Hagerty's Q4 2024 Earnings Call: Unpacking Contradictions in Tariffs, Margins, and Strategic Partnerships

These are the key contradictions discussed in Hagerty's latest 2024Q4 earnings call, specifically including: Impact of Tariffs on Supply Chain and Pricing Strategy, Expense Savings and Revenue Growth Expectations, Cross-selling and Membership Engagement, Margin Expectations, Enthusiast Product Rollout Timeline, and State Farm Partnership Expansion:



Revenue and Membership Growth:
- Hagerty, Inc. reported total revenue of $292 million for Q4 2024, up 19% year-on-year.
- The company added more than 0.5 million car enthusiasts to its ecosystem, contributing to revenue growth.
- This growth was driven by increased membership, robust new business count, and high retention rates.

Investment in Technology and Digital Transformation:
- Hagerty is investing over $20 million in 2025 for a technology migration to a modern cloud-based architecture.
- This investment aims to improve member experience, drive future efficiency gains, and support scalable growth.
- The migration is crucial for expanding specialty insurance offerings and enhancing marketplace integration.

Partner Expansion and Market Penetration:
- Hagerty's partnership with State Farm is expected to result in an additional 70,000 vehicles becoming part of the Classic Plus program by the end of 2025.
- The company is targeting a significant increase in its market share, with plans to double its policies in force to 3 million by 2030.
- Growth is anticipated through new partnerships, expanding underwriting aperture, and launching new products.

Profitability and Margin Expansion:
- Hagerty reported an operating profit of $3 million for Q4 2024, expecting net income to grow by 30% to 40% in 2025.
- Profitability is supported by cost discipline, resource prioritization, and operational efficiencies.
- The company is focused on leveraging its unique car culture and technology investments to drive future profitability.