--- title: "Root | 8-K: FY2026 Q1 Revenue: USD 393.5 M" type: "News" locale: "en" url: "https://longbridge.com/en/news/285477470.md" datetime: "2026-05-07T03:15:30.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/285477470.md) - [en](https://longbridge.com/en/news/285477470.md) - [zh-HK](https://longbridge.com/zh-HK/news/285477470.md) --- # Root | 8-K: FY2026 Q1 Revenue: USD 393.5 M Revenue: As of FY2026 Q1, the actual value is USD 393.5 M. EPS: As of FY2026 Q1, the actual value is USD 2.09, beating the estimate of USD 0.84. EBIT: As of FY2026 Q1, the actual value is USD 37 M. #### Financial Results - Q1 2026 vs. Q1 2025 - **Net Income**: Root, Inc. reported a net income of $35.9 million in Q1 2026, nearly doubling from $18.4 million in Q1 2025 . - **Operating Income**: Operating income increased to $40.9 million in Q1 2026 from $23.7 million in Q1 2025 . - **Adjusted EBITDA**: Adjusted EBITDA reached $56.8 million in Q1 2026, up from $31.9 million in Q1 2025 . - **Net Combined Ratio**: The net combined ratio improved by 4.2 points to 91.4% in Q1 2026, compared to 95.6% in Q1 2025 . - **Gross Premiums Written**: Gross premiums written were $389.0 million in Q1 2026, a 5% year-over-year moderation from $410.8 million in Q1 2025 . - **Gross Premiums Earned**: Gross premiums earned grew by 8% year-over-year to $370.3 million in Q1 2026, from $344.4 million in Q1 2025 . - **Net Premiums Earned**: Net premiums earned were $363.7 million in Q1 2026, compared to $321.3 million in Q1 2025 . - **Gross Profit**: Gross profit for Q1 2026 was $107.9 million, a slight increase from $107.1 million in Q1 2025 . - **Direct Contribution**: Direct contribution was $140.5 million in Q1 2026, compared to $127.1 million in Q1 2025 . - **Return on Equity**: Root, Inc. generated an approximately 47% annualized return on equity . #### Operating Costs - Q1 2026 vs. Q1 2025 - **Loss and Loss Adjustment Expenses**: $226.2 million in Q1 2026, up from $205.6 million in Q1 2025 . - **Sales and Marketing**: Decreased to $27.3 million in Q1 2026 from $51.5 million in Q1 2025 . - **Other Insurance Expense**: Increased to $59.4 million in Q1 2026 from $36.7 million in Q1 2025 . - **Technology and Development**: Increased to $15.2 million in Q1 2026 from $11.4 million in Q1 2025 . - **General and Administrative**: Increased to $24.5 million in Q1 2026 from $20.5 million in Q1 2025 . #### Cash Flow - **Cash Flow from Operating Activities**: Net cash provided by operating activities was $9.3 million in Q1 2026, a decrease from $26.8 million in Q1 2025 . #### Operational Metrics - **Policies in Force**: Policies in force increased by 9% year-over-year to 495,429 in Q1 2026, from 453,800 in Q1 2025 . - **Partnership New Writings**: New writings from the partnership channel grew nearly 30% year-over-year . #### Debt Refinancing and Capital Allocation - Root, Inc. successfully refinanced its existing $200 million debt into a new senior secured term loan facility led by The Huntington National Bank on May 4, 2026, which matures on May 4, 2029 . The new term loan bears interest at SOFR + 3.25%, representing a 225 basis point reduction from the prior facility . This refinancing is expected to generate approximately $4.5 million in annual interest expense savings . The company anticipates expensing approximately $4.8 million in Q2 2026 for unamortized debt discount, issuance costs, and a prepayment premium related to the prior term loan . The term loan of $200,000,000 is repayable in installments, starting with $500,000 quarterly from September 30, 2026, until March 31, 2028, followed by $2,500,000 quarterly until the maturity date . - Root, Inc. authorized a share repurchase program of up to $75 million of its Class A common stock, with no fixed expiration date . This program allows for increased capacity to execute opportunistic share repurchases . #### Financial Covenants (New Credit Agreement) - **Minimum Risk-Based Capital Ratio**: Each U.S. Insurance Subsidiary must maintain a Risk-Based Capital Ratio of no less than the greater of the highest required by the applicable Insurance Regulatory Authority or agreement, and 300%, commencing September 30, 2026 . - **Maximum Debt to Capital Ratio**: The Debt to Capital Ratio must not exceed 45.0% from September 30, 2026, through March 31, 2027; 40.0% from June 30, 2027, through March 31, 2028; and 35.0% from June 30, 2028, and each Fiscal Quarter thereafter . - **Minimum Consolidated Net Worth**: Consolidated Net Worth must be no less than the sum of 80.0% of Consolidated Net Worth as of December 31, 2025, plus 50.0% of Consolidated Net Income for each Fiscal Quarter ending after December 31, 2025, plus 50.0% of capital contributions received after December 31, 2025, minus 50% of Permitted Share Repurchases after December 31, 2025, commencing September 30, 2026 . - **Minimum Debt Service Coverage Ratio**: The Consolidated Debt Service Coverage Ratio must be no less than 1.40:1.00, commencing September 30, 2026 . - **Minimum Regulated Subsidiary Equity**: Regulated Subsidiary Equity must be no less than $125,000,000, commencing September 30, 2026 . #### Outlook / Guidance Root, Inc. expects the debt refinancing to generate approximately $4.5 million in annual interest expense savings and enhance capital flexibility for share repurchases and strategic investments . The company anticipates the challenging growth environment may persist through 2026 but believes it is well-positioned for long-term growth, aiming to be in all contiguous U.S. states by the end of 2027 and launching in New Jersey in 2026 . Investments in pricing models and AI are expected to lead to continued strong margins, better customer prices, and long-term growth . ### Related Stocks - [ROOT.US](https://longbridge.com/en/quote/ROOT.US.md) ## Related News & Research - [Root & Freeway Insurance Expand Integrated Coverage Options Through New Partnership | ROOT Stock News](https://longbridge.com/en/news/283839254.md) - [Root (ROOT) Reports Q4: Everything You Need To Know Ahead Of Earnings](https://longbridge.com/en/news/276677260.md) - [LOWE'S REPORTS FIRST QUARTER 2026 SALES AND EARNINGS RESULTS | LOW Stock News](https://longbridge.com/en/news/287043063.md) - [Apollo Clarifies Legal Status of Recent 8-K Disclosure](https://longbridge.com/en/news/286564452.md) - [XP Inc. Reports First Quarter 2026 Results | XP Stock News](https://longbridge.com/en/news/286814239.md)