Hagerty Reports Second Quarter 2025 Results; Increases 2025 Outlook for Revenue and Profit Growth

Rhea-AI Summary

Hagerty (NYSE:HGTY), an automotive enthusiast brand and specialty vehicle insurance provider, reported strong Q2 2025 results and raised its full-year outlook. Total Revenue grew 18% year-over-year to $368.7 million, while Net Income increased 11% to $47.2 million.

Key highlights include a 327% increase in Marketplace revenue to $26.8 million, an 11% growth in Written Premium to $356.0 million, and a 20% rise in Adjusted EBITDA to $63.7 million. The company maintains strong retention with 88.7% Policies in Force Retention and grew its insured vehicles by 6% to 2.7 million.

Hagerty increased its 2025 guidance, now expecting 13-14% revenue growth, 43-53% net income growth, and 30-38% Adjusted EBITDA growth. The company also announced a non-binding LOI with Markel for a new fronting arrangement that would give Hagerty control of 100% of premium by January 2026.

Positive

• Total Revenue increased 18% year-over-year to $368.7 million in Q2 2025
• Marketplace revenue surged 327% year-over-year to $26.8 million
• Operating Income grew 25% to $47.7 million with margin expansion of 70 bps
• Strong policy retention rate of 88.7% with 6% growth in insured vehicles to 2.7 million
• Increased 2025 guidance for revenue, net income, and Adjusted EBITDA growth
• New fronting arrangement with Markel to control 100% of premium by 2026
• Hagerty Drivers Club paid members increased 6% to 908,000

Negative

• Loss Ratio increased to 42.3% from 41.1% in prior year period
• General and administrative expenses rose 8.5% due to software costs
• Salary and benefits increased 8.2% from merit increases and higher headcount
• $20 million in elevated technology investments impacting 2025 profits
• $10 million pre-tax impact from Southern California wildfires

Insights

Financial Analyst

Hagerty's Q2 shows strong growth with 18% revenue increase and raised 2025 outlook, signaling robust business momentum.

Hagerty delivered impressive Q2 results with $368.7 million in total revenue, representing an 18% year-over-year increase. The company's financial health looks robust across multiple metrics, with net income growing 11% to $47.2 million and Adjusted EBITDA increasing 20% to $63.7 million.

The standout performer was Hagerty's Marketplace segment, which saw extraordinary growth of 327% year-over-year to $26.8 million. This dramatic expansion was driven by increased inventory sales and their first European auction at Concorso d'Eleganza Villa d'Este. The company's core insurance business remains solid with Written Premium up 11% to $356 million and a retention rate holding steady at 88.7%.

Management's confidence is evident in their upgraded 2025 outlook, raising revenue growth projections from 12-13% to 13-14% and significantly boosting profit expectations. Net income growth is now projected at 43-53% (up from 30-40%), while Adjusted EBITDA growth is forecasted at 30-38% (previously 20-29%).

The announcement of a non-binding LOI with Markel represents a strategic shift in Hagerty's business model. This new fronting arrangement would allow Hagerty to control 100% of premium as of January 2026, potentially improving margins and capital efficiency.

Despite investing $20 million in technology infrastructure (primarily the Duck Creek platform) and absorbing approximately $10 million in pre-tax impact from Southern California wildfires, the company's margins are expanding faster than initially expected. This suggests effective cost management and operational efficiency improvements alongside growth investments.

The company maintains a solid balance sheet with $140.3 million in unrestricted cash against $176.1 million in total debt, though it's worth noting that $38.9 million of this debt is back leverage for their collector car loan portfolio.

Overall, Hagerty appears to be executing effectively on its strategy of protecting, growing, and connecting automotive enthusiasts while demonstrating strong financial discipline and accelerating growth in its marketplace business.

