The company achieved a 90.8% combined ratio in 2026Q1, signaling a successful transition to profitable underwriting as operating margins reached 2.69%.
| Revenue | 1.56B | 1.52B | 1.18B | 455M | 310.8M | 345.4M | 346.8M | 290.2M | 43.3M |
| Revenue Growth % | 22.83% | 28.95% | 158.57% | 46.4% | -10.02% | -0.4% | 19.5% | 570.21% | - |
| Medical Costs & Claims | 1.11B | 1.13B | 839.4M | 378.9M | 343M | 397.3M | 361M | 373.7M | 53.7M |
| Medical Cost Ratio % | 71.38% | 74.52% | 71.35% | 83.27% | 110.36% | 115.03% | 104.09% | 128.77% | 124.02% |
| Gross Profit | 446.8M | 386.6M | 337.1M | 76.1M | -32.2M | -51.9M | -14.2M | -83.5M | -10.4M |
| Gross Margin % | 28.62% | 25.48% | 28.65% | 16.73% | -10.36% | -15.03% | -4.09% | -28.77% | -24.02% |
| Gross Profit Growth % | - | 14.68% | 342.97% | 336.34% | 37.96% | -265.49% | 82.99% | -702.88% | - |
| Operating Expenses | 388.3M | 345.8M | 306.2M | 223.5M | 265.5M | 469.2M | 348.8M | 198.9M | 58.7M |
| OpEx / Revenue % | 24.87% | 22.79% | 26.03% | 49.12% | 85.42% | 135.84% | 100.58% | 68.54% | 135.57% |
| Depreciation & Amortization | 12.9M | 11.8M | 14.9M | 12.6M | 13.8M | 16.6M | 15.6M | 4.9M | 600K |
| Combined Ratio % | 96.25% | 97.31% | 97.37% | 132.4% | 195.79% | 250.87% | 204.67% | 197.31% | 259.58% |
| Operating Income | 58.5M | 40.8M | 30.9M | -147.4M | -297.7M | -521.1M | -363M | -282.4M | -69.1M |
| Operating Margin % | 3.75% | 2.69% | 2.63% | -32.4% | -95.79% | -150.87% | -104.67% | -97.31% | -159.58% |
| Operating Income Growth % | - | 32.04% | 120.96% | 50.49% | 42.87% | -43.55% | -28.54% | -308.68% | - |
| EBITDA | 71.4M | 52.6M | 45.8M | -134.8M | -283.9M | -504.5M | -347.4M | -277.5M | -68.5M |
| EBITDA Margin % | 4.57% | 3.47% | 3.89% | -29.63% | -91.34% | -146.06% | -100.17% | -95.62% | -158.2% |
| Interest Expense | 20.5M | 21M | 42.2M | 46.1M | 34.6M | 20M | 77.7M | 22.3M | 900K |
| Non-Operating Income | -20.5M | -21M | -42.2M | -46.1M | -34.6M | -20M | -77.7M | -22.3M | -900K |
| Pretax Income | 58.5M | 40.8M | 30.9M | -147.4M | -297.7M | -521.1M | -363M | -282.4M | -69.1M |
| Pretax Margin % | 3.75% | 2.69% | 2.63% | -32.4% | -95.79% | -150.87% | -104.67% | -97.31% | -159.58% |
| Income Tax | -300K | -500K | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Effective Tax Rate % | -0.51% | -1.23% | 0% | 0% | 0% | 0% | 0% | 0% | 0% |
| Net Income | 57.8M | 40.3M | 30.9M | -147.4M | -297.7M | -521.1M | -363M | -282.4M | -69.1M |
| Net Margin % | 3.7% | 2.66% | 2.63% | -32.4% | -95.79% | -150.87% | -104.67% | -97.31% | -159.58% |
| Net Income Growth % | 4.14% | 30.42% | 120.96% | 50.49% | 42.87% | -43.55% | -28.54% | -308.68% | - |
| EPS (Diluted) | 3.36 | 2.24 | 1.83 | -10.24 | -21.11 | -37.62 | -86.43 | -24.83 | -6.08 |
| EPS Growth % | 4.38% | 22.4% | 117.87% | 51.49% | 43.89% | 56.47% | -248.09% | -308.39% | - |
| EPS (Basic) | - | 2.49 | 1.96 | -10.24 | -21.11 | -37.62 | -86.43 | -24.83 | -6.08 |
| Diluted Shares Outstanding | 17.2M | 17.2M | 16.9M | 14.4M | 14.1M | 13.84M | 13.88M | 14.08M | 1.77M |
Embedded channel partner concentration
As indicated by recent financial disclosures, Root has successfully transitioned toward embedded distribution channels, yielding a 28.95% year-over-year revenue growth rate that suggests a sustainable shift away from the high-cost, direct-to-consumer marketing models that previously characterized the company's early-stage growth trajectory and customer acquisition strategy.
The pivot toward embedded partnerships, particularly with automotive retailers, appears to be effectively replacing volume lost from reduced direct marketing spend. Investors should monitor whether this growth remains durable if automotive transaction volumes face cyclical headwinds, as the current model relies heavily on these specific integration points.
Based on the latest quarterly data, Root has achieved a combined ratio of 90.8% in 2026Q1, marking a significant improvement in underwriting profitability that suggests the company's telematics-based risk selection is beginning to yield tangible margin expansion compared to the loss-heavy periods observed in 2024.
The reduction in the loss ratio to 57.5% indicates that the company's proprietary underwriting engine may be successfully identifying lower-risk segments within the non-standard auto market. This trend warrants further investigation to determine if the improvement is structural or if it reflects a temporary benefit from favorable claims frequency trends.
According to reported income statements, Root has successfully moved into positive operating territory with a 2.69% operating margin, suggesting that the company is finally achieving the necessary scale to leverage its fixed technological infrastructure against a growing base of earned premiums without excessive acquisition costs.
The transition from operating losses to consistent profitability suggests that management has successfully curtailed the aggressive marketing spend that previously constrained the bottom line. Future margin sustainability will likely depend on maintaining this efficiency as the company attempts to scale its policy count through third-party distribution partners.
While recent performance appears robust, the heavy reliance on embedded partnerships creates a potential single point of failure, as evidenced by the company's strategic pivot which may leave it vulnerable to operational or financial distress at key partners like Carvana, according to recent market context.
The current growth model may mask underlying risks related to bargaining power and channel dependency, which could limit the company's ability to adjust pricing or terms independently. Investors should remain cautious regarding the potential for abrupt volume volatility if these primary distribution channels experience any material disruption in their own business models.
Quick answers to the most common questions about buying ROOT stock.
For fiscal year 2025, Root, Inc. (ROOT) reported total revenue of $1.52B. This represents a 3403.7% increase compared to $43.3M in 2018.
Root, Inc. (ROOT) is profitable, generating $40.3M in net income for the fiscal year ending 2025 with a net profit margin of 2.7%.
Root, Inc. (ROOT) reported an operating income of $40.8M, resulting in an operating profit margin of 2.7%. This margin reflects the operational efficiency of the business before interest and taxes.
Root, Inc. (ROOT) generated $386.6M in gross profit for the year, representing a gross profit margin of 25.5%. This demonstrates the company's core pricing power and production efficiency.