10-Q

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

EXZEO GROUP, INC. AND SUBSIDIARIES

Consolidated Balance Sheets


	June 30,			December 31,
(in thousands, except share and per share amounts)	2026			2025
	(Unaudited)
Assets:
Current assets:
Cash and cash equivalents	$	136,731		$	305,372
Accounts receivable		1,785			2,906
Receivable from related parties		20,379			11,295
Prepaid expense		1,512			1,483
Current contract cost assets		5,169			4,722
Other current assets		4,127			43
Total current assets		169,703			325,821
Non-current assets:
Fixed-maturity securities, available-for-sale, at fair value (amortized cost: $198,426 and $0, respectively, and allowance for credit losses: $0 and $0, respectively)		197,072			—
Property and equipment, net		9,732			10,662
Operating lease right-of-use assets		6,263			6,884
Non-current contract cost assets		272			1,118
Deferred income taxes, net		2,400			2,975
Other assets		341			274
Total non-current assets		216,080			21,913
Total assets	$	385,783		$	347,734
Liabilities and Shareholders' Equity:
Current liabilities:
Current contract liabilities	$	74,539		$	70,893
Commissions payable		4,794			4,605
Accounts payable and accrued liabilities		8,358			2,950
Operating lease liabilities		2,482			2,413
Income taxes payable		411			2,455
Payable to related parties		1,151			1,073
Total current liabilities		91,735			84,389
Non-current liabilities:
Non-current contract liabilities		829			3,567
Operating lease liabilities		4,140			4,832
Other liabilities		908			790
Total non-current liabilities		5,877			9,189
Total liabilities		97,612			93,578
Commitments and contingencies (Note 16)
Shareholders' equity:
Common stock ($0.001 par value, 350,000,000 shares authorized, 90,200,252 and 90,926,720 shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively)		90			91
Additional paid-in capital		220,003			228,647
Retained earnings		69,093			25,418
Accumulated other comprehensive loss		(1,015	)		—
Total shareholders' equity		288,171			254,156
Total liabilities and shareholders' equity	$	385,783		$	347,734

See accompanying Notes to Consolidated Financial Statements (Unaudited).

EXZEO GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Income

(Unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands, except per share amounts)	2026		2025		2026		2025
Revenue (1)	$	57,787	$	56,091	$	113,321	$	108,498
Cost of revenue (2)		20,949		22,540		43,740		46,122
Gross profit		36,838		33,551		69,581		62,376
Operating expenses:
Selling, general and administrative		5,788		2,960		11,004		5,666
Research and development		2,440		2,354		4,746		4,575
Depreciation and amortization		147		110		293		211
Total operating expenses		8,375		5,424		16,043		10,452
Operating income		28,463		28,127		53,538		51,924
Investment income		2,963		763		5,475		1,161
Income before income taxes		31,426		28,890		59,013		53,085
Income tax expense		8,157		7,227		15,338		13,471
Net income	$	23,269	$	21,663	$	43,675	$	39,614
Basic and diluted earnings per share	$	0.26	$	0.26	$	0.48	$	0.48

(1)

Amounts include revenues earned from related parties of $54,217 and $107,539 for the three and six months ended June 30, 2026, respectively, and $54,341 and $106,748 for the three and six months ended June 30, 2025, respectively. Refer to Note 5. Revenue and Note 8. Related Party Transactions for additional details.

(2)

Amounts include costs incurred pursuant to related party transactions of $3,288 and $6,844 for the three and six months ended June 30, 2026, respectively, and $5,465 and $9,264 for the three and six months ended June 30, 2025, respectively. Refer to Note 8. Related Party Transactions for additional details.

See accompanying Notes to Consolidated Financial Statements (Unaudited).

EXZEO GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended					Six Months Ended
	June 30,					June 30,
(in thousands)	2026			2025		2026			2025
Net income	$	23,269		$	21,663	$	43,675		$	39,614
Other comprehensive loss, net of income taxes:
Available-for-sale fixed-maturity securities		(654	)		—		(1,015	)		—
Other comprehensive loss, net of income taxes		(654	)		—		(1,015	)		—
Comprehensive income	$	22,615		$	21,663	$	42,660		$	39,614

See accompanying Notes to Consolidated Financial Statements (Unaudited).

EXZEO GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Shareholders' Equity

(Unaudited)


	Common Stock						Additional Paid-In			Retained			Accumulated Other Comprehensive			Total Shareholders'
(in thousands, except per share amounts)	Shares			Amount			Capital			Earnings			Loss			Equity
Balance as of March 31, 2026		90,918,430		$	91		$	229,387		$	45,824		$	(361	)	$	274,941
Net income		—			—			—			23,269			—			23,269
Other comprehensive loss, net of income taxes		—			—			—			—			(654	)		(654	)
Non-cash capital contributions from parent		—			—			4			—			—			4
Issuance of restricted stock		18,000			—			—			—			—			—
Forfeiture of restricted stock		(9,350	)		—			—			—			—			—
Repurchase of common stock		(726,828	)		(1	)		(10,143	)		—			—			(10,144	)
Share-based compensation		—			—			755			—			—			755
Balance as of June 30, 2026		90,200,252		$	90		$	220,003		$	69,093		$	(1,015	)	$	288,171

	Common Stock						Additional Paid-In			Retained Earnings (Accumulated			Accumulated Other Comprehensive			Total Shareholders'
(in thousands, except per share amounts)	Shares			Amount			Capital			Deficit)			Loss			Equity
Balance as of March 31, 2025		82,709,589		$	83		$	73,479		$	(39,380	)	$	—		$	34,182
Net income		—			—			—			21,663			—			21,663
Non-cash capital contributions from parent		—			—			4			—			—			4
Forfeiture of restricted stock		(8,400	)		—			—			—			—			—
Share-based compensation		—			—			702			—			—			702
Balance as of June 30, 2025		82,701,189		$	83		$	74,185		$	(17,717	)	$	—		$	56,551

	Common Stock						Additional Paid-In			Retained			Accumulated Other Comprehensive			Total Shareholders'
(in thousands, except per share amounts)	Shares			Amount			Capital			Earnings			Loss			Equity
Balance as of December 31, 2025		90,926,720		$	91		$	228,647		$	25,418		$	—		$	254,156
Net income		—			—			—			43,675			—			43,675
Other comprehensive loss, net of income taxes		—			—			—			—			(1,015	)		(1,015	)
Non-cash capital contributions from parent		—			—			8			—			—			8
Issuance of restricted stock		33,000			—			—			—			—			—
Forfeiture of restricted stock		(32,640	)		—			—			—			—			—
Repurchase of common stock		(726,828	)		(1	)		(10,143	)		—			—			(10,144	)
Share-based compensation		—			—			1,491			—			—			1,491
Balance as of June 30, 2026		90,200,252		$	90		$	220,003		$	69,093		$	(1,015	)	$	288,171

	Common Stock						Additional Paid-In			Retained Earnings (Accumulated			Accumulated Other Comprehensive			Total Shareholders'
(in thousands, except per share amounts)	Shares			Amount			Capital			Deficit)			Loss			Equity
Balance as of December 31, 2024		82,810,089		$	83		$	72,755		$	(57,331	)	$	—		$	15,507
Net income		—			—			—			39,614			—			39,614
Non-cash capital contributions from parent		—			—			25			—			—			25
Forfeiture of restricted stock		(108,900	)		—			1			—			—			1
Share-based compensation		—			—			1,404			—			—			1,404
Balance as of June 30, 2025		82,701,189		$	83		$	74,185		$	(17,717	)	$	—		$	56,551

See accompanying Notes to Consolidated Financial Statements (Unaudited).

EXZEO GROUP, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)


	Six Months Ended June 30,
(in thousands)	2026			2025
Operating activities:
Net income	$	43,675		$	39,614
Adjustments to reconcile net income to cash provided by operating activities:
Share-based compensation		1,499			1,429
Depreciation and amortization		1,466			1,439
Deferred income taxes		914			(4,840	)
Net accretion of discount on investments in fixed-maturity securities		(31	)		—
Foreign currency remeasurement losses		191			48
Changes in operating assets and liabilities:
Accounts receivable		1,121			—
Related party receivable and payable		(9,006	)		(15,746	)
Prepaid expenses		(29	)		(60	)
Contract cost assets		399			1,954
Income taxes payable		(2,044	)		3,196
Contract liabilities		908			26,629
Commissions payable		189			119
Accounts payable and accrued liabilities		5,783			5,665
Other liabilities		(18	)		(221	)
Other assets		(4,153	)		(1,741	)
Operating leases, net		23			41
Cash provided by operating activities		40,887			57,526
Investing activities:
Capital expenditures		(536	)		(1,252	)
Purchase of available-for-sale securities		(198,395	)		—
Cash used in investing activities		(198,931	)		(1,252	)
Financing activities:
Payment of issuance costs		(375	)		—
Repurchase of common stock		(10,043	)		—
Cash used in financing activities		(10,418	)		—
Effect of exchange rate changes on cash		(179	)		(44	)
Net (decrease) increase in cash and cash equivalents		(168,641	)		56,230
Cash and cash equivalents at beginning of period		305,372			54,502
Cash and cash equivalents at end of period	$	136,731		$	110,732
Non-cash financing activities:
Capital contribution from parent	$	8		$	25
Payable related to share repurchases	$	100		$	—

See accompanying Notes to Consolidated Financial Statements (Unaudited).

EXZEO GROUP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

(in thousands, except share and per share amounts, unless otherwise stated)

Note 1. Nature of Operations

Exzeo Group, Inc., and its subsidiaries, a majority owned subsidiary of HCI, provide technology-enabled services to P&C insurance companies, including underwriting, policy management, claims processing management, and related software solutions. The Company primarily operates through MGA agreements and technology service agreements. The Company is headquartered in the United States and all revenue generating activities are conducted domestically. The Company also maintains a wholly-owned subsidiary in India that provides product research and development and software enhancement services.

On November 6, 2025, the Company completed its IPO, pursuant to which it issued and sold shares of its common stock to the public and commenced trading on the New York Stock Exchange. The net proceeds from the offering are being used for general corporate purposes, including working capital and pending the use of such proceeds, the Company is investing the net proceeds in short-term and long-term interest-bearing obligations, investment-grade investments, certificates of deposit or direct or guaranteed obligations of the U.S. government.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information. The unaudited interim Consolidated Financial Statements include the accounts of the Company's controlled subsidiaries and all intercompany balances and transactions have been eliminated.

Certain information and footnote disclosures normally included in annual audited Consolidated Financial Statements prepared in accordance with GAAP have been condensed or omitted in this interim presentation. In the opinion of management, the accompanying unaudited interim Consolidated Financial Statements reflect all normal, recurring adjustments necessary for a fair statement of the Company's financial position as of June 30, 2026, and the results of operations and cash flows for the interim periods presented. Operating results for the interim periods presented are not necessarily indicative of results expected for the fiscal year ending December 31, 2026. These unaudited interim Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and related notes included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on February 26, 2026. There have been no material changes to the Company's significant accounting policies from those described in the audited Consolidated Financial Statements.

In preparing these unaudited interim Consolidated Financial Statements, management is required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures as of the financial reporting date and for the periods presented. Certain estimates result from assumptions that can be subjective and complex and consequently actual results may differ from these estimates. Accounting policies specific to revenue recognition, income taxes, and share-based compensation involve significant estimates and assumptions that are material to the Company's unaudited interim Consolidated Financial Statements.

Recent Accounting Pronouncements

Accounting Standards Adopted in the Current Year

In July 2025, the FASB issued ASU No. 2025-05 - Financial Instruments–Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This update simplifies the estimation of current expected credit losses on current accounts receivable and current contract assets related to revenue from contracts with customers by allowing all entities to assume that current conditions as of the balance sheet date will not change for the remaining life of the current accounts receivable and current contract assets. This standard is effective for all entities for fiscal years and interim periods beginning after December 15, 2025, with early adoption permitted. The Company adopted the amendments on a prospective basis, effective January 1, 2026. The adoption of this standard did not have a material impact on the Company's unaudited interim Consolidated Financial Statements.

Accounting Standards Issued but Not Yet Adopted

In September 2025, the FASB issued ASU No. 2025-06 - Intangibles–Goodwill and Other–Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. This update enhances guidance on the capitalization of software development costs by eliminating project phase-based criteria and clarifying the conditions signifying significant development uncertainty used by entities to evaluate when the probable-to-complete recognition threshold is met. This standard is effective for fiscal years and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the potential impact of these updates on its Consolidated Financial Statements.

In November 2024, the FASB issued ASU No. 2024-03 - Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The amendment requires additional disclosures of certain costs and expenses within the notes to the Consolidated Financial Statements. Additionally, in January 2025, the FASB issued ASU No. 2025-01 - Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures

(Subtopic 220-40): Clarifying the Effective Date, which clarified that the updates for this standard are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the potential impact of these updates on its Consolidated Financial Statements.

Note 3. Investments

Available-for-Sale Fixed-Maturity Securities

During the six months ended June 30, 2026, the Company began investing in U.S. Treasury securities, which are classified as available-for-sale debt securities. The Company held no investment securities as of December 31, 2025. The amortized cost, gross unrealized gains, gross unrealized losses and estimated fair value of the Company’s available-for-sale debt securities as of June 30, 2026 is as follows:


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value (1)
U.S. Treasury securities	$	198,426	$	76	$	(1,430	)	$	197,072

(1)

There was no allowance for credit losses for the periods presented. Estimated fair value is determined using quoted prices in active markets for identical assets (Level 1 inputs). Refer to Note 4. Fair Value Measurements for additional details.

Accrued interest receivable on available-for-sale fixed-maturity securities is recorded within other current assets in the Consolidated Balance Sheets. As of June 30, 2026 and December 31, 2025, accrued interest receivable was $2,116 and $0, respectively.

There were no sales of available-for-sale fixed-maturity securities during the three and six months ended June 30, 2026 and 2025.

Contractual Maturities of Available-for-Sale Fixed-Maturity Securities

The following table presents the amortized cost and estimated fair value of the Company's available-for-sale fixed-maturity securities by contractual maturity as of June 30, 2026.


	Amortized Cost		Estimated Fair Value
Within one year	$	—	$	—
After one year through five years		99,406		99,482
After five years through ten years		99,020		97,590
After ten years		—		—
Total	$	198,426	$	197,072

Expected maturities may differ from contractual maturities as certain instruments may be subject to call or prepayment provisions. As of June 30, 2026, the Company's U.S. Treasury securities were not subject to call or prepayment provisions. Accordingly, expected maturities were consistent with contractual maturities for all securities held as of that date.

