Root (NASDAQ:ROOT) shares surged 175% in Thursday morning trading after the auto insurance platform achieved its first-ever net income profitability, on both a quarter-to-date and year-to-date basis, as Q3 expenses retreated during the quarter.

The company said the improvement in its earnings profile was also being driven by a ~50% reduction in interest after refinancing and reducing debt.

Q3 GAAP EPS of $1.35 jumped from -$0.52 in Q2 and -$3.16 in the year-ago period. Revenue of $305.7M, vs. $266.5M expected, advanced from $289.2M in the prior quarter and $115.3M in Q3 of last year.

Total operating expenses fell to $271.3M from $285.4M in Q2 and rose from $149.3M in the year-earlier quarter.

During its post-earnings conference call Wednesday, co-founder and CEO Alex Timm said that Root (NASDAQ:ROOT) now can reinvest its profits into its "growth engines in both the direct and partnerships channel with indirect during the quarter we continue to expand and test into new areas of the marketing funnel and we expect that to continue in the quarters ahead."

Policies in force totaled $407.3M, up from $406.3M in Q2 and $259.5M a year before.

Gross premiums written increased to $331.7M from $308.2M in the prior quarter and $224.2M in Q3 2023. Gross premiums earned of $331.7M vs. $308.0M in Q2 and $159.8M in Q3 2023.

Adjusted EBITDA climbed to $41.6M from $12.1M in Q2 and -$19.4M in Q3 2023.