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Hagerty Reports First Quarter 2026 Results; Reaffirms 2026 Growth OutlookMay 6, 2026 6:55 AM
PR Newswire (US) First quarter 2026 HighlightsCompleted strategic evolution to assume control of Markel program and 100% of premium post transition to fronting arrangementStrong underlying operational performance with growth in written premiums, earned premium and membersTransition to fronting arrangement resulted in decrease to reported revenue as previously disclosedWritten Premium increased 18% to $289 millionPolicies in force increased 15% to 1.8 million with a record 112,000 new policies added in the first quarterEarned premium increased 42% to $240 millionNet Loss of $13 million, including $89 million of pre-tax Markel Fronting Arrangement transitional costs, compared to Net Income of $27 million in the prior year periodAdjusted EBITDA (a non-GAAP measure) increased 77% to $85 million, compared to $48 million in the prior year periodReaffirmed 2026 Outlook for Written Premium growth of 15% to 16%TRAVERSE CITY, Mich., May 6, 2026 /PRNewswire/ -- Hagerty, Inc. (NYSE: HGTY) makes it easier and more enjoyable for car enthusiasts to drive and celebrate the vehicles they love — through specialty vehicle insurance, live and digital auctions, engaging media and events, and the Hagerty Drivers Club, the world's largest membership community of car lovers. Today the company announced financial results for the three months ended March 31, 2026. "First quarter results and the breadth of momentum across our ecosystem give us increasing confidence in our full year outlook that we reaffirmed today. We delivered 18% written premium growth in the first quarter, ahead of our full year outlook, and earned premium growth of 42% with the January 1, 2026 increase in quota share to 100%. 2026 is performing better than expected economically, even if the financial presentation looks different as we transition to the new Markel Fronting Arrangement. The presentation is different but the business is not, as we delivered another quarter of record growth," said McKeel Hagerty, Chief Executive Officer and Chairman of Hagerty."Our business momentum is showing up across the ecosystem - and Broad Arrow is no exception. During the first quarter, Broad Arrow hosted the most successful sale in the 31-year history of Amelia Car Week, delivering $111 million in total sales with a 92% sell-through rate and over 1,000 bidders from 23 countries. Results like this are the product of four decades of building trust, one member and one partner at a time, and they reflect exactly the kind of member-centric company that Hagerty is building for the long-term," added Mr. Hagerty.FIRST QUARTER 2026 FINANCIAL HIGHLIGHTSFirst quarter 2026 Written Premium increased 18% year-over-year to $289 millionFirst quarter 2026 Earned Premium increased 42% year-over-year to $240 million, driven by the combination of strong written premium growth and the January 1, 2026 transition to 100% quota share under the new fronting arrangementPolicies in Force Retention was 88.5% as of March 31, 2026 compared to 89.0% in the prior year period, and policies in force count increased 15% year-over-year to 1.8 millionFirst quarter 2026 Commission and fee revenue decreased 84% year-over-year to $16 million, as Markel commission revenue is eliminated upon consolidation under the new fronting arrangementFirst quarter 2026 Marketplace revenue decreased 12% year-over-year to $26 million, with strong year-over-year growth in auction sales at The Amelia offset by lower inventory sales from the prior year's one-time sale of vehicles acquired from The Academy of Art University CollectionFirst quarter 2026 Membership and other revenue increased 6% year-over-year to $22 millionHagerty Drivers Club (HDC) paid members increased 6% year-over-year to over 940,000First quarter 2026 Net investment income increased 13% year-over-year to $10 millionFirst quarter 2026 Total Revenue decreased 5% year-over-year to $312 million, reflecting the transition to the Markel Fronting ArrangementFirst quarter 2026 Loss before taxes of $21 million, including $89 million of Markel Fronting Arrangement transitional costsFirst quarter 2026 Hagerty Re Loss Ratio was 38.4% compared to 42.0% in the prior year period, including $6 million of favorable prior accident year loss developmentFirst quarter 2026 Hagerty Re Combined Ratio was 86.5% compared to 88.5% in the prior year periodTransition to new fronting arrangement and Article 7 reporting results in a different classification of certain expenses, impacting the period-to-period comparability of Policy acquisition costs, net (+$25 million), Underwriting and other insurance expenses (+$58 million), and Selling, general, and administrative expenses (-$72 million)First quarter 2026 Net Loss of $13 million, including $89 million of pre-tax Markel Fronting Arrangement transitional costs, compared to Net Income of $27 million in the prior year periodFirst quarter 2026 Adjusted EBITDA (a non-GAAP measure) increased 77% year-over-year to $85 million, compared to $48 million in the prior year periodFirst quarter 2026 Basic and Diluted Loss Per Share were $(0.06); Adjusted Diluted Loss Per Share (a non-GAAP measure) was $(0.04)The Company had $212 million of unrestricted cash and $229 million of total debt, $110 million of which was back leverage for Broad Arrow Capital's portfolio of loans collateralized by collector carsThe definitions and reconciliations of non-GAAP financial measures are provided under the heading Key Performance Indicators and Certain Non-GAAP Financial Measures at the end of this press release.2026 OUTLOOK - SUSTAINED COMPOUNDING GROWTHWe believe 2026 is on track to be another great year of underlying profit growth for Hagerty as our team executes on our long-term plan to deliver compounding premium growth through investing in our long-term competitive advantages with our member-centric approach. As of January 1, 2026, we moved to a 100% quota share arrangement with our long-term partner, Markel, where we retain 100% of the premium and risk from our high-quality, historically low volatility underwriting. We also remain focused on delivering this growth more efficiently through the benefits of scale, continued cost discipline, and investments in our technology platform.For full year 2026, Hagerty anticipates:Written Premium growth of 15% to 16%Total Revenue change of (12)% to (11)%, as Markel-related commission revenue is eliminated under the Markel Fronting Arrangement1Net Loss of $(51) million to $(41) million, including ~$190 million of Markel Fronting Arrangement transitional costs2Adjusted EBITDA of $236 million to $247 million
2026 Outlook ($)
2026 Outlook (%)in thousands2025 Results
Low End
High End
Low End
High EndTotal Written Premium$1,193,548
$1,373,000
$1,385,000
15 %
16 %Total Revenue1$1,456,389
$1,280,000
$1,300,000
(12) %
(11) %Net Income (Loss)2, 3$149,225
$(51,000)
$(41,000)
N/M
N/MAdjusted EBITDA4$236,791
$236,000
$247,000
— %
4 %
1Revenue guidance reflects the accounting impact of the Markel Fronting Arrangement. Beginning in 2026, we now control the Essentia book of business with the benefit of our MGA services received by Hagerty Re and not Essentia. As a result, commission revenue and the associated ceding commission expense for policies issued through the Markel Fronting Arrangement are now eliminated in consolidation. Although we expect the arrangement to result in increased profitability (as reflected in Adjusted EBITDA), reported commission revenue and ceding commission expense will be significantly lower than prior periods, affecting period-to-period comparability. 2025 commission revenue associated with our alliance agreement with Markel was $437 million and ceding commission expense related to the Company's reinsurance quota share agreement with Markel was $344 million in 2025.2The projected Net Loss includes approximately $190 million of pre-tax transitional costs related to the Markel Fronting Arrangement representing deferred ceding commissions paid to Markel for policies written prior to January 1, 2026, which will be fully amortized ratably over the remaining term of those policies throughout 2026. This amortization will decline from $89 million in Q1 2026 to approximately $10 million in Q4 2026 as 2025 policies expire. Excluding these transitional costs, we expect 2026 to reflect underlying profitability improvement.3Full year 2025 Net Income includes (i) the benefit from the $42 million release of a portion of our valuation allowance, partially offset by a $32 million loss related to the change in value of the TRA liability; and (ii) a $21 million reduction in reserves in the fourth quarter, primarily related to favorable development for the 2024 accident year and improvement in current accident year experience.4See Non-GAAP Financial Measures below for additional information regarding this non-GAAP financial measure.
