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ROOT on Nasdaq

Root, Inc.

In its 2026 annual report the company says: “Root is a technology insurance company founded on the idea that car insurance rates should be based primarily on driving behaviors, not demographics. We are revolutionizing the archaic car insurance industry by using modern technology, data science, and telematics to offer fair, personalized rates to good drivers.”5 It is headquartered in Columbus, Ohio.1

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Last updated Oct 21, 2026.

Overview

$1.5BRevenue, fiscal 20252
$40.3MNet income, fiscal 20252

Compare with The Hartford, CNA Financial or UNIVERSAL INSURANCE HOLDINGS, INC., or pick any stock.

  • TickerROOT on Nasdaq1
  • IndustryFire, Marine & Casualty Insurance1
  • HeadquartersColumbus, Ohio1
  • Incorporated inDE3
  • Business address80 E Rich Street, Suite 500, Columbus, Oh 432153
  • Filer categoryLarge accelerated filer3

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Root is a technology insurance company founded on the idea that car insurance rates should be based primarily on driving behaviors, not demographics. We are revolutionizing the archaic car insurance industry by using modern technology, data science, and telematics to offer fair, personalized rates to good drivers. We primarily reach customers through two channels: our direct channel, where we target consumers with what we believe to be a great insurance product at a great price, and through our partnership channel, where we meet consumers at contextually relevant times, such as during the car purchasing experience or through independent insurance agents.5 From its latest annual report

Financials

From the company’s reports to the SEC. Every number links to the filing it came from.

Key numbers, fiscal 2025

4.1%Operating margin2
2.7%Net margin2
29.0%Revenue growth, 20252
14.2%Return on equity2
0.70×Debt to equity2
$206.5MFree cash flow2

Where the money goes

Where each dollar of revenue went, fiscal 2025

  • Other costs97¢$1.5B
  • Income tax0¢$500.0K
  • Profit3¢$40.3M

Out of $1.5B in revenue.2

Where each dollar of operating cash went, fiscal 2025

  • Kept or used elsewhere100¢$206.5M

Out of $206.5M of cash from operations.2

Financial statements

Revenue6789102$1.5B in 2025+3404% since 2018
0$500.0M$1.0B$1.5B$2.0B2018: $43.3M$43.3M20182019: $290.2M$290.2M2019+570%2020: $346.8M$346.8M2020+20%2021: $345.4M$345.4M2021−0%2022: $310.8M$310.8M2022−10%2023: $455.0M$455.0M2023+46%2024: $1.2B$1.2B2024+159%2025: $1.5B$1.5B2025+29%
Operating income789102$61.8M in 2025
-$600.0M-$400.0M-$200.0M0$200.0M2019: -$260.1M-$260.1M20192020: -$285.3M-$285.3M2020+10%2021: -$485.2M-$485.2M2021+70%2022: -$263.1M-$263.1M2022−46%2023: -$101.3M-$101.3M2023−61%2024: $78.5M$78.5M20242025: $61.8M$61.8M2025−21%
Net income6789102$40.3M in 2025
-$600.0M-$400.0M-$200.0M0$200.0M2018: -$69.1M-$69.1M20182019: -$282.4M-$282.4M2019+309%2020: -$363.0M-$363.0M2020+29%2021: -$521.1M-$521.1M2021+44%2022: -$297.7M-$297.7M2022−43%2023: -$147.4M-$147.4M2023−50%2024: $30.9M$30.9M20242025: $40.3M$40.3M2025+30%

Every line of the income statement as filed: the last 3 fiscal years, latest first.2

Period ending2025-12-312024-12-312023-12-31
Net premiums earned$1.4B$1.1B$399.9M
Net investment income$33.7M$35.9M$30.2M
Fee income$78.3M$66.0M$23.4M
Other income$3.4M$3.7M$1.5M
Total revenues$1.5B$1.2B$455.0M
Loss and loss adjustment expenses$924.2M$733.0M$331.3M
Sales and marketing$174.8M$135.8M$49.3M
Other insurance expense$206.3M$106.4M$47.6M
Technology and development$53.1M$53.3M$44.8M
General and administrative$96.9M$69.5M$83.3M
Total operating expenses$1.5B$1.1B$556.3M
Operating income (loss)$61.8M$78.5M-$101.3M
Interest expense$21.0M$42.2M$46.1M
Loss on extinguishment of debt$0$5.4M$0
Income (loss) before income tax expense$40.8M$30.9M-$147.4M
Income tax expense$500.0K$0$0
Net income (loss)$40.3M$30.9M-$147.4M
Net income attributable to participating securities$2.0M$1.7M$0
Net income (loss) attributable to common shareholders$38.3M$29.2M-$147.4M
Changes in net unrealized gains on investments$6.2M$200.0K$3.3M
Comprehensive income (loss)$46.5M$31.1M-$144.1M
Basic (in dollars per share)$2.49$1.96-$10.24
Diluted (in dollars per share)$2.36$1.83-$10.24
Basic (in shares)15.4M shares14.9M shares14.4M shares
Diluted (in shares)17.1M shares16.9M shares14.4M shares

