Hagerty Reports Second Quarter 2025 Results; Increases 2025 Outlook for Revenue and Profit Growth
-- The Company increased its full year 2025 outlook for Total Revenue growth to 13-14%, Net Income growth of 43-53%, and Adjusted EBITDA growth of 30-38% -- Second quarter 2025 Total Revenue increased 18% year-over-year to $368.7 million, and year-to-date 2025 Total Revenue increased 18% to $688.3 million -- Second quarter 2025 Written Premium increased 11% year-over-year to $356.0 million, and year-to-date 2025 Written Premium increased 11% to $600.3 million -- Second quarter 2025 Marketplace revenue increased 327% year-over-year to $26.8 million, and year-to-date 2025 Marketplace revenue increased 232% to $55.8 million -- Second quarter 2025 Operating Income increased 25% year-over-year to $47.7 million, and year-to-date 2025 Operating Income increased 46% to $73.4 million -- Second quarter 2025 Net Income increased 11% year-over-year to $47.2 million, and year-to-date 2025 Net Income increased 46% to $74.5 million -- Second quarter 2025 Adjusted EBITDA increased 20% year-over-year to $63.7 million, and year-to-date 2025 Adjusted EBITDA increased 28% to $103.4 million -- Second quarter 2025 Basic and Diluted Earnings Per Share was $0.09, and year-to-date 2025 Basic and Diluted Earnings Per Share was $0.16 -- The Company announced a non-binding LOI for a new fronting arrangement with Markel that would result in Hagerty controlling 100% of the premium as of January 1, 2026
TRAVERSE CITY, Mich., Aug. 4, 2025 /PRNewswire/ -- Hagerty, Inc. (NYSE: HGTY), an automotive enthusiast brand and leading specialty vehicle insurance provider, announced today financial results for the three and six months ended June 30, 2025.
"We delivered solid results during the first half of 2025 with revenue growth of 18%, net income gains of 46%, and Adjusted EBITDA gains of 28%. We continued to expand our margins while making large investments in future growth, including rolling out State Farm Classic+, launching our Enthusiast+ product, building our European Marketplace team, and investing in the technology that will enable further margin expansion as we scale up over the coming years," said McKeel Hagerty, Chief Executive Officer and Chairman of Hagerty.
"Given our first half results and strong business momentum, we have increased our 2025 revenue growth outlook to 13-14% as we help car enthusiasts protect, buy and sell, and enjoy their special vehicles. Margins are expanding faster than expected in our original outlook, and we now expect to deliver net income growth of 43-53% in 2025. We are well positioned for accelerating rates of top and bottom line growth as we move into 2026, including the recently announced evolution of our partnership with Markel that would result in Hagerty controlling 100% of the premium next year," added Mr. Hagerty.
SECOND QUARTER AND YTD 2025 FINANCIAL HIGHLIGHTS
-- Second quarter 2025 Total Revenue increased 18% year-over-year to $368.7 million, and year-to-date 2025 Total Revenue increased 18% year-over-year to $688.3 million -- Second quarter 2025 Written Premium increased 11% year-over-year to $356.0 million, and year-to-date 2025 Written Premium increased 11% year-over-year to $600.3 million -- Second quarter 2025 Commission and fee revenue increased 11% year-over-year to $143.3 million, and year-to-date 2025 Commission and fee revenue increased 12% year-over-year to $243.6 million -- Policies in Force Retention was 88.7% as of June 30, 2025 compared to 88.7% in the prior year period, and total insured vehicles increased 6% year-over-year to 2.7 million -- Second quarter 2025 Loss Ratio was 42.3% including 1.6% of impact from catastrophe losses, compared to 41.1% in the prior year period. Year-to-date 2025 Loss Ratio was 42.2% including 4.1% of impact from catastrophe losses, compared to 41.1% in the prior year period -- Second quarter 2025 Earned Premium increased 13% year-over-year to $177.8 million, and year-to-date 2025 Earned Premium increased 12% year-over-year to $347.1 million -- Second quarter 2025 Membership, marketplace and other revenue increased 78% year-over-year to $47.6 million, and year-to-date 2025 Membership, marketplace and other revenue increased 68% year-over-year to $97.6 million -- Second quarter 2025 Marketplace revenue increased 