Octave Specialty Group (NYSE: OSG) grows Q2 revenue 51% but stays in loss
Rhea-AI Filing Summary
Octave Specialty Group, Inc. reported second quarter 2026 results with total revenue of $83.0 million, up 51% from $55.0 million a year earlier, driven mainly by its Insurance Distribution segment and the 2025 ArmadaCare acquisition. Net loss attributable to shareholders narrowed to $(14.4) million, or $(0.33) per diluted share, compared with $(72.7) million, or $(1.51) per share, in 2025.
Adjusted EBITDA to shareholders turned positive at $3.7 million versus a $(4.6) million loss, and adjusted net loss improved to $(1.8) million from $(10.6) million. Insurance Distribution revenue rose 77% to $58.4 million with organic revenue growth of 44.1%, while Adjusted EBITDA to shareholders climbed to $9.8 million from $2.5 million. Specialty P&C insurer Everspan generated net income of $1.1 million, improved its loss ratio to 61.4%, and reduced its combined ratio to 100.6%.
For the first half of 2026, total revenue reached about $187.2 million, and adjusted net income attributable to shareholders was $14.8 million. Stockholders’ equity attributable to common shareholders was $699 million, or $15.52 per share as of June 30, 2026. Octave also highlighted new data and AI initiatives, including a proprietary AI-driven underwriting platform, and scheduled an August 7, 2026 earnings call to discuss results and updated 2026 guidance.
Positive
- Q2 2026 revenue surged 51% to $83.0 million, while Adjusted EBITDA to shareholders improved from a $(4.6) million loss to a $3.7 million profit, reflecting much stronger underlying operating performance.
- Insurance Distribution posted 77% revenue growth to $58.4 million, with organic revenue growth of 44.1% and Adjusted EBITDA to shareholders rising to $9.8 million from $2.5 million, showing strong momentum in the core MGA platform.
- Everspan’s underwriting metrics improved meaningfully, with the loss ratio falling to 61.4% and the combined ratio to 100.6%, while net income increased to $1.1 million and Adjusted EBITDA to shareholders to $1.8 million.
Negative
- The company remains loss-making on a GAAP basis, with Q2 2026 net loss attributable to shareholders of $(14.4) million and stockholders’ equity per share slipping to $15.52 from $15.83 at March 31, 2026.
- Everspan’s combined ratio, though improved, stayed above breakeven at 100.6%, and Corporate & Other reported an Adjusted EBITDA loss of $(7.7) million in Q2 2026, indicating ongoing pressure from overhead and financing costs.
Filing Explained
At June 30, cash and equivalents were $79,096 thousand against $155,459 thousand of long-term debt; common equity was $698,753 thousand.
A Form 8-K reports specified material events, and this filing reports Octave Specialty Group’s second-quarter 2026 results for the period ended
At
The balance sheet also reports
Adjusted EBITDA and adjusted net income are supplemental non-GAAP measures derived from consolidated financial information; the company says they are not substitutes for GAAP results and should not be viewed in isolation.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Total revenues Q2 2026: $82,995
Total revenues Q2 2025: $54,957
Net loss attributable to shareholders Q2 2026: $(14,429)
+5 more
8 metrics
Total revenues Q2 2026
$82,995
Three months ended June 30, 2026; dollars in thousands
Total revenues Q2 2025
$54,957
Three months ended June 30, 2025; dollars in thousands
Net loss attributable to shareholders Q2 2026
$(14,429)
Three months ended June 30, 2026; includes continuing operations
Adjusted EBITDA to shareholders Q2 2026
$3,685
Non-GAAP; three months ended June 30, 2026; dollars in thousands
Insurance Distribution revenues Q2 2026
$58,418
Segment total revenues; three months ended June 30, 2026; dollars in thousands
Everspan combined ratio Q2 2026
100.6%
Specialty P&C Insurance segment combined ratio for three months ended June 30, 2026
Stockholders’ equity attributable to common shareholders
$698,753
As of June 30, 2026; dollars in thousands
Weighted-average diluted shares Q2 2026
45,391
Weighted-average diluted shares outstanding for three months ended June 30, 2026 (in thousands of shares)
Key Terms
Adjusted EBITDA, Organic Revenue Growth, Combined Ratio, Loss Ratio, +2 more
6 terms
Adjusted EBITDA financial
"Adjusted EBITDA to shareholders for the second quarter of 2026 improved to $3.7 million"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
Organic Revenue Growth financial
"reflecting the acquisition of ArmadaCare and organic revenue growth of 44%"
Organic revenue growth is the increase in a company's sales that comes from its existing products and services, without including any gains from acquisitions or selling off parts of the business. It reflects the company’s ability to attract more customers or encourage existing customers to buy more over time. For investors, it indicates the company's underlying strength and efficiency in expanding its core operations.
Combined Ratio financial
"the combined ratio decreased more than 600 basis points from the prior year period"
The combined ratio is a way insurance companies measure how well they are doing by adding up all their costs and claims and comparing them to the money they earn from premiums. If the ratio is below 100%, it means the company is making a profit; if it's above 100%, they are losing money. It helps see if an insurance company is financially healthy or not.
Loss Ratio financial
"led by a reduction of the loss ratio to 61.4%"
Loss ratio is the percentage of an insurer’s collected premiums that is paid out to cover claims and related costs, showing how much of customer payments are used to settle losses. Investors treat it like a fuel-efficiency gauge for an insurance business—lower loss ratios suggest pricing and risk selection leave more room for profit, while consistently high ratios signal weak pricing, rising claims, or not enough money set aside, which can hurt returns.
redeemable noncontrolling interest financial
"Adjustment for Redeemable NCI"
A redeemable noncontrolling interest is a minority ownership stake in a business that the minority owner can require to be bought back for cash or that must be redeemed under set conditions. Investors care because it is not permanent equity: it represents a foreseeable cash obligation and can reduce the parent company’s reported equity and available cash, much like a loan from a roommate you must repay on request rather than shared ownership of the house.
Managing General Agents/Underwriters financial
"Managing General Agents/Underwriters and brokers receive commissions"
Earnings Snapshot
Total revenues Q2 2026: $82,995
Three and six months ended June 30, 2026
Total revenues Q2 2026
$82,995
up 51% from $54,957 in Q2 2025
Net loss attributable to shareholders Q2 2026
$(14,429)
improved from $(72,699) in Q2 2025
Adjusted EBITDA to shareholders Q2 2026
$3,685
improved from $(4,569) in Q2 2025
Insurance Distribution total revenues Q2 2026
$58,418
up from $33,041 in Q2 2025
Specialty P&C combined ratio Q2 2026
100.6%
improved from 106.7% in Q2 2025
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did Octave Specialty Group (OSG) perform financially in Q2 2026?
Octave reported Q2 2026 revenue of $83.0 million, up 51% from $55.0 million a year earlier. Net loss attributable to shareholders narrowed to $(14.4) million, or $(0.33) per diluted share, compared with $(72.7) million, or $(1.51) per share, in Q2 2025.
How did OSG’s profitability and non-GAAP metrics change versus Q2 2025?
Profitability improved significantly, with Adjusted EBITDA to shareholders turning positive at $3.7 million versus a $(4.6) million loss. Adjusted net loss to shareholders also improved to $(1.8) million from $(10.6) million, indicating better underlying operating performance despite a GAAP net loss.
What were the key Q2 2026 results for OSG’s Insurance Distribution segment?
Insurance Distribution delivered revenue of $58.4 million, up 77% year over year, with organic revenue growth of 44.1%. Adjusted EBITDA to shareholders rose sharply to $9.8 million from $2.5 million, aided by ArmadaCare and higher ownership in Octave Ventures.
How did Everspan, OSG’s Specialty P&C Insurance segment, perform in Q2 2026?
Everspan produced net income of $1.1 million, up from $0.4 million in Q2 2025. Gross premiums written were $94.7 million, and the loss ratio improved to 61.4% while the combined ratio decreased to 100.6%, reflecting better underwriting results.
What is Octave Specialty Group’s equity position as of June 30, 2026?