N/M = Not meaningfulConference Call Details
Hagerty will hold a conference call to discuss the financial results on Wednesday, May 6, 2026 10:00 am Eastern Time. A webcast of the conference call, including its Investor Presentation highlighting first quarter 2026 financial results, will be available on Hagerty's investor relations website at investor.hagerty.com. The dial-in for the conference call is (877) 423-9813 (toll-free) or (201) 689-8573 (international). Please dial the number 10 minutes prior to the scheduled start time.A webcast replay of the call will be available at investor.hagerty.com following the call.Forward-Looking Statements
This press release contains statements that constitute "forward-looking statements" within the meaning of the federal securities laws. All statements we provide, other than statements of historical fact, are forward-looking statements, including those regarding Hagerty's future operating results and financial position, Hagerty's business strategy and plans, products, services, and technology implementations, market conditions, growth and trends, expansion plans and opportunities, and Hagerty's objectives for future operations. The words "anticipate," "believe," "envision," "estimate," "expect," "intend," "may," "plan," "predict," "project," "target," "potential," "will," "would," "could," "should," "continue," "ongoing," "contemplate," and similar expressions, and the negatives of these expressions, are intended to identify forward-looking statements.Hagerty has based these forward-looking statements largely on current expectations about future events, which may not materialize. Actual results could differ materially and adversely from those anticipated or implied in forward-looking statements. These factors include, among other things, Hagerty's ability to: (i) compete effectively within Hagerty's industry and attract and retain insurance policyholders and paid Hagerty Drivers Club ("HDC") subscribers; (ii) maintain key strategic relationships with Hagerty's insurance distribution and underwriting carrier partners; (iii) prevent, monitor, and detect fraudulent activity; (iv) manage risks associated with disruptions, interruptions, outages, or other issues with Hagerty's technology platforms or use of third-party services; (v) accelerate the adoption of Hagerty's membership and marketplace products and services, as well as any new insurance programs and products offered; (vi) successfully implement the fronting arrangement consummated with Markel and realize the anticipated benefits while also managing the increased exposure to underwriting volatility, catastrophes, reinsurance counterparty risk, and legal, compliance, and regulatory risks resulting from the shift to Hagerty Re assuming 100% of the risk for policies written through this arrangement; (vii) underwrite and price new products, including Enthusiast+, consistent with expected loss ratios and risk tolerances; (viii) execute Broad Arrow's private sale, auction, and financing strategies; (ix) manage the cyclical nature of the insurance business and broader macroeconomic conditions, including inflation, interest rates, and potential recessionary pressures; (x) achieve Hagerty's investment objectives and avoid losses in the investment portfolio; (xi) address unexpected increases in the frequency or severity of claims, including catastrophe losses; and (xii) comply with numerous laws and regulations applicable to Hagerty's business, including without limitation state, federal, and foreign laws relating to insurance and rate increases, privacy and cybersecurity, marketing and advertising, digital services, accounting matters, tax, anti-money laundering, and economic sanctions.The forward-looking statements in this release represent Hagerty's views as of the date hereof. You should not rely on forward-looking statements as predictions of future events. We operate in a very competitive and rapidly changing environment and new risks emerge from time to time. This presentation should be read in conjunction with the information included in filings with the SEC and press releases. Understanding the information contained in these filings is important in order to fully understand Hagerty's reported financial results and business outlook for future periods. In addition, this presentation contains certain "non-GAAP financial measures". The non-GAAP measures are presented for supplemental informational purposes only. These financial measures are not recognized measures under GAAP and should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Reconciliations to the most directly comparable financial measure calculated and presented in accordance with GAAP are provided in the appendix to this presentation.About Hagerty
Hagerty is a company built by drivers for drivers, protecting 2.9 million vehicles in the United States, Canada and the UK. We make it easier and more enjoyable for car enthusiasts to drive and celebrate the vehicles they love through innovative vehicle insurance products, live and digital auctions, engaging media and events, and the Hagerty Drivers Club, the world's largest membership community of car lovers.For more information, please visit www.hagerty.com or www.newsroom.hagerty.com. Never Stop Driving®.Category: Financial
Source: Hagerty Hagerty, Inc.Condensed Consolidated Statements of Operations (Unaudited)
Three months ended March 31,
2026
2025
$ Change
% Change
REVENUES:
in thousands (except percentages and per share amounts)Earned premium, net$ 239,642
$ 169,355
$ 70,287
41.5 %Commission and fee revenue16,435
100,287
(83,852)
(83.6) %Marketplace revenue
25,652
29,086
(3,434)
(11.8) %Membership and other revenue22,127
20,865
1,262
6.0 %Net investment income
10,263
9,058
1,205
13.3 %Net investment losses
(2,289)
(315)
(1,974)
N/MTotal revenue
311,830
328,336
(16,506)
(5.0) %EXPENSES:
Losses and loss adjustment expenses
97,919
71,130
26,789
37.7 %Policy acquisition costs, net
101,922
77,333
24,589
31.8 %Underwriting and other insurance expenses
59,588
1,357
58,231
N/MSelling, general, and administrative expenses72,416
144,045
(71,629)
(49.7) %Interest expense and other, net922
1,689
(767)
(45.4) %Total expenses
332,767
295,554
37,213
12.6 %INCOME (LOSS) BEFORE TAXES(20,937)
32,782
(53,719)
(163.9) %Income tax (expense) benefit
8,192
(5,489)
13,681
N/MNET INCOME (LOSS)
(12,745)
27,293
(40,038)
(146.7) %Net (income) loss attributable to non-controlling interest8,254
(18,922)
27,176
143.6 %Accretion of Series A Convertible Preferred Stock(2,030)
(1,875)
155
8.3 %NET INCOME (LOSS) ATTRIBUTABLE TO CLASS A COMMON STOCKHOLDERS$ (6,521)
$ 6,496
$ (13,017)
(200.4) %
Earnings (loss) per share of Class A Common Stock:
Basic
$ (0.06)
$ 0.07
Diluted
$ (0.06)
$ 0.07
Weighted average shares of Class A Common Stock outstanding:
Basic
101,034
90,047
Diluted
101,034
346,311
N/M = Not meaningful Hagerty, Inc.Condensed Consolidated Balance Sheets (Unaudited)
March 31,
December 31,
2026
2025
ASSETS
in thousands (except share amounts)Fixed maturity securities available-for-sale, at fair value (amortized cost: $670,922 in 2026, $687,813 in 2025)$ 673,100
$ 696,271Equity securities, at fair value
47,804
34,871Total investments
720,904
731,142Cash and cash equivalents
212,371
160,177Restricted cash and cash equivalents
154,362
138,823Accounts receivable
27,993
98,872Premiums receivable
92,446
180,529Deferred acquisition costs, net
143,552
179,224Reinsurance recoverables
11,863
15,296Prepaid reinsurance premiums
40,405
21,950Notes receivable
148,944
113,887Intangible assets, net
89,125
88,915Goodwill
114,150
114,164Deferred tax assets
40,092
43,011Other assets
228,386
207,986TOTAL ASSETS
$ 2,024,593
$ 2,093,976LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses
$ 85,847
$ 111,947Advance premiums
50,748
28,287Due to insurers
14,366
94,930Losses payable and reserves for unpaid losses and loss adjustment expenses
203,987
264,204Unearned premiums
508,003
412,058Ceding commissions payable
1,870
86,165Debt, net
228,608
177,907Contract liabilities
46,383
46,450Deferred tax liability
5,697
23,489Tax receivable agreement liability
38,284
39,829Other liabilities
106,757
61,684TOTAL LIABILITIES
1,290,550
1,346,950Commitments and Contingencies
—
—TEMPORARY EQUITY
Preferred stock, $0.0001 par value (20,000,000 shares authorized, 8,483,561 Series A Convertible Preferred Stock issued and outstanding as of March 31, 2026 and December 31, 2025) 188,648
86,618STOCKHOLDERS' EQUITY
Class A Common Stock, $0.0001 par value (500,000,000 shares authorized, 101,085,283 and 100,706,893 issued and outstanding as of March 31, 2026 and December 31, 2025, respectively)10
10Class V Common Stock, $0.0001 par value (300,000,000 authorized, 241,552,156 shares issued and outstanding as of March 31, 2026 and December 31, 2025)24
24Additional paid-in capital
626,166
623,013Accumulated earnings (deficit)
(407,451)
(402,960)Accumulated other comprehensive income (loss)
(66)
1,229Total stockholders' equity
218,683
221,316Non-controlling interest
426,712
439,092Total equity
645,395
660,408TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY$ 2,024,593
$ 2,093,976
1The Series A Convertible Preferred Stock is recorded within Temporary Equity because it has equity conversion and cash redemption features. Hagerty, Inc.Condensed Consolidated Statements of Cash Flows (Unaudited)
Three months ended March 31,
2026
2025
OPERATING ACTIVITIES:in thousandsNet income (loss)$ (12,745)
$ 27,293Adjustments to reconcile net income (loss) to net cash from operating activities:
Loss on disposals of equipment, software, and other assets 213
1,136Depreciation and amortization9,706
9,488Provision for deferred taxes(13,528)
(939)Share-based compensation expense4,617
4,392Non-cash lease expense2,108
2,109Net investment losses2,289
315(Accretion) amortization of discount and premium, net(1,358)
(1,184)Amortization of gain on loss portfolio transfer(1,308)
—Other575
1,852Changes in assets and liabilities:
Accounts and premiums receivable157,636
(42,812)Deferred acquisition costs, net35,672
4,196Reinsurance recoverables3,433
(7,561)Prepaid reinsurance premiums(18,455)
(8,285)Advance premiums22,512
19,921Due to insurers(80,441)
25,336Losses payable and reserves for unpaid losses and loss adjustment expenses(60,217)
(14,958)Unearned premiums95,945
(5,377)Ceding commissions payable(84,295)
1,926Other assets and liabilities, net(46,106)
26,982Net Cash Provided by Operating Activities16,253
43,830INVESTING ACTIVITIES:
Capital expenditures(7,712)
(5,389)Issuance of notes receivable(48,133)
(9,886)Collection of notes receivable14,014
1,650Purchases of fixed maturity securities(149,982)
(39,150)Purchases of equity securities(51,041)
(246)Proceeds from maturities and sales of fixed maturity securities167,537
48,526Proceeds from sales of equity securities35,405
247Other investing activities(13)
(233)Net Cash Used in Investing Activities (39,925)
(4,481)FINANCING ACTIVITIES:
Repayments of debt(6,159)
(120,880)Proceeds from debt, net of issuance costs57,911
160,067Proceeds from loss portfolio transfer50,500
—Claims payments made from loss portfolio transfer(9,248)
—Distributions paid to non-controlling interest unit holders(359)
(24,676)Funding of TRA Liability payments(1,545)
(223)Funding of employee tax obligations upon vesting of share-based payments(61)
(44)Net Cash Provided by Financing Activities91,039
14,244Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents366
(130)
Change in cash and cash equivalents and restricted cash and cash equivalents67,733
53,463Beginning cash and cash equivalents and restricted cash and cash equivalents299,000
232,845Ending cash and cash equivalents and restricted cash and cash equivalents$ 366,733
$ 286,308Key Performance Indicators and Non-GAAP Financial MeasuresKey Performance IndicatorsThe tables below present a summary of our Key Performance Indicators, which include important operational metrics, as well as certain financial measures prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and non-GAAP financial measures. We use these Key Performance Indicators to evaluate our business, measure our performance, identify trends against planned initiatives, prepare financial projections, and make strategic decisions. We believe these Key Performance Indicators are useful in evaluating our performance when read together with our Condensed Consolidated Financial Statements prepared in accordance with GAAP.
