Porch Group 2025 Q1 Earnings Beats Expectations as Net Income Swings 128%

Porch Group (PRCH) reported its fiscal 2025 Q1 earnings on May 08th, 2025. Porch Group's first-quarter earnings exceeded expectations, with a notable improvement in net income. The company raised its full-year 2025 guidance, reflecting optimism in its commission and fee-based model. Revenue for the quarter decreased, but earnings per share (EPS) turned positive, indicating a significant turnaround. Analysts had forecasted lower revenue and EPS figures, making these results a positive surprise. The company's revised guidance further highlights its strong performance and strategic direction.

Revenue
Porch Group's total revenue for the first quarter of 2025 fell by 9.3% to $104.75 million, compared to $115.44 million in the same quarter of 2024.

Earnings/Net Income
Porch Group returned to profitability with an EPS of $0.08 in 2025 Q1, a significant improvement from a loss of $0.14 per share in 2024 Q1, marking a 157.1% positive change. The company achieved a net income of $3.74 million in 2025 Q1, representing a 128.0% positive swing from the net loss of $-13.36 million in 2024 Q1. This quarter marked a record high for fiscal Q1 net income, the highest in six years. The EPS indicates a positive trend for the company.

Price Action
The stock price of Porch Group has edged up 2.16% during the latest trading day, surged 77.20% during the most recent full trading week, and has increased 93.25% month-to-date.

Post-Earnings Price Action Review
Porch Group's strategy of purchasing shares after its revenue increase quarter-over-quarter and holding them for 30 days resulted in a notable loss. Over five years, the total return was -45.0%, underperforming the market benchmark, suggesting that this approach did not yield the desired profits over the specified period. The stock's price movements after earnings announcements indicate that the strategy of buying and holding shares post-revenue increase has historically not been successful. This underscores the importance of reevaluating investment strategies, especially when they consistently underperform against market benchmarks.

CEO Commentary
“This quarter marks a special time for the company. After selling our insurance carrier into the 3rd party owned Reciprocal at the start of 2025 and becoming its manager, we are excited to report our first quarter under our new model. Our business is now simple, predictable, commission and fee-based, and higher margin. We delivered outstanding Q1 results including an 82% gross margin and 86% year-over-year growth in Gross Profit and a $34 million year-over-year increase in Adjusted EBITDA to $17 million, with even higher cash flow from operations for Porch shareholders. Our business remains strong despite the broad economic uncertainty and tariffs, and we have raised 2025 guidance for Porch Shareholder Interest to Revenue of $410 million, Gross Profit of $327.5 million, and Adjusted EBITDA of $65 million at the mid-point," said Matt Ehrlichman, Chief Executive Officer, Chairman and Founder.

Guidance
Porch Group has raised its full-year 2025 guidance for Porch Shareholder Interest to a revenue range of $400 million to $420 million, up from the previous range of $390 million to $410 million. The company now expects Gross Profit between $320 million and $335 million, an increase from $310 million to $325 million, and Adjusted EBITDA is projected in the range of $60 million to $70 million, compared to the prior estimate of $55 million to $65 million.

Additional News
In recent developments, Porch Group completed the sale of its legacy homeowners insurance carrier, Homeowners of America, to the Porch Reciprocal Exchange at the start of 2025. The company also announced new executive appointments, including the promotion of key leaders to strengthen strategic initiatives. Furthermore, Porch Group has launched a new set of consumer services to expand its market reach, focusing on enhancing customer experience with innovative moving and warranty services. These strategic moves are expected to bolster Porch Group's market position and drive long-term growth.