Core Insights - Broad Arrow Auctions, a Hagerty company, achieved $61.7 million in total sales during its third annual Amelia Auction, with 88 percent of all lots sold [1] - The auction saw a 22 percent increase in bidder registrations compared to the previous year, with 60 percent of bidders attending in person [1] - The top sale was a 1959 Ferrari 250 GT LWB California Spider Competizione, which sold for $9,465,000, making it the most valuable car ever sold by Broad Arrow [2][3] Auction Performance - The auction took place on March 7 and 8, 2025, at the Ritz-Carlton Amelia Island, with a well-attended preview leading to high engagement during the auction [1] - Over 15,000 viewers watched the auction on Broad Arrow's YouTube channel, with millions more tuning in via Hagerty's Samsung TV Plus and Tubi channels [1] - The auction featured spirited bidding across all categories, indicating a strong demand for high-quality collector cars [3] Notable Sales - The top 10 sales included iconic models such as the 1971 Lamborghini Miura P400 SV, which sold for $4,460,000, and the 2018 Pagani Huayra Roadster, which sold for $3,415,000 [4] - Other notable sales included a 1954 Jaguar D-Type for $4,295,000 and a 1990 Ferrari F40 for $3,665,000, showcasing a diverse range of high-value vehicles [4] Upcoming Events - Broad Arrow's next auction is the Porsche Air|Water Auction scheduled for April 26, 2025, featuring approximately 50 desirable Porsches [5] - The auction house will also host a Spring Memorabilia Online Auction from April 21 to May 4, 2025, focusing on motorsport memorabilia [4]

Financial Data and Key Metrics Changes - Total revenue for Q4 2024 grew 19% to $292 million, with written premiums increasing by 13% and commission and fee revenue rising 15% to $89 million [22][24] - Full year revenue increased by $412 million, operating income rose by $134 million, and operating cash flow tripled to $177 million [8][30] - Full year net income reached $78 million, a 178% increase, with adjusted earnings per share at $0.24 [29][30] Business Line Data and Key Metrics Changes - Membership, marketplace, and other revenue surged 68% to $34 million, driven by marketplace inventory sales [22] - Commission and fee revenue for the full year jumped 16%, while earned premium for Hagerty Reinsurance increased by 21% [27][29] - Operating income for 2024 increased to $66 million, with operating margins expanding by 450 basis points [28] Market Data and Key Metrics Changes - The company currently holds a 5% share of the 48 million collectible car market in the US, with a retention rate climbing to 89% in 2024 [11][34] - The marketplace for vehicles bought and sold by members reached $15.7 billion, up 10% from 2023 [16] Company Strategy and Development Direction - The company aims to expand specialty insurance offerings, simplify membership experiences, and grow its marketplace business [14][15] - A significant technology transformation is underway to transition to a modern cloud-based architecture, expected to enhance efficiency and scalability [19][20] - The company plans to double its policies enforced to three million by 2030, leveraging partnerships and new product offerings [21][37] Management's Comments on Operating Environment and Future Outlook - Management anticipates strong results in 2025, projecting 12% to 13% total revenue growth and 30% to 40% net income gains [34][37] - The company acknowledges potential inflationary effects from tariffs but expects a gradual impact due to its diverse supply chain [50][62] - Management remains optimistic about customer engagement and retention, with a focus on leveraging the Hagerty Drivers Club for cross-selling opportunities [45][48] Other Important Information - The company ended December 2024 with an unrestricted cash balance of $105 million, equal to its long-term debt [33] - The company has successfully renegotiated reinsurance terms for 2025, maintaining similar coverage at a lower cost despite a challenging hurricane season [32] Q&A Session Summary Question: Trends in cross-sell or cross-engagement between insurance, membership, and marketplace - Management noted that 80% of insurance customers also purchase the Hagerty Drivers Club membership, which drives engagement and retention [45][48] Question: Impact of tariffs on the business - Management indicated that while there may be an inflationary effect from tariffs, the impact would be