The headline GAAP numbers look poor but the underlying insurance business is accelerating — watch for the stock to trade on Adjusted EBITDA and written premium growth rather than GAAP revenue/net income. The $89M transitional cost headwind declines sharply through 2026 (to ~$10M in Q4), so sequential GAAP improvement is locked in. Key catalysts: State Farm rollout progress, Liberty/Safeco partnership in 2027, and Broad Arrow auction momentum.
Price Chart
Executive Summary
Hagerty reported Q1 2026 results that are structurally distorted by the Markel Fronting Arrangement transition: GAAP total revenue fell 5% to $312M and GAAP net loss was -$13M (vs +$27M a year ago), but the core insurance business is accelerating — written premium grew 18% to $289M, earned premium surged 42% to $240M, and Adjusted EBITDA jumped 77% to $85M. The company reaffirmed its 2026 outlook for 15-16% written premium growth and $236-247M Adjusted EBITDA, signaling the underlying profit trajectory is intact despite the accounting noise from the $89M in transitional costs.
Key Financial Metrics
Key Facts
- Written Premium increased 18% YoY to $289M, ahead of full-year 15-16% guidance
- Earned Premium increased 42% YoY to $240M, driven by 100% quota share transition
- GAAP Total Revenue decreased 5% YoY to $312M due to elimination of Markel commission revenue
- GAAP Net Loss of -$13M vs Net Income of $27M in Q1 2025, including $89M pre-tax transitional costs
- Adjusted EBITDA increased 77% YoY to $85M (from $48M), a record first-quarter result
- Record 112,000 new policies added in Q1; Policies in Force up 15% to 1.8M
- Hagerty Re Combined Ratio improved to 86.5% from 88.5% a year ago
- Full-year 2026 outlook reaffirmed: Written Premium +15-16%, Adjusted EBITDA $236-247M
Financial Impact
GAAP revenue -5% and GAAP net loss of -$13M vs +$27M, but Adjusted EBITDA +77% to $85M; $89M in one-time transitional costs mask underlying profit growth
Risk Factors
- GAAP revenue and net income will remain depressed through 2026 due to accounting changes, confusing momentum investors
- Transition to 100% quota share increases Hagerty's exposure to underwriting volatility and catastrophe losses
- Marketplace revenue declined 12% YoY due to one-time inventory sales in prior year; sustainability of auction growth is unproven
- Full-year guidance implies Q2-Q4 Adjusted EBITDA of $151-162M, requiring acceleration from Q1's $85M
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 8 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001840776-26-000019 |
| Document: a26-q1xinvestorxdeck05x0.htm | 0001840776-26-000019 |
| Document: hgty-20260506.htm | 0001840776-26-000019 |
| Document: q126stockholderletter050.htm | 0001840776-26-000019 |
| Document: 0001840776-26-000019-index-headers.html | 0001840776-26-000019 |
| Document: 0001840776-26-000019-index.html | 0001840776-26-000019 |
| Document: 0001840776-26-000019.txt | 0001840776-26-000019 |
| 8-K Data (Synthetic) | 0001840776-26-000019 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 20, 2026 6d ago | Press Release | $15.52 | awaiting T+20 | — | $15.95 (+2.77%) |
Oct 15, 2026 11d ago | Press Release | $15.30 | awaiting T+20 | — | $15.95 (+4.25%) |
Oct 6, 2026 20d ago | SC 13G/A | $13.93 | awaiting T+20 | — | $15.95 (+14.50%) |
Sep 24, 2026 4w ago | Press Release | $13.58 $15.79 | ▲ +16.27% | ▲ +16.69% | $15.95 (+17.45%) |
Sep 23, 2026 4w ago | Press Release | $13.70 $15.52 | ▲ +13.28% | ▲ +12.60% | $15.95 (+16.42%) |
Sep 22, 2026 4w ago | Press Release | $13.55 $15.46 | ▲ +14.10% | ▲ +14.66% | $15.95 (+17.71%) |
Sep 17, 2026 5w ago | Press Release | $13.87 $15.30 | ▲ +10.31% | ▲ +9.10% | $15.95 (+15.00%) |
Sep 9, 2026 6w ago | Press Release | $13.49 $14.20 | ▼ −5.26% | ▼ −3.14% | $15.95 (−18.24%) |
Sep 3, 2026 7w ago | Press Release | $13.46 $13.61 | ▲ +1.11% | ▲ +2.30% | $15.95 (+18.50%) |
Aug 17, 2026 10w ago | Press Release | $12.86 $14.02 | ▲ +9.02% | ▲ +11.00% | $15.95 (+24.03%) |
US Market Status
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