Q1 2026 Neptune Insurance Holdings Inc Earnings Call

April 22, 2026

Operator 1: Thank you for standing by. My name is Angela, and I will be your conference operator today. At this time, I would like to welcome everyone to the Neptune Insurance Holdings Q1 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one in your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Mr. Jonathan Carlon, Director of Corporate Development. You may begin.

Operator: Thank you for standing by. My name is Angela, and I will be your conference operator today. At this time, I would like to welcome everyone to the Neptune Insurance Holdings Q1 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star followed by the number one in your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Mr. Jonathan Carlon, Director of Corporate Development. You may begin.

Speaker #2: All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press star, followed by the number 1 on your telephone keypad.

Speaker #2: If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to Mr. John Carlin, Director of Corporate Development.

Speaker #2: You may begin. Thank you and good afternoon. With me here today is Trevor Burgess, Chairman and CEO; Matt Duffy, President and Chief Risk Officer; and Jim Steiner, CFO and COO.

Jonathan Carlon: Thank you, and good afternoon. With me here today is Trevor Burgess, Chairman and CEO, Matt Duffy, President and Chief Risk Officer, and Jim Steiner, CFO and COO. Before we begin, I'd like to remind everyone that today's discussion will include forward-looking statements, including, among others, statements about our expectations for our future financial performance, growth opportunities, business strategy, market trends, and capital allocation plans. These statements are based on our current views and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. We direct you to our recent SEC filings for a full description of these risks. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. We will also reference certain non-GAAP financial measures.

Speaker #2: Before we begin, I'd like to remind everyone that today's discussion will include forward-looking statements, including among others, statements about our expectations for our future financial performance, growth opportunities, business strategy, market trends, and capital allocation plans.

Speaker #2: These statements are based on our current views and assumptions and are subject to risk and uncertainties that could cause actual results to differ materially.

Speaker #2: We direct you to our recent SEC filings for a full description of these risks. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

Speaker #2: Except as required by law. We will also reference certain non-GAAP financial measures. These measures should be considered only as supplements to their comparable GAAP measures.

Jonathan Carlon: These measures should be considered only as supplements to their comparable GAAP measures. Additional information, including reconciliations of the non-GAAP measures to their most comparable GAAP measures, can be found in our earnings release at investors.neptuneflood.com and in our current report on Form 8-K that was publicly filed with the SEC on 22 April 2026. Now I'd like to turn the call over to Trevor.

Speaker #2: Additional information, including reconciliations of the non-GAAP measures to their most comparable GAAP measures, can be found in our earnings release at investors.neptuneflood.com and in our current report on Form 8-K that was publicly filed with the SEC on April 22, 2026.

Speaker #2: And now I'd like to turn the call over to Trevor.

Speaker #3: Good evening and thank you for joining us for Neptune's first quarter earnings call. Before we review the quarter, I wanted to talk about how excited I am by this moment in the history of technology.

Trevor Burgess: Good evening, and thank you for joining us for Neptune's Q1 earnings call. Before we review Q1, I wanted to talk about how excited I am by this moment in the history of technology. I was an investment banker during the first dot-com boom. I built one of the first technology-first banks and now am leading one of the first AI-native public companies. What AI has enabled in the last few months has far surpassed anything I've seen before. This is the power of the exponential. The Neptune team has the horse by the reins and is building something very special. People often ask how we think about AI at Neptune. The answer goes back to the very beginning.

Speaker #3: I was an investment banker during the first dot-com boom, I built one of the first technology-first banks, and now I'm leading one of the first AI-native public companies.

Speaker #3: What AI has enabled in the last few months has far surpassed anything I've seen before. This is the power of the exponential. The Neptune team has the horse by the reins, and is building something very special.

Speaker #3: People often ask how we think about AI at Neptune. The answer goes back to the very beginning. In 2018, when we hired our first engineers, I put a sign on the wall that said, "No humans." Not because we don't value people, but because we wanted to build a system where technology could do what humans cannot.

Trevor Burgess: In 2018, when we hired our first engineers, I put a sign on the wall that said, "No humans." Not because we don't value people, but because we wanted to build a system where technology could do what humans cannot faster, more consistently, and at scale. What is now being described as AI native, we simply viewed as the right way to build from day one. That mindset continues to guide us today. We don't start with today's constraints and optimize around them. We start with where the world is going and build towards that future. As the technology continues to evolve, the gap between Neptune and traditional insurance platforms is not narrowing, it is widening. AI also creates a significant opportunity to expand the market. Tens of millions of properties in the United States remain uninsured for flood risk.

Speaker #3: Faster, more consistently, and at scale. What is now being described as AI-native, we simply viewed as the right way to build from day one.

Speaker #3: That mindset continues to guide us today. We don't start with today's constraints and optimize around them. We start with where the world is going and build towards that future.

Speaker #3: And as the technology continues to evolve, the gap between Neptune and traditional insurance platforms is not narrowing; it is widening. AI also creates a significant opportunity to expand the market.

Speaker #3: Tens of millions of properties in the United States remain uninsured for flood risk. By using AI to improve risk awareness, simplify the buying process, and support agents with better tools, we believe we can meaningfully grow the insured base over time.

Trevor Burgess: By using AI to improve risk awareness, simplify the buying process, and support agents with better tools, we believe we can meaningfully grow the insured base over time. That brings me to what we are seeing in the business today. Last quarter, I spoke about turning agents into what we call super agents. We are now seeing that come to life. Following quarter end, we launched in a beta release, Atlas Plus, our agentic assistant for insurance agents. Atlas Plus can answer questions, generate sales materials, and interact directly with quotes in real time. Early feedback has been extremely strong, including examples of policies being sold directly as a result of these interactions. Over time, we expect Atlas Plus to become a core part of the sales workflow. Importantly, these capabilities are built on top of what we believe is one of our most important advantages, our proprietary data.

Speaker #3: That brings me to what we are seeing in the business today. Last quarter, I spoke about turning agents into what we call superagents. We are now seeing that come to life.

Speaker #3: Following quarter-end, we launched, in a beta release, Atlas Plus. Our agentic assistant for insurance agents. Atlas Plus can answer questions, generate sales materials, and interact directly with quotes in real time.

Speaker #3: Early feedback has been extremely strong, including examples of policies being sold directly as a result of these interactions. Over time, we expect Atlas Plus to become a core part of the sales workflow.

Speaker #3: Importantly, these capabilities are built on top of what we believe is one of our most important advantages. Our proprietary data. Our platform has processed tens of millions of quotes, and over a million policies, generating real-world underwriting, pricing, and behavioral data that continuously improves our models.

Trevor Burgess: Our platform has processed tens of millions of quotes and over a million policies, generating real-world underwriting, pricing, and behavioral data that continuously improves our models. We believe that data advantage will continue to compound over time and create a structural barrier to entry in an AI-driven market. From a financial perspective, the implications are equally important. In 2025, we operated at a 60% adjusted EBITDA margin. As AI continues to reduce friction in distribution and automate workflows, we believe our current level is a floor and not a ceiling. Turning to the quarter, Q1 2026 was a record first quarter for Neptune and reflected continued strength across the business. Highlights from Q1 include revenue of $37.8 million, a 29% increase year-over-year, net income of $7.3 million with adjusted net income of $13.4 million. Adjusted EBITDA was $21.6 million. That's growth of 26%.

Speaker #3: We believe that data advantage will continue to compound over time, and create a structural barrier to entry in an AI-driven market. From a financial perspective, the implications are equally important.

Speaker #3: In 2025, we operated at a 60% adjusted EBITDA margin. As AI continues to reduce friction in distribution and automate workflows, we believe our current level is a floor, not a ceiling.

Speaker #3: Turning to the quarter, the first quarter of 2026 was a record first quarter for Neptune, and reflected continued strength across the business. Highlights from Q1 include revenue of $37.8 million, a 29% increase year over year; net income of $7.3 million, with adjusted net income of $13.4 million; adjusted EBITDA was $21.6 million—that's growth of 26%; written premium was $86.7 million, driving 32% year-over-year premium-in-force growth.

Trevor Burgess: Written premium was $86.7 million, driving 32% year-over-year premium in force growth. We had record Q1 new business sales. As a reminder, Q1 is typically our lowest margin quarter due to seasonality. This year that effect is more pronounced as public company audit and compliance costs are front-end loaded in Q1. As a result, adjusted EBITDA margin in the quarter was approximately 57.1%. Importantly, this is a timing dynamic, not a structural change in the business, and we continue to expect full year margins in the 60% to 61% range. Premium in force reached approximately $389 million at quarter end, and we look forward to celebrating our $400 million threshold shortly. As a reminder, Neptune operates as an asset-light MGA and takes no balance sheet risk. This allows us to scale efficiently while maintaining strong profitability.

Speaker #3: And we had record first quarter new business sales. As a reminder, the first quarter is typically our lowest margin quarter due to seasonality. And this year, that effect is more pronounced as public company audit and compliance costs are front-end loaded in Q1.

Speaker #3: As a result, adjusted EBITDA margin in the quarter was approximately 57.1%. Importantly, this is a timing dynamic, not a structural change in the business.

Speaker #3: And we continue to expect full-year margins in the 60 to 61% range. Premium enforce, reached approximately $389 million at quarter-end, and we look forward to celebrating our $400 million threshold shortly.

Speaker #3: As a reminder, Neptune operates as an asset-light MGA and takes no balance sheet risk. This allows us to scale efficiently while maintaining strong profitability.

Speaker #3: On a trailing 12-month basis, revenue per employee reached $2.8 million, and adjusted EBITDA per employee reached $1.7 million—both record levels. To put our revenue per employee in context, let's do this calculation for other companies.

Trevor Burgess: On a trailing 12-month basis, revenue per employee reached $2.8 million, and adjusted EBITDA per employee reached $1.7 million, both record levels. To put our revenue per employee in context, do this calculation for other companies. This is how you can tell if a company is really AI native. In addition to our earnings results, today we announced that our board has approved a $100 million stock repurchase program. We expect to fund this program through free cash flow over the next two years. This is incremental to our previously announced plan to retire shares associated with RSU tax settlements. We view share repurchases as a high return use of capital given the strength of our cash generation and the scalability of our model.

