Hagerty Reports Full Year 2024 Results; Provides 2025 Outlook for Revenue and Profit Growth

2025 Outlook ($)

2025 Outlook (%)

in thousands

2024 Results

Low End

High End

Low End

High End

Total Written Premium

$1,044,492

$1,180,000

$1,191,000

13 %

14 %

Total Revenue

$1,200,038

$1,344,000

$1,356,000

12 %

13 %

Net Income ¹

$78,303

$102,000

$110,000

30 %

40 %

Adjusted EBITDA ²

$124,473

$160,000

21 %

29 %

¹

Fully diluted share count post warrant exchange of ~360 million including Class A Common Stock, Class V Common Stock, Series A Convertible Preferred Stock, and share-based compensation awards.

²

See Non-GAAP Financial Measures below for additional information regarding this non-GAAP financial measure.

Hagerty, Inc.

Consolidated Statements of Operations
 (Unaudited)

Three months ended December 31,

2024

2023

$ Change

% Change

REVENUE:

in thousands (except percentages and per share amounts)

Commission and fee revenue

$       89,423

$       77,540

$       11,883

15.3 %

Earned premium

168,407

147,368

21,039

14.3 %

Membership, marketplace and other revenue

33,901

20,135

13,766

68.4 %

Total revenue

291,731

245,043

46,688

19.1 %

OPERATING EXPENSES:

Salaries and benefits

60,462

56,774

3,688

6.5 %

Ceding commissions, net

79,842

70,617

9,225

13.1 %

Losses and loss adjustment expenses

72,078

61,197

10,881

17.8 %

Sales expense

43,732

31,587

12,145

38.4 %

General and administrative expenses

20,432

20,569

(137)

(0.7) %

Depreciation and amortization

9,147

10,916

(1,769)

(16.2) %

Restructuring, impairment and related charges, net

—

(45)

45

(100.0) %

Gains, losses, and impairments related to divestitures

—

(99)

99

(100.0) %

Total operating expenses

285,693

251,516

34,177

13.6 %

OPERATING INCOME (LOSS)

6,038

(6,473)

12,511

193.3 %

Gain (loss) related to warrant liabilities, net

—

12,962

(12,962)

(100.0) %

Interest and other income (expense), net

7,863

7,144

719

10.1 %

INCOME BEFORE INCOME TAX EXPENSE

13,901

13,633

268

2.0 %

Income tax expense

(5,461)

(4,591)

(870)

19.0 %

NET INCOME

8,440

9,042

(602)

(6.7) %

Net (income) loss attributable to non-controlling interest

(5,335)

5,529

(10,864)

(196.5) %

Accretion of Series A Convertible Preferred Stock

(1,875)

(1,839)

(36)

2.0 %

NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCKHOLDERS

$         1,230

$       12,732

$     (11,502)

(90.3) %

Earnings per share of Class A Common Stock:

Basic

$           0.01

$           0.14

Diluted

$           0.01

$           0.03

Weighted average shares of Class A Common Stock outstanding:

Basic

90,032

84,588

Diluted

90,032

347,455

Hagerty, Inc.

Consolidated Statements of Operations

Year ended December 31,

2024

2023

$ Change

% Change

REVENUE:

in thousands (except percentages and per share amounts)

Commission and fee revenue

$     423,240

$     365,512

$       57,728

15.8 %

Earned premium

643,324

531,866

111,458

21.0 %

Membership, marketplace and other revenue

133,474

102,835

30,639

29.8 %

Total revenue

1,200,038

1,000,213

199,825

20.0 %

OPERATING EXPENSES:

Salaries and benefits

221,463

216,896

4,567

2.1 %

Ceding commissions, net

301,719

251,805

49,914

19.8 %

Losses and loss adjustment expenses

298,593

220,658

77,935

35.3 %

Sales expense

190,523

156,378

34,145

21.8 %

General and administrative expenses

82,504

85,434

(2,930)

(3.4) %

Depreciation and amortization

38,905

45,809

(6,904)

(15.1) %

Restructuring, impairment and related charges, net

—

8,812

(8,812)