Gross Unrealized Losses for Available-for-Sale Fixed-Maturity Securities

Available-for-sale fixed-maturity securities with gross unrealized loss positions as of June 30, 2026, aggregated by investment category and length of time the individual securities have been in a continuous loss position are as follows:


		Less Than Twelve Months						Twelve Months or Longer
	Gross Unrealized Loss				Fair Value		Gross Unrealized Loss			Fair Value
U.S. Treasury securities	$		(1,430	)	$	97,590	$		—	$	—

As of June 30, 2026, one security was in an unrealized loss position and had been in a continuous unrealized loss position for less than twelve months.

Allowance for Credit Losses of Available-for-Sale Fixed-Maturity Securities

The Company regularly reviews its individual investment securities for credit impairment. The Company considers various factors, including the financial condition and near-term prospects of the issuer, the extent to which the fair value of the security is below its amortized cost, general market conditions, industry or sector specific factors, any nonpayment of contractually due principal or interest, and the Company's ability to hold the investment for a period of time sufficient to allow for recovery of its amortized cost.

The Company's available-for-sale fixed-maturity securities consist entirely of U.S. Treasury securities. The unrealized losses as of June 30, 2026 were attributable to changes in market interest rates since the date of purchase and are not indicative of credit deterioration. Because U.S. Treasury securities are backed by the full faith and credit of the U.S. government, the risk of credit loss is generally considered remote. The Company has the intent and ability to hold these securities until recovery of the amortized cost or maturity, accordingly, no allowance for credit losses was recorded.

Investment Income

Investment income by source is as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Cash and cash equivalents	$	1,812	$	763	$	4,184	$	1,161
Available-for-sale fixed-maturity securities		1,151		—		1,291		—
Investment income	$	2,963	$	763	$	5,475	$	1,161

Note 4. Fair Value Measurements

The Company records and discloses certain financial assets at their estimated fair values. The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three broad levels as follows:

•

Level 1 - Unadjusted quoted prices in active markets for identical assets.

•

Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets in active markets, quoted prices for identical or similar assets in markets that are not active, and inputs derived from or corroborated by observable market data.

•

Level 3 - Inputs that are unobservable.

The Company's financial assets measured at fair value on a recurring basis consist of cash and cash equivalents and available-for-sale fixed-maturity securities. Cash and cash equivalents, which consist primarily of money market funds, are classified as Level 1 due to the use of quoted prices in active markets. Available-for-sale fixed-maturity securities consist of U.S. Treasury securities and are also classified as Level 1, as fair value is determined using quoted prices in active markets.

The fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value is as follows:


	Fair Value Measurements Using
	(Level 1)		(Level 2)		(Level 3)		Total
As of June 30, 2026
Cash and cash equivalents	$	136,731	$	—	$	—	$	136,731
U.S. Treasury securities	$	197,072	$	—	$	—	$	197,072
As of December 31, 2025
Cash and cash equivalents	$	305,372	$	—	$	—	$	305,372

As of June 30, 2026 and December 31, 2025, the Company did not have any assets or liabilities measured at fair value on a nonrecurring basis. The Company held no investment securities as of December 31, 2025.

Note 5. Revenue

The Company generates revenue from three primary sources: underwriting and management services, claim services, and other technology services.

Revenue disaggregated by service type and the timing of recognition is as follows:


		Three Months Ended June 30, 2026							Three Months Ended June 30, 2025
	Point in Time			Over Time		Total		Point in Time			Over Time		Total
Underwriting and management services	$		26,572	$	21,770	$	48,342	$		25,270	$	20,025	$	45,295
Claim services			45		6,699		6,744			13		8,610		8,623
Other technology services			—		2,701		2,701			—		2,173		2,173
Total revenue	$		26,617	$	31,170	$	57,787	$		25,283	$	30,808	$	56,091

		Six Months Ended June 30, 2026							Six Months Ended June 30, 2025
	Point in Time			Over Time		Total		Point in Time			Over Time		Total
Underwriting and management services	$		51,603	$	42,667	$	94,270	$		49,676	$	38,869	$	88,545
Claim services			109		13,526		13,635			36		15,416		15,452
Other technology services			—		5,416		5,416			—		4,501		4,501
Total revenue	$		51,712	$	61,609	$	113,321	$		49,712	$	58,786	$	108,498

The Company primarily derives revenue through insurance solutions services provided to various customers. The Company provides services to certain of its affiliates under separate MGA, policy administration, and technology agreements. Refer to Note 8. Related Party Transactions for additional details.

Underwriting and Management Services

The Company provides policy issuance and renewal services that result in executed insurance policies. In addition, the Company provides management services, including soliciting and negotiating reinsurance for authorized programs and managing and maintaining a policy administration system. The Company also provides administrative services, including maintaining policy records, and printing policy-related documents.

The Company has identified three performance obligations within its underwriting and management services: 1) policy issuance and renewal, 2) management services, and 3) sub-broker services.

The transaction price allocated to the policy issuance and renewal performance obligation is determined based on the estimated standalone selling price of the service. This price is calculated as a proportion of direct written premiums, assumed written premiums, or both, plus related policy fees, and varies based on the specific terms of each agreement. The estimated standalone selling price was determined using the expected cost plus a margin approach. The transaction price is comprised of variable consideration because the Company is obligated to return a portion of the consideration if an underlying policy is canceled subsequent to issuance or renewal. Accordingly, the Company applies an estimate of constraint against the transaction price related to possible underlying policy cancellations in the future using the expected value method. Revenue related to the policy issuance and renewal performance obligation is recognized at the point in time when a policy is issued or renewed, as this marks the point at which the customer receives the economic benefits of the policy issuance or renewal, with the related services being substantially complete.

The transaction price allocated to the management services performance obligation is determined based on the estimated standalone selling price of the services. This price is calculated as a proportion of direct written premiums, assumed written premiums, or both, and varies based on the specific terms of each agreement. The estimated standalone selling price was determined using the expected cost plus a margin approach. Revenue for management services is deferred and recognized ratably over time as the services are provided.

Revenue from sub-broker services is recognized at a point in time when the Company fulfills its performance obligation by completing the services for the customer and is included within underwriting and management services. Due to the nature of the services, there are no significant financing components or variable consideration. For the three and six months ended June 30, 2026, the Company recognized revenue from sub-broker services of $1,500. For the three and six months ended June 30, 2025, the Company recognized revenue from sub-broker services of $1,750. As of June 30, 2026 and December 31, 2025, the Company had a receivable balance related to this service of $1,500 and $875, respectively, which was recorded within accounts receivable in the Consolidated Balance Sheets.

Claim Services

The Company provides services for all reported and assigned claims on behalf of its customers, for which the Company will handle each claim, including investigating, evaluating, adjusting and settling. While a variety of activities are performed, the overall nature of the

obligation is to provide services for all reported and assigned claims, including catastrophe claims. The Company also provides "catastrophe services" in the form of claim services to handle and adjust the increased and extraordinary volume of claims attributable to a catastrophe.

The Company has identified two performance obligations within claim services: 1) claim services and 2) catastrophe services.

The transaction price allocated to the claim services performance obligation is determined based on the estimated standalone selling price of the services. This price is calculated as a proportion of direct and assumed written premiums and varies based on the specific terms of each agreement. The estimated standalone selling price is determined using the estimated cost plus a margin approach. Revenue related to claim services is recognized ratably over the policy term, typically over a twelve-month period. This method reflects the continuous transfer of services to the customer and aligns revenue recognition with the ongoing delivery of claims handling services.

The transaction price allocated to the catastrophe services performance obligation is determined based on the estimated standalone selling price, which includes per-claim fees and a percentage of indemnification costs and varies by agreement. The transaction price involves variable consideration because the Company must estimate both the ultimate number of claims and the total indemnification expected to be paid. Accordingly, the Company applies a constraint to the transaction price related to possible overestimation of the transaction price using the expected value method. Revenue for this performance obligation is recognized over time using an output method that measures progress by comparing total claims paid to date against the total expected claims to be paid.

Other Technology Services

The Company's other technology services revenue is derived primarily from fees for providing services using various proprietary software, which includes functionality for policy administration, billing, reporting and compliance, and claims handling, to the customer through software service agreements.

The Company has identified two performance obligations related to software services: 1) policy administration software services and 2) catastrophe claims software services.

The transaction price of the policy administration software services performance obligation is based on the claims processed by the customer using a flat per-claim fee. The overall nature of the obligation is to provide customers with continuous access to the Company's hosted policy administration software platform through which the Company processes policy administration activities. Each of these arrangements represents a stand-ready obligation to perform these activities on an as-needed basis. As the Company has a right to invoice the customer at an amount that corresponds directly with the value of services delivered, the Company applies the as-invoiced practical expedient to recognize revenue.

The transaction price of the catastrophe claims software service performance obligation is calculated as a percentage of the amount incurred for each catastrophe claim handled. The nature of the performance obligation is that the Company will provide the service of allowing the customer access to its software systems. This catastrophe claims software services revenue is recognized over time as the performance obligation is satisfied, generally ratably over the period of four to five years.

Remaining Performance Obligations

As of June 30, 2026 and December 31, 2025, the aggregate transaction price allocated to remaining performance obligations that are unsatisfied or partially unsatisfied was $75,368 and $74,460, respectively, of which $74,539 and $70,893, respectively, are expected to be recognized within the following 12 months, and $829 and $3,567, respectively, are expected to be recognized beyond the next 12 months.

The Company's remaining performance obligations primarily consist of contractual fees under multi-year underwriting management agreements and technology service agreements. The Company expects to recognize revenue on the current portion of the remaining performance obligations within the next 12 months. The non-current portion relates primarily to multi-year catastrophe software claims service agreements that the Company expects to recognize revenue ratably over the period in which it expects to satisfy the related performance obligations, which is generally estimated to be four to five years.

Contract Balances

The Company receives payments from customers based on billing terms established in contractual agreements. Accounts receivable are recognized when the right to consideration becomes unconditional and only the passage of time is required before payment of consideration is due. The timing of revenue recognition may differ from the timing of invoicing. Receivables related to these services are classified within accounts receivable and receivable from related parties in the Consolidated Balance Sheets. These receivables are typically collected within 15 to 30 days after month-end or invoice date, as applicable, and substantially all cash collections are completed within one year, consistent with the annual term of insurance policies. As of June 30, 2026 and December 31, 2025, the Company reported $1,785 and $2,906, respectively, in accounts receivable related to these contracts in the Consolidated Balance Sheets. As of June 30, 2026 and December 31, 2025, the Company reported $20,379 and $11,295, respectively, in receivable from related parties related to these contracts in the Consolidated Balance Sheets.

The portion of revenue not yet earned is recorded as a contract liability in the Consolidated Balance Sheets. Contract liabilities are recorded when the Company has received consideration or has an unconditional right to payment but has not yet transferred the related services. This represents the portion of revenue that will be recognized over the term of the respective agreements. The over time performance obligations fall in this category given the Company recognizes revenue over the non-cancelable term of the underlying contracts.

The changes in contract liabilities during the three and six months ended June 30, 2026 resulted from normal business activity and were not materially affected by unusual or nonrecurring items. During the three and six months ended June 30, 2026, the Company recognized revenue of $29,080 and $58,529, respectively, that was included in the contract liability balance as of December 31, 2025. During the three and six months ended June 30, 2025, the Company recognized revenue of $18,460 and $34,663, respectively, that was included in the contract liability balance as of December 31, 2024. Contract liabilities are reflected in current liabilities for those to be recognized in less than 12 months and in non-current liabilities for those to be recognized more than 12 months from the date presented in the Company's Consolidated Balance Sheets.

Contract cost assets primarily consist of incremental costs to fulfill customer contracts that are expected to be recovered. Changes in the contract cost asset balance occur in the ordinary course of business. Contract cost assets are reflected in current assets when expected to be recognized in less than 12 months and in non-current assets when expected to be recognized in more than 12 months from the date presented in the Company's Consolidated Balance Sheets. The changes in contract cost assets during the three and six months ended June 30, 2026 resulted from normal business activity and were not materially affected by unusual or nonrecurring items. As of June 30, 2026 and December 31, 2025, total contract cost assets were $5,441 and $5,840, respectively.

Note 6. Comprehensive Income

Comprehensive income consists of net income and other comprehensive income (loss), which reflects valuation changes in available-for-sale fixed-maturity securities carried at fair value, net of income taxes.

The components of other comprehensive income (loss) are as follows:


	Three Months Ended June 30,					Six Months Ended June 30,
	2026			2025		2026			2025
Unrealized changes on fixed-maturity securities
Balance at the beginning of the period	$	(361	)	$	—	$	—		$	—
Unrealized losses on available-for-sale fixed-maturity securities		(872	)		—		(1,354	)		—
Deferred income taxes		218			—		339			—
Other comprehensive loss, net of income taxes	$	(654	)	$	—	$	(1,015	)	$	—
Balance at the end of the period	$	(1,015	)	$	—	$	(1,015	)	$	—

Note 7. Concentrations of Risk

The Company is exposed to certain concentrations of risk that could reasonably be expected to have a material impact on its business, financial condition, and results of operations, including customer concentration risk, related party concentration risk and cash concentration risk.

Customer Concentration

A customer is considered significant if it represents 10% or more of total revenue or total receivables for the applicable period.

For the three months ended June 30, 2026, the Company had two related party customers that individually represented more than 10% of total revenue, collectively accounting for approximately 85.6% of total revenue. For the six months ended June 30, 2026, the Company had two customers that individually represented more than 10% of total revenue, collectively accounting for approximately 86.9% of total revenue.

As of June 30, 2026, receivables from related parties constituting customers individually accounting for more than 10% of total receivables totaled approximately $17,884 and are included in receivables from related parties in the Consolidated Balance Sheets.

For the three months ended June 30, 2025, the Company had two related party customers that individually represented more than 10% of total revenue, collectively accounting for approximately 93.5% of total revenue. For the six months ended June 30, 2025, the Company had two customers that individually represented more than 10% of total revenue, collectively accounting for approximately 94.0% of total revenue.

As of December 31, 2025, receivables from related parties constituting customers individually accounting for more than 10% of total receivables totaled approximately $10,665 and are included in receivable from related parties in the Consolidated Balance Sheets.

Related Party Concentration

A significant portion of the Company's revenue is generated from customers affiliated with the Company's controlling shareholder, HCI. For the three and six months ended June 30, 2026, customers that individually represented more than 10% collectively accounted for 85.6% and 86.9% of total revenue, respectively. For the three and six months ended June 30, 2025, such customers collectively accounted for 93.5% and 94.0% of revenue, respectively. Accordingly, the Company is exposed to concentration risk related to these related party customers. A reduction in, or loss of, revenue from these customers could have a material adverse effect on the Company's results of operations.

