Financial Results Announcement - Hippo will release its first quarter financial results after market close on May 7, 2025 [1] - A conference call and live webcast for analysts and investors will take place at 5:00 PM ET / 2:00 PM PT on the same day [1][3] - A shareholder letter with the financial results will be available on the company's investor relations website prior to the conference call [1] Investor Day - The company will host an Investor Day on June 12, 2025, in New York City [2] - The event will feature presentations and Q&A sessions with Hippo's senior management regarding long-term growth strategy and financial goals [2] - Attendance is by invitation only, with more information to be provided closer to the event date [2] Company Overview - Hippo focuses on proactive home protection, safeguarding customers' financial assets through real-time data and a suite of home services [3] - Operating subsidiaries include Hippo Insurance Services, Hippo Builder Insurance Agency, Hippo Home Care, Spinnaker Insurance Company, Spinnaker Specialty Insurance Company, and Wingsail Insurance Company [3] - Hippo Insurance Services and Hippo Builder Insurance Agency are licensed property casualty insurance agents with products underwritten by various affiliated and unaffiliated insurance companies [3]

Financial Data and Key Metrics Changes - In Q4 2024, Hippo achieved positive adjusted EBITDA of $8.5 million, a $31 million improvement year-over-year [29] - Revenue for Q4 2024 increased 58% year-over-year to $102 million, up from $64 million in Q4 of the previous year [23] - Q4 net income was positive $44 million, an $86 million improvement compared to Q4 of last year [28] Business Line Data and Key Metrics Changes - The total generated premium (TGP) grew by 10% year-over-year to $295 million, driven by a 22% increase in the Insurance as a Service segment [22] - The Hippo home insurance program segment experienced an expected decline of 8% due to efforts to manage exposure to high catastrophe geographies [23] - The HHIP gross loss ratio improved to 50%, while the HHIP non-PCS loss ratio improved to 43%, reflecting significant operational changes [25] Market Data and Key Metrics Changes - The company reported a gross loss ratio of 73% for the full year 2024, with a non-cat PCS loss ratio of under 45% in Q4 [15] - The HHIP/PCS cat loss ratio was 7% during Q4, an increase of 17 percentage points year-over-year, primarily due to prior accident period reserve releases [26] Company Strategy and Development Direction - Hippo is focused on expanding its network of partners and enhancing relationships with existing partners, particularly in the new homes channel [17] - The company aims to turn net income profitable by the end of 2025, with a revenue guidance increase to $465 million for 2025 [31] - The strategic focus includes maintaining high-quality underwriting standards while exploring new program opportunities [62] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of recent wildfires in California, estimating pretax catastrophe losses of approximately $42 million, but emphasized that these losses were primarily from legacy policies [11][12] - The company remains optimistic about its position in 2025, expecting substantial improvements in operating income despite short-term impacts from the wildfires [18] - Management expressed confidence in achieving continued improvements in gross and net loss ratios in 2025 [32] Other Important Information - The company announced a leadership change, with Guy Zeltser appointed as the new Chief Financial Officer effective March 10 [36] - Hippo's cash and investments increased by $25 million to $571 million, driven by positive cash flow and proceeds from the sale of a majority stake in First Connect [30] Q&A Session Summary Question: Strategy behind the sale of Eaton Fire subrogation rights - Management confirmed the sale was not due to liquidity needs but rather a strategic decision based on current market conditions and potential recovery values [41][42] Question: Impact of early-year catastrophe loss event on reinsurance protection - Management indicated that the losses barely impacted the existing reinsurance structure, which remains intact [44][46] Question: Guidance for full year 2025 on bottom line basis - Management stated that detailed guidance would be provided during the upcoming Investor Day event on June 12 [48][50] Question: Update on California exposures and derisking efforts - Management reassured that losses from recent fires did not affect the new home business and emphasized ongoing efforts to reduce concentration exposures [56][58] Question: Competitive environment in Insurance as a Service and growth outlook - Management expressed confidence in the quality of their programs and partnerships, indicating a strong pipeline for growth [62][64] Question: Sales and marketing spend and seasonality into 2025 - Management highlighted improved efficiency in spending and indicated a disciplined approach to future marketing investments [68][70]

PALO ALTO, Calif., March 6, 2025 /PRNewswire/ -- Hippo (NYSE: HIPO), the home insurance group focused on proactive home protection, today announced its consolidated financial results for the three months that ended December 31, 2024."Hippo delivered $8.5 million in positive adjusted EBITDA in Q4 2024, surpassing all expectations," said Hippo President and CEO Rick McCathron. "A nearly 30-point improvement in our gross loss ratio in 2024 and the further streamlining of our operations contributed to our most ...