327% year-over-year to $26.8 million, and year-to-date 2025 Marketplace revenue increased 232% year-over-year to $55.8 million -- The increase was primarily due to a higher level of inventory sales as well as our inaugural European auction at Concorso d'Eleganza Villa d'Este in May -- Second quarter 2025 Membership revenue increased 11% year-over-year to $15.7 million, and year-to-date 2025 Membership revenue increased 12% year-over-year to $31.0 million -- Hagerty Drivers Club (HDC) paid members increased 6% year-over-year to approximately 908,000 compared to 854,000 -- Second quarter 2025 Operating Income increased 25% year-over-year to $47.7 million, and year-to-date 2025 Operating Income increased 46% year-over-year to $73.4 million -- Second quarter 2025 Operating Income margin increased by 70 bps, and year-to-date 2025 Operating Income margin increased by 210 bps compared to the prior year periods -- Year-to-date 2025 General and administrative expenses increased 8.5% due primarily to an increase in software-related costs, and Salary and benefits increased 8.2% due to merit increases and higher headcount -- Second quarter 2025 Depreciation and amortization was $8.8 million compared to $10.0 million in the prior year period, and year-to-date 2025 depreciation and amortization was $18.3 million compared to $20.6 million in the prior year period -- Second quarter 2025 Net Income increased 11% year-over-year to $47.2 million, and year-to-date 2025 Net Income increased 46% year-over-year to $74.5 million -- Second quarter 2025 Net Income included $5.7 million of interest and other income (expense), which included $10.7 million in interest and investment income, partially offset by $2.0 million of interest expense and a $3.1 million increase in our TRA liability -- Year-to-date 2025 Net Income included $12.7 million of interest and other income (expense), which included $19.5 million in interest and investment income, partially offset by $3.9 million of interest expense and a $3.1 million increase in our TRA liability -- Second quarter 2025 Adjusted EBITDA (a non-GAAP measure) increased 20% year-over-year to $63.7 million, and year-to-date 2025 Adjusted EBITDA increased 28% year-over-year to $103.4 million -- Second quarter 2025 Basic and Diluted Earnings Per Share was $0.09, and year-to-date 2025 Basic and Diluted Earnings Per Share was $0.16 -- Second quarter 2025 Adjusted Earnings Per Share (a non-GAAP measure) was $0.13, and year-to-date 2025 Adjusted Earnings Per Share was $0.21 -- The Company ended the quarter with $140.3 million of unrestricted cash and $176.1 million of total debt, $38.9 million of which is 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.
2025 OUTLOOK - SUSTAINED REVENUE GROWTH AND MARGIN EXPANSION
We believe 2025 is on track to be another year of strong profit growth for Hagerty as our team executes on our long-term plan to create value for stakeholders by delivering high rates of compounding revenue growth through investing in our long-term competitive advantages. In 2025, these investments aggregate to $20 million of elevated spend, primarily in our new technology platform, Duck Creek. Duck Creek will help us efficiently grow our business over the coming years. We remain focused on growing our Insurance, Membership and Marketplace businesses, positioning us to deliver sustained, compounding profit growth over the coming years, and fund our purpose to save driving and fuel car culture for future generations.
-- For full year 2025, Hagerty anticipates: -- Written Premium growth of 13-14% -- Total Revenue growth of 13-14% -- Net Income growth of 43-53% -- Adjusted EBITDA growth of 30-38%
Prior 2025 Outlook(1) Revised 2025 Outlook
($) ($)
in thousands 2024 Results Low End High End Low End High End
Total Written Premium $1,044,492 $1,180,000 $1,191,000 $1,180,000 $1,191,000
Total Revenue $1,200,038 $1,344,000 $1,356,000 $1,356,000 $1,368,000
Net Income2, 4 $78,303 $102,000 $110,000 $112,000 $120,000
Adjusted EBITDA3, 4 $124,473 $150,000 $160,000 $162,000 $172,000
1
Prior 2025 Outlook shared on the Company's first quarter earnings call on May 7th, 2025.
2 Fully diluted share count of approximately 361 million shares including Class A Common Stock, Class V Common Stock, Series A Convertible
Preferred Stock, and share-based compensation awards.