gradual and less pronounced due to the fragmented supply chain [50][62] Question: Any slowdown in shopping behavior from consumers - Management confirmed that shopping behavior is seasonal, with a ramp-up expected in the coming months, and noted that recent events like wildfires may dampen activity temporarily [56][58] Question: Expense savings and tech migration - Management clarified that elevated expenses are expected to continue due to ongoing investments in technology and staffing for growth initiatives [67][70] Question: Drivers of strong growth and doubling policy count - Management highlighted the transition of State Farm vehicles to their program and the introduction of new products like Enthusiast Plus as key growth drivers [75][79]

Financial Performance - In 2024, the company reported Net Income of $78.3 million, a 177.9% increase compared to 2023, and Adjusted EBITDA of $124.5 million, a 41.2% increase compared to 2023[252]. - The company experienced a 20.0% increase in Total Revenue, reaching $1,200.0 million in 2024 compared to $1,000.2 million in 2023[255]. - Adjusted Earnings Per Share increased to $0.24 in 2024, a 500.0% increase from $0.04 in 2023[255]. - Operating income for 2024 was $66.4 million, a significant increase of $56.0 million, or 538.1%, compared to 2023[277]. - Net income for the year was $78.3 million, reflecting a substantial increase of $50.1 million, or 177.9%, from the previous year[277]. - Total revenue for the year ended December 31, 2024, was $1,200.0 million, an increase of $199.8 million, or 20.0%, compared to 2023[277]. - Consolidated net income for 2024 is $78.3 million, up from $28.2 million in 2023, indicating strong growth in profitability[368]. Revenue Sources - Total Written Premium reached $1,044.5 million in 2024, reflecting a 15.1% increase from $907.2 million in 2023[255]. - Commission and fee revenue increased to $423.2 million, up $57.7 million, or 15.8%, driven by a 16.2% increase in renewal policy premiums and a 13.4% increase in new policy premiums[278][279]. - Membership, marketplace, and other revenue reached $133.5 million, an increase of $30.6 million, or 29.8%, compared to 2023[284]. - Marketplace revenue surged to $54.3 million, a 90.1% increase, attributed to higher inventory sales and improved auction results[286]. Expenses and Loss Ratios - Total operating expenses were $1,133.6 million, an increase of $143.8 million, or 14.5%, with losses and loss adjustment expenses rising by 35.3% to $298.6 million[277]. - The Hagerty Re Loss Ratio increased to 46.4% in 2024 from 41.5% in 2023, while the Combined Ratio rose to 94.1% from 89.2%[255]. - Losses and loss adjustment expenses rose to $298.6 million, an increase of $77.9 million or 35.3% compared to 2023, driven by estimated losses from Hurricanes Helene and Milton[290]. - The loss ratio for 2024 was 46.4%, up from 41.5% in 2023, with catastrophe losses contributing 5.6% in 2024 compared to 1.2% in 2023[291]. Cash Flow and Investments - Net cash provided by operating activities for the year ended December 31, 2024 was $177.0 million, an increase of $43.3 million, or 32.4%, compared to 2023[326]. - Cash used in investing activities increased by $565.9 million in 2024, primarily due to diversification of the investment portfolio and the acquisition of Drivers Edge for $11.3 million[328]. - Cash used in financing activities included a reduction of outstanding borrowings by $28.8 million and a cash dividend payment of $5.6 million on Series A Convertible Preferred Stock[329]. - The company reported a net cash used in investing activities of $618,564,000 in 2024, a substantial increase from $52,647,000 in 2023[400]. Assets and Liabilities - Total assets increased to $1,709,338, up from $1,588,212 in 2023, indicating growth in the company's asset base[392]. - Total liabilities slightly increased to $1,101,169 from $1,094,867 in 2023, showing stable financial management[392]. - The total provision for unpaid losses and loss adjustment expenses as of December 31, 2024 was $168.5 million, compared to $136.5 million in 2023, reflecting an increase of $32.0 million[337]. - Outstanding losses reported as of December 31, 2024 were $99.3 million, which is 58.9% of the total provision, compared to $86.4 million or 63.3% in 2023[337]. Tax and Deferred Assets - The effective income tax rate decreased to 17% in 2024 from 37% in 2023, with income tax expense at $15.4 million, down $1.2 million or 7.3%[302][303]. - As of December 31, 2024, the company recorded deferred tax assets of $193.6 million, with $148.1 million related to the difference between the outside tax basis and book basis of its investment in THG[345]. - A valuation allowance of $176.2 million was recorded against deferred tax assets as of December 31, 2024, indicating management's belief that certain deferred tax assets may not be realized[345]. - The company anticipates a reasonable possibility of reversing a significant portion of the valuation allowance against U.S. deferred tax assets within the next twelve months[346]. Shareholder Equity - Total stockholders' equity increased to $523.506 million as of December 31, 2024, up from $410.509 million in 2023, representing a growth of approximately 27.5%[393]. - The additional paid-in capital rose to $603.780 million in 2024, up from $561.754 million in 2023, marking an increase of about 7.5%[393]. - The company reported an accretion of Series A Convertible Preferred Stock amounting to $7.427 million for the year 2024[393]. - The total accumulated earnings (deficit) improved to $(451.978) million in 2024 from $(468.995) million in 2023, indicating a reduction in the deficit by approximately 3.6%[393]. Goodwill and Intangible Assets - The company recorded goodwill of $114.1 million and intangible assets of $90.1 million as of December 31, 2024[356]. - Goodwill represents the excess cost of a business combination over the fair value of net assets acquired and is tested annually for impairment[446]. - Intangible assets are recorded at cost and amortized over 3 to 25 years, depending on the type of asset[445]. - Non-compete agreements and customer relationships are part of the intangible assets amortized over their estimated life[445].

Group 1: Earnings Performance - Hagerty, Inc. reported quarterly earnings of $0.02 per share, exceeding the Zacks Consensus Estimate of $0.01 per share, compared to a loss of $0.01 per share a year ago, representing an earnings surprise of 100% [1] - The company posted revenues of $291.73 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 4.77%, and compared to year-ago revenues of $245.04 million [2] - Over the last four quarters, Hagerty has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Group 2: Stock Performance and Outlook - Hagerty shares have increased approximately 3.7% since the beginning of the year, while the S&P 500 has declined by 0.5% [3] - The current consensus EPS estimate for the coming quarter is $0.06 on revenues of $305.21 million, and for the current fiscal year, it is $0.36 on revenues of $1.36 billion [7] - The estimate revisions trend for Hagerty is favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Group 3: Industry Context - The Automotive - Retail and Wholesale - Parts industry, to which Hagerty belongs, is currently in the top 24% of over 250 Zacks industries, suggesting a positive outlook for the sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Revenue Growth - Full year 2024 Total Revenue increased 20% year-over-year to $1.200 billion, with Written Premium up 15% to $1.044 billion[6]. - For 2025, Hagerty anticipates Total Revenue growth of 12-13% and Written Premium growth of 13-14%[14]. - Total revenue for the three months ended December 31, 2024, was $291,731,000, representing a 19.1% increase from $245,043,000 in the same period of 2023[23]. - For the year ended December 31, 2024, total revenue was $1,200,038,000, a 20.0% increase from $1,000,213,000 in 2023[25]. - Total revenue rose to $1,200,038,000, reflecting a 20.0% increase from $1,000,213,000 in the previous year[31]. Net Income and Earnings - Full year 2024 Net Income surged 178% to $78.3 million, while Adjusted EBITDA rose 41% to $124.5 million[6]. - The company expects Net Income growth of 30-40% and Adjusted EBITDA growth of 21-29% in 2025, incorporating $20 million in elevated technology investments[14]. - Net income for the year rose to $78,303,000, reflecting a 177.9% increase from $28,179,000 in 2023[25]. - The consolidated net income for the year ended December 31, 2024, was $78,303,000, compared to $28,179,000 in 2023, showing a substantial increase[41]. - The adjusted consolidated net income for the year ended December 31, 2024, was $86,847,000, up from $16,636,000 in 2023, indicating strong year-over-year growth[41]. Operating Performance - Fourth quarter 2024 Operating Income