Financial Data and Key Metrics Changes - Ambac generated a net loss from continuing operations of $16 million or $0.58 per share in Q1 2025, compared to a loss of $4 million or $0.09 per share in Q1 2024 [10] - Total revenues from continuing operations increased by 27% to $63 million in Q1 2025, driven primarily by the acquisition of Beat [11] - Adjusted EBITDA from continuing operations was a loss of $1 million, compared to a slight profit in Q1 2024 [11] Business Line Data and Key Metrics Changes - The insurance distribution and specialty program business produced $318 million of premium, up 70%, and generated $63 million of revenue, up 27% from the prior period last year [5] - Serata generated over $230 million of premium for the quarter, up 156% [5] - Everspan's gross premiums written were approximately $87 million, down 10% from the prior year, while the loss ratio improved nearly 9% [8] Market Data and Key Metrics Changes - Organic growth, excluding the Beat acquisition, contracted by 2%, primarily due to a pullback in ESL and short-term medical business [6] - If FEED had been included in the organic growth computation, consolidated organic growth would have been approximately 17% across all lines [6] Company Strategy and Development Direction - The company aims to maintain profitable underwriting results and believes market conditions are stabilizing for growth [7] - Focus areas for enhancing organic growth include risk capacity enhancement, product expansion, and distribution expansion [7] - The company is building its business for the long term, targeting $80 million to $90 million of adjusted EBITDA for common shareholders by 2028 [16][17] Management's Comments on Operating Environment and Future Outlook - Management noted that the competitive environment is growing, but the company's unique business model allows it to attract top talent [24] - The company sees significant opportunities in the specialty P&C business and is focused on scaling its platform [16] Other Important Information - The OCI approval process for the sale of the legacy business is ongoing, which is expected to transform the company into a pure play specialty P&C insurance business [9] Q&A Session Summary Question: Importance of staffing for MGA ramp-up and market conditions for recruiting - Management emphasized that staffing is crucial for individual MGAs and that there are significant opportunities for staffing growth due to the attractiveness of the business model [19][20] Question: Update on property versus casualty mix and growth outlook - Management indicated that liability business will be the primary source of growth, while property remains critical, with a focus on diversifying the property segments [21][23] Question: Comments on the competitive environment - Management acknowledged growing competition but believes their differentiated model allows them to attract top talent and maintain a competitive edge [24]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 1-10777 AMBAC FINANCIAL GROUP, INC. (Exact name of Registrant as specified in its charter) (State of incorporation) Delaware 13-3621676 (I.R.S. employer identification no.) One Wo ...

```markdown [Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) [CEO Commentary & Business Outlook](index=1&type=section&id=CEO%20Commentary%20%26%20Business%20Outlook) CEO Claude LeBlanc highlighted a strong start for the P&C business in Q1 2025, with significant premium and revenue growth, partly due to the Beat acquisition, emphasizing a diversified portfolio for long-term growth and resilience, and positive early indications from new MGAs, with the Legacy business sale nearing completion awaiting Wisconsin regulatory approval - P&C business premium production up **70%** to **$318 million** and revenue up **27%** to **$63 million** in Q1 2025, bolstered by Beat acquisition[3](index=3&type=chunk) - Diversified portfolio built for long-term growth and market cyclicality, with new MGAs showing early profitability trends[3](index=3&type=chunk) - Completed pre-closing conditions for Legacy business sale, awaiting Wisconsin regulatory approval[3](index=3&type=chunk) [First Quarter 2025 Key Highlights](index=1&type=section&id=First%20Quarter%202025%20Key%20Highlights) Total revenue from continuing P&C operations increased 27% to $63 million, and total P&C premium production rose 70% to $318 million, with the Insurance Distribution segment seeing revenue grow 129% to $41 