Speaker #3: This is how you can tell if a company is really AI-native. In addition to our earnings results, today we announced that our board has approved a $100 million stock repurchase program.

Speaker #3: We expect to fund this program through free cash flow over the next two years. This is incremental to our previously announced plan to retire shares associated with RSU tax settlements.

Speaker #3: We view share repurchases as a high-return use of capital given the strength of our cash generation, and the scalability of our model. Stepping back, we believe our competitive position is defined by three core advantages.

Trevor Burgess: Stepping back, we believe our competitive position is defined by three core advantages, proprietary data and AI-driven underwriting, deep and expanding capacity relationships, and flexible technology-enabled distribution. Together, these create a durable and widening moat. I'll now turn things over to Matt to walk through the business in more detail.

Speaker #3: Proprietary data and AI-driven underwriting, deep and expanding capacity relationships, and flexible technology-enabled distribution. Together, these create a durable and widening moat. I'll now turn things over to Matt to walk through the business in more detail.

Speaker #4: Thank you, Trevor. Q1 was a very strong quarter for our system and our team of 62 exceptional employees. Across our three core pillars, we continued to adapt, innovate, and perform.

Matt Duffy: Thank you, Trevor. Q1 was a very strong quarter for our system and our team of 62 exceptional employees. Across our three core pillars, we continue to adapt, innovate, and perform, with the results able to speak for themselves. Starting with technology. Trevor touched on the pace of change we're seeing in technology. Inside Neptune, that's showing up in a very tangible way. I'll be honest, it's hard to capture in an earnings call just how fast things are moving internally. Our team is building with tools that didn't exist a matter of months ago, and they're using them to rethink how we build, how we operate, and how we serve our agents and customers. You can see that directly in the pace of product development coming out of the company.

Speaker #4: With the results able to speak for themselves. Starting with technology. Trevor touched on the pace of change we're seeing in technology. Inside Neptune, that's showing up in a very tangible way.

Speaker #4: And I'll be honest, it's hard to capture in an earnings call just how fast things are moving internally. Our team is building with tools that didn't exist a matter of months ago.

Speaker #4: And they're using them to rethink how we build, how we operate, and how we serve our agents and customers. You can see that directly in the pace of product development coming out of the immediately following the first quarter. We rolled out three major technology advancements, all of which lay the groundwork for a continued redefinition of how our system is utilized, accessed, and built.

Matt Duffy: During and immediately following Q1, we rolled out three major technology advancements, all of which lay the groundwork for a continued redefinition of how our system is utilized, accessed, and built. The first is Atlas Plus, which is the AI layer we're building across the Neptune platform, and which we introduced in April through an initial beta experience for a small group of agents. This beta is a conversational interface embedded directly into the quoting workflow. Agents can ask questions, adjust coverage, and move through the quote-to-bind process using natural language. In the first couple of weeks, we've seen thousands of agent interactions, which tells us this fits naturally into how agents already work. This is just the starting point.

Speaker #4: The first is Atlas Plus, which is the AI layer we're building across the Neptune platform, and which we introduced in April through an initial beta experience for a small group of agents.

Speaker #4: This beta is a conversational interface embedded directly into the quoting workflow. Agents can ask questions, adjust coverage, and move through the quote-to-bind process using natural language.

Speaker #4: In the first couple of weeks, we've seen thousands of agent interactions, which tells us this fits naturally into how agents already work. And this is just the starting point.

Speaker #4: Over the coming quarters, we expect Atlas Plus to expand beyond this initial interface and become a core part of how users interact with Neptune across our platform.

Matt Duffy: Over the coming quarters, we expect Atlas Plus to expand beyond this initial interface and become a core part of how users interact with Neptune across our platform. The second is our Neptune application inside ChatGPT, which gives property owners a new way to interact with our platform. Instead of navigating a traditional quoting flow, users can ask questions about flood risk in plain language and receive a real-time Neptune quote directly within the interface. What's important here is less the interface itself and more what it represents. As conversational AI continues to evolve, we expect experiences like this to play an increasing role in how people access information and make decisions. The third is Proteus, an internally developed AI software developer. The way we think about this is pretty simple. Our engineers are exceptionally talented, and their highest value comes from problem-solving, system design, and building new capabilities.

Speaker #4: The second is our Neptune application inside ChatGPT. Which gives property owners a new way to interact with our platform. Instead of navigating a traditional quoting flow, users can ask questions about flood risk in plain language.

Speaker #4: And receive a real-time Neptune quote directly within the interface. What's important here is less the interface itself, and more what it represents. As conversational AI continues to evolve, we expect experiences like this to play an increasing role in how people access information and make decisions.

Speaker #4: And the third is Proteus, an internally developed AI software developer. The way we think about this is pretty simple: our engineers are exceptionally talented.

Speaker #4: And their highest value comes from problem-solving, system design, and building new capabilities—not from spending time on execution that can be automated. So, we've built Proteus as a set of agentic tools and skills that can take on that execution work.

Matt Duffy: Not from spending time on execution that can be automated. We've built Proteus as a set of agentic tools and skills that can take on that execution work. Proteus writes code, reviews it, completes development tasks, and monitors the system in real time. It allows our engineers to stay focused on the critical thinking and design work that actually moves the platform forwards. In March alone, Proteus was responsible for over 30% of the engineering tickets completed. Put differently, that's nearly a 50% increase in the amount of work the team is shipping, and you can feel that inside the company. Things that used to take weeks are getting done in hours, and ideas we've had for years are now becoming feasible projects. Each of these changes I've discussed is powered by the data running through our system.

Speaker #4: Proteus writes code, reviews it, completes development tasks, and monitors the system in real time. It allows our engineers to stay focused on the critical thinking and design work that actually moves the platform forwards.

Speaker #4: In March alone, Proteus was responsible for over 30% of the engineering tickets completed. Put differently, that's nearly a 50% increase in the amount of work the team is shipping.

Speaker #4: And you can feel that inside the company. Things that used to take weeks are getting done in hours. And ideas we've had for years are now becoming feasible projects.

Speaker #4: Each of these changes I've discussed is powered by the data running through our system. Tens of millions of quotes, over a million-bound policies, and constant interaction from tens of thousands of agents.

Matt Duffy: Tens of millions of quotes, over 1 million bound policies, and constant interaction from tens of thousands of agents. As they evolve, these changes will continue to represent a fundamental shift in how Neptune's platform is accessed, how it's used, and how it's built. Turning to capacity. During the quarter, we renewed one of our 8 programs, increasing the size of that program for the 2026, 2027 treaty period and adding 2 new reinsurers, bringing our total panel to 42 capacity providers. Program renewals are important milestones for the business. They reflect long-term relationships and a track record of consistent underwriting performance. In this case, we saw the program grow and terms update in a way that reflect the results we've delivered. That's been a consistent pattern for us. As the platform scales and the data continues to improve, our capacity partners are growing alongside us. Finally, distribution.

Speaker #4: And as they evolve, these changes will continue to represent a fundamental shift in how Neptune's platform is accessed, how it's used, and how it's built.

Speaker #4: Turning to capacity. During the quarter, we renewed one of our eight programs, increasing the size of that program for the 2026–2027 treaty period, and adding two new reinsurers.

Speaker #4: Bringing our total panel to 42 capacity providers. Program renewals are important milestones for the business. They reflect long-term relationships and a track record of consistent underwriting performance.

Speaker #4: In this case, we saw the program grow, and terms update in a way that reflects the results we've delivered. That's been a consistent pattern for us. As the platform scales and the data continues to improve, our capacity partners are growing alongside us.

Speaker #4: And finally, distribution. Our growth continues to be supported by the strength of our agent network, which remains an important part of how we reach and serve property owners across the country.

Matt Duffy: Our growth continues to be supported by the strength of our agent network, which remains an important part of how we reach and serve property owners across the country. During Q1, we delivered record Q1 new business production, driven by strong agent engagement and continued deepening of distribution relationships. One of the clearest indicators of that momentum is user-based activity. Since launching our new user-based login system in December, more than 45,000 individual agents have signed up for direct access to Neptune, and that number continues to grow daily. To be clear, this is not the total number of agents we work with, but rather the number of individual users who created direct accounts using their email and phone number and verified that access via multi-factor authentication on the platform between December and March.

Speaker #4: During the first quarter, we delivered record first-quarter new business production, driven by strong agent engagement and continued deepening of distribution relationships. One of the clearest indicators of that momentum is user-based activity.

Speaker #4: Since launching our new user-based login system in December, more than 45,000 individual agents have signed up for direct access to Neptune and that number continues to grow daily.

Speaker #4: To be clear, this is not the total number of agents we work with, but rather the number of individual users who create a direct account using their email and phone number, and verify that access via multi-factor authentication on the platform between December and March.

Speaker #4: And nearly 11,000 of those users have already bound new business policies in that same timeframe. Those stats show the real scale of how the platform is being used, and the associated data allows us to build better tools and experiences around how agents actually work.

Matt Duffy: Nearly 11,000 of those users have already bound new business policies in that same timeframe. Those stats show the real scale of how the platform is being used, and the associated data allows us to build better tools and experiences around how agents actually work. We continue to invest heavily in our agents through building tools and products that are driving adoption and helping us to help insurance agents become increasingly effective. I'll summarize with this. What you're seeing here is a system, an ecosystem, that gets better in real time, faster to build, easier to use, and more valuable to the agents, customers, and capacity providers that are a part of it. That's really how this business can continue to compound over time. As we head into hurricane season, which is typically our busiest period, that level of performance really matters.

Speaker #4: We continue to invest heavily in our agents through building tools and products that are driving adoption and helping us to help insurance effective. I'll summarize with this.

Speaker #4: What you're seeing here is a system and ecosystem that gets better in real time—faster to build, easier to use, and more valuable to the agents, customers, and capacity providers that are a part of it.

