Hagerty's 16% member jump and a profitable marketplace drove Q2 revenue above guidance. The insurer raised its full-year outlook and sees the collector-car ecosystem accelerating.
Hagerty turned in a second quarter that beat its own revenue forecast and drew an upgrade to full-year guidance, driven by a 16% increase in members and a growing haul from its auction and marketplace businesses.
The Traverse City, Michigan-based specialty insurer reported total revenue of $352.7 million for the three months through June, above the $340 million to $350 million range it had projected in May. Adjusted net income came in at $17.9 million, or 8 cents a share, against $13.4 million, or 6 cents, a year earlier.
Chief Executive McKeel Hagerty said the company added about 91,000 net new members during the quarter, pushing the total to roughly 2.2 million. Retention rates held above 84%. The member growth, he said, is feeding the company's ecosystem – more policyholders mean more cars moving through Hagerty's auction platform and more buyers for its digital marketplace.
“We're seeing the flywheel accelerate,” Hagerty said on the call with analysts. “More members bring more cars to auction, which brings more buyers, which brings more data, which makes us a better insurer.”
The company now expects full-year 2026 revenue of $1.37 billion to $1.40 billion, up from a prior range of $1.34 billion to $1.37 billion. Adjusted EBITDA guidance was raised to $185 million to $195 million from $175 million to $185 million.
Chief Financial Officer Patrick McClymont pointed to Hagerty's marketplace segment as a key driver. Revenue from auctions and the Drivers Club marketplace hit $65.7 million, up 28% from a year ago. The segment turned profitable on an adjusted basis for the quarter, with a $1.1 million contribution margin after a $2.5 million loss in the year-ago period.
“The marketplace is no longer just a marketing cost,” McClymont said. “It's becoming a real earnings contributor.”
Underwriting income for the insurance segment was $31.5 million, roughly flat from $32 million a year earlier. The combined ratio ticked up to 89.6% from 88.4%, still inside the company's target range. Investment income rose to $10.3 million from $8.4 million, helped by higher yields on the fixed-income portfolio.
Hagerty ended the quarter with $215 million in cash and investments and no borrowings on its $100 million revolving credit facility. The company did not repurchase any shares during the quarter.
On the call, analysts pressed on the competitive landscape. Hagerty said the broader insurance market is seeing rate increases of 5% to 10% across the specialty auto segment, and that Hagerty is taking similar increases. He added that the company's proprietary data on collector-car valuations gives it an edge in pricing risk that generalist carriers lack.
“A standard auto carrier doesn't know what a 1965 Mustang fastback is worth,” he said. “We have transaction data on every one that's sold in the last five years. That's not easy to replicate.”
Shares of Hagerty closed at $28.14 on Tuesday, up 1.4% in regular trading. The stock has gained about 22% year to date.
The company's Alpha Score sits at 67 out of 100, a Moderate rating, reflecting solid financial health and improving revenue trends. See the JPM stock page for broader sector context.
Hagerty's next investor event is the Keefe, Bruyette & Woods Insurance Conference in New York on Sept. 9.
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