million and Adjusted EBITDA increase 136% to $12 million, while the Specialty P&C Insurance segment improved its loss ratio by 880 bps to 66.9%, though its combined ratio increased | Metric | Q1 2025 | Q1 2024 | % Change | | :----------------------------------- | :------ | :------ | :------- | | Total revenue from continuing P&C operations | $63 million | N/A | 27% | | Total P&C premium production | $318 million | N/A | 70% | | **Insurance Distribution (Cirrata):** | | | | | Total revenue | $41 million | N/A | 129% | | Net loss to Shareholders | $(2) million | N/A | (145)% | | Adjusted EBITDA | $12 million | N/A | 136% | | Adjusted EBITDA to Shareholders | $7 million | N/A | 69% | | **Specialty P&C Insurance (Everspan):** | | | | | Loss ratio | 66.9% | N/A | -880 bps | | Combined ratio | 102.1% | N/A | 370 bps | | Net income to Shareholders | >$1 million | N/A | down slightly | | Adjusted EBITDA to Shareholders | <$2 million | N/A | down slightly | [Consolidated Financial Performance](index=2&type=section&id=Consolidated%20Financial%20Performance) [Summary of Continuing Operations](index=2&type=section&id=Summary%20of%20Continuing%20Operations) Total revenue from continuing operations increased 27% to $63 million, primarily due to the Beat Capital acquisition, offsetting reductions at Everspan, while total expenses rose 48% to $78 million, driven by G&A from Beat, transaction-related fees, and intangible amortization, resulting in a significant net loss from continuing operations to shareholders of $(16) million and Adjusted EBITDA to shareholders of $(1) million, impacted by higher holding company expenses despite Cirrata's growth | Metric (in thousands) | Q1 2025 | Q1 2024 | % Change | | :------------------------------------------ | :------ | :------ | :------- | | Total revenues from continuing operations | $62,756 | $49,551 | 27% | | Total expenses from continuing operations | $77,863 | $52,790 | 47% | | Pretax income (loss) from continuing operations | $(15,107) | $(3,239) | 366% | | Net income (loss) from continuing operations attributable to Ambac shareholders | $(16,144) | $(4,070) | 297% | | Adjusted EBITDA to shareholders | $(1,287) | $384 | (435)% | - Revenue increase primarily due to Beat Capital acquisition, offsetting Everspan's managed reduction[6](index=6&type=chunk) - Expense increase driven by G&A from Beat, professional fees, and intangible amortization/interest related to Beat acquisition[7](index=7&type=chunk) [Key Financial Metrics (GAAP & Non-GAAP)](index=2&type=section&id=Key%20Financial%20Metrics%20(GAAP%20%26%20Non-GAAP)) Ambac reported a net loss attributable to shareholders of $(46) million, a significant decrease from a $20 million net income in Q1 2024, with diluted EPS at $(1.22), down from $0.44, and adjusted net loss attributable to shareholders at $(6) million, compared to $(0.3) million in the prior year | Metric (in thousands, except per share) | Q1 2025 | Q1 2024 | % Change | | :------------------------------------------ | :------ | :------ | :------- | | Net income (loss) attributable to Ambac shareholders | $(46,391) | $20,070 | (331)% | | Net income (loss) attributable to common stockholders per diluted share | $(1.22) | $0.44 | (377)% | | Adjusted net income (loss) attributable to shareholders | $(6,037) | $(329) | 1735% | | Adjusted net income (loss) to shareholders per diluted share | $(0.13) | $(0.01) | NM | [Earnings Call Information](index=3&type=section&id=Earnings%20Call%20Information) [Webcast and Replay Details](index=3&type=section&id=Webcast%20and%20Replay%20Details) Ambac will host an earnings call on May 13, 2025, at 8:30 AM ET to discuss Q1 2025 results, with a live audio webcast available on Ambac's investor relations website and a replay accessible until May 27, 2025 - Earnings call on **May 13, 2025**, at **8:30 AM ET**, accessible via webcast on Ambac's investor relations website[11](index=11&type=chunk) - Replay available until **May 27, 2025**, via phone or archived webcast[12](index=12&type=chunk) [Segment Performance Analysis](index=3&type=section&id=Segment%20Performance%20Analysis) [Insurance Distribution Segment (Cirrata)](index=3&type=section&id=Insurance%20Distribution%20Segment%20(Cirrata)) The Insurance Distribution segment experienced substantial growth, with total revenues increasing 129% to $41 million, Adjusted EBITDA to shareholders growing 69% to $7.1 million, and Adjusted EBITDA increasing 136% to $12.1 million, despite