Hagerty Reports Full Year 2025 Results; Provides 2026 Growth Outlook

Rhea-AI Summary

Hagerty (NYSE: HGTY) reported full year 2025 results: Total Revenue $1.456B, Written Premium $1.194B, Net Income $149M, and Adjusted EBITDA $237M. Hagerty added a record 371,000 new members and grew Marketplace revenue 119% to $119M. For 2026 the company expects Written Premium growth of 15%–16%, a move to a 100% quota share with Markel, a reported Net Loss of $(51M) to $(41M) driven by ~$190M of transitional Markel fronting costs, and Adjusted EBITDA of $236M–$247M.

Positive

• Total Revenue +17% to $1.456B in 2025
• Net Income +91% to $149M in 2025
• Marketplace revenue +119% to $119M driven by Europe expansion
• Added members record 371,000 new members in 2025

Negative

• 2026 Net Loss $(51M) to $(41M) includes ~$190M transitional Markel costs
• Total Revenue guidance declines ~(12)% to ~(11)% due to fronting accounting
• General and administrative expenses +15% in 2025 from expansion and fees

Key Figures

2025 Total Revenue: $1,456 million (+17%) 2025 Written Premium: $1,194 million (+14%) 2025 Net Income: $149 million (+91%) +5 more

8 metrics

2025 Total Revenue $1,456 million (+17%) Full year 2025 total revenue growth

2025 Written Premium $1,194 million (+14%) Full year 2025 written premium

2025 Net Income $149 million (+91%) Full year 2025 net income growth

2025 Adjusted EBITDA $237 million (+46%) Full year 2025 adjusted EBITDA

2026 Written Premium Outlook 15%–16% growth Guided written premium growth for full year 2026

2026 Revenue Outlook $1,280–$1,300 million (-12% to -11%) Total revenue guidance for 2026 under Markel fronting arrangement

2026 Net Income Outlook $(51)–$(41) million Projected 2026 net loss including ~$190M Markel transition costs

2026 Adjusted EBITDA Outlook $236–$247 million Guided 2026 adjusted EBITDA versus $236.8M in 2025

Market Reality Check

Price: $11.62 Vol: Volume 110,755 is at 1.04...

normal vol

$11.62 Last Close

Volume Volume 110,755 is at 1.04x the 20-day average of 106,202, indicating typical pre-news activity. normal

Technical Trading slightly above the 200-day MA of 11.54 with price at 11.62, and about 17% below the 52-week high of 14.00.

Peers on Argus

HGTY was up 2.02% ahead of earnings while peers were mixed: MCY up 2.06%, WTM, S...

HGTY was up 2.02% ahead of earnings while peers were mixed: MCY up 2.06%, WTM, SIGI, and LMND slightly down or negative, and KMPR flat. This points to a stock-specific move rather than a uniform insurance sector shift.

Previous Earnings Reports

5 past events · Latest: Nov 04 (Positive)

Same Type Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Nov 04	Q3 2025 earnings	Positive	-1.3%	Raised 2025 outlook with strong revenue and margin expansion.
Aug 04	Q2 2025 earnings	Positive	+7.3%	Strong Q2 growth and upgraded 2025 revenue and profit guidance.
May 07	Q1 2025 earnings	Positive	+9.8%	Robust Q1 revenue, net income, and Marketplace growth; outlook reaffirmed.
Mar 04	FY 2024 earnings	Positive	-1.1%	Strong 2024 growth with higher net income and EBITDA; 2025 guide raised.
Nov 07	Q3 2024 earnings	Negative	-4.3%	Hurricane losses drove higher loss ratio and lower adjusted EBITDA.

Pattern Detected

Earnings releases are generally positive and have produced mixed reactions, with slightly more instances of price moves aligning with the upbeat fundamentals.

Recent Company History

Recent earnings reports for Hagerty show consistent growth in revenue, written premiums, and Marketplace contributions. Prior updates highlighted rising net income, expanding adjusted EBITDA, and ongoing technology investments, alongside resilience to weather-related losses. Price reactions have varied, with some strong positive moves and several modest pullbacks despite constructive guidance. Today’s full-year 2025 results and 2026 outlook continue this narrative of growth, profitability focus, and evolving economics under the Markel fronting and quota share arrangements.

Historical Comparison

+2.1% avg move · In the past five earnings-related releases, HGTY’s average move was 2.06%, with mostly positive fund...

earnings

+2.1%

Average Historical Move earnings

In the past five earnings-related releases, HGTY’s average move was 2.06%, with mostly positive fundamentals but mixed price follow-through, making reactions to this report broadly consistent with prior behavior.

Earnings updates show a progression from strong 2024 growth into 2025, with recurring upgrades to revenue, net income, and adjusted EBITDA guidance and increasing contributions from the Marketplace segment.

Market Pulse Summary

This announcement highlights robust 2025 performance, with double-digit growth in revenue, written p...

Analysis

This announcement highlights robust 2025 performance, with double-digit growth in revenue, written premiums, net income, and adjusted EBITDA, as well as rapid Marketplace expansion. The 2026 outlook introduces higher written premium growth but a reported net loss tied to transitional Markel fronting costs and revenue recognition changes. Historical earnings releases show consistent operational momentum, but investors may focus on loss ratio trends, execution of the 100% quota share, and delivery on adjusted EBITDA targets.

Key Terms

adjusted EBITDA, loss ratio, combined ratio, valuation allowance, +2 more

6 terms

adjusted EBITDA financial

"Full year 2025 Adjusted EBITDA increased 46% year-over-year to $237 million"

Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.

loss ratio financial

"Fourth quarter 2025 Loss Ratio was 31.4% compared to 42.8% in the prior year period."

