Financial Model Notes

Exzeo Group [XZO]

Exzeo Group [XZO] — Financial Model Notes

As of 2026-07-29 · all figures $000 unless stated · source: SEC EDGAR CIK 0001873951

Every number below is traced to a filed statement. Derived figures are marked [derived] with the arithmetic shown. Nothing is estimated without being labelled.

1. Income statement — as filed

Annual (10-K, FY2025, three years presented — continuing operations)

	FY2023	FY2024	FY2025
Revenue	88,333	133,948	216,980
Cost of revenue	71,061	80,739	85,957
Gross profit	17,272	53,209	131,023
Gross margin	19.6%	39.7%	60.4%
Selling, general & administrative	7,898	8,343	15,724
Research & development	6,528	6,514	8,830
Depreciation & amortisation	292	335	479
Total operating expenses	14,718	15,192	25,033
Operating income	2,554	38,017	105,990
Operating margin	2.9%	28.4%	48.8%
Investment income	52	548	4,302
Interest expense	(1,723)	(3,329)	—
Pre-tax income, continuing	883	35,236	110,292
Income tax expense / (benefit)	(12,018)	9,168	27,543
Net income, continuing	12,901	26,068	82,749
Income from discontinued operations, after tax	8,561	19,253	—
Net income	21,462	45,321	82,749
Preferred dividends	(9,370)	(10,149)	—
Net income to common	12,092	35,172	82,749
Basic & diluted EPS, continuing	$0.04	$0.20	$0.99
Memo: revenue from related parties	88,333	133,448	214,611
Memo: related-party % of revenue	100.0%	99.6%	98.9%
Memo: costs from related parties	14,568	21,148	16,288

Quarterly reconstruction [derived]

Quarter	Revenue	Derivation
Q4 2024	44,533	FY24 133,948 − 9M24 89,415
Q1 2025	52,407	Q1-26 10-Q comparative — as filed
Q2 2025	56,091	9M25 163,664 − Q1 52,407 − Q3 55,166
Q3 2025	55,166	Q3-25 10-Q — as filed
Q4 2025	53,316	FY25 216,980 − 9M25 163,664
Q1 2026	55,534	Q1-26 10-Q — as filed

Five consecutive quarters in a $52.4–56.1m band. Q1-26 YoY +6.0%.

Q1 2026 vs Q1 2025 — as filed

	Q1 2026	Q1 2025
Revenue	55,534	52,407
Cost of revenue	22,791	23,582
Gross profit	32,743	28,825
Gross margin	59.0%	55.0%
SG&A	5,216	2,706
R&D	2,306	2,221
D&A	146	101
Operating income	25,075	23,797
Operating margin	45.2%	45.4%
Investment income	2,512	398
Pre-tax income	27,587	24,195
Income tax	7,181	6,244
Net income	20,406	17,951
Basic & diluted EPS	$0.22	$0.22
Memo: related-party revenue	53,323	52,407
Memo: related-party % of revenue	*96.0%*	*100.0%*

Modelling note — SG&A has permanently re-based. $2,706 → $5,216 per quarter (+92.8%) on public-company costs. That ~$10m annualised step-up is why NTM operating margin is modelled at Q1-26's 45.2%, not TTM's 48.7%. Using the TTM margin would overstate NTM EBIT by ~$9m.

2. Revenue by service line

	FY2023	FY2024	FY2025	% of FY25	Q1-25	Q1-26
Underwriting & management services	—	95,373	176,368	81.3%	43,250	45,928
Claim services	—	30,777	31,154	14.4%	6,829	6,891
Other technology services	—	7,798	9,458	4.4%	2,328	2,715
Total	88,333	133,948	216,980	100.0%	52,407	55,534
YoY		+51.6%	+62.0%			+6.0%

Underwriting & management +84.9% in FY2025; MD&A attributes 82.3% of the increase to "new management fee arrangements with four additional customers."
Claim services +1.2% — essentially flat; MD&A: elevated 2024 storm activity "did not recur at similar levels in 2025."
Other technology services +21.3%, driven by catastrophe software fees from Hurricanes Milton and Helene; Q1-26's increase from Hurricane Ian (2022) completion accounting.

Only 4.4% of revenue is software/SaaS.

