Root, Inc.

Ladies and gentlemen, greetings and welcome to the routing 3Q24 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Matt. Lamalwa, please go ahead.

Thank you for joining us today. Root is hosting this call to discuss its third quarter 2024 earnings results. Participating on today's call are Alex Tim, co-founder and chief executive officer, and Megan Binkley, chief financial officer. Earlier today, Root 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 third quarter 2024 Form 10Q, which was filed with the Securities and Exchange Commission earlier 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 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-gap measures while talking about Root's performance. You can find reconciliations of those historical measures to the nearest comparable gap 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 Tim, Root's co-founder and CEO.

Thanks, Matt. Our third quarter performance was a landmark quarter for Root. We have consistently said that our top priority has been to reach profitability, and in the third quarter, we delivered it. This is a pivotal moment for Root and a firm validation of our business model, technology, and delightful customer experience. Our success is a direct result of the steadfast, hard work of our entire team, and I could not be prouder. To build upon this success and support future growth, we amended our term loan with our longstanding partner, BlackRock, and significantly improved our cost of capital moving forward. Megan will provide more details shortly. With profitability now achieved, we have the opportunity to reinvest our profits into the business in the quarters ahead, particularly investing in our growth engines in both the direct and partnerships channel. With Indirect, during the quarter, we continue to expand and test into new areas of the marketing funnel, and we expect that to continue in the quarters ahead. This includes investing more in R&D marketing, which typically takes more time to produce results. With these investments, we expect to accelerate our policies and force growth over the long term. As a reminder, we came out of a hyper growth period in the first quarter of this year, which weighted our book toward newer policyholders. This dynamic typically results in lower retention in the near term following rapid growth. We are now two quarters past the hypergrowth period, and as a result, we expect to see more contributions from renewals and, therefore, a gradual return to policies-enforced growth. Looking ahead, we believe there are material opportunities to expand our competitive advantage to additional data-rich channels. As always, we will explore these channels in a disciplined, rigorous manner and quickly grow or jettison these experiments based on results. We also made fantastic progress in our partnerships channel in the quarter, where we meet customers at contextually relevant times. New writings in the channel more than doubled from the prior year, and we launched several exciting new partnerships. Notably, we launched a partnership with Goosehead Insurance, where our technology has enabled agents to quote faster and more efficiently, thereby providing their clients with a great experience at a great price. The partnership channel is a key to our continued long-term success, given the differentiated access to customers it provides. Our pipeline of partnership opportunities remains robust, and we believe we are well poised to drive strong growth in this channel in 2025 and beyond. Our laser-focused mindset on disciplined underwriting, driven by our proprietary technology platform and data science algorithms, led to what we believe is an industry-best 57% gross loss ratio. Thanks to our consistently strong underwriting, we have the opportunity to reduce rates in select states while not compromising our target returns. While we certainly believe lower rates for the best drivers can further improve growth, we do not set prices with a primary goal to gain market share. Our goal is to set prices accurately, and our data science acumen and high telematics adoption rates allow us to effectively price and realize our target returns. As our data sets grow and we continue to retrain our models, we build an even stronger moat around our business. As we look to 2025, we're excited by the growth opportunities in front of us. We expect to add new partners, drive additional profitable growth, expand our geographic footprint, and deliver even better products at better prices to customers. Our team's determination to become the largest and most profitable personalized insurance carrier in the United States is stronger than ever, and achieving net income profitability is an important milestone on that journey. Yet our momentum does not stop here. We maintain a culture of discipline and innovation, which we believe translates to long-term value for all of our stakeholders. I'm now turning the call over to Megan to discuss our operating results in more detail.