Neptune Insurance Hldgs (NYSE:NP) reported first-quarter financial results on Wednesday. The transcript from the company’s first-quarter earnings call has been provided below.
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Access the full call at https://events.q4inc.com/attendee/239893151
Summary
Neptune Insurance Holdings Inc reported a record first quarter with revenue of $37.8 million, a 29% increase year over year, and net income of $7.3 million.
The company launched ATLAS Plus, an AI-driven agent assistant, and a beta version of Neptune’s application inside ChatGPT to improve agent engagement and customer interaction.
Neptune Insurance Holdings Inc announced a $100 million stock repurchase program funded through free cash flow over the next two years.
The company is focused on AI-driven growth with an emphasis on increasing efficiency and expanding its data-driven underwriting capabilities.
Full-year 2026 expectations have been raised to a revenue target of $195 million and adjusted EBITDA margins between 60% and 61%.
Full Transcript
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 first quarter 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. John Carlon, Director of Corporate Development. You may begin.
John Carlon (Director of Corporate Development)
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. 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@investors.neptuneinsurance.com and in our current report on Form 8K that was publicly filed with the SEC on April 22, 2026. And now I’d like to turn the call over to Trevor. 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. I was an investment banker during the first.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 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. 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. 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. 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 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 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. 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 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 enforced growth 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. 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. On a trailing twelve 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, review 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 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.
Trevor Burgess (Chairman and CEO)
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 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 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, 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. During and 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. The first is Atlas, 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 conversotional 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 thousonds of agent interactions, which tells us this fits naturally into how agents already work. And this is just the starting point. Over the coming quarters, we expect ATLAS 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 conversotional AI continues to evolve, we expect experiences like this to play an increasing role in how people access information and make decisions. 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 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 agent-like 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. Tens of millions of quotes, over a million bound policies, and constant interaction from tens of thousonds of agents. 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. Turning to capacity, during the quarter, we renewed one of our eight programs, increasing the size of that program for the 2627 treaty period and adding two 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 sow 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 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. 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. 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 by a Multi Factor authentication on the platform between December and March, and nearly 11,000 of those users have already bound new business policies in that some 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. 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 matters. With that, I’ll turn it over to Jim.
Matt Duffy (President and Chief Risk Officer)
Thanks, Matt. The first quarter reflects another strong period of execution with 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 and L during the first quarter. 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. 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 twelve month basis. 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. If we had to add one employee for every few …
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