Hippo (HIPO) - 2025 Q2 - Quarterly Results

Financial Performance - Gross Written Premium increased by 16% year-over-year to $299 million, driven by organic growth in existing and new hybrid fronting programs[7] - Revenue grew by 31% year-over-year to $117 million, supported by a 12% increase in gross earned premium and a 9 percentage point rise in premium retention to 39%[29] - Net Income attributable to Hippo was $1 million, a significant improvement from a net loss of $41 million in the same quarter last year[43] - Adjusted Net Income reached $17 million, reflecting a $37 million improvement compared to the prior year[44] - For Q2 2025, gross written premium reached $298.6 million, up from $257.6 million in Q2 2024, indicating a year-over-year growth[70] - The net income attributable to Hippo for Q2 2025 was $1.3 million, a significant improvement from a loss of $40.5 million in Q2 2024[71] - Total consolidated revenue for the three months ended June 30, 2025, is $117.3 million, with segment revenue contributing $120.3 million[87] - Total consolidated revenue for the six months ended June 30, 2025, is $227.6 million, with a significant increase from $174.7 million in the same period of 2024[92] - Total revenue for Q2 2025 reached $117.3 million, a 31% increase from $89.6 million in Q2 2024[98] Loss Ratios and Financial Guidance - Consolidated Net Loss Ratio improved by 46 percentage points year-over-year to 47%, aided by underwriting actions and enhanced claims operations[35] - The gross loss ratio improved to 37% in Q2 2025, down from 58% in Q2 2024, indicating better loss management[70] - Net Loss Ratio decreased to 47% for the three months ended June 30, 2025, compared to 94% in the same period of 2024[81] - The consolidated net loss ratio guidance has improved to 67-69% for FY 2025, driven by positive loss trends[55] - Net income guidance has been raised to a positive range of $35-39 million for FY 2025, influenced by improved net loss ratio trends and a one-time gain from the asset sale[55] - Adjusted net income guidance has been updated to a loss of between $4 million and breakeven for FY 2025, reflecting improved net loss ratio trends[55] Expenses and Cash Management - Fixed expenses decreased by $6 million year-over-year, representing a 16% reduction, and fell from 46% of revenue in Q2'24 to 30% in Q2'25[41] - Cash and investments increased by $76 million quarter-over-quarter to $604 million, primarily due to a $50 million surplus note issuance[49] - Net cash used in operating activities was $(10.9) million for the six months ended June 30, 2025, compared to $7.1 million provided in the same period of 2024[74] - Total stockholders' equity decreased to $334.1 million as of June 30, 2025, from $365.2 million at December 31, 2024[73] Strategic Initiatives and Future Outlook - The strategic partnership with The Baldwin Group is expected to triple market access and enhance premium growth through expanded distribution channels[9] - Future targets include gross written premium exceeding $2 billion and adjusted net income over $125 million by 2028[23] - The company aims to optimize risk management and diversify its premium base across personal and commercial lines to drive long-term growth[9] - The company closed the sale of its homebuilder distribution network for $75 million in cash, with an expected gain of approximately $90 million in Q3 FY 2025[50] - Revenue guidance for FY 2025 is set between $460 million and $465 million, with expected reductions of $5.5 million and $6.5 million in Q3 and Q4 due to the sale of distribution assets[55] Segment Performance - Net earned premium for Hippo Home Insurance Program in Q2 2025 is $55.2 million, up from $48.8 million in Q2 2024[89] - Segment adjusted operating income for Hippo Home Insurance Program in Q2 2025 is $11.6 million, compared to a loss of $24.8 million in Q2 2024[89] - Insurance-as-a-service revenue surged by 97% to $48.0 million, up from $24.4 million year-over-year[98] - Hippo Home Insurance Program revenue increased by 8% to $60.6 million, compared to $56.2 million in the previous year[98] - Adjusted operating income for Insurance-as-a-service improved by 75% to $10.0 million, up from $5.7 million year-over-year[98] - Hippo Home Insurance Program achieved an adjusted operating income of $4.8 million, a significant recovery from a loss of $26.0 million in Q2 2024[98] - The company reported a total adjusted operating income of $11.8 million, a turnaround from a loss of $24.9 million in Q2 2024[98] - The company continues to focus on expanding its Insurance-as-a-service offerings and improving profitability across segments[98]