Root, Inc. announced its third quarter 2024 financial results, reporting GAAP net income of $23 million and revenue of $305.7 million. This revenue figure surpassed analyst estimates by $39.19 million, and the reported earnings per share of $1.35 significantly beat the consensus estimate of a loss of $0.98 per share. This marks a pivotal achievement for the company, as it represents its first quarter of GAAP net income profitability.
Concurrently, Root successfully refinanced its term loan facility with BlackRock, reducing the principal amount from $300 million to $200 million. The amended facility, effective October 29, carries an interest rate of 3-month term SOFR plus 600 basis points with performance-based step-downs, reflecting a reduction of at least 300 basis points from the prior term loan. Root will maintain $150 million of available capital, net of financial covenants, consistent with the previous facility.
The refinancing is projected to reduce Root's interest expense by approximately 50% on a run-rate basis in 2025, which is expected to further accelerate profitability and enable increased investments in strategic growth initiatives. The company expensed approximately $5.5 million of unamortized debt discount and issuance costs in the fourth quarter related to this loan extinguishment and modification, highlighting the immediate financial impact of the transaction.
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