TRAVERSE CITY, Mich. – Hagerty, Inc. (NYSE: HGTY), the automotive enthusiast brand and specialty vehicle insurance provider, reported a significant increase in its first quarter 2024 revenue, which rose 24% to $271.7 million, surpassing the analyst consensus of $265.55 million.
However, the company missed earnings per share (EPS) estimates, posting a loss of -$0.04 per share compared to the expected $0.03 per share.
The company's first quarter performance was marked by a 19% year-over-year (YoY) increase in written premium, reaching $218.3 million, and an operating income margin expansion of 1,210 basis points compared to the prior year. Net income saw a remarkable turnaround, with a $23.2 million increase to $8.2 million compared to the previous year's loss. Adjusted EBITDA, an adjusted measure, also showed significant improvement, growing by $20.6 million to $27.3 million.
Hagerty's CEO, McKeel Hagerty, attributed the strong top-line momentum and margin expansion to initiatives undertaken in the previous year. The company's focus on profitability led to substantial improvements in net income and adjusted EBITDA in what was historically a seasonally weak quarter. Hagerty also highlighted the company's efficient acquisition of new customers and service to existing ones, which contributed to the operating margin expansion.
Despite the uncertain macro environment, Hagerty reaffirmed its 2024 outlook, expecting continued revenue growth and margin expansion. The company anticipates delivering written premium growth of 13-14%, total revenue growth of 15-17%, net income growth of 116-148%, and adjusted EBITDA growth of 41-53%.
Key business priorities for 2024 include enhancing member experience, expanding insurance offerings, and building the Hagerty Marketplace as a trusted platform for collector car transactions. The company also aims to improve loyalty and drive renewals and referrals.
Hagerty's policies in force retention stood at 88.7%, showing strong customer loyalty, and the company achieved an insurance net promoter score of 82. Cost containment and resource prioritization initiatives led to a 7.1% decline in general and administrative services, while salary and benefits growth was contained to 1.6%.
The company's first quarter financial highlights also noted a 29% YoY growth in earned premium to $151.6 million, driven by strong written premium growth and an increased quota share from the previous year. Membership, marketplace, and other revenue increased by 18% YoY to $31.2 million, with marketplace revenue alone jumping 58% YoY to $10.5 million.
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