Stockholders’ equity attributable to common shareholders was $699 million, or $15.52 per share, at June 30, 2026, compared with $713 million, or $15.83 per share, at March 31, 2026. OSG separately reported holding-company net assets of $48 million.
What strategic initiatives and technology investments did OSG highlight?
Management emphasized data and AI initiatives, including a proprietary enterprise AI-driven underwriting platform that converts unstructured submissions into decision-ready risks. The company expects this platform to accelerate and improve underwriting decisions and help bring additional MGAs to market faster.
Does Octave Specialty Group (OSG) have any notable restrictions on its common stock?
Yes. OSG’s amended and restated certificate of incorporation includes restrictions on transfers that would cause any holder, or group, to reach or exceed 5% ownership, or increase an existing 5% or greater position, generally rendering such transfers prohibited and void.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
| FORM | ||||||||
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 6, 2026
| (Exact name of Registrant as specified in its charter) | ||
| (State of incorporation) | (Commission file number) | (I.R.S. employer identification no.) | ||||||||||||
| (Address of principal executive offices) | |||||||||||
| (Registrant's telephone number, including area code) | |||||||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4c)) | |||||
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 under the Securities Act (17 CFR 230.405) or Rule 12b-2 under the Exchange Act (17 CFR 240.12b-2).
Emerging growth company | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to | ||||||||
| Section 13(a) of the Exchange Act. | ☐ | |||||||
Item 2.02 Results of Operations and Financial Condition.
On August 6, 2026, Octave Specialty Group, Inc. issued a press release announcing financial results for its second quarter ended June 30, 2026. Exhibit 99.1 is a copy of such press release and is incorporated by reference.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of Octave Specialty Group, Inc. under the Securities Act of 1933 or the Exchange Act.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit | ||||||||
| Number | Exhibit Description | |||||||
| 99.1 | Press Release dated August 6, 2026 | |||||||
EXHIBIT INDEX
| Exhibit | ||||||||
| Number | Exhibit Description | |||||||
| 99.1 | Press Release dated August 6, 2026 | |||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Octave Specialty Group, Inc. | ||||||||||||||||||||
| (Registrant) | ||||||||||||||||||||
| Dated: | August 6, 2026 | By: | /s/ Reid Powell | |||||||||||||||||
| Reid Powell | ||||||||||||||||||||
| Corporate Secretary and Assistant General Counsel | ||||||||||||||||||||
1
Exhibit 99.1
Octave Specialty Group Reports Second Quarter 2026 Results
•Insurance Distribution Segment
◦Total revenue grew 77% to $58 million
◦Organic revenue growth equaled 44%
◦Net loss to Shareholders totaled $(4) million, compared to $(8) million in 2Q25
◦Adjusted EBITDA to Shareholders totaled $10 million, compared to $3 million in 2Q25
•Specialty P&C Insurance Segment ("Everspan")
◦Gross and net premiums written totaled $95 million and $23 million, down (2)% and up 52%, respectively
◦Net income equaled $1 million, compared to $0.4 million in 2Q25
◦Adjusted EBITDA to Shareholders totaled $1.8 million, compared to $0.7 million in 2Q25
NEW YORK, NY, August 6, 2026, (BUSINESS WIRE) — Octave Specialty Group, Inc. (NYSE: OSG) ("Octave" or "OSG"), a global specialty insurance firm, today reported its results for the Second Quarter 2026.
Claude LeBlanc, President and Chief Executive Officer of Octave, said "Our core Insurance Distribution business delivered another quarter of strong performance led by revenue growth of 77% and organic revenue growth of 44%. Our Insurance Distribution top-line success translated to a near fourfold increase in Adjusted EBITDA to shareholders during the second quarter of 2026 compared to 2025. These results reflect the successful 2025 acquisition of ArmadaCare and the diversification of our portfolio of MGAs against the backdrop of increasingly soft property market conditions."
LeBlanc continued, "While our efforts continue towards repositioning Everspan, we are encouraged by the trend in Everspan's results since these efforts began in the second half of 2024. During the second quarter of 2026 the combined ratio decreased more than 600 basis points from the prior year period led by a reduction of the loss ratio to 61.4%."
"During the quarter, we also further advanced our data and AI initiatives designed to both improve our operating platform as well as enhance underwriting and business production. We recently launched our proprietary, enterprise, AI-driven underwriting platform, which turns unstructured submissions into decision-ready risks. We expect this platform to enable us to significantly accelerate and improve underwriting decisions and bring additional MGAs to market more quickly."
1
Octave's Second Quarter 2026 Summary Results | ||||||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||
(in thousands, except per share data)(1) | 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||||||||||||||||||||||
| Total revenues | $ | 82,995 | $ | 54,957 | 51% | $ | 187,165 | $ | 117,713 | 59% | ||||||||||||||||||||||||||||
| Total expenses | $ | 94,666 | $ | 77,931 | 21% | $ | 202,180 | $ | 155,794 | 30% | ||||||||||||||||||||||||||||
| Pretax income (loss) from continuing operations | $ | (11,671) | $ | (22,974) | NM | $ | (15,015) | $ | (38,081) | NM | ||||||||||||||||||||||||||||
| Provision (benefit) for income taxes from continuing operations | $ | 485 | $ | (2,172) | NM | $ | 4 | $ | (2,789) | NM | ||||||||||||||||||||||||||||
| Net income (loss) from continuing operations | $ | (12,156) | $ | (20,802) | NM | $ | (15,019) | $ | (35,292) | NM | ||||||||||||||||||||||||||||
| Net income (loss) from continuing operations attributable to shareholders, net of tax | $ | (14,429) | $ | (20,548) | NM | $ | (21,280) | $ | (36,692) | NM | ||||||||||||||||||||||||||||
| Net income (loss) from discontinued operations | $ | — | $ | (52,151) | NM | $ | — | $ | (82,398) | NM | ||||||||||||||||||||||||||||
| Net income (loss) attributable to shareholders | $ | (14,429) | $ | (72,699) | NM | $ | (21,280) | $ | (119,090) | NM | ||||||||||||||||||||||||||||
Net income (loss) from continuing operations attributable to shareholders per diluted share (3) | $ | (0.33) | $ | (0.42) | (21)% | $ | (0.47) | $ | (0.99) | (53)% | ||||||||||||||||||||||||||||
Net income (loss) attributable to shareholders per diluted share (3) | $ | (0.33) | $ | (1.51) | (78)% | $ | (0.47) | $ | (2.72) | (83)% | ||||||||||||||||||||||||||||
Non-GAAP(2) | ||||||||||||||||||||||||||||||||||||||
| EBITDA to shareholders | $ | (1,737) | $ | (9,848) | NM | $ | 1,873 | $ | (15,345) | NM | ||||||||||||||||||||||||||||
| Adjusted EBITDA to shareholders | $ | 3,685 | $ | (4,569) | NM | $ | 23,754 | $ | (5,876) | NM | ||||||||||||||||||||||||||||
| Adjusted net income (loss) attributable to shareholders | $ | (1,813) | $ | (10,552) | NM | $ | 14,802 | $ | (16,587) | NM | ||||||||||||||||||||||||||||
| Per Share | ||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA to shareholders per diluted share(2) | $ | 0.08 | $ | (0.09) | NM | $ | 0.52 | $ | (0.12) | NM | ||||||||||||||||||||||||||||
Adjusted net income (loss) to shareholders per diluted share(2) | $ | (0.04) | $ | (0.22) | (82)% | $ | 0.33 | $ | (0.35) | NM | ||||||||||||||||||||||||||||
Weighted-average diluted shares outstanding | 45,391 | 48,117 | (6)% | 45,347 | 47,738 | (5)% | ||||||||||||||||||||||||||||||||
(1)Some financial data in this press release may not add up due to rounding
(2)See Non-GAAP Financial Data section of this press release for further information
(3)Per diluted share includes the impact of adjusting redeemable noncontrolling interests to current redemption value
Second Quarter 2026 Summary(4)
Total revenue for the second quarter of 2026 was $83.0 million, an increase of 51% compared to $55.0 million in the same prior-year period. The growth in total revenue was driven primarily by the Insurance Distribution segment, reflecting the acquisition of ArmadaCare and organic revenue growth of 44%.