Investment Risks - The company's investment portfolio is primarily exposed to interest rate changes, with significant holdings in debt securities, treasury bills, municipal bonds, and mortgage- and asset-backed securities [254]. - Interest rates increased significantly in 2022 and 2023, which could lead to declines in the value of fixed income securities, depending on the duration and magnitude of interest rate increases [254]. - The company faces risks related to potential defaults or impairments in its investment portfolio, which could negatively impact net investment income and result in realized investment losses [255]. - Valuation uncertainties increase in illiquid markets, raising the risk that the estimated fair value of securities may not reflect actual transaction prices [256]. - The investment portfolio is at risk of default or impairment due to the financial condition of issuers, which could lead to realized investment losses [255]. - The company may face increased valuation uncertainties in illiquid markets, affecting the estimated fair value of securities held in the portfolio [256]. - The investment policy includes parameters for maximum percentages of investment in certain securities and minimum levels of credit quality [259]. Stock Performance and Compliance - The company executed a 1-for-25 reverse stock split on September 29, 2022, to comply with NYSE listing standards after receiving a notice of non-compliance due to the average closing price being below $1.00 per share [264][265]. - The market price of the company's common stock may be highly volatile, influenced by various factors including operating performance, market conditions, and investor sentiment [266]. - The company may face challenges in maintaining compliance with NYSE listing standards, which could affect liquidity and market price of its securities [263]. - The average closing price of the company's common stock was less than $1.00 per share over a consecutive 30-trading day period, leading to a notice from the NYSE regarding non-compliance with listing standards [264]. - A 1-for-25 reverse stock split of the company's common stock was executed on September 29, 2022, to regain compliance with NYSE listing standards [265]. - The company may face significant volatility in the market price of its common stock, influenced by various factors including operating performance and broader market conditions [266]. - The company’s stock may not have an active trading market, making it difficult for stockholders to sell shares at attractive prices [262]. - The company’s stock price could materially decline if analysts cease coverage or change their recommendations negatively [268]. Dividend Policy - The company does not currently expect to pay any cash dividends on its common stock for the foreseeable future, intending to retain future earnings for business operations and expansion [288]. - The ability to pay dividends is dependent on the earnings and distributions from subsidiaries, which may be restricted by future credit agreements or debt securities [289]. - The company does not anticipate paying cash dividends in the near future, with any future dividend decisions dependent on various financial factors [288]. - Dividend payments from the company's insurance subsidiaries are restricted by state laws, which could limit the funds available for the parent company [286]. Legal and Compliance Challenges - The company faces significant legal, accounting, and compliance costs associated with being a public company, which may strain resources and divert management's attention [291]. - The company may be subject to regulatory actions if unable to comply with public company obligations, which could negatively impact stock price and investor confidence [292]. - The company is subject to significant legal and financial compliance costs as a public entity, which may strain resources and divert management's attention [291]. - The company is required to comply with state insurance laws for any change of control, which may delay or prevent acquisitions [272]. - The company may face increased costs and challenges in obtaining insurance due to compliance with public company regulations [292]. Management and Governance - The management team has limited experience managing a publicly traded company, which could affect business operations and financial condition [293]. - The company’s Certificate of Incorporation includes anti-takeover provisions that could discourage acquisitions even if beneficial to stockholders [269]. - The company’s bylaws require indemnification of directors and officers, which may reduce available funds for third-party claims [276]. - The company maintains directors' and officers' liability insurance, but it may not be adequate to cover all liabilities incurred [278]. - The company is classified as an emerging growth company and will not require an independent audit of internal controls until it no longer qualifies, potentially impacting investor confidence [281]. - The company may face challenges in establishing effective internal controls, which could lead to material weaknesses and affect financial reporting accuracy [282]. Shareholder Concerns - Sales of a substantial number of shares by existing stockholders could significantly reduce the market price of the company's common stock [294]. - Anti-takeover provisions in the company's Certificate of Incorporation may discourage acquisitions that could benefit stockholders [269].

