Oxbridge Re Holdings Limited (OXBR) Q4 2025 Earnings Report, Transcript and Summary

Good afternoon. Welcome to Oxbridge's Fiscal 2025 Earnings Call. My name is Shamali, and I will be your conference operator this afternoon. [Operator Instructions] Joining us for today's presentation is Oxbridge's Chairman, President and Chief Executive Officer, Jay Madhu; and Chief Financial Officer and Corporate Secretary, Wrendon Timothy. Following their remarks, we will open up the call for your questions. I would like to remind everyone that this call will be available via telephone replay until April 13, 2026. Details for the telephone replay are included in the press release issued today. Now I would like to turn the call over to Wrendon Timothy, Chief Financial Officer of Oxbridge, who will provide the necessary cautions regarding the forward-looking statements that will be made by management during this call.

Thank you, operator. During today's call, there will be forward-looking statements made regarding future events, including Oxbridge's future financial performance. These forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995. Words such as anticipates, estimates, expects, intends, plans, projects and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions, but rather are subject to various risks and uncertainties. A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from forward-looking statements is included in the section entitled Risk Factors contained in our Form 10-K filed today, March 30, 2026, with the Securities and Exchange Commission. The occurrence of any of these risks and uncertainties could have a material adverse effect on the company's business, financial condition and the volatility of our earnings, which in turn could cause significant market price and trade volume fluctuations for our securities. Any forward-looking statements made on this conference call speak only as of the date of this conference call. And except as required by law, the company undertakes no obligation to update any forward-looking statements contained on this call or in any company presentation, even if the company's expectations or any related events, conditions or circumstances change. Now I'd like to turn the call over to our Chairman, President and Chief Executive Officer, Jay Madhu. Jay?

Thank you, Wrendon, and welcome, everyone. Thank you for joining us today. Let me start by saying we are proud of the significant steps we have taken to fortify and innovate our business by bringing reinsurance on chain and broadening investor access. At our core, we are a disciplined reinsurance business, writing fully collateralized policies covering property catastrophe risk. We compete through selective data-driven underwriting with a focus on generating attractive risk-adjusted returns and long-term growth in book value per share. Our strategy centers on low frequency, high severity risk where significant data exists to rigorously evaluate the risk return profile. We emphasize disciplined risk selection, appropriate pricing and thoughtful structuring, supported by our fully collateralization to ensure transparency and alignment. Building on this foundation, SurancePlus continues to expand our ability to bring reinsurance on chain in a compliant and scalable manner, broadening access to an asset class that has historically been limited to institutional partnerships. We believe this combination of underwriting discipline and evolving platform capabilities positions Oxbridge well as we continue to execute our strategy and pursue opportunities within the growing real estate asset market -- pardon me, growing real-world asset market. We now turn things over to Wrendon to take us through our financial results. Wrendon?