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Corporate structure

Root, Inc. sits at the top of its group. 12 entities, 2 countries on record. Switch between the flow chart and the network, and select any entity to see its details.

Major holders of Root, Inc.

  • Root, Inc. Columbus, Ohio
    • Caret Holdings, Inc. Subsidiary · Delaware, United States
    • Root Enterprise, LLC Subsidiary · Delaware, United States
    • Root Florida Insurance Company Subsidiary · Florida, United States
    • Root Insurance Agency, LLC Subsidiary · Ohio, United States
    • Root Insurance Company Subsidiary · Ohio, United States
    • Root Lone Star Insurance Agency, Inc. Subsidiary · Texas, United States
    • Root Property & Casualty Insurance Company Subsidiary · Ohio, United States
    • Root Reinsurance Company, Ltd. Subsidiary · Cayman Islands
    • Root Republic Managing General Agency, LLC Subsidiary · Texas, United States
    • Root Scout, LLC Subsidiary · Delaware, United States
    • Root Texas Managing General Agency, LLC Subsidiary · Texas, United States

Built from subsidiaries listed in Exhibit 21 of annual reports filed with the SEC; major holders from Schedules 13D and 13G. Each entity in the chart links to its source.

What it owns

What Root, Inc. reports owning in its annual reports to the SEC: buildings, land and equipment, real estate and locations, investments, intangible assets and inventory, at the end of its latest fiscal year and a year before.

Property and equipment

ItemLatestA year beforeChange
Computer equipment and software$57.4M2 Dec 31, 2025$50.0M2 Dec 31, 2024+14.8%
Property and equipment, before depreciation$8.0M2 Dec 31, 2025$15.8M2 Dec 31, 2024−49.4%
Accumulated depreciation$6.8M2 Dec 31, 2025$14.0M2 Dec 31, 2024−51.4%
Property and equipment, net$1.2M2 Dec 31, 2025$1.8M2 Dec 31, 2024−33.3%
Operating-lease assets (leased space)$2.0M2 Dec 31, 2025$2.6M2 Dec 31, 2024−23.1%

Investments

ItemLatestA year beforeChange
Cash and cash equivalents$669.3M2 Dec 31, 2025$599.3M2 Dec 31, 2024+11.7%

Properties, in its own words

Our corporate headquarters is located in Columbus, Ohio, and consists of 43,228 square feet that we occupy under a lease agreement that expires in 2027, but which could be terminated early under certain circumstances. We lease all of our facilities and do not currently own any real property. We also sublease certain office space to the extent we no longer need that space for current and anticipated future needs. We believe our facilities are adequate and suitable for our current needs and that suitable additional or alternative space will be available through a lease or purchase to accommodate our operations.

For additional information regarding our leases, refer to Note 8, “Leases,” in the Notes to Consolidated Financial Statements.

Item 2 of the 10-K filed Feb 25, 2026.5

Leadership

Who has led Root, Inc., and when. Pick a name to see everywhere that person has worked.

Chief executive

  1. Alexander E. Timm2020–now

President

  1. Mahtiyar Bonakdarpour2024–now

Chief financial officer

  1. Daniel H. Rosenthal2020–2022
  2. Robert H. Bateman2022
  3. Megan Binkley2023–now

Chief operating officer

  1. Daniel H. Rosenthal2022
2025
Board members and other officers (20)

Subsidiaries and ownership

Subsidiaries (Exhibit 21)

  • Caret Holdings, Inc. Delaware4
  • Root Enterprise, LLC Delaware4
  • Root Florida Insurance Company Florida4
  • Root Insurance Agency, LLC Ohio4
  • Root Insurance Company Ohio4
  • Root Lone Star Insurance Agency, Inc. Texas4
  • Root Property & Casualty Insurance Company Ohio4
  • Root Reinsurance Company, Ltd. Cayman Islands4
  • Root Republic Managing General Agency, LLC Texas4
  • Root Scout, LLC Delaware4
  • Root Texas Managing General Agency, LLC Texas4

The subsidiaries the company lists in Exhibit 21 of its annual report, as filed.

