Root (ROOT) Q1 2026 earnings summary

Executive summary

• Achieved the most profitable quarter in company history with net income of $36 million, up 95% year-over-year, and annualized ROE of 47%.

• Policies in force grew over 9% year-over-year to 495,429, with gross premiums written at $389 million.

• Operating income rose to $41 million, with adjusted EBITDA at $57 million, both showing strong year-over-year growth.

• Focused on a five-part growth strategy: lowest prices, nationwide launch, agency expansion, embedded products, and AI-driven marketing.

• Announced a $75 million share repurchase program and refinanced $200 million debt facility, enhancing capital flexibility.

Financial highlights

• Net premiums earned increased 13.2% to $363.7 million, while gross premiums earned were $370 million, up 8% year-over-year.

• Adjusted EBITDA rose to $57 million, up $25 million year-over-year.

• Net combined ratio improved to 91.4% from 95.6% year-over-year.

• Partnership and independent agent new writings grew over 30% year-over-year.

• Cash and cash equivalents stood at $597.2 million as of March 31, 2026.

Outlook and guidance

• Expect similar growth trends as Q1 if the current environment persists.

• Net income for 2026 projected to exceed 2025, barring major market changes.

• Loss ratios expected to remain within the 60%-65% target range, with mild increases through the year due to seasonality.

• OpEx (excluding acquisition) expected to remain stable at 10%-11% of gross earned premium.

• Management expects sufficient liquidity for at least the next 12 months and the foreseeable future.