Thank you, Jay. I would like to remind you that our typical contract period is from June 1 to May 31 of the following year. Net premiums earned for the 3 months ended December 31, 2025, decreased to $555,000 from $595,000 for the quarter ended December 31, 2024. The decrease is due to lower weighted average rate on reinsurance contracts in force during the quarter ended December 31, 2025, when compared with the prior period. Net premiums earned for the years ended December 31, 2025 and 2024 was approximately $2.3 million. Our net investment income for the 3 months ended December 31, 2025, increased to $63,000 from $68,000 from prior comparable period. There was a decrease in the fair value of equity securities during this period. And along with net premiums, our total revenue amounted to $576,000 for the 3 months ended December 31, 2025, compared to $422,000 in the prior year comparable period. Our net investment and other income for the fiscal year ended December 31, 2025, increased to $314,000 from $248,000 from the prior year comparable period. Along with net premiums, change in fair value of equity securities and other investments resulted in total revenues of $2.58 million for the fiscal year ended December 31, 2025, compared to $546,000 in the prior year comparable period. Regarding total expenses for the 3 months ended December 31, 2025, total expenses, including policy acquisition costs and general and admin expenses and underwriting costs increased to $1.04 million from $497,000 for the quarter ended December 31, 2024. The increase is primarily due to the recording of underwriting losses incurred on Hurricane Milton, which occurred in 2024 as a result of adverse loss development as well as increased general and admin expenses when compared with the prior period. For the year ended December 31, 2025, total expenses, which includes policy acquisition costs, loss and loss adjustment expenses and general and admin expenses increased to $6.04 million from $2.17 million for the year ended December 31, 2024. Again, the increase is due primarily to the recording of losses on reinsurance contracts affected by Hurricane Milton in 2024, increased professional costs relating to investor relations, our web3 subsidiary tokenization costs, S-3 related costs, increased human resources and personnel and legal expenditures. Net income for the quarter ended December 31, 2025, was $120,000 or $0.02 per basic and diluted income per share compared to a net loss of $460,000 or $0.05 basic and diluted loss per share for the quarter ended December 31, 2024. The decrease in net loss is primarily due to the allocation of underwriting losses to token holders coupled with a decrease in negative change in fair value of equity securities and unrealized loss on other investments, an increase in investment income and other income during the quarter ended December 31, 2025, when compared with the prior period. Net loss for the year December 31, 2025, was $2.08 million or $0.28 basic and diluted loss per share compared to a net loss of $2.73 million or $0.45 basic and diluted loss per share for the year ended December 31, 2024. The change is primarily due to higher overall revenues driven by a significant decrease in unrealized loss on investments, partially offset by higher expenses and higher underwriting losses borne by token holders during the year ended December 31, 2025, when compared with the prior period. As we have discussed before on our investor calls, we use various measures to analyze the growth and profitability of our business operations. For our reinsurance business, we measure underwriting profitability by examining our loss ratio, acquisition ratio, expense ratio and combined ratio. The loss ratio is the ratio of loss and loss adjusted expenses incurred to premiums earned and measures the underwriting profitability of our reinsurance business. The loss ratio increased to 80.9% for the 3-month period ended December 2025 when compared with the prior comparative period. The loss ratio increased 119.9% for the fiscal year ended December 31, 2025, when compared with the prior comparative period. These increases were due to losses recognized on reinsurance contracts affected by Hurricane Milton, which was a loss event occurring in 2024. Our acquisition cost ratio, which measures operational efficiency, compares policy acquisition costs and net premiums earned. The acquisition cost ratio remained consistent at 11% for the quarter and year ended December 31, 2025, when compared with the prior comparative period. Our expense ratio measures operating performance compares policy acquisition costs and general and admin expenses with net premiums earned. For the 3 months ended December 31, 2025, the expense ratio increased to 106.7% from 83.5% for the 3-month period ended December 31, 2024. For the year ended December 31, 2025, the expense ratio increased to 144.2% from 94.3% for the year ended December 31, 2024. The increase are primarily due to increased professional costs relating to our Investor Relations and marketing, our web3 subsidiary costs, renewed S-3 related costs, increased human resources and personnel and legal costs during the quarter and year ended December 31, 2025, when compared with the prior comparable periods. Our combined ratio, which is used to measure underwriting performance, is the sum of the loss ratio and expense ratio. For the 3-month period ended December 31, 2025, the combined ratio increased to 187.6% from 83.5% for the 3-month period ended December 31, 2024. For the year ended December 31, 2025, the combined ratio increased to 264% from 94.3% for the year ended December 31, 2024. Again, the increase is due to higher general and admin expenses and losses incurred due to Hurricane Milton that have been recorded during the quarter and the year ended December 31, 2025, when compared with prior comparable periods. Now turning to the balance sheet. Our investment portfolio decreased to 0 at December 31, 2025, from $113,000 at the prior year-end, primarily due to the sale of our 2 equity securities during the year ended December 31, 2025. Cash and cash equivalents and restricted cash and cash equivalents increased by $1.08 million to approximately $7 million from $5.89 million as of December 31, 2024. The increase is due primarily to new collateral deposits for the current treaty year ended May 31, 2026, more than offset in fund being released from the underlying trust or loss payments during 2025 relating to Hurricane Milton. I'll now turn the call back over to Jay to wrap up before we take your questions. Jay?

