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CI

CITIZENS, INC. (CIA)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $55.7M, down 3.6% YoY and below S&P Global consensus of $58.9M; GAAP diluted EPS was -$0.03 while Primary EPS (SPGI) printed $0.02 versus $0.05 consensus, reflecting investment losses and higher insurance benefits. Bold miss on both top-line and EPS. *
  • Adjusted total revenues grew to $58.5M (+3.2% YoY) and adjusted pre-tax income was $1.1M (vs. $4.0M prior year), supported by strong first-year premium growth (+49%) and record direct insurance in force of $5.28B.
  • Profitability was pressured by a mostly non-cash $3.1M valuation write-down in the BlackRock Global Renewable Power Fund III and a $2.5M increase in insurance benefits paid/provided due to a maturing endowment block, alongside higher general expenses (+$1.4M).
  • Management reaffirmed a growth-focused roadmap, expanding the producing agent base (+50% since Q1 2024) and licensing footprint, while emphasizing persistent and profitable growth and capital discipline (no debt, positive operating cash annually since 2004).

What Went Well and What Went Wrong

What Went Well

  • First-year life and A&H premiums rose 49% YoY, driven by new products and expanded distribution, marking the tenth consecutive quarter of YoY growth in first-year premiums. “We continue to deliver on our strategic commitments…” – CEO Jon Stenberg.
  • Record total direct insurance in force reached $5.28B (+5% YoY), supported by strong domestic and international sales.
  • Adjusted total revenues increased to $58.5M from $56.7M, on higher life insurance premiums and stronger renewal premiums ($33.5M vs. $33.1M).

What Went Wrong

  • GAAP net loss of $1.6M and diluted EPS of -$0.03, driven by investment related losses (net -$2.9M), including a $3.1M unrealized loss in BlackRock GRP III.
  • Total benefits and expenses climbed to $57.4M (+$4.6M YoY), including a $2.5M increase in insurance benefits due to a maturing endowment block and higher equity comp costs tied to stock price appreciation.
  • Other general expenses increased by $1.4M, reflecting entry into new markets and expansion initiatives; adjusted after-tax operating income fell to $1.0M from $3.6M.

Financial Results

Headline Financials (Sequential and YoY)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$61.731 $63.474 $55.652
Diluted EPS ($USD)$0.05 $0.07 -$0.03

Adjusted Metrics

MetricQ1 2024Q4 2024Q1 2025
Adjusted Revenues ($USD Millions)$56.749 $67.637 $58.546
Adjusted Income Before Federal Income Tax ($USD Millions)$3.957 $8.009 $1.107

Margins

MetricQ1 2024Q4 2024Q1 2025
Net Income Margin (%)7.87%*5.70%*-2.92%*
EBIT Margin (%)8.53%*5.85%*-3.21%*
Values retrieved from S&P Global.*

Segment Performance (Q1 2025 vs Q1 2024)

Segment MetricQ1 2024Q1 2025
Life Insurance – Insurance premiums ($USD Millions)$27.861 $29.154
Life Insurance – Total revenues ($USD Millions)$43.139 $41.291
Life Insurance – Claims & surrenders ($USD Millions)$27.364 $34.142
Life Insurance – Income (loss) before tax ($USD Millions)$5.800 $0.243
Home Service – Insurance premiums ($USD Millions)$10.812 $10.643
Home Service – Total revenues ($USD Millions)$14.258 $14.173
Home Service – Claims & surrenders ($USD Millions)$5.749 $5.956
Home Service – Income before tax ($USD Millions)$0.623 $0.120

Operating KPIs

KPIQ3 2024Q4 2024Q1 2025
Total direct insurance in force ($USD Billions)$5.190B $5.228B $5.283B
Renewal premiums ($USD Millions)$36.0 $40.7 $33.5
Net investment income ($USD Millions)$17.377 $17.308 $17.377
Claims and surrenders ($USD Millions)$36.478 $41.961 $40.098
Cash from operations (quarter, $USD Millions)$9.7 $10.8 $0.7
Cash & equivalents ($USD Millions)$32.4 $29.3 $18.4