Loss ratio is the percentage of an insurer’s collected premiums that is paid out to cover claims and related costs, showing how much of customer payments are used to settle losses. Investors treat it like a fuel-efficiency gauge for an insurance business—lower loss ratios suggest pricing and risk selection leave more room for profit, while consistently high ratios signal weak pricing, rising claims, or not enough money set aside, which can hurt returns.

combined ratio financial

"Full year 2025 Combined Ratio for Hagerty Re was 86.6% compared to 94.1% in the prior year period"

The combined ratio is a way insurance companies measure how well they are doing by adding up all their costs and claims and comparing them to the money they earn from premiums. If the ratio is below 100%, it means the company is making a profit; if it's above 100%, they are losing money. It helps see if an insurance company is financially healthy or not.

valuation allowance financial

"release of a portion of the valuation allowance against our deferred tax assets"

A valuation allowance is a reserve set aside to reduce the value of certain assets on a company's financial records when there is uncertainty about whether they will generate the expected benefits. It acts like a caution sign, indicating that some assets might not be fully recoverable or worth their recorded amount. This matters to investors because it provides a more realistic picture of a company's financial health and potential risks.

deferred tax assets financial

"valuation allowance against our deferred tax assets which decreased taxes by $42 million"

An item on a company’s balance sheet showing tax benefits it can use later to reduce future tax bills — think of it as an IOU from the tax system for past losses or timing differences. It matters to investors because it can boost future cash flow and apparent value if the company expects profits ahead, but those benefits vanish if the company cannot generate taxable income and the asset must be reduced.

quota share financial

"we move to a 100% quota share with our long-term partner, Markel"

A quota share is a proportional reinsurance arrangement in which an insurer cedes a fixed percentage of its policies, premiums and claims to another insurer so both parties take the same slice of revenue and losses. For investors, quota share deals change how much risk and income remain on a company’s balance sheet, which can smooth earnings, free up capital for growth, and alter profit margins—like handing someone a steady slice of every pie you bake.

AI-generated analysis. Not financial advice.

Full year 2025 Highlights

• Total Revenue increased 17% to $1,456 million
• Written Premium increased 14% to $1,194 million
  • Added a record 371,000 new members in 2025
• Marketplace revenue increased 119% to $119 million
• Income before taxes increased 49% to $139 million
• Net Income increased 91% to $149 million
• Adjusted EBITDA increased 46% to $237 million
• Basic and Diluted Earnings Per Share was $0.41 and $0.37, respectively
• 2026 Outlook for sustained Written Premium growth of 15% to 16%

TRAVERSE CITY, Mich., Feb. 26, 2026 /PRNewswire/ – Hagerty, Inc. (NYSE: HGTY), an automotive enthusiast brand and leading specialty vehicle insurance provider, announced today financial results for the three and twelve months ended December 31, 2025.

"2025 was a standout year for Hagerty, defined by accelerating momentum and record new business count. Top-line gains of 17% were fueled by written premium growth of 14%, and we efficiently converted this revenue into a 91% surge in net income. We also reinvested significantly in our business, including our technology transformation, the launch of Enthusiast+, the roll-out of State Farm to 27 states, as well as our Marketplace expansion into Europe," said McKeel Hagerty, Chief Executive Officer and Chairman of Hagerty.

"In 2026, we will continue to invest back into our member-centric model to drive durable, compounding growth, with written premiums expected to increase 15% to 16%. 2026 also marks a major milestone for Hagerty as we move to a 100% quota share with our long-term partner, Markel. We believe this evolution, combined with our technology-led efficiency initiatives, positions us to generate even higher rates of underlying profit growth and cash flow for our shareholders over the coming years," added Mr. Hagerty.

FOURTH QUARTER AND FULL YEAR 2025 FINANCIAL HIGHLIGHTS

• Fourth quarter 2025 Total Revenue increased 19% year-over-year to $357 million, and full year 2025 Total Revenue increased 17% year-over-year to $1,456 million
• Fourth quarter 2025 Written Premium increased 19% year-over-year to $259 million, and full year 2025 Written Premium increased 14% year-over-year to $1,194 million
• Fourth quarter 2025 Commission and fee revenue increased 18% year-over-year to $106 million, and full year 2025 Commission and fee revenue increased 15% year-over-year to $486 million
  • Policies in Force Retention was 88.7% as of December 31, 2025 compared to 89.0% in the prior year period, and total insured vehicles increased 9% year-over-year to 2.8 million
• Fourth quarter 2025 Earned Premium increased 14% year-over-year to $193 million, and full year 2025 Earned Premium increased 13% year-over-year to $727 million
• Fourth quarter 2025 Marketplace revenue increased 80% year-over-year to $29 million, and full year 2025 Marketplace revenue increased 119% year-over-year to $119 million
  • The increase was primarily due to growth in private sales and additional auctions with the Company's expansion into Europe
• Fourth quarter 2025 Membership and other revenue increased 8% year-over-year to $19 million, and full year 2025 Membership and other revenue increased 4% year-over-year to $82 million
  • Hagerty Drivers Club (HDC) paid members increased 6% year-over-year to approximately 930,000 compared to 876,000
• Fourth quarter 2025 Net investment income was $10 million, an increase of 7% year-over-year.
• Fourth quarter 2025 Income before taxes increased 186% year-over-year to $40 million, and full year 2025 Income before taxes increased 49% year-over-year to $139 million
  • Fourth quarter 2025 Income before tax margin increased by approximately 650 bps, and full year 2025 margin increased by approximately 200 bps compared to the prior year periods
• Fourth quarter 2025 Loss Ratio was 31.4% compared to 42.8% in the prior year period. Full year 2025 Loss Ratio was 39.3% compared to 46.4% in the prior year period
  • Full year 2025 Combined Ratio for Hagerty Re was 86.6% compared to 94.1% in the prior year period
  • Fourth quarter 2025 and full year 2025 loss expense includes a $21 million reduction in reserves, primarily related to favorable development for the 2024 accident year and improvement in current accident year experience (10.6 percentage points impact to combined ratio in the fourth quarter and 2.8 percentage points for the full year)
• Full year 2025 Salary and benefits increased 19% due to higher accrued incentive compensation reflecting stronger performance in 2025 compared to the prior year period when accruals were negatively impacted by hurricane activity
• Full year 2025 General and administrative expenses increased 15% due to an increase in professional fees related to the secondary offering, the Markel Fronting Arrangement and Marketplace expansion into Europe, as well as software-related costs
• Full year 2025 Depreciation and amortization was $38 million compared to $39 million in the prior year period
• Full year 2025 Interest expense and other, net was $41 million of expense, which included a $32 million expense related to a change in our TRA liability and $8 million of interest expense.
• Fourth quarter 2025 Net Income increased 238% year-over-year to $29 million, and full year 2025 Net Income increased 91% year-over-year to $149 million
  • Fourth quarter Income tax expense of $11 million, and full year 2025 Income tax benefit of $10 million which included the release of a portion of the valuation allowance against our deferred tax assets which decreased taxes by $42 million for the year.
• Fourth quarter 2025 Adjusted EBITDA (a non-GAAP measure) increased 97% year-over-year to $57 million, and full year 2025 Adjusted EBITDA increased 46% year-over-year to $237 million
• Fourth quarter 2025 Adjusted Earnings Per Share (a non-GAAP measure) was $0.08, and full year 2025 Adjusted Earnings Per Share was $0.37
• Fourth quarter 2025 Basic and Diluted Earnings Per Share were $0.06, and full year 2025 Basic and Diluted Earnings Per Share was $0.41 and $0.37, respectively
• The Company ended the quarter with $160 million of unrestricted cash and $178 million of total debt, $68 million of which was back leverage for Broad Arrow Capital's portfolio of loans collateralized by collector cars

