Executive Summary

Q4 2024 was dominated by discontinued-operations accounting for the Legacy Financial Guarantee sale, driving a consolidated net loss of $548.3M and GAAP diluted EPS of $(10.23); continuing operations diluted EPS printed at $0.70 due to redeemable NCI remeasurement .
Specialty P&C performance improved: Everspan delivered a 96.5% combined ratio (vs 100.5% in Q3 and 100.3% in Q4’23) and Insurance Distribution (Cirrata + Beat) revenues rose to $44.1M (up 257% YoY) .
Management raised the long-term target to $80–$90M adjusted EBITDA to Ambac common shareholders by 2028 (from $70–$80M previously), and will revisit 2025 guidance after the Legacy sale closes (expected later this quarter or early next) .
Near-term catalysts: Wisconsin OCI approval and closing of the Legacy sale; ongoing buyback activity with ~$35M remaining authorization after repurchasing ~$14.8M of stock at $12.48 (Q4) and $11.71 (Q1’25) averages .

What Went Well and What Went Wrong

What Went Well

Specialty P&C underwriting improved materially: combined ratio fell to 96.5%, driven by favorable program performance and reserving discipline; adjusted EBITDA to Ambac common shareholders rose to $2.7M vs $1.4M in Q4’23 .
Distribution scale and earnings power increased: total Insurance Distribution revenues hit $44.1M (+257% YoY) with adjusted EBITDA to Ambac shareholders at $5.3M (+270% YoY), aided by the Beat acquisition .
Strategic transformation advancing: “successfully selling our legacy Financial Guarantee business to Oaktree for $420 million” and “substantially completed the separation of our legacy and P&C businesses” positioning 2025 for focus on growth .

What Went Wrong

Discontinued operations loss on sale booked at $(570)M, producing consolidated GAAP diluted EPS of $(10.23); continuing operations remained loss-making on a GAAP basis (net loss from continuing ops attributable to Ambac shareholders $(22.2)M) despite the EPS calculation impact from NCI .
Everspan’s expense ratio rose to 44.6% due to sliding scale commissions (a 14.9% expense charge vs a 1.2% benefit last year), partially offsetting underwriting gains .
A&H softness pressured organic growth in distribution (short‑term medical, employer stop‑loss), with start‑up losses (~$2.4M impact to adjusted EBITDA to Ambac shareholders) temporarily depressing margins .

Financial Results

Consolidated and Key Operating Metrics

Metric	Q4 2023	Q3 2024	Q4 2024
Total Revenues from Continuing Operations ($USD Millions)	$43.3	$70.0	$65.2
GAAP Diluted EPS (Total)	$(0.24)	$(0.63)	$(10.23)
Diluted EPS – Continuing Ops	$(0.10)	N/A	$0.70
Adjusted EPS (Non-GAAP)	$(0.10)	$(0.46)	$(0.12)
Net Income (Loss) – Continuing Ops to Ambac Shareholders ($USD Millions)	$(9.2)	$(7.1)	$(22.2)
Net Income (Loss) – Discontinued Ops ($USD Millions)	$(6.5)	N/A	$(526.1)

Segment Breakdown

Segment Metric	Q4 2023	Q3 2024	Q4 2024
Insurance Distribution: Total Revenues ($USD Millions)	$12.3	$24.0	$44.1
Insurance Distribution: Adjusted EBITDA to Ambac Shareholders ($USD Millions)	$1.4	N/A	$5.3
Specialty P&C (Everspan): Total Revenues ($USD Millions)	$28.6	$40.1	$24.8
Specialty P&C (Everspan): Combined Ratio (%)	100.3%	100.5%	96.5%
Specialty P&C (Everspan): Adj. EBITDA to Ambac Shareholders ($USD Millions)	$1.4	N/A	$2.7

Production and KPIs

KPI	Q4 2023	Q3 2024	Q4 2024
Insurance Distribution Premiums Placed ($USD Millions)	$50.2	$144.9	$204.9
Specialty P&C Gross Premiums Written ($USD Millions)	$90.7	$115.2	$60.0
Total Specialty P&C Insurance Production ($USD Millions)	$140.9	$260.1	$264.9

Notes: Q4 2024 continuing revenues include negative Corporate revenue; distribution revenues reflect inclusion of Beat; Everspan revenue decline reflects program non‑renewal and a shift to fully fronted structures .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EBITDA to Ambac Common Shareholders	FY 2028	$70–$80M	$80–$90M	Raised
2025 Guidance (overall)	FY 2025	Provide post-Legacy sale close (anticipated Q4’24/Q1’25)	Will revisit after sale close; closing expected later this quarter or early next	Maintained (timing update)
Managed Third-Party Capacity (Cirrata)	FY 2025	Not previously quantified	>$1.5B committed, >60% with ≥4-year support	First disclosure