Octave's net (loss) to shareholders for the second quarter of 2026 improved to $(14.4) million compared to $(20.5) million in the same prior-year period. The improvement was attributable to (i) our Insurance Distribution segment, which reported a net (loss) of $(3.7) million compared to $(7.7) million in the same prior-year period, (ii) our Specialty Property & Casualty segment, where Everspan reported net income of $1.1 million compared to $0.4 million in the same prior-year period, and (iii) a Corporate net loss of $(11.6) million compared to $(13.2) million in the same prior-year period.
Adjusted net (loss) to shareholders for the second quarter of 2026 improved to $(1.8) million, compared to $(10.6) million in the same prior-year period. Adjusted EBITDA to shareholders for the second quarter of 2026 improved to $3.7 million, compared to $(4.6) million in the same prior-year period. The improvement in Adjusted EBITDA to shareholders was driven by a $7.3 million increase in Insurance Distribution Adjusted EBITDA to shareholders, reflecting organic growth across our core MGA platform, the acquisition of ArmadaCare, and an increase in our ownership position in Octave Ventures (formerly known as Beat Capital Partners) to 70% from 60%. In addition, Everspan's Adjusted EBITDA to shareholders increased $1.1 million to $1.8 million in the second quarter of 2026 from $0.7 million a year ago.
(4)For definitions of each non-GAAP measure referred to above, as well as reconciliation of such non-GAAP measures to their most directly comparable GAAP measures, see "Non-GAAP Financial Measures" below.
2
Earnings Call and Webcast
On August 7, 2026, at 8:30am ET, Claude LeBlanc, President and Chief Executive Officer, and David Trick, Executive Vice President and Chief Financial Officer, will discuss Octave's second quarter 2026 results and updated 2026 guidance during a conference call. A live audio webcast of the call will be available through the Investor Relations section of Octave’s website, https://octavegroup.com/investor-relations/events-and-presentations. Participants may also listen via telephone by dialing (877) 407-9716 or (201) 493-6779.
The webcast will be archived on Octave's website. A replay of the call will be available through August 21, 2026, and can be accessed by dialing (Domestic) (844) 512-2921 or (International) (412) 317-6671; and using ID# 13761601.
Additional information is included in an operating supplement and presentations on Octave's website, www.octavegroup.com.
Results of Operations by Segment
Insurance Distribution Segment
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||
($ in thousands)(1) | 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||||||||||||||||||||||
| Premiums placed | $ | 314,367 | $ | 249,912 | 26 | % | $ | 741,200 | $ | 483,098 | 53 | % | ||||||||||||||||||||||||||
| Total revenues | $ | 58,418 | $ | 33,041 | 77 | % | $ | 136,944 | $ | 74,039 | 85 | % | ||||||||||||||||||||||||||
| Pretax income (loss) | $ | (846) | $ | (10,173) | NM | $ | 15,939 | $ | (12,416) | NM | ||||||||||||||||||||||||||||
Pretax income (loss) to shareholders(2) | $ | (3,232) | $ | (9,919) | NM | $ | 9,565 | $ | (13,816) | NM | ||||||||||||||||||||||||||||
Net income (loss) | $ | (1,325) | $ | (7,992) | NM | $ | 15,828 | $ | (9,735) | NM | ||||||||||||||||||||||||||||
Net income (loss) to shareholders(2) | $ | (3,711) | $ | (7,738) | NM | $ | 9,454 | $ | (11,135) | NM | ||||||||||||||||||||||||||||
EBITDA(4) | $ | 13,887 | $ | 4,698 | 196% | $ | 44,704 | $ | 16,781 | 166% | ||||||||||||||||||||||||||||
EBITDA to shareholders(2)(4) | $ | 8,670 | $ | 2,513 | 245% | $ | 32,137 | $ | 9,576 | 236% | ||||||||||||||||||||||||||||
Adjusted EBITDA(4) | $ | 15,329 | $ | 4,580 | 235% | $ | 48,324 | $ | 16,692 | 190% | ||||||||||||||||||||||||||||
Adjusted EBITDA to shareholders(2)(4) | $ | 9,792 | $ | 2,519 | 289% | $ | 35,132 | $ | 9,611 | 266% | ||||||||||||||||||||||||||||
Adjusted net income (loss)(4) | $ | 9,419 | $ | (701) | NM | $ | 38,168 | $ | 6,348 | 501% | ||||||||||||||||||||||||||||
Adjusted net income (loss) to shareholders(2)(4) | $ | 4,605 | $ | (3,013) | NM | $ | 26,650 | $ | (464) | NM | ||||||||||||||||||||||||||||
Pretax income margin to shareholders(3) | (5.5) | % | (30.0) | % | 2450 | bps | 7.0 | % | (18.7) | % | 2570 | bps | ||||||||||||||||||||||||||
Adjusted EBITDA margin to shareholders(4),(5) | 16.8 | % | 7.6 | % | 920 | bps | 25.7 | % | 13.0 | % | 1270 | bps | ||||||||||||||||||||||||||
Organic Growth(4) | 44.1 | % | (2.6) | % | 42.9 | % | (2.3) | % | ||||||||||||||||||||||||||||||
(1) Reflects segment results prior to intersegment activities eliminated in consolidation.
(2) After the impact of noncontrolling interests
(3)Represents Pretax income (loss) to shareholders divided by total revenues
(4)See Non-GAAP Financial Data section of this press release for further information
(5) Represents Adjusted EBITDA to shareholders divided by total revenues
Specialty Property & Casualty Insurance Segment
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||
($ in thousands)(1) | 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||||||||||||||||||||||
| Gross premium written | $ | 94,702 | $ | 96,247 | (2) | % | $ | 198,418 | $ | 183,162 | 8 | % | ||||||||||||||||||||||||||
| Net premiums written | $ | 23,142 | $ | 15,207 | 52 | % | $ | 55,591 | $ | 33,212 | 67 | % | ||||||||||||||||||||||||||
| Net premiums earned | $ | 21,749 | $ | 16,203 | 34 | % | $ | 41,750 | $ | 31,881 | 31 | % | ||||||||||||||||||||||||||
| Total revenue | $ | 26,403 | $ | 21,390 | 23 | % | $ | 51,702 | $ | 42,561 | 21 | % | ||||||||||||||||||||||||||
Net income (loss) | $ | 1,119 | $ | 428 | 161% | $ | (6,571) | $ | 1,852 | NM | ||||||||||||||||||||||||||||
Adjusted EBITDA to shareholders(2) | $ | 1,757 | $ | 681 | 158% | $ | 3,375 | $ | 2,270 | 49% | ||||||||||||||||||||||||||||
| Loss Ratio | 61.4 | % | 67.8 | % | (640) | bps | 79.1 | % | 67.4 | % | 1170 | bps | ||||||||||||||||||||||||||
| Expense Ratio | 39.2 | % | 38.9 | % | 30 | bps | 45.0 | % | 37.1 | % | 790 | bps | ||||||||||||||||||||||||||
| Combined Ratio | 100.6 | % | 106.7 | % | (610) | bps | 124.1 | % | 104.5 | % | 1960 | bps | ||||||||||||||||||||||||||
(1) Reflects segment results prior to intersegment activities eliminated in consolidation.
(2) See Non-GAAP Financial Data section of this press release for further information
3
OSG Corporate (holding company only)
OSG on a standalone basis, excluding its ownership interests in its Specialty P&C Insurance and Insurance Distribution subsidiaries, had net assets of $48 million as of June 30, 2026. Assets included cash and liquid securities of $26 million and other investments of $22 million.
Consolidated Octave Specialty Group, Inc. Stockholders' Equity and Noncontrolling Interests ("NCI") Impact to EPS
Stockholders’ equity attributable to common shareholders at June 30, 2026, was $699 million, or $15.52 per share, compared to $713 million, or $15.83 per share, as of March 31, 2026. The decline was primarily a result of the total comprehensive loss attributable to common shareholders of $(12) million.