The definitions and reconciliations of non-GAAP financial measures are provided under the heading Key Performance Indicators and Certain Non-GAAP Financial Measures at the end of this press release.

2026 OUTLOOK - SUSTAINED COMPOUNDING GROWTH

We believe 2026 is on track to be another great year for Hagerty as our team executes on our long-term plan to deliver compounding premium growth through investing in our long-term competitive advantages with a member-centric approach. In 2026, we will move to a 100% quota share arrangement with our long-term partner, Markel, where we retain 100% of the premium and risk from our high quality, low volatility underwriting. We also remain focused on delivering this growth more efficiently through the benefits of scale, continued cost discipline, and investments in our technology platform.

• For full year 2026, Hagerty anticipates:
  • Written Premium growth of 15% to 16%
  • Total Revenue change of (12)% to (11)%, as Markel related commission revenue is eliminated under the new fronting arrangement¹
  • Net Income of $(51) million to $(41) million, including ~$190 million of pre-tax Markel fronting arrangement transition costs²
  • Adjusted EBITDA of $236 million to $247 million

			2026 Outlook ($)				2026 Outlook (%)
in thousands	2025 Results		Low End		High End		Low End		High End
Total Written Premium	$1,193,548		$1,373,000		$1,385,000		15 %		16 %
Total Revenue1	$1,456,389		$1,280,000		$1,300,000		(12) %		(11) %
Net Income (Loss)2, 3	$149,225		$(51,000)		$(41,000)		N/M		N/M
Adjusted EBITDA4	$236,791		$236,000		$247,000		— %		4 %

1	Revenue guidance reflects the accounting impact of the Markel Fronting Arrangement. Beginning in 2026, we now control the Markel book of business with the benefit of our MGA services received by Hagerty Re and not Markel. As a result commission revenue and the associated ceding commission expense for policies issued through the Markel Fronting Arrangement will be eliminated in consolidation. Although we expect the arrangement to result in increased profitability (as reflected in Adjusted EBITDA), reported commission revenue and ceding commission expense will be significantly lower than prior periods, affecting period-to-period comparability. 2025 commission revenue associated with our alliance agreement with Markel was $437 million and ceding commission expense related to the Company's reinsurance quota share agreement with Markel was $344 million in 2025.
2	The projected Net Loss includes approximately $190 million of transitional, non-cash costs related to the Markel Fronting Arrangement representing deferred ceding commissions paid to Markel in 2025 for policies written prior to January 1, 2026, which will be fully amortized ratably over the remaining term of those policies throughout 2026. This amortization will decline from approximately $90 million in Q1 2026 to approximately $10 million in Q4 2026 as 2025 policies expire. Excluding these transitional costs, we expect 2026 to reflect underlying profitability improvement.
3	Full year 2025 Net Income includes (i) the benefit from the $42 million release of a portion of our valuation allowance, partially offset by a $32 million loss related to the change in value of the TRA liability; and (ii) a $21 million reduction in reserves in the fourth quarter, primarily related to favorable development for the 2024 accident year and improvement in current accident year experience.
4	See Non-GAAP Financial Measures below for additional information regarding this non-GAAP financial measure.
	N/M = Not meaningful

Conference Call Details

Hagerty will hold a conference call to discuss the financial results on Thursday, February 26, 2026 10:00 am Eastern Time. A webcast of the conference call, including its Investor Presentation highlighting full year 2025 financial results, will be available on Hagerty's investor relations website at investor.hagerty.com. The dial-in for the conference call is (877) 423-9813 (toll-free) or (201) 689-8573 (international). Please dial the number 10 minutes prior to the scheduled start time.

A webcast replay of the call will be available at investor.hagerty.com following the call.

Forward-Looking Statements

This press release contains statements that constitute "forward-looking statements" within the meaning of the federal securities laws. All statements we provide, other than statements of historical fact, are forward-looking statements, including those regarding Hagerty's future operating results and financial position, Hagerty's business strategy and plans, products, services, and technology implementations, market conditions, growth and trends, expansion plans and opportunities, and Hagerty's objectives for future operations. The words "anticipate," "believe," "envision," "estimate," "expect," "intend," "may," "plan," "predict," "project," "target," "potential," "will," "would," "could," "should," "continue," "ongoing," "contemplate," and similar expressions, and the negatives of these expressions, are intended to identify forward-looking statements.