reporting a pretax loss to shareholders of $(3.9) million, a significant decline from a $3.3 million pretax income in the prior year, and negative organic growth of (2.1)% | Metric (in thousands) | Q1 2025 | Q1 2024 | % Change | | :-------------------------------- | :------ | :------ | :------- | | Total revenues | $40,998 | $17,865 | 129% | | Pretax income (loss) to shareholders | $(3,897) | $3,270 | (219)% | | Adjusted EBITDA to shareholders | $7,112 | $4,202 | 69% | | Adjusted EBITDA | $12,112 | $5,122 | 136% | | Organic Growth | (2.1)% | 7.7% | N/A | [Specialty Property & Casualty Insurance Segment (Everspan)](index=3&type=section&id=Specialty%20Property%20%26%20Casualty%20Insurance%20Segment%20(Everspan)) The Specialty P&C Insurance segment saw a decrease in gross premiums written by 10% to $86.9 million and net premiums earned by 39% to $15.7 million, with total revenue declining 28% to $21.2 million, yet the loss ratio improved by 880 bps to 66.9%, though the expense ratio increased by 1250 bps, leading to a combined ratio of 102.1% (up 370 bps), and net income from continuing operations decreased 17% to $1.4 million | Metric (in thousands) | Q1 2025 | Q1 2024 | % Change | | :-------------------------------- | :------ | :------ | :------- | | Gross premium written | $86,915 | $96,422 | (10)% | | Net premiums earned | $15,678 | $25,579 | (39)% | | Total revenue | $21,171 | $29,542 | (28)% | | Net income (loss) from continuing operations | $1,425 | $1,715 | (17)% | | Loss Ratio | 66.9% | 75.7% | -880 bps | | Expense Ratio | 35.2% | 22.7% | 1250 bps | | Combined Ratio | 102.1% | 98.4% | 370 bps | [AFG Corporate (Holding Company)](index=3&type=section&id=AFG%20Corporate%20(Holding%20Company)) As of March 31, 2025, AFG Corporate had net assets of $104 million, including $54 million in cash and liquid securities and $29 million in other investments | Metric | March 31, 2025 | | :-------------------------------- | :------------- | | Net assets | $104 million | | Cash and liquid securities | $54 million | | Other investments | $29 million | [Capital & Equity](index=4&type=section&id=Capital%20%26%20Equity) [Capital Activity](index=4&type=section&id=Capital%20Activity) Ambac repurchased 264,791 shares at an average price of $11.79 per share during Q1 2025, with approximately $35.2 million remaining on the current repurchase authorization - Repurchased **264,791 shares** at an average price of **$11.79 per share** in Q1 2025[18](index=18&type=chunk) - Approximately **$35.2 million** remains on the current share repurchase authorization[18](index=18&type=chunk) [Stockholders' Equity](index=4&type=section&id=Stockholders'%20Equity) Stockholders' equity decreased slightly to $852 million ($18.36 per share) at March 31, 2025, from $857 million ($18.43 per share) at December 31, 2024, with the net loss attributable to common shareholders partially offset by net unrealized investment gains and foreign exchange translation gains | Metric | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Stockholders' equity | $852 million | $857 million | | Stockholders' equity per share | $18.36 | $18.43 | - Net loss attributable to common shareholders of **$(46) million** was offset by **$19 million** in net unrealized investment gains and **$36 million** in foreign exchange translation gains[19](index=19&type=chunk) [Earnings Per Share Calculation](index=4&type=section&id=Earnings%20Per%20Share%20Calculation) The diluted EPS calculation for Q1 2025 shows a diluted net loss per share of $(1.22), a significant decline from $0.44 in Q1 2024, including adjustments for redeemable noncontrolling interests | Metric (in thousands, except share data) | Q1 2025 | Q1 2024 | | :------------------------------------------ | :------ | :------ | | Net income (loss) from continuing operations attributable to shareholders | $(16,144) | $(4,070) | | Adjustment for Redeemable NCI | $(11,183) | $53 | | Numerator of diluted EPS (Continuing Ops) | $(27,327) | $(4,017) | | Per Share — Diluted (Continuing Ops) | $(0.58) | $(0.09) | | Net income (loss) attributable to Ambac shareholders | $(46,391) | $20,070 | | Numerator of diluted EPS (Total) | $(57,574) | $20,123 | | Per Share — Diluted (Total) | $(1.22) | $0.44 | | Weighted-average diluted shares outstanding (in millions) | 47,313 | 45,827 | [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statements of Income (Loss)](index=5&type=section&id=Consolidated%20Statements%20of%20Income%20(Loss)) The