Root, Inc.

Greetings and welcome to the Root in Corp 2025 Second Quarter Earnings Conference Call. At this time, all participants are in the listen-only mode. A brief question and answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please signal the operator by pressing star and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host for today, Matt Lovelma, Head of Investor Relations and Corporate Development. Please go ahead.

Thank you for joining us. Root is hosting this call to discuss its second quarter 2025 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 second quarter 2025 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 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 Roots 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 Tim, Roots co-founder and CEO.

Thanks, Matt. The second quarter was another impressive quarter for Root. We delivered strong financial results, setting a record on revenue with 371 million in gross earned premiums and generated net income of 22 million. These results are the culmination of consistent execution of our strategy, allowing us to create great experiences and great prices for our customers. Beyond financial results, we continue to advance our strategy releasing our next-gen pricing model, continuing to rapidly grow our partnerships channel, and making meaningful progress on our path to becoming national. Building AI and machine learning to better price insurance is the bedrock of our strategy. Our new pricing model substantially improves our risk selection, increasing customer lifetime values by 20% on average. This impact could be even larger in some states and allows us to grow faster, collect more data, and continue to build even more predictive models. For context, our last model update was released at the end of 2024. Our foundation in artificial intelligence, namely machine learning, has allowed us to iterate on our models not only rapidly, but also with big improvements to segmentation. These results show the power of this technology and our strategy. Our partnerships channel has seen quarterly new writings nearly triple year over year, and we are seeing strong early wins with independent agents. driven by our technology platform that makes it incredibly easy for agents to deliver great prices quickly to their clients. We are now available through the industry's two largest comparative raters, EasyLynx and PLRating. Now live in more than 20 states, early traction on these platforms has been strong, and we are working to expand within our geographic footprint by year end. Through these platforms, REIT significantly expands its reach, meeting agents where they are with an embedded technology that provides increased efficiency to their quote, in-buying process. As anticipated, we saw competition increase in our direct channel, and our data science machine reacted exactly as designed, reducing marketing spend when appropriate. To date, we have largely focused on performance marketing channels. Combining the data rich nature of these channels with our machine learning prowess allows for a competitive advantage among high intent customers. We have proven that we can win in this segment and believe the next leg of our growth will come from ongoing R&D investments as we leverage this competitive advantage across additional data rich marketing channels. Given the size of these untapped marketing channels and the opportunity to build a competitive advantage based on data in these channels, We believe this opportunity is substantial and well worth the wait. As mentioned last quarter, we believe we will react swiftly and appropriately to potential tariffs. To date, we have not seen a meaningful impact from tariffs. Given that our current loss ratios remain below our long-term target of 60% to 65%, we are in position to absorb some impact without raising rates or sacrificing our long-term unit economic targets. We are pleased with our progress in the quarter, but are far from satisfied as our goal remains to be the largest, most profitable personal lines insurance carrier in the United States. We will continue to invest in our business, technology, and growth, which we expect will impact near-term profitability in the back half of 2025. As we have made clear, at Root, it's all about the long-term. That means we invest our capital to drive intrinsic value creation, not near-term calendar period results. We believe a disciplined adherence to this framework creates a tremendous opportunity for long-term investors, and we are excited to continue to invest in the opportunity ahead. I will now hand the call over to Megan to discuss our second quarter operating results in more detail.