Former names

  • Root Stockholdings, Inc.Sep 20, 2019 to Sep 17, 20203

Timeline

  1. Sep 1, 20268-K Entered a material agreement; Unregistered sale of shares39
  2. Aug 5, 20268-K Results of operations; Regulation FD disclosure40
  3. Jun 8, 20268-K Bylaws or fiscal year changed; Shareholder vote41
  4. May 6, 20268-K Entered a material agreement; Ended a material agreement; Results of operations42
  5. Feb 25, 20268-K Results of operations43
  6. Nov 5, 20258-K Results of operations; Regulation FD disclosure44
  7. Aug 6, 20258-K Results of operations; Regulation FD disclosure45
  8. Jun 6, 20258-K Shareholder vote46
  9. May 7, 20258-K Results of operations; Regulation FD disclosure47
  10. Feb 26, 20258-K Results of operations48
  11. Nov 15, 20248-K Executive or director change49
  12. Oct 30, 20248-K Results of operations; Regulation FD disclosure50
  13. Oct 27, 2020New chief executive Alexander E. Timm becomes CEO15

Calendar

Coming up

  1. Nov 4, 2026 · After the closeReports results for the quarter ending Sep/2026 A year earlier it reported ($0.35) a share, on Nov 5, 2025.51

When it reported results

  1. Aug 5, 2026Reported quarterly or annual results40
  2. May 6, 2026Reported quarterly or annual results42
  3. Feb 25, 2026Reported quarterly or annual results43
  4. Nov 5, 2025Reported quarterly or annual results44
  5. Aug 6, 2025Reported quarterly or annual results45
  6. May 7, 2025Reported quarterly or annual results47
  7. Feb 26, 2025Reported quarterly or annual results48
  8. Oct 30, 2024Reported quarterly or annual results50

Upcoming dates from Nasdaq's calendar; past results from the company's 8-K filings (Item 2.02). The full markets calendar

Filings

451 filings to the SEC since October 2021: 5 annual reports, 15 quarterly reports, 49 major events, 261 insider forms, 55 large holders, 66 other. The latest 20:

  1. Sep 22, 20264 EDGAR
  2. Sep 17, 20264 EDGAR
  3. Sep 2, 20264 EDGAR
  4. Sep 2, 2026SCHEDULE 13D/A EDGAR
  5. Sep 1, 20268-K EDGAR
  6. Aug 24, 20264 EDGAR
  7. Aug 24, 20264 EDGAR
  8. Aug 5, 202610-Q EDGAR
  9. Aug 5, 20268-K EDGAR
  10. Jul 29, 2026SCHEDULE 13G/A EDGAR
  11. Jun 23, 20264 EDGAR
  12. Jun 16, 20264 EDGAR
  13. Jun 8, 2026S-8 EDGAR
  14. Jun 8, 20268-K EDGAR
  15. Jun 4, 20264 EDGAR
  16. Jun 4, 20264 EDGAR
  17. Jun 4, 20264 EDGAR
  18. Jun 4, 20264 EDGAR
  19. Jun 4, 20264 EDGAR
  20. Jun 4, 20264 EDGAR

The 451 filings since October 2021 can be filtered by form type and year here when JavaScript is on.

Every filing from the last five years, summarized. The full record is on SEC EDGAR.

Insider trades

53 open-market trades by officers, directors and large owners since October 2021: 7 buys and 46 sales. Grants, option exercises and gifts are left out.

