Form 8-K - Current report

Name	Symbol	Market	Type
Hagerty Inc (PK)	USOTC:HGTPW	OTCMarkets	Equity Warrant

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

November 7, 2024

Date of Report (date of earliest event reported)

HAGERTY, INC.

(Exact name of registrant as specified in its charter)


Delaware	001-40244	86-1213144
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

121 Drivers Edge

Traverse City, Michigan 49684

(Address of principal executive offices and zip code)

(800) 922-4050

Registrant's telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbols

Name of each exchange on which registered

Class A common stock, par value $0.0001 per share

HGTY

The New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

ITEM 2.02 Results of Operations and Financial Condition

On November 7, 2024, Hagerty, Inc. (the "Company") announced its financial results for the fiscal quarter ended September 30, 2024 by issuing a letter to its stockholders and a press release. The Company will also be holding a conference call on November 7, 2024 to discuss its financial results for the three and nine months ended September 30, 2024. The full text of the Company's letter to its stockholders and press release are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively.

ITEM 7.01 Regulation FD Disclosure

On November 7, 2024, the Company posted to the investor relations page of its website an investor presentation expected to be used by the Company in connection with certain future presentations to investors and others. A copy of the investor presentation is attached as Exhibit 99.3 to this Current Report on Form 8-K.

The Company uses its investor relations website as a means of disclosing material non-public information, announcing upcoming investor conferences and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor the Company's investor relations website in addition to following its press releases, SEC filings and public conference calls and webcasts.

The information contained in Item 2.02 and Item 7.01 of this Current Report on Form 8-K, including Exhibits 99.1, 99.2 and 99.3, shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits


Exhibit No.						Description
99.1						Letter to Stockholders, dated November 7, 2024
99.2						Press Release, dated November 7, 2024
99.3						Investor Presentation, dated November 7, 2024
104						Cover Page Interactive Data File (formatted as Inline XBRL)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.



						HAGERTY, INC.

						/s/ Diana M. Chafey
Date: November 7, 2024						Diana M. Chafey
						Chief Legal Officer

Stockholder Letter Q3 2024

HAGERTY Q3 2024 | 2 November is when collectors in many parts of the country begin winterizing their beloved vintage cars, trucks, and motorcycles. There is detailing to be done, oil to be changed, batteries to be removed, and about a dozen other steps. It is quite a process, but auto enthusiasts do it because their vehicle is special to them. We feel the same about our members, partners, employees, and investors. We make every effort to take excellent care of them because without them there is no Hagerty, and without Hagerty, our purpose to save driving and fuel car culture for future generations dies. Our recipe for success goes like this: Put Members First: Hagerty has a Net Promoter Score (an important measure of customer experience) of 82 in an industry where the average NPS is 37. You only get that kind of score if you have a long history of taking great care of your members. We take customer retention very seriously and are proud to see our retention ticking up to 89% in 2024. Engage, Entertain, Connect: People want to be a part of something bigger than themselves. They want to be entertained. They want to engage with people who love the same thing they do – cars and driving. They want a trusted place to buy and sell cars. To meet these needs and delight our members, we have created a comprehensive ecosystem of automotive experiences, events, services, and media that give us an unbeatable authenticity edge in the collector car world that no competitor comes close to matching. The next largest players in the collectible space are roughly one sixth and one tenth the size of Hagerty, and we are lengthening our Dear Hagerty Stockholders, Members and One Team Hagerty, Stockholder Letter A RECIPE FOR LASTING SUCCESS

HAGERTY Q3 2024 | 3 lead as our flywheel kicks in. In fact, we are on track to welcome a record 275,000 new members in 2024. Create True Partnerships: We partner with 9 of the top 10 automotive insurers in the U.S. Why do these giant companies want to work with us? Because we are the experts on classic car values and claims, which can be very complex. You cannot, for instance, just put a program windshield back in a ’66 Jaguar. You need a specialty source for parts, and it takes a lot of time and care to put that windshield in. It is not a $500 repair; it is going to cost between $5,000 and $15,000. Those are the kinds of claims that regular insurance companies struggle with, but that is what we do every day. That is why they partner with us. We make it easy for them. Evolve and Improve: We have a great thing going at Hagerty, carefully cultivated over the last 40 years. We have a strong leadership team that is focused on sustained growth with financial discipline, which has enabled us to add margin expansion and cash flow to our longstanding growth story. We insure over 2.5 million vehicles but are only scratching the surface of our Total Addressable Market in the U.S., which we estimate to be 46 million collectible vehicles. We are intent on making more and more of the people who own those cars Hagerty members. As you have all seen on the news, the past month has been a difficult one for the people impacted by hurricanes Helene and Milton. A collector car owner’s first concerns are about the safety of their friends, family, neighbors. But once the immediate threat has passed, they quickly turn to assessing the damage done to their prized vehicles. Moments like that are when we shine the brightest, and a great example of when we “Put Members First.” While we had hoped for an uneventful hurricane season, we have a disciplined approach to underwriting and our team of 1,700 Hagerty associates was well prepared to help our members with their losses. We even set up a pop-up claims center at the Porsche dealership in Clearwater, Florida. Countless members who had expected a long, drawn-out process incredulously asked, “That’s it?” after we issued them on-the- spot checks and direct deposits for vehicles deemed to be total losses. I want to take this opportunity to thank One Team Hagerty. They are the heart and soul of everything we do. And with their help, the best is yet to come. As always, thank you for being on this ride with us. Onward and upward! McKeel Hagerty CEO and Chairman, Hagerty

