v3.26.1
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)2026202520262025
Management fee revenue$882,498 $842,149 $1,688,372 $1,614,843 
Administrative services reimbursement revenue201,554 212,644 401,650 422,917 
Service agreement revenue5,744 5,304 11,685 11,736 
Total operating revenue1,089,796 1,060,097 2,101,707 2,049,496 
Commissions508,097 463,442 972,953 900,302 
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 services684,119 648,280 1,329,147 1,276,030 
Cost of operations - administrative services201,554 212,644 401,650 422,917 
Total operating expenses (2)
885,673 860,924 1,730,797 1,698,947 
Operating income204,123 199,173 370,910 350,549 
Total investment income22,553 19,600 44,672 39,136 
Other income1,401 1,974 2,821 5,808 
Income tax expense47,783 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.