Hagerty has based these forward-looking statements largely on current expectations about future events, which may not materialize. Actual results could differ materially and adversely from those anticipated or implied in forward-looking statements. These factors include, among other things, Hagerty's ability to: (i) compete effectively within Hagerty's industry and attract and retain insurance policyholders and paid Hagerty Drivers Club ("HDC") subscribers; (ii) maintain key strategic relationships with Hagerty's insurance distribution and underwriting carrier partners; (iii) prevent, monitor, and detect fraudulent activity; (iv) manage risks associated with disruptions, interruptions, outages, or other issues with Hagerty's technology platforms or use of third-party services; (v) accelerate the adoption of Hagerty's membership and marketplace products and services, as well as any new insurance programs and products offered; (vi) successfully implement the fronting arrangement consummated with Markel and realize the anticipated benefits while also managing the increased exposure to underwriting volatility, catastrophes, reinsurance counterparty risk, and legal, compliance, and regulatory risks resulting from the shift to Hagerty Re assuming 100% of the risk for policies written through this arrangement; (vii) underwrite and price new products, including Enthusiast+, consistent with expected loss ratios and risk tolerances; (viii) execute Broad Arrow's private sale, auction, and financing strategies; (ix) manage the cyclical nature of the insurance business and broader macroeconomic conditions, including inflation, interest rates, and potential recessionary pressures; (x) achieve Hagerty's investment objectives and avoid losses in the investment portfolio; (xi) address unexpected increases in the frequency or severity of claims, including catastrophe losses; and (xii) comply with numerous laws and regulations applicable to Hagerty's business, including without limitation state, federal, and foreign laws relating to insurance and rate increases, privacy and cybersecurity, marketing and advertising, digital services, accounting matters, tax, anti-money laundering, and economic sanctions.

The forward-looking statements in this release represent Hagerty's views as of the date hereof. You should not rely on forward-looking statements as predictions of future events. We operate in a very competitive and rapidly changing environment and new risks emerge from time to time. This presentation should be read in conjunction with the information included in filings with the SEC and press releases. Understanding the information contained in these filings is important in order to fully understand Hagerty's reported financial results and business outlook for future periods. In addition, this presentation contains certain "non-GAAP financial measures". The non-GAAP measures are presented for supplemental informational purposes only. These financial measures are not recognized measures under GAAP and should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Reconciliations to the most directly comparable financial measure calculated and presented in accordance with GAAP are provided in the appendix to this presentation.

About Hagerty, Inc. (NYSE: HGTY)

Hagerty is a company built by drivers for drivers, protecting 2.8 million vehicles in the United States, Canada and the UK. We make it easier and more enjoyable for car enthusiasts to drive and celebrate the machines they love through innovative vehicle insurance products, live and digital auctions, engaging media and events, and the Hagerty Drivers Club, the world's largest membership community of car lovers.

For more information, please visit www.hagerty.com or www.newsroom.hagerty.com. Never Stop Driving®.

Category: Financial
Source: Hagerty

Hagerty, Inc. Consolidated Statements of Operations
		Three months ended December 31,
		2025		2024		$ Change		% Change
REVENUES:		in thousands (except percentages and per share amounts)
Commission and fee revenue		$     105,699		$       89,423		$       16,276		18.2 %
Earned premium, net		192,547		168,407		24,140		14.3 %
Marketplace revenue		28,871		16,048		12,823		79.9 %
Membership and other revenue		19,274		17,853		1,421		8.0 %
Net investment income		10,022		9,329		693		7.4 %
Net investment gains		913		412		501		121.6 %
Total revenue		357,326		301,472		55,854		18.5 %
EXPENSES:
Losses and loss adjustment expenses		60,425		72,078		(11,653)		(16.2) %
Ceding commissions, net		89,405		79,842		9,563		12.0 %
Sales expense		58,524		43,732		14,792		33.8 %
Salaries and benefits		72,312		60,462		11,850		19.6 %
General and administrative expenses		25,313		20,432		4,881		23.9 %
Depreciation and amortization		9,790		9,147		643		7.0 %
Interest expense and other, net		1,857		1,878		(21)		(1.1) %
Total expenses		317,626		287,571		30,055		10.5 %
INCOME BEFORE TAXES		39,700		13,901		25,799		185.6 %
Income tax expense		(11,141)		(5,461)		(5,680)		(104.0) %
NET INCOME		28,559		8,440		20,119		238.4 %
Net income attributable to non-controlling interest		(19,733)		(5,335)		14,398		269.9 %
Accretion of Series A Convertible Preferred Stock		(1,902)		(1,875)		27		1.4 %
NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCKHOLDERS		$         6,924		$         1,230		$         5,694		462.9 %
Earnings per share of Class A Common Stock:
Basic		$           0.06		$           0.01
Diluted		$           0.06		$           0.01
Weighted average shares of Class A Common Stock outstanding:
Basic		100,570		90,032
Diluted		102,321		90,032

 