Three months ended March 31,
2026
2025
Change
GAAP Financial Measures
dollars in thousands (except per share amounts)Total Revenue 1
$ 311,830
$ 328,336
$ (16,506)
(5.0) %Income (loss) before taxes
$ (20,937)
$ 32,782
$ (53,719)
(163.9) %Net Income (Loss)
$ (12,745)
$ 27,293
$ (40,038)
(146.7) %Basic Earnings (Loss) Per Share
$ (0.06)
$ 0.07
$ (0.13)
(185.7) %Diluted Earnings (Loss) Per Share
$ (0.06)
$ 0.07
$ (0.13)
(185.7) %
Non-GAAP Financial Measures
Adjusted EBITDA
$ 85,185
$ 48,151
$ 37,034
76.9 %Adjusted Net Income (Loss)
$ (13,144)
$ 25,352
$ (38,496)
(151.8) %Adjusted Diluted EPS
$ (0.04)
$ 0.07
$ (0.11)
(157.1) %
Insurance Operational Metrics
Total Written Premium
$ 288,946
$ 244,327
$ 44,619
18.3 %Net Assumed Premium
$ 317,346
$ 155,651
$ 161,695
103.9 %Hagerty Re Loss Ratio
38.4 %
42.0 %
(3.6) %
N/MHagerty Re Combined Ratio
86.5 %
88.5 %
(2.0) %
N/MNew Business Count — Insurance
111,896
55,309
56,587
102.3 %
Marketplace Operational Metrics
Aggregate Auction Sales
$ 135,379
$ 75,336
$ 60,043
79.7 %Net Auction Sales
$ 123,436
$ 68,213
$ 55,223
81.0 %Private Sales
$ 36,830
$ 53,669
$ (16,839)
(31.4) %BAC Average Loan Portfolio
$ 135,270
$ 62,784
$ 72,486
115.5 %
N/M = Not meaningful
1Total Revenue for the three months ended March 31, 2025 has been recast to include Net investment income and Net investment losses as components of revenue in accordance with the Article 7 reporting standards adopted in 2025. Total revenue as previously presented in accordance with Article 5 was $320 million for the three months ended March 31, 2025.
March 31,
2026
2025
Change
Insurance Operational Metrics
dollars in thousandsPolicies in Force
1,760,400
1,524,927
235,473
15.4 %Policies in Force Retention
88.5 %
89.0 %
(0.5) %
N/MVehicles in Force
2,910,661
2,609,209
301,452
11.6 %HDC Paid Member Count
940,313
889,390
50,923
5.7 %Marketplace Operational Metrics
BAC Loan Portfolio Balance
$ 142,956
$ 73,192
$ 69,764
95.3 %
N/M = Not meaningfulAdjusted EBITDAWe define EBITDA as consolidated Net income (loss), excluding Interest expense and other, net, Income tax expense (benefit), and Depreciation and amortization. We define Adjusted EBITDA as EBITDA, further adjusted to (i) exclude net investment gains and losses; (ii) deduct interest expense related to the State Farm Term Loan; (iii) exclude share-based compensation expense; and when applicable, exclude (iv) restructuring, impairment and related charges; (v) gains, losses and impairments related to divestitures; and (vi) certain other unusual items, such as Markel Fronting Arrangement transitional costs during the three months ended March 31, 2026.How This Measure is UsefulWhen used in conjunction with GAAP financial measures, Adjusted EBITDA is a supplemental measure of operating performance that we believe is a useful measure to evaluate our performance period over period and relative to our competitors and peers. Management uses Adjusted EBITDA to evaluate our operating performance on a consistent basis, as it removes the impact of items not directly resulting from our core operations. We believe the presentation of Adjusted EBITDA provides securities analysts, investors, and other interested parties with a supplemental view of our operating performance that enhances their understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives.Limitations of the Usefulness of This MeasureAdjusted EBITDA may differ from similarly titled measures used by other companies due to different methods of calculation, which could reduce the usefulness of this non-GAAP financial measure when comparing our performance to that of other companies. Presentation of Adjusted EBITDA is not intended to be considered in isolation or a substitute for, or superior to, the financial information prepared in accordance with GAAP. A reconciliation of Adjusted EBITDA to Net income (loss), the most directly comparable GAAP measure, is presented below.
Three months ended March 31,
2026
2025
in thousandsNet income (loss)$ (12,745)
$ 27,293Interest expense and other, net 1922
1,689Income tax expense (benefit)(8,192)
5,489Depreciation and amortization9,706
9,488EBITDA(10,309)
43,959Markel Fronting Arrangement transitional costs 288,958
—Net investment losses2,289
315Interest expense related to State Farm Term Loan 3(515)
(515)Share-based compensation expense4,617
4,392Other unusual items 4145
—Adjusted EBITDA$ 85,185
$ 48,151
1Excludes interest expense related to the BAC Credit Facility, which is recorded within "Selling, general, and administrative expenses" in the Condensed Consolidated Statements of Operations.2Represents the amortization of deferred ceding commissions paid to Markel for policies written prior to January 1, 2026. These costs relate exclusively to policies written prior to our entry into the Markel Fronting Arrangement and are being fully amortized ratably over the remaining term of those policies through December 31, 2026. We expect the amortization of these deferred ceding commissions to decline from $89.0 million in the first quarter of 2026 to approximately $10.0 million in the fourth quarter of 2026, as the remaining 2025 policy terms run off. Management excludes these costs from Adjusted EBITDA because they are transitional charges related solely to deferred ceding commissions on policies written prior to January 1, 2026, are expected to run off by December 31, 2026, and are not indicative of our ongoing operating performance under the Markel Fronting Arrangement.3Interest expense related to the State Farm Term Loan is charged against Adjusted EBITDA as it is directly attributable to the operations of Hagerty Re.4For the three months ended March 31, 2026, other unusual items includes additional severance expenses associated with the actions taken in the fourth quarter of 2025.As a result of our transition to the Article 7 reporting standards, Net investment income is reported as a component of revenue and is no longer an adjustment in our reconciliation from Net income (loss) to Adjusted EBITDA. In addition, interest expense related to the State Farm Term Loan is now deducted from Adjusted EBITDA as it is directly attributable to Hagerty Re, which generates a significant portion of our net investment income. The following table presents a reconciliation of Adjusted EBITDA as presented in the prior period in accordance with Article 5, to the current presentation in accordance with Article 7:
Three months ended
March 31, 2025
in thousandsPrior presentation of Adjusted EBITDA$ 39,608Net investment income9,058Interest expense related to State Farm Term Loan(515)Current presentation of Adjusted EBITDA$ 48,151The following table reconciles Adjusted EBITDA for the year ended December 31, 2026 Outlook to the most directly comparable GAAP measure, which is Net income (loss):
2026 Low
2026 High
in thousandsNet loss 1$ (51,000)
$ (41,000)Interest expense and other, net 25,000
5,000Income tax expense33,000
34,000Depreciation and amortization40,000
40,000Share-based compensation expense19,000
19,000Markel Fronting Arrangement transitional costs 1190,000
190,000Adjusted EBITDA$ 236,000
$ 247,000
1Represents the amortization of deferred ceding commissions paid to Markel for policies written prior to January 1, 2026. These costs relate exclusively to policies written prior to our entry into the Markel Fronting Arrangement and are being fully amortized ratably over the remaining term of those policies through December 31, 2026. We expect the amortization of these deferred ceding commissions to decline from $89.0 million in the first quarter of 2026 to approximately $10.0 million in the fourth quarter of 2026, as the remaining 2025 policy terms run off. Management excludes these costs from Adjusted EBITDA because they are transitional charges related solely to deferred ceding commissions on policies written prior to January 1, 2026, are expected to run off by December 31, 2026, and are not indicative of our ongoing operating performance under the Markel Fronting Arrangement.2Excludes interest expense related to the BAC Credit Facility, which is recorded within "Selling, general, and administrative expenses" in the Condensed Consolidated Statements of Operations.Adjusted Net Income (Loss) and Adjusted Diluted EPSAdjusted Net Income (Loss) represents Net income (loss) attributable to Class A Common Stockholders, assuming the full exchange of all outstanding THG units and Series A Convertible Preferred Stock for shares of Class A Common Stock, adjusted to exclude (i) net investment gains and losses; and when applicable, (ii) changes in the TRA Liability; (iii) gains and losses related to divestitures; and (iv) certain other unusual items, each of which we do not believe are directly related to our core operations and may not be indicative of our ongoing performance. Adjusted Diluted EPS is calculated by dividing Adjusted Net Income (Loss) by the weighted average shares of Class A Common Stock outstanding, assuming the full exchange of all outstanding THG units, Series A Convertible Preferred Stock, and unvested share-based compensation awards.How These Measures Are UsefulWhen used in conjunction with GAAP financial measures, Adjusted Net Income (Loss) and Adjusted Diluted EPS are supplemental measures of operating performance that we believe are useful measures to evaluate our performance period over period and relative to our competitors and peers. Management uses Adjusted Net Income (Loss) and Adjusted Diluted EPS to evaluate our operating performance on a consistent basis to make strategic and operational decisions. We believe these measures provide management and investors with useful information regarding trends in our business that may not otherwise be apparent when relying solely on GAAP measures. By assuming the full exchange of all outstanding THG units and Series A Convertible Preferred Stock, we believe these measures facilitate comparisons with other companies that have different organizational and tax structures, as well as comparisons period over period because it eliminates the effect of any changes in Net income (loss) attributable to Class A Common Stockholders driven by increases in Hagerty, Inc.'s ownership in THG, which is unrelated to our operating performance, and excludes items that are unusual or may not be indicative of our ongoing performance.Limitations of the Usefulness of These MeasuresAdjusted Net Income (Loss) and Adjusted Diluted EPS may differ from similarly titled measures used by other companies due to different methods of calculation. Presentation of Adjusted Net Income (Loss) and Adjusted Diluted EPS should not be considered alternatives to Net income (loss) attributable to Class A Common Stockholders and Diluted EPS, as determined under GAAP. While these measures are useful in evaluating our performance, they assume the full exchange of all outstanding THG units and Series A Convertible Preferred Stock for shares of Class A Common Stock, which has not occurred and may not occur. Further, the adjustments made to arrive at Adjusted Net Income (Loss) exclude certain expenses and income that may recur in the future. Adjusted Net Income (Loss) and Adjusted Diluted EPS should be evaluated in conjunction with our GAAP financial results. A reconciliation of Adjusted Net Income (Loss) to Net income (loss) attributable to Class A Common Stockholders, the most directly comparable GAAP measure, and the computation of Adjusted Diluted EPS are presented below.
Three months ended March 31,
2026
2025
Numerator:
in thousands (except per share amounts)Net income (loss) attributable to Class A Common Stockholders$ (6,521)
$ 6,496Adjustments:
Accretion of Series A Convertible Preferred Stock2,030
1,875Net income (loss) attributable to non-controlling interest(8,254)
18,922Net investment losses
2,289
315Other unusual items 1
145
—Tax impact of above adjustments 2
(2,833)
(2,256)Adjusted Net Income (Loss)
$ (13,144)
$ 25,352
Denominator:
Weighted average shares of Class A Common Stock outstanding — Diluted101,034
346,311Adjustments:
Assumed exchange of non-controlling interest THG units for shares of Class A Common Stock245,102
—Assumed conversion of shares of Series A Convertible Preferred Stock into shares of Class A Common Stock6,785
6,785Assumed vesting of share-based compensation awards8,007
6,881Adjusted weighted average shares of Class A Common Stock outstanding — Diluted360,928
359,977
Adjusted Diluted EPS
$ (0.04)
$ 0.07
Three months ended March 31,
2026
2025
Diluted EPS
$ (0.06)
$ 0.07Impact of assumed exchange, conversion, or vesting of remaining potentially dilutive securities 30.02
0.01Non-GAAP adjustments 4—
(0.01)Adjusted Diluted EPS$ (0.04)
$ 0.07
1For the three months ended March 31, 2026, other unusual items includes additional severance expenses associated with the actions taken in the fourth quarter of 2025.2Represents the tax effect of the aforementioned adjustments to reflect corporate income taxes at an estimated effective tax rate of 29.0% and 23.4% for 2025 and 2025, respectively, which considers the U.S. federal statutory rate of 21%, a combined state income tax rate of approximately 5% (net of federal benefits), and certain material permanent items.3Assumes the exchange of all outstanding THG units, Series A Convertible Preferred Stock, and unvested share-based compensation awards for shares of Class A Common Stock, resulting in the elimination of the non-controlling interest and recognition of the Net income (loss) attributable to non-controlling interest, as well as elimination of the accretion of Series A Convertible Preferred Stock.4Represents the per share impact of non-GAAP adjustments for each period. Refer to the reconciliation above for additional information. View original content to download multimedia:https://www.prnewswire.com/news-releases/hagerty-reports-first-quarter-2026-results-reaffirms-2026-growth-outlook-302763540.htmlSOURCE Hagerty Original: Hagerty Reports First Quarter 2026 Results; Reaffirms 2026 Growth Outlook
