Tiptree (US:TIPT)2025-10-31 12:44Financial Performance - Tiptree reported net income of $31.0 million for the nine months ended September 30, 2025, a decrease from $33.8 million in the prior year period, primarily due to deal-related expenses and increased interest expense [225]. - Adjusted net income for the same period was $79.2 million, up from $72.8 million in the prior year, driven by growth in insurance operations [225]. - For the three months ended September 30, 2025, net income attributable to common stockholders was $6.4 million, a decrease of 46.2% from $11.9 million in the prior year period [246]. - Adjusted net income for the three months ended September 30, 2025 was $28.8 million, an increase of 3.2% from $27.9 million in the prior year period [247]. - Adjusted net income increased by $7.3 million, or 23.1%, to $39.1 million for the three months ended September 30, 2025 [276]. - Adjusted net income for the nine months ended September 30, 2025, was $135.2 million, an increase of 18.1% from $114.5 million in the prior year [291]. Revenue Growth - Total revenues for the nine months ended September 30, 2025, were $1.5 billion, reflecting a $26.5 million increase, or 1.8%, from the previous year [232]. - Total revenues for the three months ended September 30, 2025 were $540.3 million, an increase of 9.3% from $494.4 million in the prior year period [253]. - Insurance segment revenues for the three months ended September 30, 2025 were $522.6 million, up 8.6% from $481.0 million in the prior year period [253]. - Total revenues for the nine months ended September 30, 2025, increased by 1.8% to $1.5 billion compared to $1.5 billion in the prior year [292]. Premiums and Underwriting - Gross written premiums and premium equivalents increased by $304.2 million, or 13.7%, to $2.5 billion for the nine months ended September 30, 2025, attributed to growth in E&S insurance lines [232]. - Net written premiums rose to $1.2 billion, a 10.2% increase from the prior year, supported by stable premium retention levels [232]. - The combined ratio improved to 88.5%, an enhancement of 1.7 percentage points, driven by better underwriting performance [232]. - The combined ratio for the insurance segment indicates an underwriting profit, as it remains below 100% [272]. - The combined ratio improved to 87.3% from 90.2% in the prior year, reflecting better underwriting performance [288]. Stockholders' Equity - Tiptree's total stockholders' equity increased by 24.1% to $776.2 million as of September 30, 2025, compared to $625.5 million at the end of 2024 [232]. - Total stockholders' equity rose to $741.4 million as of September 30, 2025, up from $656.2 million as of September 30, 2024 [249]. - Total stockholders' equity as of September 30, 2025, was $741.4 million, up from $656.2 million as of September 30, 2024, representing an increase of 12.9% [345]. Expenses and Interest - Total expenses increased by 7.7% to $467.4 million, with significant increases in other expenses by $24.0 million, or 91.1% [276][282]. - Employee compensation and benefits increased by $3.9 million, or 10.2%, reflecting investments in human capital [282]. - Interest expense increased by $1.1 million, or 15.2%, to $8.3 million, primarily due to the issuance of new debt [283]. - Interest expense increased by 14.6% to $25.6 million for the nine months ended September 30, 2025, primarily due to the issuance of new debt [296]. Cash Flow and Investments - Cash provided by operating activities for the nine months ended September 30, 2025, was $123.4 million, compared to $170.8 million for the same period in 2024, a decrease of 27.7% [356]. - Cash used in investing activities for the nine months ended September 30, 2025, was $122.9 million, compared to $146.2 million for the same period in 2024, a decrease of 15.9% [358]. - Cash provided by financing activities was $58.1 million for the nine months ended September 30, 2025, primarily from a senior secured credit facility of $75.0 million [360]. Corporate Actions - On September 26, 2025, Tiptree entered into a Merger Agreement to sell Fortegra for $1.65 billion in cash, with transaction expenses of approximately $8.1 million incurred [223]. - The company plans to sell Reliance for an estimated $51 million, representing 93.5% of tangible book value, as of September 30, 2025 [225]. - As of September 30, 2025, Tiptree owned approximately 78.9% of Fortegra [333]. Tax and Liabilities - The total income tax expense for the three months ended September 30, 2025, was $22.7 million, with an effective tax rate of 59.2%, significantly higher than the U.S. statutory rate of 21.0% [327]. - The deferred tax liability related to Fortegra increased to $109.2 million as of September 30, 2025, up by $24.5 million from the previous year [330].