3
See Non-GAAP Financial Measures below for additional information regarding this non-GAAP financial measure.
4 Profit ranges incorporate $20 million of elevated technology investments in 2025, as well as approximately $10 million pre-tax impact
from the Southern California wildfires.
Conference Call Details
Hagerty will hold a conference call to discuss the financial results today at 10:00 am Eastern Time. A webcast of the conference call, including its Investor Presentation highlighting second quarter 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 provided, 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 negative 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 the forward-looking statements. These factors include, among other things, Hagerty's ability to: (i) compete effectively within our industry and attract and retain our insurance policyholders and paid Hagerty Drivers Club ("HDC") subscribers; (ii) maintain key strategic relationships with our 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 our technology platforms or our use of third-party services; (v) accelerate the adoption of our membership and marketplace products and services, as well as any new insurance programs and products we offer; (vi) enter into and successfully implement the proposed fronting arrangement with Markel; (vii) achieve the anticipated benefits of the proposed fronting arrangement with Markel; (viii) manage the cyclical nature of the insurance business, including through any periods of recession, economic downturn or inflation; (ix) address unexpected increases in the frequency or severity of claims, and (x) comply with the numerous laws and regulations applicable to our business, including state, federal and foreign laws relating to insurance and rate increases, privacy, the internet, and accounting matters.
The forward-looking statements herein represent the judgment of Hagerty as of the date of this release and Hagerty disclaims any intent or obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise. This press release should be read in conjunction with the information included in Hagerty's other press releases, reports and other filings with the Securities and Exchange Commission. Understanding the information contained in these filings is important in order to fully understand Hagerty's reported financial results and its business outlook for future periods.
About Hagerty, Inc. (NYSE: HGTY)
Hagerty is an automotive enthusiast brand committed to saving driving and to fueling car culture for future generations. The company is a leading provider of specialty vehicle insurance, expert car valuation data and insights, live and digital car auction services, immersive events and automotive entertainment custom made for the 67 million Americans who self-describe as car enthusiasts. Hagerty also operates in Canada and the U.K. and is home to Hagerty Drivers Club, a community of over 900,000 who can't get enough of cars. For more information, please visit www.hagerty.com or connect with us on Facebook, Instagram, Twitter and LinkedIn.
More information can be found at newsroom.hagerty.com.
Category: Financial
Source: Hagerty
Hagerty, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
Three months ended June 30,
2025 2024
$ Change % Change
REVENUE: in thousands (except percentages and per share
amounts)
Commission and fee revenue $143,287 $128,816 $14,471 11.2 %
Earned premium 177,785 157,612 20,173 12.8 %
Membership, marketplace and other revenue 47,627 26,797 20,830 77.7 %
Total revenue 368,699 313,225 55,474 17.7 %
OPERATING EXPENSES:
Salaries and benefits 64,062 57,693 6,369 11.0 %
Ceding commissions, net 82,938 73,446 9,492 12.9 %
Losses and loss adjustment expenses 75,213 64,729 10,484 16.2 %
Sales expense 67,380 47,990 19,390 40.4 %
General and administrative expenses 22,574 21,373 1,201 5.6 %
Depreciation and amortization 8,833 10,014 (1,181) (11.8) %
Gain related to divestiture (87) 87 N/M
Total operating expenses 321,000 275,158 45,842 16.7 %
OPERATING INCOME 47,699 38,067 9,632 (25.3) %
Loss related to warrant liabilities, net (1,941) 1,941 N/M
Interest and other income (expense), net 5,664 12,342 (6,678) (54.1) %
INCOME BEFORE INCOME TAX EXPENSE 53,363 48,468 4,895 10.1 %
Income tax expense (6,161) (5,811) (350) 6.0 %
NET INCOME 47,202 42,657 4,545 10.7 %
Net income attributable to non-controlling interest (36,229) (32,279) (3,950) 12.2 %