US Market News
3月前
Hagerty Reports Full Year 2025 Results; Provides 2026 Growth OutlookFebruary 26, 2026 6:55 AM
PR Newswire (US)
Full year 2025 Highlights
Total Revenue increased 17% to $1,456 millionWritten Premium increased 14% to $1,194 millionAdded a record 371,000 new members in 2025Marketplace revenue increased 119% to $119 millionIncome before taxes increased 49% to $139 millionNet Income increased 91% to $149 millionAdjusted EBITDA increased 46% to $237 millionBasic and Diluted Earnings Per Share was $0.41 and $0.37, respectively2026 Outlook for sustained Written Premium growth of 15% to 16%TRAVERSE CITY, Mich., Feb. 26, 2026 /PRNewswire/ – Hagerty, Inc. (NYSE: HGTY), an automotive enthusiast brand and leading specialty vehicle insurance provider, announced today financial results for the three and twelve months ended December 31, 2025."2025 was a standout year for Hagerty, defined by accelerating momentum and record new business count. Top-line gains of 17% were fueled by written premium growth of 14%, and we efficiently converted this revenue into a 91% surge in net income. We also reinvested significantly in our business, including our technology transformation, the launch of Enthusiast+, the roll-out of State Farm to 27 states, as well as our Marketplace expansion into Europe," said McKeel Hagerty, Chief Executive Officer and Chairman of Hagerty."In 2026, we will continue to invest back into our member-centric model to drive durable, compounding growth, with written premiums expected to increase 15% to 16%. 2026 also marks a major milestone for Hagerty as we move to a 100% quota share with our long-term partner, Markel. We believe this evolution, combined with our technology-led efficiency initiatives, positions us to generate even higher rates of underlying profit growth and cash flow for our shareholders over the coming years," added Mr. Hagerty.FOURTH QUARTER AND FULL YEAR 2025 FINANCIAL HIGHLIGHTSFourth quarter 2025 Total Revenue increased 19% year-over-year to $357 million, and full year 2025 Total Revenue increased 17% year-over-year to $1,456 millionFourth quarter 2025 Written Premium increased 19% year-over-year to $259 million, and full year 2025 Written Premium increased 14% year-over-year to $1,194 millionFourth quarter 2025 Commission and fee revenue increased 18% year-over-year to $106 million, and full year 2025 Commission and fee revenue increased 15% year-over-year to $486 millionPolicies in Force Retention was 88.7% as of December 31, 2025 compared to 89.0% in the prior year period, and total insured vehicles increased 9% year-over-year to 2.8 millionFourth quarter 2025 Earned Premium increased 14% year-over-year to $193 million, and full year 2025 Earned Premium increased 13% year-over-year to $727 millionFourth quarter 2025 Marketplace revenue increased 80% year-over-year to $29 million, and full year 2025 Marketplace revenue increased 119% year-over-year to $119 millionThe increase was primarily due to growth in private sales and additional auctions with the Company's expansion into EuropeFourth quarter 2025 Membership and other revenue increased 8% year-over-year to $19 million, and full year 2025 Membership and other revenue increased 4% year-over-year to $82 millionHagerty Drivers Club (HDC) paid members increased 6% year-over-year to approximately 930,000 compared to 876,000Fourth quarter 2025 Net investment income was $10 million, an increase of 7% year-over-year.Fourth quarter 2025 Income before taxes increased 186% year-over-year to $40 million, and full year 2025 Income before taxes increased 49% year-over-year to $139 millionFourth quarter 2025 Income before tax margin increased by approximately 650 bps, and full year 2025 margin increased by approximately 200 bps compared to the prior year periodsFourth quarter 2025 Loss Ratio was 31.4% compared to 42.8% in the prior year period. Full year 2025 Loss Ratio was 39.3% compared to 46.4% in the prior year periodFull year 2025 Combined Ratio for Hagerty Re was 86.6% compared to 94.1% in the prior year periodFourth quarter 2025 and full year 2025 loss expense includes a $21 million reduction in reserves, primarily related to favorable development for the 2024 accident year and improvement in current accident year experience (10.6 percentage points impact to combined ratio in the fourth quarter and 2.8 percentage points for the full year)Full year 2025 Salary and benefits increased 19% due to higher accrued incentive compensation reflecting stronger performance in 2025 compared to the prior year period when accruals were negatively impacted by hurricane activityFull year 2025 General and administrative expenses increased 15% due to an increase in professional fees related to the secondary offering, the Markel Fronting Arrangement and Marketplace expansion into Europe, as well as software-related costsFull year 2025 Depreciation and amortization was $38 million compared to $39 million in the prior year periodFull year 2025 Interest expense and other, net was $41 million of expense, which included a $32 million expense related to a change in our TRA liability and $8 million of interest expense.Fourth quarter 2025 Net Income increased 238% year-over-year to $29 million, and full year 2025 Net Income increased 91% year-over-year to $149 millionFourth quarter Income tax expense of $11 million, and full year 2025 Income tax benefit of $10 million which included the release of a portion of the valuation allowance against our deferred tax assets which decreased taxes by $42 million for the year.Fourth quarter 2025 Adjusted EBITDA (a non-GAAP measure) increased 97% year-over-year to $57 million, and full year 2025 Adjusted EBITDA increased 46% year-over-year to $237 millionFourth quarter 2025 Adjusted Earnings Per Share (a non-GAAP measure) was $0.08, and full year 2025 Adjusted Earnings Per Share was $0.37Fourth quarter 2025 Basic and Diluted Earnings Per Share were $0.06, and full year 2025 Basic and Diluted Earnings Per Share was $0.41 and $0.37, respectivelyThe Company ended the quarter with $160 million of unrestricted cash and $178 million of total debt, $68 million of which was back leverage for Broad Arrow Capital's portfolio of loans collateralized by collector carsThe definitions and reconciliations of non-GAAP financial measures are provided under the heading Key Performance Indicators and Certain Non-GAAP Financial Measures at the end of this press release.2026 OUTLOOK - SUSTAINED COMPOUNDING GROWTHWe believe 2026 is on track to be another great year for Hagerty as our team executes on our long-term plan to deliver compounding premium growth through investing in our long-term competitive advantages with a member-centric approach. In 2026, we will move to a 100% quota share arrangement with our long-term partner, Markel, where we retain 100% of the premium and risk from our high quality, low volatility underwriting. We also remain focused on delivering this growth more efficiently through the benefits of scale, continued cost discipline, and investments in our technology platform.For full year 2026, Hagerty anticipates:Written Premium growth of 15% to 16%Total Revenue change of (12)% to (11)%, as Markel related commission revenue is eliminated under the new fronting arrangement1Net Income of $(51) million to $(41) million, including ~$190 million of pre-tax Markel fronting arrangement transition costs2Adjusted EBITDA of $236 million to $247 million
2026 Outlook ($)
2026 Outlook (%)in thousands2025 Results
Low End
High End
Low End
High EndTotal Written Premium$1,193,548
$1,373,000
$1,385,000
15 %
16 %Total Revenue1$1,456,389
$1,280,000
$1,300,000
(12) %
(11) %Net Income (Loss)2, 3$149,225
$(51,000)
$(41,000)
N/M
N/MAdjusted EBITDA4$236,791
$236,000
$247,000
— %
4 %
1Revenue guidance reflects the accounting impact of the Markel Fronting Arrangement. Beginning in 2026, we now control the Markel book of business with the benefit of our MGA services received by Hagerty Re and not Markel. As a result commission revenue and the associated ceding commission expense for policies issued through the Markel Fronting Arrangement will be eliminated in consolidation. Although we expect the arrangement to result in increased profitability (as reflected in Adjusted EBITDA), reported commission revenue and ceding commission expense will be significantly lower than prior periods, affecting period-to-period comparability. 2025 commission revenue associated with our alliance agreement with Markel was $437 million and ceding commission expense related to the Company's reinsurance quota share agreement with Markel was $344 million in 2025.2The projected Net Loss includes approximately $190 million of transitional, non-cash costs related to the Markel Fronting Arrangement representing deferred ceding commissions paid to Markel in 2025 for policies written prior to January 1, 2026, which will be fully amortized ratably over the remaining term of those policies throughout 2026. This amortization will decline from approximately $90 million in Q1 2026 to approximately $10 million in Q4 2026 as 2025 policies expire. Excluding these transitional costs, we expect 2026 to reflect underlying profitability improvement.3Full year 2025 Net Income includes (i) the benefit from the $42 million release of a portion of our valuation allowance, partially offset by a $32 million loss related to the change in value of the TRA liability; and (ii) a $21 million reduction in reserves in the fourth quarter, primarily related to favorable development for the 2024 accident year and improvement in current accident year experience.4See Non-GAAP Financial Measures below for additional information regarding this non-GAAP financial measure.