Never Stop Driving

For Immediate Release

Hagerty Reports Third Quarter 2024 Results

Updates 2024 Outlook for Revenue and Profit Growth

•Third quarter 2024 Total Revenue increased 17% year-over-year to $323.4 million, and year-to-date 2024 Total Revenue increased 20% year-over-year to $908.3 million

•Third quarter 2024 Written Premium increased 13% year-over-year to $287.6 million, and year-to-date 2024 Written Premium increased 16% year-over-year to $827.1 million

•Third quarter 2024 Marketplace revenue increased 66% year-over-year to $21.6 million, and year-to-date 2024 Marketplace revenue increased 54% year-over-year to $38.3 million

•Third quarter 2024 Loss Ratio of 60.0% (includes $24.7 million of pre-tax catastrophe losses related to Hurricane Helene) compared to 41.1% in the prior year period. Year-to-date 2024 Loss Ratio of 47.7% compared to 41.5% in the prior year period

•Third quarter 2024 Adjusted EBITDA of $24.2 million, a decrease of $13.2 million compared to the prior year period, and year-to-date 2024 Adjusted EBITDA of $104.6 million, an increase of $26.2 million compared to the prior year period

•Increased 2024 growth outlook for Total Revenue to 18-19% and Written Premium to 15%. Hagerty’s outlook for Net Income and Adjusted EBITDA has been updated to account for the $24.7 million of catastrophe losses from Hurricane Helene and an estimated $5.0 million of losses from Milton

TRAVERSE CITY, Mich., November 7, 2024 /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, 2024.

“Hagerty delivered yet another excellent quarter of strong revenue growth and operational efficiencies as we execute on our multi-year initiatives to drive sustained underlying profit growth. Year-to-date total revenue jumped 20% due to new business count gains and our growing Marketplace business. Our disciplined approach to expense management and optimization continued to drive margins higher. During the first nine months of 2024, we produced Net Income of $70 million and Adjusted EBITDA of $105 million,” said McKeel Hagerty, Chief Executive Officer and Chairman of Hagerty.

“Given the strength of our results over the first nine months, we have increased our total revenue expectations for the year to 18-19% with written premiums on track to grow 15%. Our bottom line expectations were tracking consistently with our prior guidance before incorporating the losses from hurricanes Helene and Milton. After including catastrophe losses, we now expect net income growth of 131% to 163% and Adjusted EBITDA growth of 25% to 36%,” continued Mr. Hagerty.

“Hurricane Helene was a devastating event for the United States, but we have a disciplined underwriting model and our teams were prepared for the storm. I want to thank One Team Hagerty as they have been working tirelessly over the last five weeks to help our members get back out on the roads in their special cars. Hagerty’s customer-centric model and automotive expertise position us well for future growth through enhancing our net promoter scores and driving industry-leading member retention," added Mr. Hagerty.

THIRD QUARTER 2024 FINANCIAL HIGHLIGHTS

•Third quarter 2024 Total Revenue increased 17% year-over-year to $323.4 million, and year-to-date 2024 Total Revenue increased 20% year-over-year to $908.3 million

•Third quarter 2024 Written Premium increased 13% year-over-year to $287.6 million, and year-to-date 2024 Written Premium increased 16% year-over-year to $827.1 million

•Third quarter 2024 Commission and fee revenue increased 13% year-over-year to $116.2 million, and year-to-date 2024 Commission and fee revenue increased 16% year-over-year to $333.8 million

•Policies in Force Retention was 89% as of September 30, 2024 compared to 88% in the prior year period and total insured vehicles increased 8% year-over-year to 2.6 million

•Third quarter 2024 Loss Ratio was 60.0% compared to 41.1% in the prior year period, and year-to-date 2024 Loss Ratio was 47.7% compared to 41.5% in the prior year period

•Third quarter 2024 Earned Premium increased 19% year-over-year to $165.7 million, and year-to-date 2024 Earned Premium increased 24% year-over-year to $474.9 million

•Third quarter 2024 Membership, marketplace and other revenue increased 27% year-over-year to $41.5 million, and year-to-date 2024 Membership, marketplace and other revenue increased 20% year-over-year to $99.6 million

•Third quarter 2024 Marketplace revenue increased 66% year-over-year to $21.6 million, and year-to-date 2024 Marketplace revenue increased 54% year-over-year to $38.3 million

•Third quarter 2024 Membership revenue increased 7% year-over-year to $14.8 million, and 2024 Membership revenue increased 7% year-over-year to $42.4 million