• The Company increased its full year 2025 outlook for Total Revenue growth to 13-14%, Net Income growth of 43-53%, and Adjusted EBITDA growth of 30-38%
• Second quarter 2025 Total Revenue increased 18% year-over-year to $368.7 million, and year-to-date 2025 Total Revenue increased 18% to $688.3 million
• Second quarter 2025 Written Premium increased 11% year-over-year to $356.0 million, and year-to-date 2025 Written Premium increased 11% to $600.3 million
• Second quarter 2025 Marketplace revenue increased 327% year-over-year to $26.8 million, and year-to-date 2025 Marketplace revenue increased 232% to $55.8 million
• Second quarter 2025 Operating Income increased 25% year-over-year to $47.7 million, and year-to-date 2025 Operating Income increased 46% to $73.4 million
• Second quarter 2025 Net Income increased 11% year-over-year to $47.2 million, and year-to-date 2025 Net Income increased 46% to $74.5 million
• Second quarter 2025 Adjusted EBITDA increased 20% year-over-year to $63.7 million, and year-to-date 2025 Adjusted EBITDA increased 28% to $103.4 million
• Second quarter 2025 Basic and Diluted Earnings Per Share was $0.09, and year-to-date 2025 Basic and Diluted Earnings Per Share was $0.16
• The Company announced a non-binding LOI for a new fronting arrangement with Markel that would result in Hagerty controlling 100% of the premium as of January 1, 2026

TRAVERSE CITY, Mich., Aug. 4, 2025 /PRNewswire/ -- Hagerty, Inc. (NYSE: HGTY), an automotive enthusiast brand and leading specialty vehicle insurance provider, announced today financial results for the three and six months ended June 30, 2025.

"We delivered solid results during the first half of 2025 with revenue growth of 18%, net income gains of 46%, and Adjusted EBITDA gains of 28%. We continued to expand our margins while making large investments in future growth, including rolling out State Farm Classic+, launching our Enthusiast+ product, building our European Marketplace team, and investing in the technology that will enable further margin expansion as we scale up over the coming years," said McKeel Hagerty, Chief Executive Officer and Chairman of Hagerty.

"Given our first half results and strong business momentum, we have increased our 2025 revenue growth outlook to 13-14% as we help car enthusiasts protect, buy and sell, and enjoy their special vehicles. Margins are expanding faster than expected in our original outlook, and we now expect to deliver net income growth of 43-53% in 2025. We are well positioned for accelerating rates of top and bottom line growth as we move into 2026, including the recently announced evolution of our partnership with Markel that would result in Hagerty controlling 100% of the premium next year," added Mr. Hagerty.

