Heritage Insurance (HRTG) Financials

Heritage Insurance Holdings, Inc. (NYSE: HRTG) Financial Summary – Last Four Years

Heritage Insurance has shown a generally improving financial profile over the past four years, highlighted by steady growth in net income and earnings per share, but also demonstrating some volatility in insurance claim expenses and investments. Below is a breakdown of key financial trends based on the provided quarterly data.

• Net Income Growth: Heritage’s consolidated net income increased significantly over the period. For example, in Q1 2025, net income was $30.47 million, up from $14.0 million in Q1 2023 and from losses experienced in 2022. This strong upward trend suggests improving profitability.
• Earnings per Share (EPS) Improvement: Basic and diluted EPS also increased in line with net income. In Q1 2025, EPS stood at $0.99 compared to $0.55 in Q1 2023, reflecting solid earnings growth and shareholder value creation.
• Revenue Growth: Total revenue has generally increased over the years, with premiums earned rising from $166 million in early 2023 to over $200 million by early 2025, showing strong core insurance business expansion.
• Improved Operating Cash Flow: Net cash from continuing operating activities turned positive and showed improvement in recent quarters, such as $837,000 in Q1 2025 compared to substantial negative cash from operating activities in prior years (e.g., negative $56 million in Q4 2024), indicating better cash management.
• Investment Gains: Net realized and unrealized capital gains on investments have remained robust, contributing positively to non-interest income. The figure was $8.57 million in Q1 2025, up from previous quarters, supporting overall profitability.
• Stable Debt Levels with Some Repayments: Long-term debt remained roughly stable around $95 million to $126 million range but there were consistent repayments of debt, e.g., $21.65 million paid in Q1 2025, which reduces financial leverage over time.
• Consistent Asset Base: Total assets have been stable between approximately $2.1 billion and $2.6 billion, demonstrating steady scale. Growth in “Unearned Premiums Asset” balances highlights underwriting activity, though it requires continuous management to avoid future claims issues.
• Insurance Claims and Expenses: Property & Liability insurance claims have fluctuated but remain a significant expense, with $99 million in Q1 2025 and peaking above $130 million in some quarters. While expected for an insurer, managing claim costs is critical for margin improvement.
• Volatility and Negative Earnings Periods: Notably, Heritage experienced a large loss in Q3 2022 with a net loss of $48.24 million and negative EPS of -$1.83, reflecting operational challenges or prior claims volatility. This volatility introduces risk and may affect investor confidence.
• High Non-Interest Expenses and Impairment Charges: Non-interest expenses, including acquisition costs and operating expenses, remain high relative to revenue. Additionally, there was a significant impairment charge of $91.9 million in Q2 2022, which adversely impacted profitability. Managing these costs will be critical going forward.

Summary: Heritage Insurance Holdings has rebounded strongly from significant losses in 2022 to positive and growing net income and earnings per share in 2024 and 2025. The insurance company’s main revenue driver – premiums earned – continues to grow, supported by investment gains and operating cash flow improvements. However, the company must continue managing insurance claims and overhead costs effectively, as these remain relatively high and have caused earnings volatility in the past. Investors should watch ongoing trends in claims expenses, operating cash flow, and debt management to assess sustainability of this positive momentum.