Hagerty, Inc. Consolidated Statements of Operations
		Year ended December 31,
		2025		2024		$ Change		% Change
REVENUES:		in thousands (except percentages and per share amounts)
Commission and fee revenue		$     486,376		$     423,240		$       63,136		14.9 %
Earned premium, net		726,726		643,324		83,402		13.0 %
Marketplace revenue		119,199		54,549		64,650		118.5 %
Membership and other revenue		82,376		78,925		3,451		4.4 %
Net investment income		38,648		39,249		(601)		(1.5) %
Net investment gains		3,064		2,223		841		37.8 %
Total revenue		1,456,389		1,241,510		214,879		17.3 %
EXPENSES:
Losses and loss adjustment expenses 1		285,394		298,593		(13,199)		(4.4) %
Ceding commissions, net		337,087		301,719		35,368		11.7 %
Sales expense		258,202		190,523		67,679		35.5 %
Salaries and benefits		263,587		221,463		42,124		19.0 %
General and administrative expenses		94,517		82,504		12,013		14.6 %
Depreciation and amortization		37,524		38,905		(1,381)		(3.5) %
Gain related to divestiture		—		(87)		87		N/M
Loss related to warrant liabilities, net		—		8,544		(8,544)		N/M
Interest expense and other, net 2		40,896		5,664		35,232		N/M
Total expenses		1,317,207		1,147,828		169,379		14.8 %
INCOME BEFORE TAXES		139,182		93,682		45,500		48.6 %
Income tax benefit (expense) 3		10,043		(15,379)		25,422		165.3 %
NET INCOME		149,225		78,303		70,922		90.6 %
Net income attributable to non-controlling interest		(100,207)		(61,286)		38,921		63.5 %
Accretion of Series A Convertible Preferred Stock		(7,555)		(7,427)		128		1.7 %
NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCKHOLDERS		$       41,463		$         9,590		$       31,873		332.4 %
Earnings per share of Class A Common Stock:
Basic		$           0.41		$           0.10
Diluted		$           0.37		$           0.10
Weighted average shares of Class A Common Stock outstanding:
Basic		94,404		87,529
Diluted		346,973		88,504

	N/M = Not meaningful
1	Includes a $21 million reduction in reserves, primarily related to favorable development for the 2024 accident year and improvement in current accident year experience.
2	Includes a $32 million loss related to changes in the value of the TRA liability.
3	Includes $42 million benefit related to the release of a portion of the valuation allowance.

 

Hagerty, Inc. Consolidated Balance Sheets
		December 31,
		2025		2024
ASSETS		in thousands (except share amounts)
Fixed maturity securities available-for-sale, at fair value (amortized cost: $687,813 in 2025, $578,669 in 2024)		$                  696,271		$                  577,688
Equity securities, at fair value		34,871		11,839
Total investments		731,142		589,527
Cash and cash equivalents		160,177		104,784
Restricted cash and cash equivalents		138,823		128,061
Accounts receivable		96,205		84,763
Commissions receivable		28,904		20,430
Premiums receivable		180,529		153,748
Deferred acquisition costs, net		179,224		156,466
Reinsurance recoverables		15,296		11,927
Prepaid reinsurance premiums		21,950		18,521
Notes receivable		113,887		56,972
Intangible assets, net		88,915		90,107
Goodwill		114,164		114,123
Deferred tax assets		43,011		—
Other assets		181,749		179,909
TOTAL ASSETS		$               2,093,976		$               1,709,338
LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses		$                  111,947		$                    58,892
Advance premiums and due to insurers		123,217		108,352
Losses payable		95,353		98,386
Reserves for unpaid losses and loss adjustment expenses		168,851		168,492
Unearned premiums		412,058		357,539
Ceding commissions payable		86,165		77,389
Debt, net		177,907		105,760
Contract liabilities		46,450		47,239
Deferred tax liability		23,489		18,065
Tax receivable agreement liability		39,829		2,180
Other liabilities		61,684		58,875
TOTAL LIABILITIES		1,346,950		1,101,169
Commitments and Contingencies		—		—
TEMPORARY EQUITY
Preferred stock, $0.0001 par value (20,000,000 shares authorized, 8,483,561 Series A Convertible Preferred Stock issued and outstanding as of December 31, 2025 and December 31, 2024) 1		86,618		84,663
STOCKHOLDERS' EQUITY
Class A Common Stock, $0.0001 par value (500,000,000 shares authorized, 100,706,893 and 90,032,391 issued and outstanding as of December 31, 2025 and December 31, 2024, respectively)		10		9
Class V Common Stock, $0.0001 par value (300,000,000 authorized, 241,552,156 and 251,033,906 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively)		24		25
Additional paid-in capital		623,013		603,780
Accumulated earnings (deficit)		(402,960)		(451,978)
Accumulated other comprehensive income (loss)		1,229		(1,514)
Total stockholders' equity		221,316		150,322
Non-controlling interest		439,092		373,184
Total equity		660,408		523,506
TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY		$               2,093,976		$               1,709,338

1	The Series A Convertible Preferred Stock is recorded within Temporary Equity because it has equity conversion and cash redemption features.

 

Hagerty, Inc. Consolidated Statements of Cash Flows
	Year ended December 31,
	2025		2024
OPERATING ACTIVITIES:	in thousands
Net income	$                 149,225		$                   78,303
Adjustments to reconcile net income to net cash from operating activities:
Loss on disposals of equipment, software, and other assets	1,912		500
Loss related to warrant liabilities, net	—		8,544
Change in TRA Liability	32,235		1,602
Depreciation and amortization	37,524		38,905
Provision for deferred taxes	(34,503)		2,929
Share-based compensation expense	18,908		17,357
Non-cash lease expense	8,911		8,053
Net investment gains	(3,064)		(2,223)
(Accretion) amortization of discount and premium, net	(4,146)		(3,386)
Other	1,297		3,698
Changes in assets and liabilities:
Accounts, commissions, and premiums receivable	(62,595)		26,498
Deferred acquisition costs, net	(22,758)		(14,829)
Reinsurance recoverables	(3,369)		(9,144)
Prepaid reinsurance premiums	(3,429)		(8,047)
Advance premiums and due to insurers	14,175		8,418
Losses payable	(3,033)		36,385
Reserves for unpaid losses and loss adjustment expenses	359		31,985
Unearned premiums	54,519		40,264
Ceding commissions payable	8,776		(31,350)
Other assets and liabilities, net	28,042		(57,438)
Net Cash Provided by Operating Activities	218,986		177,024
INVESTING ACTIVITIES:
Capital expenditures	(24,535)		(21,344)
Acquisitions, net of cash acquired, and other investments	(1,619)		(25,120)
Issuance of notes receivable	(74,714)		(65,770)
Collection of notes receivable	37,733		59,788
Purchases of fixed maturity securities	(333,050)		(669,452)
Purchases of equity securities	(21,890)		(10,861)
Proceeds from maturities and sales of fixed maturity securities	229,899		113,216
Other investing activities	2,979		979
Net Cash Used in Investing Activities	(185,197)		(618,564)
FINANCING ACTIVITIES:
Repayments of debt	(187,881)		(90,775)
Proceeds from debt, net of issuance costs	257,191		61,972
Distributions paid to non-controlling interest unit holders	(30,257)		(6,683)
Payment of Series A Convertible Preferred Stock dividends	(5,600)		(5,600)
Funding of TRA Liability payments	(223)		—
Funding of employee tax obligations upon vesting of share-based payments	(3,854)		(5,836)
Other financing activities	552		—
Net Cash Provided by (Used in) Financing Activities	29,928		(46,922)
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents	2,438		(2,969)
Change in cash and cash equivalents and restricted cash and cash equivalents	66,155		(491,431)
Beginning cash and cash equivalents and restricted cash and cash equivalents	232,845		724,276
Ending cash and cash equivalents and restricted cash and cash equivalents	$                 299,000		$                 232,845

