Palomar (NasdaqGS:PLMR) Q4 2025 Earnings call February 12, 2026 12:00 PM ET Company ParticipantsAndrew Andersen - Equity Research and Senior Vice PresidentChris Uchida - CFOJon Christianson - PresidentMac Armstrong - Founder and CEOMeyer Shields - Managing DirectorPablo Singzon - Executive DirectorPaul Newsome - Managing DirectorConference Call ParticipantsDavid Motamedi - Research AnalystMark Hughes - AnalystMatt Carletti - Research AnalystOperatorGood morning, and welcome to Palomar Holdings, Inc. fourth ...

Palomar (NasdaqGS:PLMR) Q4 2025 Earnings call February 12, 2026 12:00 PM ET Company ParticipantsAndrew Andersen - Equity Research and Senior Vice PresidentChris Uchida - CFOJon Christianson - PresidentMac Armstrong - Founder and CEOMeyer Shields - Managing DirectorPablo Singzon - Executive DirectorPaul Newsome - Managing DirectorConference Call ParticipantsDavid Motamedi - Research AnalystMark Hughes - AnalystMatt Carletti - Research AnalystOperatorGood morning, and welcome to Palomar Holdings, Inc. fourth ...

Financial Data and Key Metrics Changes - In 2025, the company achieved record levels of gross written premium and adjusted net income, with gross written premium increasing by 32% to $2 billion and adjusted net income growing by 62% to $216 million [4][28][29] - The adjusted return on equity for the full year was 25.9%, compared to 22.2% in 2024, indicating strong profitability [29] - For Q4 2025, adjusted net income was $61.1 million, or $2.24 per share, representing a 48% increase from $41.3 million, or $1.52 per share, in Q4 2024 [22][24] Business Line Data and Key Metrics Changes - The earthquake franchise saw a 2% decline year-over-year, primarily due to a one-time headwind from a large unearned premium transfer in Q4 2024 [7] - The Inland Marine and other property group grew by 30% year-over-year in Q4, driven by strong performance in Builders Risk and flood products [9] - The casualty business experienced a 120% year-over-year growth in gross written premium in Q4, ending 2025 at 20% of total gross written premium [11][12] Market Data and Key Metrics Changes - The commercial earthquake book faced a 15% rate decrease, with competition remaining elevated, while the residential earthquake book maintained a healthy premium retention rate of 97% [8][9] - The crop franchise generated $248 million in gross written premium in 2025, exceeding expectations, with a projected growth of over 30% in 2026 [14][15] Company Strategy and Development Direction - The company executed four strategic imperatives in 2025: integrate and operate, build new market leaders, remember preferences, and generate consistent earnings [5] - For 2026, the company aims to leverage scale for profitable growth, curate a distinct portfolio, deepen market positions, and integrate AI for operational efficiency [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining the Palomar 2X target, with adjusted net income guidance for 2026 set at $260 million-$275 million, implying a 24% growth [18][30] - The company anticipates modest premium growth and margin expansion in the earthquake book despite ongoing commercial pressure [9][46] Other Important Information - The company successfully integrated two specialty franchises and closed the acquisition of Gray Casualty & Surety, which is expected to strengthen its surety franchise [5][17] - The adjusted combined ratio for the full year was 72.7%, with expectations for it to be in the mid-70s for 2026 [31] Q&A Session Summary Question: Higher retention on crop and its contribution to earnings - Management indicated that retaining more crop business will add approximately $8 million of pre-tax income for every $100 million retained, with a combined ratio expected in the low 90s [35][36] Question: 10% reduction in reinsurance costs - The 10% reduction is on a risk-adjusted basis, assuming like-for-like exposure [37] Question: Growth expectations from new underwriting hires - Management noted that growth contributions from new hires depend on the market they enter, with a focus on moderate growth and strong reinsurance support [40][42] Question: Breakdown of earthquake growth - The residential earthquake book is expected to grow in the high single digits to double digits, while commercial earthquake will face continued pressure [45][46] Question: Long-term returns on equity with changing business mix - Management believes it can maintain an ROE above 20% while achieving the Palomar 2X target, despite changes in the business mix [80]

