Hippo (HIPO) Q3 2024 earnings summary

Executive summary

• Net loss for Q3 2024 was $8.5 million, an 84% year-over-year improvement, driven by higher premium retention, improved reinsurance terms, and lower operating expenses.

• Revenue increased 66% year-over-year to $95.5 million, with strong growth in Services and Insurance-as-a-Service segments.

• Adjusted EBITDA loss was $7.5 million, an 81% improvement year-over-year.

• Sold a majority stake in First Connect Insurance Services for $48 million, with potential for an additional $12 million, retaining a minority interest and focusing on core business.

• Completed the sale of dormant shell insurance carrier (Mainsail), recognizing an $8.2 million gain.

Financial highlights

• Total generated premium (TGP) grew 21% year-over-year to $368 million.

• Revenue for Q3 2024 was $95.5 million, up from $57.7 million in Q3 2023.

• Net earned premium for Q3 2024 was $70.6 million, up from $32.9 million in Q3 2023.

• Cash and investments at quarter end totaled $545 million, with $191.2 million in cash and $354.3 million in investments.

• Operating expenses declined 33% year-over-year, now 36% of revenue versus 89% last year.

Outlook and guidance

• Q4 guidance reiterates expected revenue of $95–$99 million and Adjusted EBITDA of positive $5–$6 million, despite the removal of First Connect and expected hurricane impacts.

• Management expects continued improvement in loss ratios and profitability as pricing and underwriting actions take further effect.

• Services and Insurance-as-a-Service segments expected to continue outpacing HHIP growth into 2025.

• Strategic focus remains on expense management, risk reduction, and optimizing reinsurance structures.