Core Insights - The Amelia Concours achieved record auction sales of $111 million, marking the highest grossing auction in its 31-year history [1] - The event featured notable awards, with a 1931 Duesenberg Model J winning Best of Show and a 1969 McLaren M8B winning Best of Show - Concours de Sport [1] - Broad Arrow Auctions, the auction house for the event, reported a 92% sell-through rate, indicating strong demand in the collector car market [1] Auction Performance - Broad Arrow Auctions conducted its most successful auction to date, with total sales exceeding $111 million and 92% of lots sold [1] - The auction attracted over 1,000 registered bidders from 23 countries, leading to standing-room-only attendance [1] - Record prices were achieved for several modern supercars, including a 2003 Ferrari Enzo sold for $15,185,000 and a 1972 Lamborghini Miura P400 SV sold for $6,605,000, surpassing previous benchmarks [1] Event Highlights - The Amelia Concours featured over 275 distinguished automobiles and included a sold-out Reverie kick-off gathering and the largest-ever RADwood display [1] - The event celebrated automotive culture with luxury hospitality, seminars, and driving experiences, attracting a diverse community of car enthusiasts [1] - The Amelia Concours has donated over $4 million to charitable organizations since its inception in 1996, highlighting its commitment to philanthropy [2] Future Events - The Amelia Concours will return in 2027, scheduled for March 4-7, and will continue to host events that celebrate automotive excellence [2] - Upcoming events include The Greenwich Concours on May 30-31, 2026, and Motorlux during Monterey Car Week on August 12, 2026 [2]

Core Insights - Broad Arrow Auctions achieved over $111 million in total sales during the 2026 Amelia Concours Auction, marking the highest-grossing auction in the event's 31-year history and Broad Arrow's most successful auction since its founding in 2021 [1][3] Auction Performance - The auction took place on March 6-7, 2026, at The Ritz-Carlton, Amelia Island, with a sell-through rate of 92%, selling 165 out of 179 lots [1][3] - The event attracted over 1,000 registered bidders from 23 countries, indicating strong global interest [2] Record Sales - The top-selling item was a single-owner 2003 Ferrari Enzo, which sold for $15,185,000, setting a new record for the auction [1][4] - A total of 13 new world record auction prices were established, including: - 2005 Porsche Carrera GT at $6,715,000 - 1972 Lamborghini Miura P400 SV at $6,605,000 - 2015 Porsche 918 Spyder at $2,975,000 [1][11][13] Market Trends - The auction demonstrated robust demand for modern supercars, with significant bidding activity for exceptionally specified vehicles [3][11] - High-quality cars with great provenance from various eras also secured strong prices, reflecting a healthy collector car market [3][11] Upcoming Events - Broad Arrow Auctions will return for the 2026 edition of Air|Water on April 25, featuring over 60 desirable Porsches [14] - The company is also preparing for the Concorso d'Eleganza Villa d'Este Auction on May 16-17, with early consignments already in place [14]

Core Insights - Broad Arrow Auctions, driven by Hagerty, set new auction records for several high-value collector cars during the 2026 Amelia Concours Auction, highlighting the strength of the collector car market [1][9] Auction Highlights - The 2003 Ferrari Enzo sold for $15,185,000, becoming the second most valuable Enzo ever sold at auction [3] - The 2021 Ferrari Monza SP2 achieved a world record auction price of $4,955,000, nearly doubling the previous highest price for the model [3] - The 2017 Ferrari F12tdf sold for a world record price of $4,185,000, showcasing strong demand with multiple bidders involved [2] - The 1988 Porsche 959 Sport set a new world record price of $5,505,000, reflecting its rarity and desirability among collectors [4] - A 2005 Porsche Carrera GT, offered without reserve, sold for $6,715,000, more than doubling its previous auction record [5] Auction Context - The auction took place at the Ritz-Carlton, Amelia Island, and was characterized by a packed room and competitive bidding, particularly for the Private Collection of Unobtanium Supercars [1][6]

