First quarter 2025 Total Revenue increased 18% year-over-year to $319.6 million First quarter 2025 Written Premium increased 12% year-over-year to $244.3 million First quarter 2025 Marketplace revenue increased 176% year-over-year to $29.0 million First quarter 2025 Operating Income increased 110% year-over-year to $25.7 million

First quarter 2025 Operating Income margin increased by 360 bps compared to the prior year period First quarter 2025 Net Income increased 233% year-over-year to $27.3 million First quarter 2025 Adjusted EBITDA increased 45% year-over-year to $39.6 million Reaffirmed 2025 Outlook for 12-13% Total Revenue growth, 30-40% Net Income growth and 21-29% Adjusted EBITDA growth

TRAVERSE CITY, Mich., May 7, 2025 /PRNewswire/ -- Hagerty, Inc. (NYSE: HGTY), an automotive enthusiast brand and leading specialty vehicle insurance provider, announced today financial results for the three months ended March 31, 2025.Hagerty (PRNewsfoto/Hagerty)

"We are off to a solid start to 2025, with first quarter revenue growth of 18%, net income growth of 233%, and Adjusted EBITDA growth of 45%. We expanded our margins and are making substantial technology investments to become even more efficient in how we deliver on our brand promise to members over the coming years," said McKeel Hagerty, Chief Executive Officer and Chairman of Hagerty.

"Hagerty enjoys the enviable position of operating in an industry that has historically performed well regardless of the economic cycle. Our industry-leading retention delivers visible revenue streams that are augmented by consistently high rates of new member growth thanks to the strength of the Hagerty brand and value proposition. Our strategic priorities enable us to acquire new customers and service existing ones more efficiently than ever, and we are well-positioned for accelerating growth as we move into 2026," continued Mr. Hagerty.

"Our business momentum and first quarter results keep us on track to deliver 12-13% total revenue growth in 2025 as we help car enthusiasts protect, buy and sell, and enjoy their special vehicles. Operating margin expansion should drive even faster rates of bottom-line growth, with net income expected to increase by 30-40% compared to 2024," added Mr. Hagerty.

FIRST QUARTER 2025 FINANCIAL HIGHLIGHTS

First quarter 2025 Total Revenue increased 18% year-over-year to $319.6 million First quarter 2025 Written Premium increased 12% year-over-year to $244.3 million First quarter 2025 Commission and fee revenue increased 13% year-over-year to $100.3 million

Policies in Force Retention was 89.0% as of March 31, 2025 compared to 88.7% in the prior year period, and total insured vehicles increased 8% year-over-year to 2.6 million First quarter 2025 Loss Ratio was 42.0% including 6.7% of impact from catastrophe losses (including approximately $10.4 million in pre-tax losses from the Southern California wildfires), compared to 41.1% in the prior year period First quarter 2025 Earned Premium increased 12% year-over-year to $169.4 million First quarter 2025 Membership, marketplace and other revenue increased 60% year-over-year to $50.0 million

First quarter 2025 Marketplace revenue increased 176% year-over-year to $29.0 million

The increase was primarily due to a higher level of inventory sales, including cars sold in February 2025 from the Academy of Art University Collection First quarter 2025 Membership revenue increased 14% year-over-year to $15.3 million

Hagerty Drivers Club (HDC) paid members increased 7% year-over-year to approximately 889,000 compared to 831,000 First quarter 2025 Operating Income of $25.7 million, an increase of $13.5 million compared to the prior year period

First quarter 2025 Operating Income margin increased by 360 bps compared to the prior year period

General and administrative expenses increased 11.7% due primarily to an increase in software-related costs, and Salary and benefits increased 5.3% First quarter 2025 depreciation and amortization was $9.5 million compared to $10.6 million in the prior year period First quarter 2025 Net Income of $27.3 million, an increase of $19.1 million compared to the prior year period

First quarter 2025 Net Income includes $7.1 million in interest and other income First quarter 2025 Adjusted EBITDA (a non-GAAP measure) of $39.6 million, an increase of $12.3 million compared to the prior year period First quarter 2025 Basic and Diluted Earnings per Share was $0.07

First quarter 2025 Adjusted EPS (a non-GAAP measure) was $0.08 We ended the quarter with $128 million of cash and $147 million of total debt, $32 million of which is back leverage for Broad Arrow Capital's portfolio of loans collateralized by collector cars

We increased the borrowing capacity under our unsecured credit facility to $375 million with lower borrowing costs and a March 2030 maturity

Story Continues

The 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.

2025 OUTLOOK - SUSTAINED GROWTH AND PROFITABILITY

We believe 2025 is on track to be another year of strong profit growth for Hagerty as our team executes on our long-term plan to create value for stakeholders by delivering high rates of compounding revenue growth through investing in our long-term competitive advantages. In 2025, these investments aggregate to $20 million of elevated spend, primarily in our new technology platform, Duck Creek. Duck Creek will help us efficiently grow our business over the coming years. We remain focused on growing our Insurance, Membership and Marketplace businesses, positioning us to deliver sustained, compounding profit growth over the coming years, and fund our purpose to save driving and fuel car culture for future generations.

For full year 2025, Hagerty anticipates:

Written Premium growth of 13-14% Total Revenue growth of 12-13% Net Income growth of 30-40% Adjusted EBITDA growth of 21-29%

Profit ranges incorporate $20 million of elevated technology investments in 2025, as well as an estimated $10 million pre-tax impact from the Southern California wildfires

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   $150,000  $160,000  21 %  29 %

1  Fully diluted share count of approximately 360 million shares 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.

Conference Call Details

Hagerty will hold a conference call to discuss the financial results today at 10:00 am Eastern Time. A webcast of the conference call, including its Investor Presentation highlighting first quarter 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 Statements

This press release contains statements that constitute "forward-looking statements" within the meaning of the federal securities laws. All statements provided, 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 negative 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 the forward-looking statements. These factors include, among other things, Hagerty's ability to: (i) compete effectively within our industry and attract and retain our insurance policyholders and paid Hagerty Drivers Club ("HDC") subscribers; (ii) maintain key strategic relationships with our 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 our technology platforms or our use of third-party services; (v) accelerate the adoption of our membership and marketplace products and services, as well as any new insurance programs and products we offer; (vi) manage the cyclical nature of the insurance business, including through any periods of recession, economic downturn or inflation; (vii) address unexpected increases in the frequency or severity of claims, and (viii) comply with the numerous laws and regulations applicable to our business, including state, federal and foreign laws relating to insurance and rate increases, privacy, the internet, and accounting matters.

The forward-looking statements herein represent the judgment of Hagerty as of the date of this release and Hagerty disclaims any intent or obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise. This press release should be read in conjunction with the information included in the Hagerty's other press releases, reports and other filings with the Securities and Exchange Commission. Understanding the information contained in these filings is important in order to fully understand Hagerty's reported financial results and its business outlook for future periods.

About Hagerty, Inc. (NYSE: HGTY)

Hagerty is an automotive enthusiast brand committed to saving driving and to fueling car culture for future generations. The company is a leading provider of specialty vehicle insurance, expert car valuation data and insights, live and digital car auction services, immersive events and automotive entertainment custom made for the 67 million Americans who self-describe as car enthusiasts. Hagerty also operates in Canada and the U.K. and is home to Hagerty Drivers Club, a community of nearly 890,000 who can't get enough of cars. For more information, please visit www.hagerty.com or connect with us on Facebook, Instagram, Twitter and LinkedIn..

More information can be found at newsroom.hagerty.com.

Category: Financial

Source: Hagerty

Hagerty, Inc.

Condensed Consolidated Statements of Operations (Unaudited) Three months ended March 31, 2025  2024  $ Change  % Change REVENUE:  in thousands (except percentages and per share amounts) Commission and fee revenue $     100,287  $       88,840  $       11,447  12.9 % Earned premium 169,355  151,619  17,736  11.7 % Membership, marketplace and other revenue 49,951  31,249  18,702  59.8 % Total revenue  319,593  271,708  47,885  17.6 % OPERATING EXPENSES:  Salaries and benefits  59,103  56,116  2,987  5.3 % Ceding commissions, net  77,333  70,930  6,403  9.0 % Losses and loss adjustment expenses  71,130  62,356  8,774  14.1 % Sales expense  54,626  39,660  14,966  37.7 % General and administrative expenses  22,185  19,862  2,323  11.7 % Depreciation and amortization  9,488  10,560  (1,072)  (10.2) % Total operating expenses  293,865  259,484  34,381  13.2 % OPERATING INCOME  25,728  12,224  13,504  110.5 % Loss related to warrant liabilities, net  —  (6,140)  6,140  (100.0) % Interest and other income (expense), net  7,054  7,244  (190)  (2.6) % INCOME BEFORE INCOME TAX EXPENSE 32,782  13,328  19,454  146.0 % Income tax expense  (5,489)  (5,129)  (360)  7.0 % NET INCOME  27,293  8,199  19,094  232.9 % Net income attributable to non-controlling interest (18,922)  (9,550)  (9,372)  98.1 % Accretion of Series A Convertible Preferred Stock (1,875)  (1,838)  (37)  2.0 % NET INCOME (LOSS) ATTRIBUTABLE TO CLASS A COMMON STOCKHOLDERS $         6,496  $       (3,189)  $         9,685  303.7 %  Earnings (loss) per share of Class A Common Stock:  Basic  $           0.07  $         (0.04)  Diluted  $           0.07  $         (0.04)   Weighted average shares of Class A Common Stock outstanding:  Basic  90,047  84,656  Diluted  346,311  84,656

Hagerty, Inc.

Condensed Consolidated Balance Sheets (Unaudited) March 31,  December 31, 2025  2024 ASSETS  in thousands (except share amounts) Current Assets:  Cash and cash equivalents  $                   127,704  $                   104,784 Restricted cash and cash equivalents  158,604  128,061 Investments  104,991  73,957 Accounts receivable  97,610  84,763 Premiums receivable  175,522  153,748 Commissions receivable  17,135  20,430 Notes receivable  62,053  45,417 Deferred acquisition costs, net  152,270  156,466 Other current assets  102,044  90,779 Total current assets  997,933  858,405 Investments  481,115  515,570 Notes receivable  11,139  11,555 Property and equipment, net  17,919  18,205 Lease right-of-use assets  43,433  44,485 Intangible assets, net  87,122  90,107 Goodwill  114,127  114,123 Other long-term assets  63,403  56,888 TOTAL ASSETS  $                1,816,191  $                1,709,338 LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY  Current Liabilities:  Accounts payable, accrued expenses and other current liabilities  $                   116,875  $                     73,383 Losses payable and provision for unpaid losses and loss adjustment expenses  251,920  266,878 Commissions payable  79,315  77,389 Advance premiums and due to insurers  154,009  108,352 Unearned premiums  352,162  357,539 Contract liabilities  32,778  31,905 Total current liabilities  987,059  915,446 Long-term lease liabilities  41,956  43,178 Long-term debt, net  132,596  104,968 Deferred tax liability  18,421  18,065 Contract liabilities  14,834  15,334 Other long-term liabilities  2,130  4,178 TOTAL LIABILITIES  1,196,996  1,101,169 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 March 31, 2025 and December 31, 2024) 86,538  84,663 STOCKHOLDERS' EQUITY  Class A Common Stock, $0.0001 par value (500,000,000 shares authorized, 90,064,663 and 90,032,391 
issued and outstanding as of March 31, 2025 and December 31, 2024, respectively) 9  9 Class V Common Stock, $0.0001 par value (300,000,000 authorized, 251,033,906 shares issued and 
outstanding as of March 31, 2025 and December 31, 2024) 25  25 Additional paid-in capital  606,972  603,780 Accumulated earnings (deficit)  (443,607)  (451,978) Accumulated other comprehensive income (loss)  (455)  (1,514) Total stockholders' equity  162,944  150,322 Non-controlling interest  369,713  373,184 Total equity  532,657  523,506 TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY  $                1,816,191  $                1,709,338

