Hagerty Reports Third Quarter 2024 Results; Updates 2024 Outlook for Revenue and Profit Growth
Hagerty reported third quarter 2024 results, highlighting a 17% increase in total revenue year-over-year to $323.4 million and a 13% rise in written premium to $287.6 million. Year-to-date, total revenue grew by 20% to $908.3 million, and written premium increased by 16% to $827.1 million.
Marketplace revenue surged 66% year-over-year in Q3 to $21.6 million. However, the loss ratio increased to 60.0% from 41.1% due to $24.7 million in pre-tax catastrophe losses from Hurricane Helene.
Net income for Q3 was $19.0 million, up slightly by $0.4 million, whereas adjusted EBITDA decreased by $13.2 million to $24.2 million. Despite these challenges, Hagerty raised its 2024 revenue growth outlook to 18-19% and written premium growth to 15%, adjusting for hurricane-related losses.
Net income growth is projected at 131-163%, with adjusted EBITDA expected to grow by 25-36%.
Hagerty ha riportato i risultati del terzo trimestre del 2024, evidenziando un aumento del 17% dei ricavi totali rispetto all’anno precedente, per un totale di 323,4 milioni di dollari, e un aumento del 13% del premio scritto a 287,6 milioni di dollari. Fino ad oggi, i ricavi totali sono cresciuti del 20% a 908,3 milioni di dollari, e il premio scritto è aumentato del 16% a 827,1 milioni di dollari.
I ricavi del marketplace sono aumentati del 66% anno su anno nel Q3, raggiungendo 21,6 milioni di dollari. Tuttavia, il tasso di perdita è aumentato al 60,0% dal 41,1% a causa di perdite per catastrofi pre-tasse pari a 24,7 milioni di dollari causate dall’uragano Helene.
Il reddito netto per il Q3 è stato di 19,0 milioni di dollari, in aumento leggero di 0,4 milioni, mentre l'EBITDA rettificato è diminuito di 13,2 milioni a 24,2 milioni di dollari. Nonostante queste sfide, Hagerty ha alzato le previsioni di crescita dei ricavi per il 2024 all'18-19% e la crescita del premio scritto al 15%, adeguando le stime per le perdite legate all'uragano.
Si prevede che la crescita del reddito netto si attesti tra il 131% e il 163%, con l’EBITDA rettificato atteso in crescita tra il 25% e il 36%.
Hagerty reportó los resultados del tercer trimestre de 2024, destacando un aumento del 17% en los ingresos totales en comparación con el año anterior, alcanzando los 323.4 millones de dólares, y un incremento del 13% en las primas escritas a 287.6 millones de dólares. Hasta la fecha, los ingresos totales crecieron un 20% a 908.3 millones de dólares, y las primas escritas aumentaron un 16% a 827.1 millones de dólares.
Los ingresos del marketplace aumentaron un 66% con respecto al año anterior en el tercer trimestre, alcanzando los 21.6 millones de dólares. Sin embargo, el ratio de pérdida aumentó al 60.0% desde el 41.1% debido a pérdidas por catástrofes antes de impuestos de 24.7 millones de dólares relacionadas con el huracán Helene.
El ingreso neto para el tercer trimestre fue de 19.0 millones de dólares, un leve aumento de 0.4 millones, mientras que el EBITDA ajustado disminuyó en 13.2 millones a 24.2 millones de dólares. A pesar de estos desafíos, Hagerty elevó su perspectiva de crecimiento de ingresos para 2024 al 18-19% y el crecimiento de primas escritas al 15%, ajustando por las pérdidas relacionadas con el huracán.
Se proyecta que el crecimiento del ingreso neto esté entre el 131% y el 163%, con el EBITDA ajustado que se espera crezca entre el 25% y el 36%.
하게르티는 2024년 3분기 결과를 보고하며 총 수익이 전년 대비 17% 증가하여 3억 2,340만 달러에 달하고 서면 보험료가 13% 증가하여 2억 8,760만 달러에 도달했다고 강조했습니다. 올해 누적 수익은 20% 증가하여 9억 8,830만 달러에 달하고, 서면 보험료는 16% 증가하여 8억 2,710만 달러에 달했습니다.
시장에서의 수익은 3분기에 연간 66% 증가하여 2160만 달러에 도달했습니다. 그러나 손실 비율이 증가하여 60.0%로 올라갔고, 이는 허리케인 헬렌으로 인한 세전 재해 손실 2,470만 달러에 기인합니다.