Core Insights - The company achieved record new member additions with 371,000 new members in 2025 and reported a 14% increase in written premiums, indicating strong growth across its ecosystem [1][6] - Management emphasized a focus on top-line growth while efficiently translating revenue into profits and cash flow, with a compounded annual revenue growth rate of 23% since going public [2][6] - The company exceeded its 2025 expectations with a 17% revenue growth and a 91% increase in net income, attributed to record new business volume and operational efficiencies [3][6] Financial Performance - For the fourth quarter, revenue increased by 19% to $357 million, with net income rising sharply by 238% to $29 million [10][12] - Operating cash flow for the year increased by 24% to $219 million, with a retention rate of 89% in Q4 [2][6] - The company reported a quarterly loss ratio of 31%, positively impacted by a $21 million reserve reduction [11][19] Marketplace Growth - Marketplace revenue more than doubled in 2025, increasing by 119% to $119 million, driven by expansion into Europe and strong auction performance [5][14] - Total vehicle transactions reached $624 million, with significant contributions from financing activity and online sales [14] - Management noted that while Marketplace growth is strong, it is more variable compared to insurance, making forecasting less precise [15] Strategic Changes - The company signed a new fronting deal with Markel, allowing it to retain 100% of premium, which is expected to enhance long-term underwriting profitability but will result in a non-cash amortization of approximately $190 million in 2026 [6][8] - The new arrangement is anticipated to create a "step function increase" in potential underwriting profitability and investment income [8] - Management cautioned that GAAP net income for 2026 will be negatively impacted by transitional accounting items related to the new fronting structure [4][16] 2026 Outlook - For 2026, the company projects written premium growth of 15% to 16%, driven by new business counts and the evolved Markel arrangement [16][18] - Despite the expected growth in written premiums, revenue is forecasted to be between $1.28 billion and $1.3 billion, lower than 2025 due to the elimination of commission revenue [17] - GAAP net income is guided to be negative, ranging from $41 million to $51 million, while adjusted EBITDA is expected to be between $236 million and $247 million [18]

Financial Data and Key Metrics Changes - Total revenue increased by 19% to $357 million in Q4 2025, with written premiums growing 19% due to robust new business count and a retention rate of 89% [14][15] - Net income surged 91% to $149 million for the full year 2025, driven by premium growth and cost discipline [10][19] - Operating cash flow grew 24% to $219 million, reflecting strong cash generation capabilities [8][20] Business Line Data and Key Metrics Changes - Commission and fee revenue rose 18% to $106 million in Q4 2025, while earned premium grew 14% to $193 million [15][17] - Marketplace revenue increased significantly by 80% to $29 million in Q4 2025, with full-year marketplace revenue jumping 119% to $119 million [15][18] - The company welcomed a record 371,000 new members in 2025, contributing to a 14% increase in written premiums [8][9] Market Data and Key Metrics Changes - The company is targeting a 15%-16% growth in written premiums for 2026, an acceleration from the previous year's 14% [22] - The total transaction value of vehicles sold at auction and through private transactions reached $566 million, positioning the company as the number two global player in the market [9] Company Strategy and Development Direction - The company aims to enhance member experience and efficiency in delivering products and services, focusing on the implementation of a new fronting arrangement with Markel [12] - Strategic priorities for 2026 include expanding the State Farm Classic Plus program, refining distribution strategies, and continuing technology transformation [12][13] - The company is committed to doubling its policies in force to three million by 2030, leveraging its differentiated model and brand strength [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving record growth in 2026, driven by new business count and the evolved fronting arrangement with Markel [22][27] - The company anticipates a transitional year in 2026 due to accounting changes, but expects strong underlying growth in premiums and cash flow [27][29] - Management highlighted the importance of technology and AI in enhancing operational efficiency and personalizing member experiences [66][90] Other Important Information - The company has transitioned to presenting its financial statements in accordance with Article Seven for insurance companies, reflecting its evolving business operations [14] - A new partnership with Liberty Mutual and Safeco was announced, which is expected to contribute positively to growth in the coming years [82] Q&A Session Summary Question: Guidance on net loss number and comparison to 2025 net income - Management advised focusing on Adjusted EBITDA guidance, indicating a potential 10% growth compared to 2025 [31][34] Question: Clarification on ceding commission to Markel - Management confirmed the $190 million ceding commission is a solid number with no expected changes [37] Question: Loss ratio trends and improvements - Management