DateWhoTradeSharesPriceValueFiling
May 15, 2026Allison JonathanChief Administrative OfficerSale1,606$55.96$89.9KForm 4
May 12, 2026Allison JonathanChief Administrative OfficerSale1,706$55.74$95.1KForm 4
Apr 7, 2026Allison JonathanChief Administrative OfficerSale1,706$44.35$75.7KForm 4
Apr 2, 2026Allison JonathanChief Administrative OfficerSale4,112$42.33$174.1KForm 4
Mar 20, 2026Allison JonathanChief Administrative OfficerSale3,990$44.78$178.7KForm 4
Mar 17, 2026Allison JonathanChief Administrative OfficerSale3,990$45.00$179.6KForm 4
Mar 12, 2026Allison JonathanChief Administrative OfficerSale3,900$43.61$170.1KForm 4
Mar 10, 2026Allison JonathanChief Administrative OfficerSale3,900$44.97$175.4KForm 4
Mar 9, 2026Ulman DougDirectorSale13,152$45.11$593.3KForm 4
Mar 5, 2026Allison JonathanChief Administrative OfficerSale3,900$48.05$187.4KForm 4
Mar 3, 2026Allison JonathanChief Administrative OfficerSale3,900$47.88$186.7KForm 4
Dec 10, 2025Bonakdarpour MahtiyarPresident and CTOSale5,750$83.00$477.2KForm 4
Dec 10, 2025Timm Alexander E.Chief Executive OfficerSale6,336$83.00$525.9KForm 4
Sep 2, 2025Bonakdarpour MahtiyarPresident and CTOSale5,750$89.74$516.0KForm 4
Sep 2, 2025Timm Alexander E.Chief Executive OfficerSale10,861$88.88$965.4KForm 4
Jun 16, 2025Allison JonathanChief Administrative OfficerSale2,500$149.16$372.9KForm 4
Jun 11, 2025Szudarek JulieDirectorSale1,500$155.00$232.5KForm 4
Jun 5, 2025DEVARD JERRIDirectorSale1,895$141.50$268.1KForm 4
Jun 5, 2025Szudarek JulieDirectorSale2,790$133.80$373.3KForm 4
Jun 5, 2025Birnbaum Beth ADirectorSale2,852$138.33$394.5KForm 4

All 53 trades can be filtered by person here when JavaScript is on.

From Forms 4 filed with the SEC.

Major holders

Investors who own more than 5% of the shares must tell the SEC: a 13D if they may seek to influence the company, a 13G if they hold passively.

Executive pay

What the company paid its top executives, from the summary compensation table in its proxy statement. Total pay includes salary, bonus, stock and option awards and other pay, as the company valued them.

YearExecutiveAgeSalaryTotal pay
2025Alexander TimmChief Executive Officer37$750.0K$8.2M71
2025Mahtiyar BonakdarpourPresident & Chief Technology Officer39$550.0K$5.1M71
2025Jonathan AllisonChief Administrative Officer59$520.0K$3.7M71
2025Megan BinkleyChief Financial Officer42$484.7K$3.7M71
2024Alexander TimmChief Executive Officer37$750.0K$10.7M71
2024Mahtiyar BonakdarpourPresident & Chief Technology Officer39$541.3K$7.2M71
2024Jonathan AllisonChief Administrative Officer59$514.6K$4.8M71
2024Megan BinkleyChief Financial Officer42$449.8K$4.3M71
2023Alexander TimmChief Executive Officer37$750.0K$8.7M71
2023Mahtiyar BonakdarpourPresident & Chief Technology Officer39$500.0K$4.2M71
2023Jonathan AllisonChief Administrative Officer59$488.8K$3.3M71

Held by these funds

The largest holders among investment managers' 13F reports for the quarter ending Jun 30, 2026, the top 25 of 100. Change is in shares since the quarter before.

FundSharesValueShare of the fundChange
Ribbit Management Company, LLC1,232,607$68.9M3.4%No change
BlackRock, Inc.1,149,263$64.3M0.0%+98,936
Vanguard Capital Management LLC528,317$29.5M0.0%+11,685
Findell Capital Management LLC460,000$25.7M4.2%+85,000
Geode Capital Management, LLC345,379$19.3M0.0%+25,851
State Street Corp290,772$16.3M0.0%+24,833
Galileo (PTC) Ltd252,669$14.1M1.3%No change
Renaissance Technologies LLC245,281$13.7M0.0%+6,500
Boothbay Fund Management, LLC203,234$11.4M0.2%+64,238
Quinn Opportunity Partners LLC171,176$9.6M0.4%+100,837
Tairen Capital Ltd160,798$9.0M0.8%No change
Dragoneer Investment Group, LLC154,320$8.6M0.3%No change
Morgan Stanley148,225$8.3M0.0%+7,148
Goldman Sachs Group Inc144,306$8.1M0.0%−5,011
Northern Trust Corp120,334$6.7M0.0%+10,926
Charles Schwab Investment Management Inc109,270$6.1M0.0%+1,577
Vanguard Portfolio Management LLC106,983$6.0M0.0%+16,067
Bank Of America Corp /de/105,524$5.9M0.0%−22,057
Vanguard Fiduciary Trust Co97,201$5.4M0.0%+6,013
Jane Street Group, LLC89,493$5.0M0.0%New
Bnp Paribas Financial Markets87,818$4.9M0.0%−10,441
Citadel Advisors LLC87,598$4.9M0.0%+68,149
Dimensional Fund Advisors LP87,223$4.9M0.0%−63,241
UBS Group AG82,826$4.6M0.0%+24,671
Tudor Investment Corp Et Al79,805$4.5M0.0%+41,901