Accretion of Series A Convertible Preferred Stock (1,875) (1,839) (36) 2.0 %
NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCKHOLDERS $9,098 $8,539 $559 6.5 %
Earnings per share of Class A Common Stock:
Basic $0.09 $0.09
Diluted $0.09 $0.09
Weighted average shares of Class A Common Stock outstanding:
Basic 90,698 85,687
Diluted 90,698 85,687
N/M = Not meaningful
Hagerty, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
Six months ended June 30,
2025 2024
$ Change % Change
REVENUE: in thousands (except percentages and per share
amounts)
Commission and fee revenue $243,574 $217,656 $25,918 11.9 %
Earned premium 347,140 309,231 37,909 12.3 %
Membership, marketplace and other revenue 97,578 58,046 39,532 68.1 %
Total revenue 688,292 584,933 103,359 17.7 %
OPERATING EXPENSES:
Salaries and benefits 123,165 113,809 9,356 8.2 %
Ceding commissions, net 160,271 144,376 15,895 11.0 %
Losses and loss adjustment expenses 146,343 127,085 19,258 15.2 %
Sales expense 122,006 87,650 34,356 39.2 %
General and administrative expenses 44,759 41,235 3,524 8.5 %
Depreciation and amortization 18,321 20,574 (2,253) (11.0) %
Gain related to divestiture (87) 87 N/M
Total operating expenses 614,865 534,642 80,223 15.0 %
OPERATING INCOME 73,427 50,291 23,136 46.0 %
Loss related to warrant liabilities, net (8,081) 8,081 N/M
Interest and other income (expense), net 12,718 19,586 (6,868) (35.1) %
INCOME BEFORE INCOME TAX EXPENSE 86,145 61,796 24,349 39.4 %
Income tax expense (11,650) (10,940) (710) 6.5 %
NET INCOME 74,495 50,856 23,639 46.5 %
Net income attributable to non-controlling interest (55,151) (41,829) (13,322) 31.8 %
Accretion of Series A Convertible Preferred Stock (3,750) (3,677) (73) 2.0 %
NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCKHOLDERS $15,594 $5,350 $10,244 191.5 %
Earnings per share of Class A Common Stock:
Basic $0.16 $0.06
Diluted $0.16 $0.06
Weighted average shares of Class A Common Stock outstanding:
Basic 90,374 85,171
Diluted 91,247 86,072
N/M = Not meaningful
Hagerty, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
June 30, December 31,
2025 2024
ASSETS in thousands (except share amounts)
Current Assets:
Cash and cash equivalents $140,300 $104,784
Restricted cash and cash equivalents 190,286 128,061
Investments 119,326 73,957
Accounts receivable 107,925 84,763
Premiums receivable 249,830 153,748
Commissions receivable 27,362 20,430
Notes receivable 83,478 45,417
Deferred acquisition costs, net 178,430 156,466
Other current assets 116,047 90,779
Total current assets 1,212,984 858,405
Investments 482,248 515,570
Notes receivable 17,931 11,555
Property and equipment, net 17,259 18,205
Lease right-of-use assets 42,549 44,485
Intangible assets, net 86,732 90,107
Goodwill 114,165 114,123
Other long-term assets 66,707 56,888
TOTAL ASSETS $2,040,575 $1,709,338
LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable, accrued expenses and other current liabilities $138,349 $73,383
Losses payable and provision for unpaid losses and loss adjustment expenses 259,050 266,878
Ceding commissions payable 113,080 77,389
Advance premiums and due to insurers 188,403 108,352
Unearned premiums 410,496 357,539
Contract liabilities 36,602 31,905
Total current liabilities 1,145,980 915,446
Long-term lease liabilities 40,903 43,178
Long-term debt, net 153,383 104,968
Deferred tax liability 21,857 18,065
Contract liabilities 14,334 15,334
Other long-term liabilities 3,267 4,178
TOTAL LIABILITIES 1,379,724 1,101,169
Commitments and Contingencies
TEMPORARY EQUITY
(1)
Preferred stock, $0.0001 par value (20,000,000 shares authorized, 8,483,561 Series A Convertible 82,813 84,663
Preferred Stock issued and outstanding as of June 30, 2025 and December 31, 2024)
STOCKHOLDERS' EQUITY
Class A Common Stock, $0.0001 par value (500,000,000 shares authorized, 90,715,648 and 90,032,391 9 9
issued and outstanding as of June 30, 2025 and December 31, 2024, respectively)
Class V Common Stock, $0.0001 par value (300,000,000 authorized, 251,033,906 shares issued and 25 25
outstanding as of June 30, 2025 and December 31, 2024)
Additional paid-in capital 604,621 603,780
Accumulated earnings (deficit) (432,634) (451,978)
Accumulated other comprehensive income (loss) 262 (1,514)
Total stockholders' equity 172,283 150,322
Non-controlling interest 405,755 373,184
Total equity 578,038 523,506
TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY $2,040,575 $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.
