Oxbridge Re Holdings Ltd (OXBR) (Q2 2026) Earnings Call Highlights: Net Income Turnaround and ...

Negative Points

• Net premiums earned decreased to $368,000 in Q2 2026 from $582,000 in Q2 2025, due to lower weighted average rates and reduced capital deployment.

• The expense ratio remains high at 175.8% for Q2 2026, indicating that operating costs are still elevated relative to premiums earned.

• The combined ratio for Q2 2026 was 175.8%, well above 100%, signaling continued underwriting losses despite the absence of catastrophe losses.

• Net investment income declined to $71,000 in Q2 2026 from $93,000 in Q2 2025, reflecting lower returns on invested assets.

• The company's expansion into AI data centers involves significant execution risks, including high capital requirements and competition from larger players.

Q & A Highlights

Q: For your AI data center initiatives, can you talk a little strategically about what you're targeting, how you're thinking about where it makes sense to do this, the type of tenants and demand, and any thoughts on financing? A: Jay Madhu (CEO): We are targeting "nano" data centers of 10 to 100 megawatts, with an initial focus around 50 megawatts, rather than competing with the "juggernauts" on gigawatt-scale projects. Our geographic focus is the Southeast of the US. The type of tenant will depend on the location and the specific type of data center built. We are finding significant demand from larger AEC companies. Our strategy is built on flexibility and optionality, which gives us a better view of potential tenants as the project develops.

Q: Can you expand a little bit more on the optionality aspect and the vertical integration strategy? A: Jay Madhu (CEO): We have options at every stage of the value chain. For example, after securing land and obtaining entitlements and power letters, we can either sell the asset for a significant multiple or move forward with vertical construction. If we build the data center, we can section it off into halls and act as a landlord, or we can choose to operate it and bring in our own GPUs. This flexibility ensures we don't overcommit or overpay on assets. Furthermore, this strategy complements SurancePlus perfectly. Since data centers are a real-world asset (RWA), SurancePlus can fill the void for smaller investors by allowing them to participate with smaller checks, as traditional financing typically requires significant capital. This provides multiple levers for financing these opportunities.

Q: So if I heard you correctly, you could use RWAs for part of the financing and raising funds, so that's how the individual could actually own part of the data center itself? A: Jay Madhu (CEO): Absolutely. This approach also helps with the "NIMBY" (Not In My Backyard) rhetoric, as people can see that they actually have an opportunity to own a piece of the real estate or data center as part of their investment strategy through tokenization.

Q: (No question, this is a statement from the CEO) A: Jay Madhu (CEO): We are proud of the strong performance of our business and the progress on our long-term strategy. During the second quarter, we continued to build on the growth of our tokenized reinsurance business, expanded the platform to include third-party opportunities, and established a new AI infrastructure business, AI GridWorks. For the 2025-2026 treaty year, our EtaCat Re and ZetaCat Re offerings exceeded their original targets, delivering annualized returns of 29.3% and 43.4%, respectively. For the 2026-2027 treaty year, we closed 5 tokenized reinsurance offerings on the Solana blockchain, raising $7.1 million in gross proceeds, including three third-party offerings associated with HCI Group and Fortex Re.

Q: (No question, this is a statement from the CFO) A: Wrendon Timothy (CFO): Net income for Q2 2026 was $176,000, or $0.02 per share, compared to a net loss of $1.87 million in Q2 2025. This improvement is primarily due to no underwriting losses recorded for the period. Total revenue for the quarter increased to $940,000 from $664,000 in the prior year. The loss ratio decreased to 0% from 394% for the quarter, and the combined ratio decreased to 175.8% from 621%. Restricted cash and cash equivalents increased by $12.85 million to $19.82 million as of June 30, 2026.

Q: (No question, this is a statement from the CEO) A: Jay Madhu (CEO): Since launching, SurancePlus has completed offerings across four consecutive treaty years, issuing approximately 1.27 million tokenized securities and raising more than $16 million in cumulative gross proceeds, backing over $31 million of deployed capital. The addition of third-party reinsurance opportunities demonstrates that SurancePlus can extend beyond Oxbridge-originated reinsurance and provide the infrastructure to structure and tokenize real-world assets originated by third parties. AI GridWorks builds upon this RWA strategy by expanding into the development and ownership of the underlying physical infrastructure supporting AI growth.

Q: (No question, this is a statement from the CEO) A: Jay Madhu (CEO): AI GridWorks is focused on identifying and securing strategic sites, developing powered land, and developing, owning, and operating data center infrastructure. We have assembled an experienced team with deep expertise, including leadership with seven years of data center infrastructure experience at Meta across five campuses representing 2.5 gigawatts of deployed capacity. As AI GridWorks develops these assets, we intend to leverage SurancePlus's RWA structuring and tokenization capabilities to tokenize interests in AI infrastructure assets and associated revenue streams, creating a cohesive and vertically integrated strategy.

Q: (No question, this is a statement from the CFO) A: Wrendon Timothy (CFO): Net premiums earned for Q2 2026 decreased to $368,000 from $582,000 in Q2 2025, due to a lower weighted average rate on reinsurance contracts and a lower amount of capital deployed. Total expenses decreased to $647,000 from $3.6 million, primarily due to no underwriting losses recognized. The acquisition cost ratio increased marginally to 12% from 11%, while the expense ratio decreased to 175.8% from 227% for the quarter.

Q: (No question, this is a statement from the CFO) A: Wrendon Timothy (CFO): For the six months ended June 30, 2026, net income was $198,000, or $0.02 per share, compared to a net loss of $2.01 million in the prior year period. Total revenue increased to $1.5 million from $1.3 million. The loss ratio decreased to 0% from 194.8%, and the combined ratio decreased to 133.1% from 355% for the six-month period. The decreases are primarily due to no underwriting losses recorded and reduced professional fees and overall compensation.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .