million dollars in the prior quarter. These results were above the guidance we provided. Earnings per share for the quarter were $0.26 and year-to-date earnings per share were $0.48. For the second quarter, total revenue increased to $58 million, up from $56 million in the prior quarter, driven by the increase of managed premium on the platform. Excluding outsourcing claim fees, adjusted revenue increased by $4 million year-over-year to more than $56 million. Managed premium in the quarter was $1.4 billion, an increase from $1.2 billion in the prior quarter. Given the functionality of growth for our clients, managed premiums were in line with expectations. Our adjusted EBITDA margin was over 53% in the quarter, and we believe annualized margins above 50% are achievable for the foreseeable future. A few additional highlights for the quarter. Our annual recurring revenue was $211 million in the second quarter, an increase from $195 million in the prior quarter. Our balance sheet remains exceptionally strong. We ended the quarter with over $333 million of invested assets, which includes cash, cash equivalents, and fixed income securities. We remain debt-free and continue to maintain significant financial flexibility. Shareholders' equity increased to $288 million, an increase from $254 million at the end of the year. Next, I want to quickly touch on our guidance expectations. For the third quarter, we expect pre-tax income to be between $28 and $31 million, and we expect managed premium to be approximately $1.4 billion. dollars. Our guidance for the third quarter is consistent with the anticipated timing of growth across our existing client base. Our full-year guidance remains unchanged. Before turning the call over to Kevin, I wanted to quickly touch on recent capital management actions. During the quarter, we repurchased over 726,000 shares of our common stock for approximately $10 million. Subsequent to the quarter, we already purchased an additional 107,000 shares, which brings total repurchases to $12 million completing the authorized share repurchase program. We continue to have tremendous confidence in the long-term outlook for our business. Given our asset-like model, high margins, debt-free balance sheet, significant cash on hand, and the momentum we are seeing across the business, we believe allocating less than one-quarter's worth of earnings to repurchase shares at attractive valuations was a compelling use of capital. And with that, I will hand it over to Kevin, president of Exio.

Thank you, Suela. The Exeo platform continues to gain momentum, and we are seeing encouraging customer wins. Let me elaborate on some of these achievements. While we often talk about the insurance companies joining our platform, demand extends well beyond carriers. We are seeing growing interest from independent agents who are proactively reaching out to join the Exeo platform. The flywheel effect we've discussed in the past is real. As more agents join the platform, it becomes increasingly attractive to insurance companies. As more carriers come on board, the value proposition for agents continues to strengthen. That network effect is helping accelerate adoption across our ecosystem. Second, we've seen quote volume more than double since the beginning of the year. Third, last month, we signed our eighth carrier partner. Our new partnership with GEICO brings auto insurance to the platform, marking another meaningful step in expanding our capabilities. Agents can now bundle home and auto. With the addition of auto, the XCO platform now offers homeowners, commercial residential, flood, and auto insurance. Expanding our product set makes the platform more valuable to agents by enabling them to serve more of their clients' insurance needs through a single platform. In closing, since the beginning of the year, we've made meaningful progress across every dimension of the platform. We've doubled the number of agents, we've more than doubled quote volume, and we've added additional products. And we've grown to eight carriers on the platform. Now I'll turn the call over to Parish, Exio's Chief Executive Officer.

