v3.25.1
Segment Information
 3 Months Ended
Mar. 31, 2025
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 assesses performance for the management operations segment and decides how to allocate resources 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, 2024 as filed with the SEC on February 27, 2025.

The following table presents our management operations segment revenue, significant segment expenses regularly provided to the CODM and net income for the three months ended March 31:

(in thousands)20252024
Management fee revenue$772,694 $682,620 
Administrative services reimbursement revenue210,273 191,567 
Service agreement revenue6,432 6,514 
Total operating revenue989,399 880,701 
Commissions436,860 375,760 
Underwriting and policy processing51,260 48,168 
Information technology64,785 53,490 
Sales and advertising17,375 17,207 
Customer service11,687 10,080 
Administrative and other45,783 45,617 
Cost of operations - policy issuance and renewal services627,750 550,322 
Cost of operations - administrative services210,273 191,567 
Total operating expenses (1)
838,023 741,889 
Operating income151,376 138,812 
Total investment income19,536 15,079 
Other income3,834 3,411 
Income tax expense36,329 32,750 
Net income$138,417 $124,552 

(1)    Management operations segment depreciation and amortization expense included in "Total operating expenses" as reported on our Consolidated Statements of Operations totaled $15.8 million and $13.3 million for the three months ended March 31, 2025 and 2024, respectively. The Exchange and its insurance subsidiaries reimbursed us for approximately 29% and 27% in the three months ended March 31, 2025 and 2024, 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.