SECOND QUARTER AND YTD 2025 FINANCIAL HIGHLIGHTS

• Second quarter 2025 Total Revenue increased 18% year-over-year to $368.7 million, and year-to-date 2025 Total Revenue increased 18% year-over-year to $688.3 million
• Second quarter 2025 Written Premium increased 11% year-over-year to $356.0 million, and year-to-date 2025 Written Premium increased 11% year-over-year to $600.3 million
• Second quarter 2025 Commission and fee revenue increased 11% year-over-year to $143.3 million, and year-to-date 2025 Commission and fee revenue increased 12% year-over-year to $243.6 million
  • Policies in Force Retention was 88.7% as of June 30, 2025 compared to 88.7% in the prior year period, and total insured vehicles increased 6% year-over-year to 2.7 million
• Second quarter 2025 Loss Ratio was 42.3% including 1.6% of impact from catastrophe losses, compared to 41.1% in the prior year period. Year-to-date 2025 Loss Ratio was 42.2% including 4.1% of impact from catastrophe losses, compared to 41.1% in the prior year period
• Second quarter 2025 Earned Premium increased 13% year-over-year to $177.8 million, and year-to-date 2025 Earned Premium increased 12% year-over-year to $347.1 million
• Second quarter 2025 Membership, marketplace and other revenue increased 78% year-over-year to $47.6 million, and year-to-date 2025 Membership, marketplace and other revenue increased 68% year-over-year to $97.6 million
  • Second quarter 2025 Marketplace revenue increased 327% year-over-year to $26.8 million, and year-to-date 2025 Marketplace revenue increased 232% year-over-year to $55.8 million
    • The increase was primarily due to a higher level of inventory sales as well as our inaugural European auction at Concorso d'Eleganza Villa d'Este in May
  • Second quarter 2025 Membership revenue increased 11% year-over-year to $15.7 million, and year-to-date 2025 Membership revenue increased 12% year-over-year to $31.0 million
    • Hagerty Drivers Club (HDC) paid members increased 6% year-over-year to approximately 908,000 compared to 854,000
• Second quarter 2025 Operating Income increased 25% year-over-year to $47.7 million, and year-to-date 2025 Operating Income increased 46% year-over-year to $73.4 million
  • Second quarter 2025 Operating Income margin increased by 70 bps, and year-to-date 2025 Operating Income margin increased by 210 bps compared to the prior year periods
    • Year-to-date 2025 General and administrative expenses increased 8.5% due primarily to an increase in software-related costs, and Salary and benefits increased 8.2% due to merit increases and higher headcount
  • Second quarter 2025 Depreciation and amortization was $8.8 million compared to $10.0 million in the prior year period, and year-to-date 2025 depreciation and amortization was $18.3 million compared to $20.6 million in the prior year period
• Second quarter 2025 Net Income increased 11% year-over-year to $47.2 million, and year-to-date 2025 Net Income increased 46% year-over-year to $74.5 million
  • Second quarter 2025 Net Income included $5.7 million of interest and other income (expense), which included $10.7 million in interest and investment income, partially offset by $2.0 million of interest expense and a $3.1 million increase in our TRA liability
  • Year-to-date 2025 Net Income included $12.7 million of interest and other income (expense), which included $19.5 million in interest and investment income, partially offset by $3.9 million of interest expense and a $3.1 million increase in our TRA liability
• Second quarter 2025 Adjusted EBITDA (a non-GAAP measure) increased 20% year-over-year to $63.7 million, and year-to-date 2025 Adjusted EBITDA increased 28% year-over-year to $103.4 million
• Second quarter 2025 Basic and Diluted Earnings Per Share was $0.09, and year-to-date 2025 Basic and Diluted Earnings Per Share was $0.16
  • Second quarter 2025 Adjusted Earnings Per Share (a non-GAAP measure) was $0.13, and year-to-date 2025 Adjusted Earnings Per Share was $0.21
• The Company ended the quarter with $140.3 million of unrestricted cash and $176.1 million of total debt, $38.9 million of which is back leverage for Broad Arrow Capital's portfolio of loans collateralized by collector cars

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 REVENUE GROWTH AND MARGIN EXPANSION

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 13-14%
  • Net Income growth of 43-53%
  • Adjusted EBITDA growth of 30-38%

			Prior 2025 Outlook1 ($)				Revised 2025 Outlook ($)
in thousands	2024 Results		Low End		High End		Low End		High End
Total Written Premium	$1,044,492		$1,180,000		$1,191,000		$1,180,000		$1,191,000
Total Revenue	$1,200,038		$1,344,000		$1,356,000		$1,356,000		$1,368,000
Net Income2, 4	$78,303		$102,000		$110,000		$112,000		$120,000
Adjusted EBITDA3, 4	$124,473		$150,000		$160,000		$162,000		$172,000

1	Prior 2025 Outlook shared on the Company's first quarter earnings call on May 7th, 2025.
2	Fully diluted share count of approximately 361 million shares including Class A Common Stock, Class V Common Stock, Series A Convertible Preferred Stock, and share-based compensation awards.
3	See Non-GAAP Financial Measures below for additional information regarding this non-GAAP financial measure.
4	Profit ranges incorporate $20 million of elevated technology investments in 2025, as well as approximately $10 million pre-tax impact from the Southern California wildfires.