◦Hagerty Drivers Club (HDC) paid members increased 8% year-over-year to approximately 868,000 compared to 807,000

•Third quarter 2024 Operating Income of $10.1 million, a decrease of $6.0 million compared to the prior year period, and year-to-date 2024 Operating Income of $60.4 million, an increase of $43.5 million compared to the prior year period

•Third quarter 2024 Operating Income margin decreased by 270 bps compared to the prior year period, and year-to-date 2024 Operating Income margin expanded by 440 bps compared to the prior year period. Hurricane Helene negatively impacted year-to-date operating margins by 280 bps

•Cost containment and resource prioritization initiatives decreased general and administrative expenses by 6.0% in the third quarter 2024 and 4.3% year-to-date. Cost discipline, combined with reduced accrued incentive compensation, resulted in a decline in salary and benefits of 8.0% in the third quarter 2024 and an increase of 0.5% year-to-date

•Third quarter 2024 depreciation and amortization was $9.2 million compared to $10.8 million in the prior year period, and year-to-date 2024 depreciation and amortization was $29.8 million compared to $34.9 million in the prior year period

•Third quarter 2024 Net Income of $19.0 million, an increase of $0.4 million compared to the prior year period, and year-to-date 2024 Net Income of $69.9 million, an increase of $50.7 million compared to the prior year period. Third quarter and year-to-date 2024 results both include an estimated $19.5 million post-tax impact from Hurricane Helene

•Third quarter 2024 Net Income includes a $2.1 million increase in interest and other income, and year-to-date 2024 Net Income includes a $12.3 million increase in interest and other income, primarily due to the diversification of Hagerty Re's investment portfolio which resulted in investing in higher yielding fixed maturity securities. In addition, third quarter 2024 Net Income includes a $0.5 million loss and year-to-date 2024 Net Income includes a $8.5 million loss due to the change in fair value and settlement of warrant liabilities

•Completed warrant exchange offer and mandatory exchange in July 2024, whereby Hagerty issued 3.9 million shares of Class A Common Stock in exchange for 19.5 million warrants

•Third quarter 2024 Adjusted EBITDA (a non-GAAP measure) of $24.2 million, a decrease of $13.2 million compared to the prior year period, and year-to-date 2024 Adjusted EBITDA of $104.6 million, an increase of $26.2 million compared to the prior year period

•Third quarter 2024 Basic and Diluted Earnings per Share was $0.03, and year-to-date 2024 Basic and Diluted Earnings per Share was $0.09

•Third quarter 2024 Adjusted EPS (a non-GAAP measure) was $0.05, and year-to-date 2024 Adjusted EPS was $0.22

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.

UPDATED 2024 OUTLOOK FOR GROWTH AND PROFITABILITY

2024 is on track to be another year of strong top-line growth and margin expansion for Hagerty as our performance-based culture powers great results for stakeholders. We remain focused on growing our Insurance, Membership and Marketplace businesses, positioning us to deliver sustained, compounding profit growth over the coming years, fund our purpose to save driving and fuel car culture for future generations.

•Key 2024 business priorities include:

◦Further improve loyalty to drive renewals and referrals

◦Enhance member experience in a cost effective and efficient way

◦Build Hagerty Marketplace into the most trusted and preferred place to buy, sell, and finance collector cars

◦Expand insurance offerings, particularly in the post-1980s collectible space

•For full year 2024, Hagerty updated its outlook:

◦Written Premium growth of approximately 15%

◦Total Revenue growth of 18-19%

◦Net Income growth of 131-163%

◦Adjusted EBITDA growth of 25-36%

◦Adjusted EBITDA and Net Income incorporate combined losses from Hurricane Helene and Hurricane Milton of $29.7 million pre-tax and $23.5 million post-tax


		Prior 2024 Outlook 1		Revised 2024 Outlook
in thousands	2023 Results	Low End	High End	Low End	High End
Total Written Premium	$907,175	$1,034,000	$1,043,000	$1,043,000	$1,043,000
Total Revenue	$1,000,213	$1,160,000	$1,180,000	$1,180,000	$1,190,000
Net Income 2	$28,179	$76,000	$84,000	$65,000	$74,000
Adjusted EBITDA 3	$88,162	$130,000	$140,000	$110,000	$120,000

1 Prior 2024 Outlook shared on the Hagerty’s second quarter earnings call on August 6th, 2024.

2 Net income range assumes no impact from warrants. Fully diluted share count post warrant exchange of ~360 million 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.

Conference Call Details

Hagerty will hold a conference call to discuss the financial results today at 10:00 am Eastern Time. A webcast of the conference call, including its Investor Presentation highlighting third quarter 2024 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 forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical facts. These forward-looking statements reflect Hagerty’s current expectations and projections with respect to its expected future business and financial performance, including, among other things: (i) expected operating results, such as revenue growth and increases in profit and earned premium; (ii) changes in the market for Hagerty’s products and services, (iii) anticipated business objectives; and (iv) the strength of Hagerty’s business model. These statements may be preceded by, followed by or include the words "aim," "anticipate," "believe," "estimate," "expect," "forecast," "future," "goal," "intend," "likely," "outlook," "plan," "potential," "project," "seek," "target," "can," "could," "may," "should," "would," "will," the negatives thereof and other words and terms of similar meaning.

