Octave Specialty Group Q2 Earnings Call Highlights

Second-quarter results improved: Octave Specialty Group narrowed its net loss to $14.4 million from $20.5 million, while adjusted EBITDA turned positive at $3.7 million versus a $4.6 million loss a year earlier. Insurance Distribution drove growth: Revenue rose 77% to $58.4 million, and segment adjusted EBITDA nearly quadrupled to $9.8 million. The company raised its full-year outlook for organic growth to above 25% and adjusted EBITDA to $45 million. Everspan continued to improve but guidance was reduced: Its combined ratio improved to 100.6% and it generated $1.8 million in adjusted EBITDA, though full-year Everspan EBITDA guidance fell to $6 million due to higher acquisition costs. Octave is also investing several million dollars in AI underwriting tools intended to shorten submission-to-quote times and support future efficiency.

Octave Specialty Group NYSE: OSG reported improved second-quarter results as growth in its Insurance Distribution segment and progress at its Everspan specialty insurance platform narrowed its net loss and lifted adjusted EBITDA. For the second quarter of 2026, the company reported a net loss to shareholders of $14.4 million, or $0.33 per share, compared with a $20.5 million loss, or $0.42 per share, a year earlier. Consolidated adjusted EBITDA improved to positive $3.7 million from negative $4.6 million in the prior-year quarter. Adjusted net loss to shareholders narrowed to $1.8 million, or $0.04 per share, from $10.6 million, or $0.22 per share. President and CEO Claude LeBlanc said the quarter reflected continued momentum in distribution operations, as well as improving financial performance at the company’s specialty insurance business.

Insurance Distribution Revenue Rises 77% Insurance Distribution revenue increased 77% year over year to $58.4 million. The growth included 44% organic growth and the contribution from Octave’s October 2025 acquisition of ArmadaCare. Adjusted EBITDA attributable to shareholders in the segment nearly quadrupled to $9.8 million from $2.5 million a year earlier, while the adjusted EBITDA margin increased to 16.8% from 7.6%. Adjusted net income attributable to shareholders was $4.6 million, compared with a $3 million adjusted net loss in the second quarter of 2025. Chief Financial Officer David Trick said results were supported by ArmadaCare, organic growth across the company’s managing general agents, higher profit commissions, the acquisition of an additional 10% stake in Octave Ventures, and nearly $3 million of lower interest expense. The company also continued investing in recently launched MGAs, which reduced Insurance Distribution EBITDA by about $1.1 million during the quarter. LeBlanc said MGAs launched in 2024 and 2025 accounted for roughly 75% of organic growth during the quarter. About half of that group is now generating EBITDA, he said, with further contributions expected by the end of 2026 and into 2027. Octave expects to launch one or two MGAs in 2026 after launching nine during 2024 and 2025. For 2027, management is targeting a relatively modest two to four launches, while also pursuing growth by adding teams to existing MGA platforms.

Everspan Shows Underwriting Improvement At Everspan, Octave’s specialty property and casualty operation, gross premiums written were $95 million in the quarter, while net premiums written and premiums earned were $23 million and $22 million, respectively. Gross premiums written declined 2%, while net premiums written rose 52% and premiums earned increased 34%. Everspan’s reported loss ratio improved 640 basis points from the prior-year period to 61.4%. Its active programs operated at about a 59% loss rat...