13F reports cover disclosed long positions in U.S. stocks only.

SEC filer profile

How Root, Inc. is registered with the Securities and Exchange Commission, from its EDGAR record and the cover page of its latest annual report.

  • Name on EDGARRoot, Inc.1
  • CIK0001788882
  • Employer ID (EIN)84-27179035
  • Filer statusLarge accelerated filer not an emerging growth company; not a smaller reporting company; not a shell company5
  • Incorporated inDelaware5
  • Fiscal year endsDecember 311
  • Industry code (SIC)6331 Fire, Marine & Casualty Insurance1
  • SEC reviewing officeOffice of Finance, Division of Corporation Finance1
  • Business address80 E Rich Street, Suite 500, Columbus, OH 432151
  • Phone(866) 980-94311
  • Shares outstanding13,748,408 Common Class A shares; 1,806,236 Common Class B shares as of Feb 18, 20265
  • Public float$1.6B as of Jun 30, 20255
  • AuditorDELOITTE & TOUCHE LLP, Columbus, Ohio PCAOB ID 34; it also attests to the company’s internal control over financial reporting5
  • On EDGAR sinceSep 20, 20191
  • Filings579 in all: 4 (292), 8-K (59), 144 (45), 3 (32), SC 13G/A (22), 10-Q (18), SC 13G (18), SCHEDULE 13G/A (9)1
    All 35 form types

    SC 13D/A (8), CORRESP (7), S-8 (7), 10-K (6), 4/A (6), DEF 14A (6), DEFA14A (6), SCHEDULE 13D/A (6), ARS (4), UPLOAD (4), S-1/A (3), 3/A (2), DRSLTR (2), PRE 14A (2), SC 13D (2), SCHEDULE 13G (2), 424B4 (1), 5 (1), 8-A12B (1), 8-K/A (1), CERT (1), D (1), DRS (1), DRS/A (1), EFFECT (1), S-1 (1), S-1MEF (1)

  • Latest filingsAnnual report (10-K) Feb 25, 2026
    Quarterly report (10-Q) Aug 5, 2026
    Proxy statement (DEF 14A) Apr 24, 2026
    Latest 8-K (8-K) Sep 1, 2026

Securities registered for trading

ClassSymbolExchange
Class A common stock,$0.0001 par value per shareROOTThe Nasdaq Stock Market LLC

From the cover page of the 10-K filed Feb 25, 2026 (Section 12(b) of the Exchange Act).5

Risk factors and legal proceedings

The risks Root, Inc. names in Item 1A of its 10-K filed Feb 25, 2026: 64 risks under these headings, as written.5