A number of factors could cause actual results or outcomes to differ materially from those indicated by these forward-looking statements. These factors include, among other things, Hagerty’s ability to: (i) compete effectively within its industry and attract and retain insurance policy holders and paid HDC subscribers; (ii) maintain key strategic relationships with its insurance distribution and underwriting carrier partners; (iii) prevent, monitor and detect fraudulent activity; (iv) manage risks associated with disruptions, interruptions, outages with its technology platforms or third-party services; (v) accelerate the adoption of Hagerty’s membership products as well as any new insurance programs and products; (vi) manage the cyclical nature of the insurance business including through any periods of recession, economic downturn or inflation; (vii) address unexpected increases in the frequency or severity of claims; (viii) comply with the numerous laws and regulations applicable to Hagerty’s business, including state, federal and foreign laws relating to insurance and rate increases, privacy, the internet and accounting matters; (ix) manage risks associated with being a controlled company; (x) successfully defend any litigation, government inquiries and investigations, and (xi) other risks and uncertainties indicated from time to time in documents filed or to be filed with the Securities and Exchange Commission (the "SEC") by Hagerty.

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 the Hagerty's other press releases, reports and other filings with the SEC. 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 865,000 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.

Contact: Jay Koval, investor@hagerty.com

Hagerty Media Contact: Andrew Heller, aheller@hagerty.com

Category: Financial

Source: Hagerty

Hagerty, Inc.

Condensed Consolidated Statements of Operations (Unaudited)


	Three months ended September 30,
	2024		2023		$ Change		% Change

REVENUE:	in thousands (except percentages and per share amounts)
Commission and fee revenue	$	116,161	$	103,173	$	12,988	12.6	%
Earned premium	165,686		139,785		25,901		18.5	%
Membership, marketplace and other revenue	41,527		32,616		8,911		27.3	%
Total revenue	323,374		275,574		47,800		17.3	%
OPERATING EXPENSES:
Salaries and benefits	47,192		51,318		(4,126)		(8.0)	%
Ceding commissions, net	77,501		65,413		12,088		18.5	%
Losses and loss adjustment expenses	99,430		57,485		41,945		73.0	%
Sales expense	59,141		47,737		11,404		23.9	%
General and administrative	20,837		22,166		(1,329)		(6.0)	%
Depreciation and amortization	9,184		10,753		(1,569)		(14.6)	%
Restructuring, impairment and related charges, net	—		473		(473)		(100.0)	%
Gains, losses, and impairments related to divestitures	—		4,112		(4,112)		(100.0)	%
Total operating expenses	313,285		259,457		53,828		20.7	%
OPERATING INCOME	10,089		16,117		(6,028)		(37.4)	%
Gain (loss) related to warrant liabilities, net	(463)		850		(1,313)		(154.5)	%
Interest and other income (expense), net	8,359		6,260		2,099		33.5	%
INCOME BEFORE INCOME TAX EXPENSE	17,985		23,227		(5,242)		(22.6)	%
Income tax benefit (expense)	1,022		(4,604)		5,626		(122.2)	%
NET INCOME	19,007		18,623		384		2.1	%
Net income attributable to non-controlling interest	(14,122)		(13,269)		(853)		6.4	%
Accretion of Series A Convertible Preferred Stock	(1,875)		(1,838)		(37)		2.0	%
NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCKHOLDERS	$	3,010	$	3,516	$	(506)	(14.4)	%

Earnings per share of Class A Common Stock:
Basic	$	0.03	$	0.04
Diluted	$	0.03	$	0.04

Weighted average shares of Class A Common Stock outstanding:
Basic	89,691		84,479
Diluted	89,691		84,479

Hagerty, Inc.

Condensed Consolidated Statements of Operations (Unaudited)


	Nine months ended September 30,
	2024		2023		$ Change		% Change

REVENUE:	in thousands (except percentages and per share amounts)
Commission and fee revenue	$	333,817	$	287,972	$	45,845	15.9	%
Earned premium	474,917		384,498		90,419		23.5	%
Membership, marketplace and other revenue	99,573		82,700		16,873		20.4	%
Total revenue	908,307		755,170		153,137		20.3	%
OPERATING EXPENSES:
Salaries and benefits	161,001		160,122		879		0.5	%
Ceding commissions, net	221,877		181,188		40,689		22.5	%
Losses and loss adjustment expenses	226,515		159,461		67,054		42.1	%
Sales expense	146,791		124,791		22,000		17.6	%
General and administrative	62,072		64,865		(2,793)		(4.3)	%
Depreciation and amortization	29,758		34,893		(5,135)		(14.7)	%
Restructuring, impairment and related charges, net	—		8,857		(8,857)		(100.0)	%
Gains, losses, and impairments related to divestitures	(87)		4,112		(4,199)		(102.1)	%
Total operating expenses	847,927		738,289		109,638		14.9	%
OPERATING INCOME	60,380		16,881		43,499		257.7	%
Loss related to warrant liabilities, net	(8,544)		(1,419)		(7,125)		N/M
Interest and other income (expense), net	27,945		15,677		12,268		78.3	%
INCOME BEFORE INCOME TAX EXPENSE	79,781		31,139		48,642		156.2	%
Income tax expense	(9,918)		(12,002)		2,084		(17.4)	%
NET INCOME	69,863		19,137		50,726		265.1	%
Net income attributable to non-controlling interest	(55,951)		(13,477)		(42,474)		N/M
Accretion of Series A Convertible Preferred Stock	(5,552)		(1,838)		(3,714)		N/M
NET INCOME ATTRIBUTABLE TO CLASS A COMMON STOCKHOLDERS	$	8,360	$	3,822	$	4,538	118.7	%

