Hagerty Reports Third Quarter 2025 Results; Increases 2025 Outlook
TRAVERSE CITY, Mich., Nov. 4, 2025 /PRNewswire/ -- Hagerty, Inc. (NYSE: HGTY), an automotive enthusiast brand and leading specialty vehicle insurance provider, announced today financial results for the three and nine months ended September 30, 2025.
"We delivered high rates of growth through the third quarter of 2025 with year-to-date revenue gains of 18%. Margins continued to expand as we scale up our business while maintaining tight cost discipline, resulting in year-to-date net income growth of 73%, and Adjusted EBITDA gains of 46%," said McKeel Hagerty, Chief Executive Officer and Chairman of Hagerty.
"Our strong business momentum allowed us to increase our 2025 outlook for the second straight quarter as we help car enthusiasts protect, buy and sell, and enjoy their special vehicles. We now expect to deliver total revenue growth of 14-15% and net income growth of 58-65% in 2025. We believe 2026 is shaping up to be another great year of sustained growth and margin expansion, and we continue to develop our growth pipeline through 2030, including new partnerships," added Mr. Hagerty.
THIRD QUARTER AND YTD 2025 FINANCIAL HIGHLIGHTS
The 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.
2025 OUTLOOK - SUSTAINED REVENUE GROWTH AND MARGIN EXPANSION
We believe 2025 is on track to be another year of strong profit growth for Hagerty as our team executes on our long-term plan to create value for stakeholders by delivering high rates of compounding revenue growth through investing in our long-term competitive advantages. In 2025, these investments aggregate to $20 million of elevated spend, primarily in our new technology platform, Duck Creek, which we believe will help us more efficiently grow our business over the coming years. We remain focused on growing our Insurance, Membership and Marketplace businesses, positioning us to deliver sustained, compounding profit growth over the coming years, and fund our purpose to save driving and fuel car culture for future generations.
Prior 2025 Outlook 1 ($)
Revised 2025 Outlook ($)
in thousands
2024 Results
Low End
High End
Low End
High End
Total Written Premium
$1,044,492
$1,180,000
$1,191,000
$1,180,000
$1,191,000
Total Revenue
$1,200,038
$1,356,000
$1,368,000
$1,368,000
$1,380,000
Net Income 2, 4, 5
$78,303
$112,000
$120,000
$124,000
$129,000
Adjusted EBITDA 3, 4
$124,473
$162,000
$172,000
$170,000
$176,000
1
Prior 2025 Outlook shared on the Company's second quarter earnings call on August 4th, 2025.
2
Fully diluted share count of approximately 361 million shares including Class A Common Stock, Class V Common Stock, Series A Convertible Preferred Stock, and share-based compensation awards.
3
See Non-GAAP Financial Measures below for additional information regarding this non-GAAP financial measure.
4
Profit ranges incorporate $20 million of elevated technology investments in 2025, as well as approximately $10 million pre-tax impact from the Southern California wildfires.
5
Full year 2025 net income includes $5.8 million of net benefit as a result of the release of a portion of our valuation allowance of $38.1 million partially offset by a $32.3 million loss related to the change in value of the TRA liability.
Conference Call Details
Hagerty will hold a conference call to discuss the financial results on Tuesday, November 4, 2025 10:00 am Eastern Time. A webcast of the conference call, including its Investor Presentation highlighting third quarter 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 Statements
This press release contains statements that constitute "forward-looking statements" within the meaning of the federal securities laws. All statements provided, 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 negative 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 the forward-looking statements. These factors include, among other things, Hagerty's ability to: (i) compete effectively and to attract, retain and engage insurance policyholders and paid Hagerty Drivers Club ("HDC") members; (ii) Hagerty's reliance on key strategic relationships, including distribution partners and underwriting carrier partners, and our ability to enter into, implement, and realize the anticipated benefits of the proposed Fronting Arrangement with Markel; (iii) the performance and availability of reinsurance and fronting capacity, and the timing and terms of renewals; (iv) execution risks associated with technology initiatives, including implementation, and migration to the Duck Creek policy administration platform, and risks of disruptions, interruptions, outages, cybersecurity events, or other issues with Hagerty's technology systems or third‑party service providers; (v) macroeconomic and industry conditions, including inflation, interest rate movements, capital market volatility, consumer sentiment, and the cyclicality of collector and enthusiast vehicle prices and transaction volumes; (vi) risks associated with Hagerty's Marketplace and Broad Arrow Capital businesses, including inventory and credit risk, financing availability and cost, and the potential for write‑downs; (vii) catastrophe, weather and other losses, including increases in the frequency or severity of claims; (viii) Hagerty's ability to obtain and implement rate changes and other regulatory approvals on a timely basis, and (ix) the impact of evolving laws and regulations applicable to Hagerty's business in the United States and internationally.