Key Takeaways Palomar posted Q4 operating EPS of $2.24, up 47%, as revenues surged 59.9% to $251 million.PLMR saw net earned premiums jump 61% and underwriting income rise over 50% year over year.Palomar lifted 2026 adjusted net income guidance to $260-$275M, citing strong momentum.Palomar Holdings, Inc. (PLMR) reported fourth-quarter 2025 operating income of $2.24 per share, which beat the Zacks Consensus Estimate by 9%. The bottom line increased 47.4% year over year.Total revenues improved 59.9% year over ...

Specialty insurer Palomar Holdings, Inc. has reported a 60.6% rise in net income to $56.2 million for the fourth quarter of 2025, compared to net income of $35 million in Q4’24.The insurer reported strong underwriting results for the quarter as gross written premiums (GWP) rose by 31.8% to $492.6 million compared to $373.7 million in Q4’24. Net premiums written (NPW) rose by 46.3% to $247.6 million in Q4’25, compared to $169.2 million in Q4’24. At the same time, net premiums earned (NPE) increased 61.1% to ...

Core Insights - Palomar (PLMR) reported a revenue of $250.99 million for the quarter ended December 2025, marking a year-over-year increase of 59.9% and exceeding the Zacks Consensus Estimate by 13.07% [1] - The earnings per share (EPS) for the same period was $2.24, up from $1.52 a year ago, with an EPS surprise of 8.95% compared to the consensus estimate of $2.06 [1] Financial Performance Metrics - Loss Ratio stood at 30.4%, better than the five-analyst average estimate of 31% [4] - Combined Ratio was reported at 76.8%, slightly above the average estimate of 75.5% based on four analysts [4] - Expense Ratio was 46.4%, compared to the four-analyst average estimate of 44.5% [4] - Adjusted Combined Ratio was 73.4%, in line with the average estimate of 73.1% from two analysts [4] - Net Investment Income was $15.99 million, exceeding the average estimate of $15.34 million by 41.3% year-over-year [4] - Commission and Other Income reached $1.54 million, significantly higher than the estimated $1.1 million, representing a 105.5% year-over-year increase [4] - Net Earned Premiums totaled $233.46 million, surpassing the average estimate of $205.55 million, with a year-over-year change of 61.1% [4] Stock Performance - Palomar's shares have returned +1.3% over the past month, contrasting with a -0.3% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Insights - Palomar (PLMR) reported quarterly earnings of $2.24 per share, exceeding the Zacks Consensus Estimate of $2.06 per share, and showing a significant increase from $1.52 per share a year ago, representing an earnings surprise of +8.95% [1] - The company achieved revenues of $250.99 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 13.07%, compared to $156.96 million in the same quarter last year [2] Earnings Performance - Over the last four quarters, Palomar has consistently surpassed consensus EPS estimates, achieving this four times [2] - The company also topped consensus revenue estimates in all four quarters during the same period [2] Stock Performance - Palomar shares have declined approximately 4.1% since the beginning of the year, while the S&P 500 has gained 1.4% [3] - The current Zacks Rank for Palomar is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $2.07 on revenues of $238.11 million, and for the current fiscal year, it is $8.63 on revenues of $1.08 billion [7] - The outlook for the insurance industry, particularly the Insurance - Property and Casualty sector, is currently in the bottom 38% of Zacks industries, which may impact stock performance [8]

Exhibit 99.1 (1) See discussion of "Non-GAAP and Key Performance Indicators" below. Mac Armstrong, Chairman and Chief Executive Officer, commented, "Our strong fourth quarter results provided a superb culmination to what was an exceptional 2025. The quarter was highlighted by record adjusted net income, strong top and bottom-line growth as gross written premium grew 32% and adjusted net income increased 48% across our unique and diverse portfolio. Our specialty product suite is purpose-built to navigate any ...

