Segment Information

6 Months Ended

Jun. 30, 2026

Segment Reporting [Abstract]

Segment Information

Segment Information

We have one reportable segment: management operations. All segment revenue is derived in the United States, the majority of which is from the subscriber’s agreement between us and the subscribers (policyholders) at the Exchange, our sole customer, as further described in Note 3, "Revenue". Our chief operating decision maker ("CODM") is our Executive Council, which includes our Chief Executive Officer ("CEO"), Chief Financial Officer, executive vice presidents and certain senior vice presidents reporting directly to the CEO as applicable. The CODM evaluates performance and decides how to allocate resources for the management operations segment based on net income, as reported in our Consolidated Statements of Operations. Net income is used to monitor budget versus actual results. Total assets as reported in our Consolidated Statements of Financial Position, all of which are located in the United States, are reviewed by the CODM for purposes of decision making. The accounting policies of our management operations segment are the same as those described in Note 2, "Significant Accounting Policies, of Notes to Consolidated Financial Statements" included in our Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the SEC on February 23, 2026.

Beginning in the first quarter of 2026, the significant segment expense categories included in the financial information regularly provided to the CODM were revised to align with the current manner in which the CODM reviews expenses in evaluating performance and allocating resources. Prior-period segment expense disclosures have been recast to conform to the current period presentation. This change did not affect our determination that we have one reportable segment and did not affect the measure of net income.

The following table presents our management operations segment revenue, significant segment expenses regularly provided to the CODM, and net income:

	Three months ended June 30,				Six months ended June 30,
(in thousands)	2026		2025		2026		2025
Management fee revenue	$	882,498	$	842,149	$	1,688,372	$	1,614,843
Administrative services reimbursement revenue	201,554		212,644		401,650		422,917
Service agreement revenue	5,744		5,304		11,685		11,736
Total operating revenue	1,089,796		1,060,097		2,101,707		2,049,496
Commissions	508,097		463,442		972,953		900,302
Personnel costs (1)	88,809		85,789		180,872		175,778
Sales and advertising (1)	8,061		9,729		12,966		16,681
Acquisition and underwriting support costs (1)	23,968		27,838		48,092		53,841
Technology infrastructure costs (1)	25,086		24,311		50,889		50,382
Professional fees (1)	19,191		24,192		38,512		50,468
Administrative and other (1)	10,907		12,979		24,863		28,578
Cost of operations - policy issuance and renewal services	684,119		648,280		1,329,147		1,276,030
Cost of operations - administrative services	201,554		212,644		401,650		422,917
Total operating expenses (2)	885,673		860,924		1,730,797		1,698,947
Operating income	204,123		199,173		370,910		350,549
Total investment income	22,553		19,600		44,672		39,136
Other income	1,401		1,974		2,821		5,808
Income tax expense	47,783		46,062		87,635		82,391
Net income	$	180,294	$	174,685	$	330,768	$	313,102

(1)    2025 amounts have been recast to conform to the current presentation.

(2)    Management operations segment depreciation and amortization expense included primarily in "Total operating expenses" as reported on our Consolidated Statements of Operations totaled $20.8 million and $16.1 million for the three months ended June 30, 2026 and 2025, respectively, and $40.8 million and $31.9 million for the six months ended June 30, 2026 and 2025, respectively. The Exchange and its insurance subsidiaries reimbursed us approximately 33% and 29% in the six months ended June 30, 2026 and 2025, respectively, for depreciation and amortization expense on assets supporting administrative services. See our Consolidated Statements of Cash Flows for segment expenditures on fixed asset additions.