  • Risks Related to Our Business
  • We have a history of net losses and could incur substantial net losses in the future. We may not be able to grow, achieve or maintain profitability in the future.
  • We may lose existing customers or fail to acquire new customers, including through our partnership channel, and our future growth and profitability depend in part on our ability to successfully operate in an insurance industry that is highly competitive. If we are unable to maintain the levels of customer service or continue technological innovation and improvements, our prospects for future growth may be materially adversely affected.
  • We may require additional capital to support business growth or to satisfy our regulatory capital and surplus requirements, and this capital might not be available on acceptable terms, if at all.
  • We rely on telematics, mobile technology and our digital platform to collect data points that we evaluate in pricing and underwriting our insurance policies, managing claims and customer support, and improving business processes. To the extent regulators prohibit or restrict our collection or use of this data, our business will be harmed.
  • We may fail to maintain an effective partnership channel offering, including our embedded insurance product and our independent agent platform, and/or fail to perform under the associated commercial arrangements.
  • Operating system platforms and application stores controlled by third parties, such as Apple and Google, may change their terms of service or policies in a manner that increases our costs or impacts our ability to distribute our mobile app, collect data through it and market our products.
  • Our expansion within the United States will subject us to additional regulatory approvals and costs and risks, and our plans may not be successful.
  • Our technology platform may not operate properly or as we expect it to operate.
  • Regulators may limit our ability to develop or implement our telematics-based pricing model and/or may eliminate or restrict the confidentiality of our proprietary technology.
  • We are subject to full scope financial examinations by state insurance regulatory authorities in each state in which our insurance company subsidiaries are domiciled, which could result in adverse examination findings and necessitate remedial actions.
  • We are subject to market conduct examinations by state insurance regulatory authorities in any state in which our insurance subsidiaries issue insurance policies, which could result in adverse examination findings and necessitate remedial actions.
The other 53 risks
  • Our exposure to loss activity and regulation may be greater in states where we currently have most of our customers, including Texas, Georgia, Florida, and California.
  • We are subject to complex and evolving privacy, data security and cybersecurity laws, regulations, and standards increasing the burden of compliance. Our actual or perceived failure to comply with such obligations could harm our reputation, subject us to significant fines and liability, or adversely affect our business.
  • Cybersecurity incidents, or real or perceived errors, failures or bugs in our or our vendors’ systems, or our website or mobile app could impair our operations, compromise our confidential information or our customers’ personal information, damage our reputation and brand, and harm our business, financial condition, operating results and prospects.
  • Our brand may not become as widely known or accepted as our competitors’ brands or our brand may become tarnished.
  • We rely on highly skilled and experienced personnel, and if we are unable to attract, retain or motivate key personnel or hire qualified personnel, our business may be seriously harmed. In addition, the loss of key senior management personnel could harm our business, results of operations, financial condition and prospects.
  • New legislation or legal requirements may affect how we use AI and /or may impact how we communicate with our customers, which could have an adverse effect on our business, financial condition, results of operations and prospects.
  • Denial of claims or our failure to accurately and timely pay claims could materially and adversely affect our business, results of operations, financial condition and prospects.
  • Unexpected increases in the frequency or severity of claims, as well as increasing costs of social inflation and the legal environment, may adversely affect our business, results of operations, financial condition and prospects.
  • Failure to maintain our risk-based capital at the required levels could adversely affect our ability to maintain regulatory authority to conduct our business.
  • We may be unable to prevent, monitor or detect fraudulent activity, including policy acquisitions or payments of claims that are fraudulent in nature, or fraud that may be perpetrated by employees or external parties.
  • We rely on our mobile app to execute our business strategy. Government regulation of the internet and the use of mobile apps in particular is evolving, and unfavorable changes could seriously harm our business.
  • Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products, services and brand.
  • Some of our products and services contain open source software, which may pose particular risks to our proprietary software, products, and services in a manner that could have a negative effect on our business.
  • Claims by others that we infringed proprietary technology or other intellectual property rights could harm our business.
  • If our customers were to claim that the insurance policies they purchased failed to provide adequate or appropriate coverage, we could face claims that could harm our business, results of operations, financial condition and prospects.
  • If we are unable to underwrite risks accurately or charge competitive yet profitable rates to our customers, our business, results of operations, financial condition and prospects will be adversely affected.
  • Our insurance operating results have been, and will likely continue to be, materially adversely affected by severe weather or other catastrophic events, and climate change may be exacerbating these events and their impacts.
  • We are subject to assessments and other surcharges from state guaranty funds from time to time, which may materially reduce our profitability.
  • Litigation and legal proceedings filed by or against us and our subsidiaries could have a material adverse effect on our business, results of operations, financial condition and prospects, and may divert management’s attention and resources away from our business.
  • Our ability to utilize our net operating loss carryforwards may be limited.
  • The manner in which we fund tax withholding obligations that will arise upon vesting of outstanding restricted stock awards may require us to use a substantial amount of cash, which would reduce our liquidity, or may result in sales of shares of our Class A common stock into the market, which could cause the market price of our Class A common stock to decline.