Financial Performance - Q4 revenue increased by 58% year-over-year to $102 million, with FY2024 revenue up 77% to $372 million[5] - Q4 net income attributable to Hippo was $44 million, compared to a net loss of $42 million in the same quarter last year[5] - Adjusted EBITDA for Q4 was positive $8.5 million, an improvement of $31 million year-over-year[43] - The company reported a net loss attributable to Hippo of $44.2 million for Q4 2024, compared to a net loss of $(42.3) million in Q4 2023[75] - Adjusted EBITDA for Q4 2024 was $8.5 million, a significant improvement from a loss of $(22.3) million in Q4 2023[71] - The company reported a loss before income taxes of $47.1 million for the three months ended December 31, 2024, an improvement from a loss of $39.0 million in the same period of 2023[89] Revenue Growth - Total Generated Premium (TGP) grew by 10% year-over-year to $295 million, with Insurance-as-a-Service segment growing by 22%[24] - Total Generated Premium for the year ended December 31, 2024, was $1,336.1 million, up from $1,134.3 million in 2023, indicating a strong growth trajectory[71] - Total segment revenue for the year ended December 31, 2024, reached $384.1 million, compared to $217.1 million in 2023, reflecting a growth of 76.9%[90] - Revenue surged by 58% to $102.0 million in Q4 2024 compared to $64.5 million in Q4 2023[92] - Hippo Home Insurance Program revenue more than doubled, increasing by 106% to $64.1 million in Q4 2024 from $31.1 million in Q4 2023[92] Loss Ratios and Improvements - HHIP gross loss ratio improved by 3 percentage points year-over-year to 50%, while the net loss ratio improved by 46 percentage points to 60%[5] - The HHIP non-PCS loss ratio improved to 43%, with a target of further improvements expected in 2025[7] - The gross loss ratio for Q4 2024 was reported at 45%, while the net loss ratio was 58%, showing significant improvement from previous years[71] - The Gross Loss Ratio for the year improved to 53% in 2024 from 71% in 2023, indicating better loss management[82] Cash Flow and Investments - Cash and investments increased by $25 million quarter-over-quarter to $571 million, driven by positive cash flow and proceeds from the sale of a majority stake in First Connect[47] - Cash flows from operating activities turned positive with a net cash provided of $47.5 million in 2024, compared to $(92.4) million in 2023[78] - The company achieved a net cash increase of $37.7 million in 2024, reversing a decrease of $(49.4) million in 2023[78] - Cash, cash equivalents, and restricted cash at the end of the period increased to $232.8 million in 2024 from $195.1 million in 2023[78] Future Outlook - The company aims to achieve positive net income by the end of 2025, despite short-term impacts from recent wildfires[13] - The company is on track to exceed its revenue target of $420 to $450 million for 2025, with a current annual run-rate of approximately $410 million[21] - The company has raised its 2025 revenue guidance to a range of $465 million, representing a 25% YoY growth rate from 2024 revenue on a GAAP basis[51] - The company expects to achieve positive net income by Q4 2025, driven by improvements in gross and net loss ratios, with a gross loss ratio expected to be less than 60%[52] Expense Management - Fixed expenses decreased by $8 million year-over-year, resulting in a reduction from 69% of revenue in Q4'23 to 35% in Q4'24[39] - Sales and marketing expenses for the year ended December 31, 2024, were $6.0 million, a decrease from $16.9 million in 2023, representing a reduction of 64.6%[90] - Total segment expenses rose by 12% to $87.7 million in Q4 2024 compared to $78.0 million in Q4 2023[92] - Services segment expenses decreased by 21% to $12.4 million in Q4 2024 from $15.7 million in Q4 2023[92] - Insurance-as-a-service segment expenses increased by 51% to $18.7 million in Q4 2024 from $12.4 million in Q4 2023[92] - Hippo Home Insurance Program segment expenses rose by 13% to $56.6 million in Q4 2024 from $49.9 million in Q4 2023[92] Market Strategy - The company plans to continue expanding its market presence and investing in technology and development to enhance its service offerings and operational efficiency[88]

