging, too. I guess a couple of things. If I go back to Ryan's initial question, I think what people are trying to get at effectively is understanding the confidence that you have that this scales, right? And clearly, you've got all the data. I mean you had a record take rate in the quarter, you had record RWP to EBITDA conversion. And just any comfort you can give us around sort of what the long tail looks like as you guys get towards your $3 billion in RWP over time, if those metrics are sustainable would be super helpful. That's number one. And number two, you mentioned several times on the call that you've got excess surplus. I think you -- I lost track after a certain point. We know your history, I think here's a pretty big optimism out there for you guys to put that to work maybe with some what we are calling cashless M&A. So just any thoughts you want to give on that front? And just to be clear, outside of the $600 million in organic RWP, that would be super helpful.

You got good questions. I'll take them. The first I mean candidly, and also, I don't know how 1 doesn't grow this business sequentially for a long period of time given we have this fundamental margin advantage in this massive industry where the industry is growing, where consumers need are required to have our products in order to have a mortgage the natural kind of characteristics of the market where you buy our product, and you usually have it for a long time, exists. It really is a beautiful market. And so for us, because we have more margin, we are able to drive conversion rate outcomes that we want. Now I do think we've proven a few key things, that we're obviously highlighting, which is, can we grow surplus? Well, clearly, we have grown surplus at the reciprocal dramatically this last year. Can we grow top of funnel? And clearly, we've dramatically grown the number of agencies, the number of quotes and so then it really is just what the conversion rate is. And when we talk about at the beginning of the journey and just scratching the surface, like we are just at the beginning of this journey. Like we are a small player in Texas, which is our largest state. But we'll continue to add more states. We'll continue to grow in existing states. We'll obviously add now the Porch insurance product on top of HOA to kind of hit different customer demographics. So yes, I mean to answer that first question, Dan, I would say we are sincerely, our team meetings fired up about what is ahead for these next 30 years. And when we talk about that midterm goal of that $3 billion target, it's not just this number that's off there, like we are building all the business to be able to go become a top 10 player in that medium term. And then guess what? We're there, we're going to have some other bigger, more ambitious goals. Like I'm looking to build this thing to become a real player, a very large business for a long period of time. It was a lot for answer number one. Number two, the -- there's a lot of ways to be able to grow premium faster with more surplus. We've talked about, obviously, being able to increase conversion rates. There could be other ways to be able to do certain deals to be able to bring more premium on top of our organic not only just M&A, which I know is what you're kind of asking about there, which is we've talked in the past about turning our M&A engine, building pipeline back on, but other things, book rolls or renewal rights deals like there's a variety of ways of things that we can do there. And so we're excited about that and on it, I would say, to be able to create optionality for ourselves

Very comprehensive, Matt. .

Our next question comes from the line of Jason Kreyer with Craig Hallum.

So just on the insurance side, we're going from a world of pretty rapid premium increases over the last couple of years. Now I think '26 will be a little bit more muted environment. So I'm curious on a 25% growth target for RWP, how are you balancing that between premium growth and policy growth?

Sure. I can take that. We certainly are not expecting the double-digit price increases that we've seen over the last few years. We are, as Matt has mentioned and I mentioned, looking at where we can strategically reduce price for low-risk customers, to increase our conversion rate. And so we aren't materially counting on price increases next year to hit that 25% organic growth number.

I wanted to also just ask on surplus a little bit because we've talked the last couple of quarters about Q4 being the best quarter for surplus growth. statutory surplus was up a few million quarter-over-quarter. I'm just wondering if we can break that down like how much of the change in equity impact that versus how much surplus gain came from operational?