The forward-looking statements herein represent the judgment of Hagerty as of the date of this release and Hagerty disclaims any intent or obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise. This press release should be read in conjunction with the information included in Hagerty's other press releases, reports and other filings with the Securities and Exchange Commission. Understanding the information contained in these filings is important in order to fully understand Hagerty's reported financial results and its business outlook for future periods.
About Hagerty, Inc. (NYSE: HGTY)
Hagerty is an automotive enthusiast brand committed to saving driving and to fueling car culture for future generations. The company is a leading provider of specialty vehicle insurance, expert car valuation data and insights, live and digital car auction services, immersive events and automotive entertainment custom made for the 67 million Americans who self-describe as car enthusiasts. Hagerty also operates in Canada and the U.K. and is home to Hagerty Drivers Club, a community of over 920,000 who can't get enough of cars. For more information, please visit www.hagerty.com or connect with us on Facebook, Instagram, Twitter and LinkedIn.
More information can be found at newsroom.hagerty.com.
Category: Financial
Source: Hagerty
Hagerty, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
Three months ended September 30,
2025
2024
$ Change
% Change
REVENUE:
in thousands (except percentages and per share amounts)
Commission and fee revenue
$ 137,103
$ 116,161
$ 20,942
18.0 %
Earned premium, net
187,039
165,686
21,353
12.9 %
Membership, marketplace and other revenue
55,852
41,527
14,325
34.5 %
Total revenue
379,994
323,374
56,620
17.5 %
OPERATING EXPENSES:
Salaries and benefits
68,110
47,192
20,918
44.3 %
Ceding commissions, net
87,411
77,501
9,910
12.8 %
Losses and loss adjustment expenses
78,626
99,430
(20,804)
(20.9) %
Sales expense
77,672
59,141
18,531
31.3 %
General and administrative expenses
24,445
20,837
3,608
17.3 %
Depreciation and amortization
9,413
9,184
229
2.5 %
Total operating expenses
345,677
313,285
32,392
10.3 %
OPERATING INCOME
34,317
10,089
24,228
240.1 %
Loss related to warrant liabilities, net
—
(463)
463
N/M
Interest and other income (expense), net 1
(20,980)
8,359
(29,339)
N/M
INCOME BEFORE TAXES
13,337
17,985
(4,648)
(25.8) %
Income tax benefit 2
32,834
1,022
31,812
N/M
NET INCOME
46,171
19,007
27,164
142.9 %
Net income attributable to non-controlling interest
(25,323)
(14,122)
11,201
79.3 %
Accretion of Series A Convertible Preferred Stock
(1,903)
(1,875)
28
1.5 %
NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCKHOLDERS
$ 18,945
$ 3,010
$ 15,935
529.4 %
Earnings per share of Class A Common Stock:
Basic
$ 0.18
$ 0.03
Diluted
$ 0.11
$ 0.03
Weighted average shares of Class A Common Stock outstanding:
Basic
96,167
89,691
Diluted
347,240
89,691
N/M = Not meaningful
1 Includes a $29.2 million loss related to changes in the value of the TRA liability.
2 Includes $38.1 million gain related to the release of a portion of the valuation allowance.
Hagerty, Inc.
