Root, Inc.

Hello and thank you for standing by. My name is Regina and I will be your conference operator today. At this time, I would like to welcome everyone to the Root, Inc. First Quarter 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. If you'd like to withdraw your question, press star 1 again. I would now like to turn the conference over to Matt LaMalva, Head of Investor Relations. Please go ahead.

Good afternoon, and thank you for joining us. Root is hosting this call to discuss its first quarter 2024 earnings results. Participating on today's call are Alex Tim, Co-Founder and Chief Executive Officer, and Megan Binkley, Chief Financial Officer. Root recently issued a shareholder letter announcing its financial results. While this call will reflect items discussed within that document, for more complete information about our financial performance, we also encourage you to read our first quarter 2024 Form 10-Q. Before we begin, I want to remind you that matters discussed on this 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 will reflect our opinions as of the date of this call, and we undertake no obligation 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. In addition, we are subject to a number of risks that may significantly impact our business and financial results. 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 Roots performance. You can find reconciliations of those 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 Timm, Roots co-founder and CEO.

Thanks, Matt. For those new to Root, welcome. I'd love to take a minute to tell you a little bit more about the company before I jump into our results. We believe drivers should have more control and understanding of their insurance. So we've built car insurance that is transparent, easy to understand, and offers great prices. We do this through the Root app where customers can see how they are driving, manage their policy, and file a claim in seconds. We also do this through our partnership channel where we meet customers where they are in their moment of need. This includes, for example, embedding our insurance product at the point of vehicle sale. This is all enabled through our data science and technology, which allows us to create seamless, flexible customer experiences at what we believe to be some of the best prices. With that, I'd like to talk a little bit about the quarter. The first quarter of 2024 was an excellent quarter. For the first time in the company's history, we generated operating income and positive adjusted EBITDA. We did this while doubling gross written premiums and policies in force year over year. These results are a testament to our strong product offering, disciplined execution, and the power of our technology. While pleased with this performance, we are far from achieving what we believe we can as a company. Over the long term, we believe data science and technology will fundamentally change the way insurance is priced. And in the first quarter, we continued to significantly improve the predictive accuracy of our pricing and underwriting models. As we grow, our data set grows, which allows us to retrain our models and deliver better prices to customers. In turn, with better prices, we are able to grow more efficiently, leading to a virtuous cycle. Also core to our strategy is continuing to build differentiated access to customers through our partnerships channel. Offering a three-click purchase experience via our partner platform continues to drive differentiated access to customers, and we're pleased to have grown new writings in our partnership channel 68% year over year. The expansion of this channel is foundational to our long-term growth strategy. Our direct channel also continued to have impressive growth in the quarter. We leverage advanced machine learning-based algorithms to optimize for our return targets. Our data science machine is constantly looking to see how the competitive environment is evolving. As such, this channel fluctuates due to seasonality and competitive dynamics, and as anticipated, we saw competition increase in the direct channel this quarter. We continue to optimize for target unit economics and believe being responsive to the changing environment is a smart way to profitably grow this business over the long term, even though it may lead to quarter-over-quarter variabilities. In the first quarter, the path to gap profitability looks stronger than ever. We continue to be excited by the long-term growth potential of the business by adding additional partners, expanding our footprint, and continuing to improve our prices and products. I am proud of our entire team for the dedication toward driving our success in this quarter. I'll now turn the call over to Megan to discuss our operating results in more detail.