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 second 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) enter into and successfully implement the proposed fronting arrangement with Markel; (vii) achieve the anticipated benefits of the proposed fronting arrangement with Markel; (viii) manage the cyclical nature of the insurance business, including through any periods of recession, economic downturn or inflation; (ix) address unexpected increases in the frequency or severity of claims, and (x) 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 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 over 900,000 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 June 30,
		2025		2024		$ Change		% Change
REVENUE:		in thousands (except percentages and per share amounts)
Commission and fee revenue		$     143,287		$     128,816		$       14,471		11.2 %
Earned premium		177,785		157,612		20,173		12.8 %
Membership, marketplace and other revenue		47,627		26,797		20,830		77.7 %
Total revenue		368,699		313,225		55,474		17.7 %
OPERATING EXPENSES:
Salaries and benefits		64,062		57,693		6,369		11.0 %
Ceding commissions, net		82,938		73,446		9,492		12.9 %
Losses and loss adjustment expenses		75,213		64,729		10,484		16.2 %
Sales expense		67,380		47,990		19,390		40.4 %
General and administrative expenses		22,574		21,373		1,201		5.6 %
Depreciation and amortization		8,833		10,014		(1,181)		(11.8) %
Gain related to divestiture		—		(87)		87		N/M
Total operating expenses		321,000		275,158		45,842		16.7 %
OPERATING INCOME		47,699		38,067		9,632		(25.3) %
Loss related to warrant liabilities, net		—		(1,941)		1,941		N/M
Interest and other income (expense), net		5,664		12,342		(6,678)		(54.1) %
INCOME BEFORE INCOME TAX EXPENSE		53,363		48,468		4,895		10.1 %
Income tax expense		(6,161)		(5,811)		(350)		6.0 %
NET INCOME		47,202		42,657		4,545		10.7 %
Net income attributable to non-controlling interest		(36,229)		(32,279)		(3,950)		12.2 %
Accretion of Series A Convertible Preferred Stock		(1,875)		(1,839)		(36)		2.0 %
NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCKHOLDERS		$         9,098		$         8,539		$            559		6.5 %
Earnings per share of Class A Common Stock:
Basic		$           0.09		$           0.09
Diluted		$           0.09		$           0.09
Weighted average shares of Class A Common Stock outstanding:
Basic		90,698		85,687
Diluted		90,698		85,687

N/M = Not meaningful

 

Hagerty, Inc. Condensed Consolidated Statements of Operations (Unaudited)
		Six months ended June 30,
		2025		2024		$ Change		% Change
REVENUE:		in thousands (except percentages and per share amounts)
Commission and fee revenue		$     243,574		$     217,656		$       25,918		11.9 %
Earned premium		347,140		309,231		37,909		12.3 %
Membership, marketplace and other revenue		97,578		58,046		39,532		68.1 %
Total revenue		688,292		584,933		103,359		17.7 %
OPERATING EXPENSES:
Salaries and benefits		123,165		113,809		9,356		8.2 %
Ceding commissions, net		160,271		144,376		15,895		11.0 %
Losses and loss adjustment expenses		146,343		127,085		19,258		15.2 %
Sales expense		122,006		87,650		34,356		39.2 %
General and administrative expenses		44,759		41,235		3,524		8.5 %
Depreciation and amortization		18,321		20,574		(2,253)		(11.0) %
Gain related to divestiture		—		(87)		87		N/M
Total operating expenses		614,865		534,642		80,223		15.0 %
OPERATING INCOME		73,427		50,291		23,136		46.0 %
Loss related to warrant liabilities, net		—		(8,081)		8,081		N/M
Interest and other income (expense), net		12,718		19,586		(6,868)		(35.1) %
INCOME BEFORE INCOME TAX EXPENSE		86,145		61,796		24,349		39.4 %
Income tax expense		(11,650)		(10,940)		(710)		6.5 %
NET INCOME		74,495		50,856		23,639		46.5 %
Net income attributable to non-controlling interest		(55,151)		(41,829)		(13,322)		31.8 %
Accretion of Series A Convertible Preferred Stock		(3,750)		(3,677)		(73)		2.0 %
NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCKHOLDERS		$       15,594		$         5,350		$       10,244		191.5 %
Earnings per share of Class A Common Stock:
Basic		$           0.16		$           0.06
Diluted		$           0.16		$           0.06
Weighted average shares of Class A Common Stock outstanding:
Basic		90,374		85,171
Diluted		91,247		86,072