Earnings per share of Class A Common Stock:
Basic	$	0.09	$	0.04
Diluted	$	0.09	$	0.04

Weighted average shares of Class A Common Stock outstanding:
Basic	86,689		84,042
Diluted	87,601		84,042

N/M = Not meaningful

Hagerty, Inc.

Condensed Consolidated Balance Sheets (Unaudited)


	September 30,		December 31,
	2024		2023

ASSETS	in thousands (except share amounts)
Current Assets:
Cash and cash equivalents	$	147,120	$	108,326
Restricted cash and cash equivalents	176,309		615,950
Investments	61,827		10,946
Accounts receivable	93,488		71,530
Premiums receivable	201,992		137,525
Commissions receivable	18,987		79,115
Notes receivable	62,517		35,896
Deferred acquisition costs, net	168,635		141,637
Other current assets	77,995		49,293
Total current assets	1,008,870		1,250,218
Investments	471,965		5,526
Notes receivable	11,667		17,018
Property and equipment, net	18,674		20,764
Lease right-of-use assets	45,916		50,515
Intangible assets, net	92,035		91,924
Goodwill	114,175		114,214
Other long-term assets	54,710		38,033
TOTAL ASSETS	$	1,818,012	$	1,588,212
LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable, accrued expenses and other current liabilities	$	74,547	$	87,175
Losses payable and provision for unpaid losses and loss adjustment expenses	258,836		198,508

Commissions payable	94,005		108,739
Due to insurers	118,480		79,815
Advanced premiums	30,639		20,471
Unearned premiums	385,619		317,275
Contract liabilities	38,890		30,316
Total current liabilities	1,001,016		842,299
Long-term lease liabilities	44,866		50,459
Long-term debt, net	122,867		130,680
Warrant liabilities	—		34,018
Deferred tax liability	21,008		15,937
Contract liabilities	15,834		17,335
Other long-term liabilities	4,199		4,139
TOTAL LIABILITIES	1,209,790		1,094,867
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, 2024 and December 31, 2023)	82,788		82,836
STOCKHOLDERS' EQUITY
Class A Common Stock, $0.0001 par value (500,000,000 shares authorized, 89,980,363 and 84,588,536 issued and outstanding as of September 30, 2024 and December 31, 2023, respectively)	9		8
Class V Common Stock, $0.0001 par value (300,000,000 authorized, 251,033,906 shares issued and outstanding as of September 30, 2024 and December 31, 2023)	25		25
Additional paid-in capital	601,867		561,754
Accumulated earnings (deficit)	(455,083)		(468,995)
Accumulated other comprehensive income (loss)	1,447		(88)
Total stockholders' equity	148,265		92,704
Non-controlling interest	377,169		317,805
Total equity	525,434		410,509
TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS' EQUITY	$	1,818,012	$	1,588,212

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,
	2024		2023

OPERATING ACTIVITIES:	in thousands
Net income	$	69,863	$	19,137
Adjustments to reconcile net income to net cash from operating activities:
Loss related to warrant liabilities, net	8,544		1,419


Depreciation and amortization	29,758		34,893
Provision for deferred taxes	2,772		4,973
Impairment of operating lease right-of-use assets	—		1,147
Loss on disposals of equipment, software and other assets	401		2,019
Gains, losses, and impairments related to divestitures	(87)		2,827
Share-based compensation expense	13,018		13,157
Non-cash lease expense	5,920		9,472
Other	(354)		708
Changes in operating assets and liabilities:
Accounts, premiums and commissions receivable	(28,062)		(107,001)
Deferred acquisition costs, net	(26,998)		(47,936)
Losses payable and provision for unpaid losses and loss adjustment expenses	60,328		23,527

Commissions payable	(14,734)		34,582
Due to insurers	38,586		45,322
Advanced premiums	10,166		11,800
Unearned premiums	68,344		100,439
Operating lease liabilities	(6,781)		(9,018)
Other assets and liabilities, net	(41,042)		(9,246)
Net Cash Provided by Operating Activities	189,642		132,221
INVESTING ACTIVITIES:
Capital expenditures	(17,278)		(21,556)
Acquisitions, net of cash acquired, and other investments	(23,865)		(8,690)