Key Performance Indicators and Certain Non-GAAP Financial Measures

Key Performance Indicators

The tables below present a summary of our Key Performance Indicators, which include important operational metrics, as well as certain financial measures prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and non-GAAP financial measures. We use these Key Performance Indicators to evaluate our business, measure our performance, identify trends against planned initiatives, prepare financial projections, and make strategic decisions. We believe these Key Performance Indicators are useful in evaluating our performance when read together with our Consolidated Financial Statements prepared in accordance with GAAP.

		Year ended December 31,
		2025		2024		Change
GAAP Financial Measures		dollars in thousands (except per share amounts)
Total Revenue 1		$ 1,456,389		$ 1,241,510		$    214,879		17.3 %
Income before taxes		$    139,182		$      93,682		$      45,500		48.6 %
Net Income		$    149,225		$      78,303		$      70,922		90.6 %
Basic Earnings Per Share		$         0.41		$         0.10		$         0.31		N/M
Diluted Earnings Per Share		$         0.37		$         0.10		$         0.27		N/M
Non-GAAP Financial Measures
Adjusted EBITDA		$    236,791		$    161,662		$      75,129		46.5 %
Adjusted Net Income		$    132,577		$      76,204		$      56,373		74.0 %
Adjusted Diluted EPS		$         0.37		$         0.21		$         0.16		76.2 %
Insurance Operational Metrics
Total Written Premium		$ 1,193,548		$ 1,044,492		$    149,056		14.3 %
Hagerty Re Loss Ratio		39.3 %		46.4 %		(7.1) %		N/M
Hagerty Re Combined Ratio		86.6 %		94.1 %		(7.5) %		N/M
New Business Count — Insurance		371,203		278,556		92,647		33.3 %
Marketplace Operational Metrics
Auction sales:
Aggregate Auction Sales		$    278,694		$    178,199		$    100,495		56.4 %
Net Auction Sales		$    252,363		$    163,312		$      89,051		54.5 %
Private Sales		$    286,763		$      77,281		$    209,482		271.1 %
BAC Average Loan Portfolio		$      85,468		$      65,045		$      20,423		31.4 %

	N/M = Not meaningful
1	Total Revenue for 2024 has been recast to include Net investment income and Net investment gains as components of revenue in accordance with the Article 7 reporting standards adopted in 2025. Total revenue as previously presented in accordance with Article 5 was $1,200 million for the year ended December 31, 2024.

 

		December 31,
		2025		2024		Change
Insurance Operational Metrics
Policies in Force		1,684,935		1,506,451		178,484		11.8 %
Policies in Force Retention		88.7 %		89.0 %		(0.3) %		N/M
Vehicles in Force		2,819,179		2,576,700		242,479		9.4 %
HDC Paid Member Count		929,895		875,822		54,073		6.2 %
Marketplace Operational Metrics
BAC Loan Portfolio Balance		$    103,338		$      56,972		$      46,366		81.4 %

N/M = Not meaningful

Non-GAAP Financial Measures

Adjusted EBITDA

We define EBITDA as consolidated Net income, excluding Interest expense and other, net, Income tax expense (benefit), and Depreciation and amortization. We define Adjusted EBITDA as EBITDA, further adjusted to (i) exclude net investment gains and losses; (ii) deduct interest expense related to the State Farm Term Loan; (iii) exclude net gains and losses related to our warrant liabilities prior to the Warrant Exchange; (iv) exclude share-based compensation expense; and when applicable, exclude (v) restructuring, impairment and related charges; (vi) gains, losses and impairments related to divestitures; and (vii) certain other unusual items.

How This Measures is Useful

When used in conjunction with GAAP financial measures, Adjusted EBITDA is a supplemental measure of operating performance that we believe is a useful measure to evaluate our performance period over period and relative to our competitors and peers. Management uses Adjusted EBITDA to evaluate our operating performance on a consistent basis, as it removes the impact of items not directly resulting from our core operations. We believe the presentation of Adjusted EBITDA provides securities analysts, investors, and other interested parties with a supplemental view of our operating performance that enhances their understanding of our business and our results operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives.

Limitations of the Usefulness of This Measure

Adjusted EBITDA may differ from similarly titled measures used by other companies due to different methods of calculation, which could reduce the usefulness of this non-GAAP financial measure when comparing our performance to that of other companies. Presentation of Adjusted EBITDA is not intended to be considered in isolation or a substitute for, or superior to, the financial information prepared in accordance with GAAP. A reconciliation of Adjusted EBITDA to Net income, the most directly comparable GAAP measure, is presented below.

