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(Mark One)

Commission File Number: 001-39658

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 30, 2025, the number of outstanding shares of the registrant’s Class A common stock, par value $0.0001 per share, was 13,618,876 and the number of outstanding shares of the registrant’s Class B common stock, par value $0.0001 per share, was 1,828,458.

This Quarterly Report on Form 10-Q contains forward-looking statements about us and our industry that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “path,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these words or other similar terms or expressions. These forward-looking statements include, but are not limited to, statements concerning the following:

•our ability to retain existing customers, acquire new customers and expand our customer reach;

•our expectations regarding our future financial performance, including total revenue, gross profit, net income (loss), direct contribution, adjusted EBITDA, net loss and loss adjustment expense, or LAE, ratio, net expense ratio, net combined ratio, gross loss ratio, marketing costs and costs of customer acquisition, gross LAE ratio, gross expense ratio, gross combined ratio, operating expenses, quota share levels, changes in unencumbered cash balances and expansion of our new and renewal premium base;

•our ability to realize profits, acquire customers, retain customers, contract with additional partners to utilize the products, or achieve other benefits from our embedded insurance offering;

•our ability to expand our distribution channels through additional partnership relationships, digital media, independent agents and referrals;

•our ability to drive a significant long-term competitive advantage through our partnership with Carvana Group, LLC, or Carvana, and other partnerships, such as our partnerships with Hyundai Capital America and Experian;

•our ability to develop products for embedded insurance and other partners;

•the impact of supply chain disruptions, increasing inflation, a potential increase in tariffs or the implementation of new tariffs, a recession and/or disruptions to properly functioning financial and capital markets and interest rates on our business and financial condition;

•our ability to remain profitable and extend our capital runway;

•our goal to be licensed in all states in the United States, or U.S., and the timing of obtaining additional licenses and launching in new states;

•the accuracy and efficiency of our telematics and behavioral data, and our ability to gather and leverage existing and additional data;

•our ability to materially improve retention rates and our ability to realize benefits from retaining customers;

•our ability to underwrite risks accurately and charge profitable rates;

•our ability to maintain our business model and improve our capital and marketing efficiency;

•our ability to drive improved conversion and decrease the cost of customer acquisition;

•our ability to maintain and enhance our brand and reputation;

•our ability to effectively manage the growth of our business;

•our ability to raise additional capital efficiently or at all;

•our ability to improve our product offerings, introduce new products and expand into additional insurance lines;

•our ability to cross sell our products and attain greater value from each customer;

•our ability to compete effectively with existing competitors and new market entrants in our industry;

•future performance of the markets in which we operate;

•our ability to operate a “capital-efficient” business and obtain and maintain desirable levels of reinsurance;

•the effect of further reductions in the utilization of reinsurance, which would result in retention of more premium and losses and could cause our capital requirements to increase;

•our ability to realize economies of scale;

•our ability to attract, motivate and retain key personnel, or hire personnel, and to offer competitive compensation and benefits;

•our ability to deliver a vertically integrated customer experience;

•our ability to develop products that utilize telematics to drive better customer satisfaction and retention;

•our ability to protect our intellectual property and any costs associated therewith;

•our ability to develop an autonomous claims experience;

•our ability to take rate action early and react to changing environments;

•our ability to meet risk-based capital requirements;

•our ability to realize benefits from our Texas county mutual fronting arrangement;

•our ability to expand domestically;

•our ability to comply with laws and regulations that currently apply or become applicable to our business;

•the impact of litigation or other losses;

•changes in laws or regulations, or changes in the interpretation of laws or regulations by a regulatory authority, specific to the use of artificial intelligence, telematics data and the consent to use telematics data, connected card data, and other sources of data, or relating to taxation including changes in tax regulations or guidance promulgated pursuant to the new legislation implemented in the One Big Beautiful Bill Act;

•our ability to defend against cybersecurity threats and prevent, or recover from, a security incident or other significant disruption of our technology systems or those of our partners and third-party service providers;

•the effect of interest rates on our available cash and our ability to maintain compliance with our Amended Term Loan (as defined herein);

•our ability to maintain proper and effective internal control over financial reporting; and

•the growth rates of the markets in which we compete.