N/M = Not meaningful

 

Hagerty, Inc. Condensed Consolidated Balance Sheets (Unaudited)
		June 30,		December 31,
		2025		2024
ASSETS		in thousands (except share amounts)
Current Assets:
Cash and cash equivalents		$                   140,300		$                   104,784
Restricted cash and cash equivalents		190,286		128,061
Investments		119,326		73,957
Accounts receivable		107,925		84,763
Premiums receivable		249,830		153,748
Commissions receivable		27,362		20,430
Notes receivable		83,478		45,417
Deferred acquisition costs, net		178,430		156,466
Other current assets		116,047		90,779
Total current assets		1,212,984		858,405
Investments		482,248		515,570
Notes receivable		17,931		11,555
Property and equipment, net		17,259		18,205
Lease right-of-use assets		42,549		44,485
Intangible assets, net		86,732		90,107
Goodwill		114,165		114,123
Other long-term assets		66,707		56,888
TOTAL ASSETS		$                2,040,575		$                1,709,338
LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable, accrued expenses and other current liabilities		$                   138,349		$                     73,383
Losses payable and provision for unpaid losses and loss adjustment expenses		259,050		266,878
Ceding commissions payable		113,080		77,389
Advance premiums and due to insurers		188,403		108,352
Unearned premiums		410,496		357,539
Contract liabilities		36,602		31,905
Total current liabilities		1,145,980		915,446
Long-term lease liabilities		40,903		43,178
Long-term debt, net		153,383		104,968
Deferred tax liability		21,857		18,065
Contract liabilities		14,334		15,334
Other long-term liabilities		3,267		4,178
TOTAL LIABILITIES		1,379,724		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 June 30, 2025 and December 31, 2024)		82,813		84,663
STOCKHOLDERS' EQUITY
Class A Common Stock, $0.0001 par value (500,000,000 shares authorized, 90,715,648 and 90,032,391 issued and outstanding as of June 30, 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 June 30, 2025 and December 31, 2024)		25		25
Additional paid-in capital		604,621		603,780
Accumulated earnings (deficit)		(432,634)		(451,978)
Accumulated other comprehensive income (loss)		262		(1,514)
Total stockholders' equity		172,283		150,322
Non-controlling interest		405,755		373,184
Total equity		578,038		523,506
TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY		$                2,040,575		$                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)
	Six months ended June 30,
	2025		2024
OPERATING ACTIVITIES:	in thousands
Net income	$                   74,495		$                   50,856
Adjustments to reconcile net income to net cash from operating activities:
Loss on disposals of equipment, software and other assets	1,211		—
Loss related to warrant liabilities, net	—		8,081
Increase (decrease) in tax receivable agreement liability	3,078		—
Depreciation and amortization	18,321		20,574
Provision for deferred taxes	2,061		1,984
Share-based compensation expense	9,538		8,926
Non-cash lease expense	4,226		4,038
Realized (gain) loss on investments, net	(879)		(548)
(Accretion) amortization of discount and premium, net	(2,316)		(769)
Other	355		1,312
Changes in operating assets and liabilities:
Accounts, premiums and commissions receivable	(148,883)		(39,306)
Deferred acquisition costs, net	(21,964)		(17,670)
Losses payable and provision for unpaid losses and loss adjustment expenses	(7,828)		19,037
Ceding commissions payable	35,691		(7,639)
Advance premiums and due to insurers	78,846		75,869
Unearned premiums	52,957		45,234
Operating lease assets and liabilities	(4,534)		(4,531)
Other assets and liabilities, net	3,339		(43,193)
Net Cash Provided by Operating Activities	97,714		122,255
INVESTING ACTIVITIES:
Capital expenditures	(11,549)		(11,936)
Acquisitions, net of cash acquired, and other investments	—		(3,843)
Issuance of notes receivable	(26,617)		(32,136)
Collection of notes receivable	8,091		19,354
Purchases of fixed maturity securities	(98,455)		(455,766)
Proceeds from sales of fixed maturity securities	21,341		7,570
Proceeds from maturities of fixed maturity securities	75,470		5,596
Purchases of equity securities	(347)		(9,407)
Proceeds from sales of equity securities	378		—
Other investing activities	(151)		631
Net Cash Used in Investing Activities	(31,839)		(479,937)
FINANCING ACTIVITIES:
Payments on long-term debt	(124,493)		(60,757)
Proceeds from long-term debt, net of issuance costs	192,339		25,482
Distributions paid to non-controlling interest unit holders	(30,380)		(5,320)
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	(2,452)		(4,588)
Other financing activities	289		—
Net Cash Provided by (Used in) Financing Activities	29,480		(50,783)
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents	2,386		(289)
Change in cash and cash equivalents and restricted cash and cash equivalents	97,741		(408,754)
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	$                 330,586		$                 315,522

