Top-line performance remains highly unstable, with a 27.4% revenue decline in 2026Q1 and a combined ratio that swung from -128.0% in 2025Q2 to 168.2% in 2026Q1.
| Revenue | 41.25M | 34.05M | 5.25M | 1.33M | 58.13M | 98.72M | 186.59M |
| Revenue Growth % | - | - | 294.7% | -97.71% | -41.11% | -47.09% | - |
| Medical Costs & Claims | 13.36M | 8.99M | 3.4M | 3.53M | 0 | 0 | 0 |
| Medical Cost Ratio % | 32.39% | 26.41% | 64.8% | 265.05% | 0% | 0% | 0% |
| Gross Profit | 27.89M | 25.06M | 1.85M | -2.2M | 58.13M | 98.72M | 186.59M |
| Gross Margin % | 67.61% | 73.59% | 35.2% | -165.05% | 100% | 100% | 100% |
| Gross Profit Growth % | - | - | 184.17% | -103.78% | -41.11% | -47.09% | - |
| Operating Expenses | -15.1M | -24.55M | 1.71M | 2.25M | 0 | 0 | 0 |
| OpEx / Revenue % | -36.6% | -72.1% | 32.5% | 169.17% | 0% | 0% | 0% |
| Depreciation & Amortization | -213K | 94K | 0 | 0 | 0 | 0 | 0 |
| Combined Ratio % | -4.22% | -45.69% | 97.3% | 434.22% | 0% | 0% | 0% |
| Operating Income | 42.98M | 49.61M | 141.76K | -4.45M | -49.32M | 30.55M | 66.88M |
| Operating Margin % | 104.22% | 145.69% | 2.7% | -334.22% | -84.84% | 30.95% | 35.84% |
| Operating Income Growth % | - | - | 103.19% | 90.99% | -261.41% | -54.31% | - |
| EBITDA | 48.42M | 49.7M | 141.76K | -4.45M | -41.06M | 38.24M | 55.88M |
| EBITDA Margin % | 117.39% | 145.97% | 2.7% | -334.22% | -70.64% | 38.73% | 29.95% |
| Interest Expense | 13.76M | 9.87M | 0 | 0 | 19.33M | 19.33M | 19.32M |
| Non-Operating Income | -13.76M | -9.87M | 0 | 0 | -8.26M | -7.68M | 10.99M |
| Pretax Income | 42.96M | 49.61M | 354.31K | -4.22M | -60.6M | 26.66M | 41.66M |
| Pretax Margin % | 104.16% | 145.69% | 6.75% | -316.94% | -104.24% | 27.01% | 22.33% |
| Income Tax | -18K | 68K | 30.04K | 0 | -557K | 15K | -104K |
| Effective Tax Rate % | -0.04% | 0.14% | 8.48% | 0% | 0.92% | 0.06% | -0.25% |
| Net Income | 39.69M | 46.73M | 324.27K | -4.22M | -60.35M | 25.62M | 41.76M |
| Net Margin % | 96.22% | 137.23% | 6.18% | -316.94% | -103.82% | 25.96% | 22.38% |
| Net Income Growth % | - | - | 107.69% | 93.02% | -335.54% | -38.64% | - |
| EPS (Diluted) | 5.12 | 8.15 | -40.23 | -0.55 | 12.65 | 27.10 | 18.96 |
| EPS Growth % | - | - | -7214.55% | -104.35% | -53.32% | 42.93% | - |
| EPS (Basic) | - | 8.15 | -40.23 | -0.55 | 12.65 | 27.10 | 18.96 |
| Diluted Shares Outstanding | 7.75M | 5.73M | 5M | 7.7M | 4.36M | 4.3M | 4.22M |
Legacy reserve volatility
As evidenced by the quarterly data, Kestrel Group's revenue trajectory remains highly inconsistent, with a reported 27.4% decline in 2026Q1 and extreme fluctuations in prior periods, suggesting that the firm's top-line performance is driven by lumpy, non-recurring legacy portfolio acquisitions rather than sustainable, organic premium growth.
The lack of a consistent revenue base indicates that the company's business model is heavily dependent on the timing of specific reinsurance deals. Investors should monitor whether the firm can establish a recurring fee-based stream through its Insurance Programs segment to mitigate the inherent volatility of its legacy reinsurance operations.
Based on the provided financial statements, the combined ratio has exhibited extreme volatility, swinging from a negative 128.0% in 2025Q2 to a 168.2% in 2026Q1, which suggests that the firm's underwriting performance is currently unstable and heavily influenced by accounting adjustments rather than core operational efficiency.
The wide variance in the combined ratio implies that the company is struggling to maintain consistent underwriting discipline. The negative combined ratio in 2025Q2 likely reflects significant reserve releases or one-time gains that distort the underlying profitability of the insurance portfolio.
According to the reported loss ratios, which fluctuated from -54.3% in 2025Q1 to 59.7% in 2025Q3, Kestrel Group's earnings appear to be significantly impacted by prior-year reserve development, raising concerns about the long-term sustainability of the firm's reported net income and the adequacy of its current loss reserves.
The extreme swings in loss ratios suggest that the company may be relying on favorable reserve development to offset operational losses. This warrants further investigation into the actuarial assumptions used to value legacy liabilities, as any adverse development could materially impair the firm's capital position.
Based on the reported figures, Kestrel Group's cash and equivalents of $16.9M appear insufficient relative to its operational scale and potential liability exposure, suggesting that the firm may face significant liquidity constraints if it encounters unexpected claims or requires capital to collateralize new legacy reinsurance transactions.
The company's reliance on transactional gains to support its balance sheet creates a precarious risk profile. Investors should be wary of the potential for social inflation or litigation tailwinds to erode the value of assumed legacy blocks, which could force the firm to seek external financing under unfavorable terms.
Quick answers to the most common questions about buying KG stock.
For fiscal year 2025, Kestrel Group, Ltd. (KG) reported total revenue of $34.0M. This represents a 81.8% decline compared to $186.6M in 2020.
Kestrel Group, Ltd. (KG) is profitable, generating $46.7M in net income for the fiscal year ending 2025 with a net profit margin of 137.2%.
Kestrel Group, Ltd. (KG) reported an operating income of $49.6M, resulting in an operating profit margin of 145.7%. This margin reflects the operational efficiency of the business before interest and taxes.
Kestrel Group, Ltd. (KG) generated $25.1M in gross profit for the year, representing a gross profit margin of 73.6%. This demonstrates the company's core pricing power and production efficiency.