3분기 순익은 1,900만 달러로 40만 달러 소폭 증가했으며, 조정된 EBITDA는 1,320만 달러 감소하여 2420만 달러에 머물렀습니다. 이러한 도전에도 불구하고, 하게르티는 2024년 수익 성장 전망을 18-19%로, 서면 보험료 성장은 15%로 조정하며 허리케인과 관련된 손실을 반영했습니다.
순익 성장률은 131-163%로 예상되며, 조정된 EBITDA는 25-36% 성장할 것으로 보입니다.
Hagerty a rapporté les résultats du troisième trimestre 2024, mettant en avant une augmentation de 17% des revenus totaux par rapport à l'année précédente, atteignant 323,4 millions de dollars, et une augmentation de 13% des primes écrites à 287,6 millions de dollars. À ce jour, les revenus totaux ont augmenté de 20% pour atteindre 908,3 millions de dollars, et les primes écrites ont augmenté de 16% pour s'établir à 827,1 millions de dollars.
Les revenus du marché ont bondi de 66% par rapport à l'année précédente au troisième trimestre, atteignant 21,6 millions de dollars. Cependant, le taux de perte a augmenté pour atteindre 60,0% contre 41,1% en raison de pertes de catastrophe avant impôts de 24,7 millions de dollars en raison de l'ouragan Helene.
Le revenu net pour le troisième trimestre était de 19,0 millions de dollars, en légère hausse de 0,4 million, tandis que l'EBITDA ajusté a diminué de 13,2 millions à 24,2 millions de dollars. Malgré ces défis, Hagerty a relevé ses prévisions de croissance des revenus pour 2024 à 18-19% et la croissance des primes écrites à 15%, en tenant compte des pertes liées à l'ouragan.
La croissance du revenu net est projetée entre 131% et 163%, avec un EBITDA ajusté qui devrait croître de 25% à 36%.
Hagerty reportierte die Ergebnisse des dritten Quartals 2024 und hob einen Anstieg der Gesamterlöse um 17% im Vergleich zum Vorjahr auf 323,4 Millionen Dollar sowie einen Anstieg der geschriebenen Prämien um 13% auf 287,6 Millionen Dollar hervor. Im bisherigen Jahresverlauf stiegen die Gesamterlöse um 20% auf 908,3 Millionen Dollar, während die geschriebenen Prämien um 16% auf 827,1 Millionen Dollar zunahmen.
Die Erlöse aus dem Marktplatz stiegen im dritten Quartal um 66% im Vergleich zum Vorjahr auf 21,6 Millionen Dollar. Der Schadenverhältnis erhöhte sich jedoch auf 60,0% von 41,1%, bedingt durch 24,7 Millionen Dollar an vorsteuerlichen Katastrophenschäden durch den Hurrikan Helene.
Der Nettogewinn im dritten Quartal betrug 19,0 Millionen Dollar, was einem leichten Anstieg um 0,4 Millionen Dollar entspricht, während das bereinigte EBITDA um 13,2 Millionen auf 24,2 Millionen Dollar sank. Trotz dieser Herausforderungen hat Hagerty seine Umsatzwachstumsprognose für 2024 auf 18-19% und das Wachstum der geschriebenen Prämien auf 15% angehoben, wobei die Verluste durch den Hurrikan berücksichtigt wurden.
Das Wachstum des Nettogehalts wird auf 131-163% geschätzt, wobei das bereinigte EBITDA voraussichtlich um 25-36% steigen wird.
- Total revenue increased by 17% year-over-year to $323.4 million.
- Year-to-date total revenue increased by 20% to $908.3 million.
- Written premium increased by 13% year-over-year to $287.6 million.
- Marketplace revenue surged 66% year-over-year to $21.6 million.
- Net income for Q3 was $19.0 million, up $0.4 million.
- Raised 2024 revenue growth outlook to 18-19%.
- Net income growth projected at 131-163% for 2024.
- Loss ratio increased to 60.0% from 41.1% due to $24.7 million in pre-tax catastrophe losses.
- Adjusted EBITDA decreased by $13.2 million to $24.2 million.
Insights
Hagerty's Q3 2024 results demonstrate strong revenue growth with some mixed signals. Total revenue increased 17% YoY to
However, profitability was impacted by Hurricane Helene, with a loss ratio of
The company's updated guidance reflects confidence in top-line growth but acknowledges hurricane impacts on profitability. The retention rate of
The elevated loss ratio of
Notable operational improvements include reduced G&A expenses by
The company's specialty focus and expertise in collector cars creates a defensive moat, though increased exposure to natural disasters remains a key risk factor.