1 The 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, 2025  2024 OPERATING ACTIVITIES: in thousands Net income $                   27,293  $                     8,199 Adjustments to reconcile net income to net cash from operating activities:  Loss on disposals of equipment, software and other assets  1,136  — Loss related to warrant liabilities, net —  6,140 Depreciation and amortization 9,488  10,560 Provision for deferred taxes (939)  (571) Share-based compensation expense 4,392  4,543 Non-cash lease expense 2,109  2,197 Realized (gain) loss on investments, net 315  — (Accretion) amortization of discount and premium, net (1,184)  — Other 1,852  1,140 Changes in operating assets and liabilities:  Accounts, premiums and commissions receivable (39,394)  42,736 Deferred acquisition costs, net 4,196  4,712 Losses payable and provision for unpaid losses and loss adjustment expenses (14,958)  5,567 Commissions payable 1,926  (37,669) Advance premiums and due to insurers 45,257  34,941 Unearned premiums (5,377)  (4,573) Operating lease assets and liabilities (2,252)  (2,282) Other assets and liabilities, net 9,970  (17,402) Net Cash Provided by Operating Activities 43,830  58,238 INVESTING ACTIVITIES:  Capital expenditures (5,389)  (4,538) Acquisitions, net of cash acquired, and other investments —  (3,843) Issuance of notes receivable (9,886)  (17,828) Collection of notes receivable 1,650  11,041 Purchases of fixed maturity securities (39,150)  (2,956) Proceeds from sales of fixed maturity securities 14,804  — Proceeds from maturities of fixed maturity securities 33,722  1,075 Purchases of equity securities (246)  — Sales of equity securities 247  — Other investing activities (233)  (1,238) Net Cash Used in Investing Activities (4,481)  (18,287) FINANCING ACTIVITIES:  Payments on long-term debt (120,880)  (45,331) Proceeds from long-term debt, net of issuance costs 160,067  8,098 Distributions paid to non-controlling interest unit holders (24,676)  — Funding of TRA liability payments (223)  — Funding of employee tax obligations upon vesting of share-based payments (44)  — Net Cash Provided by (Used in) Financing Activities 14,244  (37,233) Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents (130)  (186)  Change in cash and cash equivalents and restricted cash and cash equivalents 53,463  2,532 Beginning cash and cash equivalents and restricted cash and cash equivalents 232,845  724,276 Ending cash and cash equivalents and restricted cash and cash equivalents $                 286,308  $                 726,808

Hagerty, Inc. Key Performance Indicators and Certain Non-GAAP Financial Measures

Key Performance Indicators

The 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, 2025  2024  Change Operational Metrics   dollars in thousands (except per share amounts) Total Written Premium  $    244,327  $    218,286  $     26,041  11.9 % Hagerty Re Loss Ratio  42.0 %  41.1 %  0.9 %  N/M Hagerty Re Combined Ratio  88.5 %  88.5 %  — %  N/M New Business Count — Insurance  55,309  59,286  (3,977)  (6.7) %  GAAP Financial Measures  Total Revenue  $    319,593  $    271,708  $     47,885  17.6 % Operating Income  $     25,728  $     12,224  $     13,504  110.5 % Net Income  $     27,293  $       8,199  $     19,094  232.9 % Basic Earnings (Loss) Per Share  $         0.07  $        (0.04)  $         0.11  N/M Diluted Earnings (Loss) Per Share  $         0.07  $        (0.04)  $         0.11  N/M  Non-GAAP Financial Measures  Adjusted EBITDA  $     39,608  $     27,327  $     12,281  44.9 % Adjusted Earnings Per Share  $         0.08  $         0.04  $         0.04  100.0 %

N/M = Not meaningful

March 31,  December 31,  2025  2024  Change  Operational Metrics  Policies in Force  1,524,927  1,506,451  18,476  1.2 % Policies in Force Retention  89.0 %  89.0 %  — %  — % Vehicles in Force  2,609,209  2,576,700  32,509  1.3 % HDC Paid Member Count  889,390  875,822  13,568  1.5 % Net Promoter Score (NPS)  82  82  —  — %

Non-GAAP Financial Measures

Adjusted EBITDA

We define Adjusted EBITDA as consolidated Net income, excluding net interest and other income (expense), income tax expense, and depreciation and amortization, further adjusted to exclude (i) net gains and losses related to our warrant liabilities prior to the Warrant Exchange; (ii) share-based compensation expense; and when applicable, (iii) restructuring, impairment and related charges; (iv) gains, losses and impairments related to divestitures; and (v) certain other unusual items.

We present Adjusted EBITDA because 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. We use Adjusted EBITDA as a measure of the operating performance of our business on a consistent basis, as it removes the impact of items not directly resulting from our core operations.

By providing this non-GAAP financial measure, together with a reconciliation to Net income, which is the most comparable GAAP measure, we believe we are enhancing investors' understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. However, Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation, or as an alternative to, or a substitute for Net income or other financial statement data presented in our Condensed Consolidated Financial Statements as indicators of financial performance. Our definition of Adjusted EBITDA may be different than similarly titled measures used by other companies in our industry, which could reduce the usefulness of this non-GAAP financial measure when comparing our performance to that of other companies.