Calculation of Earnings (Loss) Per Share (EPS)
Diluted net income (loss) per share is computed by dividing net income (loss) attributable to shareholders, adjusted for the direct retained earnings impacts of changes to redeemable noncontrolling interests, by the basic weighted-average shares outstanding plus all potentially dilutive common shares outstanding during the period. The following table provides a reconciliation of net income (loss) attributable to shareholders to the numerator in the diluted earnings per share calculation, together with the resulting earnings per share amounts:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
(in thousands, except per share data) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Net income (loss) from continuing operations attributable to shareholders | $ | (14,429) | $ | (20,548) | $ | (21,280) | $ | (36,692) | |||||||||||||||
| Adjustment for Redeemable NCI | (737) | 220 | $ | 70 | $ | (10,605) | |||||||||||||||||
| Numerator of diluted EPS | $ | (15,166) | $ | (20,328) | $ | (21,210) | $ | (47,297) | |||||||||||||||
| Per Share — Diluted | $ | (0.33) | $ | (0.42) | $ | (0.47) | $ | (0.99) | |||||||||||||||
| Net income (loss) attributable to shareholders | $ | (14,429) | $ | (72,699) | $ | (21,280) | $ | (119,090) | |||||||||||||||
| Adjustment for Redeemable NCI | (737) | 220 | 70 | (10,605) | |||||||||||||||||||
| Numerator of diluted EPS | $ | (15,166) | $ | (72,479) | $ | (21,210) | $ | (129,695) | |||||||||||||||
| Per Share — Diluted | $ | (0.33) | $ | (1.51) | $ | (0.47) | $ | (2.72) | |||||||||||||||
| WASO-Diluted | 45,391 | 48,117 | 45,347 | 47,738 | |||||||||||||||||||
4
OCTAVE SPECIALTY GROUP, INC. AND SUBSIDIARIES
Consolidated Statements of Income (Loss) (Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| ($ in thousands, except share data) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| Commissions | $ | 49,728 | $ | 30,322 | $ | 117,906 | $ | 67,093 | ||||||||||||||||||
| Servicing and other fees | 5,913 | 4,472 | 15,275 | 9,436 | ||||||||||||||||||||||
| Net premiums earned | 21,749 | 16,203 | 41,750 | 31,881 | ||||||||||||||||||||||
| Program fees | 3,293 | 3,497 | 6,937 | 7,149 | ||||||||||||||||||||||
| Investment income | 1,877 | 2,609 | 4,232 | 5,424 | ||||||||||||||||||||||
| Other | 435 | (2,146) | 1,065 | (3,270) | ||||||||||||||||||||||
| Total revenues | 82,995 | 54,957 | 187,165 | 117,713 | ||||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||
| Commissions | 8,508 | 7,403 | 22,513 | 17,768 | ||||||||||||||||||||||
| Losses and loss adjustment expenses | 13,346 | 10,978 | 33,025 | 21,474 | ||||||||||||||||||||||
| Policy acquisition costs | 6,359 | 3,699 | 12,730 | 7,540 | ||||||||||||||||||||||
| General and administrative | 51,415 | 40,540 | 104,570 | 79,071 | ||||||||||||||||||||||
| Intangible amortization and depreciation | 12,264 | 9,741 | 24,478 | 18,917 | ||||||||||||||||||||||
| Interest | 2,774 | 5,570 | 4,864 | 11,024 | ||||||||||||||||||||||
| Total expenses | 94,666 | 77,931 | 202,180 | 155,794 | ||||||||||||||||||||||
| Pretax income (loss) from continuing operations | (11,671) | (22,974) | (15,015) | (38,081) | ||||||||||||||||||||||
| Provision (benefit) for income taxes from continuing operations | 485 | (2,172) | 4 | (2,789) | ||||||||||||||||||||||
| Net income (loss) from continuing operations | (12,156) | (20,802) | (15,019) | (35,292) | ||||||||||||||||||||||
| Net income (loss) from discontinued operations | — | (52,151) | — | (82,398) | ||||||||||||||||||||||
| Net income (loss) | (12,156) | (72,953) | (15,019) | (117,690) | ||||||||||||||||||||||
| Net (gain) loss attributable to noncontrolling interest | (2,273) | 254 | (6,261) | (1,400) | ||||||||||||||||||||||
| Net income (loss) attributable to shareholders | $ | (14,429) | $ | (72,699) | $ | (21,280) | $ | (119,090) | ||||||||||||||||||
| Net income (loss) from continuing operations attributable to shareholders | $ | (14,429) | $ | (20,548) | $ | (21,280) | $ | (36,692) | ||||||||||||||||||
| Net income (loss) from discontinued operations attributable to shareholders | — | (52,151) | — | (82,398) | ||||||||||||||||||||||
| Net income (loss) attributable to shareholders | $ | (14,429) | $ | (72,699) | $ | (21,280) | $ | (119,090) | ||||||||||||||||||
| Net income (loss) from continuing operations per share attributable to shareholders | ||||||||||||||||||||||||||
| Basic | $ | (0.33) | $ | (0.42) | $ | (0.47) | $ | (0.99) | ||||||||||||||||||
| Diluted | $ | (0.33) | $ | (0.42) | $ | (0.47) | $ | (0.99) | ||||||||||||||||||
| Net income (loss) per share attributable to shareholders | ||||||||||||||||||||||||||
| Basic | $ | (0.33) | $ | (1.51) | $ | (0.47) | $ | (2.72) | ||||||||||||||||||
| Diluted | $ | (0.33) | $ | (1.51) | $ | (0.47) | $ | (2.72) | ||||||||||||||||||
| Weighted-average number of common shares outstanding: | ||||||||||||||||||||||||||
| Basic | 45,390,612 | 48,116,503 | 45,347,014 | 47,738,050 | ||||||||||||||||||||||
| Diluted | 45,390,612 | 48,116,503 | 45,347,014 | 47,738,050 | ||||||||||||||||||||||
5
OCTAVE SPECIALTY GROUP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)
| ($ in thousands, except share data) | June 30, 2026 | March 31, 2026 | ||||||||||||
| Assets: | ||||||||||||||
| Investments: | ||||||||||||||
| Fixed maturity securities, at fair value (amortized cost: $136,793 and $139,242) | $ | 134,141 | $ | 137,092 | ||||||||||
| Short-term investments, at fair value (amortized cost: $82,513 and $92,295) | 82,513 | 92,295 | ||||||||||||
| Other investments (includes $7,498 and $7,454 at fair value) | 25,015 | 24,971 | ||||||||||||
| Total investments (net of allowance for credit losses of $0 and $0) | 241,669 | 254,358 | ||||||||||||
| Cash and cash equivalents (including $52,308 and $46,634 of restricted cash) | 79,096 | 93,537 | ||||||||||||
| Premium receivables (net of allowance for credit losses of $500 and $500) | 94,635 | 87,653 | ||||||||||||
| Commission and fees receivable | 100,537 | 106,198 | ||||||||||||
| Reinsurance recoverable on paid and unpaid losses (net of allowance for credit losses of $100 and $100) | 495,653 | 469,859 | ||||||||||||
| Deferred ceded premium | 148,236 | 145,420 | ||||||||||||
| Policy acquisition costs | 16,423 | 16,451 | ||||||||||||
| Intangible assets, less accumulated amortization | 447,448 | 458,380 | ||||||||||||
| Goodwill | 534,304 | 533,497 | ||||||||||||
| Other assets (net of allowance for credit losses of $350 and $350) | 122,856 | 101,673 | ||||||||||||
| Total assets | $ | 2,280,857 | $ | 2,267,026 | ||||||||||
| Liabilities and Stockholders’ Equity: | ||||||||||||||
| Liabilities: | ||||||||||||||
| Unearned premiums | $ | 202,890 | $ | 198,681 | ||||||||||
| Loss and loss adjustment expense reserves | 499,043 | 487,261 | ||||||||||||
| Ceded premiums payable | 93,346 | 89,148 | ||||||||||||
| Deferred program fees and reinsurance commissions | 6,989 | 6,929 | ||||||||||||
| Commission payable | 128,231 | 118,086 | ||||||||||||
| Deferred taxes | 58,855 | 60,553 | ||||||||||||
| Long-term debt | 155,459 | 117,062 | ||||||||||||
| Accrued interest payable | 27 | 1,305 | ||||||||||||
| Other liabilities | 120,643 | 158,458 | ||||||||||||
| Total liabilities | 1,265,483 | 1,237,483 | ||||||||||||
| Redeemable noncontrolling interest | 197,529 | 195,969 | ||||||||||||
| Stockholders’ equity: | ||||||||||||||
| Preferred stock, par value $0.01 per share; 20,000,000 shares authorized shares; issued and outstanding shares—none | — | — | ||||||||||||
| Common stock, par value $0.01 per share; 130,000,000 shares authorized; issued shares: 48,876,882 and 48,876,882 | 489 | 489 | ||||||||||||
| Additional paid-in capital | 379,561 | 380,263 | ||||||||||||
| Accumulated other comprehensive income | 3,292 | 1,224 | ||||||||||||
| Retained earnings | 348,474 | 363,751 | ||||||||||||
| Treasury stock, shares at cost: 3,859,121 and 3,863,290 | (33,063) | (33,109) | ||||||||||||
| Total Octave Specialty Group, Inc. stockholders’ equity | 698,753 | 712,618 | ||||||||||||
| Nonredeemable noncontrolling interest | 119,092 | 120,956 | ||||||||||||
| Total stockholders’ equity | 817,845 | 833,574 | ||||||||||||
| Total liabilities, redeemable noncontrolling interest and stockholders’ equity | $ | 2,280,857 | $ | 2,267,026 | ||||||||||
6
Non-GAAP Financial Data
In addition to reporting the Company’s quarterly financial results in accordance with GAAP, the Company is reporting non-GAAP financial measures: EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin, Organic Revenue Growth Rate (Insurance Distribution segment only), Adjusted Net Income and Adjusted Net Income Margin. These amounts are derived from our consolidated financial information, but are not presented in our consolidated financial results because they are not calculated in accordance with GAAP.