Speaker #4: And that's really how this business can continue to compound over time. As we head into Hurricane season, which is typically our busiest period, that level of performance really Jim.

Matt Duffy: With that, I'll turn it over to Jim.

Speaker #5: Thanks, Matt. The first quarter reflects another strong period of execution. The continued growth in revenue, strong retention across the portfolio, and sustained profitability. Revenue for the quarter increased 28.8% year over year to $37.8 million, driven by record first-quarter new business production and the continued expansion of our premium in-force.

Jim Steiner: Thanks, Matt. The first quarter reflects another strong period of execution with a continued growth in revenue, strong retention across the portfolio, and sustained profitability. Revenue for the quarter increased 28.8% year over year to $37.8 million, driven by record first quarter new business production and the continued expansion of our premium in force. Adjusted EBITDA increased 26% to $21.6 million, which demonstrates that revenue growth didn't come at the expense of operating discipline. We continue to see strong performance on renewals. Premium retention remains high, reflecting both the value of our product and the consistency of our pricing approach. The Q1 adjusted EBITDA margin was 57.1%, even though substantially all of our public company accounting costs hit the P&L during the first quarter.

Speaker #5: Adjusted EBITDA increased 26% to $21.6 million, which demonstrates that revenue growth didn't come at the expense of operating discipline. We continue to see strong performance on renewals.

Speaker #5: Premium retention remains high, reflecting both the value of our product and the consistency of our pricing approach. The Q1 adjusted EBITDA margin was 57.1%, even though substantially all of our public company accounting costs hit the P&L during the first quarter.

Speaker #5: Again, this is a timing dynamic. Not a structural change in the business, and we continue to expect full-year adjusted EBITDA margins in the 60 to 61% range.

Jim Steiner: Again, this is a timing dynamic, not a structural change in the business, and we continue to expect full year adjusted EBITDA margins in the 60% to 61% range. Stepping back, the underlying economics of the model remain very strong. A reminder on the model, we don't carry any of the underwriting risk, the carriers do. What we carry is the technology that decides which risk to bind, who to bind them with, and at what price. That means we grow by adding policies, not by adding capital. We scale by writing more code, not by hiring underwriters. We track our employee metrics as key indicators of our performance. Revenue per employee was $2.8 million on a trailing 12-month basis. Adjusted EBITDA per employee was $1.7 million. Both metrics are up double digits year over year.

Speaker #5: Stepping back, the underlying economics of the model remain very strong. A reminder on the model: we don't carry any of the underwriting risk. The carriers do.

Speaker #5: What we carry is the technology that decides which risk to bind, who to bind them with, and at what price. That means we grow by adding policies, not by adding capital.

Speaker #5: And we scale by writing more code, not by hiring underwriters. We track our employee metrics as key indicators of our performance. Revenue per employee was 2.8 million on a trailing 12-month basis.

Speaker #5: Adjusted EBITDA per employee was $1.7 million. Both metrics are up double digits year over year. These headcount ratios hold the roof up on the whole margin story.

Jim Steiner: These headcount ratios hold the roof up on the whole margin story. If we had to add one employee for every few hundred thousand of revenue, we'd look like every other insurance company. These metrics highlight the efficiency and scalability of the platform as we grow. Turning to the balance sheet. During the quarter, we continued to strengthen our capital structure. Last year, we refinanced our existing term debt into a $260 million revolving credit facility, which lowered our cost of capital, removed required amortization, and has provided greater flexibility as we manage the business. We ended the quarter at $227 million of total debt outstanding on the revolver, which is 2.2x trailing adjusted EBITDA. Yesterday, we paid another $5 million down, bringing our current balance to $222 million.

Speaker #5: If we had to add one employee for every few hundred thousand of revenue, we'd look like every other insurance company. These metrics highlight the efficiency and scalability of the platform as we grow.

Speaker #5: Turning to the balance sheet, during the quarter we continued to strengthen our capital structure. Last year, we refinanced our existing term debt into a $260 million revolving credit facility, which lowered our cost of capital, removed required amortization, and has provided greater flexibility as we manage the business.

Speaker #5: We ended the quarter at $227 million of total debt outstanding on the revolver, which is 2.2 times trailing adjusted EBITDA. Yesterday, we paid another $5 million down, bringing our current balance to $222 million.

Speaker #5: Neptune's earnings mean that leverage comes down on its own, and to date, we've repaid debt with excess cash. From a capital allocation perspective, our framework is pretty simple going forward.

Jim Steiner: Neptune's earnings mean that leverage comes down on its own, and to date, we've repaid debt with excess cash. From a capital allocation perspective, our framework is pretty simple going forward. The first dollar goes into the platform because that's where the compounding happens. The second dollar shows up in the share buyback program Trevor just announced and the RSU net settlement program we announced last year. Both of these tools return capital to shareholders. Overall, the financial results of the quarter reinforce the strength of the model. We continue to deliver strong growth, high margins, and increasing operating efficiency while maintaining a disciplined approach to capital management. With that, I'll turn it back to Trevor.

Speaker #5: The first dollar goes into the platform because that's where the compounding happens. The second dollar shows up in the share buyback program Trevor just announced, and the RSU net settlement program we announced last year.

Speaker #5: Both of these tools return capital to shareholders. Overall, the financial results of the quarter reinforce the strength of the model. We continue to deliver strong growth, high margins, and increasing operating efficiency, while maintaining a disciplined approach to capital management.

Speaker #5: With that, I'll turn it back to Trevor.

Speaker #1: Neptune remains focused on long-term shareholder value creation. Despite the inherent variability of government policy and weather-related activity, the strength of our performance in the first quarter has increased our confidence in the outlook for 2026.

Trevor Burgess: Neptune remains focused on long-term shareholder value creation. Despite the inherent variability of government policy and weather-related activity, the strength of our performance in Q1 has increased our confidence in the outlook for 2026. Based on that performance, we are increasing our full year expectations. For the full year 2026, we now expect revenue of $195 million and an adjusted EBITDA margin between 60% and 61%. These targets reflect our continued commitment to profitable growth, operational efficiency, and disciplined capital allocation. Where appropriate, we intend to deploy capital to grow the business while returning excess capital to shareholders. To date, that has included a strong emphasis on debt reduction as a straightforward and efficient way to enhance equity value.

Speaker #1: Based on that performance, we are increasing our full-year expectations. For the full year 2026, we now expect revenue of $195 million and an adjusted EBITDA margin between 60% and 61%.

Speaker #1: These targets reflect our continued commitment to profitable growth, operational efficiency, and disciplined capital allocation. Where appropriate, we intend to deploy capital to grow the business while returning excess capital to shareholders.

Speaker #1: To date, that has included a strong emphasis on debt reduction as a straightforward and efficient way to enhance equity value. As part of this approach, our newly authorized stock repurchase program, together with our ongoing RSU-related stock retirement, gives us multiple levers to return capital in a disciplined and opportunistic way.

Trevor Burgess: As part of this approach, our newly authorized stock repurchase program, together with our ongoing RSU-related stock retirement, gives us multiple levers to return capital in a disciplined and opportunistic way. We view these actions as a natural extension of the strong cash generation and high margin profile of this business. As we move towards the 2026 hurricane season, there are always unknowns around storm activity and weather patterns. What our customers and agents can count on is that our team shows up when it matters most. We are constantly improving the systems that help people protect their homes and businesses, and we take that responsibility seriously. For our investors, our focus remains the same. We'll continue to push the boundaries of what an AI-native insurance platform can do. Every quarter, we are doubling down on our technological lead, strengthening our distribution network, and deepening our capacity relationships.

Speaker #1: We view these actions as a natural extension of the strong cash generation and high-margin profile of this business. As we move towards the 2026 hurricane season, there are always unknowns around storm activity and weather patterns.

Speaker #1: What our customers and agents can count on is that our team shows up when it matters most. We are constantly improving the systems that help people protect their homes and businesses, and we take that responsibility seriously.

Speaker #1: And for our investors, our focus remains the same. We'll continue to push the boundaries of what an AI-native insurance platform can do. Every quarter, we are doubling down on our technological lead, strengthening our distribution network, and deepening our capacity relationships.

Speaker #1: We believe the combination of those three things will continue to have a power law effect around this business. I'll now turn things over for questions.

Trevor Burgess: We believe the combination of those three things will continue to have a power law effect around this business. We'll now turn things over for questions.

Operator 1: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. Thank you. Your first question comes from the line of Robert Cox with Goldman Sachs. Your line is now open.

Operator: Thank you. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. Thank you. Your first question comes from the line of Robert Cox with Goldman Sachs. Your line is now open.

Speaker #2: Thank you, we will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star one and your telephone keypad to raise your hand and join the queue.

Speaker #2: If you would like to withdraw your question, simply press star one again. Thank you. And your first question comes from the line of Rob Cox with Goldman Sachs.

Speaker #2: Your line is now open.

Speaker #3: Hey, thanks. Good evening. Yeah, just—the Atlas sounds very interesting. I was just hoping you could give us some more color around what exactly Atlas is doing, how near-term impactful this is of the three items you mentioned where you've been leveraging AI.

Rob Cox: Hey, thanks. Good evening. Yeah, just the Atlas sounds very interesting. I was just hoping you could give us some more color around what exactly Atlas is doing, how near-term impactful this is of the three items you mentioned where you've been leveraging AI. Do you expect to see this today and in 2026, or how near-term is this?

Speaker #3: Do you expect to see this today? And in 2026, or how near-term is this?

Speaker #4: Yeah, thanks, Rob. We are very excited about Atlas+. The original Atlas was launched about a year and a half ago as we looked for ways to use AI available at that time to help educate our independent insurance agents about things like incoming storm activity, or how many claims there have been in a particular neighborhood, to give them facts and figures to help them become better at selling flood insurance.

