Root, Inc. reported fourth‑quarter and full‑year 2025 results, posting net income of $40.3 million on $1.5 billion in premiums written. The company achieved a net combined ratio of 98.2%, the first time it has earned underwriting profit on a full‑year basis.
Revenue for the year reached $1.517 billion, up 29% from $1.48 billion in 2024, driven by a 29% increase in premiums written. Fourth‑quarter revenue of $397 million exceeded analyst estimates of $383 million, reflecting strong demand in the independent agent channel.
The independent agent channel, now responsible for roughly 50% of new U.S. auto‑insurance business, more than tripled its new writings in Q3 2025. This growth lifted the company’s customer lifetime value by over 20% through its AI‑driven pricing model, reinforcing the strategy to scale without high direct‑marketing costs.
Net income for Q4 2025 was $5.3 million, up from $22.1 million in Q4 2024, and GAAP earnings per share of $0.31 beat consensus estimates of a loss of $0.31, a $0.62 swing. The beat was largely driven by disciplined expense management and a robust telematics platform that improved loss ratios.
Management highlighted disciplined cost control and the expansion of the independent agent channel as key drivers of profitability. CEO Alex Timm noted that Root had grown policies in force the fastest in 2025 and that the company’s technology‑centric approach continues to deliver underwriting discipline and margin improvement.
The results signal that Root is on a path to sustained profitability, with a strong capital position of $312 million in unencumbered capital at year‑end 2025. The company did not provide new forward guidance in the release, but the earnings beat and margin improvement suggest confidence in continued growth.
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