No formal quarterly revenue/EPS guidance, OpEx, OI&E, or tax rate guidance provided for Q4 2024; management emphasized revisiting 2025 guidance post close .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024, Q3 2024)	Current Period (Q4 2024)	Trend
Legacy sale & regulatory approvals	Announced $420M sale; expected close Q4’24; PRA approval received; awaiting Wisconsin OCI	Separation of platforms substantially complete; close expected later this quarter or early next	Progressing toward close
Long-term EBITDA target	$70–$80M by 2028	Raised to $80–$90M; will revisit 2025 guidance post close	More ambitious
E&S market conditions	Favorable rates in casualty; property softening; cautious on commercial auto	High single to double-digit rate increases in U.S. casualty; property softening; watching CA wildfires	Still supportive; selective caution
Underwriting profitability (Everspan)	Combined ratio 109.4% (Q2), 100.5% (Q3); target ~90% LT; mid-teen ROE goal	Combined ratio 96.5%; effective loss ratios mid-60s; reserve to high end for runoff programs	Improving toward targets
Distribution growth & de novo pipeline	Beat acquisition; 6 new MGAs; start‑up costs $1.5–$3.5M over 6–8 quarters	6 MGAs launched in 2024 (4 post‑Beat); de novo costs impacted Q4; >$1.5B managed capacity	Scaling; margin headwind near‑term
FX and hedging	FX losses at Beat; hedge ~50% exposure	Net FX gains/losses recurring; Beat hedges ~50%	Ongoing
Capital allocation (buyback) & leverage	Authorized $50M buyback; earlier commencement; leverage framework discussed	Repurchased ~$14.8M Q4/Q1’25; ~$35M remaining authorization	Active buybacks

Management Commentary

“Our P&C operating businesses had record performances in 2024, generating nearly $900 million in premiums across the platform… Looking at 2025 our pipeline for organic and strategic growth remains very strong.” — Claude LeBlanc, CEO .
“Successfully selling our legacy Financial Guarantee business to Oaktree for $420 million… provides us the opportunity to accelerate the scaling of our Specialty P&C business.” — Claude LeBlanc, CEO .
“For 2025, the Cirrata platform has more than $1.5 billion of committed third-party capacity… Over 60%… for 4 or more years.” — Claude LeBlanc, CEO .
“This quarter, we introduced a revised adjusted net income, a new adjusted EBITDA, a new organic growth metric and finally, eliminated adjusted book value.” — David Trick, CFO .

Q&A Highlights

A&H market softness (employer stop‑loss, short‑term medical): management expects potential stabilization near-term and remains disciplined on selection/pricing; overall A&H growth continues outside ESL .
Everspan combined ratio sustainability: effective loss ratios in mid-60s align with long-term goals; variability expected, but focus remains on profitability .
Closing timeline and sentiment: management anticipates Wisconsin OCI approval and close later this quarter or early next; reiterated enthusiasm to be pure‑play specialty P&C .

Estimates Context

Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable due to data access limits; therefore, we cannot assess beat/miss versus estimates at this time. Values would normally be retrieved from S&P Global consensus; unavailable in this session.
Given the lack of accessible consensus data, traders should focus on internal momentum: Everspan’s combined ratio improvement, rapid distribution scaling post-Beat, and the imminent Legacy sale close .

Key Takeaways for Investors

Specialty P&C underwriting turning the corner: combined ratio down to 96.5% with effective loss ratios mid‑60s, signaling improving profitability trajectory .
Distribution economics expanding: $44.1M Q4 revenues (+257% YoY), >$1.5B managed capacity for 2025, and a growing de novo pipeline underpin medium‑term margin gains despite near‑term start‑up costs .
Structural reset complete: discontinued‑operations accounting and $(570)M loss on Legacy sale charge are non‑economic to the transaction terms; post‑close narrative centers on pure‑play P&C growth .
Capital returns remain a lever: ~$14.8M repurchased through Q4/Q1’25 with ~$35M authorization remaining; buybacks can help bridge valuation gaps pending sale close .
Guidance inflection: 2028 adjusted EBITDA target raised to $80–$90M; management to revisit 2025 guidance post close, increasing visibility on earnings power .
Watch near-term noise: sliding scale commissions elevated Q4 expense ratio; A&H softness and FX variability likely to persist quarter-to-quarter but do not derail longer-term growth thesis .
Trading setup: Regulatory approval and sale close are identifiable catalysts; continued underwriting improvement and distribution scaling are the fundamental drivers to monitor .

AMBAC FINANCIAL GROUP INC (AMBC)·Q4 2024 Earnings Summary