Condensed Consolidated Statements of Cash Flows (Unaudited)
Six months ended June 30,
2025 2024
OPERATING ACTIVITIES:
in thousands
Net income $74,495 $50,856
Adjustments to reconcile net income to net cash from operating activities:
Loss on disposals of equipment, software and other assets 1,211
Loss related to warrant liabilities, net - 8,081
Increase (decrease) in tax receivable agreement liability 3,078
Depreciation and amortization 18,321 20,574
Provision for deferred taxes 2,061 1,984
Share-based compensation expense 9,538 8,926
Non-cash lease expense 4,226 4,038
Realized (gain) loss on investments, net (879) (548)
(Accretion) amortization of discount and premium, net (2,316) (769)
Other 355 1,312
Changes in operating assets and liabilities:
Accounts, premiums and commissions receivable (148,883) (39,306)
Deferred acquisition costs, net (21,964) (17,670)
Losses payable and provision for unpaid losses and loss adjustment expenses (7,828) 19,037
Ceding commissions payable 35,691 (7,639)
Advance premiums and due to insurers 78,846 75,869
Unearned premiums 52,957 45,234
Operating lease assets and liabilities (4,534) (4,531)
Other assets and liabilities, net 3,339 (43,193)
Net Cash Provided by Operating Activities 97,714 122,255
INVESTING ACTIVITIES:
Capital expenditures (11,549) (11,936)
Acquisitions, net of cash acquired, and other investments - (3,843)
Issuance of notes receivable (26,617) (32,136)
Collection of notes receivable 8,091 19,354
Purchases of fixed maturity securities (98,455) (455,766)
Proceeds from sales of fixed maturity securities 21,341 7,570
Proceeds from maturities of fixed maturity securities 75,470 5,596
Purchases of equity securities (347) (9,407)
Proceeds from sales of equity securities 378
Other investing activities (151) 631
Net Cash Used in Investing Activities (31,839) (479,937)
FINANCING ACTIVITIES:
Payments on long-term debt (124,493) (60,757)
Proceeds from long-term debt, net of issuance costs 192,339 25,482
Distributions paid to non-controlling interest unit holders (30,380) (5,320)
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 (2,452) (4,588)
Other financing activities 289
Net Cash Provided by (Used in) Financing Activities 29,480 (50,783)
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents 2,386 (289)
Change in cash and cash equivalents and restricted cash and cash equivalents 97,741 (408,754)
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 $330,586 $315,522
Hagerty, Inc.
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 Condensed Consolidated Financial Statements prepared in accordance with GAAP.
