Hippo (HIPO)2024-11-07 23:14Financial Performance - Total Generated Premium (TGP) grew 21% YoY to $368 million, with Services and Insurance-as-a-Service (IaaS) segments representing 81% of TGP[12] - Revenue increased 65% YoY to $95 million, driven by higher premium retention and volume increases in the IaaS and Services segments[16] - Q3 net loss attributable to Hippo decreased by 84% YoY to $8.5 million, a $45 million improvement[24] - Adjusted EBITDA loss improved by 81% YoY to $7.5 million, reflecting a $31 million reduction[26] - Total revenue for Q3 2024 reached $95.5 million, compared to $57.7 million in Q3 2023, marking a 65.5% increase[45] - Net loss attributable to Hippo for Q3 2024 was $(8.5) million, significantly improved from $(53.1) million in Q3 2023[45] - Adjusted EBITDA for Q3 2024 was $(7.5) million, an improvement from $(38.4) million in Q3 2023[45] - Net loss for the nine months ended September 30, 2024, was $(75.5) million, a significant improvement from $(223.7) million in the same period of 2023[48] - Total revenue for the nine months ended September 30, 2023, was $145.2 million, with a breakdown of $32.8 million from services and $71.0 million from insurance-as-a-service[68] Loss Ratios and Underwriting Performance - HHIP accident period loss ratio improved by 22 percentage points YoY to 70%, with a net loss ratio improvement of 67 percentage points to 84%[21] - Gross Loss Ratio improved to 50% in Q3 2024 from 59% in Q3 2023, indicating better loss management[45] - Net Loss Ratio decreased to 73% in Q3 2024 from 111% in Q3 2023, reflecting improved underwriting performance[45] - HHIP Gross Loss Ratio (GLR) for FY 2023 was reported at 101%, with a significant improvement to 72% in Q3 2024[55] - HHIP GLR excluding PAY and PCS events improved to 53% in Q3 2024, indicating better risk management[55] Expenses and Cost Management - Fixed expenses decreased by $17 million, resulting in a decline from 89% of revenue to 36% YoY[23] - The company reported a significant improvement in operating leverage, with fixed expenses lowered while revenue increased by $37 million YoY[22] - Adjusted operating expenses for Hippo totaled $295.0 million for the nine months ended September 30, 2024, with significant costs in sales and marketing at $28.3 million[66] - Adjusted operating expenses for the three months ended September 30, 2024, totaled $93.5 million, a 7% increase from $87.6 million in 2023[69] - Stock-based compensation expense decreased to $29.3 million for the nine months ended September 30, 2024, from $46.7 million in 2023[48] Cash and Investments - Cash and investments increased by $54 million quarter-over-quarter to $545 million, driven by higher collections and proceeds from the sale of a shell insurance carrier[29] - Following the sale of a majority stake in First Connect, Hippo received approximately $48 million in cash proceeds and retained a 19.2% stake in the platform[30] - Net cash provided by operating activities was $53.9 million for the nine months ended September 30, 2024, compared to a cash outflow of $(43.9) million in 2023[48] - Cash, cash equivalents, and restricted cash at the end of the period increased to $230.9 million from $269.4 million in the previous year[48] - Net investment income for Hippo was $18.2 million for the nine months ended September 30, 2024, indicating a stable investment performance[66] - Net investment income for the nine months ended September 30, 2023, was $16.5 million, reflecting a decrease from previous periods[68] Business Development and Strategic Initiatives - The company expanded its New Homes program in California, Florida, and Texas, aiming to provide access to insurance for nearly 50,000 new homes annually[6] - Hippo sold a majority stake in First Connect Insurance Services for approximately $48 million, with potential additional proceeds of up to $12 million[7] - Q4 2024 guidance estimates revenue between $95 million and $99 million, with adjusted EBITDA projected to be positive between $5 million and $6 million[33] - The removal of First Connect from Hippo's financials is expected to lower Q4 TGP by approximately $50 to $60 million and revenue by approximately $1.5 to $1.8 million[33] Premium Growth - The collective premium from the Services and IaaS segments increased from 74% to 81% of total TGP YoY[15] - Gross written premium for the three months ended September 30, 2024, was $234.4 million, up 2.1% from $229.5 million in 2023[50] - Total generated premium increased by 21.2% to $368.0 million for the three months ended September 30, 2024, compared to $303.7 million in 2023[50] - Revenue from the Hippo Home Insurance Program surged by 111% to $61.1 million in Q3 2024, up from $28.9 million in Q3 2023[69] - The company experienced a 46% increase in total generated premium for the services segment, rising from $121.6 million in 2023 to $177.9 million in 2024[69] - The services segment reported a 14% revenue increase to $13.2 million in Q3 2024 compared to $11.6 million in Q3 2023[69] Assets and Liabilities - Total assets increased to $1,545.4 million as of September 30, 2024, compared to $1,524.7 million at the end of 2023, reflecting a growth of 1.4%[47] - Total liabilities rose to $1,215.3 million as of September 30, 2024, compared to $1,140.0 million at the end of 2023, marking a 6.6% increase[47]