Root (ROOT) Q1 2026 Earnings Call Transcript

Motley Fool Transcribing, The Motley Fool Fri, May 8, 2026 at 12:11 AM GMT+7 30 min read ROOT Image source: The Motley Fool. Chief Executive Officer — Alexander Timm Director of Investor Relations — Matthew LaMalva Need a quote from a Motley Fool analyst? Email pr@fool.com Matthew LaMalva: Good afternoon and thank you for joining us. Root is hosting this call to discuss its first quarter 2026 earnings results. Participating on today s call is Alex Timm, Co-Founder and Chief Executive Officer; and Megan Binkley, Chief Financial Officer. Earlier today, Root issued a shareholder letter announcing its financial results. We ll focus today on how we re executing against our model and the progress we re delivering across the business. While today s discussion will reflect the shareholder letter for more complete information about our financial performance, we also encourage you to read our first quarter 2026 Form 10-Q, which was filed with the Securities and Exchange Commission today. Before we begin, I want to remind you that matters discussed on today s call will include forward-looking statements related to our operating performance, financial goals and business outlook, which are based on management s current beliefs and assumptions. Please note that these forward-looking statements reflect our opinions as of the date of this call, and we are not obligated to revise this information as a result of new developments that may occur. Forward-looking statements are subject to various risks, uncertainties and other factors that could cause our actual results to differ materially from those expected and described today. For a more detailed description of our risk factors, please review our most recent 10-K, 10-Q and shareholder letter. A replay of this conference call will be available on our website under the Investor Relations section. I would also like to remind you that during the call, we will discuss some non-GAAP measures while talking about Root s performance. You can find reconciliations of these historical measures to the nearest comparable GAAP measures in our financial disclosures, all of which are posted on our website at ir.joinroot.com. I will now turn the call over to Alex. Alexander Timm: Thanks, Matt. Good afternoon, and thank you, everyone, for joining us. We kicked off 2026 with the most profitable quarter in the company s history, generating an annualized ROE of 47%. The team has worked hard to deliver these fantastic results, and we re all grateful for their hard work. These results reflect a structurally stronger model driven by improvements in pricing, underwriting and capital allocation. On growth, we grew policies in force over 9% in the quarter year-over-year with gross premiums written of $389 million. Recall that last year s growth temporarily increased on news of impending tariffs, making year-over-year comparisons difficult. As a reminder, we continue to be focused on our 5-part growth strategy: one, create the lowest prices for customers; two, launch our product in every state; three, expand into the independent agency channel; four, scale our embedded insurance products; and five, leverage our AI expertise to grow our automated marketing machine. Some highlights from the quarter. On distribution, we re continuing to build a platform that is both diversified and scalable, which is very important to our long-term growth trajectory. Our overall partnerships grew new writings 30% year-over-year. On independent agents, we now partner with more than 15,000 agents across 5,000 agencies nationwide. In the first quarter, we launched our partnership with Freeway Insurance, the largest personal lines insurance distributor in the country. We re very excited by the prospects of continuing to scale in this channel, bringing products that are easier for agents and more affordable for customers to an over $100 billion market. As our models have continued to learn in this space, we were able to materially improve our pricing for this segment of our business in the first quarter as well. We also continue to scale our embedded insurance offering with Carvana now surpassing 200,000 policies sold. This channel allows us to present nearly frictionless insurance at the point of need, creating a great experience for customers. In addition, this allows for the potential to create new pricing models distinct to each partner, leveraging their unique data, including connected vehicle data, which is critical to our long-term AV strategy. In direct, we saw a difficult growth environment that intensified throughout the quarter. These cycles are common in our industry, and we are well positioned to manage them prudently, only deploying your capital when we see meaningful opportunities to exceed our hurdle rate. When conditions are attractive, we invest aggressively. When they are not, we remain disciplined and patient. This creates some fluctuations in our quarterly growth. But over the long term, we belie

Root (ROOT) Q1 2026 Earnings Call Transcript

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Root (ROOT) Q1 2026 Earnings Call Transcript

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