Condensed Consolidated Statements of Operations (Unaudited)
Nine months ended September 30,
2025
2024
$ Change
% Change
REVENUE:
in thousands (except percentages and per share amounts)
Commission and fee revenue
$ 380,677
$ 333,817
$ 46,860
14.0 %
Earned premium, net
534,179
474,917
59,262
12.5 %
Membership, marketplace and other revenue
153,430
99,573
53,857
54.1 %
Total revenue
1,068,286
908,307
159,979
17.6 %
OPERATING EXPENSES:
Salaries and benefits
191,275
161,001
30,274
18.8 %
Ceding commissions, net
247,682
221,877
25,805
11.6 %
Losses and loss adjustment expenses
224,969
226,515
(1,546)
(0.7) %
Sales expense
199,678
146,791
52,887
36.0 %
General and administrative expenses
69,204
62,072
7,132
11.5 %
Depreciation and amortization
27,734
29,758
(2,024)
(6.8) %
Gain related to divestiture
—
(87)
87
N/M
Total operating expenses
960,542
847,927
112,615
13.3 %
OPERATING INCOME
107,744
60,380
47,364
78.4 %
Loss related to warrant liabilities, net
—
(8,544)
8,544
N/M
Interest and other income (expense), net 1
(8,262)
27,945
(36,207)
(129.6) %
INCOME BEFORE TAXES
99,482
79,781
19,701
24.7 %
Income tax (expense) benefit 2
21,184
(9,918)
31,102
N/M
NET INCOME
120,666
69,863
50,803
72.7 %
Net income attributable to non-controlling interest
(80,474)
(55,951)
24,523
43.8 %
Accretion of Series A Convertible Preferred Stock
(5,653)
(5,552)
101
1.8 %
NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCKHOLDERS
$ 34,539
$ 8,360
$ 26,179
313.1 %
Earnings per share of Class A Common Stock:
Basic
$ 0.35
$ 0.09
Diluted
$ 0.29
$ 0.09
Weighted average shares of Class A Common Stock outstanding:
Basic
92,326
86,689
Diluted
346,672
87,601
N/M = Not meaningful
1 Includes a $32.3 million loss related to changes in the value of the TRA liability.
2 Includes $38.1 million gain related to the release of a portion of the valuation allowance.
Hagerty, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
September 30,
December 31,
2025
2024
ASSETS
in thousands (except share amounts)
Current Assets:
Cash and cash equivalents
$ 160,386
$ 104,784
Restricted cash and cash equivalents
172,261
128,061
Investments
130,147
73,957
Accounts receivable
107,476
84,763
Premiums receivable
230,919
153,748
Commissions receivable
27,404
20,430
Notes receivable
94,158
45,417
Deferred acquisition costs, net
192,496
156,466
Other current assets
99,073
90,779
Total current assets
1,214,320
858,405
Investments
543,772
515,570
Notes receivable
17,807
11,555
Lease right-of-use assets
42,229
44,485
Intangible assets, net
88,452
90,107
Goodwill
114,150
114,123
Deferred tax assets
45,265
—
Other long-term assets
85,960
75,093
TOTAL ASSETS
$ 2,151,955
$ 1,709,338
LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable, accrued expenses and other current liabilities
$ 147,868
$ 104,496
Current portion of long-term debt
73,118
792
Losses payable and provision for unpaid losses and loss adjustment expenses
276,678
266,878
Ceding commissions payable
107,473
77,389
Advance premiums and due to insurers
171,616
108,352
Unearned premiums
439,395
357,539
Total current liabilities
1,216,148
915,446
Long-term lease liabilities
40,511
43,178
Long-term debt, net
104,386
104,968
Deferred tax liability
24,185
18,065
Tax receivable agreement liability
37,913
1,956
Other long-term liabilities
14,021
17,556
TOTAL LIABILITIES
1,437,164
1,101,169
Commitments and Contingencies
—
—
TEMPORARY EQUITY 1
Preferred stock, $0.0001 par value (20,000,000 shares authorized, 8,483,561 Series A Convertible Preferred Stock issued and outstanding as of September 30, 2025 and December 31, 2024)
84,716
84,663
STOCKHOLDERS' EQUITY
Class A Common Stock, $0.0001 par value (500,000,000 shares authorized, 100,426,473 and 90,032,391 issued and outstanding as of September 30, 2025 and December 31, 2024, respectively)
10
9
Class V Common Stock, $0.0001 par value (300,000,000 authorized, 241,552,156 and 251,033,906 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively)
24
25
Additional paid-in capital
622,405
603,780
Accumulated earnings (deficit)
(411,786)
(451,978)
Accumulated other comprehensive income (loss)
998
(1,514)
Total stockholders' equity
211,651
150,322
Non-controlling interest
418,424
373,184
Total equity
630,075
523,506
TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY
$ 2,151,955
$ 1,709,338
1
The Series A Convertible Preferred Stock is recorded within Temporary Equity because it has equity conversion and cash redemption features.
Hagerty, Inc.