increased 538% year-over-year to $66.4 million, with a full year Operating Income margin expanding by 450 basis points[8][10]. - Operating income for the year increased dramatically by 538.1% to $66,418,000 from $10,408,000 in the previous year[25]. - Operating income improved significantly to $6,038,000, a 193.3% increase from a loss of $6,473,000 in the previous year[23]. - Adjusted EBITDA for the year was $124,473,000, representing a 41.2% increase from $88,162,000 in 2023[31]. Membership and Marketplace Growth - Hagerty added a record 279,000 new members in 2024, contributing to a 90% increase in Marketplace revenue to $54.3 million[3][6]. - Hagerty's membership revenue for 2024 increased 10% year-over-year to $57.5 million, with Hagerty Drivers Club paid members rising 7% to approximately 876,000[8]. - Membership, marketplace, and other revenue surged by 68.4%, reaching $33,901,000 compared to $20,135,000 in the prior year[23]. Policy and Retention Metrics - Policies in Force Retention improved to 89.0% as of December 31, 2024, with total insured vehicles increasing 8% year-over-year to 2.6 million[8]. - The number of new business counts in insurance grew to 278,556, a 9.5% increase from 254,386 in 2023[31]. Financial Position - Total assets as of December 31, 2024, amounted to $1,709,338,000, up from $1,588,212,000 in 2023[27]. - Total liabilities increased slightly to $1,101,169,000 from $1,094,867,000 year-over-year[27]. - The company reported a net cash provided by operating activities of $177,024,000, compared to $133,706,000 in 2023[31]. - Ending cash and cash equivalents decreased to $232,845,000 from $724,276,000 in 2023[31]. Earnings Per Share - The company reported a basic earnings per share of $0.10 for the year ended December 31, 2024, down from $0.19 in 2023[25]. - The Basic EPS for the year ended December 31, 2024, was $0.10, down from $0.19 in 2023, while the Adjusted EPS increased to $0.24 from $0.04[41]. Loss Ratios and Other Metrics - The fourth quarter 2024 Loss Ratio was 42.8%, including a 2.4% impact from catastrophe losses, compared to 41.5% in the prior year[8]. - The Hagerty Re loss ratio increased to 46.4% from 41.5%, indicating a 4.9% rise[31]. - The company experienced a loss of $5,529,000 attributable to non-controlling interest for the three months ended December 31, 2023, highlighting volatility in this area[41].

Core Insights - Broad Arrow Auctions, a subsidiary of Hagerty, is set to feature a highly valued 1959 Ferrari 250 GT LWB California Spider Competizione at the upcoming Amelia Auction, with an estimated value between $10,000,000 and $14,000,000 [1][2][3] Company Overview - Broad Arrow Auctions is recognized as a leading global collector car auction house, founded in 2021 by industry veterans, and has rapidly grown to become a significant player in the auction market [6] - The company has expanded its global presence, with plans to launch its first European auction in May 2025, further solidifying its position in the collector car segment [6] Auction Details - The Amelia Auction will take place on March 7-8, featuring a total of 169 lots, including 166 cars, 2 tractors, and 1 child's go-kart, with more than half of the catalog offered without reserve [3][4] - The auction will showcase a variety of vehicles, from pre-war classics to modern supercars, highlighting the diversity and appeal of collector cars [3][8] Featured Vehicles - The auction will include notable vehicles such as a 1954 Jaguar D-Type Works Competition, estimated at $6,500,000 to $8,500,000, and a 1971 Lamborghini Miura P400 SV, estimated at $4,500,000 to $5,000,000 [8] - Other highlighted vehicles include a 1990 Ferrari F40 and a 2015 Porsche 918 Spyder, with estimates of $3,800,000 to $4,200,000 and $2,250,000 to $2,400,000 respectively [8]

Core Viewpoint - Hagerty, Inc. is set to report its fourth quarter 2024 financial results on March 4, 2025, before market opening [1] Group 1: Financial Reporting - The financial results will be discussed in a conference call scheduled for 10:00 am Eastern Time on the same day [2] - A live webcast of the conference call will be available on Hagerty's investor relations website [2] Group 2: Company Overview - Hagerty is a leading specialty vehicle insurance provider and an automotive enthusiast brand, dedicated to preserving driving culture for future generations [3] - The company offers specialty vehicle insurance, car valuation data, auction services, and automotive entertainment for over 67 million car enthusiasts in the U.S. [3] - Hagerty operates in Canada and the U.K. and has a community of over 865,000 members in the Hagerty Drivers Club [3]