We present non-GAAP supplemental financial information because we believe such information is of interest to the investment community, and that it provides greater transparency and enhanced visibility into the underlying drivers and performance of our businesses on a basis that may not be otherwise apparent on a GAAP basis. We view these non-GAAP financial measures as important indicators when assessing and evaluating our performance on a segmented and consolidated basis, and they are presented to improve the comparability of our results between periods by eliminating the impact of the items that may not be representative of our core operating performance. These non-GAAP financial measures are not substitutes for the Company’s GAAP reporting, should not be viewed in isolation, and may differ from similar reporting provided by other companies, which may define non-GAAP measures differently
The following paragraphs define each non-GAAP financial measure. A tabular reconciliation of the non-GAAP financial measure to the most comparable GAAP financial measure is also presented below.
Non-GAAP Financial Measures
Organic Revenue Growth & Rate (Insurance Distribution Only) — Organic revenue is based on commissions and fees for the relevant period by excluding (i) the first twelve months of commissions and fees generated from acquisitions, (ii) commissions and fees from divestitures and (iii) other items such as contingent commissions, profit commissions and the impact of changes in foreign exchange rates.
Organic Revenue Growth is the change in organic revenue period-to-period, with prior period results adjusted to (i) include commissions and fees that were excluded from organic revenue in the prior period and reached the twelve-month owned mark in the current period, and (ii) exclude commissions and fees related to divestitures from organic revenue.
Total Specialty P&C Insurance Production includes gross premiums written by Octave's Specialty P&C Insurance segment and premiums placed by the Insurance Distribution segment. Specialty P&C Insurance revenues are dependent on gross premiums written, as specialty program insurance companies earn premiums based on the portion of gross premiums written retained (i.e., net premiums written) and fees on gross premiums written that are ceded to reinsurers. Insurance Distribution revenues are dependent on premium volume, as Managing General Agents/Underwriters and brokers receive commissions based on the amount of premiums placed (i.e., gross premiums written on behalf of insurance carriers) with insurance carriers.
EBITDA — EBITDA is net income (loss) from continuing operations before interest expense, income taxes, depreciation and amortization of intangible assets.
EBITDA Margin — EBITDA divided by total revenues.
Adjusted EBITDA and Adjusted EBITDA Margin — We define Adjusted EBITDA as net income (loss) from continuing operations before interest expense, income taxes, depreciation, amortization of intangible assets, change in fair value of contingent consideration and certain items of income and expense, including share-based compensation expense, acquisition and integration-related expenses, severance, and other exceptional or non-recurring items, including those related to raising capital. We believe that Adjusted EBITDA is an appropriate measure of operating performance because it eliminates the impact of income and expenses that may obfuscate business performance, and that the presentation of this measure enhances an investor's understanding of our financial performance.
Adjusted Net Income and Adjusted Net Income Margin — We define Adjusted Net Income as net income (loss) from continuing operations attributable to shareholders adjusted for amortization of intangible assets, change in fair value of contingent consideration and certain items of income and expense, including share-based compensation expense, acquisition and integration-related expenses, severance and non-recurring income and loss items that, in the opinion of management, significantly affect the period-over-period assessment of operating results, and the related tax effect of those adjustments. Per share amounts exclude any impact of revaluing noncontrolling interests
7
as otherwise reported under GAAP earnings per share. We believe that Adjusted Net Income is an appropriate measure of operating performance because it eliminates the impact of income and expenses that may obfuscate business performance.
Results of Operations by Segment (Continued)
| Three Months Ended June 30, 2026 | Specialty Property & Casualty Insurance | Insurance Distribution | Corporate & Other | Eliminations | Consolidated | |||||||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||||||||
| Gross premiums written | $ | 94,702 | $ | 94,702 | ||||||||||||||||||||||||||||
| Net premiums written | 23,142 | 23,142 | ||||||||||||||||||||||||||||||
| Total revenues | 26,403 | $ | 58,418 | $ | 232 | $ | (2,058) | 82,995 | ||||||||||||||||||||||||
| Total expenses | 25,159 | 59,264 | 11,988 | (1,745) | 94,666 | |||||||||||||||||||||||||||
| Pretax income (loss) | 1,244 | (846) | (11,756) | (313) | (11,671) | |||||||||||||||||||||||||||
| Provision (benefit) for income taxes | 125 | 479 | (119) | — | 485 | |||||||||||||||||||||||||||
| Net income (loss) | $ | 1,119 | $ | (1,325) | $ | (11,637) | $ | (313) | $ | (12,156) | ||||||||||||||||||||||
| Adjustments to EBITDA | ||||||||||||||||||||||||||||||||
| Add: Interest expense | $ | — | $ | 2,774 | $ | — | — | $ | 2,774 | |||||||||||||||||||||||
| Add: Income tax expense | 125 | 479 | (119) | — | 485 | |||||||||||||||||||||||||||
| Add: Depreciation | — | 350 | 305 | — | 655 | |||||||||||||||||||||||||||
| Add: Intangible amortization | — | 11,609 | — | — | 11,609 | |||||||||||||||||||||||||||
| EBITDA | $ | 1,244 | $ | 13,887 | $ | (11,451) | $ | (313) | $ | 3,367 | ||||||||||||||||||||||
| EBITDA attributable to shareholders | $ | 1,244 | $ | 8,670 | $ | (11,451) | $ | (200) | $ | (1,737) | ||||||||||||||||||||||
| Adjustments to Adjusted EBITDA | ||||||||||||||||||||||||||||||||
| Add: Acquisition and integration-related expenses | $ | — | $ | 451 | $ | 688 | $ | — | $ | 1,139 | ||||||||||||||||||||||
| Add: Equity-based compensation expense | 372 | 991 | 2,650 | — | 4,013 | |||||||||||||||||||||||||||
| Add: Severance and restructuring expense | 141 | — | 449 | — | 590 | |||||||||||||||||||||||||||
| Add: Other non-operating (income) losses | — | — | — | — | — | |||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 1,757 | $ | 15,329 | $ | (7,664) | $ | (313) | $ | 9,109 | ||||||||||||||||||||||
| Adjusted EBITDA attributable to shareholders | $ | 1,757 | $ | 9,792 | $ | (7,664) | $ | (200) | $ | 3,685 | ||||||||||||||||||||||
| Net income (loss) | $ | 1,119 | $ | (1,325) | $ | (11,637) | $ | (313) | $ | (12,156) | ||||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||||||
| Add: Acquisition and integration-related expenses | — | 451 | 688 | — | 1,139 | |||||||||||||||||||||||||||
| Add: Intangible amortization | — | 11,609 | — | — | 11,609 | |||||||||||||||||||||||||||
| Add: Equity-based compensation expense | 372 | 991 | 2,650 | — | 4,013 | |||||||||||||||||||||||||||
