Exzeo Group, Inc. 2026 Q2 Earnings Call

Thank you, and good afternoon. Welcome to Exzeo Group's second quarter 2026 earnings call. To access today's webcast, please visit the investor information section of our corporate website at www.exzeo.com. Before we begin, I would like to take the opportunity to remind our listeners that today's presentation and responses to questions may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as anticipate, estimate, expect, intend, plan, and project, and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions, but rather are subject to various risks and uncertainties. Some of these risks and uncertainties are identified in the company's filings with the Securities and Exchange Commission.

Should any risks and uncertainties develop in the actual events, these developments could have a material adverse effect on the company's business, financial condition, and results of operation. Exzeo Group disclaims all the obligations to update any forward-looking statements. With that, I would like to turn the call over to Suela Bulku, Exzeo's Chief Financial Officer.

Thank you, Bill. Good evening, everyone, and thank you for joining us for Exzeo's second quarter earnings call. Exzeo continues down the path of strong execution and attractive financial results. Managed Premium on the platform remains robust at $1.4 billion, and we delivered another quarter of attractive margins, including a 53% Adjusted EBITDA margin in the quarter. Pre-tax income for the quarter was over $31 million, an increase from over $28 million in the prior quarter. These results were above the guidance we provided. Earnings per share for the quarter were $0.26, and year-to-date earnings per share were $0.48. For the second quarter, total revenue increased to $58 million, up from $56 million in the prior quarter, driven by the increase of Managed Premium on the platform. Excluding outsourcing claim fees, adjusted revenue increased by $4 million year-over-year to more than $56 million.

Managed Premium in the quarter was $1.4 billion, an increase from $1.2 billion in the prior quarter. Given the seasonality of growth for our clients, Managed Premium were in line with expectations. Our Adjusted EBITDA margin was over 53% in the quarter, and we believe annualized margins above 50% are achievable for the foreseeable future. A few additional highlights for the quarter. Our Annual Recurring Revenue was $211 million in the second quarter, an increase from $195 million in the prior quarter. Our balance sheet remains exceptionally strong. We ended the quarter with over $333 million of invested assets, which includes cash equivalents, and fixed income securities. We remain debt-free and continue to maintain significant financial flexibility. Shareholders' equity increased to $288 million, an increase from $254 million at the end of the year. I want to quickly touch on our guidance expectations.

For the third quarter, we expect pre-tax income to be between $28 million and $31 million, and we expect Managed Premium to be approximately $1.4 billion. Our guidance for the third quarter is consistent with the anticipated timing of growth across our existing client base. Our full-year guidance remains unchanged. Before turning the call over to Kevin, I wanted to quickly touch on recent capital management actions. During the quarter, we repurchased over 726,000 shares of our common stock for approximately $10 million. Subsequent to the quarter, we repurchased an additional 107,000 shares, which brings total repurchases to $12 million, completing the authorized share repurchase program. We continue to have tremendous confidence in the long-term outlook for our business.

Given our asset-light model, high margins, debt-free balance sheet, significant cash on hand, and the momentum we are seeing across the business, we believe allocating less than one quarter's worth of earnings to repurchase shares at attractive valuations was a compelling use of capital. With that, I will hand it over to Kevin, President of Exzeo.

Thank you, Suela. The Exzeo platform continues to gain momentum, and we are seeing encouraging customer wins. Let me elaborate on some of these achievements. While we often talk about the insurance companies joining our platform, demand extends well beyond carriers. We are seeing growing interest from independent agents who are proactively reaching out to join the Exzeo platform. The flywheel effect we've discussed in the past is real. As more agents join the platform, it becomes increasingly attractive to insurance companies. As more carriers come on board, the value proposition for agents continues to strengthen.

That network effect is helping accelerate adoption across our ecosystem. Second, we've seen quote volume more than double since the beginning of the year. Third, last month, we signed our eighth carrier partner. Our new partnership with GEICO brings auto insurance to the platform, marking another meaningful step in expanding our capabilities. Agents can now bundle home and auto. With the addition of auto, the Exzeo platform now offers homeowners, commercial residential, flood, and auto insurance. Expanding our product set makes the platform more valuable to agents by enabling them to serve more of their clients' insurance needs through a single platform. In closing, since the beginning of the year, we've made meaningful progress across every dimension of the platform. We've doubled the number of agents, we've more than doubled quote volume, and we've added additional products. And we've grown to eight carriers on the platform.

I'll turn the call over to Paresh, Exzeo's Chief Executive Officer.

Thanks, Kevin. Suela provided numbers that clearly show how healthy and cash flow positive Exzeo already is. Kevin highlighted the tremendous momentum in expanding the size and scope of the Exzeo platform. The continued addition of new carriers, new products, and new capabilities reinforces that our platform is gaining meaningful traction in the marketplace. While these initiatives don't translate into results overnight, they continue to strengthen our long-term growth opportunity and expand the value we can deliver. Beyond all of this, earlier today, we announced the next new initiative, Exzeo Ventures. The reason we're launching Exzeo Ventures is simple. AI represents a once-in-a-generation paradigm shift, most companies think about AI as a tool to make existing processes faster or more efficient.

While that's certainly valuable, we think there is a much bigger opportunity, a useful analogy might be to look back at the internet, the evolution of the internet. The first wave of the internet brought traditional businesses online, making familiar processes faster and more efficient. The truly transformative companies were the companies that created entirely new business models that only become possible because of the internet. For example, companies like Uber fundamentally reimagined transportation. We believe AI has the potential to follow a very similar path. Rather than simply asking how AI can make current businesses more efficient, we are asking a much bigger question. What entirely new products, services, and businesses can AI make possible? That's the purpose of Exzeo Ventures.

We've been working on these ideas behind the scenes for some time, we've reached a point where we've seen enough progress and assembled the right team that we're ready to formalize the effort. We're funding Exzeo Ventures as an internal platform, its mission is to identify opportunities that only emerge when AI fundamentally changes what's possible. Let me give you one small example amongst the number of initiatives that we are working on. After a major catastrophe event, insurance carriers experience an enormous surge in claims. The challenge isn't simply receiving those claims, it's having the personnel available to process them. That staffing bottleneck often delays claim handling at exactly a time when policyholders need assistance the most. Simply put, scaling up the human element in a demand surge is challenging. It is difficult to increase human compute at the touch of a dial.

With AI, you can increase the compute by orders of magnitude immediately. Imagine a carrier that normally processes 200 claims per week suddenly needing to process 4,000 because of major catastrophe events. The claim volume has spiked twentyfold, but now with the AI capabilities, processing capacity can increase just as quickly. The result will be faster claims handling, shorter wait times, and a significantly better experience for the policyholders during some of the most difficult times they'll ever face. This is exactly the type of opportunity that excites us, because it simply wasn't possible before AI. That's the vision behind Exzeo Ventures. Across underwriting, claims distribution, claims, risk transfer, and many other areas, we believe AI creates the opportunity for entirely new categories of products and businesses. With that, I will turn over the call for questions.