Condensed Consolidated Statements of Cash Flows (Unaudited)
Nine months ended September 30,
2025
2024
OPERATING ACTIVITIES:
in thousands
Net income
$ 120,666
$ 69,863
Adjustments to reconcile net income to net cash from operating activities:
Loss on disposals of equipment, software and other assets
1,440
401
Loss related to warrant liabilities, net
—
8,544
Expense related to tax receivable agreement liability
32,275
1,322
Depreciation and amortization
27,734
29,758
Provision for deferred taxes
(34,413)
2,772
Share-based compensation expense
14,627
13,018
Non-cash lease expense
6,590
5,920
Realized (gain) loss on investments, net
(2,150)
(1,783)
(Accretion) amortization of discount and premium, net
(3,489)
(1,755)
Other
1,681
1,775
Changes in operating assets and liabilities:
Accounts, premiums and commissions receivable
(124,250)
(28,062)
Deferred acquisition costs, net
(36,030)
(26,998)
Losses payable and provision for unpaid losses and loss adjustment expenses
9,800
60,328
Ceding commissions payable
30,084
(14,734)
Advance premiums and due to insurers
62,583
48,752
Unearned premiums
81,855
68,344
Operating lease assets and liabilities
(6,876)
(6,781)
Other assets and liabilities, net
7,758
(41,042)
Net Cash Provided by Operating Activities
189,885
189,642
INVESTING ACTIVITIES:
Capital expenditures
(18,499)
(17,278)
Acquisitions, net of cash acquired, and other investments
(2,125)
(23,865)
Issuance of notes receivable
(49,095)
(55,030)
Collection of notes receivable
14,832
32,099
Purchases of fixed maturity securities
(223,055)
(565,838)
Proceeds from sales of fixed maturity securities
41,173
53,253
Proceeds from maturities of fixed maturity securities
122,196
23,766
Purchases of equity securities
(10,565)
(10,602)
Proceeds from sales of equity securities
911
—
Other investing activities
1,421
1,005
Net Cash Used in Investing Activities
(122,806)
(562,490)
FINANCING ACTIVITIES:
Payments on long-term debt
(170,673)
(63,202)
Proceeds from long-term debt, net of issuance costs
240,701
52,718
Distributions paid to non-controlling interest unit holders
(30,547)
(5,320)
Payment of Series A Convertible Preferred Stock dividends
(5,600)
(5,600)
Funding of tax receivable agreement payments
(223)
—
Funding of employee tax obligations upon vesting of share-based payments
(3,536)
(5,713)
Other financing activities
289
—
Net Cash Provided by (Used in) Financing Activities
30,411
(27,117)
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents
2,312
(882)
Change in cash and cash equivalents and restricted cash and cash equivalents
99,802
(400,847)
Beginning cash and cash equivalents and restricted cash and cash equivalents
232,845
724,276
Ending cash and cash equivalents and restricted cash and cash equivalents
$ 332,647
$ 323,429
Hagerty, Inc.
Key Performance Indicators and Certain Non-GAAP Financial Measures
Key Performance Indicators
The tables below present a summary of our Key Performance Indicators, which include important operational metrics, as well as certain financial measures prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and non-GAAP financial measures. We use these Key Performance Indicators to evaluate our business, measure our performance, identify trends against planned initiatives, prepare financial projections, and make strategic decisions. We believe these Key Performance Indicators are useful in evaluating our performance when read together with our Condensed Consolidated Financial Statements prepared in accordance with GAAP.
Three months ended September 30,
2025
2024
Change
Operational Metrics
dollars in thousands (except per share amounts)
Total Written Premium
$ 334,048
$ 287,609
$ 46,439
16.1 %
Hagerty Re Loss Ratio
42.0 %
60.0 %
(18.0) %
N/M
Hagerty Re Combined Ratio
89.6 %
107.7 %
(18.1) %
N/M
New Business Count — Insurance
114,513
77,418
37,095
47.9 %
GAAP Financial Measures
Total Revenue
$ 379,994
$ 323,374
$ 56,620
17.5 %
Operating Income
$ 34,317
$ 10,089
$ 24,228
240.1 %
Net Income
$ 46,171
$ 19,007
$ 27,164
142.9 %
Basic Earnings Per Share
$ 0.18
$ 0.03
$ 0.15
N/M
Diluted Earnings Per Share
$ 0.11
$ 0.03
$ 0.08
N/M
Non-GAAP Financial Measures
Adjusted EBITDA
$ 49,714
$ 24,165
$ 25,549
105.7 %
Adjusted Earnings Per Share
$ 0.13
$ 0.05
$ 0.08
160.0 %
Nine months ended September 30,
2025
2024
Change
Operational Metrics
dollars in thousands (except per share amounts)
Total Written Premium
$ 934,360
$ 827,068
$ 107,292
13.0 %
Hagerty Re Loss Ratio
42.1 %
47.7 %
(5.6) %
N/M
Hagerty Re Combined Ratio