You should not rely on forward-looking statements as predictions of future events. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described under the heading “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained herein. The results, events and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made and we undertake no obligation to update them to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law.

Unless the context otherwise indicates, references in this Quarterly Report on Form 10-Q to the terms “Root,” “the Company,” “we,” “our,” and “us” refer to Root, Inc. and its subsidiaries.

We may announce material business and financial information to our investors using our investor relations website (ir.joinroot.com). We therefore encourage investors and others interested in Root to review the information that we make available on our website, in addition to following our filings with the Securities and Exchange Commission webcasts, press releases and conference calls.

1.NATURE OF BUSINESS

Root, Inc. is a holding company which, directly or indirectly, maintains 100% ownership of each of its subsidiaries, including, among others, Root Insurance Company and Root Property & Casualty Insurance Company, both Ohio-domiciled insurance companies, Root Florida Insurance Company, a Florida-domiciled insurance company, and Root Reinsurance Company, Ltd., a Cayman Islands-domiciled reinsurance company, together with Root, Inc., “we,” “us,” or “our.”

We were formed in 2015 and began writing personal auto insurance in July 2016. We are a technology company operating primarily a direct-to-consumer model with the majority of our personal insurance customers acquired through partnerships and mobile apps. We offer auto and renters insurance products underwritten by Root Insurance Company and auto insurance only through Root Property & Casualty Insurance Company and Root Florida Insurance Company.

2.BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation—In our opinion, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. All such adjustments are of a normal and recurring nature. These condensed consolidated financial statements are unaudited and, accordingly, should be read in conjunction with the consolidated financial statements and related notes included in the Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission on February 26, 2025.

Basis of Consolidation—The unaudited condensed consolidated financial statements include the accounts of Root, Inc. and its subsidiaries, all of which are wholly owned. These financial statements have been prepared in accordance with accounting principles generally accepted in the U.S., or GAAP. All intercompany accounts and transactions have been eliminated.

Use of Estimates—The preparation of the unaudited condensed consolidated financial statements requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates reflected in our unaudited condensed consolidated financial statements include, but are not limited to, reserves for loss and loss adjustment expense, or LAE, valuation allowances on our deferred tax assets and the amount of reinsurance recoverable and receivable from reinsurance contracts.

Legal and Other Contingencies—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, 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 flow.

We are contingently liable for possible future assessments under regulatory requirements for insolvencies and impairments of unaffiliated insurance companies.

Segment Information—We are a technology company that provides direct-to-consumer insurance products to customers. We operate as a single reporting segment that is managed on a consolidated basis. Our Chief Executive Officer is our chief operating decision maker, or CODM. The primary measure the CODM utilizes to manage operations, monitor budget versus actual results, and evaluate financial performance is net income (loss) as reported on the condensed consolidated statements of operations and comprehensive income (loss). This information is regularly provided to the CODM.

The CODM allocates resources based on consolidated expense and forecasted expense information. Significant expenses, which are presented on the condensed consolidated statements of operations and comprehensive income (loss), include loss and loss adjustment expense, sales and marketing, other insurance expense and technology and development.

Other segment items include expenses that our CODM does not evaluate for purposes of making operating decisions. These items include general and administrative, interest expense, and income tax expense, which can all be found on the condensed consolidated statements of operations and comprehensive income (loss). Assets provided to the CODM are consistent with those reported on the condensed consolidated balance sheets.

Cash, Cash Equivalents and Restricted Cash—The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amount in the condensed consolidated statements of cash flows:

Deferred Policy Acquisition Costs—Deferred policy acquisition costs, net of accumulated amortization, was $38.7 million and $29.3 million as of June 30, 2025 and December 31, 2024, respectively. We amortized deferred policy acquisition costs of $18.3 million and $29.7 million for the three and six months ended June 30, 2025, respectively, and $9.1 million and $15.7 million for the three and six months ended June 30, 2024, respectively.