Three months ended June 30,
2025 2024
Change
Operational Metrics dollars in thousands (except per share amounts)
Total Written Premium $355,985 $321,173 $34,812 10.8 %
Hagerty Re Loss Ratio 42.3 % 41.1 % 1.2 % N/M
Hagerty Re Combined Ratio 89.6 % 88.1 % 1.5 % N/M
New Business Count - Insurance 87,872 89,049 (1,177) (1.3) %
GAAP Financial Measures
Total Revenue $368,699 $313,225 $55,474 17.7 %
Operating Income $47,699 $38,067 $9,632 25.3 %
Net Income $47,202 $42,657 $4,545 10.7 %
Basic Earnings Per Share $0.09 $0.09
$ - - %
Diluted Earnings Per Share $0.09 $0.09
$ - - %
Non-GAAP Financial Measures
Adjusted EBITDA $63,744 $53,113 $10,631 20.0 %
Adjusted Earnings Per Share $0.13 $0.12 $0.01 - %
Six months ended June 30,
2025 2024
Change
Operational Metrics dollars in thousands (except per share amounts)
Total Written Premium $600,312 $539,459 $60,853 11.3 %
Hagerty Re Loss Ratio 42.2 % 41.1 % 1.1 % N/M
Hagerty Re Combined Ratio 89.1 % 88.3 % 0.8 % N/M
New Business Count - Insurance 143,181 148,335 (5,154) (3.5) %
GAAP Financial Measures
Total Revenue $688,292 $584,933 $103,359 17.7 %
Operating Income $73,427 $50,291 $23,136 46.0 %
Net Income $74,495 $50,856 $23,639 46.5 %
Basic Earnings Per Share $0.16 $0.06 $0.10 166.7 %
Diluted Earnings Per Share $0.16 $0.06 $0.10 166.7 %
Non-GAAP Financial Measures
Adjusted EBITDA $103,352 $80,440 $22,912 28.5 %
Adjusted Earnings Per Share $0.21 $0.16 $0.05 - %
N/M = Not meaningful
June 30, December 31,
2025 2024 Change
Operational Metrics
Policies in Force 1,559,798 1,506,451 53,347 3.5 %
Policies in Force Retention 88.7 % 89.0 % (0.3) % N/M
Vehicles in Force 2,664,611 2,576,700 87,911 3.4 %
HDC Paid Member Count 907,963 875,822 32,141 3.7 %
Net Promoter Score (NPS) 82 82 - %
N/M = Not meaningful
Non-GAAP Financial Measures
Adjusted EBITDA
We define Adjusted EBITDA as consolidated Net income, excluding net interest and other income (expense), income tax expense, and depreciation and amortization, further adjusted to exclude (i) net gains and losses related to our warrant liabilities prior to the warrant exchange transaction that closed in July 2024 (the "Warrant Exchange"); (ii) share-based compensation expense; and when applicable, (iii) restructuring, impairment and related charges; (iv) gains, losses and impairments related to divestitures; and (v) certain other unusual items.
We present Adjusted EBITDA because 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. We use Adjusted EBITDA as a measure of the operating performance of our business on a consistent basis, as it removes the impact of items not directly resulting from our core operations.
By providing this non-GAAP financial measure, together with a reconciliation to Net income, which is the most comparable GAAP measure, we believe we are enhancing investors' understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. However, Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation, or as an alternative to, or a substitute for Net income or other financial statement data presented in our Condensed Consolidated Financial Statements as indicators of financial performance. Our definition of Adjusted EBITDA may be different than similarly titled measures used by other companies in our industry, which could reduce the usefulness of this non-GAAP financial measure when comparing our performance to that of other companies.
The following table reconciles Adjusted EBITDA to the most directly comparable GAAP measure, which is Net income:
Three months ended Six months ended
June 30, June 30,
2025 2024 2025 2024
in thousands
Net income $47,202 $42,657 $74,495 $50,856
Interest and other (income) expense, net 1, 2 (5,664) (12,342) (12,718) (19,586)
Income tax expense 6,161 5,811 11,650 10,940
Depreciation and amortization 8,833 10,014 18,321 20,574
EBITDA 56,532 46,140 91,748 62,784
Loss related to warrant liabilities, net 1,941 8,081
Share-based compensation expense 5,146 4,383 9,538 8,926
Gain related to divestiture (87) (87)
Other unusual items (3) 2,066 736 2,066 736
Adjusted EBITDA $63,744 $53,113 $103,352 $80,440
(1) Excludes interest expense related to the BAC Credit Facility, which is recorded within "Sales expense" in the Condensed Consolidated
Statements of Operations.
(2)
Includes interest income and net investment income related to our investment portfolio.
(3) Other unusual items includes certain legal settlement expenses, certain professional fees, and certain material severance expenses for the
three and six months ended June 30, 2025 and professional fees associated with the Warrant Exchange for the three and six months ended
June 30, 2024.
The following table reconciles Adjusted EBITDA for the year ended December 31, 2025 Outlook to the most directly comparable GAAP measure, which is Net income:
2025 Low 2025 High
in thousands
Net income $112,000 $120,000
Interest and other (income) expense, net 1, 2 (32,000) (32,000)
Income tax expense 23,000 25,000
Depreciation and amortization 39,000 39,000
Share-based compensation expense 20,000 20,000
Adjusted EBITDA $162,000 $172,000
(1) Excludes interest expense related to the BAC Credit Facility, which is recorded within "Sales expense" in the Condensed
Consolidated Statements of Operations.