consolidated income statement shows total revenues of $62.8 million for Q1 2025, up from $49.6 million in Q1 2024, with total expenses significantly increasing to $77.9 million from $52.8 million, resulting in a pretax loss from continuing operations of $(15.1) million and a net loss attributable to Ambac shareholders of $(46.4) million, compared to a net income of $20.1 million in the prior year | Metric (in thousands) | Q1 2025 | Q1 2024 | | :-------------------------------- | :------ | :------ | | Net premiums earned | $15,678 | $25,579 | | Commission income | $36,771 | $17,729 | | Total revenues and other income | $62,756 | $49,551 | | Losses and loss adjustment expenses | $10,496 | $19,355 | | General and administrative expenses | $38,531 | $17,575 | | Intangible amortization and depreciation | $9,176 | $1,614 | | Interest expense | $5,454 | — | | Total expenses | $77,863 | $52,790 | | Pretax income (loss) from continuing operations | $(15,107) | $(3,239) | | Net income (loss) from discontinued operations | $(30,247) | $24,140 | | Net income (loss) attributable to Ambac shareholders | $(46,391) | $20,070 | [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were $8.25 billion, up from $8.06 billion at December 31, 2024, with assets held-for-sale increasing to $6.39 billion, and total liabilities also increasing to $7.04 billion from $6.86 billion, with liabilities held-for-sale remaining constant at $5.89 billion, while stockholders' equity slightly decreased to $852 million | Metric (in thousands) | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | Total investments | $291,393 | $312,915 | | Cash and cash equivalents | $51,660 | $47,275 | | Intangible assets, less accumulated amortization | $345,061 | $344,775 | | Goodwill | $429,314 | $418,234 | | Assets held-for-sale | $6,392,004 | $6,267,200 | | Total assets | $8,253,282 | $8,058,378 | | Unearned premiums | $181,387 | $182,446 | | Loss and loss adjustment expense reserves | $373,105 | $349,062 | | Liabilities held-for-sale | $5,887,685 | $5,887,685 | | Total liabilities | $7,041,817 | $6,862,857 | | Total Ambac Financial Group, Inc. stockholders' equity | $852,221 | $856,906 | [Non-GAAP Financial Measures & Reconciliations](index=7&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) [Non-GAAP Definitions](index=7&type=section&id=Non-GAAP%20Definitions) This section defines key non-GAAP financial measures used by Ambac, including Organic Revenue Growth & Rate (Insurance Distribution Only), Total Specialty P&C Insurance Production, EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin, and Adjusted Net Income and Adjusted Net Income Margin, presented to provide greater transparency into business performance by excluding certain non-core or non-recurring items - Non-GAAP measures like **EBITDA**, **Adjusted EBITDA**, **Adjusted Net Income**, and **Organic Revenue Growth** are used to provide greater transparency and comparability of underlying business performance[25](index=25&type=chunk)[26](index=26&type=chunk) - **Organic Revenue Growth** excludes the first twelve months of acquisition-generated commissions/fees, divestitures, contingent commissions, and foreign exchange impacts[27](index=27&type=chunk)[28](index=28&type=chunk) - **Adjusted EBITDA** excludes interest, taxes, depreciation, amortization, fair value changes of contingent consideration, share-based compensation, acquisition/integration expenses, severance, and other exceptional items[31](index=31&type=chunk) [Segment-wise Non-GAAP Reconciliations](index=8&type=section&id=Segment-wise%20Non-GAAP%20Reconciliations) This section provides detailed reconciliations of GAAP to non-GAAP financial measures for each segment (Specialty P&C Insurance, Insurance Distribution, and Corporate & Other) for Q1 2025 and Q1 2024, covering metrics like Pretax income, Net income, EBITDA, and Adjusted EBITDA [Three Months Ended March 31, 2025](index=8&type=section&id=Three%20Months%20Ended%20March%2031%2C%202025) For Q1 2025, Specialty P&C Insurance reported $1.4 million in net income and $1.6 million in Adjusted EBITDA to shareholders, while Insurance Distribution had a net loss of $(1.7) million but a strong Adjusted EBITDA to shareholders of $7.1 million, and Corporate & Other reported a significant net loss of $(14.2) million and Adjusted EBITDA to shareholders of $(10.0) million | Metric (in thousands) | Specialty P&C Insurance | Insurance Distribution | Corporate & Other | Consolidated | | :------------------------------------------ | :---------------------- | :--------------------- | :---------------- | :----------- | | Net income (loss) from Continuing Operations | $1,425 | $(1,743) | $(14,172) | $(14,490) | | Adjusted EBITDA from Continuing Operations attributable to Ambac shareholders | $1,589 | $7,112 | $(9,988) | $(1,287) | | Adjusted net income (loss) attributable to common shareholders | $1,511 | $2,549 | $(10,097) | $(6,037) | [Three Months Ended March 31, 2024](index=9&type=section&id=Three%20Months%20Ended%20March%2031%2C%202024) In Q1 2024, Specialty P&C Insurance reported $1.7 million in net income and $1.9 million in Adjusted EBITDA to shareholders, while Insurance Distribution had $3.9 million in net income and $4.2 million in Adjusted EBITDA to shareholders, and Corporate & Other reported a net loss of $(8.9) million and Adjusted EBITDA to shareholders of $(5.7) million | Metric (in thousands) | Specialty P&C Insurance | Insurance Distribution | Corporate & Other | Consolidated | | :------------------------------------------ | :---------------------- | :--------------------- | :---------------- | :----------- | | Net income (loss) from Continuing Operations | $1,715 | $3,855 | $(8,938) | $(3,369) | | Adjusted EBITDA from Continuing Operations attributable to Ambac shareholders | $1,872 | $4,202 | $(5,689) | $384 | | Adjusted net income (loss) attributable to common shareholders | $1,766 | $4,001 | $(6,096) | $(329) | [Organic Growth & Specialty P&C Production](index=10&type=section&id=Organic%20Growth%20%26%20Specialty%20P%26C%20Production) Total Insurance Distribution revenue grew 129% to $41 million, but organic revenue growth was negative (2.1)% for Q1 2025, while total Specialty P&C Insurance Production increased 70% to $317.5 million, driven by a 156% increase in Insurance Distribution Premiums Placed, despite a 10% decrease in Specialty P&C Insurance Gross Premiums Written | Metric (in thousands) | Q1 2025 | Q1 2024 | % Growth | | :------------------------------------------ | :------ | :------ | :------- | | Total Insurance Distribution revenue | $40,998 | $17,865 | 129% | | Total Organic Revenue | $16,336 | $16,683 | (2.1)% | | Metric (in thousands) | Q1 2025 | Q1 2024 | % Change | | :------------------------------------------ | :------ | :------ | :------- | | Specialty Property & Casualty Insurance Gross Premiums Written | $86,915 | $96,422 | (10)% | | Insurance Distribution Premiums Placed | $230,606 | $90,096 | 156% | | Specialty P&C Insurance Production | $317,521 | $186,518 | 70% | [Company Information & Disclosures](index=10&type=section&id=Company%20Information%20%26%20Disclosures) [About Ambac](index=10&type=section&id=About%20Ambac) Ambac Financial Group, Inc. is an insurance holding company focused on a growing specialty P&C distribution and underwriting platform, also managing a legacy financial guarantee business in run-off pending sale, with its common stock trading on the NYSE under "AMBC" - Ambac is an insurance holding company with a core business in **specialty P&C distribution and underwriting**[40](index=40&type=chunk) - Legacy financial guarantee business is in run-off and pending sale to **Oaktree Capital Management**[40](index=40&type=chunk) [Stock Transfer Restrictions](index=10&type=section&id=Stock%20Transfer%20Restrictions) Ambac's Certificate of Incorporation includes substantial restrictions on common stock transfers, prohibiting and voiding transfers that would result in any person or group holding 5% or more of Ambac's common stock, or increasing an existing 5% holder's interest, subject to limited exceptions - Ambac's common stock transfers are restricted to prevent any person or group from acquiring or increasing a **5% or more** ownership interest, with limited exceptions[41](index=41&type=chunk) [Forward-Looking Statements & Risk Factors](index=10&type=section&id=Forward-Looking%20Statements%20%26%20Risk%20Factors) The report contains forward-looking statements regarding future performance, which are subject to inherent uncertainties and risks, cautioning readers that actual results may differ materially due to various factors, including those discussed under "Risk Factors" in SEC filings, such as volatility in stock price, failure to consummate the Legacy business sale, inadequacy of loss reserves, credit risk, substantial indebtedness, and greater than expected underwriting losses - Forward-looking statements are not guarantees of future performance and are subject to inherent **uncertainties and risks**[42](index=42&type=chunk) - Important factors that could cause actual results to differ materially include **failure to consummate the Legacy business sale**, **disruptions from the sale**, **uncertainty in achieving value from specialty P&C and insurance distribution**, **inadequacy of loss reserves**, **credit risk**, **substantial indebtedness**, and **greater than expected underwriting losses**[43](index=43&type=chunk) ```

