Q2 2025 Hagerty Inc Earnings Call Transcript
Key Points
- Hagerty Inc (HGTY) reported an 18% increase in total revenue for the first half of 2025, driven by an 11% increase in written premium and a 12% growth in commission revenue.
- The company's operating margins improved by 210 basis points, resulting in a 46% increase in net income and a 28% growth in adjusted EBITDA.
- Hagerty Inc (HGTY) successfully launched its Enthusiast Plus program in Colorado, expanding its specialty insurance offerings to modern enthusiast vehicles.
- The company is expanding its marketplace business internationally, with successful auctions in Europe and plans for additional auctions in Belgium and Switzerland.
- Hagerty Inc (HGTY) announced a new fronting arrangement with Markel, allowing it to control 100% of the premium and risk, which is expected to increase profitability through additional underwriting and investment income.
- Premium growth in the first half of 2025 was below expectations, partly due to intentional deemphasis in certain markets like California and New York where profitability was inadequate.
- The company's technology transformation led to increased software licensing costs, contributing to a 6% rise in general and administrative expenses.
- Hagerty Inc (HGTY) faced challenges in integrating with State Farm's systems, although the partnership is expected to ramp up in the latter part of the year.
- The tax rate for the first half of the year was running low, and the company is still analyzing the implications of the new Big Beautiful Bill Act on its tax situation.
- The average premium per vehicle for State Farm's book is lower than Hagerty Inc (HGTY)'s, which could impact overall premium growth.
Greetings and welcome to the Hagerty second quarter 2025 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Jay Koval, Senior Vice President of Investor Relations. Thank you, you may begin.
Thank you, operator, and good morning, everyone. Thanks for joining us to discuss Hagerty results for the second quarter of 2025. I'm joined this morning by McKeel Hagerty, Chief Executive Officer and Chairman; and Patrick McClymont, Chief Financial Officer
During this morning's conference call, we will refer to an accompanying presentation that is available on Hagerty Investor Relations Section of the company's corporate website at investor.hagerty.com. Our earnings release, slides and letter to stockholders covering this period are also posted on the IR website, as well as our 8-K filing.
Today's discussion contains forward-looking statements and non-GAAP financial metrics as
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