Counterparty	FY2023	FY2024	FY2025	Δ FY24→25	% of Δ
TTIC (MGA, since 2016)	81,316	119,022	132,790	+13,768	17.0%
HCM / HCPCI (policy admin, eff. 2025-01-01)	0	0	60,131	+60,131	74.1%
Tailrow / TRM (MGA, eff. 2024-11-05)	0	0	7,261	+7,261	8.9%
CORE / CRM (MGA, eff. 2023-11-21)	0	6,625	4,957	−1,668	−2.1%
Other related-party (residual) [derived]	7,017	7,801	9,472	+1,671	2.1%
Total related-party	88,333	133,448	214,611	+81,163	100.0%
Third-party [derived]	0	500	2,369	+1,869
Total revenue	88,333	133,948	216,980	+83,032

Revenue ex the two agreements new in the period: FY2025 $149,588 vs FY2024 $133,948 = +11.7%. [derived]

4. Contractual take rates — the revenue driver

Revenue = (affiliated carriers' gross written premium) × (take rate) + per-policy and per-claim fees. All rates from the DEF 14A, Transactions With Related Persons.

Counterparty	Underwriting / admin	Claims	Per-policy	Catastrophe	Termination
TTIC	21.5% of written premium	3.5% of written premium; 50% of subrogation	$25	$1,200/claim + 10% of indemnity	either party, without cause, 120 days, at any quarter end
HCM / HCPCI	8.5% of HCPCI written premium	— (HCM adjusts directly)	$25	—	either party, 180 days
Tailrow	8.5%	2.5%; 50% of subrogation	$25	$1,200 + 10% of indemnity	without cause, 180 days; term to 2027-11-05
CORE	8.5%	2.5%; 50% of subrogation	—	$1,200 + 10% of indemnity	without cause, 120 days; term to 2026-11-21
HCM (CAT software licence)	—	—	—	6% of amount incurred per CAT claim	HCM, 6 months; term to 2027-09-28

Cost side, also related-party: EIS pays Griston Claim Management (an HCI subsidiary) $1,200/claim, $5,000/litigated claim, and $1,200 + 4% of indemnity per catastrophe claim. Exzeo bills CAT indemnity at 10% and pays it out at 4% — a 6pp contractual spread, which is where catastrophe margin comes from.

Implied TTIC managed premium [derived, an inference not a disclosure]: $132,790 ÷ ~25% ≈ $531m. Managed premium is not disclosed anywhere in the filings.

5. Balance sheet — 31 March 2026 vs 31 December 2025

	2026-03-31	2025-12-31
Cash and cash equivalents	231,381	305,372
Accounts receivable	2,513	2,906
Receivable from related parties	19,897	11,295
Prepaid expense	1,193	1,483
Current contract cost assets	5,404	4,722
Other current assets	541	43
Total current assets	260,929	325,821
Fixed-maturity securities, AFS, at fair value	98,516	—
Property and equipment, net	10,259	10,662
Operating lease right-of-use assets	6,576	6,884
Non-current contract cost assets	284	1,118
Deferred income taxes, net	2,905	2,975
Other assets	299	274
Total assets	379,768	347,734
Current contract liabilities	73,673	70,893
Commissions payable	5,450	4,605
Accounts payable and accrued liabilities	6,174	2,950
Operating lease liabilities (current)	2,450	2,413
Income taxes payable	9,394	2,455
Payable to related parties	1,435	1,073
Non-current contract liabilities	943	3,567
Operating lease liabilities (non-current)	4,479	4,832
Other liabilities	829	790
Total liabilities	104,827	93,578
Common stock ($0.001 par; 350,000,000 auth.; 90,918,430 / 90,926,720 issued & o/s)	91	91
Additional paid-in capital	229,387	228,647
Retained earnings	45,824	25,418
Accumulated OCI	(361)	—
Total shareholders' equity	274,941	254,156

Net cash — the screen's second error, worked

	$000
Cash and cash equivalents	231,381
+ Fixed-maturity AFS securities (amortised cost 98,998; fair value)	98,516
− Borrowings	0 — none on the balance sheet
Net cash	329,897
Strictest reading, less operating-lease liabilities of 6,929	322,968

The screen used $231,381 — cash only. Between 31 Dec and 31 Mar, Exzeo moved $98,998 of IPO proceeds into a securities portfolio classified in non-current assets. Cash fell $73,991 and the screen read that as a genuine decline. It was a reclassification. Understatement: $98,516, or 29.9% of true net cash.