- Third quarter 2024 Total Revenue increased
17% year-over-year to$323.4 million 20% year-over-year to$908.3 million - Third quarter 2024 Written Premium increased
13% year-over-year to$287.6 million 16% year-over-year to$827.1 million - Third quarter 2024 Marketplace revenue increased
66% year-over-year to$21.6 million 54% year-over-year to$38.3 million - Third quarter 2024 Loss Ratio of
60.0% (includes$24.7 million 41.1% in the prior year period. Year-to-date 2024 Loss Ratio of47.7% compared to41.5% in the prior year period - Third quarter 2024 Net Income of
$19.0 million $0.4 million $69.9 million $50.7 million - Third quarter 2024 Adjusted EBITDA of
$24.2 million $13.2 million $104.6 million $26.2 million - Increased 2024 growth outlook for Total Revenue to 18
-19% and Written Premium to15% . Hagerty's outlook for Net Income and Adjusted EBITDA has been updated to account for the$24.7 million $5.0 million
"Hagerty delivered yet another excellent quarter of strong revenue growth and operational efficiencies as we execute on our multi-year initiatives to drive sustained underlying profit growth. Year-to-date total revenue jumped
"Given the strength of our results over the first nine months, we have increased our total revenue expectations for the year to 18
"Hurricane Helene was a devastating event for
THIRD QUARTER 2024 FINANCIAL HIGHLIGHTS
- Third quarter 2024 Total Revenue increased
17% year-over-year to$323.4 million 20% year-over-year to$908.3 million - Third quarter 2024 Written Premium increased
13% year-over-year to$287.6 million 16% year-over-year to$827.1 million - Third quarter 2024 Commission and fee revenue increased
13% year-over-year to$116.2 million 16% year-over-year to$333.8 million - Policies in Force Retention was
89% as of September 30, 2024 compared to88% in the prior year period and total insured vehicles increased8% year-over-year to 2.6 million
- Policies in Force Retention was
- Third quarter 2024 Loss Ratio was
60.0% compared to41.1% in the prior year period, and year-to-date 2024 Loss Ratio was47.7% compared to41.5% in the prior year period - Third quarter 2024 Earned Premium increased
19% year-over-year to$165.7 million 24% year-over-year to$474.9 million - Third quarter 2024 Membership, marketplace and other revenue increased
27% year-over-year to$41.5 million 20% year-over-year to$99.6 million - Third quarter 2024 Marketplace revenue increased
66% year-over-year to$21.6 million 54% year-over-year to$38.3 million - Third quarter 2024 Membership revenue increased
7% year-over-year to$14.8 million 7% year-over-year to$42.4 million - Hagerty Drivers Club (HDC) paid members increased
8% year-over-year to approximately 868,000 compared to 807,000
- Hagerty Drivers Club (HDC) paid members increased
- Third quarter 2024 Marketplace revenue increased
- Third quarter 2024 Operating Income of
$10.1 million $6.0 million $60.4 million $43.5 million - Third quarter 2024 Operating Income margin decreased by 270 bps compared to the prior year period, and year-to-date 2024 Operating Income margin expanded by 440 bps compared to the prior year period. Hurricane Helene negatively impacted year-to-date operating margins by 280 bps
- Cost containment and resource prioritization initiatives decreased general and administrative expenses by
6.0% in the third quarter 2024 and4.3% year-to-date. Cost discipline, combined with reduced accrued incentive compensation, resulted in a decline in salary and benefits of8.0% in the third quarter 2024 and an increase of0.5% year-to-date - Third quarter 2024 depreciation and amortization was
$9.2 million $10.8 million $29.8 million $34.9 million
- Third quarter 2024 Net Income of
$19.0 million $0.4 million $69.9 million $50.7 million $19.5 million - Third quarter 2024 Net Income includes a
$2.1 million $12.3 million $0.5 million $8.5 million - Completed warrant exchange offer and mandatory exchange in July 2024, whereby Hagerty issued 3.9 million shares of Class A Common Stock in exchange for 19.5 million warrants
- Third quarter 2024 Net Income includes a
- Third quarter 2024 Adjusted EBITDA (a non-GAAP measure) of
$24.2 million $13.2 million $104.6 million $26.2 million - Third quarter 2024 Basic and Diluted Earnings per Share was
$0.03 $0.09 - Third quarter 2024 Adjusted EPS (a non-GAAP measure) was
$0.05 $0.22
- Third quarter 2024 Adjusted EPS (a non-GAAP measure) was
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.