Core Insights - Palomar Holdings, Inc. reported a significant increase in net income for Q4 2025, reaching $56.2 million, or $2.06 per diluted share, compared to $35.0 million, or $1.29 per diluted share, in Q4 2024, marking a 60.6% increase in net income year-over-year [1][7] - The company achieved an adjusted net income of $61.1 million, or $2.24 per diluted share, for Q4 2025, up from $41.3 million, or $1.52 per diluted share, in Q4 2024, reflecting a 48.0% increase [1][7] - Gross written premiums grew by 31.8% to $492.6 million in Q4 2025, compared to $373.7 million in Q4 2024, while net earned premiums increased by 61.1% [5][7] Fourth Quarter 2025 Highlights - The company reported a record adjusted net income and strong growth in both top and bottom lines, with gross written premiums increasing by 32% and adjusted net income rising by 48% [4] - The adjusted combined ratio for Q4 2025 was 73.4%, compared to 71.7% in Q4 2024, indicating effective underwriting performance [8][7] - The annualized return on equity for Q4 2025 was 24.7%, up from 19.5% in the same period last year [11][7] Full Year 2025 Highlights - For the full year 2025, gross written premiums reached $2.0 billion, a 31.5% increase from $1.5 billion in 2024 [7][34] - Net income for the full year was $197.1 million, a 67.6% increase from $117.6 million in 2024, while adjusted net income rose by 61.9% to $216.1 million [7][34] - The total loss ratio for 2025 was 28.5%, compared to 26.4% in 2024, indicating a slight increase in losses relative to earned premiums [7][34] Underwriting Results - Underwriting income for Q4 2025 was $54.4 million, resulting in a combined ratio of 76.8%, compared to a combined ratio of 75.9% in Q4 2024 [8][7] - The company experienced a loss ratio of 30.4% in Q4 2025, up from 25.7% in Q4 2024, with a catastrophe loss ratio of -0.9% compared to 5.6% in the previous year [6][7] Investment Results - Net investment income increased by 41.3% to $16.0 million in Q4 2025, driven by higher yields on invested assets [9][7] - The company recorded net realized and unrealized gains of $2.4 million in Q4 2025, contrasting with losses of $1.2 million in the same period last year [9][7] Stockholders' Equity and Returns - Stockholders' equity rose to $942.7 million at the end of 2025, compared to $729.0 million at the end of 2024 [11][7] - The company did not repurchase any shares during the quarter, with approximately $112.7 million remaining available for future repurchases under the existing authorization [11][7] Full Year 2026 Outlook - For the full year 2026, the company anticipates achieving adjusted net income between $260 million and $275 million, including an estimate of $8 million to $12 million in catastrophe losses [12][7]

Core Viewpoint - Palomar Holdings, Inc. has successfully completed the acquisition of The Gray Casualty & Surety Company, enhancing its position in the surety sector with a total cash consideration of $300 million [1][2]. Group 1: Acquisition Details - The acquisition was initially announced in October 2025, with Palomar agreeing to acquire Gray Surety from Bernhard Capital Partners and The Gray Insurance Company for a total cash consideration of $300 million [2]. - The financing for the acquisition includes a $150 million revolving credit facility and a $300 million term loan [2]. Group 2: Financing Arrangements - U.S. Bank National Association and KeyBank National Association served as Joint Lead Arrangers and Joint Book Runners for the financing [3]. - U.S. Bank acted as Administrative Agent, while KeyBank served as Syndication Agent [3]. - Additional banks involved in the financing include Citizens Bank, The Huntington National Bank, PNC Bank, and Wells Fargo Bank, with JPMorgan Chase Bank participating in the term loan [3]. Group 3: Management Commentary - Mac Armstrong, Chairman and CEO of Palomar, expressed satisfaction with the successful closing of the acquisition, highlighting Gray Surety's exceptional management team [4]. - The transaction is expected to significantly strengthen Palomar's surety franchise, adding scale and geographic reach, and complementing existing operations [5]. - The acquisition aligns with Palomar's strategic framework aimed at building a market leader in the surety sector [5].