Slide Insurance Holdings, Inc. Common Stock 2026 Q3 Earnings Call

Thank you, and good morning. With us today are your hosts, Bruce Lucas, Chairman and Chief Executive Officer of Slide, and Andy Omiridis, Chief Financial Officer. By now, everyone should have access to our earnings release, which was published yesterday after the market closed and can be found on our website at ir.slideinsurance.com. Before we begin our formal remarks, I need to remind everyone that part of our discussion today may include forward-looking statements, which are based on the expectations, estimates, and projections of management regarding the company's future performance, anticipated events or trends, and other matters that are not historical fact. The forward-looking statements in our discussion are subject to various assumptions, risks, uncertainties, and other factors that are difficult to predict and which could cause actual results to differ materially from those expressed or implied in the forward-looking statement.

These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them. We refer all of you to our earnings release and recent filings with the SEC for a more detailed discussion of the risks and uncertainties that could impact the future operating results and financial condition of Slide. Our statements are as of today, October 28, 2026, and we undertake no obligation to update any forward-looking statements we may make except as required by law. In addition, this call is being webcast and an archived version will be available shortly after the call ends on the investor relations portion of the company's website at www.slideinsurance.com. With that, I'd now like to turn the call over to our founder, Chairman, and CEO, Bruce Lucas.

Please go ahead. Thank you, and welcome to our third quarter 2026 earnings call.

Once again, we executed at a high level this quarter, reinforcing the strength of our tech-enabled model and its ability to produce industry-leading top and bottom-line results. For the quarter, we grew gross written premiums by 9% year over year to $506.6 million, driven by continued growth in voluntary sales and the early contributions from our expansion markets. In addition to our top-line growth, Slide grew net income by 25% year over year to $138.2 million, with diluted earnings per share of $1.09. Third quarter return on equity was approximately 11%, which equates to an approximate annualized return of 44%. Our combined ratio was 59.3%, reflecting continued underwriting discipline even with catastrophe losses. On an accident year ex-catastrophe basis, our combined ratio was an outstanding 54.4%.

Our third quarter results provide further testament to our ability to deliver meaningful value creation to our shareholders. We continue to make meaningful progress in expanding our footprint. California continues to ramp up following our May launch of the residential property E&S program, and we expect to accelerate growth there through the remainder of the year and into 2027. We also began writing residential business in Texas this quarter and remain on track to roll out New York and New Jersey in the coming quarters. Our expansion outside of Florida further reflects the scalability of our platform and our ability to identify and act on attractive opportunities where we believe we can produce significant growth coupled with attractive returns. We remain confident in our ability to execute on our diversified growth strategy, creating long-term value for our shareholders.

We have built our program around one of the strongest balance sheets in the sector, giving us the financial flexibility to pursue this kind of expansion. In October, we closed a $1.1 billion credit facility, the largest facility ever issued to a coastal property insurer, which further enhances our capital flexibility to fund accretive growth opportunities. We see a shift in the market taking place and are excited about the ability to move quickly should the right opportunity arise. Turning to capital management, we continued our disciplined approach to returning capital to shareholders. In addition to our regular quarterly cash dividend of $0.07 per share, I am pleased to announce that our board of directors has approved a special cash dividend of $1.50 per share.

This decision reflects the consistency and durability of our earnings power, the strength of our free cash flow generation, and the robust capital position we have built. The special dividend complements our share repurchase program and regular dividend, underscoring our confidence in the long-term trajectory of the business. There are several reasons why I believe a special dividend is warranted at this time. First and foremost, I have a high degree of confidence in our business model and growth initiative. Slide's ability to generate net income and free cash flow is unmatched in the coastal specialty market, and I believe that we will continue to be the market leader for the foreseeable future. The board has carefully reached the decision to issue a special dividend because the company continues to outperform virtually every financial metric, generating capital in excess of what is needed to fund our growth initiatives.

I am always looking for ways to enhance shareholder return, and to date, that has been in the form of share repurchases and dividends. Since our IPO in June of 2025, Slide has returned approximately $423.1 million in capital to our shareholders. Slide repurchased $230.9 million of stock at an average weighted price of $17.28 a share, which equates to an approximate return on investment of 56.8%. Slide has also paid approximately $192.2 million in dividends, which translates to a yield in excess of 5%. We will continue to use our capital thoughtfully to enhance future shareholder returns, and I strongly believe that both of our initiatives are accretive to our forward ROE. In the fourth quarter, Hurricane Isaias made landfall near the Florida, Alabama state line as a Category 2 hurricane.

Our thoughts are with all of our impacted policyholders, and we are here for them in their time of need. Slide is not heavily concentrated in the Florida Panhandle, and we do not expect the storm to generate significant retention losses. It is too early to state the exact dollar amount of the retention, but we believe the hurricane will result in approximately $50 million of pre-tax retention. Despite the hurricane, we believe Slide will end the year with over $500 million of net income, which translates into an annual ROE in excess of 40% for 2026, marking the fourth consecutive year of annual ROEs above 40%. Finally, our results this quarter reflect the dedicated work of our entire team. I want to thank all of our employees for their relentless effort and the important role they play in Slide's performance.

I'm proud of what we're accomplishing together, and I appreciate all of you. Thank you for your continued support of Slide. With that, I'll now turn the call over to Andy Omiridis to provide some color on our third quarter results.

Thank you, Bruce, and good morning, everyone. For the third quarter, net income increased 24.5% to $138.2 million, compared with $111 million in the prior year period, resulting in diluted earnings per share of $1.09. Our results demonstrate the continued strength of our earnings profile, supported by sustained top-line growth and disciplined expense management. Gross written premiums increased 9.3% to $506.5 million, compared with $463.4 million in the third quarter of 2025. Growth was driven by continued momentum in voluntary new business, including expansion into new states as well as policy retention. Total revenue increased 35.9% to $361.1 million, compared with $265.7 million in the prior year period. Net premiums earned grew 37.1% to $333.3 million, compared with $243.1 million, reflecting the continued earning of premiums generated by our expanding portfolio.

As a reminder, the quarterly progression of net premiums earned is not necessarily linear, given the timing and volume of Citizens depopulations completed in prior periods and their respective positions within the policy earning cycle. Turning to our underwriting performance. Net losses and loss adjustment expenses totaled $101.3 million during the quarter, including $34.2 million of catastrophe losses associated with convective storms in Florida. These losses represented 10.3% catastrophe loss ratio compared with no catastrophe loss ratio in the prior year quarter. We also recognized $18 million of favorable prior period reserve development compared with $32.5 million in the prior year period. Importantly, our accident year loss ratio, excluding catastrophe losses and prior period reserve development, improved to 25.5% from 27.5% in the prior year quarter. This 200 basis point improvement reflects favorable underlying loss experience and the continued effectiveness of our disciplined underwriting approach.

Policy acquisition and other underwriting expenses increased to $46.2 million, compared with $36.4 million in the prior year period, primarily reflecting higher acquisition costs associated with our growth. General and administrative expenses totaled $48.8 million, compared with $45 million in the prior year quarter, primarily reflecting investments in personnel and infrastructure to support our continued growth and geographic expansion. Despite these investments, we continue to realize meaningful operating leverage as our platform scales. Our expense ratio improved to 28.9%, compared with 34.8% in the prior year period, representing a 590 basis point improvement. Our reported combined ratio was 59.3%, compared with 48.5% in the prior year quarter, primarily reflecting higher catastrophe losses, partially offset by improved operating leverage and lower underwriting loss experience. More importantly, our accident year combined ratio, excluding catastrophe losses and prior period reserve development, improved to 54.4%, compared with 62.3% in the prior year period.