Executive Summary

Strong quarter operationally: Exchange Written Premium (EWP) was $1.043B (+17% y/y), total revenue $267.4M (+74% y/y), Adjusted EBITDA $105.0M (39% margin), with underlying Adj. EBITDA $66.3M ex-$39M irregular investment gains .
Mixed vs Street: Adjusted EPS beat while revenue missed on S&P basis — EPS $0.39 vs $0.21 consensus; revenue $217.8M vs $255.5M consensus (S&P methodology differs from company’s “Total revenues” metric) (*)
Platform momentum: 265 Members (+17 q/q), gross loss ratio improved to 50.1% (from 51.8% y/y), third‑party direct written premium rose to 32% of EWP; net retention 7% as mix shifts to fee businesses .
Guidance: Q4’25 EWP $1.06–$1.10B, third‑party DWP $415–$430M, Adj. EBITDA $57–$62M; FY26 reiterated at least $5.0B EWP, $2.1B third‑party DWP, $269M Adj. EBITDA; Hadron mix expected to decline to 35–40% of third‑party in FY26 and <33% by Q4’26 .
One‑time IPO accounting drove GAAP loss: Non‑cash, equity‑neutral $1.38B profits interest distribution expense explains GAAP net loss; underlying profitability sharply higher (Adj. NI $79.8M vs $19.0M y/y) .

What Went Well and What Went Wrong

What Went Well

Fee‑driven growth and margin expansion: Exchange Services revenue +34% y/y with 8.0% take rate (vs 7.1%), 70% segment margin; MGA Operations revenue +88% y/y (incl. irregular gains), underlying margin 30% .
Risk capital diversification and scaling: Third‑party DWP reached 32% (from 27% in Q2), signed four new insurers (Lloyd’s facility, Ozark, Incline, MS Transverse); Hadron mix down to 54% of third‑party, expected to keep declining .
Data/AI advantage deepened: Unique attributes ingested rose from 23k to 57k to fuel risk models; management highlighted “broadest, most usable specialty P&C data set,” supporting low‑50s gross loss ratios .

What Went Wrong

S&P revenue miss despite company‑reported revenue growth: On S&P basis, revenue was $217.8M vs $255.5M consensus (company “Total revenues” was $267.4M; methodology differences likely drive the variance) (*) .
Member runoff and transition delays: One inherited Canadian member put into runoff, and some member‑driven delays in transitioning flows to third‑party insurers modestly pressured Q3 third‑party metrics and Q4 timing .
GAAP optics: Reported GAAP net loss of $(1.367)B (diluted $(6.99)), driven by IPO‑related non‑cash profit interest distribution and other non‑cash/one‑time items, overshadowed underlying profitability .

Financial Results

Consolidated metrics (chronological: prior year → prior quarter → current)

Metric	Q3 2024	Q2 2025	Q3 2025
Exchange Written Premium ($B)	$0.888	$1.072	$1.043
Total Revenues ($M)	$153.7	$219.1	$267.4
GAAP Net Income ($M)	$9.4	$13.1	$(1,367.0)
GAAP Diluted EPS	$0.04	$0.04	$(6.99)
Adjusted EBITDA ($M)	$26.1	$63.5	$105.0
Adjusted EBITDA Margin	17%	29%	39%
Adjusted Net Income ($M)	$19.0	$28.6	$79.8
Gross Loss Ratio	51.8%	50.5%	50.1%

Notes: GAAP Q3’25 loss reflects non‑cash IPO‑related profit interest distribution expense of $1.3797B and other items .

Estimates vs Actuals (S&P Global basis)

Metric (Q3 2025)	Consensus	Actual	Surprise
Primary EPS	$0.2145 (*)	$0.3873 (*)	+$0.1728, +80.6% (*)
Revenue ($M)	$255.5 (*)	$217.8 (*)	-$37.7, -14.8% (*)

Company‑reported “Total revenues” were $267.4M; S&P’s revenue methodology differs, so estimate comparisons use S&P actuals for consistency . (*)

Segment performance (y/y)

Segment	Revenue Q3 2024 ($M)	Revenue Q3 2025 ($M)	Adj. EBITDA Q3 2024 ($M)	Adj. EBITDA Q3 2025 ($M)
Exchange Services	63.6	85.0	45.6	59.2
MGA Operations	42.9	80.8	17.7	45.4
Underwriting	83.7	117.6	(17.6)	17.6

KPIs and mix (chronological)

