Hagerty (HGTY) Q1 2025 earnings summary

Executive summary

• Total revenue for Q1 2025 grew 18% year-over-year to $320 million, driven by strong new business, retention, and robust performance across all business lines.

• Net income rose 233% to $27.3 million, with operating income up 110% to $25.7 million and Adjusted EBITDA up 45% to $39.6 million.

• Written premium increased 12% to $244.3 million, supported by 89% retention and 55,000 new members added.

• Membership, marketplace, and other revenue surged 60% to $50 million, with marketplace revenue up 176% to $29 million, fueled by successful live auctions and expanded offerings.

• Strategic priorities include expanding specialty insurance, integrating membership experiences, international marketplace expansion, and technology transformation.

Financial highlights

• Commission and fee revenue grew 13% to $100.3 million; earned premium increased 12% to $169.4 million.

• Operating profit was $26 million, up 110% year-over-year.

• Loss ratio was 42.0%, including $10.4 million in wildfire losses; combined ratio was 88.5%.

• Policy retention remained high at 89.0%, with total insured vehicles up 8% to 2.6 million.

• Basic and diluted EPS was $0.07; Adjusted EPS was $0.08.

Outlook and guidance

• 2025 guidance reaffirmed: total revenue growth of 12%-13%, written premium growth of 13%-14%.

• Net income expected at $102-$110 million (up 30%-40%), Adjusted EBITDA at $150-$160 million (up 21%-29%).

• Growth expected to accelerate in the second half of 2025, driven by State Farm program expansion and technology investments.

• Profit guidance incorporates $20 million in technology investments and $10 million pre-tax impact from wildfires.