Revenue grew 22.5% YoY in Q4 2025, but net income swung to a loss of $4.5M in Q1 2026 with a combined ratio of 106.7%, reflecting cost pressures and claims volatility.
Hagerty, Inc. (HGTY) annual income statement — 7-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 |
|---|
| Revenue | 1.4B | 1.46B | 1.19B | 1.01B | 829.49M | 576.54M | 499.55M | 397.27M |
| Revenue Growth % | 7.75% | 22.23% | 17.77% | 21.97% | 43.87% | 15.41% | - | - |
| Medical Costs & Claims | 347.68M | 285.39M | 298.59M | 220.66M | 373.55M | 263.06M | 91.03M | 0 |
| Medical Cost Ratio % | 24.76% | 19.6% | 25.06% | 21.81% | 45.03% | 45.63% | 18.22% | 0% |
| Gross Profit | 1.06B | 1.17B | 892.9M | 791.1M | 455.94M | 313.48M | 408.52M | 397.27M |
| Gross Margin % | 75.24% | 80.4% | 74.94% | 78.19% | 54.97% | 54.37% | 81.78% | 100% |
| Gross Profit Growth % | - | 31.14% | 12.87% | 73.51% | 45.44% | -23.27% | - | - |
| Operating Expenses | 1.02B | 1.03B | 799.22M | 746.33M | 444.84M | 368.08M | 393.66M | 386.43M |
| OpEx / Revenue % | 72.79% | 70.85% | 67.08% | 73.77% | 53.63% | 63.84% | 78.8% | 97.27% |
| Depreciation & Amortization | 38.63M | 37.52M | 38.91M | 45.81M | 33.89M | 22.14M | 11.8M | 8.95M |
| Combined Ratio % | 97.55% | 90.44% | 92.14% | 95.57% | 98.66% | 109.47% | 97.03% | 97.27% |
| Operating Income | 34.33M | 139.18M | 93.68M | 44.77M | 11.1M | -54.6M | 14.86M | 10.85M |
| Operating Margin % | 2.45% | 9.56% | 7.86% | 4.43% | 1.34% | -9.47% | 2.97% | 2.73% |
| Operating Income Growth % | - | 48.57% | 109.24% | 303.5% | 120.32% | -467.47% | - | - |
| EBITDA | 72.96M | 176.71M | 132.59M | 90.58M | 44.98M | -32.46M | 26.66M | 19.8M |
| EBITDA Margin % | 5.2% | 12.13% | 11.13% | 8.95% | 5.42% | -5.63% | 5.34% | 4.98% |
| Interest Expense | 1.76M | 8.7M | 0 | 4.08M | 0 | 0 | 0 | 0 |
| Non-Operating Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Pretax Income | 34.33M | 139.18M | 93.68M | 44.77M | 11.1M | -54.6M | 14.86M | 11.46M |
| Pretax Margin % | 2.45% | 9.56% | 7.86% | 4.43% | 1.34% | -9.47% | 2.97% | 2.88% |
| Income Tax | -35.69M | -10.04M | 15.38M | 16.59M | 7.02M | 6.75M | 4.82M | 7.25M |
| Effective Tax Rate % | -103.97% | -7.22% | 16.42% | 37.06% | 63.24% | -12.36% | 32.44% | 63.29% |
| Net Income | 25.46M | 49.02M | 17.02M | 20.23M | 32.08M | -46.36M | 10.17M | 4.21M |
| Net Margin % | 1.81% | 3.37% | 1.43% | 2% | 3.87% | -8.04% | 2.04% | 1.06% |
| Net Income Growth % | -6.84% | 188.05% | -15.89% | -36.93% | 169.2% | -556.01% | - | - |
| EPS (Diluted) | 0.25 | 0.37 | 0.10 | 0.09 | -0.07 | -0.56 | 0.68 | 0.01 |
| EPS Growth % | -52.14% | 270% | 7.07% | 231% | 87.27% | -182.35% | - | - |
| EPS (Basic) | - | 0.44 | 0.10 | 0.19 | 0.39 | -0.56 | 0.68 | 0.01 |
| Diluted Shares Outstanding | 101.42M | 346.97M | 88.5M | 340.32M | 336.15M | 82.33M | 14.95M | 329.31M |
Quick answers to the most common questions about buying HGTY stock.
For fiscal year 2025, Hagerty, Inc. (HGTY) reported total revenue of $1.46B. This represents a 266.6% increase compared to $397.3M in 2019.