Trevor Burgess: Yeah. Thanks, Rob. We are very excited about Atlas Plus. The original Atlas was launched about a year and a half ago as we looked for ways to use AI available at that time to help educate our independent insurance agents about things like incoming storm activity or how many claims have there been in a particular neighborhood to give them facts and figures to help them become better at selling flood insurance. What agentic AI has allowed us to do now is to turn every agent into a super agent, and that's what we've really been focused on building with Atlas Plus.

Speaker #4: What agentic AI has allowed us to do now is to turn every agent into a super agent, and that's what we've really been focused on building with Atlas+.

Speaker #4: What's currently available is a chat interface that allows an agent to ask things such as generate an email script for me that I can send out to a consumer.

Trevor Burgess: What's currently available is a chat interface that allows an agent to ask things such as, "Generate an email script for me that I can send out to a consumer," or, "Help me explain why temporary living expense cover is a really important add-on," or, "Tell me the three main reasons why this customer should buy flood insurance," or, "Go ahead and show me the price at all the different deductibles that are available." Atlas Plus can interact with the quote. We really view this as the very beginning of a long line of upgrades that we will make to the agent experience. We've mentioned for the past eight or nine years as we've built this business, that our biggest barrier to growth is how do we change agents' behavior?

Speaker #4: Or help me explain why temporary living expense cover is a really important add-on. Or tell me the three main reasons why this customer should buy flood insurance.

Speaker #4: Or go ahead and show me the price at all the different deductibles that are available. And Atlas+ can interact with the quote. We really view this as the very beginning of a long line of upgrades that we will make to the agent experience with mention for the past eight or nine years as we've built this business that our biggest barrier to growth is how do we change agents' behavior?

Speaker #4: How do we get agents to offer flood insurance every time they're selling a home or a business owner's policy? How do we get them educated to be amazingly knowledgeable about flood insurance, its risks, and why people need to be protected?

Trevor Burgess: How do we get agents to offer flood insurance every time they're selling a home or a business owner's policy? How do we get them educated to be amazingly knowledgeable about flood insurance, its risks, and why people need to be protected? Agentic AI is allowing us to do that, and we're excited to roll this out. We are already seeing the impact of what is live today, and we're very excited by the things that we'll be shipping in the coming months. I would've said a year or two ago that everything that we're trying to build would take us years to build, but it's now down to weeks or months.

Speaker #4: Agentic AI is allowing us to do that, and we're excited to roll this out. We are already seeing the impact of what is live today, and we're very excited by the things that we'll be shipping in the coming months.

Speaker #4: I would have said a year or two ago that everything that we're trying to build would take us years to build, but it's now down to weeks or months.

Speaker #4: And so, the other things—the other uses of AI—creating this prodigious system that allows our internal software developers, engineers, and data scientists to move at least twice as fast, if not three times as fast—really means that Atlas+ can be, we're trying to follow in Anthropic's footprints of constantly putting out amazing new functionality and product very, very quickly.

Trevor Burgess: The other things, the other uses of AI, creating this Proteus system that allows our internal software developers, engineers, and data scientists to move at least twice as fast, if not three times as fast, really means that Atlas Plus can be. We're trying to follow in Anthropic's footprints of constantly putting out amazing new functionality and product very quickly.

Speaker #3: Thanks for that answer. That's very helpful and exciting. Yeah, if I could just follow up on the guidance—so, revenue guidance is increasing. Just curious if that was due to this quarter, or if you're feeling better about later on in the year.

Rob Cox: Thanks for that answer. That's very helpful and exciting. If I could just follow up on the guidance. Revenue guidance is increasing. Just curious if that was due to this quarter or if you're feeling better about later on in the year. On the margin guidance maintained, I realize Q1 here we have some timing related items, but should we be thinking about this as Neptune is trending towards the lower end of the margin range for the year or is that premature?

Speaker #3: And on the margin guidance, you maintained—I realize in the first quarter here we have some timing-related items—but should we be thinking about this as Neptune is trending toward the lower end of the margin range for the year, or is that premature?

Speaker #4: Well, first, let's talk about the revenue side. What we saw in the first quarter was just continued really good trends. We obviously had great revenue in the first quarter, record sales in the first quarter.

Trevor Burgess: Well, first let's talk about the revenue side. What we saw in Q1 was just continued really good trends. We obviously had great revenue in Q1, record sales in Q1. We get a really good sense because remember our policies go into effect 10 days, there's a 10-day waiting period. By the 22nd of the month like we are today, we've got a really good sense of what April looks like and the general momentum that we have so far this year. We're quite bullish on the top line revenue trends, which is why we increased the guidance. This is not some hope and prayer that things get better later on. This is looking at the trajectory that's here and now. On the margin side, we certainly hope to do as well as possible on the margin for the full year.

Speaker #4: And we get a really good sense, because remember our policy is going to affect 10 days—it was a 10-day waiting period. So, by the 22nd of the month, like we are today, we've got a really good sense of what April looks like, and the general momentum that we have so far this year.

Speaker #4: So we're quite bullish on the top-line revenue trends, which is why we increased the guidance. This is not some hope and prayer that things get better later on.

Speaker #4: This is looking at the trajectory that's here and now. On the margin side, no, we certainly hope to do as well as possible on the margin for the full year.

Speaker #4: You can look at our first quarter margin. Every single year, it's the lowest, and that's because we have all 62 employees the whole year long, but it only makes up about 18% of our revenue, right?

Trevor Burgess: You can look at our Q1 margin. Every single year it's the lowest, and that's because we have all 62 employees the whole year long but it only makes up about 18% of our revenue because of the seasonality in the business. It's just inherently a lower margin quarter and then you build in 100% of the 2025 audit expense with PwC in Q1. Well, that's going to impact that. No, we're feeling quite good about the margin profile of the business and are excited about really 60% being a floor rather than a ceiling to what this business can become.

Speaker #4: Because of the seasonality in the business. So it's just inherently a lower margin quarter, and then you build in 100% of the 2025 audit expense with PwC in the first quarter.

Speaker #4: Well, that's going to impact that, but no, we're feeling quite good about the margin profile of the business and are excited about really 60% being a floor rather than a ceiling to what this business can become.

Speaker #5: Your next question comes from the line of Josh Shanker with Bank of America. Your line is now open.

Operator 2: Your next question comes from the line of Joshua Shanker with Bank of America. Your line is now open.

Operator: Your next question comes from the line of Joshua Shanker with Bank of America. Your line is now open.

Speaker #6: Yeah, thank you, everyone. Great quarter. We talked about fourth quarter. I'm into first quarter, about the Milton-Helene opportunity back over a year ago, and why.

Joshua Shanker: Yeah. Thank you, everyone. Great quarter. We talked about Q4 into Q1 about the Milton/Helene opportunity back over a year ago, and why that was a headwind on comparisons this year. As we enter Q2, is that done, or are there people who, six months after Milton and Helene, were still nervous and bought into Q2 2025? Or are the comparisons there not in the numbers going forward?

Josh Shanker: Yeah. Thank you, everyone. Great quarter. We talked about Q4 into Q1 about the Milton/Helene opportunity back over a year ago, and why that was a headwind on comparisons this year. As we enter Q2, is that done, or are there people who, six months after Milton and Helene, were still nervous and bought into Q2 2025? Or are the comparisons there not in the numbers going forward?

Speaker #6: That was a headwind on comparison this year. As we enter Q2, is that done or are there people who six months after Milton and Helene we're still nervous and bought into Q25 or the comparisons there not in the numbers going forward?

Speaker #7: Yeah, Josh, I don't think that's an impact going forward. That's really a 'do people renew the next year?' And the most extreme example of that is Utah had this amazing snow season a couple of years ago, and the next year it didn't snow, and so people didn't renew their policies.

Trevor Burgess: Yeah, Josh, I don't think that's an impact going forward. That's really, do people renew the next year? Most extreme example of that is, Utah had this amazing snow season a couple of years ago, and the next year it didn't snow, and so people didn't renew their policies. That's the really extreme side of it. In hurricane-prone zones such as Florida, we will see a little bit of lower renewal when people are buying after a really scary storm. That's now past us, and that wouldn't impact Q1 or Q2.

Speaker #7: That's a really extreme side of it. But in hurricane-prone zones such as Florida, we will see a little bit of lower renewal when people are buying after a really scary storm, but that's now past us.

Speaker #7: That wouldn't impact the first or second quarter.

Speaker #6: And then, switching gears to opportunity—obviously, your data flow continues to increase and get smarter. I don’t know if you’re any smarter about earthquakes, though.

Joshua Shanker: Switching gears to opportunity, obviously, your data flow continues to increase and get smarter. I don't know if you're any smarter about earthquakes, though, or other events happening in California, per se. What is your data learning right now about how Neptune can possibly be a meaningful player in a market other than flood?

Josh Shanker: Switching gears to opportunity, obviously, your data flow continues to increase and get smarter. I don't know if you're any smarter about earthquakes, though, or other events happening in California, per se. What is your data learning right now about how Neptune can possibly be a meaningful player in a market other than flood?

Speaker #6: More other events happening in California per se. What is your data learning right now about how Neptune can possibly be a meaningful player in markets other than flood?

Speaker #7: Well, certainly, I will tell you that flood remains our core focus. It is an amazing business with a tremendous opportunity—20 million buildings in America that need flood insurance that don't have it today.

Trevor Burgess: Well, it's certainly, I will tell you that flood remains our core focus. It is an amazing business with a tremendous opportunity. We have 20 million buildings in America that need flood insurance that don't have it today. We have the NFIP shrinking, and 60% of the people within the NFIP who could save money by switching to Neptune. That's about 1.7 million policies, so give us a good housing market and let's churn those into Neptune policyholders. At the same time, as we announced last quarter, we are running a beta test of earthquake. Earthquake data doesn't come because we haven't had a major earthquake in decades, and so we're obviously not gathering an earthquake experience data at this time.

Speaker #7: We have the NFIP shrinking, and 60% of the people within the NFIP could save money by switching to Neptune. That's about 1.7 million policies.

Speaker #7: So give us a good housing market, and let's churn those into Neptune policyholders. But at the same time, as we announced last quarter, we are running a beta test of earthquake.