Core Viewpoint - Hippo, a home insurance group, is set to release its fourth quarter financial results on March 6, 2025, and will host a conference call for analysts and investors on the same day [1] Financial Results Announcement - The fourth quarter financial results will be released before market open on March 6, 2025 [1] - A conference call and live webcast for analysts and investors will take place at 8am ET/5am PT on that day [1] - A shareholder letter with the financial results will be available on the company's investor relations website prior to the conference call [1] Conference Call and Webcast Information - Date: March 6, 2025 [2] - Time: 8:00 a.m. Eastern Time / 5:00 a.m. Pacific Time [2] - Dial-in number: +1 833 470 1428 with global dial-in numbers available [2] - Access code for the call: 827436 [2] - Webcast link: https://events.q4inc.com/attendee/922114957 [2] - A replay of the webcast will be accessible on the investor relations section of the company's website after the call [2] Company Overview - Hippo focuses on proactive home protection, utilizing real-time data, smart home technology, and a suite of home services [4] - The company operates through various subsidiaries, including Hippo Insurance Services and Spinnaker Insurance Company [4] - Hippo Insurance Services is a licensed property casualty insurance agent with products underwritten by affiliated and unaffiliated insurance companies [4]

Core Insights - The 2024 Housepower Report by Hippo reveals that U.S. homeowners are increasingly adopting proactive strategies to protect their homes and investments, with a focus on preventative care and home maintenance [1][3][4] Homeowner Financial Concerns - In 2024, 46% of homeowners spent over $5,000 on unexpected repairs, a rise from 36% in 2023, with common issues including water damage, roof problems, and door/window repairs [3][4] - 83% of homeowners faced unexpected repairs in 2024, nearly doubling from 46% in 2023, impacting their financial stability, as 47% reported budget strain due to these repairs [4] Home Maintenance Priorities - Homeowners prioritize maintenance to protect their primary financial asset, with 64% focusing on overall home condition, 46% on improving ROI, and 45% on preventing costly repairs [5] - Despite the emphasis on maintenance, nearly 25% of homeowners spent less than $1,000 on proactive seasonal maintenance in 2024, contrasting sharply with the $5,000 spent on unexpected repairs by nearly half of homeowners [6] Homeowner Regrets and Future Plans - 73% of homeowners expressed regrets about their home purchase in 2024, an increase from 63% in 2023, with top regrets including emergency planning and insurance reviews [7] - 59% of homeowners are considering moving in 2025 to better align with their financial and personal goals [8] Weather-Related Concerns - 28% of homeowners are concerned about extreme weather preparedness, up from 25% in 2023, with heightened risks reported for flooding (42%), wildfires (35%), and strong winds (30%) [9][10] - The U.S. experienced 24 billion-dollar climate and weather-related disaster events as of November 2024, indicating a growing need for home insurance and protection plans [10] Company Initiatives - Hippo offers tools and resources to help homeowners manage their properties confidently, including personalized maintenance checklists and home health insights through the Hippo Home app [11][13]

Core Insights - Hippo has appointed Andrea Collins as Chief Marketing Officer, returning to the company after previously serving as Vice President of Marketing from 2017 to 2022 [1][2] - Collins brings over two decades of marketing experience, having held significant roles in the insurance and technology sectors, including positions at Cowbell and Flyhomes [2][3] - The company aims to enhance its marketing strategies and deepen investments in distribution channels, particularly through its New Homes Program [4] Company Overview - Hippo focuses on proactive home protection, utilizing real-time data and smart home technology to safeguard homeowners' financial assets [5] - The company operates through various subsidiaries, including Hippo Insurance Services and Hippo Builder Insurance Agency, which are licensed property casualty insurance agencies [6]