Performance-Based Restricted Stock Units—In the second quarter of 2025, we granted 0.2 million performance-based restricted stock units to our executive officers and certain key employees as part of our equity compensation plan. The actual number of performance-based restricted stock units can vary from zero to 200% of the target depending on goal achievement relative to a gross accident period loss ratio and policies in force goal matrix. The overall performance period begins on January 1, 2025 and ends on December 31, 2027 and is divided into three sub-performance periods, each beginning on January 1, 2025 and ending on December 31 of 2025, 2026, and 2027, respectively. These overlapping sub-performance periods are one, two, and three years in duration. Expense for each sub-performance period is recognized ratably over the requisite service period. Awards earned in any sub-performance period vest on the Compensation Committee Certification date, which is expected to be in the first quarter of the subsequent year.

The performance-based restricted stock units expense is recognized based on the grant date fair value of the award, which was determined using the Company’s close price as of the grant date. This expense is recognized using a graded vesting approach. We assess the probability of the performance conditions being met on a quarterly basis and begin recognizing expense only once it is deemed probable that the performance criteria will be satisfied.

3.INVESTMENTS

The amortized cost and fair value of short-term investments and available-for-sale fixed maturity securities at June 30, 2025 and December 31, 2024 are as follows:

			June 30, 2025
			Amortized Cost						Allowance for Expected Credit Losses						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value
			(dollars in millions)
Fixed maturities:
U.S. Treasury securities			$	47.4					$	—					$	0.7					$	(0.1)					$	48.0
Municipal securities			22.3						—						0.2						(0.2)						22.3
Corporate debt securities			121.7						—						1.3						(0.4)						122.6
Asset-backed securities			125.5						—						1.1						(0.3)						126.3
Total fixed maturities			316.9						—						3.3						(1.0)						319.2
Short-term investments			3.5						—						—						—						3.5
Total			$	320.4					$	—					$	3.3					$	(1.0)					$	322.7
			December 31, 2024
			Amortized Cost						Allowance for Expected Credit Losses						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value
			(dollars in millions)
Fixed maturities:
U.S. Treasury securities and agencies			$	46.5					$	—					$	—					$	(0.3)					$	46.2
Municipal securities			23.9						—						0.1						(0.5)						23.5
Corporate debt securities			106.6						—						0.3						(1.2)						105.7
Asset-backed securities			117.3						—						0.4						(1.1)						116.6
Total fixed maturities			294.3						—						0.8						(3.1)						292.0
Short-term investments			14.8						—						—						—						14.8
Total			$	309.1					$	—					$	0.8					$	(3.1)					$	306.8

Management reviewed the available-for-sale fixed maturity securities and short-term investments at each balance sheet date to consider whether it was necessary to recognize a credit loss as of June 30, 2025 and December 31, 2024. We do not intend to sell the securities and it is not more likely than not that we will be required to sell the securities before recovery. Management concluded that the unrealized losses on the available-for-sale fixed maturity securities and short-term investments were due to non-credit related factors and, therefore, there was no allowance for credit loss as of June 30, 2025 and December 31, 2024.

The following tables reflect the gross unrealized losses and fair value of short-term investments and available-for-sale fixed maturity securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2025 and December 31, 2024:

As of June 30, 2025 and December 31, 2024, other investments related to our private equity investments were $4.4 million. There were no realized or unrealized gains or losses or impairment losses recognized on private equity investments for the three and six months ended June 30, 2025 and 2024.

There were no realized gains or losses on short-term investments and available-for-sale fixed maturities for the three and six months ended June 30, 2025 and 2024.