| Add: Severance and restructuring expense | 141 | — | 449 | — | 590 | |||||||||||||||||||||||||||
| Add: Other non-operating (income) losses | — | — | — | — | — | |||||||||||||||||||||||||||
| Adjusted net income (loss) before tax adjustments and NCI | 1,632 | 11,726 | (7,850) | (313) | 5,195 | |||||||||||||||||||||||||||
| Income tax effects | (1,132) | (2,307) | 1,132 | — | (2,307) | |||||||||||||||||||||||||||
| Adjusted net income (loss) before NCI | 500 | 9,419 | (6,718) | (313) | 2,888 | |||||||||||||||||||||||||||
| Net (income) loss attributable to noncontrolling interest | — | (4,814) | — | 113 | (4,701) | |||||||||||||||||||||||||||
| Adjusted net income (loss) attributable to shareholders | $ | 500 | $ | 4,605 | $ | (6,718) | $ | (200) | $ | (1,813) | ||||||||||||||||||||||
| Net income (loss) margin | 4.2 | % | (2.3) | % | NM | NM | (14.6) | % | ||||||||||||||||||||||||
| Adjusted EBITDA Margin | 6.7 | % | 26.2 | % | NM | NM | 11.0 | % | ||||||||||||||||||||||||
| Adjusted EBITDA Margin to shareholders | 6.7 | % | 16.8 | % | NM | NM | 4.4 | % | ||||||||||||||||||||||||
| Adjusted net income (loss) after NCI margin | 1.9 | % | 7.9 | % | NM | NM | (2.2) | % | ||||||||||||||||||||||||
8
| Three Months Ended June 30, 2025 | Specialty Property & Casualty Insurance | Insurance Distribution | Corporate & Other | Eliminations | Consolidated | |||||||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||||||||
| Gross premiums written | $ | 96,247 | $ | 96,247 | ||||||||||||||||||||||||||||
| Net premiums written | 15,207 | 15,207 | ||||||||||||||||||||||||||||||
| Total revenues | 21,390 | $ | 33,041 | $ | 526 | $ | — | 54,957 | ||||||||||||||||||||||||
| Total expenses | 20,770 | 43,214 | 13,949 | — | 77,931 | |||||||||||||||||||||||||||
| Pretax income (loss) | 620 | (10,173) | (13,423) | — | (22,974) | |||||||||||||||||||||||||||
| Provision (benefit) for income taxes | 192 | (2,181) | (183) | — | (2,172) | |||||||||||||||||||||||||||
Net income (loss) from Continuing Operations | $ | 428 | $ | (7,992) | $ | (13,240) | $ | — | $ | (20,802) | ||||||||||||||||||||||
| Adjustments to EBITDA | ||||||||||||||||||||||||||||||||
| Add: Interest expense | $ | — | $ | 5,570 | $ | — | $ | — | $ | 5,570 | ||||||||||||||||||||||
| Add: Income tax expense | 192 | (2,181) | (183) | — | (2,172) | |||||||||||||||||||||||||||
| Add: Depreciation | — | — | 440 | — | 440 | |||||||||||||||||||||||||||
| Add: Intangible amortization | — | 9,301 | — | — | 9,301 | |||||||||||||||||||||||||||
| EBITDA | $ | 620 | $ | 4,698 | $ | (12,983) | $ | — | $ | (7,663) | ||||||||||||||||||||||
| EBITDA attributable to shareholders | $ | 620 | $ | 2,513 | $ | (12,983) | $ | — | $ | (9,848) | ||||||||||||||||||||||
| Adjustments to Adjusted EBITDA | ||||||||||||||||||||||||||||||||
| Add: Acquisition and integration-related expenses | $ | — | $ | 375 | $ | 399 | $ | — | $ | 774 | ||||||||||||||||||||||
| Add: Equity-based compensation expense | 61 | 67 | 1,895 | — | 2,023 | |||||||||||||||||||||||||||
| Add: Severance and restructuring expense | — | 31 | 2,918 | — | 2,949 | |||||||||||||||||||||||||||
| Add: Other non-operating (income) losses | — | (591) | — | — | (591) | |||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 681 | $ | 4,580 | $ | (7,771) | $ | — | $ | (2,508) | ||||||||||||||||||||||
| Adjusted EBITDA to attributable to shareholders | $ | 681 | $ | 2,519 | $ | (7,771) | $ | — | $ | (4,569) | ||||||||||||||||||||||
| Net income (loss) (Continuing Operations) | $ | 428 | $ | (7,992) | $ | (13,240) | $ | — | $ | (20,802) | ||||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||||||
| Add: Acquisition and integration-related expenses | — | 375 | 399 | — | 774 | |||||||||||||||||||||||||||
| Add: Intangible amortization | — | 9,301 | — | — | 9,301 | |||||||||||||||||||||||||||
| Add: Equity-based compensation expense | 61 | 67 | 1,895 | — | 2,023 | |||||||||||||||||||||||||||
| Add: Severance and restructuring expense | — | 31 | 2,918 | — | 2,949 | |||||||||||||||||||||||||||
| Add: Other non-operating (income) losses | — | (591) | — | — | (591) | |||||||||||||||||||||||||||
| Adjusted net income (loss) before tax adjustments and NCI | 489 | 1,191 | (8,028) | — | (6,348) | |||||||||||||||||||||||||||
| Income tax effects | (15) | (1,892) | 15 | — | (1,892) | |||||||||||||||||||||||||||
| Adjusted net income (loss) before NCI | 474 | (701) | (8,013) | — | (8,240) | |||||||||||||||||||||||||||
| Net (income) loss attributable to noncontrolling interest | — | (2,312) | — | — | (2,312) | |||||||||||||||||||||||||||
| Adjusted net income (loss) attributable to shareholders | $ | 474 | $ | (3,013) | $ | (8,013) | $ | — | $ | (10,552) | ||||||||||||||||||||||
| Net income (loss) margin | 2.0 | % | (24.2) | % | NM | NM | (37.9) | % | ||||||||||||||||||||||||
| Adjusted EBITDA Margin | 3.2 | % | 13.9 | % | NM | NM | (4.6) | % | ||||||||||||||||||||||||
| Adjusted EBITDA Margin to shareholders | 3.2 | % | 7.6 | % | NM | NM | (8.3) | % | ||||||||||||||||||||||||
| Adjusted net income (loss) after NCI margin | 2.2 | % | (9.1) | % | NM | NM | (19.2) | % | ||||||||||||||||||||||||
9
Results of Operations by Segment (Continued)
| Six Months Ended June 30, 2026 | Specialty Property & Casualty Insurance | Insurance Distribution | Corporate & Other | Eliminations | Consolidated | |||||||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||||||||
| Gross premiums written | $ | 198,418 | $ | 198,418 | ||||||||||||||||||||||||||||
| Net premiums written | 55,591 | 55,591 | ||||||||||||||||||||||||||||||
| Total revenues | 51,702 | $ | 136,944 | $ | 577 | $ | (2,058) | 187,165 | ||||||||||||||||||||||||
| Total expenses | 58,740 | 121,005 | 24,180 | (1,745) | 202,180 | |||||||||||||||||||||||||||
| Pretax income (loss) | (7,038) | 15,939 | (23,603) | (313) | (15,015) | |||||||||||||||||||||||||||
| Provision (benefit) for income taxes | (467) | 111 | 360 | — | 4 | |||||||||||||||||||||||||||
| Net income (loss) | $ | (6,571) | $ | 15,828 | $ | (23,963) | $ | (313) | $ | (15,019) | ||||||||||||||||||||||
| Adjustments to EBITDA | ||||||||||||||||||||||||||||||||
| Add: Interest expense | $ | — | $ | 4,864 | $ | — | $ | — | $ | 4,864 | ||||||||||||||||||||||
| Add: Income tax expense | (467) | 111 | 360 | — | 4 | |||||||||||||||||||||||||||
| Add: Depreciation | — | 645 | 577 | — | 1,222 | |||||||||||||||||||||||||||
| Add: Intangible amortization | — | 23,256 | — | — | 23,256 | |||||||||||||||||||||||||||
| EBITDA | $ | (7,038) | $ | 44,704 | $ | (23,026) | $ | (313) | $ | 14,327 | ||||||||||||||||||||||
| EBITDA attributable to shareholders | $ | (7,038) | $ | 32,137 | $ | (23,026) | $ | (200) | $ | 1,873 | ||||||||||||||||||||||
| Adjustments to Adjusted EBITDA | ||||||||||||||||||||||||||||||||
| Add: Acquisition and integration-related expenses | $ | — | $ | 1,855 | $ | 1,752 | $ | — | $ | 3,607 | ||||||||||||||||||||||
| Add: Equity-based compensation expense | 1,069 | 1,765 | 5,771 | — | 8,605 | |||||||||||||||||||||||||||
| Add: Severance and restructuring expense | 1,432 | — | 868 | — | 2,300 | |||||||||||||||||||||||||||