Yes. I'm glad you asked that question. I think that's an important 1 for folks to understand. I think we've articulated a message and you can really see it come through this quarter that the reciprocal owns these 18,300 million Porch shares. And the statutory surplus just is not that sensitive to that. And that's what we saw in the quarter. The stock price, I think at the end of Q3, it was like around $17 and in Q4 was around $9. So with that drop in the stock price, there is only about $10 million, a little bit more than that impact to statutory surplus quarter-over-quarter. So I think it just is the point around like, it's just not that sensitive to it. And it's in a great spot and healthy to support our growth goals. We also, I guess, the other things I'd mention the reciprocals generated a lot of income. So it basin taxes. So that offset some of the underwriting profit. And then all of those 2 things were offset by a really strong underwriting performance with the loss ratios, which just generates operating income after reciprocal. So those are the components. And I guess, what I would just reiterate what I said that from a statutory surplus perspective, I think we're really well positioned for 2026 and our growth goals ahead.

Just to clarify, Shawn. So like absent the change in stock price, statutory surplus would have been like $10 million-ish better in the quarter. Is that -- am I understanding that right?

Yes. The impact from the stock price movement was just over 10%. It was a little bit more than 10%, but it was around 10 Yes. .

Our next question comes from the line of Timothy Austin from B. Riley Securities.

I'm looking at Slide 20 and I understand quote volume kind of outgrew that seasonality. But as I look at the active agencies growth quarter-over-quarter, per quote volume. There seems to be some lag. And I guess I was wondering, is that primarily due to seasonality? Or did a lot of agencies come on closer towards the end of the quarter and that quote volume could maybe see a little bit of a tailwind in the first quarter, given maybe a lag for our agencies on at the end of the quarter?

Yes, there is a lag. So it's just like any -- bringing on a new customer, there's onboarding and system setup and engagement process. And so the number of agencies is the biggest leading indicator and then it goes into quote volume. I will say we're doing a lot of things to engage and educate our distribution base. And the full rollout of Porch insurance is something that is exciting because it offers them a way to give their consumers a new different product that has these additional things that can be helpful to them. and our commission rates are very competitive with Porch Insurance. And so I'm excited about how all the work we did in Q4, building up our distribution and our number of agents is going to help push us into growth in 2026.

Our next question comes from the line of Tim Greaves with Loop Capital. .

I guess my first question is around more, I guess, the competitive landscape and the dynamics there. Have you noticed like a shift in the way competition appears in your key markets? And if so, like how could that impact the business in the near and long term? And what I mean by a shift in the way competition appears is as in our focus from more in-house agents to independent agents from an optician. So that is the query, there would be great.

I mean there is just this slow but broad shift from in-house agents to independent agents. That obviously is a positive and helpful shift for us because we distribute and work with independent agents. And so we expect that trend to continue. -- overall, last metric we saw more than 60% of all owners insurance policies were purchased through agents. It's a complex product. We think that they're really an important part of the ecosystem, and we want to continue to partner with these agencies to be able to provide them really great products to provide to their customers. So no, it's a good question because, yes, we have seen that particular shift slowly happening. And again, that's a net good thing for us.

Okay. I guess my next question would be around the affordability and shopability conversations. What are your thoughts around the affordability conversation and its potential impact to Porch, especially what you guys operate in relatively high priced areas compared to the broader industry? And what have you noticed in those markets around policy shopping and some policy shopping what that could mean for retention rates and competitive wins versus more like, I guess, greenfield typical win?

Yes. I mean, certainly, affordability is currently a national conversation. As I had mentioned earlier, we are anticipating raising prices. on our policies to be able to do what we want to do next year. And we have ways to make sure the best customers get the best rate. And so I don't think it will change anything that we are going to do, but certainly, prices are on people's mind, and we're in a good position where we have that as a lever given the kind of the margin profile we currently have to be able to support our growth.

Thank you. And at this time, we have no further questions. I will now turn the call back over to Matt Ehrlichman for closing remarks.

Thanks very much. Appreciate it. As always, we appreciate the questions. I appreciate the engagement. 2025 was obviously, it's fantastic, fun, exciting year for the company, transformational year for the company. We think 2026 is going to be another just fantastic year for us as we continue on this journey. So again, to our shareholders, we appreciate your support and partnership and we will talk with you all soon.