Slide 1: Q2 2025 Shareholder Letter
Q2 2025 Shareholder Letter
Slide 2: Key quarterly metrics and Dear Shareholders
Letter to Shareholders: Q2 2025 Key quarterly metrics Gross premiums Gross premiums Gross accident written ($M) earned ($M) period loss ratio $346.2 $371.3 $308.2 $308.0 64.2% 61.0% 59.6% $145.0 $131.5 Q2 2023 Q2 2024 Q2 2025 Q2 2023 Q2 2024 Q2 2025 Q2 2023 Q2 2024 Q2 2025 Net income (loss) Adjusted
Slide 3: Letter to Shareholders: Growth
Letter to Shareholders: Q2 2025 opportunity ahead of us, we believe it is essential to focus on how we are continuing to execute against our strategy. In this regard, the second quarter marked significant progress. This included the launch of our new pricing model in several states, with early indic
Slide 4: Letter to Shareholders: Q2 2025
Letter to Shareholders: Q2 2025 While still in the early innings, we have made considerable progress. Our second quarter results illustrate this as gross premiums written increased 12% and gross premiums earned increased 21% year-over-year, while our gross loss ratio and LAE ratio improved 6 points
Slide 5: Pricing and Underwriting
Letter to Shareholders: Q2 2025 Partnerships as a Percentage of New Writings 60% 44% 40% 31% 33% 24% 20% 17% —% Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Pricing and Underwriting Auto insurance is a top expense for most households in America. As a government-mandated product in nearly every state, mos
Slide 6: Financials
Letter to Shareholders: Q2 2025 As mentioned last quarter, we are able to react swiftly and appropriately when it comes to the potential impact of tariffs. To date, we have not seen a meaningful impact from tariff implementations, and given that our current loss ratios remain below our long-term tar
Slide 7: Looking Forward
Letter to Shareholders: Q2 2025 We have proof points that our approach is unique and our foundation for profitable growth is enduring. We will continue to invest in the back half of 2025 in our business, technology, and growth, which will impact our near- term net income profitability. However, thes
Slide 8: Non-GAAP financial measures
Letter to Shareholders: Q2 2025 Non-GAAP financial measures This letter and statements made during our earnings webcast may include information relating to Direct Contribution and Adjusted EBITDA, which are "non-GAAP financial measures" and are defined below. These non- GAAP financial measures have
Slide 9: Defined Terms & Glossary
Letter to Shareholders: Q2 2025 Defined Terms & Glossary We utilize the following definitions for terms used in this letter. Direct Contribution We define direct contribution, a non-GAAP financial measure, as gross profit excluding net investment income, acquisition costs, which include report costs
Slide 10: Letter to Shareholders: Q2 2025
Letter to Shareholders: Q2 2025 ◦ Digital. Our direct digital channel is designed to drive volume by efficiently capturing high-intent customers. We accomplish this by meeting our customers within platforms they use extensively such as Google or select marketplace platforms where consumers are activ
Slide 11: About Root, Inc.
Letter to Shareholders: Q2 2025 About Root, Inc. Founded in 2015 and based in Columbus, Ohio, Root, Inc. (NASDAQ: ROOT) is the parent company of Root Insurance Company. Root is revolutionizing insurance through data science and technology to provide consumers a personalized, easy, and fair experienc
Slide 12: Forward-looking statements
Letter to Shareholders: Q2 2025 Forward-looking statements This letter contains—and statements made during the above-referenced webcast will contain— forward-looking statements relating to, among other things, the future performance of Root and its consolidated subsidiaries that are based on Root’s
Slide 13: Forward-looking statements (continued)
Letter to Shareholders: Q2 2025 • our ability to materially improve retention rates and our ability to realize benefits from retaining customers; • our ability to underwrite risks accurately and charge profitable rates; • our ability to maintain our business model and improve our capital and marketi
Slide 14: Forward-looking statements (continued)
Letter to Shareholders: Q2 2025 • our ability to realize benefits from our Texas county mutual fronting arrangement; • our ability to expand domestically; • our ability to comply with laws and regulations that currently apply or become applicable to our business; • the impact of litigation or other
Slide 15: Financial statements
Letter to Shareholders: Q2 2025 Financial statements ROOT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED As of June 30, December 31, 2025 2024 (in millions, except par value ) Assets Investments: Fixed maturities available-for-sale, at fair value (amortized cost: $316.9 and
Slide 16: Condensed Consolidated Statements of Operations
Letter to Shareholders: Q2 2025 ROOT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) - UNAUDITED Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 (in millions, except per share data) Revenues: Net premiums earned .......
Slide 17: Condensed Consolidated Statements of Cash Flows
Letter to Shareholders: Q2 2025 ROOT, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED Six Months Ended June 30, 2025 2024 (in millions) Cash flows from operating activities: Net income (loss) ..........................................................................
Slide 18: Supplemental financial information
Letter to Shareholders: Q2 2025 Supplemental financial information ROOT, INC. AND SUBSIDIARIES KEY PERFORMANCE INDICATORS - UNAUDITED Three Months Ended June 30, March 31, December 31, September 30, June 30, June 30, 2025 2025 2024 2024 2024 2023 (dollars in millions, except Premiums per Policy) Pol
Slide 19: Key Performance Indicators
Letter to Shareholders: Q2 2025 ROOT, INC. AND SUBSIDIARIES KEY PERFORMANCE INDICATORS - UNAUDITED Six Months Ended June 30, 2025 2024 2023 (dollars in millions, except Premiums per Policy) Policies in force ......................................................................... 455,493 406,283 20
Slide 20: Reconciliation of Total Revenue to Direct Contribution
Letter to Shareholders: Q2 2025 ROOT, INC. AND SUBSIDIARIES RECONCILIATION OF TOTAL REVENUE TO DIRECT CONTRIBUTION - UNAUDITED Three Months Ended June 30, March 31, December 31, September 30, June 30, June 30, 2025 2025 2024 2024 2024 2023 (dollars in millions) Total revenue ........................
Slide 21: Reconciliation of Total Revenue to Direct Contribution (six months)
Letter to Shareholders: Q2 2025 ROOT, INC. AND SUBSIDIARIES RECONCILIATION OF TOTAL REVENUE TO DIRECT CONTRIBUTION - UNAUDITED Six Months Ended June 30, 2025 2024 2023 (dollars in millions) Total revenue .................................................................................. $ 732.3 $ 544
Slide 22: Reconciliation of Net Income/(Loss) to Adjusted EBITDA
Letter to Shareholders: Q2 2025 ROOT, INC. AND SUBSIDIARIES RECONCILIATION OF NET INCOME/(LOSS) TO ADJUSTED EBITDA - UNAUDITED Three Months Ended June 30, March 31, December 31, September 30, June 30, June 30, 2025 2025 2024 2024 2024 2023 (dollars in millions) Net income/(loss) ................. $
Slide 23: Reconciliation of Net Income/(Loss) to Adjusted EBITDA (six months)
Letter to Shareholders: Q2 2025 ROOT, INC. AND SUBSIDIARIES RECONCILIATION OF NET INCOME/(LOSS) TO ADJUSTED EBITDA - UNAUDITED Six Months Ended June 30, 2025 2024 2023 (dollars in millions) Net income/(loss) ...................................................................................... $ 40.
Slide 24: Written and Earned Premium
Letter to Shareholders: Q2 2025 ROOT, INC. AND SUBSIDIARIES WRITTEN AND EARNED PREMIUM - UNAUDITED Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 (dollars in millions) Gross premiums written.......................................... $ 346.2 $ 308.2 $ 757.0 $ 638.9 Ceded pr