Issuance of notes receivable	(55,030)		(11,405)
Collection of notes receivable	32,099		10,252
Purchases of fixed maturity securities	(565,838)		(7,277)
Proceeds from sales of fixed maturity securities	53,253		—
Proceeds from maturities of fixed maturity securities	23,766		4,128
Purchases of equity securities	(10,602)		—
Other investing activities	1,005		86
Net Cash Used in Investing Activities	(562,490)		(34,462)
FINANCING ACTIVITIES:
Payments on long-term debt	(63,202)		(132,850)
Proceeds from long-term debt, net of issuance costs	52,718		100,345
Proceeds from issuance of Series A Convertible Preferred Stock, net of issuance costs	—		79,159

Contribution from non-controlling interest	—		779
Distributions paid to non-controlling interest unit holders	(5,320)		—

Payment of Series A Convertible Preferred Stock dividends	(5,600)		—
Funding of employee tax obligations upon vesting of share-based payments	(5,713)		—
Proceeds from issuance of Class A Common Stock under employee stock purchase plan	—		906
Net Cash Provided by (Used in) Financing Activities	(27,117)		48,339
Effect of exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents	(882)		286

Change in cash and cash equivalents and restricted cash and cash equivalents	(400,847)		146,384
Beginning cash and cash equivalents and restricted cash and cash equivalents	724,276		539,191
Ending cash and cash equivalents and restricted cash and cash equivalents	$	323,429	$	685,575

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,						Nine months ended September 30,
	2024			2023			2024			2023
Operational Metrics
Total Written Premium (in thousands)	$	287,609		$	255,569		$	827,068		$	714,314
Loss Ratio	60.0		%	41.1		%	47.7		%	41.5		%
New Business Count — Insurance	77,418			69,691			225,753			201,593








GAAP Financial Measures
Total Revenue (in thousands)	$	323,374		$	275,574		$	908,307		$	755,170
Operating Income (in thousands)	$	10,089		$	16,117		$	60,380		$	16,881
Net Income (in thousands)	$	19,007		$	18,623		$	69,863		$	19,137
Basic Earnings Per Share	$	0.03		$	0.04		$	0.09		$	0.04
Diluted Earnings Per Share	$	0.03		$	0.04		$	0.09		$	0.04

Non-GAAP Financial Measures
Adjusted EBITDA (in thousands)	$	24,165		$	37,377		$	104,605		$	78,449
Adjusted Earnings Per Share	$	0.05		$	0.05		$	0.22		$	0.05


	September 30,		December 31,
	2024		2023
Operational Metrics
Policies in Force	1,494,510		1,401,037
Policies in Force Retention	88.8	%	88.7	%
Vehicles in Force	2,553,589		2,378,883
HDC Paid Member Count	867,596		815,007
Net Promoter Score (NPS)	82		82

Non-GAAP Financial Measures

Adjusted EBITDA

We define Adjusted EBITDA as consolidated Net income, excluding interest and other income (expense), net, income tax (expense) benefit, and depreciation and amortization, further adjusted to exclude (i) gains and losses related to our warrant liabilities; (ii) share-based compensation expense; and when applicable, (iii) restructuring, impairment and related charges, net; (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,
	2024		2023		2024		2023

	in thousands
Net income	$	19,007	$	18,623	$	69,863	$	19,137
Interest and other (income) expense 1	(8,359)		(6,260)		(27,945)		(15,677)
Income tax (benefit) expense	(1,022)		4,604		9,918		12,002
Depreciation and amortization	9,184		10,753		29,758		34,893
EBITDA	18,810		27,720		81,594		50,355
Restructuring, impairment and related charges, net	—		473		—		8,857
(Gain) loss related to warrant liabilities, net	463		(850)		8,544		1,419
Share-based compensation expense	4,092		4,935		13,018		12,869
Gains, losses, and impairments related to divestitures	—		4,112		(87)		4,112

Other unusual items 2	800		987		1,536		837
Adjusted EBITDA	$	24,165	$	37,377	$	104,605	$	78,449

1 Excludes interest expense related to the BAC Credit Facility, which is recorded within "Sales expense" on the Condensed Consolidated Statements of Operations.

2 Other unusual items includes professional fees associated with the warrant exchange, as well as certain material severance expenses for the three and nine months ended September 30, 2024 and a net legal settlement accrual for the three and nine months ended September 30, 2023.

The following table reconciles Adjusted EBITDA for the year ended December 31, 2024 Outlook to the most directly comparable GAAP measure, which is Net income:


	2024 Low		2024 High

	in thousands
Net income	$	65,000	$	74,000
Interest and other (income) expense 1	(35,000)		(35,000)
Income tax expense	14,000		15,000
Depreciation and amortization	40,000		40,000


(Gain) loss related to warrant liabilities, net	8,500		8,500
Share-based compensation expense	17,500		17,500

Adjusted EBITDA	$	110,000	$	120,000

1 Excludes interest expense related to the BAC Credit Facility, which is recorded within "Sales expense" on the Condensed Consolidated Statements of Operations.

