Executive Summary

Hippo delivered revenue of $120.6M (+26% YoY), GAAP diluted EPS of $3.77 (benefiting from a $95.0M gain on sale), and positive adjusted EPS of $0.70 on adjusted net income of $18.3M; net loss ratio improved 25ppt YoY to 48% and combined ratio improved 28ppt to 100% .
Management raised FY25 guidance: GWP to $1.09–$1.11B, revenue to $465–$468M, consolidated net loss ratio to 63–64%, net income to $53–$57M, and adjusted net income to $10–$14M .
Mix-shift and diversification advanced: CMP and Casualty GWP up 123% and 137% YoY (to $66M and $76M), while Homeowners GWP declined 9% YoY; platform expanded to 36 programs and first policies were bound via Westwood in October, with volume expected to ramp over 3–6 months .
Strategic catalysts for investor focus: clearer consolidated reporting, improved underwriting and expense efficiency, and equity accretion (BVPS to $16.64, +14% from YE24), supported by the Baldwin transaction and operating discipline .

What Went Well and What Went Wrong

What Went Well

Underwriting results: net loss ratio improved to 48% (−25ppt YoY) and combined ratio to 100% (−28ppt), aided by minimal CAT losses and better attritional/expense ratios .
Diversification and scale: CMP and Casualty GWP growth of +123% and +137% YoY offset Homeowners contraction; total GWP +33% YoY to $311.2M and NWP +30% YoY to $117.9M .
Management execution and tone: “Q3 was a breakout quarter… significantly improved underwriting results” — Rick McCathron, President & CEO .
Equity and ROE: BVPS rose to $16.64; adjusted ROE annualized at 19% in Q3 .

What Went Wrong

Homeowners softness: Homeowners GWP fell 9% YoY to $101.0M amid competitive E&S pricing and admitted market rebound; management is prioritizing underwriting discipline .
Commission income decline: Commissions decreased by ~$5M YoY due to sales of First Connect and the homebuilder distribution network, partially offset by NEP growth .
Net retention slightly below target: Net retention was 38% vs. the long-term goal of 40–45%, reflecting selective risk retention to preserve underwriting stability .

Financial Results

Consolidated P&L and Ratios (Quarterly)

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($M)	$110.3	$117.3	$120.6
Diluted EPS (GAAP) ($)	($1.91)	$0.05	$3.77
Diluted Adjusted EPS ($)	($1.41)	$0.65	$0.70
Net Loss Ratio (%)	106%	47%	48%
Expense Ratio (%)	53%	53%	52%
Combined Ratio (%)	159%	100%	100%

Volume and Retention (Quarterly)

Metric	Q1 2025	Q2 2025	Q3 2025
Gross Written Premium ($M)	$210.9	$298.6	$311.2
Net Written Premium ($M)	$100.3	$106.9	$117.9
Net Retention (%)	48%	36%	38%
Net Earned Premium ($M)	$87.3	$94.0	$99.7
Book Value Per Share ($)	$12.83	$13.02	$16.64

Segment Mix: GWP by Line of Business (YoY comparison)

Line of Business	Q3 2024 ($M)	Q3 2025 ($M)	Change ($M)	Change (%)
Homeowners	$111.3	$101.0	($10.3)	(9.3%)
Renters	$52.9	$59.3	$6.4	12.1%
Commercial Multi-Peril	$29.6	$66.0	$36.4	123.0%
Casualty	$32.2	$76.3	$44.1	137.0%
Other	$8.4	$8.6	$0.2	2.4%
Total	$234.4	$311.2	$76.8	32.8%

Estimates vs Actual (Q3 2025)

Metric	S&P Global Consensus	Actual
Primary EPS ($)	3.19*	GAAP Diluted: 3.77 ; Diluted Adjusted: 0.70
Revenue ($M)	117.75*	120.6
EBITDA ($M)	(0.95)*	~8.2

Values with asterisks (*) retrieved from S&P Global.

Notes: EPS conventions differ; Hippo reported both GAAP diluted EPS ($3.77, including the gain on sale) and diluted adjusted EPS ($0.70) . The “Primary EPS” consensus may not align with adjusted EPS reporting; revenue and EBITDA both exceeded consensus thresholds (revenue beat ~$2.9M; EBITDA beat vs negative expectation) .

Guidance Changes

Metric	Period	Previous Guidance (as of Q2)	Current Guidance (Q3)	Change
Gross Written Premium ($B)	FY 2025	$1.07–$1.10	$1.09–$1.11	Raised
Revenue ($M)	FY 2025	$460–$465	$465–$468	Raised
Consolidated Net Loss Ratio (%)	FY 2025	67–69	63–64	Improved
Net Income ($M)	FY 2025	$35–$39	$53–$57	Raised
Adjusted Net Income ($M)	FY 2025	($4)–$0	$10–$14	Raised
Q4 Net Income ($M)	Q4 2025	N/A	$1–$5 (Q4 guidance in table)	Set

