ROOT · Root, Inc.

Root, Inc. executed a significant capital structure optimization by refinancing its existing $200 million term loan with BlackRock into a new $200 million senior secured term loan led by The Huntington National Bank. The new facility, maturing May 4, 2029, carries an initial interest rate of SOFR + 3.25%, representing a 225 basis point reduction from the prior facility. This is expected to generate approximately $4.5 million in annual interest expense savings, though the company will incur a one-time charge of about $4.8 million in Q2 2026 for unamortized debt discount, issuance costs, and prepayment premium. The refinancing enhances capital flexibility and supports the newly authorized $75 million share repurchase program, which has no fixed expiration and allows for opportunistic repurchases. Concurrently, Root reported record Q1 2026 results: net income of $36 million (nearly double the $18 million in Q1 2025), a net combined ratio improvement of 4.2 points to 91.4%, and 9% year-over-year growth in policies in force. The company highlighted strong underwriting performance, disciplined capital allocation, and scaling of high-return distribution channels, particularly partnerships which grew new writings nearly 30% year-over-year. Management emphasized that the lower cost of capital enables more competitive pricing and continued investment in technology and AI-driven automation. The combination of debt refinancing, share repurchase authorization, and strong operational results signals confidence in Root's long-term profitability and capital allocation strategy.