The following table reconciles Adjusted EBITDA to the most directly comparable GAAP measure, which is Net income:

Three months ended
March 31, 2025  2024 in thousands Net income $            27,293  $              8,199 Interest and other (income) expense 1, 2 (7,054)  (7,244) Income tax expense 5,489  5,129 Depreciation and amortization 9,488  10,560 EBITDA 35,216  16,644 Loss related to warrant liabilities, net —  6,140 Share-based compensation expense 4,392  4,543 Adjusted EBITDA $            39,608  $            27,327

1 Excludes interest expense related to the BAC Credit Facility, which is recorded within "Sales expense" in the Condensed Consolidated Statements of Operations. 2  Includes interest income and net investment income related to our investment portfolio.

The following table reconciles Adjusted EBITDA for the year ended December 31, 2025 Outlook to the most directly comparable GAAP measure, which is Net income:

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" in the Condensed Consolidated Statements of Operations. 2  Includes interest income and net investment income related to our investment portfolio.

Adjusted EPS

We define Adjusted Earnings Per Share ("Adjusted EPS") as consolidated Net income, excluding net gains and losses related to our warrant liabilities prior to the Warrant Exchange, divided by our outstanding and total potentially dilutive securities, which includes (i) the weighted average issued and outstanding shares of Class A Common Stock; (ii) all issued and outstanding non-controlling interest units of THG; (iii) all issued and outstanding shares of our Series A Convertible Preferred Stock on an as-converted basis; (iv) all unissued share-based compensation awards; and (v) all unexercised warrants outstanding prior to the Warrant Exchange.

The most directly comparable GAAP measure to Adjusted EPS is basic earnings per share ("Basic EPS"), which is calculated as Net income (loss) available to Class A Common Stockholders divided by the weighted average number of Class A Common Stock shares outstanding during the period.

We present Adjusted EPS because we consider it to be an important supplemental measure of our operating performance and believe it is used by securities analysts, investors and other interested parties in evaluating the consolidated performance of other companies in our industry. We also believe that Adjusted EPS, which compares our consolidated Net income with our outstanding and potentially dilutive shares, provides useful information to investors regarding our performance on a fully consolidated and fully diluted basis.

Management uses Adjusted EPS:

as a measurement of operating performance of our business on a fully consolidated and fully diluted basis; to evaluate the performance and effectiveness of our operational strategies; and as a preferred predictor of core operating performance, comparisons to prior periods and competitive positioning.

We caution investors that Adjusted EPS is not a recognized measure 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, including Basic EPS, and that Adjusted EPS, as we define it, may be defined or calculated differently by other companies. In addition, Adjusted EPS has limitations as an analytical tool and should not be considered as a measure of profit or loss per share.

The following table reconciles Adjusted EPS to the most directly comparable GAAP measure, which is Basic EPS:

Three months ended

March 31, 2025  2024 in thousands (except per share amounts) Numerator:  Net income (loss) available to Class A Common Stockholders 1 $              6,041  $             (3,189) Accretion of Series A Convertible Preferred Stock 1,875  1,838 Undistributed earnings allocated to Series A Convertible Preferred Stock 455  — Net income attributable to non-controlling interest 18,922  9,550 Consolidated net income 27,293  8,199 Loss related to warrant liabilities, net —  6,140 Adjusted consolidated net income 2 $            27,293  $            14,339  Denominator:  Weighted average shares of Class A Common Stock outstanding 1 90,047  84,656 Total potentially dilutive securities outstanding:  Non-controlling interest THG units 255,154  255,499 Series A Convertible Preferred Stock, on an as-converted basis 6,785  6,785 Total unissued share-based compensation awards 7,935  8,256 Total warrants outstanding —  19,484 Potentially dilutive shares outstanding 269,874  290,024 Fully dilutive shares outstanding 2 359,921  374,680  Basic EPS 1 $                0.07  $               (0.04)  Adjusted EPS 2 $                0.08  $                0.04

1 Numerator and Denominator of the GAAP measure Basic EPS 2 Numerator and Denominator of the non-GAAP measure Adjusted EPSCision

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