N/M = Not meaningfulConference Call DetailsHagerty will hold a conference call to discuss the financial results on Thursday, February 26, 2026 10:00 am Eastern Time. A webcast of the conference call, including its Investor Presentation highlighting full year 2025 financial results, will be available on Hagerty's investor relations website at investor.hagerty.com. The dial-in for the conference call is (877) 423-9813 (toll-free) or (201) 689-8573 (international). Please dial the number 10 minutes prior to the scheduled start time.A webcast replay of the call will be available at investor.hagerty.com following the call.Forward-Looking StatementsThis press release contains statements that constitute "forward-looking statements" within the meaning of the federal securities laws. All statements we provide, other than statements of historical fact, are forward-looking statements, including those regarding Hagerty's future operating results and financial position, Hagerty's business strategy and plans, products, services, and technology implementations, market conditions, growth and trends, expansion plans and opportunities, and Hagerty's objectives for future operations. The words "anticipate," "believe," "envision," "estimate," "expect," "intend," "may," "plan," "predict," "project," "target," "potential," "will," "would," "could," "should," "continue," "ongoing," "contemplate," and similar expressions, and the negatives of these expressions, are intended to identify forward-looking statements.Hagerty has based these forward-looking statements largely on current expectations about future events, which may not materialize. Actual results could differ materially and adversely from those anticipated or implied in forward-looking statements. These factors include, among other things, Hagerty's ability to: (i) compete effectively within Hagerty's industry and attract and retain insurance policyholders and paid Hagerty Drivers Club ("HDC") subscribers; (ii) maintain key strategic relationships with Hagerty's insurance distribution and underwriting carrier partners; (iii) prevent, monitor, and detect fraudulent activity; (iv) manage risks associated with disruptions, interruptions, outages, or other issues with Hagerty's technology platforms or use of third-party services; (v) accelerate the adoption of Hagerty's membership and marketplace products and services, as well as any new insurance programs and products offered; (vi) successfully implement the fronting arrangement consummated with Markel and realize the anticipated benefits while also managing the increased exposure to underwriting volatility, catastrophes, reinsurance counterparty risk, and legal, compliance, and regulatory risks resulting from the shift to Hagerty Re assuming 100% of the risk for policies written through this arrangement; (vii) underwrite and price new products, including Enthusiast+, consistent with expected loss ratios and risk tolerances; (viii) execute Broad Arrow's private sale, auction, and financing strategies; (ix) manage the cyclical nature of the insurance business and broader macroeconomic conditions, including inflation, interest rates, and potential recessionary pressures; (x) achieve Hagerty's investment objectives and avoid losses in the investment portfolio; (xi) address unexpected increases in the frequency or severity of claims, including catastrophe losses; and (xii) comply with numerous laws and regulations applicable to Hagerty's business, including without limitation state, federal, and foreign laws relating to insurance and rate increases, privacy and cybersecurity, marketing and advertising, digital services, accounting matters, tax, anti-money laundering, and economic sanctions.The forward-looking statements in this release represent Hagerty's views as of the date hereof. You should not rely on forward-looking statements as predictions of future events. We operate in a very competitive and rapidly changing environment and new risks emerge from time to time. This presentation should be read in conjunction with the information included in filings with the SEC and press releases. Understanding the information contained in these filings is important in order to fully understand Hagerty's reported financial results and business outlook for future periods. In addition, this presentation contains certain "non-GAAP financial measures". The non-GAAP measures are presented for supplemental informational purposes only. These financial measures are not recognized measures under GAAP and should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Reconciliations to the most directly comparable financial measure calculated and presented in accordance with GAAP are provided in the appendix to this presentation.About Hagerty, Inc. (NYSE: HGTY)Hagerty is a company built by drivers for drivers, protecting 2.8 million vehicles in the United States, Canada and the UK. We make it easier and more enjoyable for car enthusiasts to drive and celebrate the machines they love through innovative vehicle insurance products, live and digital auctions, engaging media and events, and the Hagerty Drivers Club, the world's largest membership community of car lovers.For more information, please visit www.hagerty.com or www.newsroom.hagerty.com. Never Stop Driving®.Category: Financial
Source: HagertyHagerty, Inc.
Consolidated Statements of Operations
Three months ended December 31,
2025
2024
$ Change
% Change
REVENUES:
in thousands (except percentages and per share amounts)Commission and fee revenue
$ 105,699
$ 89,423
$ 16,276
18.2 %Earned premium, net
192,547
168,407
24,140
14.3 %Marketplace revenue
28,871
16,048
12,823
79.9 %Membership and other revenue
19,274
17,853
1,421
8.0 %Net investment income
10,022
9,329
693
7.4 %Net investment gains
913
412
501
121.6 %Total revenue
357,326
301,472
55,854
18.5 %EXPENSES:
Losses and loss adjustment expenses
60,425
72,078
(11,653)
(16.2) %Ceding commissions, net
89,405
79,842
9,563
12.0 %Sales expense
58,524
43,732
14,792
33.8 %Salaries and benefits
72,312
60,462
11,850
19.6 %General and administrative expenses
25,313
20,432
4,881
23.9 %Depreciation and amortization
9,790
9,147
643
7.0 %Interest expense and other, net1,857
1,878
(21)
(1.1) %Total expenses
317,626
287,571
30,055
10.5 %INCOME BEFORE TAXES
39,700
13,901
25,799
185.6 %Income tax expense
(11,141)
(5,461)
(5,680)
(104.0) %NET INCOME
28,559
8,440
20,119
238.4 %Net income attributable to non-controlling interest(19,733)
(5,335)
14,398
269.9 %Accretion of Series A Convertible Preferred Stock(1,902)
(1,875)
27
1.4 %NET INCOME ATTRIBUTABLE TO CLASS A
COMMON STOCKHOLDERS$ 6,924
$ 1,230
$ 5,694
462.9 %
Earnings per share of Class A Common Stock:
Basic
$ 0.06
$ 0.01
Diluted
$ 0.06
$ 0.01
Weighted average shares of Class A Common Stock outstanding:
Basic
100,570
90,032
Diluted
102,321
90,032
Hagerty, Inc.
Consolidated Statements of Operations
Year ended December 31,
2025
2024
$ Change
% Change
REVENUES:
in thousands (except percentages and per share amounts)Commission and fee revenue$ 486,376
$ 423,240
$ 63,136
14.9 %Earned premium, net726,726
643,324
83,402
13.0 %Marketplace revenue
119,199
54,549
64,650
118.5 %Membership and other revenue82,376
78,925
3,451
4.4 %Net investment income
38,648
39,249
(601)
(1.5) %Net investment gains
3,064
2,223
841
37.8 %Total revenue
1,456,389
1,241,510
214,879
17.3 %EXPENSES:
Losses and loss adjustment expenses 1
285,394
298,593
(13,199)
(4.4) %Ceding commissions, net
337,087
301,719
35,368
11.7 %Sales expense
258,202
190,523
67,679
35.5 %Salaries and benefits
263,587
221,463
42,124
19.0 %General and administrative expenses
94,517
82,504
12,013
14.6 %Depreciation and amortization
37,524
38,905
(1,381)
(3.5) %Gain related to divestiture
—
(87)
87
N/MLoss related to warrant liabilities, net
—
8,544
(8,544)
N/MInterest expense and other, net 240,896
5,664
35,232
N/MTotal expenses
1,317,207
1,147,828
169,379
14.8 %INCOME BEFORE TAXES139,182
93,682
45,500
48.6 %Income tax benefit (expense) 3
10,043
(15,379)
25,422
165.3 %NET INCOME
149,225
78,303
70,922
90.6 %Net income attributable to non-controlling interest(100,207)
(61,286)
38,921
63.5 %Accretion of Series A Convertible Preferred Stock(7,555)
(7,427)
128
1.7 %NET INCOME ATTRIBUTABLE TO CLASS A
COMMON STOCKHOLDERS$ 41,463
$ 9,590
$ 31,873
332.4 %
Earnings per share of Class A Common Stock:
Basic
$ 0.41
$ 0.10
Diluted
$ 0.37
$ 0.10
Weighted average shares of Class A Common Stock outstanding:
Basic
94,404
87,529
Diluted
346,973
88,504
N/M = Not meaningful1 Includes a $21 million reduction in reserves, primarily related to favorable development for the 2024 accident year and improvement in current accident year experience.2 Includes a $32 million loss related to changes in the value of the TRA liability.3 Includes $42 million benefit related to the release of a portion of the valuation allowance. Hagerty, Inc.
Consolidated Balance Sheets
December 31,
2025
2024
ASSETS
in thousands (except share amounts)Fixed maturity securities available-for-sale, at fair value (amortized cost: $687,813 in 2025, $578,669 in 2024)$ 696,271
$ 577,688Equity securities, at fair value
34,871
11,839Total investments
731,142
589,527Cash and cash equivalents
160,177
104,784Restricted cash and cash equivalents
138,823
128,061Accounts receivable
96,205
84,763Commissions receivable
28,904
20,430Premiums receivable
180,529
153,748Deferred acquisition costs, net
179,224
156,466Reinsurance recoverables
15,296
11,927Prepaid reinsurance premiums
21,950
18,521Notes receivable
113,887
56,972Intangible assets, net
88,915
90,107Goodwill
114,164
114,123Deferred tax assets
43,011
—Other assets
181,749
179,909TOTAL ASSETS
$ 2,093,976
$ 1,709,338LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses
$ 111,947
$ 58,892Advance premiums and due to insurers
123,217
108,352Losses payable
95,353
98,386Reserves for unpaid losses and loss adjustment expenses
168,851
168,492Unearned premiums
412,058
357,539Ceding commissions payable
86,165
77,389Debt, net
177,907
105,760Contract liabilities
46,450
47,239Deferred tax liability
23,489
18,065Tax receivable agreement liability
39,829
2,180Other liabilities
61,684
58,875TOTAL LIABILITIES
1,346,950
1,101,169Commitments and Contingencies
—
—TEMPORARY EQUITY
Preferred stock, $0.0001 par value (20,000,000 shares authorized, 8,483,561 Series A Convertible
Preferred Stock issued and outstanding as of December 31, 2025 and December 31, 2024) 186,618
84,663STOCKHOLDERS' EQUITY
Class A Common Stock, $0.0001 par value (500,000,000 shares authorized, 100,706,893 and
90,032,391 issued and outstanding as of December 31, 2025 and December 31, 2024, respectively)10
9Class V Common Stock, $0.0001 par value (300,000,000 authorized, 241,552,156 and 251,033,906
shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively)24
25Additional paid-in capital
623,013
603,780Accumulated earnings (deficit)
(402,960)
(451,978)Accumulated other comprehensive income (loss)
1,229
(1,514)Total stockholders' equity
221,316
150,322Non-controlling interest
439,092
373,184Total equity
660,408
523,506TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY$ 2,093,976
$ 1,709,338
1The Series A Convertible Preferred Stock is recorded within Temporary Equity because it has equity conversion and cash redemption features. Hagerty, Inc.
