Neptune Insurance Holdings Inc. Class A

Good afternoon, ladies and gentlemen, and thank you for standing by. My name is Calvin, and I will be your conference operator today. At this time, I would like to welcome everyone to the Neptune Insurance Holdings fourth quarter earnings 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 followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. Thank you. I would now like to turn the call over to John Carlin, Director of Corporate Development. Please go ahead.

Thank you and good afternoon. With me here today is Trevor Burgess, Chairman and CEO, Matt Duffy, President and Chief Risk Officer, and Jim Steiner, CFO and COO. Before we begin, I'd like to remind everyone that today's discussion will include forward-looking statements, including, among others, statements about our expectations for our future financial performance, growth opportunities, business strategy, market trends, and capital allocation plans. These statements are based on our current views and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. We direct you to our recent SEC filings for a full description of these risks. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. We will also reference certain non-gap financial measures. These measures should be considered only as supplements to their comparable gap measures. Additional information, including reconciliations of the non-gap measures to their most comparable gap measures, can be found in our earnings release at investors.neptuneflood.com. And in our current report, on Form 8K that was publicly filed with the SEC on February 18th, 2026. And now I'd like to turn the call over to Trevor.

Good evening and thank you for joining us. Let me start with what's on everyone's mind. Last week, our stock sold off seemingly because investors decided AI is coming for insurance. They're right. They just have the direction of the trade completely wrong. Neptune isn't threatened by AI disruption. We are AI disruption. We have been since the day we wrote our first policy. We have no legacy system to rip out. We have no army of manual underwriters to replace. We built this company as an AI powered, API first platform from scratch. Proprietary machine learning models running pricing, underwriting, portfolio management, and distribution across the largest private flood data set in the United States. Let me be specific about what that means. The data mode. Over years of underwriting and servicing hundreds of thousands of policies, we have assembled proprietary flood risk data, behavioral retention data, claims performance insights, and real-time transaction signals that no competitor can replicate by simply plugging in a large language model. In an AI-driven world, the model is a commodity. The data is the moat. We have the data. The results. Our underwriting performance hasn't just been good. It has been so good that capacity providers are fighting to get on our platforms. We grew from 23 to 40 capacity partners this year, a 74% increase, now supporting eight programs. And because those partners have seen hundreds of millions of dollars in underwriting profit flow through Neptune, our average commission rate increased 35 basis points year over year. That's not us negotiating harder, that's the market telling us our AI works. Where we sit, Before I explain why AI is a tailwind for us, it's worth clarifying how Neptune actually reaches the end customer, because I think some of the confusion starts here. We are a managing general agent. We sit between the capacity providers who take the risk and the distribution channel that reach the policyholder. We do not own large captive agency forces. We reach customers two ways. through a network of independent agents and wholesale partners and through direct-to-consumer digital channels. Both flow through the same platform. That distinction matters because when AI reduces the cost of distribution, that savings flows directly to Neptune's bottom line. We are not disrupting ourselves. The distribution upside. Here's the part that I think is most misunderstood. Agent commissions are our single largest expense line. If AI-driven workflows reduce friction in how consumers buy flood insurance, and they will, that is not a threat to Neptune. That is margin expansion for Neptune. We already support both agent-led and fully digital flows on the same platform. If every customer in America decides tomorrow that they want to buy flood insurance through an AI agent instead of a human one, we are ready, and our adjusted EBITDA margin goes from an already exceptional 60% to something significantly higher. The team. I'd like everyone to look at who actually works here, because it tells you what kind of company this is. Over 40% of Neptune's employees are engineers or data scientists. This is not an insurance company experimenting with AI. This is an AI company that happens to be in insurance. And that composition shows up in the numbers. In 2025, trailing 12-month revenue per employee increased 15% to $2.7 million. And adjusted EBITDA per employee increased 14% to $1.6 million. For context, our revenue per employee puts us between Apple and NVIDIA. These are not insurance company metrics. Those are elite technology platform metrics made possible because of AI. I want to be honest about something. Nobody knows exactly how AI will reshape this industry. We could be wrong about the pace, the path, or the specifics. But if the question is who is best positioned to adapt, we like our answer. We are already building with the latest tools, We are already operating at the cutting edge, and our entire infrastructure was designed to evolve. If the future belongs to AI, and we believe it does, we would rather be the company that was built for it than the one trying to catch up. Technology, capacity, distribution. Those are the three modes around this company, and we expect every one of them to get deeper as AI adoption accelerates. Now, let me talk you through the quarter. The fourth quarter was an outstanding finish to a record year for Neptune. It showcased the stability of our platform, the strength of our execution, and the durability of our business model. During the quarter, we successfully launched new capacity programs, delivered record new business sales, and scaled our technology seamlessly to meet elevated demand, all while maintaining strong margins in operational disciplines. Our first full quarter as a public company built directly on the momentum that brought us here and capped an exceptional year. A few highlights from the quarter include revenue of 43.8 million, a 39% increase year over year, net income of 4.3 million at a 10% margin, down 63% from the fourth quarter of 2024, with adjusted net income of 15.3 million, up 25% from the fourth quarter of 2024. adjusted EBITDA of $25.9 million, up 34% year-over-year at a 59% margin, written premium of $100.3 million, driving 33% year-over-year premium and forced growth, and record new business sales posted during the quarter. The strength of the fourth quarter kept an exciting and record-setting year. For the full year 2025, Neptune delivered revenue of $159.6 million, up 34% from 2024, net income of $37.4 million at a 23% margin of 8% from 2024, and adjusted net income of $56.9 million, up 38%. full year adjusted EBITDA of $95 million, up 32% year over year at a 60% margin, giving us a rule of 40 of 93. Year-end premium in force was approximately $370 million, reflecting over $90 million of net growth during the year. And as a reminder, because this is central to understanding the business, Neptune takes no balance sheet insurance risk, We are an asset-like platform that earns commissions and fees on every policy written and renewed. That model is what allows us to scale at 60% EBITDA margins without taking catastrophe exposure onto our books. Now, profitability and technology get a lot of the attention, and they should. But I wanted to spend a moment on something that doesn't always show up in the model, how we performed when it mattered most. During the fourth quarter, the federal government shut down and the National Flood Insurance Program, or NFIP, went dark. That is the primary source of flood insurance for most Americans, and it was unavailable. While the NFIP was shut down, our platform kept quoting, kept finding, and kept onboarding new agents who needed somewhere to send their customers. We made targeted, disciplined decisions to support our agent partners during the disruption, including incentives that contributed to record new business sales with minimal impact margins. That is the kind of moment that cements relationships. Agents remember who showed up. I also want to highlight a structural advantage of our market that I think is underappreciated. Flood insurance pricing is not subject to the reinsurance cycle volatility that whipsaws other property and casualty lines. The NFIP sets its rates statutorily, and as the dominant market alternative, that creates a stable pricing environment around which we can underwrite with confidence. In 2025, we retain 98% of premium. That retention rate tells you two things. Our pricing is competitive, and our policyholders are staying. The results we delivered this year reflect a model that is working. Technology, data, capacity, distribution, and execution all compounding together. We enter 2026 with real momentum and confidence in our ability to continue building value long-term. I'll now turn things over to Matt Duffy, our President and Chief Risk Officer, to discuss business updates.