Hagerty (NYSE: HGTY) reported second quarter 2022 total revenue increased 23% year-over-year (YoY) to $206.0 million, and year-to-date 2022 total revenue increased 26% YoY to $373.8 million. Growth has been powered by consistent double-digit gains in written premium, a strong and growing base of members, and higher revenue per member.
Here are five things you should know about this earnings call:
- For 2Q2022, HGTY reported an operating profit of $2 million compared to an operating profit of $14 million in the prior year period. This decline reflects the significant investments made in the Hagerty ecosystem across software development, acquired media and entertainment assets, scaling expenses related to the State Farm partnership and accelerated investments in Hagerty Marketplace.
- HGTY reported a net loss of $5.5 million for the 2Q2022 versus net income of $12.5 million a year earlier. In 2Q2022 , HGTY recorded a fair value loss of $5.4 million related to private and public warrants. This fair value adjustment was the primary driver for the net loss for the quarter as well as the previously mentioned pre-revenue costs. GAAP loss per share was $0.07 based on the weighted average shares of Class A common stock outstanding, and adjusted loss per share was $0.02.
- As part of the State Farm partnership, HGTY expects to begin activating State Farm’s 19,200 agents to sell classic car policies during the first half of 2023 and to begin the state-by-state conversion of the existing 460,000 policies to the new program.
- Earlier in 2022, HGTY acquired approximately 40% equity ownership in the Broad Arrow Group to help build the Hagerty Marketplace platform for members to buy, sell and finance collector vehicles. HGTY announces that they are acquiring the remaining 60% of Broad Arrow in a stock deal valued at $64.8 million.
- HGTY reported adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation & Amortization) of $16.1 million for the second quarter compared to $19.3 million in the prior year period (a 17% decrease), driven by incremental costs incurred this year. The full year adjusted EBITDA is now expected to be $15 million to $20 million, which at the midpoint is roughly $10 million lower than HGTY’s previously anticipated range. This is largely due to the accelerated spend in areas supporting State Farm and Broad Arrow Group.
To learn more visit: News Release – Hagerty Q2 2022 News Details
Investment banking services offered through MarshBerry Capital, LLC, Member FINRA and SIPC, and an affiliate of Marsh, Berry & Company, LLC, 28601 Chagrin Blvd, Suite 400, Woodmere, OH 44122 (440) 354-3230
This earnings summary has been prepared by Marsh, Berry & Co., LLC. and is not intended to provide investment recommendations on any company. It is not a research report, as such term is defined by applicable laws and regulations, and it does not contain sufficient information upon which to make an investment decision. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any securities, financial instruments or to participate in any particular trading strategy. These materials are based solely on information contained in publicly available documents and Marsh, Berry & Co., LLC has not independently attempted to investigate or to verify such information.