PALO
ALTO, Calif., March 6,
2025 /PRNewswire/ -- Hippo (NYSE: HIPO), the home
insurance group focused on proactive home protection, today
announced its consolidated financial results for the three months
that ended December 31, 2024.
"Hippo delivered $8.5 million
in positive adjusted EBITDA in Q4 2024, surpassing all
expectations," said Hippo President and CEO Rick McCathron. "A nearly 30-point improvement
in our gross loss ratio in 2024 and the further streamlining of our
operations contributed to our most successful year to date. We
accomplished all of this while nearly doubling our revenue, and our
focus is now on turning net income profitable by Q4 2025."
Hippo's preliminary pre-tax estimate of catastrophe losses from
the wildfires in Los Angeles in
January, including assessments from the California FAIR Plan and
net of subrogation, is approximately $42
million, with $30 million
attributed to the Hippo Home Insurance Program and $12 million related to non-Hippo programs
supported by Spinnaker.
None of the losses were associated with the company's
fastest-growing channel, the Hippo New Homes Program, which offers
homebuilders access to insurance products specifically designed for
new homes from Hippo and a panel of carrier partners. The channel
represents a substantial majority of the new business Hippo has
written in California over the
past few years.
"As a native of Southern
California, these events are deeply personal to me," added
McCathron. "I am proud of Hippo's quick and compassionate
response—arranging temporary housing, offering accelerated payouts,
and collaborating with our builder partners to find ways to shorten
the rebuilding process."
Complete financial results and full year guidance for 2025 can
be found in the company's shareholder letter in the Investor
Relations section of Hippo's website
at https://investors.hippo.com/.
Fourth Quarter Highlights
Strong Top-line Growth; Favorable Mix-Shift
- Q4 Revenue up 58% YoY to $102
million; FY2024 Revenue up 77% to $372 million
- Pro-forma for the First Connect transaction, Consolidated TGP
up 16% YoY, driven by Insurance-as-a-Service ("Iaas") which grew
22%
Continued Improvement of HHIP Loss Ratio
- HHIP Q4 gross Loss Ratio improved 3pp YoY to 50%, with HHIP
non-PCS loss ratio at 43%, and HHIP PCS loss ratio at 7%
- HHIP FY2024 Gross Loss Ratio improved 28pp to 73%
- HHIP Net Loss Ratio improved 46pp YoY to 60%
Improving Operating Leverage
- Investments in operational efficiencies continued to pay off as
fixed expenses lowered by $8 million
while revenue increased by $38
million YoY
- Sales & Marketing, Technology & Development, and
General & Administrative expenses collectively declined by 34pp
of revenue YoY, from 69% of revenue in Q4'23 to 35% in Q4'24
Significant Step Forward on our Path to Profitability
- Q4 Net Income attributable to Hippo of positive $44 million, vs. Net Loss of $42 million in Q4 of last year; Gain on Sale of
First Connect contributed $46m
- Q4 adjusted EBITDA of positive $8.5
million vs. Adjusted EBITDA loss of $22 million in Q4 of last year
Financial Strength
- Cash and investments, excluding restricted cash, increased
$25 million QoQ to $571 million
- Spinnaker surplus of $204
million, up from $191 million
a year ago
Conference Call and Webcast Information
Date:
Thursday, March 6, 2025
Time: 8:00 a.m. Eastern Time /
5:00 a.m. Pacific Time
Dial In: +1 833 470 1428 (U.S.) / Global Dial-In Numbers
Conf ID: 827436
Webcast: https://events.q4inc.com/attendee/922114957
A replay of the webcast will be made available after the call in
the investor relations section of the company's website
at https://investors.hippo.com/
Information about Key Operating Metrics/Non-GAAP Financial
Measures
We define gross loss ratio expressed as a
percentage, as the ratio of the gross losses and loss adjustment
expenses, to the gross earned premium. We define TGP as the
aggregate written premium placed across all of our business
platforms for the period presented. We measure TGP as it reflects
the volume of our business irrespective of choices related to how
we structure our reinsurance treaties, the amount of risk we retain
on our own balance sheet, or the amount of business written in our
capacity as an MGA, agency, or as an insurance carrier/reinsurer.
We define adjusted EBITDA, a Non-GAAP financial measure, as net
loss attributable to Hippo excluding interest expense, income tax
expense, depreciation, amortization, stock-based compensation, net
investment income, restructuring charges, impairment expense, gains
and losses on sales of business, other non-cash fair market value
adjustments, contingent consideration for one of our acquisitions,
and other transactions, which may include certain legal fees and
settlement costs, that we consider to be unique in nature. We
exclude these items from Adjusted EBITDA because we do not consider
them to be directly attributable to our underlying operating
performance. This Non-GAAP financial measure is in addition to, and
not a substitute for, or superior to, measures of financial
performance prepared in accordance with GAAP and should not be
considered as an alternative to net income, operating income or any
other performance measures derived in accordance with GAAP.