Thank you, Wrendon. We are encouraged by the performance of our 2025 and 2026 tokenized reinsurance contracts. The balance yield token is tracking 25% ahead of its 20% target, and the high-yield token is tracking its 42% target. These results reflect our disciplined underwriting approach and demonstrate the ability of our platform to deliver attractive uncorrelated returns within the global reinsurance market. We have also made meaningful progress expanding our platform through strategic relationships, including our entry into the Solana ecosystem and expanded distribution across more than 160 blockchain networks enabled by Layer 0 through the Alphaledger platform. These developments significantly broaden access to our offering and position SurancePlus within one of the leading blockchain ecosystems for real-world asset adoption. As we look ahead to the 2026, 2027 contract cycle, we are targeting returns of 20% and 42% for our T20 and T42 offerings. Industry commentary, including reports from Artemis include -- indicate that El Nino conditions may support a favorable risk environment, and we are optimistic about the opportunities these presents. In parallel, we are exploring opportunities to extend our model into additional high-quality cash-generating assets such as the tokenization of data center revenue streams, particularly as it relates to the growth of artificial intelligence, AI. We also believe our current market valuation does not fully reflect the strength of our balance sheet, including our cash and restricted cash positions nor the opportunities we are actively evaluating to significantly drive shareholder value. Overall, we remain focused on our disciplined execution, expanding distribution and scaling our platform as we continue to build long-term shareholder value. With that, we are ready to open the call for questions.

[Operator Instructions] Our first question comes from the line of Peter Roy with Bloomberg. Peter are you on the line? And it appears that Peter, there's no one on the line of Peter. [Operator Instructions] Our next question comes from the line of Kent Engelke with Capitol Securities.

Jay, in the press release, you mentioned this 2 different times, and you also said it in your comments as well. Can you expand a little bit more about when you're talking about the tokenization of artificial intelligence infrastructure. Can you expand on that at all? That sounds really, really intriguing. On top of that, it sounds like you got a bunch of stuff going on. And some of the stuff is -- looks like it's just about to hit. But first off, can you expand on the tokenization of data center revenue?

Yes, absolutely. Thanks, Ken, for that question. So the data center revenue, let me kind of back -- take it back a little further, right? So SurancePlus, the reinsurance tokenization, that's moving along. But reinsurance cycles, as you guys are well aware, are June 1 to May 31 of the following year. So once we get through this next month, 1.5 months, 2 months, we look for new and additional things to go forward to, right? So the data center revenue streams, what we're considering doing is we're evaluating entering into strategic relationships with partners, developers, customers, operators. But the interesting thing over here is not only would that be significant for our shareholder valuation for Oxbridge, but also significant value proposition for SurancePlus. So while we are working on the other endeavors that we've already talked about, we're evaluating some extremely interesting endeavors that will be -- that could be very interesting.

Look forward to following that as you go along. Also, it appears as though you have plenty of cash to go forward and the like. Am I reading that correctly in regards to your cash balances and your restricted cash?

Yes. Yes. We have about $6.9 million in cash and restricted cash. That puts us in great position not only to do things with the reinsurance tokenization, but also to evaluate other opportunities. So great position, great opportunities ahead.

I look forward to following you -- have been following you for a long time and it looks like there's just a bunch of things that is about to come to fruition and look forward to seeing it.

At this time, this concludes our question-and-answer session. I would now like to turn the call back over to Mr. Madhu for his closing remarks.

Thank you for joining us on today's call. Before we conclude, I would like to extend my gratitude to our employees, business partners and investors for their unwavering support. I particularly want to acknowledge our dedicated Oxbridge team whose extensive expertise has been instrumental in navigating and advancing our business. We anticipate providing you with further updates to our progress during the next call. And should you have any additional questions, please do not hesitate to reach out to us any time. Once again, thank you for your time and attention today and for your ongoing interest in Oxbridge. Operator?

Before we conclude today's call, I would like to remind everyone that a recording of today's call will be available for replay via a link available in the Investors section of the company's website. Thank you for joining us today for our presentation. You may now disconnect.