Core Viewpoint - Ambac Financial Group, Inc. (NYSE: AMBC) is currently trading at a substantial undervalue following a reported loss from the disposal of its legacy financial guarantee business, with expectations of receiving close to $420 million from the sale of these business units [1]. Company Summary - The company has reported a loss due to the disposal of its legacy financial guarantee business [1]. - If the company successfully sells these business units, it is projected to receive approximately $420 million [1]. Investment Strategy - The analysis emphasizes a focus on value investments, particularly in companies trading at around 10 times earnings and offering dividend yields [1]. - The research primarily targets small-cap and mid-cap companies across various regions including the United States, Canada, South America, the UK, France, and Germany [1].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2024 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 1-10777 AMBAC FINANCIAL GROUP, INC. (Exact name of Registrant as specified in its charter) | Delaware | | 13-3621676 | | --- | --- | --- | | (State of incorporation) ...

Group 1 - Ambac Financial Group (NYSE: AMBC) has shown material improvements that are expected to enhance its balance sheet and reduce risk [1] - The investment approach focuses on long-term ownership rather than short-term price predictions, emphasizing valuations over target prices [1] - The analyst has shifted from a broader range of ratings to a simplified approach of "Buy or Don't Buy," with future articles likely to reflect either Buy or Hold recommendations [1] Group 2 - The analyst has no current stock or derivative positions in any mentioned companies and does not plan to initiate any within the next 72 hours [2] - The article expresses the analyst's personal opinions and is not influenced by any business relationships with the companies discussed [2]

Financial Data and Key Metrics Changes - Ambac reported a consolidated net loss of $548 million or $10.23 per diluted share for Q4 2024, compared to a net loss of $16 million or $0.24 per diluted share in Q4 2023 [28] - The consolidated adjusted net loss was $6 million or $0.12 per diluted share for Q4 2024, compared to adjusted net income of $4 million or $0.10 per diluted share in Q4 2023 [30] - The company recorded a $570 million loss on the sale of its legacy financial guarantee business, now reported as discontinued operations [23] Business Line Data and Key Metrics Changes - The P&C business generated nearly $900 million in premiums, up 74% from 2023, and produced $236 million in revenue, an increase of 89% from the prior year [7] - Cirrata generated nearly $100 million in revenue for 2024, up 93%, and earned approximately $20 million of adjusted EBITDA [15] - Everspan's gross premium written grew to over $380 million, up 40% from the prior year, with a combined ratio of 101.6%, improving nearly 500 basis points over 2023 [20][39] Market Data and Key Metrics Changes - The overall E&S market continues to perform well, with high-single to double-digit rate increases in U.S. casualty lines [12] - The property market showed some softening in Q4 2024, but terms and conditions have held [13] - Professional and financial lines are experiencing softness, particularly in large account and public market D&O [14] Company Strategy and Development Direction - The company is focused on the future growth of its Specialty P&C business and delivering value for shareholders [11] - Ambac aims to achieve strong organic growth and generate $80 million to $90 million of adjusted EBITDA to common shareholders by 2028 [44] - The acquisition of Beat is expected to deliver strong organic growth and enhance the distribution platform [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about stabilization in the Employer Stop Loss and short-term medical segments, despite current challenges [50][51] - The focus remains on