| Add: Other non-operating (income) losses | 7,912 | — | 82 | — | 7,994 | |||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 3,375 | $ | 48,324 | $ | (14,553) | $ | (313) | $ | 36,833 | ||||||||||||||||||||||
| Adjusted EBITDA attributable to shareholders | $ | 3,375 | $ | 35,132 | $ | (14,553) | $ | (200) | $ | 23,754 | ||||||||||||||||||||||
| Net income (loss) | $ | (6,571) | $ | 15,828 | $ | (23,963) | $ | (313) | $ | (15,019) | ||||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||||||
| Add: Acquisition and integration-related expenses | — | 1,855 | 1,752 | — | 3,607 | |||||||||||||||||||||||||||
| Add: Intangible amortization | — | 23,256 | — | — | 23,256 | |||||||||||||||||||||||||||
| Add: Equity-based compensation expense | 1,069 | 1,765 | 5,771 | — | 8,605 | |||||||||||||||||||||||||||
| Add: Severance and restructuring expense | 1,432 | — | 868 | — | 2,300 | |||||||||||||||||||||||||||
| Add: Other non-operating (income) losses | 7,912 | — | 82 | — | 7,994 | |||||||||||||||||||||||||||
| Adjusted net income (loss) before tax adjustments and NCI | 3,842 | 42,704 | (15,490) | (313) | 30,743 | |||||||||||||||||||||||||||
| Income tax effects | (2,187) | (4,536) | 2,187 | — | (4,536) | |||||||||||||||||||||||||||
| Adjusted net income (loss) before NCI | 1,655 | 38,168 | (13,303) | (313) | 26,207 | |||||||||||||||||||||||||||
| Net (income) loss attributable to noncontrolling interest | — | (11,518) | — | 113 | (11,405) | |||||||||||||||||||||||||||
| Adjusted net income (loss) attributable to shareholders | $ | 1,655 | $ | 26,650 | $ | (13,303) | $ | (200) | $ | 14,802 | ||||||||||||||||||||||
| Net income (loss) margin | (12.7) | % | 11.6 | % | NM | NM | (8.0) | % | ||||||||||||||||||||||||
| Adjusted EBITDA Margin | 6.5 | % | 35.3 | % | NM | NM | 19.7 | % | ||||||||||||||||||||||||
| Adjusted EBITDA Margin to shareholders | 6.5 | % | 25.7 | % | NM | NM | 12.7 | % | ||||||||||||||||||||||||
| Adjusted Net income (loss) after NCI margin | 3.2 | % | 19.5 | % | NM | NM | 7.9 | % | ||||||||||||||||||||||||
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| Six Months Ended June 30, 2025 | Specialty Property & Casualty Insurance | Insurance Distribution | Corporate & Other | Eliminations | Consolidated | |||||||||||||||||||||||||||
| ($ in thousands) | ||||||||||||||||||||||||||||||||
| Gross premiums written | $ | 183,162 | $ | 183,162 | ||||||||||||||||||||||||||||
| Net premiums written | 33,212 | 33,212 | ||||||||||||||||||||||||||||||
| Total revenues | 42,561 | $ | 74,039 | $ | 1,113 | $ | — | 117,713 | ||||||||||||||||||||||||
| Total expenses | 40,439 | 86,455 | 28,901 | — | 155,794 | |||||||||||||||||||||||||||
| Pretax income (loss) | 2,122 | (12,416) | (27,788) | — | (38,081) | |||||||||||||||||||||||||||
| Provision (benefit) for income taxes | 270 | (2,681) | (378) | — | (2,789) | |||||||||||||||||||||||||||
Net income (loss) from Continuing Operations | $ | 1,852 | $ | (9,735) | $ | (27,410) | $ | — | $ | (35,292) | ||||||||||||||||||||||
| Adjustments to EBITDA | ||||||||||||||||||||||||||||||||
| Add: Interest expense | $ | — | $ | 11,024 | $ | — | $ | — | $ | 11,024 | ||||||||||||||||||||||
| Add: Income tax expense | 270 | (2,681) | (378) | — | (2,789) | |||||||||||||||||||||||||||
| Add: Depreciation | — | 109 | 744 | — | 853 | |||||||||||||||||||||||||||
| Add: Intangible amortization | — | 18,064 | — | — | 18,064 | |||||||||||||||||||||||||||
| EBITDA | $ | 2,122 | $ | 16,781 | $ | (27,044) | $ | — | $ | (8,140) | ||||||||||||||||||||||
| EBITDA attributable to shareholders | $ | 2,122 | $ | 9,576 | $ | (27,044) | $ | — | $ | (15,345) | ||||||||||||||||||||||
| Adjustments to Adjusted EBITDA | ||||||||||||||||||||||||||||||||
| Add: Acquisition and integration-related expenses | $ | — | $ | 375 | $ | 1,081 | $ | — | $ | 1,456 | ||||||||||||||||||||||
| Add: Equity-based compensation expense | 147 | 67 | 3,469 | — | 3,683 | |||||||||||||||||||||||||||
| Add: Severance and restructuring expense | — | 60 | 4,737 | — | 4,797 | |||||||||||||||||||||||||||
| Add: Other non-operating (income) losses | — | (591) | — | — | (591) | |||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 2,270 | $ | 16,692 | $ | (17,759) | $ | — | $ | 1,205 | ||||||||||||||||||||||
| Adjusted EBITDA to shareholders | $ | 2,270 | $ | 9,611 | $ | (17,759) | $ | — | $ | (5,876) | ||||||||||||||||||||||
| Net income (loss) (Continuing Operations) | $ | 1,852 | $ | (9,735) | $ | (27,410) | $ | — | $ | (35,292) | ||||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||||||||
| Add: Acquisition and integration-related expenses | — | 375 | 1,081 | — | 1,456 | |||||||||||||||||||||||||||
| Add: Intangible amortization | — | 18,064 | — | — | 18,064 | |||||||||||||||||||||||||||
| Add: Equity-based compensation expense | 147 | 67 | 3,469 | — | 3,683 | |||||||||||||||||||||||||||
| Add: Severance and restructuring expense | — | 60 | 4,737 | — | 4,797 | |||||||||||||||||||||||||||
| Add: Other non-operating (income) losses | — | (591) | — | — | (591) | |||||||||||||||||||||||||||
| Adjusted net income (loss) before tax adjustments and NCI | 2,000 | 8,240 | (18,123) | — | (7,883) | |||||||||||||||||||||||||||
| Income tax effects | (15) | (1,892) | 15 | — | (1,892) | |||||||||||||||||||||||||||
| Adjusted net income (loss) before NCI | 1,985 | 6,348 | (18,108) | — | (9,775) | |||||||||||||||||||||||||||
| Net (income) loss attributable to noncontrolling interest | — | (6,812) | — | — | (6,812) | |||||||||||||||||||||||||||
| Adjusted net income (loss) attributable to shareholders | $ | 1,985 | $ | (464) | $ | (18,108) | $ | — | $ | (16,587) | ||||||||||||||||||||||
| Net income (loss) margin | 4.4 | % | (13.1) | % | NM | NM | (30.0) | % | ||||||||||||||||||||||||
| Adjusted EBITDA Margin | 5.3 | % | 22.5 | % | NM | NM | 1.0 | % | ||||||||||||||||||||||||
| Adjusted EBITDA Margin to shareholders | 5.3 | % | 13.0 | % | NM | NM | (5.0) | % | ||||||||||||||||||||||||
| Adjusted Net income (loss) after NCI margin | 4.7 | % | (0.6) | % | NM | NM | (14.1) | % | ||||||||||||||||||||||||
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Organic Growth
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||
| ($ in thousands) | 2026 | 2025 | % Growth | 2026 | 2025 | % Growth | ||||||||||||||||||||||||||||||||
Total Insurance Distribution revenue (1) | $ | 58,418 | $ | 33,041 | 76.8 | % | $ | 136,944 | $ | 74,039 | 85.0 | % | ||||||||||||||||||||||||||
| Less: Acquired revenues | (7,289) | — | (28,410) | — | ||||||||||||||||||||||||||||||||||
| Less: Profit commission and contingent commission income | (5,620) | (2,266) | (11,808) | (6,957) | ||||||||||||||||||||||||||||||||||
| Less: Impact of F.X. rates | (445) | 2,564 | (1,722) | 3,710 | ||||||||||||||||||||||||||||||||||
Less: Other conforming adjustments (2) | — | (2,074) | — | (4,307) | ||||||||||||||||||||||||||||||||||
| Total Organic Revenue & Growth Percentage | $ | 45,064 | $ | 31,265 | 44.1 | % | $ | 95,004 | $ | 66,485 | 42.9 | % | ||||||||||||||||||||||||||
(1)Total Insurance Distribution revenue includes investment income
(2)Change in accounting in 1Q26 related to an MGA contracts on a net basis, normalizing the prior year for consistency.