Speaker #7: Earthquake data doesn't come because we haven't had a major earthquake in decades. And so you're obviously not gathering earthquake experience data at this time. What we're doing with earthquake is working with our agents and making sure that we have good product-market fit before we actually launch a product into the marketplace.

Trevor Burgess: What we're doing with earthquake is working with our agents and making sure that we have good product market fit before we actually launch a product into the marketplace. I would expect that beta test would continue for the next 3 or 4 months, and we would then make a decision around what we're going to launch in California.

Speaker #7: I

Speaker #1: I would expect that that beta test would continue for the next, you know, three or four months. And we would then make a decision around what we're going to launch in California.

Joshua Shanker: Thank you for all the answers. Appreciate it.

Josh Shanker: Thank you for all the answers. Appreciate it.

Speaker #2: Thank you for all the answers. Appreciate it.

Speaker #3: Your next question comes from the line of Gregory Peters with Raymond James. Your line is now open.

Operator 2: Your next question comes from the line of C. Gregory Peters with Raymond James. Your line is now open.

Operator: Your next question comes from the line of C. Gregory Peters with Raymond James. Your line is now open.

Speaker #4: Hey , good afternoon . Everyone . So one of the things that we've been watching is that we've noticed that other companies have announced flood startup initiatives or expanded their existing flood capabilities .

C. Gregory Peters: Hey, good afternoon, everyone. One of the things that we've been watching is that we've noticed that other companies have announced flood startup initiatives or expanded their existing flood capabilities. I'm thinking about another local company, SageSure. I'm thinking about Nationwide. I think they announced something called Titan Flood. Maybe you could just for a moment, talk about how resilient your competitive position is and talk about what you're seeing from other flood insurance alternatives that is in the marketplace, and if you're seeing anything that's of a concern.

Gregory Peters: Hey, good afternoon, everyone. One of the things that we've been watching is that we've noticed that other companies have announced flood startup initiatives or expanded their existing flood capabilities. I'm thinking about another local company, SageSure. I'm thinking about Nationwide. I think they announced something called Titan Flood. Maybe you could just for a moment, talk about how resilient your competitive position is and talk about what you're seeing from other flood insurance alternatives that is in the marketplace, and if you're seeing anything that's of a concern.

Speaker #4: I'm thinking about like another local company , Zco . I'm thinking about like nationwide . They I think they announced something called Titan Flood So maybe you could just for a moment talk about how resilient your competitive position is and talk about what you're seeing from other blood alternatives .

Speaker #4: Flood insurance alternatives that are in the marketplace, and if you're seeing anything that's of concern.

Speaker #1: Yeah . Thank you . I , I really think that this is a power law business where the more data and the more size you have , the better that that business is going to do .

Trevor Burgess: Yeah. Thank you. I really think that this is a power law business, where the more data and the more size you have, the better that that business is going to do. If you think about investing in social media companies, there were lots of competitors to Facebook, but if you didn't invest in Facebook, you didn't make any money. To get very specific about flood insurance competitors, we had a record Q1 sales. That was the best Q1 sales we've ever had. We are not seeing any meaningful impact from any competitor except for the NFIP, who remains the dominant force in flood insurance with approximately 85% of the business that's out there. We, of course, pay attention to all potential competitors, and we have seen many competitors come and go over the years. It is a very difficult peril to underwrite.

Speaker #1: You know , I think about if you think about , you know , investing in Very specific about flood insurance competitors . We had a record first quarter sales .

Speaker #1: It was the best first quarter sales we've ever had . We are not seeing any meaningful impact from any competitor except for the Nfip , who remains the dominant force in flood insurance with approximately 85% of the business that's out there We , of course , pay attention to all potential competitors , and we have seen many , many competitors come and go over the years It is a very difficult peril to underwrite .

Speaker #1: We had no landfall hurricanes last year . That has given people a lot of confidence that they can successfully underwrite flood insurance Neptune , you'll remember , has been through 21 landfall , hurricanes Some of these new startups , when faced with a meaningful hurricane in a major metropolitan area where they've sold a lot of policies , at least historically , have not fared very well .

Trevor Burgess: We had no landfall hurricanes last year. That has given people a lot of confidence that they can successfully underwrite flood insurance. Neptune, you'll remember, has been through 21 landfall hurricanes. Some of these new startups, when faced with a meaningful hurricane in a major metropolitan area where they've sold a lot of policies, at least historically, have not fared very well and has led to many of them going out of business as quickly as they've gone into business. It is important for us always to pay attention to potential competitors and to look at the marketplace. If we are Uber, we want to be paying attention to who could potentially be the Lyft.

Speaker #1: And this led to many of them going out of business as quickly as they've gone into business. But it is important for us always to pay attention to potential competitors and to look at the marketplace.

Speaker #1: If we are Uber, we want to be paying attention to who could potentially be the Lyft. I just don't see that yet, but we continue to look very carefully.

Matt Duffy: I just don't see that yet, but we continue to look very carefully. I would say as of today, we don't believe it's impacting our business.

Trevor Burgess: I just don't see that yet, but we continue to look very carefully. I would say as of today, we don't believe it's impacting our business.

Speaker #1: So, I would say, as of today, we don't believe it's impacting our business.

Speaker #4: Fair enough . In your in your investor presentation , when in the revenue section , you highlight a couple of positives . The larger renewal portfolio increased commission , and then in the negatives or the headwinds section , you cited the residual slowdown in sales due to less active storm season , which you just addressed in the previous question .

C. Gregory Peters: Fair enough. In your investor presentation, when in the revenue section, you highlight a couple of positives, the larger renewal portfolio, increased commission. In the negatives or the headwind section, you cited the residual slowdown in sales due to less active storm season, which you just addressed in a previous question. You also talk about the ongoing slow real estate market. I'm just interested in your perspective on how, if there's a change in the real estate market outlook sometime down the road that might become a tailwind, or how do you size up that headwind versus a tailwind?

Gregory Peters: Fair enough. In your investor presentation, when in the revenue section, you highlight a couple of positives, the larger renewal portfolio, increased commission. In the negatives or the headwind section, you cited the residual slowdown in sales due to less active storm season, which you just addressed in a previous question. You also talk about the ongoing slow real estate market. I'm just interested in your perspective on how, if there's a change in the real estate market outlook sometime down the road that might become a tailwind, or how do you size up that headwind versus a tailwind?

Speaker #4: But you also talk about the ongoing slow real estate market . And so I'm just I'm just interested in your perspective on how if there's a change in the real estate market outlook sometime down the road , that that might be become a tailwind , or how do you size up that headwind versus a tailwind

Speaker #5: Hey , Greg . Yeah , thanks for the thanks for the question . You know , we've , we've talked about this for a number of years now while we've been experiencing this slow housing market and the most important number to remember there is the one that Trevor just mentioned , you know , the market has existed today has something like policies .

Matt Duffy: Hey, Greg. Yeah, thanks for the question. We've talked about this for a number of years now, while we've been experiencing this slow housing market. The most important number to remember there is the one that Trevor just mentioned. The market as it exists today has something like 4 million policies, the flood insurance market. About 3.5 million of those exist with the NFIP. Today, about 1.7 or 1.8 million of those policyholders with the NFIP would save money by switching to Neptune. They have not done so because there's been no turnover in the housing market, and so there's not been the ability to shop that policy into the private market to see what that pricing looks like.

Speaker #5: The flood insurance market , and about 3.5 million of those exist with the Nfip today , about 1.7 or 1.8 million of those policyholders would benefit , would save money by switching to Neptune .

Speaker #5: They have not done so because there's been no turnover in the housing market. And so they've not had the ability to shop that policy into the private market and to see what that pricing looks like.

Speaker #5: And so we believe a change in the housing market and , you uptick in sales there , whether it's housing sales or whether it's refinancing activity would be a huge , huge tailwind to the business .

Matt Duffy: We believe a change in the housing market and an uptick in sales there, whether it's housing sales or whether it's refinancing activity, would be a huge, huge tailwind for the business. We saw this a little bit at the start of COVID when the housing market picked up then. While there was a very small incremental impact in midterm cancels on our portfolio, there was a much, much larger impact on new business sales, which far outweighs any cancellations on the portfolio. Give us a better housing market and we're very, very bullish on what that means for sales and for portfolio growth in general.

Speaker #5: We saw this a little bit , you know , at the start of Covid , when the housing market picked up , there and while there was , you know , a very small incremental impact to midterm councils in our portfolio , there was a much , much larger impact on new business sales , which far outweighs , you know , any cancellations on the portfolio .

Speaker #5: So give us a give us a better housing market . And , you know , we're very , very bullish on what that means for sales and for portfolio growth in general

Speaker #4: Thanks. Thanks for the answers.

C. Gregory Peters: Thanks. Thanks for the answers.

Gregory Peters: Thanks. Thanks for the answers.

Speaker #3: Your next question comes from the line of David Motemaden with Evercore ISI. Your line is now open.

Operator 2: Your next question comes from the line of David Motemaden with Evercore ISI. Your line is now open.

Operator: Your next question comes from the line of David Motemaden with Evercore ISI. Your line is now open.

Speaker #6: Hey , thanks . Good evening . I had a question just on just on policy retention , if you could talk a little bit about how that trended in the quarter .

David Motemaden: Hey, thanks. Good evening. I had a question just on policy retention, if you could talk a little bit about how that trended in the quarter. I see on slide nine that revenue retention ticked down a little bit. Still at a strong level, it's at 90% over the last 12 months, but it did tick down from 92% in 2025. Just hoping you can unpack some of the trends there, please.

Speaker #6: I see on slide nine that revenue retention ticked down a little bit. Still had a strong level. It's at 90% over the last 12 months.

Speaker #6: But it did tick down from 92% in 2025. So just hoping you can unpack some of the trends there, please.

Speaker #1: So I think the first thing to mention , then I'll turn it over to Matt for some more details . But the first thing to mention is , you know , we're one of the only companies in the PNC space to still be taking positive rate .

