Root, Inc. ( ROOT ) shares are trading higher Thursday after the company reported better-than-expected third-quarter earnings. Here’s what you need to know.

What To Know: Root posted earnings per share of $1.35, beating estimates for a loss of 98 cents per share. Revenue came in at $305.7 million, beating analyst estimates of $275.36 million, according to Benzinga Pro.

Root said it reached net income profitability for the first time in company history. The company noted that its strong quarterly results were driven by targeted acquisition investment, loss ratio performance and the efficiency of the company’s fixed expense base as growth continues. 

“This is a pivotal moment for Root. This quarter validates the strength of our business model, our technology, and our customer value proposition. We have maintained conviction that our data science and machine learning acumen, our modern technology stack, and our delightful customer experiences would ultimately combine to drive the company to net income profitability. And that's exactly what happened,” the company said in a letter to shareholders.

Root highlighted that it recently refinanced and reduced its debt. The company said its partnership channel continues to grow at impressive rates. Root also noted that it has continued to grow policies in force gradually in the fourth quarter after policies in force grew 57% in the third quarter.

“While this quarter certainly validated our conviction, we are just getting started. With a strong capital position and ability to drive profit, we are excited to increasingly focus on profitable growth. We will continue to invest our profits into the business to drive long term value creation, which will naturally increase our operating expenses in the near term,” the company said.

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Root also announced Thursday morning that it refinanced its term loan with BlackRock, reducing the principal amount by $100 million. At current interest rates, the amended loan will reduce Root’s interest expense by approximately 50% on a run-rate basis. 

“We are excited to complete the refinancing of our term loan, which demonstrates the strength of our business model, our improved operational performance, and BlackRock’s continued confidence in our long-term growth outlook,” said Root CFO Megan Binkley.

ROOT Price Action: Root shares were up 108.1% at $84.25 at the time of writing, according to Benzinga Pro.

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