Consolidated Statements of Cash Flows
Year ended December 31,
2025
2024
OPERATING ACTIVITIES:in thousandsNet income$ 149,225
$ 78,303Adjustments to reconcile net income to net cash from operating activities:
Loss on disposals of equipment, software, and other assets 1,912
500Loss related to warrant liabilities, net—
8,544Change in TRA Liability32,235
1,602Depreciation and amortization37,524
38,905Provision for deferred taxes(34,503)
2,929Share-based compensation expense18,908
17,357Non-cash lease expense8,911
8,053Net investment gains(3,064)
(2,223)(Accretion) amortization of discount and premium, net(4,146)
(3,386)Other1,297
3,698Changes in assets and liabilities:
Accounts, commissions, and premiums receivable(62,595)
26,498Deferred acquisition costs, net(22,758)
(14,829)Reinsurance recoverables(3,369)
(9,144)Prepaid reinsurance premiums(3,429)
(8,047)Advance premiums and due to insurers14,175
8,418Losses payable(3,033)
36,385Reserves for unpaid losses and loss adjustment expenses359
31,985Unearned premiums54,519
40,264Ceding commissions payable8,776
(31,350)Other assets and liabilities, net28,042
(57,438)Net Cash Provided by Operating Activities218,986
177,024INVESTING ACTIVITIES:
Capital expenditures(24,535)
(21,344)Acquisitions, net of cash acquired, and other investments(1,619)
(25,120)Issuance of notes receivable(74,714)
(65,770)Collection of notes receivable37,733
59,788Purchases of fixed maturity securities(333,050)
(669,452)Purchases of equity securities(21,890)
(10,861)Proceeds from maturities and sales of fixed maturity securities229,899
113,216Other investing activities2,979
979Net Cash Used in Investing Activities (185,197)
(618,564)FINANCING ACTIVITIES:
Repayments of debt(187,881)
(90,775)Proceeds from debt, net of issuance costs257,191
61,972Distributions paid to non-controlling interest unit holders(30,257)
(6,683)Payment of Series A Convertible Preferred Stock dividends(5,600)
(5,600)Funding of TRA Liability payments(223)
—Funding of employee tax obligations upon vesting of share-based payments(3,854)
(5,836)Other financing activities552
—Net Cash Provided by (Used in) Financing Activities29,928
(46,922)Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents2,438
(2,969)
Change in cash and cash equivalents and restricted cash and cash equivalents66,155
(491,431)Beginning cash and cash equivalents and restricted cash and cash equivalents232,845
724,276Ending cash and cash equivalents and restricted cash and cash equivalents$ 299,000
$ 232,845Key Performance Indicators and Certain Non-GAAP Financial MeasuresKey Performance IndicatorsThe tables below present a summary of our Key Performance Indicators, which include important operational metrics, as well as certain financial measures prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and non-GAAP financial measures. We use these Key Performance Indicators to evaluate our business, measure our performance, identify trends against planned initiatives, prepare financial projections, and make strategic decisions. We believe these Key Performance Indicators are useful in evaluating our performance when read together with our Consolidated Financial Statements prepared in accordance with GAAP.
Year ended December 31,
2025
2024
Change
GAAP Financial Measures
dollars in thousands (except per share amounts)Total Revenue 1
$ 1,456,389
$ 1,241,510
$ 214,879
17.3 %Income before taxes
$ 139,182
$ 93,682
$ 45,500
48.6 %Net Income
$ 149,225
$ 78,303
$ 70,922
90.6 %Basic Earnings Per Share
$ 0.41
$ 0.10
$ 0.31
N/MDiluted Earnings Per Share
$ 0.37
$ 0.10
$ 0.27
N/M
Non-GAAP Financial Measures
Adjusted EBITDA
$ 236,791
$ 161,662
$ 75,129
46.5 %Adjusted Net Income
$ 132,577
$ 76,204
$ 56,373
74.0 %Adjusted Diluted EPS
$ 0.37
$ 0.21
$ 0.16
76.2 %
Insurance Operational Metrics
Total Written Premium
$ 1,193,548
$ 1,044,492
$ 149,056
14.3 %Hagerty Re Loss Ratio
39.3 %
46.4 %
(7.1) %
N/MHagerty Re Combined Ratio
86.6 %
94.1 %
(7.5) %
N/MNew Business Count — Insurance
371,203
278,556
92,647
33.3 %
Marketplace Operational Metrics
Auction sales:
Aggregate Auction Sales
$ 278,694
$ 178,199
$ 100,495
56.4 %Net Auction Sales
$ 252,363
$ 163,312
$ 89,051
54.5 %Private Sales
$ 286,763
$ 77,281
$ 209,482
271.1 %BAC Average Loan Portfolio
$ 85,468
$ 65,045
$ 20,423
31.4 %
N/M = Not meaningful1Total Revenue for 2024 has been recast to include Net investment income and Net investment gains as components of revenue in accordance with the Article 7 reporting standards adopted in 2025. Total revenue as previously presented in accordance with Article 5 was $1,200 million for the year ended December 31, 2024.
December 31,
2025
2024
Change
Insurance Operational Metrics
Policies in Force
1,684,935
1,506,451
178,484
11.8 %Policies in Force Retention
88.7 %
89.0 %
(0.3) %
N/MVehicles in Force
2,819,179
2,576,700
242,479
9.4 %HDC Paid Member Count
929,895
875,822
54,073
6.2 %Marketplace Operational Metrics
BAC Loan Portfolio Balance
$ 103,338
$ 56,972
$ 46,366
81.4 %
N/M = Not meaningfulNon-GAAP Financial MeasuresAdjusted EBITDAWe define EBITDA as consolidated Net income, excluding Interest expense and other, net, Income tax expense (benefit), and Depreciation and amortization. We define Adjusted EBITDA as EBITDA, further adjusted to (i) exclude net investment gains and losses; (ii) deduct interest expense related to the State Farm Term Loan; (iii) exclude net gains and losses related to our warrant liabilities prior to the Warrant Exchange; (iv) exclude share-based compensation expense; and when applicable, exclude (v) restructuring, impairment and related charges; (vi) gains, losses and impairments related to divestitures; and (vii) certain other unusual items.How This Measures is UsefulWhen used in conjunction with GAAP financial measures, Adjusted EBITDA is a supplemental measure of operating performance that we believe is a useful measure to evaluate our performance period over period and relative to our competitors and peers. Management uses Adjusted EBITDA to evaluate our operating performance on a consistent basis, as it removes the impact of items not directly resulting from our core operations. We believe the presentation of Adjusted EBITDA provides securities analysts, investors, and other interested parties with a supplemental view of our operating performance that enhances their understanding of our business and our results operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives.Limitations of the Usefulness of This MeasureAdjusted EBITDA may differ from similarly titled measures used by other companies due to different methods of calculation, which could reduce the usefulness of this non-GAAP financial measure when comparing our performance to that of other companies. Presentation of Adjusted EBITDA is not intended to be considered in isolation or a substitute for, or superior to, the financial information prepared in accordance with GAAP. A reconciliation of Adjusted EBITDA to Net income, the most directly comparable GAAP measure, is presented below.