Note 8. Related Party Transactions

Management Fee Revenue from Insurance Carriers

The following table presents underwriting and management services, as well as claim services revenue, recognized under agreements with related parties:


	Three Months Ended June 30,				Six Months Ended June 30,
Counterparty	2026		2025		2026		2025
TTIC (1)	$	30,782	$	33,651	$	64,467	$	67,409
CRM (2)		954		1,020		1,701		2,627
TRM (3)		3,772		847		7,322		2,106
HCM (4)		16,006		16,649		28,631		30,104
Total management fee revenue	$	51,514	$	52,167	$	102,121	$	102,246

(1)

EIS is a party to an MGA agreement with TTIC.

(2)

EIS is a party to an MGA agreement with CRM, the attorney-in-fact for CORE.

(3)

EIS is a party to an MGA agreement with TRM, the attorney-in-fact for Tailrow.

(4)

On January 1, 2025, EIS entered into a policy administration service agreement with HCM for HCPCI.

Unearned revenue related to these agreements was recorded within contract liabilities in the Consolidated Balance Sheets and is presented as follows:


	June 30,		December 31,
Counterparty	2026		2025
TTIC	$	33,320	$	32,875
CRM		1,714		1,799
TRM		4,954		5,097
HCM		21,265		18,181
Total unearned revenue	$	61,253	$	57,952

Receivable from related parties related to these agreements are as follows:


	June 30,		December 31,
Counterparty	2026		2025
TTIC	$	10,048	$	9,516
CRM		772		68
TRM		1,594		501
HCM		7,784		946
Total receivable from related parties (1)	$	20,198	$	11,031

(1)

Such fees are typically settled in the month following the period in which the services were rendered.

Other Technology Services

The following table presents policy administration software services revenue and catastrophe claims software services revenue recognized from related parties:


	Three Months Ended June 30,				Six Months Ended June 30,
Service Type	2026		2025		2026		2025
Policy administration software services (1)	$	8	$	19	$	16	$	19
Catastrophe claims software services (2)		2,693		2,154		5,400		4,482
Total other technology services revenue	$	2,701	$	2,173	$	5,416	$	4,501

(1)

Effective January 1, 2025, the Company amended the agreement with HCM and only charges a flat per-claim fee to use ClaimColonyTM.

(2)

The Company provides catastrophe claims software services through the usage of its software, enabling efficient management and adjustment of the increased claim volumes arising from catastrophes. This service is offered to HCM, TTIC, CRM, and TRM under their respective agreements.

Unearned revenue and receivables from related parties related to catastrophe claims software services are as follows:


	June 30,		December 31,
	2026		2025
Unearned revenue (1)	$	11,138	$	15,096
Receivable from related parties (2)	$	181	$	232

(1)

Recorded within contract liabilities in the Consolidated Balance Sheets.

(2)

Such fees are typically settled in the month following the period in which the services were rendered.

Policy Administration Services

The Company charges HCM a service fee for each new and renewed HCPCI flood policy issued outside of Florida. Policy administration services revenue and the related accounts receivable were immaterial for all periods presented. Such fees are typically settled within two weeks following the invoice date.

Related Party Service Agreements - Expenses

Agent Commissions

Under an agent commission agreement with Omega, a subsidiary of HCI, the Company pays commissions on premiums received in cash for policies issued by specific customers during the term of the agreement. Commission expenses pursuant to the agent commission agreement with Omega were $22 and $51 for the three and six months ended June 30, 2026, respectively, and $19 and $53 for the three and six months ended June 30, 2025, respectively. Such commission expenses were recorded within cost of revenue in the Consolidated Statements of Income. As of June 30, 2026 and December 31, 2025, commissions payable to Omega related to agent commissions were $6 and $12, respectively.

Claim Services

The Company receives field adjuster services from Griston Claim Services, Inc., a subsidiary of HCI, and generally pays a flat fee per claim handled. The Company also engages GCM, a subsidiary of HCI, to provide claims management services. Fees paid to GCM vary by program and claim type. For TTIC and Tailrow, the Company pays a per-claim fee for non-catastrophe claims, and a per-claim fee plus a percentage of incurred loss for catastrophe claims, including litigated claims. For CORE, the Company pays a per-claim fee plus a percentage of the amounts expended for indemnification for both catastrophe and non-catastrophe claims, including litigated claims.

Expenses related to claim services are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Field adjuster services expenses	$	525	$	551	$	1,056	$	1,177
Claim management services		2,592		4,746		5,438		7,734
Total claim services expenses (1)	$	3,117	$	5,297	$	6,494	$	8,911

(1)

Recorded within cost of revenue in the Consolidated Statements of Income.

As of June 30, 2026 and December 31, 2025, accounts payable related to claim services were $968 and $861, respectively, and are included in payable to related parties within the Consolidated Balance Sheets. These fees are typically settled in the month following the period in which the services are rendered.

Office Leases

The Company leases office space in Tampa, Florida, from Century Park Holdings, LLC, a subsidiary of HCI, under an agreement that commenced on January 1, 2023 and expires on December 31, 2032. The Company also leases office space in Ocala, Florida, from Silver Springs Property Investment, LLC, a subsidiary of HCI, under an agreement that commenced on January 1, 2022 and was originally scheduled to expire on December 31, 2024. On July 4, 2024, the Company exercised a renewal option extending the lease term through December 31, 2027.

For each of the three and six months ended June 30, 2026 and 2025, lease expense related to these agreements was $382 and $765, respectively. These expenses are included in cost of revenue and selling, general and administrative expenses in the Consolidated Statements of Income.

As of June 30, 2026 and December 31, 2025, there were no accounts payable outstanding related to these leases, as payments are due on the first day of each calendar month.

Corporate Cost Allocation

The Company provided corporate services to TTIC under a cost allocation agreement between Exzeo and its affiliates, amended effective July 1, 2025, to remove TTIC from the scope of the agreement. Following this amendment, the Company ceased providing corporate services to TTIC under the cost allocation agreement.

No expenses were allocated under this agreement during the three or six months ended June 30, 2026. Expenses allocated under this agreement during the three and six months ended June 30, 2025 were $921 and $1,746, respectively. Reimbursements received under the agreement are presented as a reduction in selling, general and administrative expenses within the Consolidated Statements of Income. All balances under this agreement were settled in 2025, and no amounts were outstanding as of June 30, 2026 or December 31, 2025.

Non-cash Capital Contributions

For the three and six months ended June 30, 2026, the Company recognized compensation expense related to HCI restricted stock held by certain Company employees of $4 and $8, respectively, in the Consolidated Statements of Income and as a non-cash capital contribution in the Consolidated Balance Sheets. For the three and six months ended June 30, 2025, the Company recognized compensation expense related to HCI restricted stock held by certain Company employees of $4 and $25, respectively, in the Consolidated Statements of Income and as a non-cash capital contribution in the Consolidated Balance Sheets. Refer to Note 12. Share-Based Compensation for additional details.

Note 9. Leases

Right-of-use assets and operating lease liabilities are as follows:


	June 30,		December 31,
	2026		2025
Assets:
Operating lease right-of-use assets	$	6,263	$	6,884
Liabilities:
Operating lease liabilities - current	$	2,482	$	2,413
Operating lease liabilities - non-current		4,140		4,832
Total operating lease liabilities	$	6,622	$	7,245

Weighted-average lease term and discount rate are as follows:


	As of June 30,
	2026			2025
Weighted-average remaining lease term (in years)		5.7			6.4
Weighted-average discount rate		6.3	%		6.2	%

The Company has entered into lease agreements with both affiliates and third parties. Refer to Note 8. Related Party Transactions for additional details. The Company's operating leases are summarized as follows:


Class of Assets	Initial Term	Renewal Option	Other Terms and Conditions
Office space	3 to 10 years	Yes	(1), (2)
Office equipment	5.25 years	Not applicable	Not applicable

(1)

Includes variable lease payments.

(2)

Includes rent escalation provisions.

As of June 30, 2026, maturities of operating lease liabilities are as follows:


Due in 12 months following June 30,	Operating Leases
2026	$	1,651
2027		1,380
2028		1,077
2029		1,103
2030		1,091
Thereafter		1,597
Total undiscounted liabilities		7,899
Less: Imputed interest		1,277
Total operating lease liabilities	$	6,622

Quantitative information regarding the components of lease cost and cash payments related to operating leases for the periods presented is as follows:


		Three Months Ended June 30,						Six Months Ended June 30,
		2026			2025			2026			2025
Operating lease cost (1)	$		432	$		437	$		858	$		872
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows – operating leases							$		829	$		816

(1)

Included within cost of revenue, selling, general and administrative, and research and development expenses in the Consolidated Statements of Income.

Note 10. Income Taxes

For the three months ended June 30, 2026 and 2025, the Company recorded income tax expense of $8,157 and $7,227, respectively, representing an effective tax rate of 26.0% and 25.0%, respectively. The Company's estimated annual effective tax rate differs from the statutory federal tax rate due to state and foreign income taxes, permanent differences related to non-deductible expenses, and tax-exempt items. The change in effective tax rate primarily reflects permanent differences related to non-deductible executive compensation. For the six months ended June 30, 2026 and 2025, the Company recorded income tax expense of $15,338 and $13,471, respectively, representing an effective tax rate of 26.0% and 25.4%, respectively. The Company's estimated annual effective tax rate differs from the U.S. federal statutory income tax rate primarily due to the impact of state and foreign income taxes, permanent differences related to non-deductible expenses, and tax-exempt items. The period-over-period change in the effective tax rate was primarily driven by permanent differences related to non-deductible executive compensation.

The Company evaluates the realizability of deferred tax assets on a quarterly basis and records a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. In assessing the need for a valuation allowance, management considers all positive and negative evidence, including recent operating results, available tax planning strategies, and forecasted future taxable income. The Company maintained a valuation allowance of $1,208 related to certain deferred tax assets as of June 30, 2026 and December 31, 2025, as it is more likely than not that such assets will not be realized.

Note 11. Earnings Per Share

Basic EPS is computed by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding during the period. The Company applies the two-class method in calculating basic EPS because certain unvested restricted stock awards are considered participating securities, as the holders have non-forfeitable dividend rights. Under this method, earnings are allocated between common shareholders and participating securities based on their respective rights to receive dividends and undistributed earnings.

Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted. Potentially dilutive securities are excluded from diluted EPS when their effect would be anti-dilutive. For the periods presented, weighted-average diluted shares outstanding were the same as weighted-average basic shares outstanding.

The calculation of basic and diluted earnings per share for the periods presented is as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except per share amounts)	2026			2025			2026			2025
Numerator:
Net income	$	23,269		$	21,663		$	43,675		$	39,614
Less: Income attributable to participating securities		(651	)		(1,038	)		(1,219	)		(1,912	)
Income attributable to common shareholders	$	22,618		$	20,625		$	42,456		$	37,702
Denominator:
Weighted-average basic shares outstanding		88,228			78,741			88,306			78,741
Weighted-average diluted shares outstanding (1)		88,228			78,741			88,306			78,741
Basic and diluted earnings per share	$	0.26		$	0.26		$	0.48		$	0.48

(1)

For the periods presented, all potentially dilutive securities were excluded from the diluted earnings per share computation because their (i) effect would be anti-dilutive, (ii) exercise prices were "out-of-the-money," or (iii) contingent exercise conditions were unsatisfied.

Note 12. Share-Based Compensation

Share-based compensation cost is measured at the grant date fair value of the award and recognized over the requisite service period. Compensation expense is recorded within cost of revenue, selling, general and administrative, and research and development expenses in the Consolidated Statements of Income. Forfeitures are accounted for as they occur.

Omnibus Incentive Plans

The Company's 2021 Omnibus Plan authorized the issuance of shares of common stock for equity-based compensation awards to employees, directors, and consultants. On November 4, 2025, the Company terminated the 2021 Omnibus Plan and adopted the 2025 Omnibus Plan, which authorized the issuance of up to 10,000,000 shares of common stock. Awards outstanding under the 2021 Omnibus Plan continue to be governed by the terms of that plan. As of June 30, 2026, 9,768,170 shares remained available for future grant under the 2025 Omnibus Plan.

Stock Options

Stock options generally vest based on service conditions, typically over four years, and have contractual terms of up to ten years. Stock option activity for the periods presented is as follows:


						Weighted
				Weighted		Average
				Average		Remaining			Aggregate
	Number of			Exercise		Contractual			Intrinsic
(in thousands, except per share amounts and options)	Options			Price		Term (in years)			Value (1)
Outstanding as of January 1, 2026		6,350,000	$		23.00	5.75		$		7,938
Granted		—
Exercised		—
Forfeited		—
Outstanding as of March 31, 2026		6,350,000	$		23.00		5.50	$		—
Granted		—
Exercised		—
Forfeited		—
Outstanding as of June 30, 2026		6,350,000	$		23.00		5.25	$		—
Exercisable as of June 30, 2026 (2)		6,350,000	$		23.00		5.25	$		—

Outstanding as of January 1, 2025		6,350,000	$		23.00	6.75		$		—
Granted		—
Exercised		—
Forfeited		—
Outstanding as of March 31 2025		6,350,000	$		23.00		6.50	$		—
Granted		—
Exercised		—
Forfeited		—
Outstanding as of June 30, 2025		6,350,000	$		23.00		6.25	$		—
Exercisable as of June 30, 2025		6,350,000	$		23.00		6.25	$		—

(1)

As of June 30, 2026, all options were out-of-the-money and the aggregate intrinsic value was zero.

(2)

Included in the stock options presented as exercisable are 6,000,000 options that are non-exercisable without approval of HCI's Board of Directors.

As of June 30, 2026, all outstanding stock options were vested and exercisable, subject to the approval requirement described above for certain awards. For the three and six months ended June 30, 2026, there was no share-based compensation expense or deferred tax benefits related to stock options. For the three and six months ended June 30, 2025, the Company recognized $348 and $690, respectively, of compensation expense within selling, general and administrative expenses in the Consolidated Statements of Income related to stock options. Deferred tax benefits related to stock options for the three and six months ended June 30, 2025 were $25 and $50, respectively, and were recorded as an income tax benefit in the Consolidated Statements of Income. As of June 30, 2026 and December 31, 2025, there was no unrecognized compensation expense related to nonvested stock options.