Balance sheet: 90,918,430 issued and outstanding at 2026-03-31.
10-Q cover page: 90,918,430 at 2026-05-01.
10-K cover page: 90,913,540 at 2026-02-20.

Single class. 350,000,000 authorised, one line, no non-voting stub in the outstanding count — no dual-class aggregation trap.

Scale cross-check (net income ÷ shares ≈ filed EPS, as the brief requires): - Q1-26: 20,406 ÷ 90,918,430 = $0.2245 vs filed $0.22 ✓ - FY2025: 82,749 ÷ ~83.6m weighted average = $0.99 vs filed $0.99 ✓

Anti-dilutive overhang, outside the count: 5,000,000 options (Paresh Patel, granted 2021-10-01, strike $23.00, expiry 2031-10-01, exercise requires Board approval) + 1,000,000 (Kevin Mitchell). At $16.455 they are out of the money and filed EPS is "basic and diluted" identical, which confirms it. Above $23.00, add 6.0m shares — 6.6% dilution.

6. TTM build (to 2026-03-31)

	FY2025	− Q1 2025	+ Q1 2026	= TTM
Revenue	216,980	52,407	55,534	220,107
Operating income	105,990	23,797	25,075	107,268
Net income	82,749	17,951	20,406	85,204
EPS (÷ 90,918,430)				$0.937

The screen recorded TTM revenue of $192,217 — $27,890 (12.7%) below this. It also sits below FY2025's $216,980, which is impossible when Q1-26 grew year on year. The screen additionally used FY2025 gross and operating margins (60.4% / 48.8%) alongside a TTM revenue figure, mixing periods within one record. Neither number has been silently adopted.

7. Cash flow and capital allocation

FY2025 financing inflow $153,646, of which IPO net proceeds $156,205.
FY2024 financing outflow $6,398 (preferred redemption and dividends, partly offset by a related-party note).
Capex is not material to the thesis; property and equipment net fell 10,662 → 10,259 in Q1-26.
R&D $8,830 in FY2025 = 4.1% of revenue. SIC 7372 peers run 15–25%. Consistent with an MGA, not a software developer.
$12m buyback authorised 2026-05-26 under a Rule 10b5-1 plan — ~0.8% of market cap, but 6–9% of float.
No dividend.
$329.9m of net cash — 22.0% of market cap, 28.3% of EV — sits in cash and T-bill-like securities generating investment income ($4,302 in FY2025; $2,512 in Q1-26 alone). There is no disclosed reinvestment programme. This is the Quality Criteria failure in balance-sheet form: "a compounder that cannot reinvest is a bond and should be valued as one."

8. Segments, geography, discontinued operations

One reportable segment. All revenue generated in the United States; substantially all long-lived assets in the US; no geographic disaggregation presented.
Discontinued operations: TTIC, the insurance carrier, was sold to HCI on 2024-07-01 in a common-control transaction. All prior periods restated; FY2025 shows nil discontinued operations. The FY2023–FY2025 revenue series above is continuing operations throughout and is therefore comparable — checked, because a disposal mid-series is exactly the kind of thing that manufactures a false CAGR.
Pre-disposal MGA amounts with TTIC were intercompany, presented gross as continuing-operations revenue with the matching expense in discontinued operations, eliminating in consolidation with no net income effect.
Headcount: ~354 full-time employees at 2025-12-31 (Tampa FL, Ocala FL, Noida India).
Auditor: Forvis Mazars, LLP, ratified at the 2026-06-09 annual meeting (85,524,086 for / 12,889 against).

9. Data-hygiene assertions

Per valuation.md §"Data hygiene":

TTM used throughout, never last-FY. Built from the last four quarterly periods; the build is shown in §6.
Recency asserted. Latest filing is the 10-Q for the period ended 2026-03-31, filed 2026-05-07 (amended 2026-05-15) — 83 days old at the as-of date, well within tolerance. The screen's own record flagged revenue_stale_days: 119. Q2 2026 is not yet filed and every quarterly conclusion here stops at Q1 2026.
Missing inputs are INDETERMINATE, never FAIL. Managed premium, ADV, and call transcripts are unavailable and are recorded as missing in XZO_Research.md §10 rather than scored against the name.
The screen's own record carried "data_quality_ok": false.

Generated from each name's analysis.json. Figures are research output, not investment advice. Gaps are shown as “—” rather than filled: a missing input is recorded as indeterminate, never estimated.