(100.0) %

Gains, losses, and impairments related to divestitures

(87)

4,013

(4,100)

(102.2) %

Total operating expenses

1,133,620

989,805

143,815

14.5 %

OPERATING INCOME

66,418

10,408

56,010

538.1 %

Gain (loss) related to warrant liabilities, net

(8,544)

11,543

(20,087)

(174.0) %

Interest and other income (expense), net

35,808

22,821

12,987

56.9 %

INCOME BEFORE INCOME TAX EXPENSE

93,682

44,772

48,910

109.2 %

Income tax expense

(15,379)

(16,593)

1,214

(7.3) %

NET INCOME

78,303

28,179

50,124

177.9 %

Net (income) loss attributable to non-controlling interest

(61,286)

(7,948)

(53,338)

N/M

Accretion of Series A Convertible Preferred Stock

(7,427)

(3,677)

(3,750)

102.0 %

NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCKHOLDERS

$         9,590

$       16,554

$       (6,964)

(42.1) %

Earnings per share of Class A Common Stock:

Basic

$           0.10

$           0.19

Diluted

$           0.10

$           0.09

Weighted average shares of Class A Common Stock outstanding:

Basic

87,529

84,180

Diluted

88,504

340,323

N/M = Not meaningful

Hagerty, Inc.

Consolidated Balance Sheets

December 31,

December 31,

2024

2023

ASSETS

in thousands (except share amounts)

Current Assets:

Cash and cash equivalents

$                   104,784

$                   108,326

Restricted cash and cash equivalents

128,061

615,950

Investments

73,957

10,946

Accounts receivable

84,763

71,530

Premiums receivable

153,748

137,525

Commissions receivable

20,430

79,115

Notes receivable

45,417

35,896

Deferred acquisition costs, net

156,466

141,637

Other current assets

90,779

49,293

Total current assets

858,405

1,250,218

Investments

515,570

5,526

Notes receivable

11,555

17,018

Property and equipment, net

18,205

20,764

Lease right-of-use assets

44,485

50,515

Intangible assets, net

90,107

91,924

Goodwill

114,123

114,214

Other long-term assets

56,888

38,033

TOTAL ASSETS

$                1,709,338

$                1,588,212

LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Accounts payable, accrued expenses and other current liabilities

$                     73,383

$                     87,175

Losses payable

98,386

62,001

Provision for unpaid losses and loss adjustment expenses

168,492

136,507

Commissions payable

77,389

108,739

Advance premiums and due to insurers

108,352

100,286

Unearned premiums

357,539

317,275

Contract liabilities

31,905

30,316

Total current liabilities

915,446

842,299

Long-term lease liabilities

43,178

50,459

Long-term debt, net

104,968

130,680

Warrant liabilities

—

34,018

Deferred tax liability

18,065

15,937

Contract liabilities

15,334

17,335

Other long-term liabilities

4,178

4,139

TOTAL LIABILITIES

1,101,169

1,094,867

Commitments and Contingencies

—

—

TEMPORARY EQUITY
¹

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, 2024 and December 31, 2023)

84,663

82,836

STOCKHOLDERS’ EQUITY

Class A Common Stock, $0.0001 par value (500,000,000 shares authorized, 90,032,391 and 84,588,536 issued and outstanding as of December 31, 2024 and December 31, 2023, respectively)

9

8

Class V Common Stock, $0.0001 par value (300,000,000 authorized, 251,033,906 shares issued and outstanding as of December 31, 2024 and December 31, 2023)

25

25

Additional paid-in capital

603,780

561,754

Accumulated earnings (deficit)

(451,978)

(468,995)

Accumulated other comprehensive income (loss)

(1,514)

(88)

Total stockholders’ equity

150,322

92,704

Non-controlling interest

373,184

317,805

Total equity

523,506

410,509

TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY

$                1,709,338

$                1,588,212

¹

The 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,

2024

2023

OPERATING ACTIVITIES:

in thousands

Net income

$                    78,303

$                    28,179

Adjustments to reconcile net income to net cash from operating activities:

Impairment of operating lease right-of-use assets

—

1,147

Loss on disposals of equipment, software and other assets

500

1,894

(Gain) loss related to warrant liabilities, net

8,544

(11,543)

Depreciation and amortization

38,905

45,809

Provision for deferred taxes

2,929

2,921

Share-based compensation expense

17,357

18,017

Non-cash lease expense

8,053

11,681

Realized (gain) loss on investments, net

(2,223)

—

(Accretion) amortization of discount and premium, net

(3,386)

34

Other

5,300

1,334

Changes in operating assets and liabilities:

Accounts, premiums and commissions receivable

26,498

(69,879)

Deferred acquisition costs, net

(14,829)

(34,295)

Losses payable

36,385

6,485

Provision for unpaid losses and loss adjustment expenses

31,985

24,766

Commissions payable

(31,350)

31,664

Advance premiums and due to insurers

8,418

14,880

Unearned premiums

40,264

81,813

Operating lease assets and liabilities

(9,036)

(11,243)

Other assets and liabilities, net

(65,593)

(9,958)

Net Cash Provided by Operating Activities

177,024

133,706

INVESTING ACTIVITIES:

Capital expenditures

(21,344)

(26,403)

Acquisitions, net of cash acquired, and other investments

(25,120)

(8,683)

Issuance of notes receivable

(65,770)

(24,939)

Collection of notes receivable

59,788

10,357

Purchases of fixed maturity securities

(669,452)

(10,568)

Proceeds from sales of fixed maturity securities

64,827

—

Proceeds from maturities of fixed maturity securities

48,389

7,468

Purchases of equity securities

(10,861)

—

Other investing activities

979

121

Net Cash Used in Investing Activities

(618,564)

(52,647)

FINANCING ACTIVITIES:

Payments on long-term debt

(90,775)

(139,850)

Proceeds from long-term debt, net of issuance costs

61,972

161,547

Proceeds from issuance of Series A Convertible Preferred Stock, net of issuance costs

—

79,159

Distributions paid to non-controlling interest unit holders

(6,683)

—

Payment of Series A Convertible Preferred Stock dividends

(5,600)

—

Funding of employee tax obligations upon vesting of share-based payments

(5,836)

—

Other financing activities

—

2,305

Net Cash Provided by (Used in) Financing Activities

(46,922)

103,161

Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents

(2,969)

865

Change in cash and cash equivalents and restricted cash and cash equivalents

(491,431)

185,085

Beginning cash and cash equivalents and restricted cash and cash equivalents

724,276

539,191

Ending cash and cash equivalents and restricted cash and cash equivalents

$                  232,845

$                  724,276

Year ended December 31,

2024

2023

Change

Operational Metrics

dollars in thousands (except per share amounts)

Total Written Premium

$ 1,044,492

$    907,175

$    137,317

15.1 %

Hagerty Re Loss Ratio

46.4 %

41.5 %

4.9 %

N/M

Hagerty Re Combined Ratio

94.1 %

89.2 %

4.9 %

N/M

New Business Count — Insurance

278,556

254,386

24,170

9.5 %

GAAP Financial Measures

Total Revenue

$ 1,200,038

$ 1,000,213

$    199,825

20.0 %

Operating Income

$     66,418

$     10,408

$     56,010

538.1 %

Net Income

$     78,303

$     28,179

$     50,124

177.9 %

Basic Earnings Per Share

$         0.10

$         0.19

$        (0.09)

(47.4) %

Diluted Earnings Per Share

$         0.10

$         0.09

$         0.01

11.1 %

Non-GAAP Financial Measures

Adjusted EBITDA

$    124,473

$     88,162

$     36,311

41.2 %

Adjusted Earnings Per Share

$         0.24

$         0.04

$         0.20

500.0 %

N/M = Not meaningful

December 31,

2024

2023

Change

Operational Metrics

Policies in Force

1,506,451

1,401,037

105,414

7.5 %

Policies in Force Retention

89.0 %

88.7 %

0.3 %

N/M

Vehicles in Force

2,576,700

2,378,883

197,817

8.3 %

HDC Paid Member Count

875,822

815,007

60,815

7.5 %

Net Promoter Score (NPS)