Adjusted EPS

We define Adjusted Earnings Per Share ("Adjusted EPS") as consolidated Net income, less gains and losses related to our warrant liabilities, 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; (iv) all unissued share-based compensation awards; and (v) all unexercised warrants outstanding prior to the Warrant Exchange.

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 outstanding and potentially dilutive shares, provides useful information to investors regarding our performance on a fully consolidated basis.

Management uses Adjusted EPS:

•as a measurement of operating performance of our business on a fully consolidated basis;

•to evaluate the performance and effectiveness of our operational strategies; and

•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,
	2024		2023		2024		2023

	in thousands (except per share amounts)
Numerator:
Net income available to Class A Common Stockholders 1	$	2,798	$	3,255	$	7,753	$	3,712
Accretion of Series A Convertible Preferred Stock	1,875		1,838		5,552		1,838
Undistributed earnings allocated to Series A Convertible Preferred Stock	212		261		607		110
Net income attributable to non-controlling interest	14,122		13,269		55,951		13,477
Consolidated net income	19,007		18,623		69,863		19,137
(Gain) loss related to warrant liabilities, net	463		(850)		8,544		1,419

Adjusted consolidated net income 2	$	19,470	$	17,773	$	78,407	$	20,556

Denominator:
Weighted average shares of Class A Common Stock outstanding 1	89,691		84,479		86,689		84,042
Total potentially dilutive securities outstanding:
Non-controlling interest units	255,178		255,499		255,178		255,499
Series A Convertible Preferred Stock, on an as-converted basis	6,785		6,785		6,785		6,785
Total unissued share-based compensation awards	8,076		8,490		8,076		8,490
Total warrants outstanding	—		19,484		—		19,484
Potentially dilutive shares outstanding	270,039		290,258		270,039		290,258
Fully dilutive shares outstanding 2	359,730		374,737		356,728		374,300

Basic EPS 1	$	0.03	$	0.04	$	0.09	$	0.04

Adjusted EPS 2	$	0.05	$	0.05	$	0.22	$	0.05

1 Numerator and Denominator of the GAAP measure Basic EPS

2 Numerator and Denominator of the non-GAAP measure Adjusted EPS

88.8% Adjusted EBITDA2

$19 $19 $24 $24 $37 $(10) Q3 2022 Q3 2022Q3 2023 Q3 2023Q3 2024 Q3 2024

$78 $105 $-- $35 $70 $19

HAGERTY Q3 2024 | 10 IN THOUSANDS 2023 RESULTS PRIOR 2024 OUTLOOK2 REVISED 2024 OUTLOOK Total Written Premium $907,175 $1,034,000 - $1,043,000 $1,043,000 - $1,043,000 Total Revenue $1,000,213 $1,160,000 - $1,180,000 $1,180,000 - $1,190,000 Net Income3 $28,179 $76,000 - $84,000 $65,000 - $74,000 Adjusted EBITDA4 $88,162 $130,000 - $140,000 $110,000 - $120,000

To ta l L os s Pe rfo rm an ce 0% 100% 200% 300% 400% 500% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 To ta l P er ce nt ag e G ro w th 0% 100% 200% 300% 400% 500% 2010 2011 2012 2013 2014 2015 2016 2017 2018 19 2020 021 022 2023 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 2010 2011 2012 2013 2014 2015 2016 2017 2018 19 2020 021 2022 2023

0 100 200 300 400 500 600 700 800 900 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 10 2 0 11 2 0 12 2 0 13 2 0 14 2 0 15 2 0 16 2 0 17 2 0 18 2 0 19 2 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3 0% 5% 10% 15% 20% 25% 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 10 2 0 11 2 0 12 2 0 13 2 0 14 2 0 15 2 0 16 2 0 17 2 0 18 2 0 19 2 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3 Total U.S. Auto Written Premium U.S. Auto Written Premium Annual Growth 0 1 0 2 0 3 0 4 0 5 0 6 0 7 0 8 0 9 0 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 10 2 0 11 2 0 12 2 0 13 2 0 14 2 0 15 2 0 16 2 0 17 2 0 18 2 0 19 2 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3 0% 5% 10% 15% 20% 25% 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 10 2 0 11 2 0 12 2 0 13 2 0 14 2 0 15 2 0 16 2 0 17 2 0 18 2 0 19 2 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3 Total U.S. Auto Written Premium U.S. Auto Written Premium A nual Growth

Global New Business Count 0 50,000 100,000 150,000 200,000 250,000 300,000 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024E

0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 7% annual growth in pre 1980s 18% annual growth in post 1980s ~13% ~2% Pre 1980 Vehicle Count Type Total Market (cars, mm) Collectible Vehicles by CohortHagerty Penetration and U.S. Auto Insured Vehicle Count Hagerty Penetration Pre 1980 Vehicles 11.2 13.3% Post 1980 Vehicles 35.2 1.7% Total ~46.3 4.5% Post 1980 Vehicle Count

