Hippo Reports First Quarter 2025 Financial Results and will Hold an Investor Day on June 12, 2025

Rhea-AI Summary

Hippo (NYSE: HIPO) reported its Q1 2025 financial results, showing revenue growth of 30% YoY to $110M. The company's homebuilder channel drove a 35% YoY increase in gross written premium, while written premium outside the Hippo Home Insurance Program grew 21% YoY. However, the LA wildfires significantly impacted results, with the HHIP Gross Loss Ratio reaching 121% (41pp increase YoY). The company reported a Q1 net loss of $48M, up $12M YoY, largely due to wildfire impacts ($45M). Operating efficiency improved with fixed expenses declining by $7M while revenue increased by $25M YoY. Hippo announced signing a $50M surplus note agreement to support growth of diversified product lines. The company ended Q1 with $528M in cash and investments and will hold an Investor Day on June 12, 2025, in New York City.

Positive

• Revenue increased 30% YoY to $110M
• Homebuilder channel grew 35% YoY in gross written premium
• IaaS revenue grew 91% YoY
• Fixed expenses decreased by $7M while revenue grew by $25M YoY
• Secured $50M surplus note agreement to support growth
• HHIP non-PCS loss ratio improved by 6pp YoY to 53%

Negative

• Q1 net loss increased by $12M YoY to $48M
• HHIP Gross Loss Ratio deteriorated to 121%, up 41pp YoY
• Consolidated Net Loss Ratio of 106%, heavily impacted by LA wildfires
• Cash and investments decreased $42M QoQ to $528M due to wildfire losses
• Q1 adjusted EBITDA loss increased $21M to $41M

Insights

Financial Analyst

Hippo shows strong 30% revenue growth and improved efficiency, but profitability remains challenged by LA wildfire losses impacting Q1 results.

Hippo delivered 30% year-over-year revenue growth to $110 million in Q1 2025, with particularly strong performance in its Insurance-as-a-Service segment, which grew 91%. This growth comes alongside operational efficiency gains, with fixed expenses decreasing by $7 million while revenue increased by $25 million, improving the expense-to-revenue ratio from 48% to 30%.

The company's diversification strategy appears to be gaining traction. The homebuilder channel, which focuses on newer and potentially more resilient properties, drove a 35% increase in gross written premium. Meanwhile, written premium outside the Hippo Home Insurance Program grew 21%, expanding the company's risk diversification.

However, catastrophe losses significantly impacted profitability. The Los Angeles wildfires contributed 56% to the Hippo Home Insurance Program's gross loss ratio, which reached 121% overall. The consolidated net loss ratio was 106%, with the wildfires accounting for 51% of this figure. Notably, the non-catastrophe loss ratio improved by 6 percentage points year-over-year to 53%, suggesting better underlying risk selection and pricing.

The net loss attributable to Hippo increased by $12 million year-over-year to $48 million, with the LA wildfires contributing $45 million to this loss. Similarly, adjusted EBITDA loss grew to $41 million, up $21 million from the prior year, with the wildfires again responsible for $45 million of the impact.

From a capital perspective, Hippo ended the quarter with $528 million in cash and investments (excluding restricted cash), down $42 million from the previous quarter primarily due to wildfire-related losses. The company has signed an agreement to raise a $50 million surplus note, pending regulatory approval, to support growth in diversified product lines through its Spinnaker platform.

The announced Investor Day on June 12 will be a key event for understanding the company's long-term strategy and financial targets as it navigates the balance between growth and profitability in a catastrophe-prone industry.

SAN JOSE, Calif., May 7, 2025 /PRNewswire/ -- Hippo (NYSE: HIPO), the home insurance group focused on proactive home protection, today announced its consolidated financial results for the three months that ended March 31, 2025.

"We delivered on two of our most important objectives as a company. We proactively supported customers affected by the Los Angeles wildfires and further advanced the key long-term value drivers in our business," said Hippo President and CEO Rick McCathron."Our homebuilder channel, which provides access to new, more resilient homes, drove a 35% year-over-year increase in gross written premium. Written premium outside of the Hippo Home Insurance Program increased by 21% year-over-year––an important source of diversification."