indicated a target loss ratio around 41% for 2026, with improvements expected in claims management [41][78] Question: Written premium guidance breakdown - Management refrained from breaking down written premium growth by category but noted State Farm's contribution to acceleration in 2026 [45] Question: Outlook for written premium per policy - Management indicated that the influx of State Farm business may lower the average written premium per policy due to the nature of the vehicles insured [94] Question: Free cash generation outlook for 2026 - Management expects cash conversion to remain consistent with 2025, with similar CapEx levels [87] Question: Opportunities from AI in distribution - Management is exploring AI applications in marketing and lead generation to enhance distribution efficiency [89]

Financial Data and Key Metrics Changes - Total revenue increased by 19% to $357 million in Q4 2025, with written premiums growing 19% due to robust new business count and a retention rate of 89% [14][15] - Net income surged 91% to $149 million for the full year 2025, driven by premium growth, cost discipline, and a $21 million reserve reduction [10][19] - Operating cash flow grew 24% to $219 million, reflecting strong cash generation capabilities [8][20] Business Line Data and Key Metrics Changes - Commission and fee revenue rose 18% to $106 million in Q4 2025, while earned premium grew 14% to $193 million [15][17] - Marketplace revenue increased by 80% to $29 million in Q4 2025, with total vehicle transactions reaching $624 million for the year [15][18] - The company welcomed a record 371,000 new members in 2025, contributing to a 14% increase in written premiums [8][9] Market Data and Key Metrics Changes - The company is targeting a 36 million vehicle market, currently capturing only 7% of this market [8] - The total transaction value of vehicles sold at auction and through private transactions reached $566 million, positioning the company as the number 2 global player in the market [9] Company Strategy and Development Direction - The company aims to enhance member experience and efficiency in delivering products and services, focusing on the implementation of a new fronting arrangement with Markel [12][13] - Strategic priorities for 2026 include expanding State Farm Classic Plus, refining distribution strategies, and continuing technology transformation [12][13] - The company plans to double its policies in force to 3 million by 2030, leveraging its differentiated model and brand strength [28] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, anticipating written premium growth of 15%-16%, an acceleration from the previous year's 14% [22] - The company acknowledged transitional accounting changes due to the new Markel fronting arrangement, which may create temporary noise in reported results for 2026 [24][27] - Management emphasized the importance of AI in enhancing operational efficiency and personalizing member experiences [66][68] Other Important Information - The company has surpassed $1 billion in investment securities, primarily in high-grade corporate and government bonds [21] - A secondary share offering increased the company's float and trading volumes, contributing to a more distributed public company [11] Q&A Session Summary Question: Guidance on net loss number and comparison to 2025 net income - Management advised focusing on Adjusted EBITDA guidance, indicating a potential 10% growth compared to 2025 [31][34] Question: Ceding commission to Markel - Management confirmed the $190 million ceding commission is a solid number with no expected increases [37] Question: Loss ratio trends - Management indicated a planning loss ratio around 41%, with improvements expected in claims management [41][78] Question: Written premium guidance breakdown - Management refrained from breaking down written premium growth by category but noted State Farm's contribution to acceleration [44][45] Question: Marketplace revenue outlook - Management acknowledged the importance of Marketplace revenue but emphasized a focus on core insurance growth for 2026 [55][56] Question: Technology and AI opportunities - Management highlighted ongoing AI initiatives aimed at improving operational efficiency and personalizing member experiences [66][68] Question: Written premium per policy outlook - Management indicated that the influx of State Farm business may lower the average written premium per policy due to the nature of the vehicles insured [92][94] Question: Impact of deferred acquisition costs - Management confirmed a ramp-up in amortization of deferred acquisition costs throughout 2026, normalizing by 2027 [96][97]