Reconciliations of this Non-GAAP financial measure to its most
directly comparable GAAP counterpart is included in the shareholder
letter referenced above. We believe that these non-GAAP measures of
financial results provide useful supplemental information to
investors about Hippo.
Forward-looking statements safe harbor
Certain
statements included in this press release that are not historical
facts are forward-looking statements for purposes of the safe
harbor provisions under the United States Private Securities
Litigation Reform Act of 1995. Forward-looking statements generally
are accompanied by words such as "believe," "may," "will,"
"estimate," "continue," "anticipate," "intend," "expect," "should,"
"would," "plan," "predict," "potential," "seem," "seek," "future,"
"outlook," and similar expressions that predict or indicate future
events or trends or that are not statements of historical matters.
These forward-looking statements include, but are not limited to,
statements regarding estimates and forecasts of financial results
and other operating and performance metrics, our business strategy,
our cost reduction efforts, the quality of our products and
services, and the potential growth of our business. These
statements are based on the current expectations of Hippo's
management and are not predictions of actual performance. Actual
events and circumstances are difficult or impossible to predict and
will differ from assumptions, and many actual events and
circumstances are beyond the control of Hippo. These
forward-looking statements are subject to a number of risks and
uncertainties, including our ability to navigate extensive
insurance industry regulations and the scrutiny of state insurance
regulators, our ability to achieve or maintain profitability in the
future; our ability to retain and expand our customer base and grow
our business, including our builder network; our ability to manage
growth effectively; risks relating to Hippo's brand and brand
reputation; denial of claims or our failure to accurately and
timely pay claims; the effects of intense competition in the
segments of the insurance industry in which we operate; the
availability and adequacy of reinsurance, including at current
coverage, limits or pricing; our ability to underwrite risks
accurately and charge competitive yet profitable rates to our
customers, and the sufficiency of the analytical models we use to
assess and predict exposure to catastrophe losses; risks related to
our proprietary technology and our digital platform; outages or
interruptions or delays in services provided by our third party
providers, including our data vendors; risks related to our
intellectual property; the seasonal and cyclical nature of our
business; the effects of severe weather events and other natural or
man-made catastrophes, including the effects of climate change,
global pandemics, and terrorism; continued disruptions from the
COVID-19 pandemic; any overall decline in economic activity;
regulators' identification of errors in the policy forms we use,
the rates we charge, and our customer communications including, but
not limited to, cancellations, non-renewals and reinstatements
through market conducts, complaints, or other inquiries; the
effects of existing or new legal or regulatory requirements on our
business, including with respect to maintenance of risk-based
capital and financial strength ratings, data privacy and
cybersecurity, and the insurance industry generally; and other
risks set forth in the sections entitled "Risk Factors" in our
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. If
any of these risks materialize or our assumptions prove incorrect,
actual results could differ materially from the results implied by
these forward-looking statements. There may be additional risks
that Hippo does not presently know, or that Hippo currently
believes are immaterial, that could also cause actual results to
differ from those contained in the forward-looking statements. In
addition, forward-looking statements reflect Hippo's expectations,
plans, or forecasts of future events and views as of the date of
this press release. Hippo anticipates that subsequent events and
developments will cause Hippo's assessments to change. However,
while Hippo may elect to update these forward-looking statements at
some point in the future, Hippo specifically disclaims any
obligation to do so. These forward-looking statements should not be
relied upon as representing Hippo's assessments of any date
subsequent to the date of this press release. Accordingly, undue
reliance should not be placed upon the forward-looking
statements.
About Hippo
Hippo is protecting the joy of
homeownership, helping to safeguard customers' most important
financial asset by harnessing the power of real-time data and a
growing suite of home services to deliver proactive home
protection. Hippo Holdings Inc. operating subsidiaries include
Hippo Insurance Services, Hippo Builder Insurance Agency, Hippo
Home Care, Spinnaker Insurance Company, Spinnaker Specialty
Insurance Company, and Wingsail Insurance Company. Hippo Insurance
Services and Hippo Builder Insurance Agency are licensed property
casualty insurance agents with products underwritten by various
affiliated and unaffiliated insurance companies. For more
information, visit http://www.hippo.com.
Contacts
Investors:
Sammy Ng
Investors@hippo.com
Press:
Mark Olson
press@hippo.com
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SOURCE Hippo Analytics, Inc
