Palomar Q4 Earnings & Revenues Beat Estimates, Premiums Rise Y/Y

Core Insights - Palomar Holdings, Inc. (PLMR) reported a strong fourth-quarter 2025 performance with operating income of $2.24 per share, exceeding the Zacks Consensus Estimate by 9% and reflecting a year-over-year increase of 47.4% [1][9] - Total revenues surged 59.9% year over year to $251 million, driven by higher premiums, commissions, and other income, surpassing the Zacks Consensus Estimate by 13.1% [1][2] Financial Performance - Gross written premiums increased by 31.8% year over year to $492.6 million, although this fell short of the estimate of $590.6 million [5] - Net earned premiums rose 61.1% year over year to $233.5 million, exceeding both the estimate of $197.9 million and the Zacks Consensus Estimate of $205.6 million [5] - Net investment income climbed 41.3% year over year to $16 million, driven by higher yields and a larger average investment balance, surpassing estimates [6] - Adjusted underwriting income reached $62.3 million, a 51.8% increase from the prior year, while reported underwriting income rose 55.7% to $54.4 million, exceeding the estimate of $46.5 million [7] - Total expenses increased by 63.1% year over year to $180.7 million, driven by higher losses and acquisition costs, exceeding the estimate of $152.1 million [7] Ratios and Guidance - The loss ratio improved to 30.4%, down 470 basis points year over year, better than the estimate of 37.9% [8] - The adjusted combined ratio worsened by 170 basis points year over year to 73.4%, slightly above the Zacks Consensus Estimate of 73.1% [10] - For the full year 2025, Palomar reported operating revenues of $876 million, a 58.2% increase from 2024, and adjusted earnings of $7.86 per share, a 54.4% increase year over year [11] - The company raised its 2026 adjusted net income guidance to $260-$275 million from a previous range of $210-$215 million, factoring in expected catastrophe losses of $8-$12 million [13] Financial Position - Cash and cash equivalents rose 32.9% year over year to $106.9 million, while shareholders' equity increased by 29.3% to $942.7 million [12] - The annualized adjusted return on equity for 2025 was 25.9%, representing an expansion of 100 basis points year over year [12]