  • Risks Related to Our Business Model and Industry
  • The insurance business, including the market for automobile and renters insurance, is historically cyclical in nature, and we may experience periods with excess underwriting capacity and unfavorable premium rates, which could adversely affect our business.
  • Retention of business written by us or through our Texas county mutual arrangement could expose us to potential losses.
  • Reinsurance may be unavailable at current levels and prices, which may limit our ability to underwrite new policies. Furthermore, reinsurance subjects us to counterparty risk and may not be adequate to protect us against losses, which could have an adverse effect on our results of operations and financial condition.
  • Reinsurance subjects us to risks of our reinsurers and may not be adequate to protect us against losses arising from ceded insurance, which could have an adverse effect on our results of operations and financial condition.
  • We are subject to extensive regulation, and potential further restrictive regulation may increase our operating costs and limit our growth.
  • A regulatory environment that requires rate increases to be approved or that can dictate underwriting practices, mandate participation in loss sharing arrangements, or require insurers to lower rates and/or disgorge profits may adversely affect our business, results of operations, financial condition and prospects.
  • State insurance regulators impose additional reporting requirements regarding enterprise risk on insurance holding company systems, and we must comply as an insurance holding company.
  • We rely on technology and intellectual property from third parties to operate our business, including for pricing and underwriting our insurance policies, handling claims and maximizing automation, the unavailability or inaccuracy of which could limit the functionality of our products and disrupt our business.
  • We are subject to payment processing risk and risk related to the availability of consumer credit.
  • Our success depends upon the insurance industry continuing to move online at its current pace and the continued growth and acceptance of online and mobile app-based products and services as effective alternatives to traditional offline products and services.
  • Our actual incurred losses and LAE may be greater than our loss and LAE reserves, which could have a material adverse effect on our business, results of operations, financial condition and prospects.
  • Performance of our investment portfolio is subject to a variety of investment risks that may adversely affect our financial results.
  • The inability to access our cash accounts or to convert investments into cash on favorable terms when we desire to do so may materially and adversely affect our business, cash flows and capital position.
  • Unexpected changes in the interpretation of our coverage or provisions, including loss limitations and exclusions, in our policies could have a material adverse effect on our financial condition and results of operations.
  • Risks Related to Ownership of Our Class A Common Stock
  • Failure to meet the continued listing requirements of Nasdaq could result in delisting of our Class A common stock, which in its turn would negatively affect the price of our Class A common stock and limit investors’ ability to trade in our common stock.
  • The dual class structure of our common stock will have the effect of concentrating voting control with our executive officers, directors and their affiliates, which will limit your ability to influence the outcome of important transactions.
  • Applicable insurance laws may make it difficult to effect a change of control.
  • We do not intend to pay dividends on our Class A common stock so any returns will be limited to the value of our stock.
  • As a public company, we are subject to more stringent federal and state law requirements. We incur significant increased costs as a result of operating as a public company, and our management devotes substantial time to compliance initiatives.
  • Actions and changing expectations from investors, clients, regulators and our employees with respect to environmental, social and governance matters may impose additional costs on us, impact our access to capital, or expose us to new or additional risks.
  • If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in our financial reporting and the trading price of our Class A common stock may decline.
  • Provisions in our corporate charter documents and under Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove our current management.
  • Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us.
  • Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware and the federal district courts of the United States are the exclusive forums for substantially all disputes
  • between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
  • Risks Related to Our Indebtedness
  • Our Amended Term Loan includes a floating interest rate that exposes us to interest rate risk, and the terms of our Amended Term Loan place restrictions on our operating and financial flexibility. Our failure to comply with covenants contained in the Amended Term Loan may result in acceleration of our repayment obligations, which could harm our liquidity, financial condition, operating results, business and prospects and cause the price of our Class A common stock to decline.
  • General Risk Factors
  • Significant stockholders may attempt to effect changes at our company or acquire control over our company, which could impact the pursuit of business strategies and adversely affect our results of operations and financial condition.
  • Future acquisitions or investments could disrupt our business and harm our financial condition.
  • We expect a number of factors to cause our results of operations to fluctuate on a quarterly and annual basis, which may make it difficult to predict our future performance.
  • New or changing technologies, including those impacting personal transportation, could cause a disruption in our business model, which may materially impact our results of operations and financial condition.
  • An economic downturn and economic uncertainty may adversely affect demand for our products.
  • Future sales of our Class A common stock in the public market by current shareholders could cause the market price of our Class A common stock to decline.

Legal proceedings

From time to time, we are party to litigation and legal proceedings relating to our business operations. While the outcome of all legal actions is not presently determinable, except as noted in Note 13, “Commitments and Contingencies,” in the Notes to Consolidated Financial Statements, we do not believe that we are party to any current or pending legal action that, if concluded adversely, could reasonably be expected to have a material adverse effect on our financial condition or results of operations and cash flows.

The opening of Item 3, Legal Proceedings.5

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