UPDATED 2024 OUTLOOK FOR GROWTH AND PROFITABILITY
2024 is on track to be another year of strong top-line growth and margin expansion for Hagerty as our performance-based culture powers great results for stakeholders. We remain focused on growing our Insurance, Membership and Marketplace businesses, positioning us to deliver sustained, compounding profit growth over the coming years, fund our purpose to save driving and fuel car culture for future generations.
- Key 2024 business priorities include:
- Further improve loyalty to drive renewals and referrals
- Enhance member experience in a cost effective and efficient way
- Build Hagerty Marketplace into the most trusted and preferred place to buy, sell, and finance collector cars
- Expand insurance offerings, particularly in the post-1980s collectible space
- For full year 2024, Hagerty updated its outlook:
- Written Premium growth of approximately
15% - Total Revenue growth of 18
-19% - Net Income growth of 131
-163% - Adjusted EBITDA growth of 25
-36% - Adjusted EBITDA and Net Income incorporate combined losses from Hurricane Helene and Hurricane Milton of
$29.7 million $23.5 million
- Adjusted EBITDA and Net Income incorporate combined losses from Hurricane Helene and Hurricane Milton of
- Written Premium growth of approximately
Prior 2024 Outlook 1 | Revised 2024 Outlook | ||||||||
in thousands | 2023 Results | Low End | High End | Low End | High End | ||||
Total Written Premium | |||||||||
Total Revenue | |||||||||
Net Income 2 | |||||||||
Adjusted EBITDA 3 | |||||||||
1 | Prior 2024 Outlook shared on the Hagerty's second quarter earnings call on August 6th, 2024. |
2 | Net income range assumes no impact from warrants. 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. |
3 | 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 third quarter 2024 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 forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical facts. These forward-looking statements reflect Hagerty's current expectations and projections with respect to its expected future business and financial performance, including, among other things: (i) expected operating results, such as revenue growth and increases in profit and earned premium; (ii) changes in the market for Hagerty's products and services, (iii) anticipated business objectives; and (iv) the strength of Hagerty's business model. These statements may be preceded by, followed by or include the words "aim," "anticipate," "believe," "estimate," "expect," "forecast," "future," "goal," "intend," "likely," "outlook," "plan," "potential," "project," "seek," "target," "can," "could," "may," "should," "would," "will," the negatives thereof and other words and terms of similar meaning.
A number of factors could cause actual results or outcomes to differ materially from those indicated by these forward-looking statements. These factors include, among other things, Hagerty's ability to: (i) compete effectively within its industry and attract and retain insurance policy holders and paid HDC subscribers; (ii) maintain key strategic relationships with its insurance distribution and underwriting carrier partners; (iii) prevent, monitor and detect fraudulent activity; (iv) manage risks associated with disruptions, interruptions, outages with its technology platforms or third-party services; (v) accelerate the adoption of Hagerty's membership products as well as any new insurance programs and products; (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; (viii) comply with the numerous laws and regulations applicable to Hagerty's business, including state, federal and foreign laws relating to insurance and rate increases, privacy, the internet and accounting matters; (ix) manage risks associated with being a controlled company; (x) successfully defend any litigation, government inquiries and investigations, and (xi) other risks and uncertainties indicated from time to time in documents filed or to be filed with the Securities and Exchange Commission (the "SEC") by Hagerty.