Financial Data and Key Metrics - Total Generated Premium (TGP) grew 21% YoY to $368 million in Q3 2024 [16] - Revenue increased 65% YoY to $95 million, up from $58 million in Q3 2023 [18] - Net loss improved by 84% YoY to $8.5 million, driven by a 67 percentage point improvement in the HHIP net loss ratio and better operating leverage [27] - Adjusted EBITDA loss improved by 81% YoY to $7.5 million [28] - Cash and investments increased by $54 million QoQ to $545 million, driven by higher reinsurance collections and proceeds from the sale of a shell insurance carrier [29] Business Line Performance - TGP in the Hippo Home Insurance Program (HHIP) segment declined 18% YoY due to reduced exposure to high-CAT geographies [16] - TGP in the Insurance-as-a-Service segment grew 12% YoY, while the Services segment saw 46% TGP growth [16] - The Services and Insurance-as-a-Service segments accounted for 81% of total TGP, up from 74% a year ago [17] - HHIP non-PCS accident period loss ratio improved by 15 percentage points YoY to 52%, driven by aggressive rate and underwriting actions [21] - Total HHIP accident period loss ratio improved by 22 percentage points YoY to 70% [23] Market and Geographic Performance - The company expanded its New Homes program in California, Florida, and Texas, adding new builder partners Perry Homes and Van Daele [10] - By year-end, the company expects to provide insurance access for nearly 50,000 new homes annually in these states [11] - The company has access to approximately 200,000 new homes annually through existing partners, with an addressable market of 1.5 million new homes expected in 2025 [37] Strategic Direction and Industry Competition - The company sold a majority stake in First Connect Insurance Services for $48 million, with potential additional proceeds of up to $12 million based on performance targets [11][31] - The transaction allows the company to focus on its core business while enabling First Connect to invest in its growth [12][32] - The company repurchased and retired 957,242 shares, representing 3.8% of total shares outstanding, using proceeds from the First Connect sale [33] - The company is prioritizing the remediation of its legacy HHIP portfolio while accelerating growth in new builder channels [45] Management Commentary on Operating Environment and Future Outlook - Management highlighted significant improvements in loss ratios and operating leverage, driven by strategic investments and underwriting actions [8][15] - The company expects Q4 2024 revenue of $95 million to $99 million and adjusted EBITDA of $5 million to $6 million, despite the impact of Hurricane Milton [35] - Management remains optimistic about the company's path to profitability and future growth opportunities [13][49] Other Important Information - The company referred to non-GAAP financial measures such as TGP and adjusted EBITDA, with reconciliations provided in the shareholder letter [7] - The sale of First Connect will lower Q4 TGP by $50 million to $60 million and revenue by $1.5 million to $1.8 million, with a negligible impact on net loss and adjusted EBITDA [34] Q&A Session Summary Question: Entry into California, Florida, and Texas homebuilder markets - The company clarified that it is not entering these states but expanding partnerships with additional homebuilders in these regions [36] - The company has access to approximately 200,000 new homes annually and expects an addressable market of 1.5 million new homes in 2025 [37] Question: Retention rates and loss ratios in the homebuilders' channel - Retention rates are high, with policies transitioning from new construction to traditional homeowner policies as homes age [38] - Early data suggests new homes have better loss ratios than older homes, particularly in non-weather losses [39] Question: Impact of First Connect sale on EBITDA - The sale has a small positive impact on adjusted EBITDA, as First Connect was not yet profitable [40] Question: Rationale for selling the shell insurance carrier - The sale involved a dormant asset, Mainsail, which was redundant given the company's other assets [43][44] Question: Growth outlook for HHIP and other segments - The company is focused on remediating the legacy HHIP portfolio while writing new business in areas with favorable loss ratios [45] - Growth in the Insurance-as-a-Service and Services segments is expected to outpace HHIP in the near term [46] Question: Share repurchase strategy - The company repurchased shares opportunistically using proceeds from the First Connect sale and may continue to explore buybacks as it approaches profitability [47]

Core Insights - Hippo Holdings Inc. reported a quarterly loss of $0.34 per share, significantly better than the Zacks Consensus Estimate of a loss of $1, and an improvement from a loss of $2.24 per share a year ago, representing an earnings surprise of 66% [1] - The company achieved revenues of $95.5 million for the quarter ended September 2024, exceeding the Zacks Consensus Estimate by 1.38% and showing a substantial increase from $57.7 million in the same quarter last year [2] - Hippo Holdings shares have increased approximately 159% since the beginning of the year, outperforming the S&P 500's gain of 25.2% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.48 on revenues of $102.5 million, and for the current fiscal year, it is -$4.60 on revenues of $371.55 million [7] - The estimate revisions trend for Hippo Holdings is favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Insurance - Multi line industry, to which Hippo Holdings belongs, is currently ranked in the top 25% of over 250 Zacks industries, suggesting a positive outlook for stocks within this 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]