Financial Data and Key Metrics Changes - Total revenue increased by 19% to $357 million in Q4 2025, with written premiums growing 19% due to robust new business count and a retention rate of 89% [13][14] - Net income surged 91% to $149 million for the full year 2025, driven by premium growth, cost discipline, and a $21 million reserve reduction [9][19] - Operating cash flow grew 24% to $219 million, reflecting strong cash generation capabilities [6][20] - Adjusted EBITDA for Q4 was $57 million, up 97% year-over-year, while full-year adjusted EBITDA grew 46% to $237 million [16][20] Business Line Data and Key Metrics Changes - Commission and fee revenue increased by 18% to $106 million in Q4 2025, while earned premium grew 14% to $193 million [14][17] - Marketplace revenue saw significant growth, increasing 80% to $29 million in Q4 and 119% to $119 million for the full year [14][17] - The company welcomed a record 371,000 new members in 2025, contributing to a total membership growth [6][8] Market Data and Key Metrics Changes - The company is targeting a 15%-16% growth in written premiums for 2026, an acceleration from the previous year's 14% [21] - The total transaction value of vehicles sold at auction and through private transactions reached $566 million, positioning the company as the number 2 global player in the market [8] Company Strategy and Development Direction - The company aims to enhance member experience and efficiency in delivering products and services, focusing on the implementation of a new fronting arrangement with Markel [11][12] - Strategic priorities for 2026 include expanding the State Farm Classic Plus program, refining distribution strategies, and continuing technology transformation [11][12] - The company is positioned to compound profit growth by targeting to double its policies in force to 3 million by 2030 [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to grow premiums and cash flow, citing a strong member-centric approach and innovative product offerings [4][5] - The management highlighted the importance of technology and AI in enhancing operational efficiency and personalizing member experiences [66][67] - The outlook for 2026 anticipates another year of record growth, despite accounting changes that may create temporary noise in reported results [21][26] Other Important Information - The company has transitioned to presenting consolidated financial statements in accordance with Article 7 for insurance companies, affecting how net investment income is reported [13] - The company has signed a new fronting arrangement with Markel, allowing it to retain 100% of the premium starting January 1, 2026 [9][19] Q&A Session Summary Question: Guidance on net loss number and comparison to 2025 net income - Management advised focusing on Adjusted EBITDA guidance, indicating a potential 10% growth compared to 2025 [31][32] Question: Ceding commission to Markel - Management confirmed the $190 million ceding commission is a solid number with no expected changes [35] Question: Loss ratio analysis - Management clarified that the loss ratio is expected to trend around 41% for 2026, with improvements in claims management [40][41] Question: Written premium guidance breakdown - Management refrained from breaking down written premium growth by category but noted that State Farm is expected to accelerate growth in 2026 [44] Question: Marketplace revenue outlook - Management acknowledged the importance of Marketplace revenue and indicated ongoing growth, though it may be variable [55][60] Question: AI opportunities in distribution - Management highlighted ongoing pilot programs for AI in marketing and lead generation, aiming to enhance distribution efficiency [87][88]

Financial Performance - Total Revenue for the year ended December 31, 2025, was $1,456.4 million, representing a 17.3% increase from $1,241.5 million in 2024[314]. - Net Income for 2025 was $149.2 million, a 90.6% increase compared to $78.3 million in 2024[314]. - Commission and fee revenue increased to $486.4 million in 2025, up 14.9% from $423.2 million in 2024, driven by policy renewals and new business[319]. - Earned premium, net reached $726.7 million, reflecting a 13.0% increase from $643.3 million in 2024, primarily due to growth in subject premiums written[323]. - Adjusted EBITDA for 2025 was $236.8 million, a 46.5% increase from $161.7 million in 2024[314]. - Membership and other revenue was $82.4 million for the year ended December 31, 2025, an increase of $3.5 million, or 4.4%, compared to 2024[324]. - Net income for the year ended December 31, 2025, was $149.225 million, reflecting a significant increase of $70.922 million or 90.6% from $78.303 million in 2024[373]. Insurance Metrics - Total Written Premium is a key metric reflecting the direct economic benefit of policy acquisition efforts, closely correlated with insurance commission revenue[301]. - The Hagerty Re Loss Ratio and Combined Ratio are critical metrics for evaluating historical loss patterns and underwriting