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue/Profit trajectoryFY 2025–FY 2026Qualitative: growth expected (Q4 2024) Qualitative commitment to profitable growth; no numerical guidance in Q1 2025 Maintained qualitative; no formal ranges
Licensing & distributionOngoing43 states + DC (Q4) Continued focus on expansion; record agents (+50% since Q1 2024) Raised qualitative capacity
Capital structureOngoingNo debt, positive operating cash annually No debt; positive operating cash annually since 2004 (reiterated) Maintained

No formal quantitative guidance ranges were provided; commentary remained qualitative.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
Product performance (final expense, international life)Strong sales; record insurance issued; first-year premiums +70%–84% First-year life & A&H premiums +49% YoY; continued renewal strength Growth sustained, moderating from extraordinary rates
Distribution/agents expansionAgents +86% YTD through 9/30/24; licensing in 42–43 states/DC Producing agents +50% since Q1 2024; +16% since 12/31/24; Americas Growth Plan Continued expansion; building scale
Investment portfolio impactsQ3 flat NII; Q4 BlackRock GRP III write-down ($3.3M) Q1 investment related losses net -$2.9M; $3.1M GRP III unrealized loss Investment losses remain a headwind
Claims/benefits dynamicsHigher reserves, remeasurement, death claims in Q3–Q4 Total insurance benefits +$2.5M; maturing endowment block pressure Elevated claims/benefits persist
Legal/regulatory$3.5M legal fee accrual in 2024 (trade secrets case) No new accrual disclosed in Q1 Stabilizing; prior-year item only
Capital & liquidityNo debt; strong liquidity; positive cash ops No debt; cash ops +$0.7M; cash $18.4M Conservative balance sheet; lower cash QoQ

No Q1 2025 earnings call transcript was available in our document catalog; management scheduled a May 22 fireside chat event.

Management Commentary

  • “We continue to deliver on our strategic commitments with our tenth consecutive quarter of year-over-year growth in first year premiums… our highest-ever total direct insurance in force of $5.28 billion.” – Jon Stenberg, President & CEO.
  • “Our producing agents have increased by 50% since the first quarter of 2024… We remain fully committed to profitable growth and capital management…”
  • “We believe we’re well positioned to drive long-term value creation… expanding niche markets globally, rapid sales force expansion, and expertise in profitable product development…”
  • Prior quarter context: “We are thrilled that our total annual premium revenue grew for the first time since 2017… highest-ever total direct insurance in force over $5.2 billion.”

Q&A Highlights

  • No Q1 2025 earnings call transcript was published; the company planned a fireside chat on May 22, 2025 (Singular Research Virtual Conference).
  • As a result, there were no disclosed analyst Q&A clarifications on quarterly trends or guidance in the quarter’s source documents.

Estimates Context

MetricConsensus (SPGI)ActualSurprise
Revenue ($USD Millions)$58.934M*$55.652M -$3.282M (-5.6% vs. consensus)*
Primary EPS ($USD)$0.05*$0.02*-$0.03*

Values retrieved from S&P Global.*
Note: GAAP diluted EPS was -$0.03; adjusted EPS was $0.02 in Q1 2025, indicating the consensus vs. “Primary EPS” refers to SPGI’s normalization rather than GAAP. *

Key Takeaways for Investors

  • Revenue and EPS missed consensus due to investment losses and higher insurance benefits, suggesting likely modest downward revisions to near-term EPS estimates. *
  • Core insurance momentum remains strong: first-year premiums +49% and record insurance in force, supporting medium-term revenue growth as new sales convert into renewals.
  • Profitability compression stems from claims/benefits and non-cash investment valuation impacts; watch for stabilization in GRP III marks and endowment block runoff impacts.
  • Operating discipline intact: positive operating cash flow since 2004 and no debt provide flexibility to invest in growth while managing volatility.
  • Segment detail shows Life Insurance profitability under pressure from higher claims; Home Service stable but modestly lower pre-tax income—monitor claims trajectory and expense control.
  • Book value per share rose YoY (to $4.37, adjusted $6.12), indicating capital accretion despite quarterly volatility; track AOCI sensitivity to rates.
  • Near-term trading: miss on both top-line and EPS and investment write-downs may be viewed negatively; medium-term thesis hinges on sustained premium growth, agent expansion, and conversion into renewal revenue. *
Notes:
- All consensus and margin values marked with * are retrieved from S&P Global.