Hagerty, Inc. (HGTY) is profitable, generating $49.0M in net income for the fiscal year ending 2025 with a net profit margin of 3.4%.
Hagerty, Inc. (HGTY) reported an operating income of $139.2M, resulting in an operating profit margin of 9.6%. This margin reflects the operational efficiency of the business before interest and taxes.
Hagerty, Inc. (HGTY) generated $1.17B in gross profit for the year, representing a gross profit margin of 80.4%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Claims severity inflation pressure
Metrics are mathematically derived from official filings.
Premium Growth Accelerates on State Farm
Hagerty's revenue grew 22.2% year-over-year in 2025, with the State Farm partnership likely fueling policy growth. According to recent SEC filings, the latest quarter shows a 22.5% YoY increase, suggesting sustained momentum.
The 22.5% YoY revenue growth in Q4 2025, following a 17.7% in Q3, indicates accelerating top-line expansion. The State Farm partnership appears to be a significant distribution channel, potentially lowering acquisition costs and expanding market reach beyond the enthusiast niche. However, the slight sequential dip in Q1 2026 (-2.4% YoY) may reflect seasonal softness or integration adjustments, warranting monitoring.
Underwriting Profitability Remains Resilient
Hagerty's combined ratio averaged 94.4% over the last four quarters, with Q4 2025 at 88.9%, indicating consistent underwriting profitability. As reported in financial statements, the loss ratio spiked to 46.5% in Q1 2025 but normalized thereafter.
The combined ratio has stayed below 100% for most quarters, with the exception of Q1 2026 (106.7%), which appears to be an anomaly possibly due to seasonal claims or reserve adjustments. The loss ratio volatility, particularly the 46.5% in Q1 2025, suggests exposure to severity spikes, but the overall trend indicates effective pricing and risk selection. The expense ratio, implied by the difference between combined and loss ratios, remains competitive, supporting margin stability.
Reserve Releases Mask Underlying Volatility
Prior-year reserve releases appear to have boosted earnings, as evidenced by the low loss ratios in Q4 2025 (16.9%) and Q2 2025 (20.4%). Based on reported figures, these releases may be masking higher current accident year loss ratios.
The unusually low loss ratios in certain quarters suggest favorable development from prior years' reserves, which can inflate reported profitability. If reserve releases are not sustainable, future earnings could face pressure as current accident year losses emerge. Investors should monitor the adequacy of reserves, especially given the inflationary environment for specialized auto parts and labor, which could lead to adverse development.
Investment Income Contribution Limited
Investment income data is unavailable for all quarters, but the company's net income is modest relative to revenue, indicating limited contribution from investments. As per the income statement, net income in Q4 2025 was $8.8M on $357.3M revenue.
With investment income not disclosed, it appears that underwriting results are the primary driver of profitability. The low net margins (3.4% in 2025) suggest that investment income is not a significant earnings lever, possibly due to a conservative portfolio or low yields. In a rising rate environment, there may be potential for increased investment income, but the current contribution seems minimal.
Expense Ratio Reflects Scale Investments
Hagerty's operating margin of 9.56% indicates a high fixed-cost base, with expenses likely tied to content and physical infrastructure. According to the latest quarterly report, operating income swung to a loss in Q1 2026, suggesting cost pressures.
The expense ratio, derived from the combined ratio, appears elevated relative to peers like Kinsale (33.8% operating margin), reflecting Hagerty's investment in its ecosystem (e.g., Garage + Social, media). While these investments may enhance brand loyalty and reduce acquisition costs long-term, they currently compress margins. The Q1 2026 operating loss of -$20.9M highlights the volatility in expenses, possibly due to seasonal marketing or one-time costs.
Claims Inflation Could Erode Underwriting Gains
Rising costs for specialized automotive parts and labor may pressure loss ratios, as seen in the 46.5% loss ratio in Q1 2025. Based on recent filings, Hagerty's gross margin of 80.4% leaves limited buffer against claims escalation.
The spike in loss ratio in Q1 2025 suggests vulnerability to severity inflation, which could persist if premium rates do not keep pace. The company's reliance on quota share reinsurance may mitigate some volatility, but increased ceding costs could offset benefits. If claims inflation accelerates, the combined ratio could exceed 100%, turning underwriting unprofitable. Investors should monitor pricing adequacy and reserve adequacy closely.