Three months endedDecember 31,
Year ended
December 31,
2025
2024
2025
2024
in thousandsNet income$ 28,559
$ 8,440
$ 149,225
$ 78,303Interest expense and other, net 1, 21,857
1,878
40,896
5,664Income tax expense (benefit) 311,141
5,461
(10,043)
15,379Depreciation and amortization9,790
9,147
37,524
38,905EBITDA51,347
24,926
217,602
138,251Net investment gains(913)
(412)
(3,064)
(2,223)Interest expense related to State Farm Term Loan 4(515)
(515)
(2,060)
(2,060)Loss related to warrant liabilities, net—
—
—
8,544Share-based compensation expense4,281
4,339
18,908
17,357Gain related to divestiture
—
—
—
(87)Other unusual items 52,444
344
5,405
1,880Adjusted EBITDA$ 56,644
$ 28,682
$ 236,791
$ 161,662
1 Excludes interest expense related to the BAC Credit Facility, which is recorded within "Sales expense" in the Consolidated Statements of Operations.2 Principally includes interest expense and changes in the value of the TRA liability, which totaled $32 million during the year ended December 31, 2025, and $2 million during the year ended December 31, 2024.3 Income tax expense (benefit) for the three and twelve months ended December 31, 2025 includes a $42 million benefit related to the release of a portion of the valuation allowance against our deferred tax assets.4 Interest expense related to the State Farm Term Loan is charged against Adjusted EBITDA as it is directly attributable to the operations of Hagerty Re.5 For the year ended December 31, 2025, other unusual items includes certain legal settlement expenses, professional fees associated with the THG Unit Exchange and related Secondary Offering, and certain material severance expenses. For the year ended December 31, 2024, other unusual items includes professional fees associated with the Warrant Exchange, as well as certain material severance expenses.As a result of our transition to the Article 7 reporting standards, Net investment income is reported as a component of revenue and is no longer an adjustment in our reconciliation from Net income to Adjusted EBITDA. In addition, interest expense related to the State Farm Term Loan is now deducted from Adjusted EBITDA as it is directly attributable to Hagerty Re, which generates a significant portion of our net investment income. The following table presents a reconciliation of Adjusted EBITDA as presented in prior periods in accordance with Article 5, to the current presentation in accordance with Article 7:
Three months endedDecember 31,
Year endedDecember 31,
2024
2024
in thousandsPrior presentation of Adjusted EBITDA$ 19,868
$ 124,473Net investment income9,329
39,249Interest expense related to State Farm Term Loan(515)
(2,060)Current presentation of Adjusted EBITDA$ 28,682
$ 161,662The following table reconciles Adjusted EBITDA for the year ended December 31, 2026 Outlook to the most directly comparable GAAP measure, which is Net income:
2026 Low
2026 High
in thousandsNet loss1$ (51,000)
$ (41,000)Interest expense and other, net25,000
5,000Income tax expense33,000
34,000Depreciation and amortization40,000
40,000Share-based compensation expense19,000
19,000Markel Fronting Arrangement transition costs 190,000
190,000Adjusted EBITDA$ 236,000
$ 247,000
1The projected Net Loss includes approximately $190 million of transitional, non-cash costs related to the Markel Fronting Arrangement representing deferred ceding commissions paid to Markel in 2025 for polcies written prior to January 1, 2026, which will be fully amortized ratably over the remaining term of those policies throughout 2026. This amortization will decline from approximately $90 million in the first quarter of 2026 to approximately $10 million in the fourth quarter of 2026 as 2025 policies expire. Excluding these transitional costs, we expect 2026 to reflect underlying profitability improvement2Excludes interest expense related to the BAC Credit Facility, which is recorded within "Sales expense" in the Consolidated Statements of OperationsAdjusted Net Income and Adjusted Diluted EPSBeginning with this Annual Report, Adjusted Net Income is presented as a non-GAAP financial measure, as we consider it to be an important supplemental measure of our performance and believe it is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. In addition, we revised and renamed our non-GAAP measure previously titled "Adjusted EPS" to "Adjusted Diluted EPS". The revised measure uses Adjusted Net Income as the numerator in the calculation and updated the most comparable GAAP measure from Basic EPS to Diluted EPS. We believe that the revised calculation better reflects the potential dilution from these securities and enhances comparability with industry peers.Adjusted Net Income represents Net income attributable to Class A Common Stockholders, assuming the full exchange of all outstanding THG units and Series A Convertible Preferred Stock for shares of Class A Common Stock, adjusted to exclude (i) net investment gains and losses; (ii) changes in the fair value of warrant liabilities prior to the Warrant Exchange; (iii) changes in the TRA Liability; (iv) gains and losses related to divestitures; and (v) certain other unusual items, each of which we do not believe are directly related to our core operations and may not be indicative of our ongoing performance. Adjusted Diluted EPS is calculated by dividing Adjusted Net Income by the weighted average shares of Class A Common Stock outstanding, assuming the full exchange of all outstanding THG units, Series A Convertible Preferred Stock, and unvested share-based compensation awards. Refer to Note 6 — Fair Value Measurements in Item 8 of Part II of this Annual Report for additional information regarding the Warrant Exchange.How These Measures Are UsefulWhen used in conjunction with GAAP financial measures, Adjusted Net Income and Adjusted Diluted EPS are supplemental measures of operating performance that we believe are useful measures to evaluate our performance period over period and relative to our competitors and peers. Management uses Adjusted Net Income and Adjusted Diluted EPS to evaluate our operating performance on a consistent basis to make strategic and operational decisions. We believe these measures provide management and investors with useful information regarding trends in our business that may not otherwise be apparent when relying solely on GAAP measures. By assuming the full exchange of all outstanding THG units and Series A Convertible Preferred Stock, we believe these measures facilitate comparisons with other companies that have different organizational and tax structures, as well as comparisons period over period because it eliminates the effect of any changes in Net income attributable to Class A Common Stockholders driven by increases in Hagerty, Inc.'s ownership in THG, which is unrelated to our operating performance, and excludes items that are unusual or may not be indicative of our ongoing performance.Limitations of the Usefulness of These MeasuresAdjusted Net Income and Adjusted Diluted EPS may differ from similarly titled measures used by other companies due to different methods of calculation. Presentation of Adjusted Net Income and Adjusted Diluted EPS should not be considered alternatives to Net income attributable to Class A Common Stockholders and Diluted EPS, as determined under GAAP. While these measures are useful in evaluating our performance, they assume the full exchange of all outstanding THG units and Series A Convertible Preferred Stock for shares of Class A Common Stock, which has not occurred and may not occur. Further, the adjustments made to arrive at Adjusted Net Income exclude certain expenses and income that may recur in the future. Adjusted Net Income and Adjusted Diluted EPS should be evaluated in conjunction with our GAAP financial results. A reconciliation of Adjusted Net Income to Net income attributable to Class A Common Stockholders, the most directly comparable GAAP measure, and the computation of Adjusted Diluted EPS are presented below.
Three months endedDecember 31,
Year ended December 31,
2025
2024
2025
2024
Numerator:
in thousands (except per share amounts)Net income attributable to Class A Common Stockholders$ 6,924
$ 1,230
$ 41,463
$ 9,590Adjustments:
Accretion of Series A Convertible Preferred Stock1,902
1,875
7,555
7,427Net income attributable to non-controlling interest19,733
5,335
100,207
61,286Net investment gains
(913)
(412)
(3,064)
(2,223)Loss related to warrant liabilities, net
—
—
—
8,544Change in TRA Liability
(40)
280
32,235
1,602Gain related to divestiture
—
—
—
(87)Other unusual items 1
2,444
344
5,405
1,880Tax impact of above adjustments 2
186
2,214
(51,224)
(11,815)Adjusted Net Income
$ 30,236
$ 10,866
$ 132,577
$ 76,204
Denominator:
Weighted average shares of Class A Common Stock outstanding — Diluted102,321
90,032
346,973
88,504Adjustments:
Assumed exchange of non-controlling interest THG units for shares of Class A Common Stock245,554
255,178
—
255,328Assumed conversion of shares of Series A Convertible Preferred Stock into shares of Class A Common Stock6,785
6,785
6,785
6,785Assumed vesting of share-based compensation awards6,445
8,101
7,062
7,162Adjusted weighted average shares of Class A Common Stock outstanding — Diluted361,105
360,096
360,820
357,779
Adjusted Diluted EPS
$ 0.08
$ 0.03
$ 0.37
$ 0.21
Three months endedDecember 31,
Year ended December 31,
2025
2024
2025
2024
in thousandsDiluted earnings per share
$ 0.06
$ 0.01
$ 0.37
$ 0.10Impact of assumed exchange, conversion, or vesting of
remaining potentially dilutive securities 30.02
0.01
0.05
0.12Non-GAAP adjustments 4—
0.01
(0.05)
(0.01)Adjusted Diluted EPS$ 0.08
$ 0.03
$ 0.37
$ 0.21
(1)For the year ended December 31, 2025, other unusual items includes certain legal settlement expenses, professional fees associated with the THG Unit Exchange and related Secondary Offering, and certain material severance expenses. For the year ended December 31, 2024, other unusual items includes professional fees associated with the Warrant Exchange, as well as certain material severance expenses.(2)Represents the tax effect of the aforementioned adjustments to reflect corporate income taxes at an estimated effective tax rate of 23.7% and 26.3% for 2025 and 2024, respectively, which considers the U.S. federal statutory rate of 21%, a combined state income tax rate of approximately 5% (net of federal benefits), and certain material permanent items.(3)Assumes the exchange of all outstanding THG units, Series A Convertible Preferred Stock, and unvested share-based compensation awards for shares of Class A Common Stock, resulting in the elimination of the non-controlling interest and recognition of the Net income attributable to non-controlling interest, as well as elimination of the accretion of Series A Convertible Preferred Stock.(4)Represents the per share impact of non-GAAP adjustments for each period. Refer to the reconciliation above for additional information.
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Original: Hagerty Reports Full Year 2025 Results; Provides 2026 Growth Outlook
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