KPI	Q3 2024	Q2 2025	Q3 2025
Members (count)	204	248	265
Net Revenue Retention	146%	151%	135%
Third‑Party Direct Written Premium (% EWP)	21%	27%	32%
Accelerant‑Retained (% EWP)	10%	6%	7%
Gross Loss Ratio	51.8%	50.5%	50.1%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Exchange Written Premium	Q4 2025	n/a	$1.06–$1.10B	Initiated
Third‑Party Direct Written Premium	Q4 2025	n/a	$415–$430M	Initiated
Adjusted EBITDA	Q4 2025	n/a	$57–$62M	Initiated
Exchange Written Premium	FY 2026	“At least $5.0B” (unchanged)	At least $5.0B	Maintained
Third‑Party Direct Written Premium	FY 2026	$2.1B (unchanged)	$2.1B	Maintained
Adjusted EBITDA	FY 2026	$269M (unchanged)	$269M	Maintained
Hadron share of 3rd‑party DWP	FY 2026	35–40%	35–40%	Maintained
Hadron share of 3rd‑party DWP	Q4 2026	<33%	<33%	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2025)	Current Period (Q3 2025)	Trend
Third‑party insurer ramp & mix	27% of EWP third‑party; Hadron a large share but expected to mix down; 16 new Members; net retention 6% .	32% third‑party; 4 new partners (Lloyd’s facility, Ozark, Incline, MS Transverse); Hadron 54% of third‑party, guided to decline .	Accelerating diversification
Data/AI capabilities	23k attributes, ML/LLM initiatives; improved subrogation and profitability .	Attributes expanded to 57k; platform described as industry‑leading data asset .	Strengthening moat
Gross loss ratio	50.5% (improved vs prior year due to reserve actions on older EU/UK lines) .	50.1% with some favorable PYD (property large losses below expectations) .	Stable low‑50s target
Member dynamics	248 members; strong pipeline .	265 members (+17 q/q); one low‑economics member in runoff .	Net adds healthy; pruning ongoing
Capital/light model & cash conversion	Shift to fee segments; eliminations timing vs cash highlighted .	Reinforced fee take‑rate stability (8% exchange services) and high cash conversion discussion .	Continued mix shift
Hadron/partner concentration	Expect Hadron mix to trend down over time .	FY26: 35–40% of 3rd‑party; Q4’26 <33% .	Concentration falling

Management Commentary

“We beat on both exchange‑rated premium and adjusted EBITDA… As a newly public company… there are two sides of the Accelerant Risk Exchange: the supply side and the demand side.” — Jeff Radke, CEO .
“Our medium‑term expectation is that third‑party insurance companies will represent approximately two‑thirds of our portfolio… We expect the net retention to approximate 10% in calendar year 2026.” — Jeff Radke .
“We have purpose‑built AI data agents… transforming and enriching a continuous firehose of unstructured data… leading to strong, profitable growth.” — Jeff Radke .
“Adjusted EBITDA was $105 million… Embedded within that were two irregular investment gains totaling $39 million… we do not expect to receive benefits like this in most quarters.” — Jay Green, CFO .

Q&A Highlights

Hadron mix and partner breadth: Mgmt reiterated Hadron’s mix to 35–40% of third‑party in FY26 and <33% by Q4’26, with 8–10 partners expected to become “very large”; diversification viewed as a core objective .
Third‑party lifecycle and reinsurance piping: Early‑stage third‑party insurers often cede via Accelerant Re for speed, then transition to direct reinsurance; Hadron has transitioned to direct cessions .
Cash flow conversion: Exchange Services/MGA fees collected upfront; eliminations are timing and don’t impact cash inflow; management to follow up with more quantification .
Loss ratio drivers: Favorable large‑loss experience in property contributed; portfolio of small policies (<$10k premium) structurally reduces volatility and liability trend exposure; expect “low‑50s” over time .
Expense/underwriting ratio: DAC favorability and OpEx migration expected as more business flows directly to third‑party insurers, but maintain near‑term expense ratios .

Estimates Context

EPS beat: Adj. EPS $0.39 vs $0.21 consensus () — likely upward pressure to near‑term EPS estimates given fee take‑rate stability and operating leverage ().
Revenue miss on S&P basis: $217.8M vs $255.5M consensus () contrasts with company “Total revenues” of $267.4M, reflecting methodology differences; analysts may refine revenue definitions and segment modeling ().
Estimate inputs: 9 EPS estimates and 6 revenue estimates for Q3’25 in S&P dataset () — expect continued focus on third‑party ramp cadence and mix as key estimate swing factor ().

Key Takeaways for Investors

Business quality improving: Low‑50s gross loss ratio and expanding fee mix underpin durable margin expansion; Exchange Services take rate stable at ~8% with 70% segment margins .
Structural catalysts: New third‑party insurers (incl. Lloyd’s facility) and rising non‑Hadron mix de‑risk capital access and should accelerate third‑party DWP in 2026 .
Near‑term setup: Q4 guide implies continued strong EWP and third‑party growth with solid Adj. EBITDA ($57–$62M) .
Watch the definitions: Use S&P basis for estimate comps (EPS beat, revenue miss), but anchor operational assessments on company‑reported “Total revenues” and segment disclosures for true business momentum (*).
IPO artifacts now visible: Large non‑cash profit interest expense distorts GAAP; underlying Adj. NI/EBITDA trajectory is the better profitability gauge .
Execution risks: Member transition timing to new third‑party carriers and selective runoff can add quarterly lumpiness; medium‑term trajectory remains intact .
2026 frame: Reiterated “at least” targets ($5.0B EWP, $2.1B third‑party, $269M Adj. EBITDA) with improving partner diversification should keep estimate revisions biased upward if execution continues .

Values marked with * retrieved from S&P Global.

Accelerant Holdings (ARX)·Q3 2025 Earnings Summary