89.3 %
95.1 %
(5.8) %
N/M
New Business Count — Insurance
257,694
225,753
31,941
14.1 %
GAAP Financial Measures
Total Revenue
$ 1,068,286
$ 908,307
$ 159,979
17.6 %
Operating Income
$ 107,744
$ 60,380
$ 47,364
78.4 %
Net Income
$ 120,666
$ 69,863
$ 50,803
72.7 %
Basic Earnings Per Share
$ 0.35
$ 0.09
$ 0.26
N/M
Diluted Earnings Per Share
$ 0.29
$ 0.09
$ 0.20
N/M
Non-GAAP Financial Measures
Adjusted EBITDA
$ 153,066
$ 104,605
$ 48,461
46.3 %
Adjusted Earnings Per Share
$ 0.34
$ 0.22
$ 0.12
54.5 %
N/M = Not meaningful
September 30,
December 31,
2025
2024
Change
Operational Metrics
Policies in Force
1,617,231
1,506,451
110,780
7.4 %
Policies in Force Retention
88.6 %
89.0 %
(0.4) %
N/M
Vehicles in Force
2,739,037
2,576,700
162,337
6.3 %
HDC Paid Member Count
920,725
875,822
44,903
5.1 %
Net Promoter Score (NPS)
82
82
—
— %
N/M = Not meaningful
Non-GAAP Financial Measures
Adjusted EBITDA
We define Adjusted EBITDA as consolidated Net income, excluding net interest and other income (expense), income tax expense, and depreciation and amortization, further adjusted to exclude (i) net gains and losses related to our warrant liabilities prior to the warrant exchange transaction that closed in July 2024 (the "Warrant Exchange"); (ii) share-based compensation expense; and when applicable, (iii) restructuring, impairment and related charges; (iv) gains, losses and impairments related to divestitures; and (v) certain other unusual items.
We present Adjusted EBITDA because we consider it to be an important supplemental measure of our performance and believe it is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. Management uses Adjusted EBITDA as a measure of the operating performance of our business on a consistent basis, as it removes the impact of items not directly resulting from our core operations.
By providing this non-GAAP financial measure, together with a reconciliation to Net income, which is the most comparable GAAP measure, we believe we are enhancing investors' understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. However, Adjusted EBITDA has limitations as an analytical tool, and should not be considered in isolation, or as an alternative to, or a substitute for Net income or other financial statement data presented in our Condensed Consolidated Financial Statements as indicators of financial performance. Our definition of Adjusted EBITDA may be different than similarly titled measures used by other companies in our industry, which could reduce the usefulness of this non-GAAP financial measure when comparing our performance to that of other companies.
The following table reconciles Adjusted EBITDA to the most directly comparable GAAP measure, which is Net income:
Three months ended
September 30,
Nine months ended
September 30,
2025
2024
2025
2024
in thousands
Net income
$ 46,171
$ 19,007
$ 120,666
$ 69,863
Interest and other (income) expense, net 1, 2
20,980
(8,359)
8,262
(27,945)
Income tax expense (benefit) 3
(32,834)
(1,022)
(21,184)
9,918
Depreciation and amortization
9,413
9,184
27,734
29,758
EBITDA
43,730
18,810
135,478
81,594
Loss related to warrant liabilities, net
—
463
—
8,544
Share-based compensation expense
5,089
4,092
14,627
13,018
Gain related to divestiture
—
—
—
(87)
Other unusual items 4
895
800
2,961
1,536
Adjusted EBITDA
$ 49,714
$ 24,165
$ 153,066
$ 104,605
1
Excludes interest expense related to the BAC Credit Facility, which is recorded within "Sales expense" in the Condensed Consolidated Statements of Operations.
2
Principally includes interest income, net investment income related to our investment portfolio, and interest expense, as well as changes in the value of the TRA liability, which totaled $29.2 million and $32.3 million during the three and nine months ended September 30, 2025, respectively, and $1.3 million during the three and nine months ended September 30, 2024.
3
Income tax expense (benefit) for the three and nine months ended September 30, 2025 includes a $38.1 million benefit related to the release of a portion of the valuation allowance against our deferred tax assets.
4
For the three and nine months ended September 30, 2025, other unusual items includes certain legal settlement expenses, professional fees associated with the THG Unit Exchange and related secondary offering, and certain material severance expenses. For the three and nine months ended September 30, 2024, other unusual items includes professional fees associated with the Warrant Exchange.