Restricted Stock Awards

Nonvested restricted stock award activity during the three and six months ended June 30, 2026 and 2025 is as follows:


	Number of				Weighted
	Restricted				Average
	Stock				Grant Date
	Awards				Fair Value
Nonvested as of January 1, 2026		2,541,593		$		4.68
Granted		15,000		$		15.69
Vested		—		$		—
Forfeited		(23,290	)	$		5.84
Nonvested as of March 31, 2026		2,533,303		$		4.74
Granted		18,000		$		17.27
Vested		—		$		—
Forfeited		(9,350	)	$		7.22
Nonvested as of June 30, 2026		2,541,953		$		4.82

Nonvested as of January 1, 2025		4,120,174		$		2.16
Granted		—		$		—
Vested		(51,554	)	$		1.12
Forfeited		(100,500	)	$		3.00
Nonvested as of March 31, 2025		3,968,120		$		2.15
Granted		—		$		—
Vested		—		$		—
Forfeited		(8,400	)	$		3.00
Nonvested as of June 30, 2025		3,959,720		$		2.15

Share-based compensation expense related to restricted stock awards are as follows:


		Three Months Ended June 30,						Six Months Ended June 30,
		2026			2025			2026			2025
Share-based compensation expense (1)	$		755	$		354	$		1,491	$		714
Deferred tax benefit (2)	$		175	$		58	$		345	$		119

(1)

Recorded within cost of revenue, selling, general and administrative, and research and development in the Consolidated Statements of Income.

(2)

Recorded within income tax expense in the Consolidated Statements of Income.

As of June 30, 2026 and December 31, 2025, there was approximately $10,599 and $11,747, respectively, of total unrecognized share-based compensation costs related to nonvested restricted stock awards. The remaining compensation costs are expected to be recognized over a weighted average period of approximately 3.75 years.

HCI Equity Incentive Plan

HCI maintains an incentive plan that provides restricted stock awards to employees of HCI and its subsidiaries. The terms of the restricted stock awards include service and market conditions, and the awards generally vest over a period of four years. In December 2024, certain employees of HCI and its subsidiaries were transferred to the Company. The Company recognizes share-based compensation expense for those employees' nonvested shares based on the fair value determined by HCI at the original grant date and the same vesting terms established at the grant date. The awards are not remeasured following the transfer.

For the three and six months ended June 30, 2026, the Company recognized compensation expense related to HCI restricted stock of $4 and $8, respectively. For the three and six months ended June 30, 2025, the Company recognized compensation expense related to HCI restricted stock of $4 and $25, respectively. Compensation expense related to HCI restricted stock is recognized in the Consolidated Statements of Income and as a non-cash capital contribution in the Consolidated Balance Sheets.

Note 13. Shareholders' Equity

As of June 30, 2026, the Company was authorized to issue 350,000,000 shares of common stock and 150,000,000 shares of preferred stock, pursuant to its Fourth Amended and Restated Articles of Incorporation, which became effective on November 6, 2025. Common stock entitles holders to one vote per share.

Share Repurchase Program

On May 26, 2026, the Company's Board of Directors authorized the Share Repurchase Program to repurchase up to $12,000 of the Company's common stock. The Share Repurchase Program permits the Company to repurchase shares for cash periodically in open market purchases, block transactions, privately negotiated transactions and by other means including through the use of trading programs intended to qualify under Rule 10b5-1 under the Exchange Act, and in accordance with applicable securities laws and other restrictions. The Share Repurchase Program does not obligate the Company to repurchase a specific number of shares of common stock, and may be canceled or suspended at any time without notice.

During the three and six months ended June 30, 2026, the Company repurchased 726,828 shares of common stock for $10,029 under the Share Repurchase Program, excluding broker commissions and excise tax. All shares repurchased were treated as retirements and reduced the number of shares issued and outstanding. The excess of purchase price over par was recorded as a reduction to additional paid-in capital. Broker commissions and excise tax on repurchase were not material during the three and six months ended June 30, 2026.

As of June 30, 2026, the Company may repurchase up to approximately $1,971 of additional shares of its common stock under the Share Repurchase Program. Refer to Note 17. Subsequent Events for repurchase activity after June 30, 2026.

Note 14. Segment Information

Operating segments are defined as components of an entity for which discrete financial information is available and that are regularly reviewed by the CODM for the purpose of allocating resources and assessing performance. The Company's CEO serves as the CODM. The CODM reviews financial information on a consolidated basis and evaluates performance based on consolidated revenue and net income. Accordingly, the Company operates in one operating segment, which is also its single reportable segment.

Geographic Information

All of the Company's revenues are generated in the United States, and substantially all of its long-lived assets are located in the United States. As a result, no geographic information by country is presented. Refer to Note 7. Concentrations of Risk for additional details.

The consolidated revenue, net income and significant expense categories regularly reviewed by the CODM for the periods indicated are as follows:


		Three Months Ended June 30,						Six Months Ended June 30,
		2026			2025			2026			2025
Revenue	$		57,787	$		56,091	$		113,321	$		108,498
Cost of revenue:
Policy commission and related expenses			10,038			10,074			22,212			22,741
Outsourced claims fees			1,494			3,831			3,023			6,086
Direct personnel expense			5,387			5,063			10,371			10,079
Other operating expenses			3,451			2,964			6,985			6,011
Depreciation and amortization			579			608			1,149			1,205
Gross profit			36,838			33,551			69,581			62,376
Operating expenses:
Selling, general and administrative:
Personnel cost			4,221			2,135			8,161			4,224
Other operating expenses			1,567			825			2,843			1,442
Research and development			2,440			2,354			4,746			4,575
Depreciation and amortization			147			110			293			211
Total operating expenses			8,375			5,424			16,043			10,452
Operating income			28,463			28,127			53,538			51,924
Investment income			2,963			763			5,475			1,161
Income before income taxes			31,426			28,890			59,013			53,085
Income tax expense			8,157			7,227			15,338			13,471
Net income	$		23,269	$		21,663	$		43,675	$		39,614

Note 15. Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consist primarily of amounts owed to vendors and service providers, accrued compensation and employee benefits, taxes and other operating accruals. These obligations are expected to be settled within twelve months of the balance sheet date and are classified as current liabilities in the Consolidated Balance Sheets.

Accounts payable and accrued liabilities were comprised of the following:


	June 30,		December 31,
	2026		2025
Accrued employee compensation	$	7,287	$	1,639
Other accrued and accounts payable		1,071		1,311
Total accounts payable and accrued liabilities	$	8,358	$	2,950

Note 16. Commitments and Contingencies

Legal Matters

From time to time, the Company may be involved in legal and regulatory proceedings arising in the ordinary course of business. The Company accrues a liability for loss contingencies when a loss is both probable and reasonably estimable.

As of June 30, 2026 and December 31, 2025, the Company was not a party to any legal proceedings, nor is aware of any matters that, individually or in the aggregate, were expected to have a material adverse effect on its financial position, results of operations, or cash flows, and no related liabilities were recorded.

Lease Commitments

The Company leases office space and certain equipment under non-cancelable operating lease agreements with initial terms ranging from three to ten years, which may include renewal options or rent escalation provisions. Refer to Note 9. Leases for additional details.

Indemnification Obligations

The Company provides indemnification obligations under certain customer agreements, which may require the Company to defend against claims arising from breaches of contractual obligations. These indemnification provisions do not specify a maximum potential payment amount.

As of June 30, 2026 and December 31, 2025, the Company had not recorded any liabilities related to indemnification obligations, as management determined that no losses were probable and reasonably estimable.

Regulatory Matters

The Company is subject to various federal and state regulatory requirements applicable to its operations.

As of June 30, 2026 and December 31, 2025, the Company was not aware of any regulatory matters that were expected to have a material adverse effect on its financial position or results of operations.

Note 17. Subsequent Events

On July 8, 2026, the Company completed its Share Repurchase Program, repurchasing an additional 107,422 shares of common stock for approximately $1,971 between July 1, 2026 and July 8, 2026, bringing the total shares repurchased under the Share Repurchase Program to 834,250 shares of common stock for approximately $12,000. No additional shares remain authorized for repurchase under the Share Repurchase Program. Refer to Note 13. Shareholders' Equity for additional details regarding the Share Repurchase Program.

On August 6, 2026, the Company announced the formation of Exzeo Ventures, a new division dedicated to the development of AI-native products, services and businesses. Exzeo Ventures will initially focus on opportunities within the insurance industry, including agentic AI for catastrophe claims, underwriting and risk transfer solutions, and distribution automation.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited interim Consolidated Financial Statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q ("Quarterly Report") and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 filed with the SEC on February 26, 2026 ("2025 Annual Report"). This section is intended to provide management’s perspective on our financial performance, material events, trends, and uncertainties that may affect our business, financial condition, results of operations, and cash flows.

Special Note Regarding Forward-Looking Statements

This Quarterly Report contains forward-looking statements within the meaning of the federal securities laws. All statements contained in this Quarterly Report, other than statements of historical fact, including statements regarding our future results of operations, financial position, market opportunity, business strategy, plans, objectives, and factors affecting our performance are forward-looking statements. In some cases, forward-looking statements can be identified by words such as "may," "will," "should," "expect," "plan," "anticipate," "could," "intend," "target," "project," "contemplate," "believe," "estimate," "predict," "potential," or "continue" or the negative of these terms or other similar expressions.

These forward-looking statements are based on management's current expectations, assumptions, estimates and projections. While we believe these expectations and assumptions are based on reasonable information, forward-looking statements are inherently predictive in nature and involve known and unknown risks and uncertainties, many of which are beyond our control. Actual results, performance or achievements may differ materially from those expressed or implied by these forward-looking statements as a result of various factors, including those discussed or referenced in Part II, Item 1A "Risk Factors" in this Quarterly Report, in our 2025 Annual Report and in other reports we file with the SEC.

Factors that could cause actual results or events to differ materially include, among others, our ability to maintain profitability and manage fluctuations in operating results on a quarterly or annual basis; our dependence on a limited number of customers for a substantial portion of our revenue; our ability to retain existing customers and attract new customers; and our continued reliance on affiliated customers. Our future performance also depends on the successful development, enhancement, and scalability of our proprietary IaaS platform, including the introduction of new features, analytical models and services, as well as the accuracy of estimates regarding market size and growth opportunities.

In addition, we operate in a highly competitive and regulated environment. Competitive pressures, consolidation within the insurance industry, regulatory scrutiny of delegated authority and claims administration functions, and evolving data privacy and cybersecurity requirements could adversely affect our business, financial condition and results of operations. Natural catastrophes, environmental risks and climate-related events, such as hurricanes and other severe weather, may significantly impact our customers’ P&C insurance operations, particularly in Florida where a substantial majority of our managed premiums are concentrated, which could in turn affect demand for our products and services. Our business also depends on the reliability and security of our information systems and third-party cloud infrastructure, and any system failures, security breaches or unauthorized disclosures of sensitive data could result in operational disruptions, regulatory action, litigation or reputational harm.

Our ownership structure further presents additional risks. HCI controls the direction of our business through its ownership interests, and this concentrated ownership limits the ability of other shareholders to influence significant corporate decisions. Potential conflicts of interest may arise between HCI and us, including those involving our executive officers and directors who hold positions or financial interests. In addition, if HCI were to sell a controlling interest of the Company in a private transaction, shareholders may not receive a change-of-control premium, and we could become subject to control by an unknown third party. We may also face challenges in realizing the anticipated benefits of operating as a standalone public company, including increased costs, regulatory compliance obligations and demands on management resources.

For further discussion of certain of these factors, see the risk factors disclosed in the section entitled "Risk Factors" in this Quarterly Report and in the 2025 Annual Report.

You are cautioned not to place undue reliance on such forward-looking statements, which are not guarantees of future performance, and our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate, may differ materially from the forward-looking statements contained in this Quarterly Report. Any forward-looking statement in this Quarterly Report speaks only as of the date of such statement, and except as required by applicable securities laws, we do not undertake any obligation to update or revise, or to publicly announce any update or revision to, any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this Quarterly Report.

Company Overview

Exzeo Group, Inc., and its subsidiaries, a majority owned subsidiary of HCI, provide turnkey insurance technology and operations solutions to insurance carriers and their agents (collectively referred to as Exzeo's "customers") through a proprietary platform of internally developed software and data analytics applications designed specifically for the P&C insurance market.

Our Insurance-as-a-Service platform, the Exzeo Platform, is an integrated suite of configurable insurance applications purpose-built to support the entire P&C value chain. The Exzeo Platform delivers integrated technology solutions that streamline operational and administrative functions for insurance carriers, MGAs, reciprocal exchanges, program administrators, and their distribution partners, enabling organizations to modernize operations, improve efficiency, and scale through a single configurable platform which includes quoting and underwriting, policy administration, claims management, data reporting, and financial reporting. Through these capabilities, the Exzeo Platform streamlines and automates insurance operational workflows across carriers, agents and policyholders.

The Exzeo business was established in 2012 as the technology and innovation division of HCI Group, Inc., a leading underwriter of homeowners insurance in Florida that now writes policies in 12 additional states. In 2020, Exzeo became an independent business entity and completed its initial public offering on November 5, 2025. Since inception, Exzeo has been led by experienced technology and insurance professionals with deep domain expertise focused on developing advanced data analytics algorithms and software tools that enable carriers to maximize system efficiency, optimize underwriting outcomes, and serve their customers more effectively.

The Exzeo Platform is a proprietary suite of software, analytics, and visualization tools capable of supporting, enhancing, or replacing legacy operational systems commonly used in the insurance industry. We enter into MGA or policy administration services agreements with our P&C insurance-industry customers under which we serve as an MGA of an insurance carrier or provide services to a carrier's MGA in exchange for fees largely based on a percentage of managed premiums. Under these agreements, we utilize the Exzeo Platform to provide policy issuance and renewal services, as well as management services such as soliciting and negotiating reinsurance for authorized programs, managing and maintaining policy administration, and providing claims management.

Key Factors and Trends Affecting Results of Operations

We believe our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including those discussed below and in the section entitled Item 1A. Risk Factors, included in our 2025 Annual Report.

•

Technology-driven underwriting support and continued investments in our platform. We leverage data, technology, and proprietary algorithms to support our customers’ underwriting and risk management processes. This includes incorporating additional dynamic external data sources and applying advanced statistical methods to inform pricing and risk selection decisions. Underwriting decisions and ultimate risk outcomes, including loss experience, remain the responsibility of our carrier customers. We expect that continued enhancements to our platform will improve underwriting, lower loss frequency, and lower loss ratios over time for policies on our platform, after adjusting for weather-related events. Our ability to deliver value depends on successfully integrating new data sources and refining our analytical capabilities to support more informed decision making by our customers.

