A VIE is a legal entity that is structured such that equity investors lack the ability to make significant decisions relating to the entity's operations through voting rights, do not substantively participate in the gains and losses of the entity, or the entity does not have sufficient equity at risk to finance its activities without additional subordinated financial support. We consolidate VIEs in which we are deemed the primary beneficiary. The primary beneficiary is the entity that has both (1) the power to direct the activities of the VIE that most significantly affect that entity's economic performance and (2) the obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE.

In 2025, we completed the formation of the Reciprocal, a Texas-domiciled reciprocal insurance exchange. In connection with the formation, we completed the sale of our legacy homeowners insurance carrier, HOA, to the Reciprocal and formed a management company that acts as the operator for the Reciprocal. The Reciprocal, now the owner of HOA, writes homeowners insurance policies that are sold to its subscribers. Following the sale, HOA became a wholly owned subsidiary of the Reciprocal.

We consolidate the Reciprocal since (1) we have provided surplus notes to the Reciprocal and would absorb any expected losses that could potentially be significant to the Reciprocal, including through the interest associated with surplus notes due to Porch from the Reciprocal and (2) we manage the business operations of the Reciprocal and therefore have the power to direct the activities that most significantly impact the economic performance of the Reciprocal. The Reciprocal’s anticipated economic performance is driven by its underwriting and investment results. We receive a management fee for the services provided to the Reciprocal. The management fee revenues are based upon all premiums written or assumed by the Reciprocal (including HOA).

The assets of the Reciprocal can be used only to settle the obligations of the Reciprocal for which creditors and other beneficial owners have no recourse to Porch. We have no obligation related to any underwriting and/or investment losses experienced by the Reciprocal. There were $106 million of surplus notes outstanding as of June 30, 2026, and December 31, 2025. The effects of the transactions between Porch and the Reciprocal are eliminated in consolidation to derive consolidated net income (loss). However, the management fee income earned is reported in net income attributable to Porch and is included in basic and diluted earnings per share.


	June 30, 2026		December 31, 2025
Current assets of the Reciprocal	$	221,473	$	200,955
Noncurrent assets of the Reciprocal	193,167		196,301
Total assets of the Reciprocal	$	414,640	$	397,256

Current liabilities of the Reciprocal	$	325,263	$	306,390
Noncurrent liabilities of the Reciprocal	854		818
Total liabilities of the Reciprocal	$	326,117	$	307,208


		Six Months Ended June 30,
		2026		2025
Net cash provided by (used in) operating activities of the Reciprocal		$	21,738	$	(17,678)
Net cash used in investing activities of the Reciprocal	(1) (2)	(3,780)		(47,752)
Net cash provided by financing activities of the Reciprocal	(3)	12		46,813

(1)For the six months ended June 30, 2026, Net cash used in investing activities of the Reciprocal includes $15.0 million cash received by the Reciprocal for the sale of Porch common stock shares to our wholly owned captive reinsurance business (see Note 10). This transaction is eliminated during consolidation.

(2)For the six months ended June 30, 2025, Net cash used in investing activities of the Reciprocal includes $46.8 million cash paid by the Reciprocal related to its purchase of HOA from Porch. This transaction is eliminated during consolidation.

(3)For the six months ended June 30, 2025, Net cash provided by financing activities of the Reciprocal includes $46.8 million cash received by the Reciprocal related to its surplus note with Porch. This transaction is eliminated during consolidation.