Matt Duffy: I think the first thing to mention, then I'll turn it over to Matt for some more details. First thing to mention is, we're one of the only companies in the P&C space to still be taking positive rates. Last year, our average price increase on renewals was about 13%, and so far this year it is still positive. It just happens to be positive mid to high single digits. That explains most of the difference in the revenue retention, is just the change in the increase of pricing. I'm really happy that we have our business as opposed to ones that are down 30%, right? To still be up 7% is amazing. We're very happy that we've picked the market that we're in.

Trevor Burgess: I think the first thing to mention, then I'll turn it over to Matt for some more details. First thing to mention is, we're one of the only companies in the P&C space to still be taking positive rates. Last year, our average price increase on renewals was about 13%, and so far this year it is still positive. It just happens to be positive mid to high single digits. That explains most of the difference in the revenue retention, is just the change in the increase of pricing. I'm really happy that we have our business as opposed to ones that are down 30%, right? To still be up 7% is amazing. We're very happy that we've picked the market that we're in.

Speaker #1: Last year, our average price increase on renewals was about 13%. And so far this year, it is still positive. It just happens to be positive.

Speaker #1: You know , mid to high single digits . And so that's that explains most of the difference in the revenue retention is just the change in , you know , the increase of pricing .

Speaker #1: I'm really happy that we have our business as opposed to ones that are down 30% , right . And to still be up , you know , seven is amazing .

Speaker #1: So we're very happy that we've, you know, picked the market that we're in and just have to remember that the NFIP prices on a statutory basis, not based upon whether or not it's a hard or soft reinsurance market.

Matt Duffy: Just have to remember that the NFIP prices on a statutory basis, not based upon whether or not it's a hard or soft reinsurance market. Matt, what would you add to that? Yeah, I think that's all right. The only thing I would add is the machine learning models that are operating on the renewal book are optimizing for lifetime value of the customer as opposed to any single year retention rate. The more units that we're able to keep around, the higher the lifetime value of that unit and of the portfolio in general. We're able to take a long-term view because we have a very, very long-term view of this business as owner-operators.

Trevor Burgess: Just have to remember that the NFIP prices on a statutory basis, not based upon whether or not it's a hard or soft reinsurance market. Matt, what would you add to that?

Speaker #1: Matt, what would you add to that?

Speaker #5: Yeah , I think that that's all right . The only thing I would add is the machine learning models that are operating on the renewal book are optimizing for lifetime value of the customer , as opposed to , you know , any single year retention rate .

Matt Duffy: Yeah, I think that's all right. The only thing I would add is the machine learning models that are operating on the renewal book are optimizing for lifetime value of the customer as opposed to any single year retention rate. The more units that we're able to keep around, the higher the lifetime value of that unit and of the portfolio in general. We're able to take a long-term view because we have a very, very long-term view of this business as owner-operators.

Speaker #5: And so, the more units that we're able to keep around, the higher the lifetime value of that unit—and of the portfolio in general.

Speaker #5: And so we're able to take a long term view because we have a very , very long term view of this business as owner operators and we will , you know , always prioritize ensuring that we keep customers around for the long term and that we have a great product and a great pricing strategy that provides value to those customers over the long term as well

Matt Duffy: We will always prioritize ensuring that we keep customers around for the long term and that we have a great product and a great pricing strategy that provides value to those customers over the long term as well.

Speaker #6: Got it . Thanks for that . Sounds like the , the policy retention is , is pretty stable . There . I think it was 86 .

David Motemaden: Got it. Thanks. It sounds like the policy retention is pretty stable there. I think it was 86. That's helpful there. My follow-up is just on how you guys are thinking about the FEMA Advisory Council process, any sort of updates you have, in terms of the possibility of a Citizens-style depopulation and how you guys might react to something like that.

Speaker #6: So that's , that's helpful . There . My follow up is just , just on how you guys are thinking about the FEMA Advisory Council process , any sort of updates you have in terms of , you know , the possibility of a of a citizen style de-population and how you guys might react to something like that

Speaker #1: So the first thing I would say is that we have no added information. We have heard nothing. We've had no communication.

Trevor Burgess: The first thing I would say is that we have no added information. We have heard nothing. We've had no communication. Other than what we've all read in the press about the timeframe being extended, we are not aware of any additional details. What I can tell you, though, is from a capacity standpoint, we have taken very specific actions to make sure that we're ready in case something does happen. We are entirely prepared to flex and bring on as many customers as we need to help make sure that Americans are protected for this peril in case the US government decides to reduce their exposure or get out of the business. Our job, we feel, is to increase the role of private flood insurance and make sure that we're a viable alternative.

Speaker #1: And so other than what we've all read in the press about the time frame being extended , we are not aware of any , you know , additional details What I can tell you , though , is from a capacity standpoint , we have taken very specific actions to make sure that we're ready in case something does happen .

Speaker #1: And so we are entirely prepared to flex and bring on as many customers as we need to, to help make sure that Americans are protected for this peril.

Speaker #1: In case the US government decides to reduce their exposure or get out of the business . Our job , we feel , is to increase the role of private flood insurance and make sure that we're a viable alternative , and we .

Trevor Burgess: We absolutely are prepared to do that and have the capacity backing to do that.

Speaker #1: Absolutely, we are prepared to do that and have the capacity backing to do that.

Speaker #6: Great . Thank you

Matt Duffy: Great. Thank you.

David Motemaden: Great. Thank you.

Speaker #3: Your next question comes from the line of Tommy Mack with KBW. Your line is now open.

Operator 2: Your next question comes from the line of Tommy McJoynt with KBW. Your line is now open.

Operator: Your next question comes from the line of Tommy McJoynt with KBW. Your line is now open.

Speaker #7: Hi . Good evening . I don't think you gave the updated lifetime to date loss ratio for your capacity providers , but I suspect it is in the teens at this point .

Tommy McJoynt: Hi, good evening. I don't think you gave the updated lifetime to date loss ratio for your capacity providers, but I suspect it is in the teens at this point. While some of that may be fortunate weather and some is surely your risk modeling expertise, at some point, does that translate into pressure to actually reduce pricing on an absolute basis?

Speaker #7: While some of that may be fortunate , weather and some is surely your your risk modeling expertise at some point , does that translate into pressure to actually reduce pricing on an absolute basis

Speaker #1: So the first thing is, I will let you know that we plan on announcing that once a year. So we will announce that at the end of the second quarter. The last time we announced that was the end of the second quarter of last year.

Trevor Burgess: The first thing is, I will let you know that we plan on announcing that once a year. We will announce that at the end of Q2. The last time that we announced that was the end of Q2 of last year, and so we will update that annually so that just people have a very clear, non-seasonally adjusted view of that. Expect that at a data point at the end of Q2. The second thing I would say is that it really just creates an opportunity for us, and this is a discussion that we've had with all of our capacity providers. Would they be interested in higher volume in exchange for a slightly higher modeled loss ratio?

Speaker #1: And so we will update that annually so that people have a very clear, you know, non-seasonally affected view of that.

Speaker #1: So, expect that at a data point at the end of the second quarter. The second thing I would say is that it really just creates an opportunity for us.

Speaker #1: And this is a discussion that we've had with all of our capacity providers. Would they be interested in higher volume in exchange for a, you know, slightly higher modeled loss ratio? And given our track record and given the exacting specificity of our underwriting platform, we are able to make changes like that, driven by our data science team.

Trevor Burgess: Given our track record and given the exacting specificity of our underwriting platform, we are able to make changes like that driven by our data science team. We have those models live in the system at this point. We're excited by the revenue growth and the policy growth that we're seeing as a result of those models being deployed. The success creates an opportunity to lower prices and get more people insured, is really the summary. Please know that this is being done with an incredible system led by an incredible team of engineers and data scientists who are focused on just that optimization of this flood insurance conundrum that the United States faces.

Speaker #1: And we have those models live in the system at this point. And we're excited by the revenue growth and the policy growth that we're seeing as a result of those models being deployed.

Speaker #1: So I think it does create a success, creates an opportunity to lower prices, and get more people insured is really the summary.

Speaker #1: But please know that this is being done with an incredible, you know, system led by an incredible team of engineers and data scientists who are focused on just that—optimization of this flood insurance conundrum that the United States faces.

Speaker #7: Thanks for that. And then, switching over to the ChatGPT product that you've rolled out, is there any compensation owed to a counterparty when flood policies of Neptune are placed through that app?

Tommy McJoynt: Thanks for that. Switching over to the ChatGPT product that you've rolled out, is there any compensation owed to a counterparty when flood policies of Neptune are placed through that app? If not, does that just imply the incremental margins on any of those policies are very strong, similar to your direct-to-consumer channel?

Speaker #7: And if not, does that imply the incremental margins on any of those policies are very strong, similar to your direct consumer channel?

Speaker #1: At this point , there are no monies owed to any counterparty . ChatGPT is not charging for that . To be clear , they don't allow binds to take place on their platform .

Trevor Burgess: At this point, there are no monies owed to any counterparty. ChatGPT is not charging for that. To be clear, they don't allow binds to take place on their platform, so it's very similar to the way you think about Google, right? If you Google Neptune, you can find it. Even if we didn't pay for Google Search, right, if we were the top rank, we would show up as we do, and someone could come to us, and we wouldn't owe anybody. Now, we do some Google Ads just to make sure we're always at the top of the paid search also. It's very similar to just a Google search engine at this point. Now, that may change in the future. We're excited to have launched that product because it's a great showcase for the technology prowess that Neptune and its engineers have.

Speaker #1: So it's very similar to the way you think about Google , right ? If you Google Neptune , you can find it and you know , even if we didn't pay for Google search , right ?

Speaker #1: If we were the top ranked, we would show up as we do, and you know, someone could come to us and we wouldn't owe anybody.

Speaker #1: Now, we do do some Google AdWords just to make sure we're always at the top of the paid search, also. But it's very similar to just a Google search engine at this point.