		Three months ended December 31,				Year ended December 31,
		2025		2024		2025		2024
		in thousands
Net income		$       28,559		$         8,440		$     149,225		$       78,303
Interest expense and other, net 1, 2		1,857		1,878		40,896		5,664
Income tax expense (benefit) 3		11,141		5,461		(10,043)		15,379
Depreciation and amortization		9,790		9,147		37,524		38,905
EBITDA		51,347		24,926		217,602		138,251
Net investment gains		(913)		(412)		(3,064)		(2,223)
Interest expense related to State Farm Term Loan 4		(515)		(515)		(2,060)		(2,060)
Loss related to warrant liabilities, net		—		—		—		8,544
Share-based compensation expense		4,281		4,339		18,908		17,357
Gain related to divestiture		—		—		—		(87)
Other unusual items 5		2,444		344		5,405		1,880
Adjusted EBITDA		$       56,644		$       28,682		$     236,791		$     161,662

1	Excludes interest expense related to the BAC Credit Facility, which is recorded within "Sales expense" in the Consolidated Statements of Operations.
2	Principally includes interest expense and changes in the value of the TRA liability, which totaled $32 million during the year ended December 31, 2025, and $2 million during the year ended December 31, 2024.
3	Income tax expense (benefit) for the three and twelve months ended December 31, 2025 includes a $42 million benefit related to the release of a portion of the valuation allowance against our deferred tax assets.
4	Interest expense related to the State Farm Term Loan is charged against Adjusted EBITDA as it is directly attributable to the operations of Hagerty Re.
5	For the year ended December 31, 2025, other unusual items includes certain legal settlement expenses, professional fees associated with the THG Unit Exchange and related Secondary Offering, and certain material severance expenses. For the year ended December 31, 2024, other unusual items includes professional fees associated with the Warrant Exchange, as well as certain material severance expenses.

As a result of our transition to the Article 7 reporting standards, Net investment income is reported as a component of revenue and is no longer an adjustment in our reconciliation from Net income to Adjusted EBITDA. In addition, interest expense related to the State Farm Term Loan is now deducted from Adjusted EBITDA as it is directly attributable to Hagerty Re, which generates a significant portion of our net investment income. The following table presents a reconciliation of Adjusted EBITDA as presented in prior periods in accordance with Article 5, to the current presentation in accordance with Article 7:

	Three months ended December 31,		Year ended December 31,
	2024		2024
	in thousands
Prior presentation of Adjusted EBITDA	$                   19,868		$                 124,473
Net investment income	9,329		39,249
Interest expense related to State Farm Term Loan	(515)		(2,060)
Current presentation of Adjusted EBITDA	$                   28,682		$                 161,662

The following table reconciles Adjusted EBITDA for the year ended December 31, 2026 Outlook to the most directly comparable GAAP measure, which is Net income:

		2026 Low		2026 High
		in thousands
Net loss1		$           (51,000)		$           (41,000)
Interest expense and other, net2		5,000		5,000
Income tax expense		33,000		34,000
Depreciation and amortization		40,000		40,000
Share-based compensation expense		19,000		19,000
Markel Fronting Arrangement transition costs		190,000		190,000
Adjusted EBITDA		$           236,000		$           247,000

1

The projected Net Loss includes approximately $190 million of transitional, non-cash costs related to the Markel Fronting Arrangement representing deferred ceding commissions paid to Markel in 2025 for polcies written prior to January 1, 2026, which will be fully amortized ratably over the remaining term of those policies throughout 2026. This amortization will decline from approximately $90 million in the first quarter of 2026 to approximately $10 million in the fourth quarter of 2026 as 2025 policies expire. Excluding these transitional costs, we expect 2026 to reflect underlying profitability improvement

2

Excludes interest expense related to the BAC Credit Facility, which is recorded within "Sales expense" in the Consolidated Statements of Operations

Adjusted Net Income and Adjusted Diluted EPS

Beginning with this Annual Report, Adjusted Net Income is presented as a non-GAAP financial measure, as we consider it to be an important supplemental measure of our performance and believe it is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. In addition, we revised and renamed our non-GAAP measure previously titled "Adjusted EPS" to "Adjusted Diluted EPS". The revised measure uses Adjusted Net Income as the numerator in the calculation and updated the most comparable GAAP measure from Basic EPS to Diluted EPS. We believe that the revised calculation better reflects the potential dilution from these securities and enhances comparability with industry peers.

Adjusted Net Income represents Net income attributable to Class A Common Stockholders, assuming the full exchange of all outstanding THG units and Series A Convertible Preferred Stock for shares of Class A Common Stock, adjusted to exclude (i) net investment gains and losses; (ii) changes in the fair value of warrant liabilities prior to the Warrant Exchange; (iii) changes in the TRA Liability; (iv) gains and losses related to divestitures; and (v) certain other unusual items, each of which we do not believe are directly related to our core operations and may not be indicative of our ongoing performance. Adjusted Diluted EPS is calculated by dividing Adjusted Net Income by the weighted average shares of Class A Common Stock outstanding, assuming the full exchange of all outstanding THG units, Series A Convertible Preferred Stock, and unvested share-based compensation awards. Refer to Note 6 — Fair Value Measurements in Item 8 of Part II of this Annual Report for additional information regarding the Warrant Exchange.

How These Measures Are Useful

When used in conjunction with GAAP financial measures, Adjusted Net Income and Adjusted Diluted EPS are supplemental measures of operating performance that we believe are useful measures to evaluate our performance period over period and relative to our competitors and peers. Management uses Adjusted Net Income and Adjusted Diluted EPS to evaluate our operating performance on a consistent basis to make strategic and operational decisions. We believe these measures provide management and investors with useful information regarding trends in our business that may not otherwise be apparent when relying solely on GAAP measures. By assuming the full exchange of all outstanding THG units and Series A Convertible Preferred Stock, we believe these measures facilitate comparisons with other companies that have different organizational and tax structures, as well as comparisons period over period because it eliminates the effect of any changes in Net income attributable to Class A Common Stockholders driven by increases in Hagerty, Inc.'s ownership in THG, which is unrelated to our operating performance, and excludes items that are unusual or may not be indicative of our ongoing performance.