The company also announced it has signed an agreement to raise a $50 million surplus note¹. It plans to use the incremental, risk-based capital to support the growth of diversified product lines it accesses via the Spinnaker platform.

"High interest in our surplus note demonstrates the trust and enthusiasm investors have in Hippo and our ability to sustain a growth trajectory while maintaining strong underwriting results," said McCathron.

Hippo will hold an Investor Day on Thursday, June 12, 2025, in New York City. The event will include presentations from senior leadership outlining the company's strategic direction and long-term financial targets.

Complete financial results and full year guidance for 2025 can be found in the company's shareholder letter in the Investor Relations section of Hippo's website at https://investors.hippo.com/.

First Quarter Highlights                                              

Top-line Growth Continues

• Q1 revenue up 30% YoY to $110m
• IaaS revenue grew 91% YoY driven by higher gross earned premium and higher premium retention
• HHIP revenue grew by 12% YoY driven by higher premium retention offset by lower gross earned premium

Loss Ratios Higher YoY, driven by the LA wildfires                                                       

• HHIP Gross Loss Ratio of 121%, a 41pp increase YoY; LA wildfires contributed 56pp
• HHIP non-PCS loss ratio of 53%, a 6pp improvement YoY
• HHIP PCS loss ratio of 68%, LA wildfires contributed 56pp
• Consolidated Net Loss Ratio of 106%, LA wildfires contributed 51pp

Improving Operating Leverage                                                                  

• Investments in operational efficiencies continued to pay off as fixed expenses (S&M, T&D, and G&A) declined by $7m while revenue increased by $25m YoY, resulting in an 18pp decrease YoY in these costs as a percentage of revenue, from 48% of revenue in Q1'24 to 30% in Q1'25

Underlying improvement in profitability masked by impact of LA wildfires

• Q1 Net Loss attributable to Hippo increased YoY by $12m to $48m; LA wildfires contributed $45m²
• Q1 adjusted EBITDA loss increased $21m to $41m; LA wildfires contributed $45m²

Financial Strength                                                                           

• Cash and investments, excluding restricted cash, decreased $42m QoQ to $528m; decrease was mostly related to losses from LA wildfires
• Spinnaker surplus of $198m
• Signed an agreement to raise a $50m surplus note; pending regulatory approval, expected to close in Q2'25

First Quarter Earnings Conference Call and Webcast Information 
Date: Wednesday, May 7, 2025
Time: 5:00 p.m. Eastern Time / 2:00 p.m. Pacific Time
Dial In: +1 833 470 1428 / Global Dial-In Numbers
Access: 093248
Webcast: https://events.q4inc.com/attendee/927507195

A replay of the webcast will be made available after the call in the investor relations section of the company's website at https://investors.hippo.com/

Information about Key Operating Metrics/Non-GAAP Financial Measures

We define gross loss ratio expressed as a percentage, as the ratio of the gross losses and loss adjustment expenses, to the gross earned premium. We define TGP as the aggregate written premium placed across all of our business platforms for the period presented. We measure TGP as it reflects the volume of our business irrespective of choices related to how we structure our reinsurance treaties, the amount of risk we retain on our own balance sheet, or the amount of business written in our capacity as an MGA, agency, or as an insurance carrier/reinsurer. We define adjusted EBITDA, a Non-GAAP financial measure, as net loss attributable to Hippo excluding interest expense, income tax expense, depreciation, amortization, stock-based compensation, net investment income, restructuring charges, impairment expense, gains and losses on sales of business, other non-cash fair market value adjustments, contingent consideration for one of our acquisitions, and other transactions, which may include certain legal fees and settlement costs, that we consider to be unique in nature. We exclude these items from Adjusted EBITDA because we do not consider them to be directly attributable to our underlying operating performance. This Non-GAAP financial measure is in addition to, and not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with GAAP. Reconciliations of this Non-GAAP financial measure to its most directly comparable GAAP counterpart is included in the shareholder letter referenced above. We believe that these non-GAAP measures of financial results provide useful supplemental information to investors about Hippo.