Thanks, Kevin. Soiler provided numbers that clearly show how healthy and cash flow positive Exio already is. Kevin highlighted tremendous momentum in expanding the size and scope of the Exio platform. The continued addition of new carriers, new products, and new capabilities reinforces that our platform is gaining meaningful traction in the marketplace. And while these initiatives don't translate results overnight, they continue to strengthen our long-term growth opportunity and expand the value we can deliver. Beyond all of this, earlier today, we announced the next new initiative, Exio Ventures. The reason we're launching Exio Ventures is simple. AI represents a once-in-a-generation paradigm shift, and most companies think about AI as a tool to make existing processes faster or more efficient. And while that's certainly valuable, we think there is a much bigger opportunity. And a useful analogy might be to look back at the internet, the evolution of the internet. The first wave of the internet brought traditional businesses online, making familiar processes faster and more efficient. But the truly transformative companies were the companies that created entirely new business models that only become possible because of the internet. For example, companies like Uber fundamentally reimagined transportation. And we believe AI has the potential to follow a very similar path. So rather than simply asking how AI can make current businesses more efficient, we are asking a much bigger question. What entirely new products, services, and businesses can AI make possible? And that's the purpose of Exio Ventures. Now, we've been working on these ideas behind the scenes for some time. and we've reached a point where we've seen enough progress and assembled the right team that we're ready to formalize the effort. We're funding Exio Ventures as an internal platform and its mission is to identify opportunities that only emerge when AI fundamentally changes what's possible. And let me give you one small example amongst the number of initiatives that we are working on. After a major catastrophe event, insurance carriers experience an enormous surge in claims. The challenge isn't simply receiving those claims, it's having the personnel available to process them. That staffing bottleneck often delays claim handling at accelerated time when policyholders need assistance the most. Simply put, scaling up the human element in a demand surge is challenging. It is difficult to increase human compute at the touch of a dial. However, with AI, you can increase the compute by orders of magnitude immediately. So imagine a carrier that normally processes 200 claims per week, suddenly needing to process 4,000 because of major catastrophe events the claim volume has spiked 20-fold but now with the ai capabilities processing capacity can increase just as quickly the result will be faster claims handling shorter wait times and a significantly better experience for the policy orders during some of the most difficult times they'll ever face and this is exactly the type of opportunity that excites us because it simply wasn't possible before AI. And that's the vision behind Exeo Ventures. Across underwriting, claims distribution, claims, risk transfer, and many other areas, we believe AI creates the opportunity for entirely new categories of products and businesses. And with that, I will turn over the call for questions.

We will now begin the question and answer session. If you would like to ask a question, please press star 1 now to raise your hand and join the queue. To withdraw your question, press star 1 again. We ask that you do pick up your handset when asking a question to allow for optimum sound quality. And if you are muted locally, please remember to unmute your device. Please stand by now while we compile the Q&A roster. Your first question comes from the line of Terry Tillman with Truist. Your line is open. Please go ahead.

Yeah, good afternoon, Parrish. Kevin, Suela, and Bill. I have three questions, but it'll be really quick, I promise. First, on GEICO, I think they're relatively large. I think they're the third largest auto insurer in the U.S. I mean, is there any way to kind of ring-fence this or give us a sense on how sizable this could be and kind of timing and when this could start to hit the model? And then I had two follow-ups.

Yes, Terry. GEICO is big. right and there's also been a recent thing about people wanting to bundle home and auto and the benefits of all of that but the issue becomes the benefit do you bundle with the auto carrier bundling the home or the home carrier bundling the auto or do you let the agent on the platform assemble the bundle these are all choices that don't result on the same outcome the partnership with geico lets people bundle and sell geico on the on the exio platform so it's it's a big start we'll see how it grows into it but yes it could be something

big uh early days yet but we are we are very excited to partner with geico understood i appreciate that and and maybe the the second question um and and i'm assuming some others might want to also double-click on this. XCO Ventures sounds very interesting, but could you help us a little bit with another one of these? What would it do? Would it be it drives more carriers or business relationships, or it drives more of a take rate with your existing carriers? Is it a managed premium dynamic? And at the same time, by making these investments, would you still be you know, kind of achieving those really high 50% plus EBITDA margins.

So I would characterize it this way. What you sort of said about AI helping the Exio platform, that's all going to occur anyway. That isn't what Exio Ventures is about. You know, there will be AI on the Exio platform side as well. And that's what everybody else is also looking at. You know, modernizing your your your current stack because of AI what we're talking about next year ventures is doing something that you could not be possible without AI right and that's what we're talking about you know businesses think of again in my earlier comments the example of uber uber is not possible without the internet and GPS and maps and everything else right but it isn't just taking a taxi company and putting it on a web presence. It's reimagining how things get done, how transportation is done. And we are starting to see there are things that you can now do with AI that you just couldn't do without AI. And one simple example of this that we kind of piloted a little bit was this win from Pro we talked about last quarter. It allowed carriers to process you know these this new requirement that came in and it would have required a lot of staffing and training and all that kinds of stuff but using ai we turned it into something that we could share with the whole industry uh very very easily it's stuff like that that we're talking about right it's a it's not retrofitting ai to existing businesses it's trying to think of new businesses we can do. That's only possible because of AI. And we have a few, we have like four or five in the hopper at the moment. We will obviously discuss them as they all come to more maturity as we go along. So we're in the process of seeding and setting all that up. But Exio Ventures is not just an incremental thing. It could be something very, very different that is even beyond insurance. if that helps.

