Operating cash flow remains volatile, fluctuating from $70.1 million in 2025Q4 to $9.3 million in 2026Q1, while the company simultaneously increased investment purchases to $100.1 million.
| Cash from Operations | 189M | 206.5M | 195.7M | -33.6M | -210.6M | -403.4M | -287.2M | -127.2M | -26.1M |
| Operating CF Growth % | -64.33% | 5.52% | 682.44% | 84.05% | 47.79% | -40.46% | -125.79% | -387.36% | - |
| Operating CF / Revenue % | 12.11% | 13.61% | 16.63% | -7.38% | -67.76% | -116.79% | -82.81% | -43.83% | -60.28% |
| Net Income | 57.8M | 40.3M | 30.9M | -147.4M | -297.7M | -521.1M | -363M | -282.4M | -69.1M |
| Depreciation & Amortization | 12.9M | 11.8M | 14.9M | 12.6M | 13.8M | 16.6M | 15.6M | 4.9M | 600K |
| Stock-Based Compensation | 61.9M | 40.1M | 22.3M | 34.7M | 45M | 28.1M | 3.7M | 1.4M | 100K |
| Deferred Taxes | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Non-Cash Items | -9.3M | 55.9M | 39M | 13.8M | 16M | 20.7M | 112.2M | 29.6M | 300K |
| Working Capital Changes | 67.4M | 58.4M | 88.6M | 52.7M | 12.3M | 52.3M | -55.7M | 119.3M | 42M |
| Cash from Investing | -164.5M | -91.7M | -154.4M | -45.7M | -16.6M | 76.9M | -114.1M | -114M | -20.6M |
| Capital Expenditures | -12.1M | -14.1M | -400K | -200K | -10.1M | -4.6M | -1.8M | -6.6M | -1.2M |
| Acquisitions | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Purchase of Investments | -219.6M | -147.4M | -197.8M | -76M | -47.7M | -17M | -158.4M | -138.1M | -40.3M |
| Sale/Maturity of Investments | 70.7M | 69.8M | 55.2M | 39.7M | 41.2M | 105.1M | 60.4M | 36.2M | 23.2M |
| Other Investing | -3.5M | 0 | -11.4M | -9.2M | 0 | -6.6M | -14.3M | -5.5M | -2.3M |
| Cash from Financing | -26.1M | -25.2M | -120.7M | -4.1M | 283.3M | -80.3M | 1.1B | 535.5M | 150.9M |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 | 0 | -200K | 0 | 0 |
| Stock Issued | 100K | 300K | 0 | 0 | 0 | 0 | 1.1B | 0 | 0 |
| Debt Issuance (Net) | 0 | 0 | -1000K | 0 | 1000K | -1000K | -1000K | 1000K | 0 |
| Other Financing | -26.2M | -25.5M | -15M | -1.1M | 300K | 3.2M | 2.1M | 11.9M | 100K |
| Net Change in Cash | -1.6M | 89.6M | -79.4M | -83.4M | 56.1M | -406.8M | 697.2M | 294.3M | 104.2M |
| Exchange Rate Effect | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Cash at Beginning | 689.9M | 600.3M | 679.7M | 763.1M | 707M | 1.11B | 416.6M | 122.3M | 18.1M |
| Cash at End | 608.9M | 689.9M | 600.3M | 679.7M | 763.1M | 707M | 1.11B | 416.6M | 122.3M |
| Free Cash Flow | 180.9M | 192.4M | 183.9M | -43M | -220.7M | -414.6M | -303.3M | -139.3M | -29.6M |
| FCF Growth % | -7.94% | 4.62% | 527.67% | 80.52% | 46.77% | -36.7% | -117.73% | -370.61% | - |
| FCF Margin % | 11.59% | 12.68% | 15.63% | -9.45% | -71.01% | -120.03% | -87.46% | -48% | -68.36% |
| FCF per Share | 10.52 | 11.19 | 10.88 | -2.99 | -15.65 | -29.95 | -21.85 | -9.89 | -16.7 |
Embedded partner channel concentration
As reported in quarterly financial statements, Root's underwriting cash flow has demonstrated significant volatility, with operating cash flow reaching $70.1 million in 2025Q4, though it moderated to $9.3 million by 2026Q1, reflecting the inherent lumpiness of claims payments relative to premium collection cycles.
The fluctuation in operating cash flow suggests that while the company is generating positive cash from operations, the timing of claims settlements remains a primary driver of quarterly variance. Investors should monitor whether the recent decline in cash generation in 2026Q1 represents a seasonal anomaly or a tightening of the float as the company scales its embedded distribution model.
Based on the provided cash flow data, Root has consistently deployed capital into investment purchases, peaking at $100.1 million in 2026Q1, which indicates a strategic shift toward building a larger, yield-generating asset base to support its growing insurance liabilities.
The consistent gap between investment purchases and sales suggests that management is actively reinvesting float rather than liquidating assets to cover operational shortfalls. This behavior appears to signal a transition toward a more traditional insurance model where investment income becomes a meaningful contributor to the bottom line.
According to historical data, claims and loss payments have trended upward from $148.1 million in 2023Q4 to $226.2 million in 2026Q1, reflecting the company's rapid expansion in premium volume and the subsequent increase in the underlying risk pool.
The steady rise in claims payments warrants close investigation to ensure that the loss ratio remains within the company's target range. If the growth in claims payments continues to outpace premium growth, it may indicate that the telematics-based risk selection is not yet fully insulating the company from broader industry-wide severity trends.
As evidenced by the OCF/NI ratio, which fluctuated from -10.67 in 2025Q3 to 13.23 in 2025Q4, there is a significant divergence between reported net income and actual cash generation, suggesting that non-cash accruals and reserve adjustments play a substantial role in the company's financial reporting.
This wide variance implies that investors should be cautious when relying solely on net income as a proxy for performance. The disconnect between accounting profits and cash flow suggests that the company's earnings quality is highly sensitive to the actuarial assumptions used to set loss reserves.
Quick answers to the most common questions about buying ROOT stock.
Root, Inc. (ROOT) generated $206.5M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Root, Inc. (ROOT) generated $192.4M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Root, Inc. (ROOT) spent $14.1M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.