Ambac Financial Group (AMBC) Financials

Ambac Financial Group (NYSE: AMBC) has experienced significant financial volatility over the past several quarters from 2022 through 2024. Here’s a summary of key trends and data based on their latest income statements, cash flow statements, and balance sheets:

• In Q1 2024, Ambac generated $96 million in total revenue, with a substantial $92 million coming from non-interest income (including $45 million in net realized & unrealized capital gains on investments).
• Their tangible asset base grew to approximately $13.5 billion by Q1 2024, up from $9.4 billion in Q3 2022, driven largely by an increase in trading account securities and other assets.
• Ambac's cash and cash equivalents improved from $29 million in Q3 2022 to $187 million in Q1 2024, indicating better liquidity.
• The company covered $38 million in property & liability insurance claims in Q1 2024, lower than the exceptionally high claims in late 2022, reflecting possible improved underwriting or reduced claims exposure.
• Net income attributable to common shareholders showed positive quarters including Q3 2023 with $66 million profit, and Q3 2022 with a $340 million profit, demonstrating earnings potential.

• Despite positive revenue, Q1 2024 posted a net loss of $28 million to common shareholders, with total non-interest expenses ($112 million) exceeding revenues, partly due to high amortization and operating expenses.
• Interest expense remains a large cost item, with $20 million in interest paid on long-term debt in Q1 2024; though this is lower than prior quarters (e.g., $48 million in Q4 2023), it still impacts profitability.
• The company maintains long-term debt around $3.5 billion as of Q1 2024, up from $2.2 billion in Q3 2022, suggesting increased leverage that could pressure interest coverage if earnings remain inconsistent.
• Cash flow from operations was flat at zero in Q1 2024, indicating limited cash generation from core business activities despite improvement in investing cash flows.
• Non-controlling interest remained stable at about $200 million in Q1 2024, showing consistent minority equity participation.

• The company has faced significant multi-quarter losses, including a severe loss of $382 million in Q4 2022 continuing operations and large net losses in several quarters of 2023 and 2024, indicating ongoing challenges to profitability.
• Q4 2022 and several 2023 quarters showed large negative net realized and unrealized capital gains impacting total revenue negatively, which points to volatility in investment income.
• High amortization expenses ranging between $8 million and $28 million per quarter add pressure to the bottom line.
• Property & Liability Insurance Claims spiked sharply to $350 million in Q4 2022 and $353 million in Q3 2022, indicating exposure to elevated claims that negatively affected earnings.
• Equity saw fluctuations influenced by accumulated other comprehensive income (AOCI) losses exceeding $80 million to $315 million negative at various points, pressuring shareholders' equity.

Summary: Ambac Financial Group has a highly volatile earnings history characterized by swings in investment gains and insurance claims. While recent quarters show improvement in revenue and asset base growth, profitability remains challenged by elevated expenses, interest costs, and capital volatility. Increased long-term debt and fluctuating operating cash flows suggest cautious monitoring is warranted. Investors should pay attention to future quarters for signs of sustainable earnings recovery and expense management.