Hippo (HIPO 15.33%), a technology-centric home insurance provider, released second-quarter fiscal 2025 results on August 5, 2025. The company reported its first GAAP net profit in Q2 2025 while outperforming analyst expectations on both the top and bottom line, with GAAP revenue of $117 million and non-GAAP EPS of $0.17. GAAP revenue was $117.3 million, above the $114.83 million estimate and up 31% year-over-year. GAAP earnings per share were $0.05, compared to the $(0.68) non-GAAP estimate and a $(1.64) GAAP basic and diluted net loss per share for Q2 2024. With notable improvements in loss ratios and expense control, the quarter marks a significant operational turning point for Hippo.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $0.05 | $(0.68) | $(1.64) | -103% |
| Revenue (GAAP) | $117.3 million | $114.83 million | $89.6 million | 31% |
| Adjusted Net Income (Non-GAAP) | $17.0 million | $(19.5) million | N/A | |
| Consolidated Net Loss Ratio | 47% | 94% | (47) pp | |
| Gross Written Premium | $298.6 million | $257.6 million | 16% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
About Hippo and Its Business Model
Hippo is an insurance technology company that aims to modernize the U.S. home insurance market, combining digital platforms, data, and automation into the insurance buying and claims process. Its business targets homeowners, offering personalized insurance products and supporting services through a customer-centric, technology-driven model. The company’s operations span direct-to-consumer offerings, partner-driven programs, and insurance-as-a-service models for other insurers or brokers.
Recently, Hippo has focused on tighter underwriting standards, greater use of data for risk selection, and expanding distribution through strategic partnerships. Its key success factors include leveraging automation for cost control, managing risk through reinsurance and premium retention strategies, and growing in diversified insurance segments such as insurance-as-a-service and new home coverage channels.
Quarter in Review: Financial and Operational Highlights
During Q2 2025, Hippo posted its first quarterly GAAP net profit and a sharp swing in adjusted net income (non-GAAP), moving from a $19.5 million loss in Q2 2024 to a $17.0 million profit. This performance reflected both top-line strength and improvements in underwriting. Gross written premium reached $298.6 million, up 15.9% from the prior-year quarter. In the core Hippo Home Insurance Program, however, gross written premium dropped 9% year-over-year as the company shifted away from riskier legacy exposures, but this was offset by gains in other channels.
Loss ratios—a key measure of insurance profitability—showed notable progress. The consolidated net loss ratio improved to 47%, down from 94% for Q2 2024, reflecting better risk selection, rate changes, and one-off reserve releases. The Hippo Home Insurance Program net loss ratio dropped to 55%, a 58-percentage point improvement. Reserve releases contributed around 7.5 percentage points to this result, providing a one-time boost. Net earned premiums (GAAP) for hybrid fronting programs increased more than twofold year-over-year.
Expense control played a significant role. Sales and marketing, technology and development, and general administrative expenses fell by $6 million year-over-year. Fixed expenses as a percentage of revenue dropped from 46% in Q2 2024 to 30%, demonstrating improved operating leverage despite ongoing investments in automation and digital infrastructure. Revenue from insurance-as-a-service operations almost doubled, climbing 97% to $48.0 million as Hippo deepened partner integrations and expanded its risk retention.
On the partnership front, the sale of homebuilder distribution assets to The Baldwin Group not only expanded Hippo’s market reach, particularly in new home insurance, but also resulted in a $90 million gain to be booked in Q3 2025. This move supports further diversification and aims to increase premium volume from the new homes channel, which is viewed as less volatile from a claims perspective than legacy housing stock.
Product Families and Segment Dynamics
Hippo’s core offerings consist of homeowners’ insurance policies provided directly to customers or through the Hippo Home Insurance Program, and insurance-as-a-service products, which allow third parties to bundle and distribute policies on Hippo’s platform. The services arm supports partners and policyholders. In Q2 2025, insurance-as-a-service revenue reached $48.0 million, reflecting partner-driven growth and increased risk retention. The Hippo Home Insurance Program segment reported $60.6 million in revenue for Q2 2025, up 8% year-over-year, supported by improved reinsurance and pricing strategies.
Services revenue declined 3% to $11.7 million. This segment supports Hippo’s business partners by providing a digital platform for independent agents to access insurance carriers and products. Despite the slight revenue dip, operating losses reduced compared to the previous year as cost structures were adjusted and operational improvements continued. Gross written premium growth in hybrid fronting programs and strategic expansion into new commercial lines further diversified Hippo’s revenue base and risk profile for future quarters, as evidenced by a 16% year-over-year increase in gross written premium to $299 million.
Forward Guidance and Upcoming Developments
Hippo raised its guidance for fiscal 2025. It now expects gross written premium of $1.07–1.1 billion for the full year, up from prior forecasts, and total GAAP revenue of $460–$465 million for the full year, even after accounting for reduced commissions from the recent asset sale. Management also improved its consolidated net loss ratio outlook to 67–69% for the full year, from the previous 72–74% range. Net income (GAAP) guidance shifted from an expected loss of $65–69 million to positive net income of $35–39 million for the full year, mainly due to better loss ratio trends and the approximately $90 million gain from the homebuilder asset sale to be realized in Q3 2025.
Adjusted net income (non-GAAP) for the full year is now expected at breakeven to a loss of $4 million, better than the earlier loss forecast of $10–14 million. The one-time benefits—such as the reserve releases and asset sale gain—materially affect these projections; without them, profitability would have advanced but by a narrower margin. With these outlook changes, Hippo’s focus in coming quarters will be on sustaining underwriting discipline, expanding new business from its diversified portfolio, and managing costs as the company scales risk participation and partner networks. HIPO does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