Core Insights - Broad Arrow Auctions successfully launched its 2025 auction calendar with The Academy of Art University Collection Auction, achieving total sales of $14.5 million from 105 collector cars sold without reserve [1][2][3] Auction Highlights - The auction featured enthusiastic bidding from 13 countries, with over 50% of registered bidders participating online [2] - The top sale was a 1955 Mercedes-Benz 300 SL Gullwing, which sold for $1,490,000, exceeding its estimate of $1,200,000 - $1,500,000 [2][3] - Other notable sales included a 1933 Chrysler Custom Imperial Phaeton at $1,039,000 and a 1937 Squire Drophead Coupe at $643,000, both surpassing their estimates [3][4] Company Performance - Caroline Cassini, Senior Car Specialist at Broad Arrow, emphasized the strong demand for classic collector cars, indicating the company's expertise in matching cars with buyers [3] - The auction demonstrated continued enthusiasm for the classic car market, with many lots fiercely contested by bidders [3] Upcoming Events - Broad Arrow Auctions will focus on its third annual Amelia Auction scheduled for March 7-8, featuring over 165 collector cars, including notable Le Mans legends [5]

Core Viewpoint - Broad Arrow Auctions, a subsidiary of Hagerty, is set to host its third annual Amelia Auction on March 7-8, 2025, featuring a total of 169 lots, including 166 cars, 2 tractors, and 1 child's go-kart, showcasing a range of highly desirable supercars and collector vehicles [1][3]. Auction Highlights - The auction will feature a 1971 Lamborghini Miura P400 SV, estimated between $4,500,000 and $5,000,000, recognized as the world's first true supercar, with only about 150 "SV" specification Miuras built [2][3]. - A 1990 Ferrari F40, estimated at $3,800,000 to $4,200,000, is included, being one of only 213 F40s delivered to the U.S. and showing just 1,248 original miles [3]. - A 2018 Pagani Huayra Roadster, estimated between $3,200,000 and $3,600,000, is presented in essentially as-new condition with only 99 miles [4]. - The auction will also feature a 2015 Porsche 918 Spyder, estimated at $2,250,000 to $2,400,000, one of only 300 U.S.-market examples with just 887 miles [5]. - A 2008 Bugatti Veyron 16.4, estimated between $1,800,000 and $2,000,000, is highlighted as a first-generation hypercar with only 3,756 miles [6]. - Additional notable vehicles include a 2019 Lamborghini Aventador SVJ 63, estimated at $950,000 to $1,100,000, and a 1959 Ferrari 250 GT LWB California Spider Competizione, among others [7][11]. Company Background - Broad Arrow Auctions, founded in 2021, is a leading global collector car auction house and is recognized as the fastest-growing auction house in its segment, with flagship events including The Amelia Auction and plans for expansion into Europe in May 2025 [8]. - Hagerty, the parent company, is a prominent automotive enthusiast brand providing specialty vehicle insurance and car valuation services, catering to a community of over 865,000 car enthusiasts [9].

Core Insights - Broad Arrow Auctions, a subsidiary of Hagerty, will feature the 1954 Jaguar D-Type Works Competition Car, chassis no. XKD 403, at its 2025 Amelia Auction, with an estimated sale price of $6,500,000 to $8,500,000 [1][4] Company Overview - Broad Arrow Auctions is a leading global collector car auction house, founded in 2021, and has rapidly expanded its presence in the auction market [11] - The company is known for its flagship events, including The Amelia Auction and plans to launch its first European auction in May 2025 [11] Industry Context - The Jaguar D-Type is recognized for its revolutionary design and engineering, contributing to Jaguar's three consecutive Le Mans victories [2] - The car on offer, 'OKV 2,' was part of Jaguar's initial strategy for the 1954 24 Hours of Le Mans and was driven by notable racers including Stirling Moss [3][4] Auction Details - The 2025 Amelia Auction is scheduled for March 7-8, 2025, at the Ritz-Carlton Amelia Island, and will feature other significant cars alongside the D-Type [8][9] - The auction will be conducted without reserve, indicating that the car will be sold to the highest bidder regardless of the price [1][4]