profitability, with a combined ratio under 100% indicating underwriting income[302][303]. - New Business Count in the Insurance segment increased by 33.3%, reaching 371,203 policies written in 2025[318]. - The Hagerty Re Loss Ratio improved to 39.3% in 2025 from 46.4% in 2024, indicating better loss management[318]. - Losses and loss adjustment expenses were $285.4 million for the year ended December 31, 2025, a decrease of $13.2 million, or 4.4%, with a loss ratio of 39.3%, down 7.1% from 2024[328]. Revenue Sources - The company generates commission and fee revenue primarily through its MGA subsidiaries from underwriting collector car insurance policies[277]. - Marketplace revenue is derived from the sale of collector cars and enthusiast vehicles, with commission and fee-based revenue recognized upon completion of sales[284]. - Membership revenue from HDC memberships provides access to various services and is recognized ratably over the membership period[280]. - Marketplace revenue was $120.1 million for the year ended December 31, 2025, an increase of $64.7 million, or 116.6%, driven by higher private sale revenue and expansion in Europe[334]. Investment and Financing - Net investment income and gains are influenced by the size and yield of the investment portfolio, impacting overall revenue[282][283]. - As of December 31, 2025, total outstanding borrowings under the 2025 JPM Credit Facility were $84.9 million, with an aggregate borrowing capacity of $375.0 million[359]. - Interest expense increased by $4.0 million to $5.4 million for the year ended December 31, 2025, due to higher net borrowings[339]. - Cash from financing activities increased by $76.928 million in 2025, mainly due to a $98.1 million increase in net proceeds from credit facility borrowings[376]. Tax and Valuation - A valuation allowance of $41.8 million was released in 2025, resulting in a corresponding income tax benefit recognized in the Consolidated Statements of Operations[343]. - For the year ended December 31, 2025, the income tax benefit was $10.0 million, a change of $25.4 million compared to 2024[344]. - The effective tax rate for 2025 was estimated at 23.7%, compared to 26.3% for 2024[353]. - The estimated value of the Tax Receivable Agreement (TRA) Liability was $39.8 million, reported within "Tax receivable agreement liability" on the Consolidated Balance Sheets[400]. Operational Changes - The company has updated its segment reporting to reflect two operating segments: Insurance and Marketplace, effective from Q4 2025[272]. - The transition to Article 7 reporting framework is aimed at enhancing the comparability of financial statements and reflects the expansion of the company's insurance operations[273][274]. - The Markel Fronting Arrangement, effective January 1, 2026, allows the company to issue policies with expanded underwriting authority and is expected to increase profitability[275][276]. Reserves and Claims - As of December 31, 2025, total reserves for losses and loss adjustment expenses were $168.851 million, with case reserves at $95.242 million and IBNR reserves at $73.609 million[384]. - The gross ultimate losses for the accident year 2025 were estimated at $318.187 million, with a net ultimate loss of $295.695 million[385]. - Adjustments to reserves for unpaid losses and loss adjustment expenses are recognized in the period when management determines an adjustment is required[387]. Goodwill and Assets - The Company recorded goodwill of $114.2 million as of December 31, 2025, including $103.6 million attributable to the Marketplace reporting unit[405]. - The Company did not recognize any goodwill impairments during the years ended December 31, 2025, 2024, and 2023[405]. - Deferred tax assets amounted to $159.2 million related to the outside basis difference in Hagerty, Inc.'s investment in THG, with a corresponding valuation allowance of $133.2 million[392]. Risk Management - The company's risk management strategy is designed to mitigate credit risk associated with single issuers[415]. - The company has exposure to credit risk as a holder of fixed maturity securities, focusing on investment grade debt to limit credit exposure[415]. - The target duration of the investment portfolio is set between two to four years to manage interest rate risk associated with fixed maturity securities[411].

INVESTOR PRESENTATION Q4 2025 Speakers: McKeel Hagerty, Chief Executive Officer and Chairman Patrick McClymont, Chief Financial Officer Forward Looking Statements / Non-GAAP Financial Measures This presentation contains statements that constitute "forward- looking statements" within the meaning of the federal securities laws. All statements we provide, other than statements of historical fact, are forward-looking statements, including those regarding our future operating results and financial position, our ...