The following table sets forth the amortized cost and fair value of short-term investments and available-for-sale fixed maturity securities by contractual maturity at June 30, 2025:

Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

The following table sets forth the components of net investment income for the three and six months ended June 30, 2025 and 2024:

			Three Months Ended June 30,												Six Months Ended June 30,
			2025						2024						2025						2024
			(dollars in millions)
Interest on fixed maturities and short-term investments			$	3.6					$	2.3					$	7.0					$	4.0
Interest on cash and cash equivalents			6.3						8.2						12.3						16.3
Total			9.9						10.5						19.3						20.3
Investment expense			(0.5)						(0.5)						(1.2)						(1.1)
Net investment income			$	9.4					$	10.0					$	18.1					$	19.2

The following tables summarize the credit ratings of short-term investments and available-for-sale fixed maturity securities at June 30, 2025 and December 31, 2024:

			June 30, 2025
			Amortized Cost						Fair Value						% of Total Fair Value
			(dollars in millions)
S&P Global rating or equivalent
AAA			$	67.5					$	67.8					21.0		%
AA+, AA, AA-, A-1+			151.5						152.7						47.3
A+, A, A-			82.0						82.6						25.6
BBB+, BBB, BBB-			19.3						19.5						6.1
BB+			0.1						0.1						—
Total			$	320.4					$	322.7					100.0		%

			December 31, 2024
			Amortized Cost						Fair Value						% of Total Fair Value
			(dollars in millions)
S&P Global rating or equivalent
AAA			$	75.2					$	74.8					24.4		%
AA+, AA, AA-, A-1+			146.0						145.0						47.3
A+, A, A-			67.8						67.1						21.9
BBB+, BBB, BBB-			20.1						19.9						6.4
Total			$	309.1					$	306.8					100.0		%

4.FAIR VALUE OF FINANCIAL INSTRUMENTS

The following tables provide information about our financial assets measured and reported at fair value as of June 30, 2025 and December 31, 2024:

			June 30, 2025
			Level 1						Level 2						Level 3						Total Fair Value
			(dollars in millions)
Assets
Fixed maturities:
U.S. Treasury securities			$	48.0					$	—					$	—					$	48.0
Municipal securities			—						22.3						—						22.3
Corporate debt securities			—						122.6						—						122.6
Asset-backed securities			—						126.3						—						126.3
Total fixed maturities			48.0						271.2						—						319.2
Short-term investments			3.5						—						—						3.5
Cash equivalents			349.5						—						—						349.5
Total assets at fair value			$	401.0					$	271.2					$	—					$	672.2
			December 31, 2024
			Level 1						Level 2						Level 3						Total Fair Value
			(dollars in millions)
Assets
Fixed maturities:
U.S. Treasury securities and agencies			$	46.2					$	—					$	—					$	46.2
Municipal securities			—						23.5						—						23.5
Corporate debt securities			—						105.7						—						105.7
Asset-backed securities			—						116.6						—						116.6
Total fixed maturities			46.2						245.8						—						292.0
Short-term investments			11.8						3.0						—						14.8
Cash equivalents			342.4						—						—						342.4
Total assets at fair value			$	400.4					$	248.8					$	—					$	649.2

We estimate the fair value of all our different classes of Level 2 fixed maturities and short-term investments by using quoted prices from a combination of an independent pricing vendor or broker/dealer, pricing models, quoted prices of securities with similar characteristics or discounted cash flows. All significant inputs were observable in the active markets.

The carrying amount of long-term debt is recorded at the unpaid balance, net of discount and debt issuance costs. The fair value of outstanding long-term debt is classified within Level 2 of the fair value hierarchy. The fair value is based on a model referencing observable interest rates and spreads to project and discount cash flows to present value. As of June 30, 2025 and December 31, 2024, the carrying amounts and fair values of these financial instruments were as follows:

			Carrying Amount as of June 30, 2025						Estimated Fair Value as of June 30, 2025						Carrying Amount as of December 31, 2024						Estimated Fair Value as of December 31, 2024
			(dollars in millions)
Long-term debt			$	200.1					$	204.6					$	200.1					$	204.9