Total Specialty P&C Insurance Production
Specialty P&C Insurance production includes gross premiums written by Octave's Specialty P&C Insurance segment and premiums placed by the Insurance Distribution segment.
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||||||||
($ in thousands) | 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||||||||||||||||||||||
| Specialty Property & Casualty Insurance Gross Premiums Written | $ | 94,702 | $ | 96,247 | (2) | % | $ | 198,418 | $ | 183,162 | 8 | % | ||||||||||||||||||||||||||
Insurance Distribution Premiums Placed (1) | 306,667 | 249,912 | 23 | % | 733,500 | 483,098 | 52 | % | ||||||||||||||||||||||||||||||
| Specialty P&C Insurance Production | $ | 401,369 | $ | 346,159 | 16 | % | $ | 931,918 | $ | 666,260 | 40 | % | ||||||||||||||||||||||||||
(1)Excludes $7,700 of intersegment premiums placed with Specialty Property & Casualty Insurance during the three and six months ended June 30, 2026.
About Octave
Octave Specialty Group, Inc. is a global specialty insurance firm that builds, buys, and scales niche insurance distribution and underwriting businesses. With a focus on operational excellence, disciplined growth, and innovation, Octave is creating a harmonized portfolio of companies that deliver exceptional performance and long-term value for shareholders. For more information, visit www.octavegroup.com.
The Amended and Restated Certificate of Incorporation of Octave contains substantial restrictions on the ability to transfer Octave’s common stock. Subject to limited exceptions, any attempted transfer of common stock shall be prohibited and void to the extent that, as a result of such transfer (or any series of transfers of which such transfer is a part), any person or group of persons shall become a holder of 5% or more of Octave’s common stock or a holder of 5% or more of Octave’s common stock increases its ownership interest.
Contact
Karen Beyer
Managing Director, Investor Relations
(212) 208-3222
ir@octavegroup.com
Forward-Looking Statements
This press release, and any related oral statements, contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as “estimate,” “project,” “plan,” “believe,” “anticipate,” “intend,” “planned,” “potential” and similar expressions, or future or conditional verbs such as “will,” “should,” “would,” “could,” and “may,” or the negative of those expressions or verbs, identify forward-looking statements. We caution readers that these statements are not guarantees of future performance. Forward-looking statements are not historical facts, but instead represent only our beliefs regarding future events, which may by their nature be inherently uncertain and some of which may be outside our control. These statements may relate to plans and objectives with respect to the future, among other things, which may change. We are alerting you to the possibility that our actual results may differ, possibly materially, from the expected objectives or anticipated results that may be suggested, expressed or implied by these forward-looking statements. Important factors that could cause our results to differ, possibly materially, from those
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indicated in the forward-looking statements include, among others, those discussed under “Risk Factors.” in our most recent SEC filed quarterly or annual report.
Any or all of management’s forward-looking statements, whether contained herein or in other publications, may prove to be incorrect and are based on management’s current belief or opinions. Octave Specialty Group’s (“OSG”) and its subsidiaries’ (collectively, “Octave” or the “Company”) actual results may differ materially from those expressed in, or implied by, these forward-looking statements, and there are no guarantees about the performance of Octave’s securities. Among events, risks, uncertainties or factors that could cause actual results to differ materially are: (1) the high degree of volatility in the price of OSG’s common stock; (2) uncertainty concerning the Company’s ability to achieve value for holders of its securities from the specialty property and casualty insurance business, the insurance distribution business, or related businesses; (3) greater than expected underwriting losses in the Company’s specialty property and casualty insurance business resulting in inadequacy of loss and loss expense reserves and the possibility that changes in reserves may result in further volatility of earnings or financial results; (4) credit risk throughout Octave’s business, including but not limited to issuers of securities in our investment portfolios, and exposures to reinsurers; (5) the Company’s level of indebtedness, including its ability to generate sufficient cash to service obligations, refinance existing debt, or obtain additional financing on acceptable terms, and the resulting impact on financial condition and operating flexibility; (6) dependence on third parties, including specialty insurance program partners, reinsurers, distribution relationships, and other service providers, and the risk of failures or disruptions in their performance; (7) inability to obtain reinsurance coverage on economic terms; (8) loss of key relationships for the production of business in our specialty property and casualty and insurance distribution businesses or the inability to secure such additional relationships to produce expected results; (9) the impact of catastrophic public health events, environmental or natural events, or political events, including as a result of global or regional conflicts; (10) restrictive covenants in agreements and instruments that impair Octave’s ability to pursue or achieve its business strategies; (11) regulatory risks, including disagreements with insurance regulators, changes in laws or regulations, and the Company’s ability to adapt to an evolving regulatory environment; (12) risks related to changes in the composition, valuation, or performance of the Company’s investment portfolio, including interest rate and foreign currency exchange rate fluctuations; (13) events or circumstances that result in the impairment of our intangible assets and/or goodwill that were recorded in connection with Octave’s acquisitions; (14) the risk of litigation, regulatory inquiries, investigations, claims or proceedings, and the risk of adverse outcomes in connection therewith; (15) system security risks, data protection breaches and cyberattacks; (16) our inability to attract and retain qualified executives, senior managers and other employees, or the loss of such personnel; (17) greater competition for our specialty property and casualty insurance business and/or our insurance distribution business; (18) loss or lowering of the AM Best rating for our property and casualty insurance company subsidiaries; (19) disintermediation within the insurance industry or greater competition from technology-based insurance solutions or non-traditional insurance markets; (20) changes in law or in the functioning of the healthcare market that impair the business model of our accident and health managing general agents; (21) failure to successfully execute business expansion initiatives, integrate acquired businesses, or realize anticipated benefits from such efforts and significant obligations under put rights granted in completed acquisitions; and (22) other risks and uncertainties that have not been identified at this time.
Source: Octave Specialty Group, Inc.
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