The following table reconciles Adjusted EBITDA for the year ended December 31, 2025 Outlook to the most directly comparable GAAP measure, which is Net income:
2025 Low
2025 High
in thousands
Net income
$ 124,000
$ 129,000
Interest and other (income) expense, net 1, 2
—
—
Income tax expense (benefit) 3
(13,000)
(12,000)
Depreciation and amortization
39,000
39,000
Share-based compensation expense
20,000
20,000
Adjusted EBITDA
$ 170,000
$ 176,000
1
Excludes interest expense related to the BAC Credit Facility, which is recorded within "Sales expense" in the Condensed Consolidated Statements of Operations.
2
Principally includes interest income, net investment income related to our investment portfolio, and interest expense, as well as changes in the value of the TRA liability ($32.3 million of expense incurred through the third quarter of 2025).
3
Income tax expense (benefit) includes $38.1 million benefit related to the release of a portion of the valuation allowance against our deferred tax assets.
Adjusted EPS
We define Adjusted Earnings Per Share ("Adjusted EPS") as consolidated Net income, excluding net gains and losses related to our warrant liabilities prior to the Warrant Exchange, divided by our outstanding and total potentially dilutive securities, which includes (i) the weighted average issued and outstanding shares of Class A Common Stock; (ii) all issued and outstanding non-controlling interest units of THG; (iii) all issued and outstanding shares of our Series A Convertible Preferred Stock on an as-converted basis; and (iv) all unissued share-based compensation awards.
The most directly comparable GAAP measure to Adjusted EPS is basic earnings per share ("Basic EPS"), which is calculated as Net income available to Class A Common Stockholders divided by the weighted average number of Class A Common Stock shares outstanding during the period.
We present Adjusted EPS because we consider it to be an important supplemental measure of our operating performance and believe it is used by securities analysts, investors and other interested parties in evaluating the consolidated performance of other companies in our industry. We also believe that Adjusted EPS, which compares our consolidated Net income with our weighted average number of Class A Common Stock shares outstanding and potentially dilutive shares, provides useful information to investors regarding our performance on a consolidated and diluted basis.
Management uses Adjusted EPS (i) as a measure of the operating performance of our business on a consolidated and diluted basis; (ii) to evaluate the performance and effectiveness of our operational strategies; and (iii) as a preferred predictor of core operating performance, comparisons to prior periods and competitive positioning.
We caution investors that Adjusted EPS is not a recognized measure 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, including Basic EPS, and that Adjusted EPS, as we define it, may be defined or calculated differently by other companies. In addition, Adjusted EPS has limitations as an analytical tool and should not be considered as a measure of profit or loss per share.
The following table reconciles Adjusted EPS to the most directly comparable GAAP measure, which is Basic EPS:
Three months ended
September 30,
Nine months ended
September 30,
2025
2024
2025
2024
in thousands (except per share amounts)
Numerator:
Net income available to Class A Common Stockholders 1
$ 17,696
$ 2,798
$ 32,174
$ 7,753
Accretion of Series A Convertible Preferred Stock
1,903
1,875
5,653
5,552
Undistributed earnings allocated to Series A Convertible Preferred Stock
1,249
212
2,365
607
Net income attributable to non-controlling interest
25,323
14,122
80,474
55,951
Consolidated net income
46,171
19,007
120,666
69,863
Loss related to warrant liabilities, net
—
463
—
8,544
Adjusted consolidated net income 2
$ 46,171
$ 19,470
$ 120,666
$ 78,407
Denominator:
Weighted average shares of Class A Common Stock outstanding 1
96,167
89,691
92,326
86,689
Total potentially dilutive securities outstanding:
Non-controlling interest THG units
245,616
255,178
245,616
255,178
Series A Convertible Preferred Stock, on an as-converted basis
6,785
6,785
6,785
6,785
Total unissued share-based compensation awards
8,374
8,076
8,374
8,076
Potentially dilutive shares outstanding
260,775
270,039
260,775
270,039
Dilutive shares outstanding 2
356,942
359,730
353,101
356,728
Basic EPS 1
$ 0.18
$ 0.03
$ 0.35
$ 0.09
Adjusted EPS 2
$ 0.13
$ 0.05
$ 0.34
$ 0.22
1
Numerator and Denominator of the GAAP measure Basic EPS
2
Numerator and Denominator of the non-GAAP measure Adjusted EPS
SOURCE Hagerty