Financial Data and Key Metrics Changes - Total revenue increased by 18% to $380 million in Q3 2025, driven by a 16% increase in written premium and 18% growth in commission revenue [12][6] - Net income rose by 143% to $46 million compared to $19 million a year earlier, with adjusted EBITDA increasing by 106% to $50 million [16][12] - Operating margins improved by 590 basis points to 9%, with operating profit reaching $34 million, a 240% increase [13][12] Business Line Data and Key Metrics Changes - Membership, marketplace, and other revenue surged by 34% to $56 million, attributed to the launch of the European auction business and growth in inventory sales [12][6] - Earned premium in Hagerty Reinsurance increased by 12%, while the loss ratio for the quarter was 42%, resulting in a year-to-date combined ratio of 89% [12][16] Market Data and Key Metrics Changes - The company reported the highest policy-in-force (PIF) growth in its history in October, with significant contributions from the conversion of State Farm policies [6][12] - The company has established itself as a leading auction house, with a total global vehicle value sold at Broad Arrow Live Auctions reaching $240 million through November 1st [10][12] Company Strategy and Development Direction - The company aims to expand its specialty insurance offerings, simplify the membership experience, and grow its marketplace business internationally [10][9] - A new partnership with Liberty Mutual and Safeco was announced, which is expected to enhance customer engagement and retention [9][8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's performance, highlighting a strong growth trajectory and the importance of long-term planning in the insurance industry [69][4] - The company expects to achieve 14%-15% revenue growth for the full year, with net income projected to grow by 58%-65% [17][12] Other Important Information - The company is transitioning to a new fronting arrangement with Markel, allowing it to control 100% of the premium and risk starting in 2026 [11][12] - A valuation allowance of $38 million was released, contributing to an income tax benefit [15][12] Q&A Session Summary Question: Can you provide quantification on the Liberty Mutual and Safeco partnership? - Management indicated it represents tens of thousands of customers and is a significant opportunity, although specific details were not disclosed [20][21] Question: What is the expected impact of the Enthusiast Plus rollout on PIF growth? - Management stated it is early days for Enthusiast Plus, and while they are optimistic, specific loss results are not yet available [23][24] Question: What is driving the acceleration in written premium growth? - Management noted that the growth is influenced by the seasonal nature of the business and the ongoing conversion of State Farm policies [26][27] Question: How will the transition to the Markel agreement impact liquidity and asset allocation? - Management confirmed that they have allocated investments into high-grade corporate and government bonds, providing protection against interest rate cuts [40][41] Question: What are the expectations for EBITDA growth in Q4? - Management indicated that Q4 is typically a lighter quarter with tighter margins, but no specific spending increases are planned [54][55] Question: How will the new policy acquisition costs impact earnings? - Management stated that it is still a work in progress and details will be shared once finalized [64][63]

Financial Performance - Total revenue grew by 18% to $1,068 million YTD Q3 2025[5] - Operating income increased by 78% to $108 million compared to $60 million[9] - Net income increased by 73% to $121 million compared to $70 million[9] - Adjusted EBITDA increased by 46% to $153 million compared to $105 million[9] Revenue Components - Commission and fee revenue increased by 14%[9] - Membership, Marketplace, and other revenue increased by 54%, with Marketplace growth at 135%[9] - Earned premium in Hagerty Re increased by 12%[9] Strategic Initiatives - Hagerty aims to double its policies in force to 3.0 million by 2030[10, 16] - Signed a new partnership with Liberty Mutual to offer enhanced collectible car insurance[7] - Announced a non-binding LOI for a new fronting arrangement with Markel, expecting to control 100% of the premium beginning in 2026[7, 17] Updated Outlook for 2025 - Total revenue is projected to be between $1,368 million and $1,380 million, representing a 14%-15% increase[44] - Net income is projected to be between $124 million and $129 million, representing a 58%-65% increase[44] - Adjusted EBITDA is projected to be between $170 million and $176 million, representing a 37%-41% increase[44]

Core Thesis - Hagerty, Inc. is positioned as a compelling investment opportunity within the classic-car insurance and enthusiast ecosystem, characterized by high-growth revenues and expanding margins [2][4]. Company Overview - Hagerty, Inc. shares were trading at $12.29 as of September 23rd, with trailing and forward P/E ratios of 61.45 and 27.32 respectively [1]. - The company dominates a niche market with high barriers to entry due to pricing complexity associated with vintage car rarity and VIN variability [2]. Business Model and Competitive Advantage - Hagerty utilizes proprietary data and valuation tools, providing a multi-year advantage in accurately pricing collectible cars [2]. - The company has a direct-to-consumer platform, agency partnerships, and ecosystem offerings such as the Hagerty Drivers Club and a marketplace for auctions and private sales, which enhance customer retention and create a defensible network effect [2]. Financial Performance - The insurance operation is highly profitable, featuring a low combined ratio and strong underwriting discipline [3]. - A transition to a fronting agreement with Markel allows for regulatory efficiency and full control over premiums and investments [3]. - Projected ROIC is above 18% against a 9% cost of capital, indicating substantial economic value creation [3]. Management and Customer Loyalty - The management team is deeply embedded in the business, contributing to operational excellence and brand loyalty, as evidenced by a high Net Promoter Score and over 90% customer retention [3]. Growth Potential - The auction business, led by experienced executives from Sotheby's and RM Sotheby's, is expected to grow significantly, leveraging Hagerty's niche brand and network for domestic and international expansion [3]. - The combination of a differentiated insurance franchise, ecosystem flywheel, and high-quality management provides a strong competitive moat and multi-year growth potential [4].

Financial Performance - Total revenue grew by 18% to $688 million[5] - Operating income increased by 46% to $73 million[9] - Net income increased by 46% to $74 million[9] - Adjusted EBITDA increased by 28% to $103 million[9] Revenue Components - Commission and fee revenue increased by 12%[9, 25] - Membership, Marketplace, and other revenue increased significantly by 68%[9, 25] Marketplace growth was 232%[9] - Earned premium in Hagerty Re grew by 12%[25] Future Outlook - The company aims to double policies in force to 30 million by 2030[10, 15] - Revised 2025 outlook projects total revenue between $1356 million and $1368 million, a 13%-14% increase[41] - Revised 2025 outlook projects net income between $112 million and $120 million, a 43%-53% increase[41] - Revised 2025 outlook projects Adjusted EBITDA between $162 million and $172 million, a 30%-38% increase[41] Strategic Initiatives - Hagerty entered into a non-binding LOI with Markel to control 100% of the premium in 2026[7, 16]

Financial Performance Highlights - Total revenue grew by 18% to $320 million in Q1 2025[5] - Commission and Fee revenue increased by 13%[10] - Membership, Marketplace, and Other revenue saw a significant increase of 60%[10] - Earned premium in Hagerty Re grew by 12%[23] - Operating income increased by 110% to $26 million, improving the operating margin by 360 bps[10] - Net income reached $27 million, a 233% increase compared to $8 million in the prior year[10] - Adjusted EBITDA increased by 45% to $40 million, compared to $27 million in the prior year[10] Strategic Initiatives and Outlook - The company entered into a $375 million unsecured credit agreement with a March 2030 maturity[7] - The company reaffirms its 2025 outlook, projecting total revenue between $1.344 billion and $1.356 billion, representing a 12%-13% growth[32] - The company anticipates net income between $102 million and $110 million, a 30%-40% increase[32] - Adjusted EBITDA is projected to be between $150 million and $160 million, a 21%-29% increase[32]