Speaker #1: Now, that may change in the future. We're excited to have launched that product because it's a great showcase for the technology prowess that Neptune and its engineers have.

Speaker #1: But it is it it is something that we think will have limited utility until consumers make the decision that they want to buy , you know , via chatbots , which is not something that has happened yet .

Trevor Burgess: It is something that we think will have limited utility until consumers make the decision that they want to buy via chatbots, which is not something that has happened yet. Consumers really like the advice of their insurance agent in America, and that's why we are really focused on building Atlas+ to help turn our agents into super agents.

Speaker #1: Consumers really like the advice of their insurance agent in America. And that's why we are really focused on building Atlas Plus to help turn our agents into super agents.

Speaker #8: Thank you

Tommy McJoynt: Thank you.

Speaker #3: Your next question comes from the line of Andrew Kligerman with TD Cowen. Your line is now open.

Operator 2: Your next question comes from the line of Andrew Kligerman with TD Cowen. Your line is now open.

Operator: Your next question comes from the line of Andrew Kligerman with TD Cowen. Your line is now open.

Speaker #9: Hey , thank you and good evening . Just just to quickly follow up on the FEMA question , if I understand it right , a congressional vote would come in either September or sooner , but nothing is clear at this stage .

Andrew Kligerman: Hey, thank you and good evening. Just to quickly follow up on the FEMA question. If I understand it right, a congressional vote would come in either September or sooner, but nothing is clear at this stage. Is that the right read?

Speaker #9: Is that the right read

Speaker #1: I'm not sure about that. The leaked FEMA memo that was published by Bloomberg seemed to suggest that the administration was looking at things that they could do without Congress's involvement.

Trevor Burgess: I'm not sure about that. The leaked FEMA memo that was published by Bloomberg seemed to suggest that the administration was looking at things that they could do without Congress's involvement. The Biden administration put forward 14 proposals during their administration, proposals to Congress. Congress did not act on any of those proposals. Those proposals all would've been pro-private flood insurance. This is really a bipartisan issue. How do we get more Americans insured? I have not heard anything about proposed legislation being given to Congress for them to consider in September or October timeframe. There's been a variety of congressional-led proposals, some of which are quite positive. Senator Scott has one to allow people to deduct the costs from their taxes, their flood insurance costs from their taxes.

Speaker #1: They the Biden administration put forward 14 proposals during their administration . Proposals to Congress . Congress did not act on any of those proposals .

Speaker #1: Those proposals all would have been pro private flood insurance . This is really a bipartisan you issue . How do we get more Americans insured ?

Speaker #1: But I have not heard anything about a proposed legislation being given to Congress for them to consider in September or October . Time frame I there has been a variety of congressional led proposals that , you know , some of which are quite positive .

Speaker #1: Senator Scott has one to, you know, allow people to deduct the cost from their taxes, their flood insurance costs from their taxes.

Speaker #1: So, there are a number of very positive, you know, suggestions coming out of Congress. But, but I haven't heard of any specific legislation.

Trevor Burgess: There are a number of very positive suggestions coming out of Congress, but I haven't heard of any specific legislation.

Speaker #9: Got it. That was very helpful. Yesterday we saw the approval grant for a Bulgaria-based broker to distribute policies directly inside of ChatGPT.

Andrew Kligerman: Got it. That was very helpful. Yesterday we saw the approval grant for Boleron, a Bulgaria-based broker, to distribute policies directly inside of ChatGPT, Trevor. Could we see this happening in the US as well, or do you see AI as more of a funnel into traditional direct channels on Neptune's website?

Speaker #9: Trevor, could we see this happening in the US as well, or do you see AI as more of a funnel into traditional direct channels on Neptune's website?

Speaker #1: Currently , ChatGPT does not allow direct binding within within the app itself . If they change that , we will be able to , you know , meet that immediately .

Trevor Burgess: Currently, ChatGPT does not allow direct binding within the app itself. If they change that, we will be able to meet that immediately. I think this is more about consumer behavior than necessarily the technological availability of something. We've had direct to consumer available since the very beginning of Neptune, and it's always made up 2% of our business. It was 2% of a very small amount 9 years ago, and it's 2% of a much larger amount now, but it's still 2%. This is really about, are consumers now going to utilize chatbots to buy home-related insurance? I think that's a much larger question than is it possible.

Speaker #1: But I think this is more about consumer behavior than necessarily the technological availability of something. We've had direct-to-consumer available since the very beginning of Neptune.

Speaker #1: And it's always made up 2% of our business. And it was 2% of a very small amount nine years ago, and it's 2% of a much larger amount now, but it's still 2%.

Speaker #1: So this is really about our consumers now going to utilize chatbots to buy home-related insurance. And I think that's a much larger question than 'is it possible?'

Speaker #9: Got it. Thanks very much.

Andrew Kligerman: Got it. Thanks very much.

Speaker #3: Your next question comes from the line of Pablo Zinzan with J.P. Morgan. Your line is now open.

Operator 2: Your next question comes from the line of Pablo Singzon with J.P. Morgan. Your line is now open.

Operator: Your next question comes from the line of Pablo Singzon with J.P. Morgan. Your line is now open.

Speaker #10: Hi . Good evening . First question is on new business . I think this might be the first quarter that you've disclosed the growth rate , which I think came in at 44% .

Pablo Singzon: Hi, good evening. First question is on new business. I think this might be the Q1 that you've disclosed the growth rate, which I think came in at 44%. I was wondering if you could give perspective on how the growth rate had trended, I guess, in 2025, right? Whether over the full year or maybe the past couple of quarters. Thanks.

Speaker #10: I was wondering if you could give perspective on how the growth rate had trended, I guess in '25, right? Whether over the full year or maybe the past couple of quarters.

Speaker #10: Thanks

Speaker #1: We felt very good about the growth rate in the first quarter . We the number of agents that were binding was up . We obviously have switched to this single sign on , which is extremely helpful in that we now have 45,000 agents who have established , you know , single sign on credentials with us .

Trevor Burgess: We felt very good about the growth rate in Q1. The number of agents that were binding was up. We obviously have switched to the single sign-on, which is extremely helpful in that we now have 45,000 agents who have established single sign-on credentials with us. We'll get back to you on comparable information for the prior year.

Speaker #1: But we'll get back to you on , you know , comparable information for the last for the prior year

Speaker #10: All right . Thanks , Trevor . And then a follow up just so as more personal lines , insurers and agents are pivot to growth , right ?

Pablo Singzon: All right. Thanks, Trevor. A follow-up. As more personal line insurers and agents sort of pivot the growth, right? Whether they're selling auto or homeowners, do you think that helps or detracts or maybe it's even neutral to your efforts to sell flood, right? How are you sort of thinking about that, your positioning against that trend? Because it is clear at this point that everyone's trying to sell more. Does it help or maybe it doesn't really affect you guys? Thanks.

Speaker #10: Whether they're selling auto or homeowners, do you think that helps or detracts? Or maybe it's even neutral to your efforts to sell self-fund, right?

Speaker #10: So how do you sort of thinking about that ? You know , your position against that trend ? Because is clear at this point that everyone's trying to sell more , you know , does it help or maybe doesn't really affect you guys ?

Speaker #10: Thanks

Speaker #1: It's extremely positive for us when agents want to add on ancillary products, right? And flood is the most obvious ancillary product to the home or to the business policy, since it's excluded by carriers.

Trevor Burgess: It's extremely positive for us when agents want to add on ancillary products, right? Flood is the most obvious ancillary product to the home or to the business policy, since it's excluded by carriers. We view that trend as a very positive trend for Neptune. There are amazing agents such as Goosehead and others who have done a great job at really thinking about policies per relationship, and how do they always offer flood insurance every time they're selling a homeowner's policy. That increases stickiness and increases the quality of the advice being given to the consumer, because as we've talked about many times, the main problem that we have in the US with flood insurance is that people don't have it. There's 20 million people who are at risk of flooding who don't have the coverage.

Speaker #1: And so we view that trend as a very positive trend for Neptune. There are amazing agents such as Goosehead and others who have done a great job at thinking about policies for relationship.

Speaker #1: And how do they always offer flood insurance every time they're selling a homeowner's policy? That increases stickiness and increases, you know, the quality of the advice being given to the consumer. Because as we've talked about many times, the main problem that we have in the US with flood insurance is that people don't have it.

Speaker #1: There are 20 million people who are at risk of flooding, who don't have the coverage. And so it's amazing advice to, you know, come from an insurance agent to their consumer.

Trevor Burgess: It's amazing advice to come from an insurance agent to their consumer. It's a great trend.

Speaker #1: So, it's a great trend.

Speaker #10: Thank you

Pablo Singzon: Thank you.

Speaker #3: Your next question comes from the line of Arun Kumar with Mizuho. Your line is now open.

Operator 2: Your next question comes from the line of Yaron Kinar with Mizuho. Your line is now open.

Operator: Your next question comes from the line of Yaron Kinar with Mizuho. Your line is now open.

Speaker #1: Thank you . Good afternoon or good evening . My first question relates to the $195 million revenue target for the year . I I'm starting to see some early indications of the North Atlantic hurricane season , potentially being a bit lower just because of El Nino .

Yaron Kinar: Thank you. Good afternoon or good evening. My first question relates to the $195 million revenue target for the year. I'm starting to see some early indications of the North Atlantic hurricane season potentially being a bit lower just because of El Niño. Is that contemplated in that number, or are you still assuming kind of a normal season and whatever that may mean?

Speaker #1: Is that contemplated in that number , or are you still assuming a normal season ? And what whatever that may mean Yeah . Thank you .

Trevor Burgess: Yeah. Thank you. We're very aware and we track very closely the predictions around the storm season. There are a couple of dynamics happening. One is the phenomenon that you've mentioned, and the other, equally impactful phenomenon is the sea temperature in the Gulf. The Gulf temperature is extremely high, which means that the Gulf systems being able to spin up very quickly and gain steam very quickly, like Hurricane Michael did, that hit Florida with amazing power, remain quite possible during the season. I would say the 195 assumes that there is some storm activity but does not assume a very active storm season.