Yeah. It does help. I'm looking forward to hearing more. Just the final one, and I'll jump off here. Anything you can share, though, Suela, in terms of 3Q and 4Q, in terms of how to think about adjusted revenue, maybe versus, you know, where we ended at $56 million in 2Q? And then can you remind us again what the managed premium target was for the end of the year? And I think you said that's unchanged.

Yes. So for full year, year-end, the guidance is $1.55 billion for managed premium. And in terms of Q3 and Q4, the one thing I would say is just a reminder that the AIR and how it converts to revenue, the seasonality that we have in our business, and that depends on the renewal cycle and the product mix. So for 2026, we have revenue that peaks slightly in Q2, and it's more modest in Q3, more natural in Q3, and then a slide Q4, a slide Q4 step down. So, just that's very typical for artisanality.

That's great. Very helpful. Thanks.

And again, if you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to join the queue now. Please stand by while we compile the Q&A roster. At this time, there are no further questions. I would now like to turn the call back over to Parish Patel, who has a few closing remarks. Actually, we've just had someone raise their hand. The next question comes from Dylan Becker with William Blair. Your line is open. Please go ahead.

Hey, guys. Sorry about that. Yeah, got thwarted by the star one, unfortunately. We made it. Hey, question on Kevin, you kind of touched on the agent fly carrier flywheel dynamic. And obviously Geico seems to be a big unlock in that context as well. But wondering if you could kind of expand on that notion as you broaden kind of the scope across carriers, premium, as well as potential kind of lines, how that kind of drives the follower notion of more agents and obviously underwriting more premium through the XCO platform as it seems kind of fortuitous in and of itself and starting to gain some real traction and momentum here.

Yeah, thanks, John. Yeah, we're seeing some interesting trends definitely this year. What we're finding is agents are looking at being proactive with their clients. A lot of that is utilizing technology. So one of the things that's really having them gravitate to the XCO platform is just the ease of use. So when you look at that, and as the word gets out, when everyone's trying to drive more and more efficiency, it's almost like that I talked about in the comments of the flywheel effect. More and more agents come on board, and because everyone's looking for that edge. And as we bring more carriers onto the platform, then the Exio platform becomes a go-to or a hub, if you will, to solve multiple different client questions or placements of coverage. So it's a positive effect. And when we look at it, we look at it in a couple different metrics. One is the number of agents coming on board, but then the utilization of the platform, which is up as well. So it's exciting. And, you know, it's our job to bring more and more options on the platform, and that's just going to encourage additional agent adoption and participation.

Got it. Okay, very helpful. And then it's kind of maybe a follow on to that as well, too. to any color, obviously we continue to add more of these external third-party carriers to the platform, but velocity maybe around kind of your pipeline conversations, maybe in particular as you enable and unlock more of that kind of rapid time to value versus maybe a larger, more complex modernization effort. The need and urgency that you're pointing to, how that's maybe resonating in some of your pipeline conversations here as well, thanks.

Yeah. So, you know, on a pipeline side, I think you just look at the last year. You know, we've consistently added, you know, folks out of the platform and we're going to continue to do that. But as we've seen, you know, the more that come on and see the capabilities, obviously it becomes an easier conversation to go ahead and build that pipeline. So everything we're seeing is pointing in the right direction.

Very helpful. Thank you.

This time, this concludes our question and answer session. And now I would like to turn the call back over to Parish Patel for a few closing remarks. Please go ahead.

Yeah, thank you. In closing, Exio is well positioned for the future. We have a debt-free balance sheet, significant financial flexibility, and a platform that continues to scale as we add new partners, products, and capabilities. With the launch of Exio Ventures, we're also investing in the opportunities that AI will create in the future over the coming decade. We believe this combination of financial discipline, platform scale, and continuous innovation provides a compelling foundation for long-term growth. I want to thank everyone who joined the call today, and I also want to thank the Exeo team for all of their hard work. Thank you.

And this concludes today's call. You may now disconnect.