Hagerty(US:HGTY)2025-11-04 11:59Financial Performance - Total revenue for Q3 2025 increased 18% year-over-year to $380.0 million, with year-to-date total revenue also up 18% to $1,068.3 million[5] - Net income for Q3 2025 increased 143% year-over-year to $46.2 million, and year-to-date net income rose 73% to $120.7 million[5] - Adjusted EBITDA for Q3 2025 grew 106% year-over-year to $49.7 million, with year-to-date adjusted EBITDA increasing 46% to $153.1 million[5] - Operating income for Q3 2025 increased 240% year-over-year to $34.3 million, with an operating income margin improvement of approximately 590 basis points[7] - Total revenue for Q3 2025 reached $379,994,000, a 17.5% increase from $323,374,000 in Q3 2024[23] - Net income attributable to Class A common stockholders rose to $18,945,000, reflecting a 529.4% increase from $3,010,000 in Q3 2024[23] - For the nine months ended September 30, 2025, total revenue was $1,068,286,000, a 17.6% increase from $908,307,000 in the same period of 2024[25] - The company reported a net income of $120,666,000 for the nine months ended September 30, 2025, a 72.7% increase from $69,863,000 in 2024[25] Premium and Revenue Growth - Written premium for Q3 2025 rose 16% year-over-year to $334.0 million, and year-to-date written premium increased 13% to $934.4 million[5] - Marketplace revenue surged 58% year-over-year to $34.2 million in Q3 2025, with year-to-date marketplace revenue up 135% to $89.9 million[5] - Membership, marketplace, and other revenue surged by 34.5% to $55,852,000, compared to $41,527,000 in the same quarter last year[23] - Membership, marketplace, and other revenue for the nine months increased by 54.1% to $153,430,000, compared to $99,573,000 in 2024[25] Assets and Liabilities - Total current assets as of September 30, 2025, amounted to $1,214,320,000, up from $858,405,000 at the end of 2024[27] - Total liabilities increased to $1,437,164,000 as of September 30, 2025, compared to $1,101,169,000 at the end of 2024[27] - Cash and cash equivalents rose to $160,386,000 from $104,784,000 at the end of 2024[27] - The ending cash and cash equivalents increased to $332,647,000 as of September 30, 2025, from $323,429,000 in 2024[30] Operational Metrics - Policies in force retention was 88.6% as of September 30, 2025, with total insured vehicles increasing 7% year-over-year to 2.7 million[7] - New business count in insurance increased by 14.1%, totaling 257,694 for the nine months ended September 30, 2025, compared to 225,753 in 2024[31] - The number of policies in force increased by 7.4% to 1,617,231 as of September 30, 2025, from 1,506,451 in 2024[32] Future Outlook - The company raised its full-year 2025 outlook for total revenue growth to 14-15% and net income growth to 58-65%[4] - The company anticipates $20 million in elevated technology investments in 2025, primarily in its new technology platform, Duck Creek[11] - The company expects net income for the year ended December 31, 2025, to be between $124,000 thousand and $129,000 thousand[37] - The projected Adjusted EBITDA for the year ended December 31, 2025, is estimated to be between $170,000 thousand and $176,000 thousand[37] Shareholder Information - Weighted average shares of Class A Common Stock outstanding increased to 96,167 thousand in Q3 2025 from 89,691 thousand in Q3 2024, a growth of 8%[43] - The company had a total of 356,942 thousand dilutive shares outstanding for the three months ended September 30, 2025[43] Tax and Expenses - Income tax expense for the three months ended September 30, 2025, included a $38.1 million benefit related to the release of a portion of the valuation allowance against deferred tax assets[37] - Share-based compensation expense for the nine months ended September 30, 2025, was $14,627 thousand, compared to $13,018 thousand in 2024, a 12% increase[37] Loss and Adjusted Metrics - The company reported a loss related to warrant liabilities of $463 thousand for the three months ended September 30, 2024, which was not present in 2025[37] - Adjusted EPS for the three months ended September 30, 2025, was $0.13, compared to $0.05 in 2024, indicating a 160% increase[43]