Total Revenue 5 YEAR AVERAGE Operating Income 5 YEAR AVERAGE $ IN THOUSANDS Q1 Q2 Q3 Q4 Total 2019 78,479 109,722 111,472 97,601 397,274 2020 106,859 135,462 135,781 121,446 499,548 2021 129,200 167,409 168,086 154,384 619,079 2022 167,811 206,017 216,757 197,003 787,588 2023 218,352 261,244 275,574 245,043 1,000,213 5 Year Average Total Revenue % 21% 27% 27% 25% 100% $ IN THOUSANDS Q1 Q2 Q3 Q4 Total 2019 (5,808) 13,247 9,258 (6,149) 10,548 2020 (4,171) 17,441 12,650 (10,074) 15,846 2021 (5,096) 14,274 1,758 (21,006) (10,070) 2022 (13,004) 2,387 (21,223) (35,726) (67,566) 2023 (16,489) 17,253 16,117 (6,473) 10,408 5 Year Average Operating Income % (34)% 51% 67% 15% 100% 21% 27% 27% 25% Q1 Q2 Q3 Q4 —% 10% 20% 30% 40% (34%) 51% 67% 15% 70% 80% 60% 50% 40% 30% 20% 10% 0 (10%) (20%) (30%) (40%) (50%) Q1 Q1 Q2 Q3 Q4

$ IN MILLIONS 112 117 127 140 147 152 158 166 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 64 75 110 103 78 89 129 116 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 21 27 24 33 20 31 27 42 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024

IN THOUSANDS Q3 2023 Q4 2023 - Q2 2024 Q3 2024 TTM Net income $18,623 $59,898 $19,007 $78,905 Interest and other (income) expense1 (6,260) (26,730) (8,359) (35,089) Income tax (benefit) expense 4,604 15,531 (1,022) 14,509 Depreciation and amortization 10,753 31,490 9,184 40,674 EBITDA 27,720 80,189 18,810 98,999 Restructuring, impairment and related charges, net 473 (45) — (45) (Gain) loss related to warrant liabilities, net (850) (4,881) 463 (4,418) Share-based compensation expense 4,935 13,786 4,092 17,878 Gain related to divestiture 4,112 (186) — (186) Other unusual items2 987 1,290 800 2,090 Adjusted EBITDA $37,377 $90,153 $24,165 $114,318

IN THOUSANDS (EXCEPT PER SHARE AMOUNTS) Q3 2024 Q3 2023 YTD 2024 YTD 2023 Numerator: Net income available to Class A Common Stockholders1 $2,798 $3,255 $7,753 $3,712 Accretion of Series A Convertible Preferred Stock 1,875 1,838 5,552 1,838 Undistributed earnings allocated to Series A Convertible Preferred Stock 212 261 607 110 Net income attributable to non-controlling interest 14,122 13,269 55,951 13,477 Consolidated net income 19,007 18,623 69,863 19,137 (Gain) loss related to warrant liabilities 463 (850) 8,544 1,419 Adjusted consolidated net income2 $19,470 $17,773 $78,407 $20,556 Denominator: Weighted-average shares of Class A Common Stock Outstanding1 89,691 84,479 86,689 84,042 Total potentially dilutive shares outstanding: Non-controlling interest units 255,178 255,499 255,178 255,499 Series A Convertible Preferred Stock, on an as-converted basis 6,785 6,785 6,785 6,785 Total unissued share-based compensation awards 8,076 8,490 8,076 8,490 Total warrants outstanding — 19,484 — 19,484 Potentially dilutive shares outstanding 270,039 290,258 270,039 290,258 Fully dilutive shares outstanding2 359,730 374,737 356,728 374,300 Basic Earnings per Share1 $0.03 $0.04 $0.09 $0.04 Adjusted Earnings per Share2 $0.05 $0.05 $0.22 $0.05

IN THOUSANDS 2024 Low 2024 High Net income $65,000 $74,000 Interest and other (income) expense2 (35,000) (35,000) Income tax (benefit) expense 14,000 15,000 Depreciation and amortization 40,000 40,000 Gain (loss) related to warrant liabilities, net 8,500 8,500 Share-based compensation expense 17,500 17,500 Adjusted EBITDA $110,000 $120,000

Cover	Nov. 07, 2024
Entity Information [Line Items]
Document Type	8-K
Document Period End Date	Nov. 07, 2024
Entity Registrant Name	HAGERTY, INC.
Entity Incorporation, State or Country Code	DE
Entity File Number	001-40244
Entity Address, Address Line One	121 Drivers Edge
Entity Address, City or Town	Traverse City
Entity Address, State or Province	MI
Entity Address, Postal Zip Code	49684
City Area Code	(800)
Local Phone Number	922-4050
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Central Index Key	0001840776
Amendment Flag	false
Title of 12(b) Security	Class A common stock, par value $0.0001 per share
Trading Symbol	HGTY
Security Exchange Name	NYSE
Entity Tax Identification Number	86-1213144

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HGTPW Hagerty Inc (PK)