Limitations of the Usefulness of These Measures

Adjusted Net Income and Adjusted Diluted EPS may differ from similarly titled measures used by other companies due to different methods of calculation. Presentation of Adjusted Net Income and Adjusted Diluted EPS should not be considered alternatives to Net income attributable to Class A Common Stockholders and Diluted EPS, as determined under GAAP. While these measures are useful in evaluating our performance, they assume the full exchange of all outstanding THG units and Series A Convertible Preferred Stock for shares of Class A Common Stock, which has not occurred and may not occur. Further, the adjustments made to arrive at Adjusted Net Income exclude certain expenses and income that may recur in the future. Adjusted Net Income and Adjusted Diluted EPS should be evaluated in conjunction with our GAAP financial results. A reconciliation of Adjusted Net Income to Net income attributable to Class A Common Stockholders, the most directly comparable GAAP measure, and the computation of Adjusted Diluted EPS are presented below.

		Three months ended December 31,				Year ended December 31,
		2025		2024		2025		2024
Numerator:		in thousands (except per share amounts)
Net income attributable to Class A Common Stockholders		$         6,924		$         1,230		$       41,463		$         9,590
Adjustments:
Accretion of Series A Convertible Preferred Stock		1,902		1,875		7,555		7,427
Net income attributable to non-controlling interest		19,733		5,335		100,207		61,286
Net investment gains		(913)		(412)		(3,064)		(2,223)
Loss related to warrant liabilities, net		—		—		—		8,544
Change in TRA Liability		(40)		280		32,235		1,602
Gain related to divestiture		—		—		—		(87)
Other unusual items 1		2,444		344		5,405		1,880
Tax impact of above adjustments 2		186		2,214		(51,224)		(11,815)
Adjusted Net Income		$       30,236		$       10,866		$     132,577		$       76,204
Denominator:
Weighted average shares of Class A Common Stock outstanding — Diluted		102,321		90,032		346,973		88,504
Adjustments:
Assumed exchange of non-controlling interest THG units for shares of Class A Common Stock		245,554		255,178		—		255,328
Assumed conversion of shares of Series A Convertible Preferred Stock into shares of Class A Common Stock		6,785		6,785		6,785		6,785
Assumed vesting of share-based compensation awards		6,445		8,101		7,062		7,162
Adjusted weighted average shares of Class A Common Stock outstanding — Diluted		361,105		360,096		360,820		357,779
Adjusted Diluted EPS		$           0.08		$           0.03		$           0.37		$           0.21

 

		Three months ended December 31,				Year ended December 31,
		2025		2024		2025		2024
		in thousands
Diluted earnings per share		$           0.06		$           0.01		$           0.37		$           0.10
Impact of assumed exchange, conversion, or vesting of remaining potentially dilutive securities 3		0.02		0.01		0.05		0.12
Non-GAAP adjustments 4		—		0.01		(0.05)		(0.01)
Adjusted Diluted EPS		$           0.08		$           0.03		$           0.37		$           0.21

(1)	For the year ended December 31, 2025, other unusual items includes certain legal settlement expenses, professional fees associated with the THG Unit Exchange and related Secondary Offering, and certain material severance expenses. For the year ended December 31, 2024, other unusual items includes professional fees associated with the Warrant Exchange, as well as certain material severance expenses.
(2)	Represents the tax effect of the aforementioned adjustments to reflect corporate income taxes at an estimated effective tax rate of 23.7% and 26.3% for 2025 and 2024, respectively, which considers the U.S. federal statutory rate of 21%, a combined state income tax rate of approximately 5% (net of federal benefits), and certain material permanent items.
(3)	Assumes the exchange of all outstanding THG units, Series A Convertible Preferred Stock, and unvested share-based compensation awards for shares of Class A Common Stock, resulting in the elimination of the non-controlling interest and recognition of the Net income attributable to non-controlling interest, as well as elimination of the accretion of Series A Convertible Preferred Stock.
(4)	Represents the per share impact of non-GAAP adjustments for each period. Refer to the reconciliation above for additional information.

 

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SOURCE Hagerty

FAQ

What were Hagerty (HGTY) full year 2025 revenues and net income?

Hagerty reported Total Revenue $1.456 billion and Net Income $149 million for full year 2025. According to the company, revenue rose 17% year-over-year and net income increased 91%, reflecting strong premium growth and favorable reserve development.

Why does Hagerty (HGTY) expect a 2026 net loss despite premium growth?

Hagerty forecasts a 2026 net loss of $(51M) to $(41M) due to transitional items. According to the company, this includes approximately $190 million of non-cash amortization related to the Markel fronting arrangement, which will decline through 2026.

How much written premium growth does Hagerty (HGTY) expect in 2026?

Hagerty expects Written Premium growth of 15% to 16% for 2026. According to the company, this reflects continued member-driven underwriting expansion and the planned move to a 100% quota share with Markel to retain premium and risk.

What guidance did Hagerty (HGTY) give for 2026 Adjusted EBITDA?

Hagerty guided Adjusted EBITDA of $236M to $247M for 2026. According to the company, this range accounts for expected profitability improvement despite fronting transition costs and reflects ongoing technology and scale benefits.

How did Hagerty's Marketplace and membership metrics perform in 2025?

Hagerty's Marketplace revenue grew 119% to $119M and Hagerty Drivers Club paid members rose to ~930,000. According to the company, Marketplace growth was driven by private sales, additional auctions and expansion into Europe.