Ambac Financial Group (OSG) Q3 2024 earnings summary

Executive summary

• Achieved a milestone quarter with the acquisition of Beat Capital Partners, expanding the MGA platform from 5 to 19 and advancing the transition to a pure-play P&C business.

• Specialty P&C premium production surged 86% year-over-year to $260 million in Q3 2024, with YTD premium reaching $611 million, driven by acquisitions and organic growth.

• Announced and commenced a $50 million share buyback program, with up to $15 million allowed before the legacy business sale closes.

• Received strong shareholder and PRA approval for the sale of the legacy financial guarantee business (AAC) for $420 million, with only one regulatory approval remaining and closing expected by early 2025.

• Total revenues rose to $114 million in Q3 2024 from $74 million in Q3 2023, reflecting growth in specialty P&C and insurance distribution.

Financial highlights

• Reported a net loss of $28 million ($0.63 per diluted share) for Q3 2024, compared to net income of $66 million in Q3 2023, mainly due to $20 million in transaction and acquisition-related interest expenses.

• Adjusted net loss was $19 million ($0.46 per diluted share), versus adjusted net income of $94 million in Q3 2023.

• Gross written premium was $113.6 million, up 43% year-over-year; net premiums earned were $33.1 million, up 81%.

• EBITDA for Q3 2024 was $6.3 million, down from $90.8 million in Q3 2023; Cirrata YTD EBITDA was $10 million with an 18% margin.

• Stockholders' equity was $1.47 billion ($30.89/share) at September 30, 2024, up from $1.36 billion at December 31, 2023.

Outlook and guidance

• Targeting over $1.4 billion in premium for 2025 and $70–$80 million EBITDA by 2028, with organic growth as the primary driver.

• Anticipates becoming a pure-play P&C franchise after the sale of the legacy business, with rebranding expected in 2025.

• Tracking well to previous guidance for gross written premiums and program fees, with some Q4 seasonality expected.

• Proceeds from the AAC sale will be used to repay Beat acquisition debt and support capital allocation.