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 SEC. 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
More information can be found at newsroom.hagerty.com
Contact: Jay Koval, investor@hagerty.com
Hagerty Media Contact: Andrew Heller, aheller@hagerty.com
Category: Financial
Source: Hagerty
Hagerty, Inc. | ||||||||
Condensed Consolidated Statements of Operations (Unaudited) | ||||||||
Three months ended September 30, | ||||||||
2024 | 2023 | $ Change | % Change | |||||
REVENUE: | in thousands (except percentages and per share amounts) | |||||||
Commission and fee revenue | $ 116,161 | $ 103,173 | $ 12,988 | 12.6 % | ||||
Earned premium | 165,686 | 139,785 | 25,901 | 18.5 % | ||||
Membership, marketplace and other revenue | 41,527 | 32,616 | 8,911 | 27.3 % | ||||
Total revenue | 323,374 | 275,574 | 47,800 | 17.3 % | ||||
OPERATING EXPENSES: | ||||||||
Salaries and benefits | 47,192 | 51,318 | (4,126) | (8.0) % | ||||
Ceding commissions, net | 77,501 | 65,413 | 12,088 | 18.5 % | ||||
Losses and loss adjustment expenses | 99,430 | 57,485 | 41,945 | 73.0 % | ||||
Sales expense | 59,141 | 47,737 | 11,404 | 23.9 % | ||||
General and administrative | 20,837 | 22,166 | (1,329) | (6.0) % | ||||
Depreciation and amortization | 9,184 | 10,753 | (1,569) | (14.6) % | ||||
Restructuring, impairment and related charges, net | — | 473 | (473) | (100.0) % | ||||
Gains, losses, and impairments related to divestitures | — | 4,112 | (4,112) | (100.0) % | ||||
Total operating expenses | 313,285 | 259,457 | 53,828 | 20.7 % | ||||
OPERATING INCOME | 10,089 | 16,117 | (6,028) | (37.4) % | ||||
Gain (loss) related to warrant liabilities, net | (463) | 850 | (1,313) | (154.5) % | ||||
Interest and other income (expense), net | 8,359 | 6,260 | 2,099 | 33.5 % | ||||
INCOME BEFORE INCOME TAX EXPENSE | 17,985 | 23,227 | (5,242) | (22.6) % | ||||
Income tax benefit (expense) | 1,022 | (4,604) | 5,626 | (122.2) % | ||||
NET INCOME | 19,007 | 18,623 | 384 | 2.1 % | ||||
Net income attributable to non-controlling interest | (14,122) | (13,269) | (853) | 6.4 % | ||||
Accretion of Series A Convertible Preferred Stock | (1,875) | (1,838) | (37) | 2.0 % | ||||
NET INCOME ATTRIBUTABLE TO CLASS A | $ 3,010 | $ 3,516 | $ (506) | (14.4) % | ||||
Earnings per share of Class A Common Stock: | ||||||||
Basic | $ 0.03 | $ 0.04 | ||||||
Diluted | $ 0.03 | $ 0.04 | ||||||
Weighted average shares of Class A Common Stock outstanding: | ||||||||
Basic | 89,691 | 84,479 | ||||||
Diluted | 89,691 | 84,479 | ||||||
Hagerty, Inc. | ||||||||
Condensed Consolidated Statements of Operations (Unaudited) | ||||||||
Nine months ended September 30, | ||||||||
2024 | 2023 | $ Change | % Change | |||||
REVENUE: | in thousands (except percentages and per share amounts) | |||||||
Commission and fee revenue | $ 333,817 | $ 287,972 | $ 45,845 | 15.9 % | ||||
Earned premium | 474,917 | 384,498 | 90,419 | 23.5 % | ||||
Membership, marketplace and other revenue | 99,573 | 82,700 | 16,873 | 20.4 % | ||||
Total revenue | 908,307 | 755,170 | 153,137 | 20.3 % | ||||
OPERATING EXPENSES: | ||||||||
Salaries and benefits | 161,001 | 160,122 | 879 | 0.5 % | ||||
Ceding commissions, net | 221,877 | 181,188 | 40,689 | 22.5 % | ||||
Losses and loss adjustment expenses | 226,515 | 159,461 | 67,054 | 42.1 % | ||||
Sales expense | 146,791 | 124,791 | 22,000 | 17.6 % | ||||
General and administrative | 62,072 | 64,865 | (2,793) | (4.3) % | ||||
Depreciation and amortization | 29,758 | 34,893 | (5,135) | (14.7) % | ||||
Restructuring, impairment and related charges, net | — | 8,857 | (8,857) | (100.0) % | ||||
Gains, losses, and impairments related to divestitures | (87) | 4,112 | (4,199) | (102.1) % | ||||
Total operating expenses | 847,927 | 738,289 | 109,638 | 14.9 % | ||||
OPERATING INCOME | 60,380 | 16,881 | 43,499 | 257.7 % | ||||
Loss related to warrant liabilities, net | (8,544) | (1,419) | (7,125) | N/M | ||||
Interest and other income (expense), net | 27,945 | 15,677 | 12,268 | 78.3 % | ||||
INCOME BEFORE INCOME TAX EXPENSE | 79,781 | 31,139 | 48,642 | 156.2 % | ||||
Income tax expense | (9,918) | (12,002) | 2,084 | (17.4) % | ||||