•

Intense competition in our market. The market for core system software serving the P&C insurance industry is highly competitive and fragmented. This market is subject to changing technology, shifting customer needs, and introductions of new products and services. Our competitors vary in size and in the breadth and scope of the products and services offered. The principal competitive factors in our industry include total cost of ownership, product functionality, flexibility and performance, customer references and in-depth knowledge of the P&C insurance industry. We believe that we compete favorably with our competitors on the basis of each of these factors. However, many of our current or potential competitors have greater financial and other resources, greater name recognition, and longer operating histories than we do.

•

New customer acquisition, success and retention. We have relied and expect to continue to rely on customer relationships with a relatively small number of carriers in the P&C insurance industry for a substantial portion of our revenue, and the loss of any of these customers or a reduction in revenue from any of these customers would significantly harm our business, results of operations, and financial condition. As part of our growth strategy, we are focused on expanding our customer base by developing new partnerships with additional carriers and their agents. Our future operating results will depend, in part, on the rate at which we acquire new customers that are not affiliates of HCI and increase the amount of managed premium generated through those relationships. We believe that demonstrating the advantages of our technology platform and variable fee structure to prospective carriers will be critical to diversifying our revenue and reducing customer concentration over time. Our ability to support this expansion depends on the continued performance of our customer success and support teams, which are critical to ensuring high customer adoption, satisfaction, and retention.

•

Expansion into new geographies and programs. We believe expanding our services across additional states and insurance programs will be an important driver of long-term growth and success of our business. As of June 30, 2026, we provide technology-enabled underwriting, policy administration and claims support services to P&C carriers operating in multiple jurisdictions, including Connecticut, Florida, Georgia, Massachusetts, Montana, Nevada, New Jersey, New Mexico, North Carolina, Rhode Island, South Carolina, South Dakota, and Utah. We expect to extend our platform to support additional geographies and use cases, applying a tailored approach that reflects state specific regulatory requirements and local dynamics. While our carrier customers retain responsibility for underwriting decisions, premium growth, and reinsurance arrangements, broader geographic deployment of our platform is expected to enhance the scalability and consistency of our service offerings. Our ability to execute on this strategy depends on successfully adapting our technology and operational capabilities to support customers across diverse regulatory environments.

•

Regulatory matters. The legal environment for cloud-based technology businesses is evolving in the United States, and we are subject to a variety of laws and regulations that involve matters central to our business. Many of these laws and regulations are still evolving and being tested in courts and could be interpreted in ways that could harm our business. These may involve privacy, data protection and personal information, content, intellectual property, data security, and data retention and deletion. In particular, we are subject to federal and state laws regarding privacy and protection of personal data. U.S. federal and state laws and regulations, which in some cases can be enforced by private parties in addition to government entities, are constantly evolving and can be subject to significant change. As a result, the application, interpretation, and enforcement of these laws and regulations are often uncertain, particularly in the evolving industry in which we operate, and may be interpreted and applied inconsistently from state to state and inconsistently with our current policies and practices.

•

Data privacy. Our customers and their policyholders upload to and store their data in our cloud-based platform. This presents legal challenges to our business and operations, such as consumer privacy rights and intellectual property rights. We must monitor and comply with a wide variety of laws and regulations regarding the data stored and processed on our cloud-based platform as well as in the operation of our business. Non-compliance with these laws could result in penalties or significant legal liability. We have invested, and continue to invest, human and technology resources into our compliance efforts and our data privacy compliance efforts generally.

•

Transition to a standalone public company. Since our IPO in November 2025, we became subject to federal and state securities laws, and applicable stock exchange requirements. Operating as a standalone public company requires us to build and enhance governance structures and corporate functions including external financial reporting, internal audit, treasury, investor relations, Board of Directors and Officer support, and stock administration, which have resulted, and are expected to continue to result, in additional costs.

Presentation of Financial Information

Unless otherwise indicated, all dollar amounts presented in this Management's Discussion and Analysis of Financial Condition and Results of Operations are stated in thousands. Percentages, ratios, and per policy figures are based on the underlying whole dollar amount.

Key Performance Metrics

We review a number of key operating metrics, which we use as we make strategic decisions, measure our performance, evaluate our business, and identify trends in our business. These operational measures are presented as follows:


	As of June 30,
(in thousands, except percentages, counts, and per policy figures)	2026			2025
Managed Premium	$	1,395,576		$	1,220,280
Managed Policies		321,141			270,094
Premium Per Policy	$	4,346		$	4,518
Gross Dollar Retention Rate		89.1	%		88.8	%
Net Dollar Retention Rate		114.4	%		242.7	%
Annual Recurring Revenue	$	210,710		$	195,257

Managed Premium

Managed premium is defined as the aggregate gross dollar value of in-force premiums that are processed, managed, or administered by our software solutions as of the period end date. This excludes any applicable policy fee income associated with managed policies. Premium pricing may vary by state due to a combination of factors including regulatory requirements; however, the majority of the policies are written in the state of Florida. Revenue is primarily derived from usage-based pricing models, which are structured based on the amount of managed premiums processed, in most cases. We view this as an important metric because it is an indicator of the overall size of our platform. However, managed premium is an operational metric and should not be considered a substitute for revenue or other financial results.

Managed premiums attributable to insurance policies written in Florida represented 91.7% and 90.0% of total managed premiums as of June 30, 2026 and 2025, respectively.

Managed Policies

Managed policies are defined as the number of currently active policies managed by us on our platform as of the period end date. We consider managed policies a key metric for evaluating our financial performance, as growth in the number of managed policies not only drives revenue growth, but we also believe that an increase in managed policies may reflect broader brand awareness and deeper market penetration of our Exzeo Platform.

Premium Per Policy

Premium per policy is defined as the managed premium divided by managed policies. We view premium per policy as an important metric which provides information as to the average size of our customers' policyholder relationships. Growth in the metric can be indicative of increased coverages offered to our customers.

Gross Dollar Retention Rate

Gross dollar retention rate measures the percentage of managed premium retained from our customers' existing policyholders. We calculate gross dollar retention rate by measuring the managed premium attributable to policyholders who remained active as of the end of the current period and dividing this amount by the managed premium attributable to those same policyholders as of the end of the corresponding prior year period (i.e., twelve months earlier). We believe the gross dollar retention rate is a valuable indicator of platform engagement among existing policyholders and provides insight into our ability to retain and sustain premium volume over time through our services.

As of June 30, 2026 and 2025, managed premiums attributable to policyholders active from the end of the prior year period used in the gross dollar retention rate calculation were $1,087,674 and $446,209, respectively.

Net Dollar Retention Rate

We use NRR as a key performance metric to measure the success of our carrier customer relationships and the growth of our revenue from new and existing carrier customers. To calculate NRR, we divide the amount of managed premium from new and existing policyholders of our customers at the end of the current period, by the amount of managed premium attributable to the policyholders active as of the respective prior year period (i.e., twelve months earlier).

Our NRR is influenced by both the growth of existing carrier customers on the platform as well as the addition of new carrier customers. We believe that maintaining a high NRR is critical to achieving sustained long-term growth and reflects the strength of our value proposition to existing as well as future customers.

Annual Recurring Revenue

We use ARR as a key operational metric to assess the scale of our recurring revenue generated from managed premium. ARR is defined as the sum of each customer's managed premiums, multiplied by their respective contractual fee rates, plus any applicable policy fee income associated with managed policies as of the period end date. ARR excludes revenue from nonrecurring sources, such as catastrophe services.

Components of Operating Results

Revenue

We generate revenue from three primary sources: underwriting and management services, claim services, and other technology services. Underwriting and management services include policy issuance and renewal, reinsurance placement, and administrative support, with fees tied to a percentage of premiums written or assumed, plus related policy fees. Claim services involve investigating, adjusting, and settling claims, including catastrophe-related claims, with pricing based on percentage of premiums written or assumed, per-claim fees and/or a percentage of indemnification costs. Other technology services are primarily derived from proprietary software solutions offered through Software-as-a-Service service agreements, with fees based on a combination of policy or claim volumes, fixed charges, or percentages of claims handled.

Cost of Revenue

Our cost of revenue includes expenses directly attributable to providing our services, including salaries and benefits for employees supporting underwriting, management, administrative and claim services. For certain customers, we are responsible for compensating agents supporting underwriting services and recognize related agent commission expenses. Cost of revenue also includes amortization of capitalized internal-use software and other intangible assets used to provide services, information technology expenses supporting policy underwriting, administrative functions, and claim handling services, and allocated overhead. Claim handling costs include adjustment, investigation, defense, recording, and payment functions. Allocated expenses from departments supporting these functions are also included in cost of revenue.

Gross Profit

Gross profit represents revenue less cost of revenue. The increase in gross profit in recent periods was primarily driven by growth in managed premium, which allows us to leverage our relatively fixed cost structure. As we continue to scale and achieve operational efficiencies, we expect gross margins to improve over time, although there can be no assurance that we will achieve these improvements.

Selling, General and Administrative Expenses

Selling, general and administrative expenses represent costs associated with supporting operations and primarily consist of employee compensation, including share-based compensation and benefits for our finance, IT, sales and marketing, human resources, legal and general management functions, as well as facilities and professional services.

Research and Development

Our research and development costs consist primarily of personnel expenses, including salaries and benefits, bonuses, share-based compensation, facilities, and related overhead costs for employees engaged in the design and development of our technology offerings and other internally developed systems and applications.

Depreciation and Amortization

Depreciation and amortization expense reflects the expenses associated with the ongoing use of our tangible long-lived assets, including computer hardware, office furniture and equipment, and leasehold improvements.

Investment Income

Investment income represents interest and returns earned from both short‑term and long‑term investments. The principal factors that influence investment income include the size and composition of our investment portfolio, the mix of short and long-term duration assets, prevailing market conditions, and the yields generated over time.

Income Tax Expense

Income tax expense primarily consists of domestic corporate federal and state income taxes related to the sale of our services. The effective tax rate can be affected by many factors, including changes in tax laws, states in which we operate, regulations or rates, new interpretations of existing laws or regulations, and changes in our overall levels of income before income taxes.

Results of Operations

Three Months Ended June 30, 2026 and 2025

Selected financial information for the three months ended June 30, 2026, and 2025, including amounts expressed as a percentage of total revenue and the year-over-year change, is presented as follows:


	Three Months Ended June 30,					Percentage of Revenue							Increase (Decrease)
(Unaudited, in thousands, except percentages)	2026			2025		2026			2025				($)			(%)
Revenue	$	57,787	$		56,091		100.0	%		100.0	%	$		1,696			3.0	%
Cost of revenue		20,949			22,540		36.3	%		40.2	%			(1,591	)		(7.1	)%
Gross profit		36,838			33,551		63.7	%		59.8	%			3,287			9.8	%
Selling, general and administrative		5,788			2,960		10.0	%		5.3	%			2,828			95.5	%
Research and development		2,440			2,354		4.2	%		4.2	%			86			3.7	%
Depreciation and amortization		147			110		0.3	%		0.2	%			37			33.6	%
Total operating expenses		8,375			5,424		14.5	%		9.7	%			2,951			54.4	%
Operating income		28,463			28,127		49.3	%		50.1	%			336			1.2	%
Investment income		2,963			763		5.1	%		1.4	%			2,200			288.3	%
Income before income taxes		31,426			28,890		54.4	%		51.5	%			2,536			8.8	%
Income tax expense		8,157			7,227		14.1	%		12.9	%			930			12.9	%
Net income	$	23,269	$		21,663		40.3	%		38.6	%	$		1,606			7.4	%

Comparison of the Three Months Ended June 30, 2026 and 2025

Revenue


	Three Months Ended June 30,				Change
(Unaudited, in thousands, except percentages)	2026		2025		($)			(%)
Underwriting and management services	$	48,342	$	45,295		3,047			6.7	%
Claim services (1)		6,744		8,623		(1,879	)		(21.8	)%
Other technology services		2,701		2,173		528			24.3	%
Total revenue	$	57,787	$	56,091		1,696			3.0	%

(1)

A portion of this revenue is earned through services delivered directly via outsourcing to a subsidiary of HCI. Although this revenue is recognized on a gross basis because we are considered the principal in the transaction, the economics are largely neutral, as the related costs incurred from the subsidiary of HCI closely match the revenue recognized. Refer to Non-GAAP Financial Measures for additional details.

Revenue increased by $1,696, or 3.0%, to $57,787 for the three months ended June 30, 2026, compared to $56,091 for the same period in 2025. The increase was primarily attributable to growth in underwriting and management services, offset by lower claim services.

Underwriting and management services revenue increased by $3,047, or 6.7%, to $48,342 for the three months ended June 30, 2026, compared to $45,295 for the same period in 2025, representing 83.7% and 80.8% of total revenue, respectively. The increase was primarily driven by higher managed premiums from two new customers that were onboarded at the end of 2025, along with growth in underwriting and management services from our existing customer base. The fee rate charged as a percentage of premium managed was modestly lower in 2026 compared to 2025, reflecting changes in service mix.

Claim services revenue decreased by $1,879, or 21.8%, to $6,744 for the three months ended June 30, 2026, compared to $8,623 for the same period in 2025, representing 11.7% and 15.4% of total revenue, respectively. The decrease was primarily due to lower catastrophe-related claim activity, associated with services delivered through our outsourced claims arrangement, in the current period compared to the same period in 2025. Claim services revenue in future periods will continue to be influenced by the level of managed premiums and the timing and severity of weather events.

Other technology services revenue increased by $528, or 24.3%, to $2,701 for the three months ended June 30, 2026, compared to $2,173 for the same period in 2025, representing 4.7% and 3.9% of total revenue, respectively. The increase was primarily driven by higher catastrophe software service revenue associated with the progression of certain catastrophe events, including Hurricane Ian, in the current period. The current period results reflect the impact of additional revenue recognized as a result of refined claims estimates in the prior year. Because catastrophe-related software activity is event driven, revenue from these services may vary between periods.

Cost of Revenue


	Three Months Ended June 30,				Change
(Unaudited, in thousands, except percentages)	2026		2025		($)			(%)
Policy commission and related expenses	$	10,038	$	10,074	$	(36	)		(0.4	)%
Outsourced claims fees		1,494		3,831		(2,337	)		(61.0	)%
Direct personnel expense		5,387		5,063		324			6.4	%
Other operating expenses		3,451		2,964		487			16.4	%
Depreciation and amortization		579		608		(29	)		(4.8	)%
Total cost of revenue	$	20,949	$	22,540	$	(1,591	)		(7.1	)%

Cost of revenue decreased by $1,591, or 7.1%, to $20,949 for the three months ended June 30, 2026, compared to $22,540 for the same period in 2025, representing 36.3% and 40.2% of total revenue, respectively. The decrease in the cost of revenue as a percentage of revenue was primarily driven by a significant reduction in outsourced claim fees, partially offset by higher other operating expenses and direct personnel expense.

