Hagerty Reports Full Year 2025 Results; Provides 2026 Growth Outlook

Full year 2025 HighlightsTotal 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%– 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 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 carsThe 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.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 DetailsHagerty 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 StatementsThis 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.

Hagerty Reports Full Year 2025 Results; Provides 2026 Growth Outlook

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