Root (ROOT) Q4 2025 earnings summary

Executive summary

• Achieved 29% revenue growth and 30% net income growth year-over-year, ending 2025 in the strongest financial position to date.

• $1.5 billion in premiums written, with a robust balance sheet and record net income of $40 million for the year.

• Leveraged AI-driven pricing and automation to enhance profitability and operational efficiency.

• Partnerships channel accounted for nearly half of new writings in Q4, with deep integrations driving durable competitive advantage.

• Independent agent channel more than tripled year-over-year in new writings, becoming the fastest-growing segment.

Financial highlights

• Q4 gross written premium grew 9% and gross earned premium grew 14% year-over-year.

• Q4 net income was $5 million, down $17 million year-over-year due to increased investments and higher loss ratio.

• Q4 operating income was $11 million and Adjusted EBITDA was $29 million, both down year-over-year.

• Full-year 2025 gross written premium grew 16%, gross earned premium grew 19%, and net income reached $40 million, up $9 million year-over-year.

• Ended 2025 with $312 million in unencumbered capital and excess capital across subsidiaries.

Outlook and guidance

• Expect accelerating annual policies in force (PIF) growth in 2026, driven by expanded distribution channels.

• Q1 2026 to see elevated shopping and sequential PIF growth, but year-over-year growth will be less pronounced due to prior tariff-driven surge.

• Underwriting performance expected to improve in Q1 2026, with loss ratio typically lowest in Q1.

• Full-year 2026 net income expected to be lower due to higher loss ratio and continued investments, but loss ratio to remain within 60%-65% target.