82

82

—

— %

N/M = Not meaningful

Three months ended
December 31,

Year ended
December 31,

2024

2023

2024

2023

in thousands

Net income

$            8,440

$            9,042

$         78,303

$         28,179

Interest and other (income) expense ^{1, 2}

(7,863)

(7,144)

(35,808)

(22,821)

Income tax expense

5,461

4,591

15,379

16,593

Depreciation and amortization

9,147

10,916

38,905

45,809

EBITDA

15,185

17,405

96,779

67,760

Restructuring, impairment and related charges, net

—

(45)

—

8,812

(Gain) loss related to warrant liabilities, net

—

(12,962)

8,544

(11,543)

Share-based compensation expense

4,339

4,860

17,357

17,729

Gains, losses, and impairments related to divestitures

—

(99)

(87)

4,013

Other unusual items ³

344

554

1,880

1,391

Adjusted EBITDA

$         19,868

$            9,713

$       124,473

$         88,162

¹

Excludes interest expense related to the BAC Credit Facility, which is recorded within “Sales expense” on the Consolidated Statements of Operations.

²

Includes interest income and net investment income related to our investment portfolio, which was diversified in the second quarter of 2024 and resulted in opening positions in higher yielding fixed maturity securities, and, to a much lesser extent, equity securities.

³

Other unusual items include professional fees associated with the warrant exchange, as well as certain material severance expenses for the year ended December 31, 2024 and certain legal settlement expenses (net) recognized for the year ended December 31, 2023.

2025 Low

2025 High

in thousands

Net income

$           102,000

$           110,000

Interest and other (income) expense ^{1, 2}

(32,000)

(32,000)

Income tax expense

21,000

23,000

Depreciation and amortization

39,000

39,000

Share-based compensation expense

20,000

20,000

Adjusted EBITDA

$           150,000

$           160,000

¹

Excludes interest expense related to the BAC Credit Facility, which is recorded within “Sales expense” on the Consolidated Statements of Operations.

²

Includes interest income and net investment income related to our investment portfolio, which was diversified in the second quarter of 2024 and resulted in opening positions in higher yielding fixed maturity securities, and, to a much lesser extent, equity securities.

Three months ended

December 31,

Year ended

December 31,

2024

2023

2024

2023

in thousands (except per share amounts)

Numerator:

Net income available to Class A Common Stockholders ¹

$         1,144

$       11,786

$         8,900

$       15,881

Accretion of Series A Convertible Preferred Stock

1,875

1,839

7,427

3,677

Undistributed earnings allocated to Series A Convertible Preferred Stock

86

946

690

673

Net income (loss) attributable to non-controlling interest

5,335

(5,529)

61,286

7,948

Consolidated net income

8,440

9,042

78,303

28,179

(Gain) loss related to warrant liabilities, net

—

(12,962)

8,544

(11,543)

Adjusted consolidated net income (loss) ²

$         8,440

$       (3,920)

$       86,847

$       16,636

Denominator:

Weighted average shares of Class A Common Stock outstanding ¹

90,032

84,588

87,529

84,180

Total potentially dilutive securities outstanding:

Non-controlling interest THG units

255,178

255,499

255,178

255,499

Series A Convertible Preferred Stock, on an as-converted basis

6,785

6,785

6,785

6,785

Total unissued share-based compensation awards

7,980

8,385

7,980

8,385

Total warrants outstanding

—

19,484

—

19,484

Potentially dilutive shares outstanding

269,943

290,153

269,943

290,153

Fully dilutive shares outstanding ²

359,975

374,741

357,472

374,333

Basic EPS ¹

$           0.01

$           0.14

$           0.10

$           0.19

Adjusted EPS ²

$           0.02

$         (0.01)

$           0.24

$           0.04

¹

Numerator and Denominator of the GAAP measure Basic EPS

²

Numerator and Denominator of the non-GAAP measure Adjusted EPS