Forward-looking statements safe harbor

Certain statements included in this press release that are not historical facts are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," "should," "would," "plan," "predict," "potential," "seem," "seek," "future," "outlook," and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding estimates and forecasts of financial results and other operating and performance metrics, our business strategy, our cost reduction efforts, the quality of our products and services, and the potential growth of our business. These statements are based on the current expectations of Hippo's management and are not predictions of actual performance. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions, and many actual events and circumstances are beyond the control of Hippo. These forward-looking statements are subject to a number of risks and uncertainties, including our ability to navigate extensive insurance industry regulations and the scrutiny of state insurance regulators, our ability to achieve or maintain profitability in the future; our ability to retain and expand our customer base and grow our business, including our builder network; our ability to manage growth effectively; risks relating to Hippo's brand and brand reputation; denial of claims or our failure to accurately and timely pay claims; the effects of intense competition in the segments of the insurance industry in which we operate; the availability and adequacy of reinsurance, including at current coverage, limits or pricing; our ability to underwrite risks accurately and charge competitive yet profitable rates to our customers, and the sufficiency of the analytical models we use to assess and predict exposure to catastrophe losses; risks related to our proprietary technology and our digital platform; outages or interruptions or delays in services provided by our third party providers, including our data vendors; risks related to our intellectual property; the seasonal and cyclical nature of our business; the effects of severe weather events and other natural or man-made catastrophes, including the effects of climate change, global pandemics, and terrorism; continued disruptions from the COVID-19 pandemic; any overall decline in economic activity; regulators' identification of errors in the policy forms we use, the rates we charge, and our customer communications including, but not limited to, cancellations, non-renewals and reinstatements through market conducts, complaints, or other inquiries; the effects of existing or new legal or regulatory requirements on our business, including with respect to maintenance of risk-based capital and financial strength ratings, data privacy and cybersecurity, and the insurance industry generally; and other risks set forth in the sections entitled "Risk Factors" in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that Hippo does not presently know, or that Hippo currently believes are immaterial, that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect Hippo's expectations, plans, or forecasts of future events and views as of the date of this press release. Hippo anticipates that subsequent events and developments will cause Hippo's assessments to change. However, while Hippo may elect to update these forward-looking statements at some point in the future, Hippo specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as representing Hippo's assessments of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements.

About Hippo

Hippo is protecting the joy of homeownership, helping to safeguard customers' most important financial asset by harnessing the power of real-time data and a growing suite of home services to deliver proactive home protection. Hippo Holdings Inc. operating subsidiaries include Hippo Insurance Services, Hippo Builder Insurance Agency, Hippo Home Care, Spinnaker Insurance Company, Spinnaker Specialty Insurance Company, and Wingsail Insurance Company. Hippo Insurance Services and Hippo Builder Insurance Agency are licensed property casualty insurance agents with products underwritten by various affiliated and unaffiliated insurance companies. For more information, visit http://www.hippo.com.

Contacts
Investors:
Sammy Ng
Investors@hippo.com

Press:
Mark Olson
press@hippo.com

¹ Pending regulatory approval
² $45m includes selling of our subrogation rights, CA FAIR assessment, and reinstatement premium

 

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SOURCE Hippo Analytics, Inc

FAQ

What were Hippo's (HIPO) Q1 2025 financial results?

Hippo reported Q1 2025 revenue growth of 30% YoY to $110M, but posted a net loss of $48M due to LA wildfire impacts. The company's homebuilder channel grew 35% YoY in gross written premium.

How did the LA wildfires impact Hippo's Q1 2025 earnings?

The LA wildfires contributed $45M to Hippo's losses, significantly impacting the HHIP Gross Loss Ratio (56pp impact) and Consolidated Net Loss Ratio (51pp impact).

What is Hippo's (HIPO) cash position as of Q1 2025?

Hippo ended Q1 2025 with $528M in cash and investments (excluding restricted cash), down $42M QoQ primarily due to LA wildfire losses.

What new financing did Hippo secure in Q1 2025?

Hippo signed an agreement to raise a $50M surplus note, pending regulatory approval, expected to close in Q2 2025, to support growth of diversified product lines.

How did Hippo's operating expenses change in Q1 2025?

Fixed expenses (S&M, T&D, and G&A) declined by $7M while revenue increased by $25M YoY, improving from 48% of revenue in Q1'24 to 30% in Q1'25.