Revenue Growth - Total Revenue for 2025 increased 17% to $1,456 million, driven by a 14% growth in Written Premium to $1,194 million[6] - Fourth quarter 2025 Total Revenue increased 19% year-over-year to $357 million, with Written Premium also up 19% to $259 million[7] - Total revenue for the three months ended December 31, 2025, was $357,326 thousand, representing an 18.5% increase from $301,472 thousand in 2024[23] - For the year ended December 31, 2025, total revenue reached $1,456,389 thousand, a 17.3% increase from $1,241,510 thousand in 2024[25] - Total revenue for 2025 reached $1,456,389, an increase of 17.3% compared to $1,241,510 in 2024[31] Net Income and Earnings - Net Income surged 91% to $149 million, with Income before taxes rising 49% to $139 million[6] - Net income for the year was $149,225 thousand, reflecting a 90.6% increase from $78,303 thousand in 2024[25] - Net income attributable to Class A common stockholders increased significantly by 462.9% to $6,924 thousand from $1,230 thousand[23] - The company reported an income before taxes of $39,700 thousand, up 185.6% from $13,901 thousand in the prior year[23] - Net income attributable to Class A Common Stockholders for the year ended December 31, 2025, is $41,463,000, compared to $9,590,000 in 2024[43] Marketplace Performance - Marketplace revenue skyrocketed 119% to $119 million, attributed to growth in private sales and the expansion into Europe[6] - Marketplace revenue surged by 79.9% to $28,871 thousand compared to $16,048 thousand in the previous year[23] - Marketplace revenue for the year increased by 118.5% to $119,199 thousand from $54,549 thousand[25] Adjusted EBITDA - Adjusted EBITDA for 2025 increased 46% to $237 million, with an outlook for 2026 adjusted EBITDA between $236 million and $247 million[6][12] - Adjusted EBITDA for the three months ended December 31, 2024, is reported at $28,682,000, up from $19,868,000 in the prior presentation[37] - Adjusted EBITDA for 2025 was $236,791, up 46.5% from $161,662 in 2024[31] - Projected Adjusted EBITDA for the year ended December 31, 2026, is estimated to be between $236,000,000 and $247,000,000, reflecting underlying profitability improvement[37] Membership Growth - A record 371,000 new members were added in 2025, bringing total Hagerty Drivers Club members to approximately 930,000[6] - New business count in insurance rose to 371,203, reflecting a 33.3% increase from 278,556 in 2024[31] - Policies in force grew to 1,684,935, an increase of 11.8% compared to 1,506,451 in 2024[31] Financial Position - Total assets as of December 31, 2025, amounted to $2,093,976 thousand, up from $1,709,338 thousand in 2024[27] - Total liabilities increased to $1,346,950 thousand from $1,101,169 thousand in the previous year[27] - Ending cash and cash equivalents rose to $299,000, up from $232,845 in 2024[29] Future Projections - The company expects Written Premium growth of 15% to 16% for 2026, alongside a transition to a 100% quota share arrangement with Markel[5][14] - The company anticipates a net loss of $(51) million to $(41) million for 2026, primarily due to transition costs related to the Markel Fronting Arrangement[12] - The projected net loss for 2026 includes approximately $190,000,000 of transitional, non-cash costs related to the Markel Fronting Arrangement[37] Compensation and Expenses - Full year 2025 Salary and benefits increased 19% due to higher accrued incentive compensation reflecting stronger performance[7] - Total expenses rose to $317,626 thousand, a 10.5% increase from $287,571 thousand in 2024[23] Adjusted Metrics - Adjusted Net Income for the three months ended December 31, 2025, is $30,236,000, compared to $10,866,000 for the same period in 2024[43] - Adjusted Diluted EPS for the year ended December 31, 2025, is $0.37, an increase from $0.21 in 2024[43] - Adjusted Net Income excludes net investment gains and losses, changes in fair value of warrant liabilities, and other unusual items not indicative of ongoing performance[39] - The company revised its non-GAAP measure previously titled "Adjusted EPS" to "Adjusted Diluted EPS" to enhance comparability with industry peers[38] - Management uses Adjusted Net Income and Adjusted Diluted EPS to evaluate operating performance consistently and make strategic decisions[40] Loss Ratio - The Loss Ratio improved to 39.3% for 2025, down from 46.4% in the prior year, indicating better underwriting performance[7] - The Hagerty Re loss ratio improved to 39.3%, down from 46.4% in 2024[31]