Policy commission and related expenses remained relatively flat at $10,038 for the three months ended June 30, 2026, compared to $10,074 for the same period in 2025, representing 17.4% and 18.0% of total revenue, respectively. Policy commission services and related expenses remained relatively unchanged and did not materially impact the change in cost of revenue.

Outsourced claims fees decreased by $2,337, or 61.0%, to $1,494 for the three months ended June 30, 2026, compared to $3,831 for the same period in 2025, representing 2.6% and 6.8% of total revenue, respectively. The decrease was primarily due to lower catastrophe claims handling activity and reduced litigation-related activity in 2026 compared with 2025, when claims handling and related litigation costs were elevated due to activity associated with storms that occurred in late 2024 and other historical storm events. The decrease in fees was attributable to this lower claim volume rather than changes in the cost per claim. Catastrophe-related activity is inherently volatile and may fluctuate significantly from period to period.

Direct personnel expense increased by $324, or 6.4%, to $5,387 for the three months ended June 30, 2026, compared to $5,063 for the same period in 2025, representing 9.3% and 9.0% of total revenue, respectively. The increase was primarily driven by higher headcount to support continued business growth, partially offset by a lower portion of discretionary compensation costs being reflected in cost of revenue as accruals were recognized.

Other operating expenses increased by $487, or 16.4%, to $3,451 for the three months ended June 30, 2026, compared to $2,964 for the same period in 2025, representing 6.0% and 5.3% of total revenue, respectively. The increase was driven by higher postage and related fees resulting from higher policy volumes, increased investment in systems and technology, and an increase to claims management activity. These increases were partially offset by lower bank fees from a system optimization initiative implemented in mid-2025.

Depreciation and amortization remained relatively flat at $579 for the three months ended June 30, 2026, compared to $608 for the same period in 2025, representing 1.0% and 1.1% of total revenue, respectively. Depreciation and amortization were relatively unchanged year-over-year and did not materially impact the change in cost of revenue.

Operating Expenses


	Three Months Ended June 30,				Change
(Unaudited, in thousands, except percentages)	2026		2025		($)		(%)
Selling, general and administrative	$	5,788	$	2,960	$	2,828		95.5	%
Research and development		2,440		2,354		86		3.7	%
Depreciation and amortization		147		110		37		33.6	%
Total operating expenses	$	8,375	$	5,424	$	2,951		54.4	%

Operating expenses increased by $2,951, or 54.4%, to $8,375 for the three months ended June 30, 2026, compared to $5,424 for the same period in 2025, representing 14.5% and 9.7% of total revenue, respectively. The increase was primarily driven by higher selling, general and administrative expenses.

Selling, general and administrative expenses increased by $2,828, or 95.5%, to $5,788 for the three months ended June 30, 2026, compared to $2,960 for the same period in 2025, representing 10.0% and 5.3% of total revenue, respectively. Employee-related costs accounted for approximately half of the increase, primarily due to a higher portion of discretionary compensation costs being reflected in selling, general and administrative expenses rather than in cost of revenue as accruals were finalized, along with higher salary and wage expenses resulting from increased headcount to support continued business growth. In addition, the increase reflects lower overhead allocations to TTIC following the sale of TTIC to HCI in July 2024. The corporate overhead allocation to TTIC included shared services such as HR, IT, legal, accounting, and lease-related costs which were allocated using methodologies appropriate to each cost type and applied consistently for all periods presented. We ceased providing corporate services, and therefore ceased allocating related expenses, to TTIC as of July 1, 2025. The remaining increase reflects higher operating costs associated with being a publicly traded Company and as a result of continued business growth.

Research and development expenses remained relatively flat at $2,440 for the three months ended June 30, 2026, compared to $2,354 for the same period in 2025, representing 4.2% of total revenue in both periods. Research and development was relatively unchanged year-over-year and did not materially affect our cost structure.

Depreciation and amortization remained relatively flat at $147, for the three months ended June 30, 2026, compared to $110 for the same period in 2025, representing 0.3% and 0.2% of total revenue, respectively. Depreciation and amortization were relatively unchanged year-over-year and did not materially affect our cost structure.

Investment Income


	Three Months Ended June 30,				Change
(Unaudited, in thousands, except percentages)	2026		2025		($)		(%)
Investment income	$	2,963	$	763	$	2,200		288.3	%

Investment income increased by $2,200, or 288.3%, to $2,963 for the three months ended June 30, 2026, compared to $763 for the same period in 2025. The increase was attributable in approximately equal measure to interest income earned on U.S. Treasury available-for-sale fixed-maturity securities acquired during the first half of 2026, for which there was no comparable activity in the prior year period, and to increased income earned on cash and cash equivalents. The increase in income from cash and cash equivalents was primarily due to higher average balances invested in money market funds following our IPO in November 2025. Investment income may fluctuate in future periods based on cash levels, the timing of the deployment of cash proceeds, and market conditions.

Income Tax


	Three Months Ended June 30,						Change
(Unaudited, in thousands, except percentages)	2026			2025			($)		(%)
Income before income taxes	$	31,426		$	28,890		$	2,536		8.8	%
Income tax expense	$	8,157		$	7,227		$	930		12.9	%
Effective tax rate		26.0	%		25.0	%

Income tax expense increased by $930, or 12.9%, to $8,157 for the three months ended June 30, 2026, compared to $7,227 for the same period in 2025. Our effective tax rate was 26.0% for the three months ended June 30, 2026, compared to 25.0% for the same period in 2025.

Our effective tax rate for both periods differed from the U.S. federal statutory rate of 21.0% primarily due to state income taxes, net of federal tax benefits, and other immaterial nondeductible expenses. The year-over-year increase in our effective tax rate was primarily driven by permanent differences related to nondeductible executive compensation. We expect our effective tax rate to continue to vary from the statutory rate principally as a result of state income taxes, permanent differences, and state tax obligations. There were no material changes in our income tax estimation methodologies for the periods presented. The increase in income tax expense was primarily due to higher income before income taxes and, to a lesser extent, the increase in our effective tax rate.

Six Months Ended June 30, 2026 and 2025

Selected financial information for the six months ended June 30, 2026, and 2025, including amounts expressed as a percentage of total revenue and the year-over-year change, is presented as follows:


		Six Months Ended June 30,					Percentage of Revenue							Increase (Decrease)
(Unaudited, in thousands, except percentages)		2026			2025		2026			2025				($)			(%)
Revenue	$		113,321	$		108,498		100.0	%		100.0	%	$		4,823			4.4	%
Cost of revenue			43,740			46,122		38.6	%		42.5	%			(2,382	)		(5.2	)%
Gross profit			69,581			62,376		61.4	%		57.5	%			7,205			11.6	%
Selling, general and administrative			11,004			5,666		9.7	%		5.2	%			5,338			94.2	%
Research and development			4,746			4,575		4.2	%		4.2	%			171			3.7	%
Depreciation and amortization			293			211		0.3	%		0.2	%			82			38.9	%
Total operating expenses			16,043			10,452		14.2	%		9.6	%			5,591			53.5	%
Operating income			53,538			51,924		47.2	%		47.9	%			1,614			3.1	%
Investment income			5,475			1,161		4.8	%		1.1	%			4,314			371.6	%
Income before income taxes			59,013			53,085		52.1	%		48.9	%			5,928			11.2	%
Income tax expense			15,338			13,471		13.5	%		12.4	%			1,867			13.9	%
Net income	$		43,675	$		39,614		38.5	%		36.5	%	$		4,061			10.3	%

Comparison of the Six Months Ended June 30, 2026 and 2025

Revenue


	Six Months Ended June 30,				Change
(Unaudited, in thousands, except percentages)	2026		2025		($)			(%)
Underwriting and management services	$	94,270	$	88,545		5,725			6.5	%
Claim services (1)		13,635		15,452		(1,817	)		(11.8	)%
Other technology services		5,416		4,501		915			20.3	%
Total revenue	$	113,321	$	108,498		4,823			4.4	%

(1)

Revenue increased by $4,823, or 4.4%, to $113,321 for the six months ended June 30, 2026, compared to $108,498 for the same period in 2025, driven primarily by new customers along with growth in underwriting and management services from our existing customer base.

Underwriting and management revenue increased by $5,725, or 6.5%, to $94,270 for the six months ended June 30, 2026, compared to $88,545 for the same period in 2025, representing 83.2% and 81.6% of total revenue, respectively. The increase was primarily driven by higher managed premiums from two new customers that were onboarded at the end of 2025, along with growth in underwriting and management services from our existing customer base. The fee rate charged as a percentage of premium managed was modestly lower in 2026 compared to 2025, reflecting changes in service mix.

Claim services revenue decreased by $1,817, or 11.8%, to $13,635 for the six months ended June 30, 2026, compared to $15,452 for the same period in 2025, representing 12.0% and 14.2% of total revenue, respectively. The decrease was primarily due to lower catastrophe-related claim activity, associated with services delivered through our outsourced claims arrangement, in the current period compared to the same period in 2025. Claim services revenue was elevated in 2025 due to higher volumes of catastrophe claims arising from prior storm events, including Hurricane Ian, Milton, and Helene. As claims associated with these events progressed toward resolution and related claim volumes normalized, claim services revenue decreased from the prior year elevated levels. The decrease was partially offset by higher managed premiums from our existing customer base, which increased related claims volume and associated service fees. Claim services revenue in future periods will continue to be influenced by the level of managed premiums and the timing and severity of weather events.

Other technology services revenue increased by $915, or 20.3%, to $5,416 for the six months ended June 30, 2026, compared to $4,501 for the same period in 2025, representing 4.8% and 4.1% of total revenue, respectively. The increase was primarily driven by higher catastrophe software service revenue associated with the progression of certain catastrophe events, including Hurricane Ian, in the current period. The current period results reflect the impact of additional revenue recognized as a result of refined claims estimates in the prior year. Because catastrophe-related software activity is event driven, revenue from these services may vary between periods.

Cost of Revenue


	Six Months Ended June 30,				Change
(Unaudited, in thousands, except percentages)	2026		2025		($)			(%)
Policy commission and related expenses	$	22,212	$	22,741	$	(529	)		(2.3	)%
Outsourced claims fees		3,023		6,086		(3,063	)		(50.3	)%
Direct personnel expense		10,371		10,079		292			2.9	%
Other operating expenses		6,985		6,011		974			16.2	%
Depreciation and amortization		1,149		1,205		(56	)		(4.6	)%
Total cost of revenue	$	43,740	$	46,122	$	(2,382	)		(5.2	)%

Cost of revenue decreased by $2,382, or 5.2%, to $43,740 for the six months ended June 30, 2026, compared to $46,122 for the same period in 2025, representing 38.7% and 42.5% of total revenue, respectively. The decrease in the cost of revenue as a percentage of total revenue was primarily driven by a significant reduction in outsourced claim fees, partially offset by higher other operating expenses and direct personnel expense.

Policy commission and related expenses decreased by $529, or 2.3%, to $22,212 for the six months ended June 30, 2026, compared to $22,741 for the same period in 2025, representing 19.6% and 21.0% of total revenue, respectively. The decrease was primarily due to lower written premiums associated with the carrier for which we provide policy commission services. The weighted average commission rate was relatively consistent at 9.0% for 2026 and 2025.

Outsourced claims fees decreased by $3,063, or 50.3%, to $3,023 for the six months ended June 30, 2026, compared to $6,086 for the same period in 2025, representing 2.7% and 5.6% of total revenue, respectively. The decrease was primarily due to lower catastrophe claims handling activity and reduced litigation-related activity in 2026 compared with 2025, when claims handling and related litigation costs were elevated due to activity associated with storms that occurred in late 2024 and other historical storm events. The decrease in fees was attributable to this lower claim volume rather than changes in the cost per claim. Catastrophe-related activity is inherently volatile and may fluctuate significantly between periods.

Direct personnel expense increased by $292, or 2.9%, to $10,371 for the six months ended June 30, 2026, compared to $10,079 for the same period in 2025, representing 9.2% and 9.3% of total revenue, respectively. The increase was primarily driven by higher headcount to support continued business growth, partially offset by a lower portion of discretionary compensation costs being reflected in cost of revenue as accruals were recognized.

Other operating expenses increased by $974, or 16.2%, to $6,985 for the six months ended June 30, 2026, compared to $6,011 for the same period in 2025, representing 6.2% and 5.5% of total revenue, respectively. The increase was driven by higher postage and related fees resulting from higher policy volumes in 2026, higher claims management activity, and increased investment in systems and technology. These increases were partially offset by lower bank fees from a system optimization initiative implemented in mid-2025.

Depreciation and amortization remained relatively flat at $1,149 for the six months ended June 30, 2026, compared to $1,205 for the same period in 2025, representing 1.0% and 1.1% of total revenue, respectively. Depreciation and amortization were relatively unchanged year-over-year and did not materially affect our cost structure.

Operating Expenses


	Six Months Ended June 30,				Change
(Unaudited, in thousands, except percentages)	2026		2025		($)		(%)
Selling, general and administrative	$	11,004	$	5,666	$	5,338		94.2	%
Research and development		4,746		4,575		171		3.7	%
Depreciation and amortization		293		211		82		38.9	%
Total operating expenses	$	16,043	$	10,452	$	5,591		53.5	%

Operating expenses increased by $5,591, or 53.5%, to $16,043 for the six months ended June 30, 2026, compared to $10,452 for the same period in 2025, representing 14.2% and 9.6% of total revenue, respectively. The increase was primarily driven by higher selling, general and administrative expenses.

Selling, general and administrative expenses increased by $5,338 or 94.2%, to $11,004 for the six months ended June 30, 2026, compared to $5,666 for the same period in 2025, representing 9.7% and 5.2% of total revenue, respectively. Employee-related costs accounted for approximately half of the increase, primarily due to a higher portion of discretionary compensation costs being reflected in selling, general and administrative expenses rather than in cost of revenue as accruals were finalized, along with salary and wage expenses resulting from higher headcount to support continued business growth. In addition, the increase reflects lower overhead allocations to TTIC following the sale of TTIC to HCI in July 2024. The corporate overhead allocation to TTIC included shared services such as HR, IT, legal, accounting, and lease-related costs which were allocated using methodologies appropriate to each cost type and applied consistently for all periods presented. We ceased providing corporate services, and therefore ceased allocating related expenses, to TTIC

as of July 1, 2025. The remaining increase reflects higher operating costs associated with being a publicly traded Company and as a result of continued business growth.