profitability for Everspan, with effective loss ratios in the mid-60s aligning with long-term goals [55] - Management is excited about the prospects of Ambac's future and the unique value proposition it offers in the specialty MGA space [43] Other Important Information - The company has committed third-party capacity of more than $1.5 billion for 2025, with over 60% of that support being long-term [19] - The adjusted EBITDA margin for 2024 was 20%, with expectations for meaningful advancements in the future [15][16] Q&A Session Summary Question: Distribution business performance and outlook - Management noted softening in Employer Stop Loss and short-term medical segments, with expectations for stabilization in the near future [50][51] Question: Sustainability of Everspan's combined ratio - Management indicated that while there are variabilities, the performance aligns with long-term objectives, aiming for effective loss ratios in the mid-60s [55]

Financial Data and Key Metrics Changes - Ambac reported a net loss of $548 million or $10.23 per diluted share for Q4 2024, compared to a net loss of $16 million or $0.24 per diluted share in Q4 2023 [28] - Consolidated adjusted net loss was $6 million or $0.12 per diluted share for Q4 2024, compared to adjusted net income of $4 million or $0.10 per diluted share in Q4 2023 [30] - The company recorded a $570 million loss on the sale of its legacy financial guarantee business [23] Business Line Data and Key Metrics Changes - The P&C business generated nearly $900 million in premiums, up 74% from 2023, and produced $236 million in revenue, up 89% from the prior year [7] - Cirrata generated nearly $100 million in revenue for 2024, up 93%, and earned approximately $20 million of adjusted EBITDA [15] - Everspan's gross premium written grew to over $380 million, up 40% from the prior year, with a combined ratio of 101.6%, improving nearly 500 basis points over 2023 [20][21] Market Data and Key Metrics Changes - The overall E&S market continues to perform well, with high-single to double-digit rate increases in U.S. casualty lines [12] - The property market showed some softening in Q4, but terms and conditions have held [13] - Professional and financial lines are experiencing softness, particularly in large account and public market D&O [14] Company Strategy and Development Direction - The company is focused on the future growth of its Specialty P&C business and delivering value for shareholders [11] - Ambac aims to achieve strong organic growth and generate $80 million to $90 million of adjusted EBITDA to common shareholders by 2028 [44] - The acquisition of Beat is expected to deliver strong organic growth and enhance the distribution platform [8] Management's Comments on Operating Environment and Future Outlook - Management noted that the areas of softening in the market, such as Employer Stop Loss and short-term medical, may stabilize in the near future [50] - The focus remains on profitability for Everspan, with effective loss ratios in the mid-60s aligning with long-term goals [55] - Management expressed optimism about the prospects for Ambac's future, particularly following the separation from the legacy financial guarantee business [43] Other Important Information - The company has substantially completed the separation of its legacy and P&C businesses, preparing for the close of the legacy sale [11] - Cirrata's premiums increased by 309% to $205 million, with total revenue rising by 257% to $44 million compared to Q4 2023 [31] Q&A Session Summary Question: Distribution business performance and outlook - Management indicated that softening in Employer Stop Loss and short-term medical is a macro trend, but stabilization is expected [50][51] Question: Sustainability of Everspan's combined ratio - Management stated that while there is variability, the performance aligns with long-term objectives, aiming for effective loss ratios in the mid-60s [55][56]

Fourth Quarter 2024 Any or all of management's forward-looking statements here or in other publications may turn out to be incorrect and are based on management's current belief or opinions. Ambac Financial Group's ("AFG") and its subsidiaries' (collectively, "Ambac" or the "Company") actual results may vary materially, and there are no guarantees about the performance of Ambac's securities. Among events, risks, uncertainties or factors that could cause actual results to differ materially are: (1) the high ...