Drivers cited: stronger top-line growth, improved loss ratio trends, cost discipline, and Baldwin transaction economics .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
Portfolio diversification across LOBs	Q1: reduce CAT-prone exposure; diversify via Spinnaker programs ; Q2: add MGA programs; outline FY2028 >$2B GWP targets	CMP/Casualty GWP +$80M; Homeowners share down to 32% of GWP; 36 programs live	Strengthening diversification
Underwriting & loss ratio	Q1: net loss ratio 106% due to LA wildfires ; Q2: net loss ratio 47% with favorable development	Net loss ratio 48% with near-zero CAT; attritional improvements; expense ratio 52%	Sustained improvement
New homes & Westwood channel	Q2: Baldwin partnership; sale of homebuilder assets; access to 3× new home closings	First policies bound in Oct; 3–6 month volume lag expected before ramp	Ramping
Risk retention & reinsurance	Q2: net retention approached 40–45% target; selective program risk	Net retention 38%, below long-term target; continued selective retention	Within target range but cautious
AI/data initiatives	CDO appointment announced 9/30/25	Management highlighted Robin Gordon’s CDO role during call	Increased focus on data/AI
Capital actions (surplus note, buybacks)	Q2: $50M surplus note; 514k share buyback for $14.5M	BVPS up 14% YoY; equity $422M; surplus note reflected on balance sheet	Strengthening capital base

Management Commentary

“Q3 was a breakout quarter… grew gross written premium by 33%, expanded our platform to 36 programs, and delivered significantly improved underwriting results” — Rick McCathron, President & CEO .
“We are raising our full-year 2025 outlook… GWP to $1.09–$1.11B; revenue $465–$468M; net loss ratio 63–64%; net income $53–$57M; adjusted net income $10–$14M” — Guy Zeltser, CFO .
“We do not intend to disclose program-level performance going forward… HHIP net loss ratio improved 29ppt YoY to 50%” — Guy Zeltser, CFO .
On homeowners competition and pricing adequacy: admitted market rebound and E&S price softening; Hippo feels rate adequacy is solid and does not anticipate repricing beyond inflationary trends — Rick McCathron .

Q&A Highlights

Casualty growth and risk retention: New lines include cyber and CGL across SMBs, real estate, construction; initial retention is low until program track record is established (fronted, then increase retention with confidence) .
Homeowners dynamics: E&S price softening and admitted market rebound; management comfortable with portfolio rate adequacy; no near-term repricing expected beyond inflation adjustments .
Business mix outlook: Homeowners expected to grow in absolute terms alongside total portfolio growth toward ~$2B GWP by 2028, with further net diversification anticipated .
Capital allocation: Capital prioritized to support surplus for >$2B GWP target and opportunistic acquisitions to accelerate diversification; comfortable cash and capital ratios .

Estimates Context

Q3 2025 revenue beat consensus: $120.6M actual vs $117.75M consensus (+$2.85M) .
EBITDA outperformed: ~$8.2M actual vs $(0.95)M consensus .
EPS comparability: S&P “Primary EPS” consensus was $3.19*, while Hippo reported GAAP diluted EPS of $3.77 and diluted adjusted EPS of $0.70; differences reflect inclusion/exclusion of the $95.0M gain on sale in GAAP vs adjusted measures .

Values retrieved from S&P Global.

Implications: Street models will likely revise revenue and loss ratio assumptions upward for FY25, while reconciling EPS frameworks (GAAP vs adjusted) given the transaction gain and clearer non-GAAP definitions .

Key Takeaways for Investors

Underwriting inflection looks durable: net loss ratio 48% with minimal CAT, combined ratio at 100%, and continued expense discipline — supports medium-term profitability trajectory .
Diversification is working: CMP and Casualty growth offset Homeowners softness, reducing volatility and improving ROE potential; 36 programs now live .
Guidance raised across all key metrics; watch execution in Q4 on net income ($1–$5M) and FY loss ratio (63–64%) to anchor 2026 targets .
Westwood homeowners distribution ramp in 3–6 months could accelerate premium and geographic diversification in 2026; monitor new home closings flow-through .
Rate adequacy intact in homeowners despite E&S softening and admitted market rebound; expect selective growth with underwriting discipline .
Equity accretion and capital flexibility: BVPS up 14% from YE24; surplus note on balance sheet; buyback executed in Q2 — supportive of capital deployment and stability .
Data/AI capability build-out (CDO appointment) should enhance risk selection and claims, supporting further attritional loss ratio improvement over time .

Appendix: Additional Data

Q3 2025 Consolidated Statement of Operations (selected)

Component	Q3 2025	Q3 2024
Net earned premium ($M)	$99.7	$70.6
Commission income, net ($M)	$10.5	$15.7
Service and fee income ($M)	$3.1	$3.0
Net investment income ($M)	$7.3	$6.2
Total revenue ($M)	$120.6	$95.5
Losses & LAE ($M)	$47.5	$51.6
Gain on sale of business ($M)	($95.0)	($8.2)
Net income attributable to Hippo ($M)	$98.1	($8.5)

Loss Ratio Components (Q3 2025 vs Q3 2024)

Metric	Q3 2025	Q3 2024
CAT losses ratio (%)	0.0%	22.8%
Non-CAT losses ratio (%)	48.0%	50.3%
Net loss ratio (%)	48.0%	73.1%
Expense ratio (%)	52.0%	54.8%
Combined ratio (%)	100.0%	127.9%

Prior Quarters (context)

Q2 2025 highlights: Revenue $117.3M; net loss ratio 47%; adjusted net income $17.0M; guidance initially raised across metrics .
Q1 2025 highlights: Revenue $110.3M; net loss ratio 106% due to LA wildfires; raised surplus note; outlined Investor Day targets .

Hippo Holdings Inc. (HIPO)·Q3 2025 Earnings Summary