Research and development expenses remained relatively flat at $4,746 for the six months ended June 30, 2026, compared to $4,575 for the same period in 2025, representing 4.2% of total revenue in both periods. Research and development were relatively unchanged year-over-year and did not materially affect our cost structure.

Depreciation and amortization remained relatively flat at $293, for the six months ended June 30, 2026, compared to $211 for the same period in 2025, representing 0.3% and 0.2% of total revenue, respectively. Depreciation and amortization were relatively unchanged year-over-year and did not materially affect our cost structure.

Investment Income


	Six Months Ended June 30,				Change
(Unaudited, in thousands, except percentages)	2026		2025		($)		(%)
Investment income	$	5,475	$	1,161	$	4,314		371.6	%

Investment income increased by $4,314, or 371.6%, to $5,475 for the six months ended June 30, 2026, compared to $1,161 for the same period in 2025. The increase was primarily driven by a combination of interest income earned on U.S. Treasury available-for-sale fixed-maturity securities acquired during the first half of 2026 and increased income earned on cash and cash equivalents, reflecting higher average invested balances and higher overall investment yields.

Income Tax


	Six Months Ended June 30,						Change
(Unaudited, in thousands, except percentages)	2026			2025			($)		(%)
Income before income taxes	$	59,013		$	53,085		$	5,928		11.2	%
Income tax expense	$	15,338		$	13,471		$	1,867		13.9	%
Effective tax rate		26.0	%		25.4	%

Income tax expense increased by $1,867, or 13.9%, to $15,338 for the six months ended June 30, 2026, compared to $13,471 for the same period in 2025. Our effective tax rate was 26.0% for the six months ended June 30, 2026, compared to 25.4% for the same period in 2025.

Our effective tax rate for both periods differed from the U.S. federal statutory rate of 21.0%, primarily due to state and foreign income taxes, net of federal tax benefits, and other nondeductible expenses. We expect our effective tax rate to continue to differ from the statutory rate due to state and foreign tax obligations and other permanent differences. There were no material changes in our income tax estimation methodologies during the periods presented, and the year-over-year change in our effective tax rate was not material. The year-over-year increase in income tax expense was primarily driven by higher income before income taxes.

Non-GAAP Financial Measures

In addition to results determined in accordance with GAAP, we use certain non-GAAP financial measures to evaluate our operating performance and make strategic decisions. These non-GAAP financial measures include Adjusted EBITDA, Adjusted Revenue, Adjusted EBITDA Margin, and Free Cash Flow. Management believes these measures provide useful supplemental information for investors by facilitating comparisons of performance across reporting periods and with other companies in the industry, many of which use similar non-GAAP financial measures.

However, these non-GAAP financial measures are not prepared in accordance with GAAP, are not based on a standardized methodology, and may not be comparable to similarly titled measures used by other companies. They should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. These measures exclude items that may be significant to an understanding of our financial condition and results of operations under GAAP. The use of non-GAAP financial measures involves management judgment regarding which items to exclude or include. Accordingly, these measures have limitations and should be viewed as a supplement to, not a replacement for, our GAAP results. Management urges investors to review the reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures included in this report and not to rely on any single financial measure to evaluate our business.

Adjusted EBITDA

We define Adjusted EBITDA as net income adjusted to exclude income tax expense, interest expense, investment income, depreciation and amortization, and share-based compensation expense. Management uses Adjusted EBITDA as a key measure of operating performance and to assess the results of the business excluding certain items that are not considered indicative of core operating results.

Adjusted EBITDA should not be viewed in isolation or as a substitute for net income calculated in accordance with GAAP, and other companies may define Adjusted EBITDA differently.

The reconciliation of net income to Adjusted EBITDA for the periods presented is as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
(Unaudited, in thousands)	2026			2025			2026			2025
Net income	$	23,269		$	21,663		$	43,675		$	39,614
Income tax expense		8,157			7,227			15,338			13,471
Investment income		(2,963	)		(763	)		(5,475	)		(1,161	)
Depreciation and amortization		726			718			1,442			1,416
Share-based compensation		759			706			1,499			1,429
Adjusted EBITDA (1)	$	29,948		$	29,551		$	56,479		$	54,769

(1)

The Company did not have any interest expense for the periods presented.

Adjusted Revenue

We define Adjusted Revenue as the portion of revenue earned through services delivered directly via our proprietary platform technology. This metric excludes revenue associated with services primarily within claims management that are outsourced to a subsidiary of HCI. Although this revenue is recognized on a gross basis under GAAP because we are considered the principal in the transaction, the economics are largely neutral, as the related costs incurred from outsourced service providers closely match the revenue recognized. Management believes Adjusted Revenue provides investors with useful insight into the performance and scalability of our core platform services and reflects the revenue generated from internally delivered operations, excluding variability associated with outsourced service arrangements. This non-GAAP measure should not be considered in isolation or as a substitute for total revenue or any other performance measure calculated in accordance with GAAP.

The reconciliation of the Adjusted Revenue for the periods presented is as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(Unaudited, in thousands)	2026		2025		2026		2025
Revenue	$	57,787	$	56,091	$	113,321	$	108,498
Less: Outsourced claims fees		1,494		3,831		3,023		6,086
Adjusted Revenue	$	56,293	$	52,260	$	110,298	$	102,412

Adjusted EBITDA Margin

We define Adjusted EBITDA Margin as Adjusted EBITDA expressed as a percentage of Adjusted Revenue. This non-GAAP measure provides management and investors with additional insight into the Company's operating efficiency and the scalability of our business model, as it reflects our progress toward long-term profitability. The most directly comparable GAAP measure is net income margin, which is calculated as net income divided by GAAP revenue.

The calculation of Adjusted EBITDA Margin for the periods presented is as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
(Unaudited, in thousands, except percentages)	2026			2025			2026			2025
Numerator: Adjusted EBITDA	$	29,948		$	29,551		$	56,479		$	54,769
Denominator: Adjusted Revenue		56,293			52,260			110,298			102,412
Adjusted EBITDA Margin (1)		53.2	%		56.5	%		51.2	%		53.5	%

(1)

The inputs used to derive Adjusted EBITDA Margin are defined and reconciled to their most directly comparable GAAP measures in the preceding tables above. Adjusted EBITDA is reconciled to net income, and Adjusted Revenue is reconciled to GAAP revenue, in each case as presented elsewhere in this filing. Net income margin represents the comparable GAAP measure.

Free Cash Flow

We define Free Cash Flow as net cash provided by operating activities less capital expenditures during the period. We believe information regarding Free Cash Flow provides useful information to management and investors because it is an indicator of strength and performance of our business operations after funding capital expenditures. Capital expenditures consist of capitalized software development costs and costs relating to property and equipment, such as computer hardware, office furniture and equipment, and leasehold improvements. Free Cash Flow should not be considered an alternative to net cash provided by operating activities, which is the most directly comparable GAAP measure, or as a measure of liquidity prepared in accordance with GAAP and may not be comparable to similar measures used by other companies.

The reconciliation of Free Cash Flow for the periods presented is as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(Unaudited, in thousands)	2026		2025		2026		2025
Cash provided by operating activities	$	15,415	$	37,754	$	40,887	$	57,526
Less: Capital expenditures		209		483		536		1,252
Free Cash Flow	$	15,206	$	37,271	$	40,351	$	56,274

Liquidity and Capital Resources

General

Our principal sources of liquidity, consisting of cash and cash equivalents and cash generated from operations, are presented as follows:


	June 30,		December 31,
(Unaudited, in thousands)	2026		2025
Cash and cash equivalents	$	136,731	$	305,372
Working capital	$	77,968	$	241,432

Cash and cash equivalents decreased during the six months ended June 30, 2026, primarily due to purchases of fixed-maturity securities classified as available-for-sale, partially offset by cash generated from operating activities. Working capital also decreased during the period, primarily reflecting the same investment activity; as the available-for-sale fixed-maturity securities were classified as non-current based on management's intent not to use the investments for current operating purposes.

We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on our liquidity, capital resources, or financial condition.

We believe that our existing cash and cash equivalents, together with expected operating cash flows, will be sufficient to meet working capital, capital expenditures, and other liquidity requirements for at least the next 12 months. We have no material long-term contractual obligations other than standard vendor agreements and lease commitments.

Our primary cash requirements include employee compensation and outsourced fees, cloud hosting and infrastructure costs, and ongoing investment in product development. At current operating levels, these requirements are expected to be supported by operating cash flows.

In May 2026, the Board of Directors authorized a Share Repurchase Program to repurchase up to $12.0 million of the Company’s common stock. The Share Repurchase Program permits the Company to repurchase shares periodically through open market purchases, block transactions, privately negotiated transactions or other means. During the six months ended June 30, 2026, the Company used $10,029 of cash to repurchase shares of its common stock, excluding broker commissions and excise tax. As of June 30, 2026, approximately $1,971 remained available under the Share Repurchase Program. The timing and amount of any share repurchases are discretionary and may vary based on the Company’s liquidity position, capital requirements, business, economic and market conditions, corporate and regulatory requirements, prevailing stock prices and other considerations. The Share Repurchase Program does not obligate the Company to repurchase any specific number of shares of common stock and may be suspended or discontinued at any time without notice.

Based on our current financial position, we also believe that our liquidity sources will be adequate to meet our long-term needs beyond the next twelve months. Over the longer term, our liquidity will depend primarily on our ability to generate cash from operations as our managed premium base scales and we continue to expand our technology and service offerings.

Investments

The primary objective of our investment policy is to maximize our after-tax investment income with a reasonable level of risk given the current financial market. Our excess cash is invested primarily in money market accounts and available-for-sale fixed-maturity securities.

As of June 30, 2026, we had $197,072 of available-for-sale fixed-maturity investments, which are carried at fair value. Changes in the general interest rate environment affect the returns available on new available-for-sale fixed-maturity investments. While a rising interest

rate environment enhances the returns available on new investments, it reduces the market value of existing available-for-sale fixed-maturity investments and thus the availability of gains on disposition. A decline in interest rates reduces the returns available on new available-for-sale fixed-maturity investments but increases the market value of existing available-for-sale fixed-maturity investments, creating the opportunity for realized investment gains on disposition.

Sources of Liquidity

Our capital requirements depend on several factors, including the volume of insurance policies managed on our platform, the level of claims related services we provide, operating expenses, investments in information technology systems, and the expansion of sales and marketing activities.

Our current liquidity sources consist primarily of existing cash and cash equivalents and cash generated from operations.

Cash Flow Summary

A summary of cash flows is as follows:


	Six Months Ended June 30,
(Unaudited, in thousands)	2026			2025
Net cash provided by (used in):
Operating activities	$	40,887		$	57,526
Investing activities	$	(198,931	)	$	(1,252	)
Financing activities	$	(10,418	)	$	—

Operating Activities

Net cash provided by operating activities for the six months ended June 30, 2026 was $40,887, a decrease of $16,639 from $57,526 for the same period in 2025. The decrease was primarily due to changes in the timing of business growth and associated cash collections, partially offset by higher net income. Operating cash flows may vary from period to period based on the timing of customer receipts, vendor payments, and other operating activities.

Investing Activities

Net cash used in investing activities for the six months ended June 30, 2026 was $198,931, compared to $1,252 for the same period in 2025, an increase in cash used of $197,679. The increase was primarily due to purchases of available-for-sale fixed-maturity securities during the 2026 period. Capital expenditures also continued in support of software development and infrastructure, consistent with our strategy to support and enhance core operations.

Financing Activities

Net cash used in financing for the six months ended June 30, 2026 was $10,418, compared to $0 for the same period in 2025. Net cash used in financing activities for 2026 was primarily driven by payments made under the Share Repurchase Program, as well as payments of offering costs related to the Company’s November 2025 IPO. Certain IPO-related costs were paid in 2026 due to the timing of invoice receipt and settlement.

Critical Accounting Policies and Estimates

The preparation of our unaudited interim Consolidated Financial Statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. These estimates are inherently uncertain and require significant judgment, particularly in areas that involve complex or subjective assumptions and often involve matters that are inherently unpredictable.

We regularly evaluate these estimates based on historical experience, current business conditions, and other relevant factors, including inputs from third-party specialists where applicable. Our estimates are subject to change as new events occur, additional information becomes available, or operating environments evolve. Actual results could differ materially from those estimates, and such differences may have a material impact on our financial condition or results of operations.

We believe the following accounting policies involve significant judgment and estimates and are critical to an understanding of our financial condition and results of operations: Revenue recognition, Share-based compensation, Income taxes.

The above and other accounting estimates and their related risks that we consider to be our critical accounting estimates are discussed further in our 2025 Annual Report, filed with the SEC on February 26, 2026. For the six months ended June 30, 2026, there have been no other material changes with respect to any of our critical accounting policies.

Revenue Recognition

We recognize revenue from contracts with customers in accordance with ASC 606. We determine the appropriate amount of revenue to be recognized by applying the five-step model: (i) identifying the contract with customer, (ii) identifying the performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the performance obligations, and (v) recognizing revenue when, or as, the performance obligations are satisfied. Our revenue is primarily usage-based and derived from fees

calculated as a percentage of premiums written by our insurance customers. The nature of our usage-based arrangements and related judgments did not change materially during the periods presented.

We allocate the transaction price to performance obligations based on their relative standalone selling prices. For most performance obligations, we estimate standalone selling prices using an expected cost-plus-margin approach, which requires significant judgment regarding forecasted fulfillment costs and appropriate market-based margins. Changes in these estimates, including changes in product or service mix, or revisions to our assessment of the market-based margins, could affect the standalone selling prices used to allocate consideration in new or renewal of existing contracts and thus result in the impact of the amount and timing of revenue recognized for each performance obligation. Our approach to determining standalone selling prices, including the underlying assumptions regarding fulfillment costs forecasts and margin estimates, remained consistent and did not change materially over the periods presented.

Because our fees are generally usage-based and tied to the underlying insurance policies written by our customers, the transaction price often includes variable consideration. While our customer contracts typically span multiple years, the underlying insurance policies can be canceled by policyholders without penalty. As a result, the uncertainty related to underlying policy volume, not termination of the MGA or customer agreement itself, drives our application of the ASC 606 constraint. We therefore constrain variable consideration to the amounts that are not probable of significant reversal. This assessment requires judgment and involves assumptions about policyholder behavior, seasonality, expected policy retention, and inherent volatility of premiums written. We update these estimates quarterly based on the most recent available information. The assumptions used to evaluate and constrain variable consideration, including expected volume and retention behavior, were applied consistently and did not change materially during the periods presented.

