Hagerty Posts 17% Revenue Growth, $219M Cash Flow, Expects $190M GAAP Drag
Hagerty added 371,000 new members in 2025, driving written premium gains of 14% and record 89% retention in Q4. Operating cash flow rose 24% to $219 million as revenue grew 17% and net income jumped 91%, despite a $190 million non-cash amortization set to pressure GAAP net income in 2026.
1. 2025 Financial Highlights
In full-year 2025, Hagerty recorded revenue growth of 17%, net income up 91% and operating cash flow up 24% to $219 million. Fourth-quarter income before taxes rose 186% to $40 million, aided by an 11-point reserve reduction and improved loss trends.
2. Membership and Underwriting Growth
The company added 371,000 new members, driving a 14% increase in written premiums and achieving 89% membership retention in Q4. Since its IPO four years ago, Hagerty has compounded revenue at 23% annually and increased net income by over $200 million.
3. Fronting Deal with Markel and 2026 Outlook
Hagerty signed a new fronting arrangement with Markel to retain 100% of premiums starting January 2026, creating a $190 million non-cash amortization. This item is forecast to drive GAAP net income to negative $41 million–$51 million next year, while adjusted EBITDA is projected at $236 million–$247 million.
4. Marketplace Expansion and Partner Programs
Marketplace revenue more than doubled in 2025, rising 119% to $119 million, with total transaction value at $566 million via auctions and private sales. Distribution partnerships with State Farm, Liberty Mutual/Safeco and new fronting terms underpin growth, with State Farm conversions targeting 525,000 vehicles across seven states by year-end 2026.