Speaker #1: We're we're very aware and we track very closely , you know , the predictions around the storm season . There are a couple of dynamics happening .

Speaker #1: One is the phenomenon that you've mentioned and the other equally impactful phenomenon is the sea temperature in the Gulf and the Gulf temperature is extremely , extremely high , which means that the Gulf systems being able to spin up very quickly and gain steam very quickly , like Hurricane Michael did , that hit Florida with amazing power remain , you know , quite possible during the season .

Speaker #1: I would say that the 195 assumes that there is some storm activity, but does not assume a very active storm season. And can you maybe give us a little bit of color as to how you're thinking about that?

Yaron Kinar: Can you maybe give us a little bit of color as to how you're thinking about that when you talk about some storm activity? Are we talking about two, three main storms making landfalls in population centers?

Speaker #1: When you talk about some storm activity, are we talking about two or three named storms making landfalls in population centers?

Trevor Burgess: Yeah, we think about that as 1.8 landfall hurricanes.

Speaker #1: Yeah , we think we think about that as 1.8 landfall , hurricanes Got it . Okay . Thank you . And then my other question .

Yaron Kinar: Got it. Okay. Thank you. My other question-

Trevor Burgess: Which happens to be the long-term average. Yeah.

Speaker #1: Long term average . Yeah . Right . Right . Okay . And then switching to capital deployment . So you have $100 million new share authorization that , if I understood correctly , you expect to utilize over the next couple of years .

Yaron Kinar: Right. Okay. Switching to capital deployment. You have $100 million new share authorization, that if I understood correctly, you expect to utilize over the next couple of years, so by the end of 2027. If I just look at the EBITDA margins and the tax rate, I think it gets a roughly ±$150 million of cash flows for the next two years. Are you intending to deploy the remaining cash flows towards lowering debt, or are you going to keep a portion of that as dry powder for other opportunities?

Speaker #1: So by the end of 27 . And then if I just look at the EBITDA margins and the , the , the tax rate , I think you get to roughly $150 million of cash flows plus minus for the next two years .

Speaker #1: Are you intending to deploy the remaining cash flows towards lowering debt, or are you going to keep a portion of that as dry powder for other opportunities? Yeah.

Trevor Burgess: Yeah. Remember that we had also announced the RSU net tax settlement, which at today's stock price, would use something like $12 million of cash or something. The employees will surrender the shares, we'll rip those up, and then we'll pay the taxes to the IRS with company cash. If you think about that this September and next September as two chunks plus the $100 million, it starts to give you a sense of where we would use the cash.

Speaker #1: Remember that we had also announced the RSU net tax settlement, which at today's stock price would use something like $12 million of cash or something.

Speaker #1: So the employees will surrender the shares. We'll rip those up, and then we'll pay the taxes to the IRS with company cash.

Speaker #1: So if you think about that, this September and next September as two chunks, plus the $100 million, it starts to give you a sense of, you know, where we would use the cash. Got it.

Yaron Kinar: Got it. Thank you.

Speaker #1: Thank you . Yep . And we can work with you on some of the , you know , as we as you model out the free cash flow , you know , we have a little higher expectations than than you've noted

Trevor Burgess: Yep. We can work with you. As you model out the free cash flow, we have a little higher expectations than you've noted.

Operator 2: Your next question comes from the line of Cave Montazeri with Deutsche Bank. Your line is now open.

Operator: Your next question comes from the line of Cave Montazeri with Deutsche Bank. Your line is now open.

Speaker #3: Your next question comes from the line of Cave Montazeri with Dosha Bank. Your line is now open.

Cave Montazeri: Thank you. You keep paying down debt. At the same time, your EBITDA is growing. Looks like it could be at 2 times debt to EBITDA by the end of next quarter. I'm just trying to understand what's your mental framework when it comes to how much debt you want to keep? Did you have a target debt to EBITDA ratio in mind for the medium to long term?

Speaker #9: Thank you .

Speaker #11: So you keep paying down debt at the same time your EBITDA is growing. Looks like you could be at two times debt to EBITDA by the end of next quarter.

Speaker #11: So I'm just trying to understand what's your your mental framework when it comes to how much debt do you want to keep ? And do you have a target debt to EBITDA ratio in mind for the medium to long term

Trevor Burgess: Yeah. We generally would like to stay below 2.5 times. There may be opportunistic times to utilize the stock repurchase. As we saw in the last quarter, if there was an event like that again, we would obviously take advantage of that to buy back shares opportunistically and utilize the revolver availability to do so. Absent that, we have, to date at least, continued to pay down debt. As long as we're below 2.5 to 3 times levered, we feel very comfortable that we can, given the certainty of how this business operates, that we can begin returning cash to shareholders, and we think stock buybacks are the best way to do that.

Speaker #1: Yeah , we generally would like to stay below two and a half times . So , you know , there may be opportunistic times to utilize the stock repurchase , you know , as as we saw , you know , in the last quarter , if there was an event like that , again , we would obviously take advantage of that to buy back shares opportunistically .

Speaker #1: And utilize the revolver availability to do so. But absent that, we have to date, at least, continued to pay down debt as long as we're below two and a half to three times levered.

Speaker #1: You know , we feel very comfortable that we can , given the certainty of how this business operates , that we can begin returning cash to shareholders and we think stock buybacks are the best way to do that .

Cave Montazeri: Okay. In terms of the technology, how much of it is built in-house versus purchased from third-party vendors? I guess of the technology that you're using from third-party vendors, do you now have the ability to maybe build it in-house and make it more bespoke versus some of the more standardized software that you can buy externally?

Speaker #11: Okay . And in terms of your the technology that you like , how much of it is , is built in-house versus purchased from third party vendors .

Speaker #11: And , and I guess , of the , the technology that you're using from third party vendors , do you now have the ability to maybe build it in-house and make it more bespoke versus some of the more standardized software that you could buy externally

Trevor Burgess: This is a really interesting debate that we often have. Now you have to think about Neptune as a rather unique company because we have 62 employees, and our entire expense base is less than 10% of our revenue. We're already about as lean a company as can exist, right? If I think about how do I deploy our engineers and data scientists, I wanted to deploy them on things that can generate more revenue. Saving no longer using a third-party piece of software like Microsoft Word. Could we rebuild Microsoft Word now? Yes. Does it make sense to do that and maintain the system, et cetera? No. It makes much more sense just to pay Microsoft whatever it costs, $5,000 a year to have it, right?

Speaker #1: This is a really interesting debate that we often have, and you have to think about Neptune as a rather unique company because we have, you know, 62 employees, and our entire expense base is less than 10% of our revenue.

Speaker #1: So we're already about as lean a company as can exist . Right . And so if I think about how do I deploy our engineers and data scientists , I wanted to deploy them on things that can generate more revenue Saving , you know , no longer using a third party piece of software like Microsoft Word .

Speaker #1: Could we rebuild Microsoft Word now ? Yes . Does it make sense to do that ? And , you know , maintain the system , etc.

Speaker #1: No, it makes much more sense just to pay Microsoft the whatever it costs, $5,000 a year, to have it right.

Trevor Burgess: We are very focused on how do we deploy our engineers to increase revenue growth rather than save the $200,000 that shows up in our externally purchased software. Most of the software that we're purchasing at this point is really commodity type of software. Matt, what would you add?

Speaker #1: And so we are very focused on how do we deploy our engineers to increase revenue growth rather than save , you know , a couple hundred thousand dollars that shows up in our externally purchased software and most of the software that we're purchasing at this point is really commodity type of software .

Matt Duffy: Yeah, Kate, I'd just add that all of the core functionality that exists in our systems today in Triton, Poseidon, Atlas, Proteus, and all of the systems that we've mentioned is built entirely in-house. Trevor's comments are 100% true for ancillary software that may be helpful from a customer service standpoint, Zoom, that type of functionality. All of the core software is built entirely in-house.

Speaker #1: Now, what would you add?

Speaker #5: Yeah . Okay . I'd just add that all of the core functionality that exists in our systems today and Triton and Poseidon and Atlas and Proteus in all of the systems that we've mentioned is , is built entirely in-house .

Speaker #5: Trevor's comments are 100% true for ancillary software . That may be helpful from a customer service standpoint . Zoom , you know , that type of functionality , but all of the core software is built entirely in-house

Cave Montazeri: Cool. That's helpful. Thank you.

Speaker #11: Cool. That's helpful. Thank you.

Operator 1: That concludes our question and answer session. I will now turn the conference back over to Mr. Trevor Burgess for closing remarks.

Operator: That concludes our question-and-answer session. I will now turn the conference back over to Mr. Trevor Burgess for closing remarks.

Speaker #3: That concludes our question and answer session. I will now turn the conference back over to Mr. Trevor Burgess for closing remarks.

Trevor Burgess: I'll end the way I started by just talking about this moment in history. I've never been more excited about being an entrepreneur than I am right now. Our entire team is giddy to be working at Neptune on this challenge, on this problem, using the tools that are now available to us. We are live watching the updates from Anthropic, from ChatGPT, from Google, from X, about what tools are available to us and how can that allow us to move more quickly to help get these 20 million Americans insured for this peril that they're not protected for right now. This is a great time to be an entrepreneur. It's a great time to be at Neptune, and thank you for joining us today.

Speaker #1: I'll end the way I started, by just talking about this moment in history. I've never been more excited about being an entrepreneur than I am right now.

Speaker #1: Our entire team is giddy to be working at Neptune on this challenge, on this problem, using the tools that are now available to us.

Speaker #1: We are live watching the updates from anthropic , from ChatGPT , from Google , from X , about what tools are available to us , and how can that allow us to move more quickly to help get these 20 million Americans insured for this peril that they're not protected for right now ?

Speaker #1: So there's a great time to be an entrepreneur. It's a great time to be at Neptune. And thank you for joining us today.

Operator 1: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Q1 2026 Neptune Insurance Holdings Inc Earnings Call

Request DemoDemo

Neptune Insurance Holdings

Earnings