NET INCOME | 69,863 | 19,137 | 50,726 | 265.1 % | ||||
Net income attributable to non-controlling interest | (55,951) | (13,477) | (42,474) | N/M | ||||
Accretion of Series A Convertible Preferred Stock | (5,552) | (1,838) | (3,714) | N/M | ||||
NET INCOME ATTRIBUTABLE TO CLASS A | $ 8,360 | $ 3,822 | $ 4,538 | 118.7 % | ||||
Earnings per share of Class A Common Stock: | ||||||||
Basic | $ 0.09 | $ 0.04 | ||||||
Diluted | $ 0.09 | $ 0.04 | ||||||
Weighted average shares of Class A Common Stock outstanding: | ||||||||
Basic | 86,689 | 84,042 | ||||||
Diluted | 87,601 | 84,042 | ||||||
_______________ |
N/M = Not meaningful |
Hagerty, Inc. | ||||
Condensed Consolidated Balance Sheets (Unaudited) | ||||
September 30, | December 31, | |||
2024 | 2023 | |||
ASSETS | in thousands (except share amounts) | |||
Current Assets: | ||||
Cash and cash equivalents | $ 147,120 | $ 108,326 | ||
Restricted cash and cash equivalents | 176,309 | 615,950 | ||
Investments | 61,827 | 10,946 | ||
Accounts receivable | 93,488 | 71,530 | ||
Premiums receivable | 201,992 | 137,525 | ||
Commissions receivable | 18,987 | 79,115 | ||
Notes receivable | 62,517 | 35,896 | ||
Deferred acquisition costs, net | 168,635 | 141,637 | ||
Other current assets | 77,995 | 49,293 | ||
Total current assets | 1,008,870 | 1,250,218 | ||
Investments | 471,965 | 5,526 | ||
Notes receivable | 11,667 | 17,018 | ||
Property and equipment, net | 18,674 | 20,764 | ||
Lease right-of-use assets | 45,916 | 50,515 | ||
Intangible assets, net | 92,035 | 91,924 | ||
Goodwill | 114,175 | 114,214 | ||
Other long-term assets | 54,710 | 38,033 | ||
TOTAL ASSETS | $ 1,818,012 | $ 1,588,212 | ||
LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY | ||||
Current Liabilities: | ||||
Accounts payable, accrued expenses and other current liabilities | $ 74,547 | $ 87,175 | ||
Losses payable and provision for unpaid losses and loss adjustment expenses | 258,836 | 198,508 | ||
Commissions payable | 94,005 | 108,739 | ||
Due to insurers | 118,480 | 79,815 | ||
Advanced premiums | 30,639 | 20,471 | ||
Unearned premiums | 385,619 | 317,275 | ||
Contract liabilities | 38,890 | 30,316 | ||
Total current liabilities | 1,001,016 | 842,299 | ||
Long-term lease liabilities | 44,866 | 50,459 | ||
Long-term debt, net | 122,867 | 130,680 | ||
Warrant liabilities | — | 34,018 | ||
Deferred tax liability | 21,008 | 15,937 | ||
Contract liabilities | 15,834 | 17,335 | ||
Other long-term liabilities | 4,199 | 4,139 | ||
TOTAL LIABILITIES | 1,209,790 | 1,094,867 | ||
Commitments and Contingencies | — | — | ||
TEMPORARY EQUITY 1 | ||||
Preferred stock, | 82,788 | 82,836 | ||
STOCKHOLDERS' EQUITY | ||||
Class A Common Stock, | 9 | 8 | ||
Class V Common Stock, | 25 | 25 | ||
Additional paid-in capital | 601,867 | 561,754 | ||
Accumulated earnings (deficit) | (455,083) | (468,995) | ||
Accumulated other comprehensive income (loss) | 1,447 | (88) | ||
Total stockholders' equity | 148,265 | 92,704 | ||
Non-controlling interest | 377,169 | 317,805 | ||
Total equity | 525,434 | 410,509 | ||
TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY | $ 1,818,012 | $ 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. | |||
Condensed Consolidated Statements of Cash Flows (Unaudited) | |||
Nine months ended September 30, | |||
2024 | 2023 | ||
OPERATING ACTIVITIES: | in thousands | ||
Net income | $ 69,863 | $ 19,137 | |
Adjustments to reconcile net income to net cash from operating activities: | |||
Loss related to warrant liabilities, net | 8,544 | 1,419 | |
Depreciation and amortization | 29,758 | 34,893 | |
Provision for deferred taxes | 2,772 | 4,973 | |
Impairment of operating lease right-of-use assets | — | 1,147 | |
Loss on disposals of equipment, software and other assets | 401 | 2,019 | |
Gains, losses, and impairments related to divestitures | (87) | 2,827 | |
Share-based compensation expense | 13,018 | 13,157 | |
Non-cash lease expense | 5,920 | 9,472 | |
Other | (354) | 708 | |
Changes in operating assets and liabilities: | |||
Accounts, premiums and commissions receivable | (28,062) | (107,001) | |