 

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 June 30,
		2025		2024		Change
Operational Metrics		dollars in thousands (except per share amounts)
Total Written Premium		$    355,985		$    321,173		$     34,812		10.8 %
Hagerty Re Loss Ratio		42.3 %		41.1 %		1.2 %		N/M
Hagerty Re Combined Ratio		89.6 %		88.1 %		1.5 %		N/M
New Business Count — Insurance		87,872		89,049		(1,177)		(1.3) %
GAAP Financial Measures
Total Revenue		$    368,699		$    313,225		$     55,474		17.7 %
Operating Income		$     47,699		$     38,067		$       9,632		25.3 %
Net Income		$     47,202		$     42,657		$       4,545		10.7 %
Basic Earnings Per Share		$         0.09		$         0.09		$            —		— %
Diluted Earnings Per Share		$         0.09		$         0.09		$            —		— %
Non-GAAP Financial Measures
Adjusted EBITDA		$     63,744		$     53,113		$     10,631		20.0 %
Adjusted Earnings Per Share		$         0.13		$         0.12		$         0.01		— %
		Six months ended June 30,
		2025		2024		Change
Operational Metrics		dollars in thousands (except per share amounts)
Total Written Premium		$    600,312		$    539,459		$     60,853		11.3 %
Hagerty Re Loss Ratio		42.2 %		41.1 %		1.1 %		N/M
Hagerty Re Combined Ratio		89.1 %		88.3 %		0.8 %		N/M
New Business Count — Insurance		143,181		148,335		(5,154)		(3.5) %
GAAP Financial Measures
Total Revenue		$    688,292		$    584,933		$    103,359		17.7 %
Operating Income		$     73,427		$     50,291		$     23,136		46.0 %
Net Income		$     74,495		$     50,856		$     23,639		46.5 %
Basic Earnings Per Share		$         0.16		$         0.06		$         0.10		166.7 %
Diluted Earnings Per Share		$         0.16		$         0.06		$         0.10		166.7 %
Non-GAAP Financial Measures
Adjusted EBITDA		$    103,352		$     80,440		$     22,912		28.5 %
Adjusted Earnings Per Share		$         0.21		$         0.16		$         0.05		— %

N/M = Not meaningful

 

		June 30,		December 31,
		2025		2024		Change
Operational Metrics
Policies in Force		1,559,798		1,506,451		53,347		3.5 %
Policies in Force Retention		88.7 %		89.0 %		(0.3) %		N/M
Vehicles in Force		2,664,611		2,576,700		87,911		3.4 %
HDC Paid Member Count		907,963		875,822		32,141		3.7 %
Net Promoter Score (NPS)		82		82		—		— %

N/M = Not meaningful

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 transaction that closed in July 2024 (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 June 30,				Six months ended June 30,
		2025		2024		2025		2024
		in thousands
Net income		$       47,202		$       42,657		$       74,495		$       50,856
Interest and other (income) expense, net 1, 2		(5,664)		(12,342)		(12,718)		(19,586)
Income tax expense		6,161		5,811		11,650		10,940
Depreciation and amortization		8,833		10,014		18,321		20,574
EBITDA		56,532		46,140		91,748		62,784
Loss related to warrant liabilities, net		—		1,941		—		8,081
Share-based compensation expense		5,146		4,383		9,538		8,926
Gain related to divestiture		—		(87)		—		(87)
Other unusual items 3		2,066		736		2,066		736
Adjusted EBITDA		$       63,744		$       53,113		$     103,352		$       80,440

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.
3	Other unusual items includes certain legal settlement expenses, certain professional fees, and certain material severance expenses for the three and six months ended June 30, 2025 and professional fees associated with the Warrant Exchange for the three and six months ended June 30, 2024.

