Hagerty(HGTY) - 2025 Q1 - Quarterly Report

Financial Performance - For the three months ended March 31, 2025, the company reported net income of $27.3 million, a 232.9$39.6 million, reflecting a 44.9% increase year-over-year, driven by an 11.9% growth in written premium[197]. - Total revenue for the quarter was $319.6 million, representing a 17.6$271.7 million in the prior year[199]. - Total revenue for the three months ended March 31, 2025, was $319.6 million, an increase of$47.9 million, or 17.6%, compared to the same period in 2024[220]. - Operating income for the three months ended March 31, 2025, was $25.7 million, a significant increase of$13.5 million, or 110.5%, compared to 2024[220]. - Adjusted EPS for Q1 2025 was $0.08, compared to$0.04 in Q1 2024, reflecting improved net income performance[282]. Premium and Revenue Growth - Total written premium reached $244.3 million, up by$26.0 million or 11.9% from the previous year[199]. - Earned premium at Hagerty Re was $169.4 million, an increase of$17.7 million, or 11.7%, primarily due to growth in subject premiums written through MGA subsidiaries[225]. - Membership, marketplace, and other revenue reached $50.0 million, an increase of$18.7 million, or 59.8%, with marketplace revenue alone increasing by $18.5 million, or 175.8$100.3 million, up $11.4 million, or 12.9$11.9 million[221]. Expenses and Losses - The company recognized approximately $4.0 million in losses and impairments related to the reorganization of certain businesses in 2023[196]. - Losses and loss adjustment expenses were$71.1 million, an increase of $8.8 million, or 14.1$15.0 million, or 37.7%, to $54.6 million for the three months ended March 31, 2025, primarily due to higher marketplace inventory sales and increased broker expenses[234]. - General and administrative expenses were$22.2 million, an increase of $2.3 million, or 11.7$2.3 million, or 11.7%, to $22.2 million for the three months ended March 31, 2025, mainly due to increased software-related costs[235]. Loss Ratios and Claims - The Hagerty Re loss ratio was reported at 42.0$10.4 million in pre-tax catastrophe losses from the Southern California wildfires[233]. Cash Flow and Financing - Net cash provided by operating activities decreased by $14.4 million, or 24.7$43.8 million for the three months ended March 31, 2025[261]. - Cash from financing activities increased by $51.5 million in Q1 2025 compared to Q1 2024, primarily due to net proceeds from credit facility borrowings[265]. - As of March 31, 2025, total outstanding borrowings under the 2025 JPM Credit Facility were$88.8 million, with an aggregate borrowing capacity of $375.0 million[247]. - The BAC Credit Facility has an aggregate borrowing capacity of$75.0 million, with outstanding borrowings of $32.1 million as of March 31, 2025[249]. Tax and Other Financial Metrics - The effective income tax rate decreased to 17$0.4 million, or 7.0%, to $5.5 million for the three months ended March 31, 2025, driven by a$1.8 million increase in pre-tax income[241]. - The decrease in net cash from operating assets and liabilities was primarily driven by a $31.9 million net decrease in operating cash flows due to the timing of CUC receivables and payables[263]. - There were no material off-balance sheet arrangements as of March 31, 2025[269]. Membership and Engagement - The number of policies in force increased to 1,524,927, a 1.2% growth from the previous period[199]. - Hagerty Drivers Club (HDC) paid member count rose to 889,390, marking a 1.5% increase year-over-year[199]. - The net promoter score (NPS) remained stable at 82, indicating strong brand loyalty and engagement among members[199].