Deferred acquisition costs, net | (26,998) | (47,936) | |
Losses payable and provision for unpaid losses and loss adjustment expenses | 60,328 | 23,527 | |
Commissions payable | (14,734) | 34,582 | |
Due to insurers | 38,586 | 45,322 | |
Advanced premiums | 10,166 | 11,800 | |
Unearned premiums | 68,344 | 100,439 | |
Operating lease liabilities | (6,781) | (9,018) | |
Other assets and liabilities, net | (41,042) | (9,246) | |
Net Cash Provided by Operating Activities | 189,642 | 132,221 | |
INVESTING ACTIVITIES: | |||
Capital expenditures | (17,278) | (21,556) | |
Acquisitions, net of cash acquired, and other investments | (23,865) | (8,690) | |
Issuance of notes receivable | (55,030) | (11,405) | |
Collection of notes receivable | 32,099 | 10,252 | |
Purchases of fixed maturity securities | (565,838) | (7,277) | |
Proceeds from sales of fixed maturity securities | 53,253 | — | |
Proceeds from maturities of fixed maturity securities | 23,766 | 4,128 | |
Purchases of equity securities | (10,602) | — | |
Other investing activities | 1,005 | 86 | |
Net Cash Used in Investing Activities | (562,490) | (34,462) | |
FINANCING ACTIVITIES: | |||
Payments on long-term debt | (63,202) | (132,850) | |
Proceeds from long-term debt, net of issuance costs | 52,718 | 100,345 | |
Proceeds from issuance of Series A Convertible Preferred Stock, net of issuance costs | — | 79,159 | |
Contribution from non-controlling interest | — | 779 | |
Distributions paid to non-controlling interest unit holders | (5,320) | — | |
Payment of Series A Convertible Preferred Stock dividends | (5,600) | — | |
Funding of employee tax obligations upon vesting of share-based payments | (5,713) | — | |
Proceeds from issuance of Class A Common Stock under employee stock purchase plan | — | 906 | |
Net Cash Provided by (Used in) Financing Activities | (27,117) | 48,339 | |
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents | (882) | 286 | |
Change in cash and cash equivalents and restricted cash and cash equivalents | (400,847) | 146,384 | |
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 | $ 323,429 | $ 685,575 | |
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
Three months ended | Nine months ended | ||||||
2024 | 2023 | 2024 | 2023 | ||||
Operational Metrics | |||||||
Total Written Premium (in thousands) | $ 287,609 | $ 255,569 | $ 827,068 | $ 714,314 | |||
Loss Ratio | 60.0 % | 41.1 % | 47.7 % | 41.5 % | |||
New Business Count — Insurance | 77,418 | 69,691 | 225,753 | 201,593 | |||
GAAP Financial Measures | |||||||
Total Revenue (in thousands) | $ 323,374 | $ 275,574 | $ 908,307 | $ 755,170 | |||
Operating Income (in thousands) | $ 10,089 | $ 16,117 | $ 60,380 | $ 16,881 | |||
Net Income (in thousands) | $ 19,007 | $ 18,623 | $ 69,863 | $ 19,137 | |||
Basic Earnings Per Share | $ 0.03 | $ 0.04 | $ 0.09 | $ 0.04 | |||
Diluted Earnings Per Share | $ 0.03 | $ 0.04 | $ 0.09 | $ 0.04 | |||
Non-GAAP Financial Measures | |||||||
Adjusted EBITDA (in thousands) | $ 24,165 | $ 37,377 | $ 104,605 | $ 78,449 | |||
Adjusted Earnings Per Share | $ 0.05 | $ 0.05 | $ 0.22 | $ 0.05 | |||
September 30, | December 31, | ||||||
2024 | 2023 | ||||||
Operational Metrics | |||||||
Policies in Force | 1,494,510 | 1,401,037 | |||||
Policies in Force Retention | 88.8 % | 88.7 % | |||||
Vehicles in Force | 2,553,589 | 2,378,883 | |||||
HDC Paid Member Count | 867,596 | 815,007 | |||||
Net Promoter Score (NPS) | 82 | 82 | |||||
Non-GAAP Financial Measures
Adjusted EBITDA
We define Adjusted EBITDA as consolidated Net income, excluding interest and other income (expense), net, income tax (expense) benefit, and depreciation and amortization, further adjusted to exclude (i) gains and losses related to our warrant liabilities; (ii) share-based compensation expense; and when applicable, (iii) restructuring, impairment and related charges, net; (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. Management uses 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 | Nine months ended | |||||||
2024 | 2023 | 2024 | 2023 | |||||
in thousands | ||||||||
