Hippo (HIPO) Q4 2024 earnings summary

Executive summary

• Achieved the most successful year and quarter in company history, with significant improvements in loss ratios and operational efficiency.

• Q4 2024 delivered $8.5 million in positive adjusted EBITDA and $44 million net income, aided by a $46 million gain from the First Connect sale.

• Revenue nearly doubled year-over-year, with Q4 revenue up 58% to $102 million and full-year 2024 revenue up 77% to $372 million.

• Responded to January LA wildfires with immediate customer support; $42M pre-tax Cat loss impact, mostly legacy policies.

• Completed broad transformation of policy portfolio, reducing Cat-related volatility and exposure to wind and hail by 80% from mid-2023.

Financial highlights

• Q4 revenue grew 58% year-over-year to $102M; annual run rate at $410M.

• Q4 net income was $44M, an $86M improvement year-over-year, including a $46M one-time gain from the First Connect sale.

• Q4 adjusted EBITDA was $8.5M, a $31M improvement year-over-year.

• Total generated premium (TGP) in Q4 grew 10% year-over-year to $295M; normalized growth rate 16% excluding First Connect.

• Q4 ending cash and investments increased by $25M to $571M.

Outlook and guidance

• 2025 revenue guidance raised to $465M, representing 25% year-over-year growth.

• On track to achieve positive net income by Q4 2025.

• Expect continued improvement in gross and net loss ratios in 2025, even factoring in Q1 wildfire impact.

• Q4 2025 guidance: HHIP gross loss ratio <60%, PCS Cat load 15%, net loss ratio <67%.

• Detailed three-year guidance to be provided at Investor Day on June 12.