Share-Based Compensation

We account for share-based compensation awards under our shareholder-approved incentive plans in accordance with the fair value recognition provisions of GAAP, recognizing expense based on grant-date fair value over the requisite service period. Our share-based awards primarily consist of restricted stock awards and stock options with service-based or market-based vesting conditions. Restricted stock awards are granted with either time-based or market-based vesting conditions tied to our stock price (e.g., share price thresholds sustained over a defined period) and are expensed over the requisite service period based on grant-date fair value. For awards with market-based vesting conditions, the grant-date fair value incorporates the probability of achieving the market condition and is not subsequently adjusted.

For stock options, we determine grant-date fair value using a Monte Carlo simulation technique and other option pricing models. These methods estimate the fair value of the option by modeling a range of potential future stock prices and associated outcomes and rely on assumptions such as expected volatility, risk-free interest rates, expected term, and dividend yield. These assumptions require significant judgment and can materially impact recognized compensation expense.

For awards granted while we were a private company, we determined the fair value of our common stock using third-party valuations under Internal Revenue Code Section 409A. These valuations incorporated assumptions regarding future performance, market conditions, and comparable company data. Inputs such as estimated stock price and expected price volatility used in these valuation methods were derived from analyses of public peer companies with similar characteristics. For awards granted after our IPO, the grant-date fair value of our common stock is based on the quoted market price of our common stock on the date of grant.

Income Taxes

We account for income taxes in accordance with GAAP, resulting in two components of income tax expense (benefit): current and deferred. The current income tax expense (benefit) reflects taxes payable or refundable for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues.

The realizability of deferred tax assets is evaluated quarterly, and judgment is required in assessing both positive and negative evidence, including recent financial performance, forecasted future earnings, and relevant tax planning strategies.

As a member of a consolidated U.S. federal income tax return with HCI, we are subject to the group's tax-sharing arrangements. Our estimate of tax expense is sensitive to changes in the effective rate applied to our standalone results, which may differ from statutory rates due to business mix or transaction-related effects.

JOBS Act

We are an EGC as defined under the JOBS Act. As an EGC, we may delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to not take advantage of the extended transition period that allows an EGC to delay the adoption of certain accounting standards until those standards would otherwise apply to private companies, which means that the financial statements included in this Quarterly Report on Form 10-Q, as well as financial statements we file in the future, will be subject to all new or revised accounting standards generally applicable to public companies. Our election not to take advantage of the extended transition period is irrevocable.

We will remain an EGC until the earliest to occur of the following: (i) the last day of the fiscal year in which our total annual gross revenues first meet or exceed at least $1.235 billion (as adjusted for inflation), (ii) the date on which we have, during the prior three-year period, issued more than $1.00 billion in non-convertible debt, (iii) the last day of the fiscal year in which we (a) have an aggregate worldwide market value of common stock held by non-affiliates of $700.0 million or more (measured at the end of each fiscal year) as of the last business day of our most recently completed second fiscal quarter and (b) have been a reporting company under the Exchange

Act for at least one year (and have filed at least one annual report under the Exchange Act), or (iv) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act.

New Accounting Guidance

Refer to Note 2. Summary of Significant Accounting Policies to the Consolidated Financial Statements for a discussion of new accounting standards.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are exposed to limited market risks in the ordinary course of our business, primarily related to interest-rate movements affecting cash balances and fixed-maturity securities, inflationary cost pressures, and credit concentrations arising from cash deposits and customer receivables. We maintain a conservative capital structure with no significant outstanding debt, and we do not engage in trading or speculative investment activities. Because our revenues are derived primarily from fixed-fee service arrangements rather than market-sensitive instruments, our direct exposure to changes in market prices, interest rates, or foreign-currency exchange rates is not material other than the impact of interest-rate changes on the fair value of our investment portfolio.

As of June 30, 2026, our investment portfolio included available-for-sale fixed-maturity securities that are not for trading or speculation. We consider factors including credit ratings, investment concentrations, regulatory requirements, anticipated fluctuation of interest rates, durations and market conditions in developing our investment strategies. The portfolio consists entirely of high-credit quality U.S. Treasury securities. We classify our fixed-maturity securities as available-for-sale and report unrealized gains or losses, net of deferred income taxes, as a component of other comprehensive income within shareholders’ equity. As such, changes in fair value may impact shareholders’ equity.

Interest Rate Risk

We are exposed to interest rate risk primarily through cash and cash equivalents and available-for-sale fixed-maturities. Our fixed-maturities consist of U.S. Treasury securities, which are carried at fair value. As these securities are carried at fair value, increases in market interest rates would generally result in decreases in their fair value, while decreases in market interest rates would result in increases in the fair value. Accordingly, changes in market interest rates may result in unrealized gains or losses recorded in other comprehensive income. We have no variable-rate borrowings outstanding.

Inflationary Risk

Inflationary pressures, such as increases in cost of revenue and operating expenses, may adversely affect our operating results. Although we do not believe inflation has had a material impact on our financial condition, results of operations or cash flows to date, a sustained high rate of inflation in the future could adversely affect our ability to maintain or increase our gross margin or decrease our operating expenses as a percentage of our revenues if the selling prices of our services do not increase proportionately with our costs. In addition, inflationary pressures affecting our insurance carrier customers could impact the level of managed premiums and the timing of policy renewals.

Credit and Liquidity-Risk Concentrations

Our cash is held in deposit demand accounts at a large financial institution in amounts that exceed the Federal Deposit Insurance Corporation ("FDIC") insurance coverage limit of $250,000 per depositor, per FDIC-insured bank, per ownership category. We monitor the credit ratings and financial condition of these counterparties on an ongoing basis and have not experienced any losses on such deposits. We believe the credit risk associated with these institutions is not material.

Credit risk also arises from potential adverse changes in the financial condition of issuers of our available-for-sale fixed-maturity securities. Because our investment portfolio consists entirely of U.S. Treasury securities, exposure to credit losses is considered minimal.

Financial instruments that potentially subject us to concentrations of credit risk principally consist of accounts receivable. We limit our exposure by performing credit evaluations when deemed necessary but do not require collateral to secure amounts owed by customers. Refer to Note 7. Concentrations of Risk for additional details.

Foreign Currency Risk

We conduct certain operations through a wholly-owned subsidiary in India that provides product research and development, operational and administrative support services. Because the subsidiary's functional currency is in the U.S. dollar, we are not exposed to material foreign-currency translation risk. We may experience minor transaction gains or losses on Indian-rupee-denominated expenses or payables, but such amounts have not been material. We do not currently use hedging instruments and believe our exposure to foreign-currency fluctuations is not material.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Exchange Act, under the supervision and with the participation of our CEO (who is our principal executive officer) and CFO (who is our principal financial officer), management evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of June 30, 2026 at a reasonable level of assurance.

Changes in Internal Control Over Financial Reporting

Management, together with our CEO and CFO, evaluated changes in our internal control over financial reporting during the quarter ended June 30, 2026. There were no changes in our internal control over financial reporting during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

Management recognizes that any system of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. The design of a control system must reflect the fact that there are resource constraints, and the benefits must be considered relative to their associated costs.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may be subject to claims and legal actions arising in the ordinary course of business. Based on information currently available, we are not involved in any legal proceedings that, in our judgment, are likely to have a material adverse effect on our unaudited interim consolidated financial position, results of operations, or cash flows. Refer to Note 16. Commitments and Contingencies for additional details.

Item 1A. Risk Factors.

There have been no material changes in the risk factors previously disclosed in the section entitled "Risk Factors" in our most recent Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which was filed with the SEC on February 26, 2026.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

(a)

Sales of Unregistered Securities

We did not sell or issue any unregistered equity securities during the three months ended June 30, 2026.

(b)

Use of Proceeds from Registered Securities

Our registration statement on Form S-1, as amended (File No. 333-290500), for our IPO offering became effective under Section 8(a) of the Securities Act of 1933, as amended, on November 4, 2025. On November 6, 2025, we completed the IPO offering of 8.0 million shares of our common stock at a public offering price of $21.00 for an aggregate offering price of $168 million. There has been no material change in the planned use of proceeds from our IPO offering as described in the prospectus filed on November 5, 2025, under Rule 424(b)(4) of the Securities Act of 1933, as amended.

(c)

Repurchases of Securities

The following table summarizes the Company's share repurchase activity for the three months ended June 30, 2026 and the approximate dollar value of shares that may yet be purchased under the program.


Issuer Purchases of Equity Securities
							Approximate
					Total Number of		Dollar Value of
					Shares Purchased		Shares That May
	Total Number				as Part of Publicly		Yet Be Purchased
	of Shares		Average Price		Announced Plans		under the Plans
Period	Purchased (1)		Paid Per Share (2)		or Programs (1)		or Program (1)
								(in thousands)
April 1, 2026 - April 30, 2026		—	$	—		—	$		—
May 1, 2026 - May 31, 2026		123,466	$	13.65		123,466	$		10,315
June 1, 2026 - June 30, 2026		603,362	$	13.83		603,362	$		1,971
Total		726,828				726,828

(1)

All shares were repurchased pursuant to the Share Repurchase Program, which was announced on May 26, 2026, under which the Board of Directors authorized the repurchase of up to $12.0 million of the Company's common stock. The Share Repurchase Program does not have a stated expiration date.

(2)

Average price paid for share excludes broker commissions and excise tax.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

Trading Arrangements Under Item 408 of Regulation S-K

During the three months ended June 30, 2026, no director or officer of the Company adopted, modified or affirmatively terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" as each term is defined in Item 408 of Regulation S-K.


Florida	85-2578837
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1000 Century Park Drive Tampa, FL	33607
(Address of principal executive offices)	(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value	XZO	New York Stock Exchange


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
		Emerging growth company	☒


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


		Page

PART I.	FINANCIAL INFORMATION	4

Item 1.	Financial Statements (Unaudited)	4
	Consolidated Balance Sheets	4
	Consolidated Statements of Income	5
	Consolidated Statements of Comprehensive Income	6
	Consolidated Statements of Shareholders' Equity	7
	Consolidated Statements of Cash Flows	8
	Notes to Consolidated Financial Statements	9
	Note 1. Nature of Operations	9
	Note 2. Summary of Significant Accounting Policies	9
	Note 3. Investments	10
	Note 4. Fair Value Measurements	11
	Note 5. Revenue	12
	Note 6. Comprehensive Income	14
	Note 7. Concentrations of Risk	14
	Note 8. Related Party Transactions	15
	Note 9. Leases	17
	Note 10. Income Taxes	18
	Note 11. Earnings Per Share	18
	Note 12. Share-Based Compensation	18
	Note 13. Shareholders' Equity	20
	Note 14. Segment Information	21
	Note 15. Accounts Payable and Accrued Liabilities	21
	Note 16. Commitments and Contingencies	22
	Note 17. Subsequent Events	22
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	38

PART II.	OTHER INFORMATION	40

Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	41
Signatures		42


Term		Definition
2021 Omnibus Plan		2021 Omnibus Incentive Plan
2025 Omnibus Plan		2025 Omnibus Incentive Plan
ARR		Annual Recurring Revenue
ASC 606		ASC Topic 606, Revenue from Contracts with Customers
ASU		Accounting Standards Update
CEO		Chief Executive Officer, who is our principal executive officer
CFO		Chief Financial Officer, who is our principal financial officer
CODM		Chief Operating Decision Maker
CORE		Condo Owners Reciprocal Exchange, a Florida reciprocal insurance exchange owned by its subscribers
CRM		Core Risk Managers, LLC, a Florida limited liability company and a direct wholly-owned subsidiary of HCI
EGC		Emerging Growth Company
EIS		Exzeo Insurance Services, Inc., a Florida corporation and a direct wholly-owned subsidiary of Exzeo Group, Inc.
EPS		Earnings Per Share
Exchange Act		Securities Exchange Act of 1934, as amended
FASB		Financial Accounting Standards Board
GAAP		Accounting principles generally accepted in the United States
GCM		Griston Claim Management, Inc., a Florida corporation and an indirect wholly-owned subsidiary of HCI
HCI		HCI Group, Inc., a Florida corporation and the controlling shareholder of Exzeo Group, Inc.
HCM		Homeowners Choice Managers, Inc., a Florida corporation and a direct wholly-owned subsidiary of HCI
HCPCI		Homeowners Choice Property & Casualty Insurance Company, Inc., a Florida corporation and a direct wholly-owned subsidiary of HCI
IPO		Initial Public Offering
JOBS Act		Jumpstart Our Business Startups Act
MGA		Managing General Agent
MGA agreement		Agreement under which the Company provides underwriting, policy administration, claims, or related services as MGA
NRR		Net Dollar Retention Rate
Omega		Omega Insurance Agency, Inc., a Florida corporation and a direct wholly-owned subsidiary of HCI
P&C		Property and Casualty
SEC		Securities and Exchange Commission
Share Repurchase Program		The program which the Board of Directors authorized to repurchase shares of up to $12.0 million of Exzeo's stock
Sub-broker services		Reinsurance placement and brokerage assistance services
Tailrow		Tailrow Insurance Exchange, a Florida reciprocal insurance exchange owned by its subscribers
TRM		Tailrow Risk Managers, LLC, a Florida limited liability company and a direct wholly-owned subsidiary of HCI
TTIC		TypTap Insurance Company, a Florida corporation and a direct wholly-owned subsidiary of HCI


Exhibit		Incorporated by Reference
Number	Description of Exhibit	Form	Exhibit	Filing Date
3.1	Fourth Amended and Restated Articles of Incorporation of Exzeo Group, Inc.	8-K	3.1	11/6/2025
3.2	Amended and Restated Bylaws of Exzeo Group, Inc.	8-K	3.2	11/6/2025
31.1*	Certification of the Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of the Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**	Certification of the Chief Executive Officer Pursuant to 18 U.S.C.ss 1350
32.2**	Certification of the Chief Financial Officer Pursuant to 18 U.S.C.ss 1350
101*	The following materials from Exzeo Group, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 formatted in iXBRL (Inline eXtensible Business Reporting Language) include (i) the Consolidated Balance Sheets (ii) the Consolidated Statements of Income (iii) the Consolidated Statements of Comprehensive Income (iv) the Consolidated Statements of Shareholders' Equity, (v) the Consolidated Statements of Cash Flows, and (vi) Notes to the Consolidated Financial Statements.
104*	Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.


	Exzeo Group, Inc.

Date: August 7, 2026	By:	/s/ Paresh Patel
		Paresh Patel
		Chief Executive Officer
		(Principal Executive Officer)

Date: August 7, 2026	By:	/s/ Suela Bulku
		Suela Bulku
		Chief Financial Officer
		(Principal Financial and Accounting Officer)