Revenue and Growth - Total revenue from continuing operations increased by 89% year-over-year to $236 million[3] - Total Specialty P&C Insurance premium rose by 74% year-over-year to $876 million[3] - Specialty P&C Insurance production reached $265 million in Q4 2024, an 88% increase from Q4 2023[7] - Total Insurance Distribution revenue for the three months ended December 31, 2024, was $44,070 thousand, representing a 257% increase compared to $12,331 thousand in the same period of 2023[29] - Gross premiums written increased to $382,771,000 in 2024 from $273,287,000 in 2023, representing a growth of 40%[42] Financial Performance - Adjusted EBITDA for Ambac common stockholders was $5 million for Q4 2024, up 270% from the previous year[3] - The company reported a consolidated net loss of $(548) million or $(10.23) per diluted share for Q4 2024[3] - The net income from continuing operations attributable to Ambac shareholders was $(22) million for Q4 2024, compared to $(9) million in Q4 2023[3] - Net income from continuing operations rose significantly by 68% to $1,836 thousand in Q4 2024, compared to $1,092 thousand in Q4 2023, with an annual increase of 3025% to $10,469 thousand from $335 thousand[13] - The diluted net income per share for Q4 2024 was $0.70, compared to a loss of $0.10 in Q4 2023[20] - The company reported a net loss attributable to common shareholders of $548 million for the year ended December 31, 2024, compared to a net income of $3,632 thousand in 2023[20] - Net income from continuing operations for 2024 was a loss of $58,921,000, compared to a loss of $23,232,000 in 2023, indicating a worsening of 153.5%[42][44] Expenses and Ratios - The combined ratio improved by 380 basis points to 96.5% compared to Q4 2023[3] - The expense ratio for Q4 2024 increased to 44.6% from 32.9% in the prior year, influenced by a sliding scale commissions adjustment[16] - Corporate expenses increased to $15 million in Q4 2024 from $13 million in Q4 2023, primarily due to costs associated with the Beat acquisition[16] - Total expenses from continuing operations increased to $295,660,000 in 2024, compared to $148,949,000 in 2023, reflecting a rise of 98.7%[42][44] Business Operations and Strategy - Ambac launched six new Managing General Agents (MGAs) in 2024, exceeding previous expectations[3] - The company is in the final stages of selling its Legacy Financial Guarantee business for $420 million, with a loss on disposal of $(570) million recorded in Q4 2024[3] - The company is in the process of selling its legacy financial guarantee business, pending regulatory approval[32] - The company faced significant challenges, including a high degree of volatility in stock price and potential disruptions from proposed sale transactions, which could materially affect future performance[36] - The company highlighted risks related to credit exposure and the inability to generate sufficient cash to service its debt obligations, which could impact financial stability[36] - The company is actively pursuing business expansion plans, although it faces challenges in onboarding new program partners and achieving expected synergies from acquisitions[36] Shareholder Information - Stockholders' equity decreased to $857 million or $18.43 per share as of December 31, 2024, down from $1.47 billion or $30.89 per share as of September 30, 2024[19] - During Q4 2024, the company repurchased 962,141 shares at an average price of $12.48 per share, totaling approximately $14.8 million[18] Tax and Income Provisions - The provision for income taxes in Q4 2023 was $274,000, while in Q4 2024 it was a benefit of $157,000, indicating a shift in tax position[39] - The provision for income taxes in 2024 was a benefit of $923,000, compared to a benefit of $989,000 in 2023, a decrease of 6.7%[42][44]