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		$           112,000		$           120,000
Interest and other (income) expense, net 1, 2		(32,000)		(32,000)
Income tax expense		23,000		25,000
Depreciation and amortization		39,000		39,000
Share-based compensation expense		20,000		20,000
Adjusted EBITDA		$           162,000		$           172,000

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 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 (i) as a measurement of operating performance of our business on a fully consolidated and fully diluted basis; (ii) to evaluate the performance and effectiveness of our operational strategies; and (iii) 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 June 30,				Six months ended June 30,
		2025		2024		2025		2024
		in thousands (except per share amounts)
Numerator:
Net income available to Class A Common Stockholders 1		$         8,465		$         7,912		$       14,505		$         4,955
Accretion of Series A Convertible Preferred Stock		1,875		1,839		3,750		3,677
Undistributed earnings allocated to Series A Convertible Preferred Stock		633		627		1,089		395
Net income attributable to non-controlling interest		36,229		32,279		55,151		41,829
Consolidated net income		47,202		42,657		74,495		50,856
Loss related to warrant liabilities, net		—		1,941		—		8,081
Adjusted consolidated net income 2		$       47,202		$       44,598		$       74,495		$       58,937
Denominator:
Weighted average shares of Class A Common Stock outstanding 1		90,698		85,687		90,374		85,171
Total potentially dilutive securities outstanding:
Non-controlling interest THG units		255,100		255,368		255,100		255,368
Series A Convertible Preferred Stock, on an as-converted basis		6,785		6,785		6,785		6,785
Total unissued share-based compensation awards		8,712		8,228		8,712		8,228
Total warrants outstanding		—		3,876		—		3,876
Potentially dilutive shares outstanding		270,597		274,257		270,597		274,257
Fully dilutive shares outstanding 2		361,295		359,944		360,971		359,428
Basic EPS 1		$           0.09		$           0.09		$           0.16		$           0.06
Adjusted EPS 2		$           0.13		$           0.12		$           0.21		$           0.16

1	Numerator and Denominator of the GAAP measure Basic EPS
2	Numerator and Denominator of the non-GAAP measure Adjusted EPS
3	For the three and six months ended June 30, 2024, the dilutive impact of the outstanding warrants included in the calculation of Adjusted EPS represents the number of Class A Common Stock shares issued in relation to the Warrant Exchange.

 

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SOURCE Hagerty

FAQ

What were Hagerty's (HGTY) key financial results for Q2 2025?

In Q2 2025, Hagerty reported Total Revenue of $368.7 million (up 18%), Net Income of $47.2 million (up 11%), and Adjusted EBITDA of $63.7 million (up 20%) year-over-year.

What is Hagerty's updated revenue and profit guidance for 2025?

Hagerty increased its 2025 outlook, projecting revenue growth of 13-14%, net income growth of 43-53%, and Adjusted EBITDA growth of 30-38%.

How many vehicles does Hagerty insure and what is their retention rate?

As of Q2 2025, Hagerty insures 2.7 million vehicles (up 6% year-over-year) and maintains a strong policy retention rate of 88.7%.

What is Hagerty's new agreement with Markel and when will it take effect?

Hagerty announced a non-binding LOI for a new fronting arrangement with Markel that would result in Hagerty controlling 100% of the premium starting January 1, 2026.

How did Hagerty's Marketplace revenue perform in Q2 2025?

Hagerty's Marketplace revenue showed exceptional growth, increasing 327% year-over-year to $26.8 million, driven by higher inventory sales and their inaugural European auction.