(2)
Includes interest income and net investment income related to our investment portfolio.
Adjusted EPS
We define Adjusted Earnings Per Share ("Adjusted EPS") as consolidated Net income, excluding net gains and losses related to our warrant liabilities prior to the Warrant Exchange, divided by our outstanding and total potentially dilutive securities, which includes (i) the weighted average issued and outstanding shares of Class A Common Stock; (ii) all issued and outstanding non-controlling interest units of THG; (iii) all issued and outstanding shares of our Series A Convertible Preferred Stock on an as-converted basis; (iv) all unissued share-based compensation awards; and (v) all unexercised warrants outstanding prior to the Warrant Exchange.
The most directly comparable GAAP measure to Adjusted EPS is basic earnings per share ("Basic EPS"), which is calculated as Net income available to Class A Common Stockholders divided by the weighted average number of Class A Common Stock shares outstanding during the period.
We present Adjusted EPS because we consider it to be an important supplemental measure of our operating performance and believe it is used by securities analysts, investors and other interested parties in evaluating the consolidated performance of other companies in our industry. We also believe that Adjusted EPS, which compares our consolidated Net income with our outstanding and potentially dilutive shares, provides useful information to investors regarding our performance on a fully consolidated and fully diluted basis.
Management uses Adjusted EPS (i) as a measurement of operating performance of our business on a fully consolidated and fully diluted basis; (ii) to evaluate the performance and effectiveness of our operational strategies; and (iii) as a preferred predictor of core operating performance, comparisons to prior periods and competitive positioning.
We caution investors that Adjusted EPS is not a recognized measure 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, including Basic EPS, and that Adjusted EPS, as we define it, may be defined or calculated differently by other companies. In addition, Adjusted EPS has limitations as an analytical tool and should not be considered as a measure of profit or loss per share.
The following table reconciles Adjusted EPS to the most directly comparable GAAP measure, which is Basic EPS:
Three months ended Six months ended
June 30,
June 30,
2025 2024 2025 2024
in thousands (except per share amounts)
Numerator:
Net income available to Class A Common Stockholders (1) $8,465 $7,912 $14,505 $4,955
Accretion of Series A Convertible Preferred Stock 1,875 1,839 3,750 3,677
Undistributed earnings allocated to Series A Convertible Preferred Stock 633 627 1,089 395
Net income attributable to non-controlling interest 36,229 32,279 55,151 41,829
Consolidated net income 47,202 42,657 74,495 50,856
Loss related to warrant liabilities, net 1,941 8,081
Adjusted consolidated net income (2) $47,202 $44,598 $74,495 $58,937
Denominator:
Weighted average shares of Class A Common Stock outstanding (1) 90,698 85,687 90,374 85,171
Total potentially dilutive securities outstanding:
Non-controlling interest THG units 255,100 255,368 255,100 255,368
Series A Convertible Preferred Stock, on an as-converted basis 6,785 6,785 6,785 6,785
Total unissued share-based compensation awards 8,712 8,228 8,712 8,228
Total warrants outstanding 3,876 3,876
Potentially dilutive shares outstanding 270,597 274,257 270,597 274,257
Fully dilutive shares outstanding (2) 361,295 359,944 360,971 359,428
Basic EPS (1) $0.09 $0.09 $0.16 $0.06
Adjusted EPS (2) $0.13 $0.12 $0.21 $0.16
(1)
Numerator and Denominator of the GAAP measure Basic EPS
(2)
Numerator and Denominator of the non-GAAP measure Adjusted EPS
(3) For the three and six months ended June 30, 2024, the dilutive impact of the outstanding warrants included in the calculation of Adjusted
EPS represents the number of Class A Common Stock shares issued in relation to the Warrant Exchange.
View original content to download multimedia:https://www.prnewswire.com/news-releases/hagerty-reports-second-quarter-2025-results-increases-2025-outlook-for-revenue-and-profit-growth-302520448.html
SOURCE Hagerty