Net income | $ 19,007 | $ 18,623 | $ 69,863 | $ 19,137 | ||||
Interest and other (income) expense 1 | (8,359) | (6,260) | (27,945) | (15,677) | ||||
Income tax (benefit) expense | (1,022) | 4,604 | 9,918 | 12,002 | ||||
Depreciation and amortization | 9,184 | 10,753 | 29,758 | 34,893 | ||||
EBITDA | 18,810 | 27,720 | 81,594 | 50,355 | ||||
Restructuring, impairment and related charges, net | — | 473 | — | 8,857 | ||||
(Gain) loss related to warrant liabilities, net | 463 | (850) | 8,544 | 1,419 | ||||
Share-based compensation expense | 4,092 | 4,935 | 13,018 | 12,869 | ||||
Gains, losses, and impairments related to divestitures | — | 4,112 | (87) | 4,112 | ||||
Other unusual items 2 | 800 | 987 | 1,536 | 837 | ||||
Adjusted EBITDA | $ 24,165 | $ 37,377 | $ 104,605 | $ 78,449 | ||||
____________________ | |
1 | Excludes interest expense related to the BAC Credit Facility, which is recorded within "Sales expense" on the Condensed Consolidated Statements of Operations. |
2 | Other unusual items includes professional fees associated with the warrant exchange, as well as certain material severance expenses for the three and nine months ended September 30, 2024 and a net legal settlement accrual for the three and nine months ended September 30, 2023. |
The following table reconciles Adjusted EBITDA for the year ended December 31, 2024 Outlook to the most directly comparable GAAP measure, which is Net income:
2024 Low | 2024 High | |||
in thousands | ||||
Net income | $ 65,000 | $ 74,000 | ||
Interest and other (income) expense 1 | (35,000) | (35,000) | ||
Income tax expense | 14,000 | 15,000 | ||
Depreciation and amortization | 40,000 | 40,000 | ||
(Gain) loss related to warrant liabilities, net | 8,500 | 8,500 | ||
Share-based compensation expense | 17,500 | 17,500 | ||
Adjusted EBITDA | $ 110,000 | $ 120,000 | ||
____________________ | |
1 | Excludes interest expense related to the BAC Credit Facility, which is recorded within "Sales expense" on the Condensed Consolidated Statements of Operations. |
Adjusted EPS
We define Adjusted Earnings Per Share ("Adjusted EPS") as consolidated Net income, less gains and losses related to our warrant liabilities, 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 basis.
Management uses Adjusted EPS:
- as a measurement of operating performance of our business on a fully consolidated 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 September 30, | Nine months ended September 30, | |||||||
2024 | 2023 | 2024 | 2023 | |||||
in thousands (except per share amounts) | ||||||||
Numerator: | ||||||||
Net income available to Class A Common Stockholders 1 | $ 2,798 | $ 3,255 | $ 7,753 | $ 3,712 | ||||
Accretion of Series A Convertible Preferred Stock | 1,875 | 1,838 | 5,552 | 1,838 | ||||
Undistributed earnings allocated to Series A Convertible Preferred Stock | 212 | 261 | 607 | 110 | ||||
Net income attributable to non-controlling interest | 14,122 | 13,269 | 55,951 | 13,477 | ||||
Consolidated net income | 19,007 | 18,623 | 69,863 | 19,137 | ||||
(Gain) loss related to warrant liabilities, net | 463 | (850) | 8,544 | 1,419 | ||||
Adjusted consolidated net income 2 | $ 19,470 | $ 17,773 | $ 78,407 | $ 20,556 | ||||
Denominator: | ||||||||
Weighted average shares of Class A Common Stock outstanding 1 | 89,691 | 84,479 | 86,689 | 84,042 | ||||
Total potentially dilutive securities outstanding: | ||||||||
Non-controlling interest 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 | 8,076 | 8,490 | 8,076 | 8,490 | ||||
Total warrants outstanding | — | 19,484 | — | 19,484 | ||||
Potentially dilutive shares outstanding | 270,039 | 290,258 | 270,039 | 290,258 | ||||
Fully dilutive shares outstanding 2 | 359,730 | 374,737 | 356,728 | 374,300 | ||||
Basic EPS 1 | $ 0.03 | $ 0.04 | $ 0.09 | $ 0.04 | ||||
Adjusted EPS 2 | $ 0.05 | $ 0.05 | $ 0.22 | $ 0.05 | ||||
____________________ | |
1 | Numerator and Denominator of the GAAP measure Basic EPS |
2 | Numerator and Denominator of the non-GAAP measure Adjusted EPS |
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SOURCE Hagerty
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