Greetings, welcome to the Hagerty first quarter 2023 earnings call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jay Koval. Please go ahead. Thank you, operator. Good morning, everyone. Thank you for joining us to discuss Hagerty's results for the first quarter of 2023. I'm joined this morning by McKeel Hagerty, Chief Executive Officer, and Patrick McClymont, Chief Financial Officer. During this morning's conference call, we will refer to an accompanying presentation that is available on Hagerty's investor relations section of the company's corporate website at investor.hagerty.com. Our earnings release, accompanying slides, and letter to stockholders covering this period are also posted on the IR website. Our 8-K filing is also available there, along with our earnings, press release, and other materials. Today's discussion contains forward-looking statements and non-GAAP financial metrics, as described further on slide 2 of the earnings presentation. Forward-looking statements, including statements about our expected future business and financial performance, are not promises or guarantees of future performance. They are subject to a variety of risks and uncertainties that could cause the actual results to differ materially from our expectations. For a discussion of material risks and important factors that could affect our actual results, please refer to those contained in our filings with the SEC, which are also available on our investor relations website and at SEC.gov. The appendix of the presentation also contains reconciliations of our non-GAAP metrics to the most directly comparable GAAP measures that are further supplemented by this morning's 8-K filing. With that, I'll turn the call over to McKeel, our founder and CEO. Thanks, Jay, and good morning, everyone. We appreciate you taking the time to join our first quarter 2023 earnings call. Over the last 6 months, we have been working diligently to re-engineer our business processes with the goal of delivering high rates of bottom-line growth, fueled by the combination of sustained top-line momentum and significantly improved margins. Patrick will cover the steps we have taken in more detail, but I couldn't be prouder of the Hagerty team and what we have accomplished over the first 3 months of 2023. Slide 3 of our investor deck shares some of the key first quarter highlights, including total revenue gains of 30% in the quarter, powered by written premium growth of 18%. We anticipated a strong start to the year, and while the first quarter is our seasonally smallest, contributing roughly 20% of a full year revenue, we are encouraged by the solid consumer interest in Hagerty's suite of products. In our risk-taking entity, Hagerty Reinsurance, premiums jumped 32% due to the growth in written premium and our increased level of quota share to 80%. We have continued to assume more of the risk and premium associated with our strong and stable underwriting capabilities. Membership, marketplace, and other revenue jumped 63%, fueled by 22% membership growth, $7 million of marketplace revenue, seen on Slide 4, and a 32% increase in other revenue, including sponsorships. Our team continues to make steady progress with the State Farm integration shown on Slide 5 on both the technology side and the people side as the teams prepare to begin writing new policies under the 10-year agreement later in 2023. In short, we have a powerful growth story and our top-line momentum has continued into 2023. Over the last two calls, we have talked at length about our heightened focus on managing expenses in an uncertain economic environment. This cost discipline will help us deliver the profitability necessary to invest in our future growth ambitions, saving driving and fueling car culture for future generations. These efforts resulted in a significant inflection in our profit trajectory during the 1st quarter as we delivered positive Adjusted EBITDA of $7 million, a $13 million improvement over the prior year period's $6 million loss. We also announced an organizational restructuring in early April that should drive additional cost savings over the coming quarters. In short, our team is executing well on our profitable growth ambitions, and we are well positioned to deliver on our 2023 key initiatives shown on Slide 6, including, first, delivering high rates of revenue growth powered by sustained double-digit written premium gains and incremental revenue from membership and marketplace. We are reconfirming total revenue growth of 22%-26% for the year. Second, continuing our evolution into a vertically integrated insurance business. Third, significantly improving the profitability of our business through cost containment and operational efficiencies. We believe we are well on track to deliver the upgraded profit outlook for 2023 Adjusted EBITDA of $55 million-$75 million. Our teams have mobilized around this short list of priorities. We feel confident about the pivot to profitability that we have begun to deliver in 2023. Let me now turn the call over to Patrick to cover the financials in more detail. Thank you, McKeel, and good morning, everyone. Let's dig into the strong results from the first quarter shown on Slides 7 and 8. As McKeel mentioned, we delivered 30% growth in total revenue, including strong gains in core insurance, marketplace, and membership. Written premium increased 18% in line with our expectations for a very strong start to the year. Hagerty's brand strength can be seen in the 88% retention and quality of written premium growth, with equal contributions from new business count and rate increases. Commission and fee revenue grew 19% to $75 million due to the strong growth in written premiums. Membership, marketplace, and other revenue increased 63% to $27 million, benefiting from an increase in total paid members, a transition to a single tier membership at $70, and an additional $7 million in marketplace revenue. Earned premium grew 32% to $117 million, driven by new written premium growth and another 10-point increase in our contractual reinsurance quota share to 80%. Our loss ratio remained stable in the quarter at 41%. Turning to profitability, shown on slide 9, we reported a fourth quarter operating loss of $16 million compared to a loss of $13 million in the prior period. This operating loss includes a $6 million restructuring charge related to the reduction in force that we implemented in the quarter to drive margins higher, as well as reduced hiring plans and other cost containment initiatives. Focus areas included reducing the total fixed cost to serve our customers, including the member service center, underwriting and claims, as well as refining the infrastructure behind our cost to acquire new customers through our direct and wholesale channels. This restructuring is the continued evolution in our business model that we embarked on six months ago to drive significantly improved profitability during the coming years and should result in additional annualized cost savings of $20 million-$25 million, of which we expect to realize roughly $15 million over the balance of 2023. The operating loss also incorporates $4 million of accelerated amortization from the write-down of the majority of our media assets in the quarter related to lower than anticipated advertising revenue. While we expect less direct monetization from Hagerty Media, we will continue to leverage this high-quality content as an effective way to bring in new customers and drive engagement across the Hagerty ecosystem. Net loss for the quarter was $17 million compared to a net gain of $16 million a year earlier. The year-over-year change in net loss was primarily driven by the $32 million swing in the fair value adjustment related to our private and public warrants. GAAP loss per share was $0.06 based on our 83 million weighted average shares of Class A stock outstanding. Our Adjusted EBITDA in the fourth quarter was positive $7 million, a $13 million improvement over the $6 million loss in the prior year period. The year-over-year improvement in Adjusted EBITDA is a result of continued growth paired with our disciplined approach to costs and focused initiatives. We expect to see this improved trajectory continue over the balance of 2023. Let me now move on to our 2023 outlook shown on slide 10. As McKeel mentioned, given the strong start to the year, we are reconfirming our outlook for total revenue growth of 22%-26%, powered by written premium growth of 11%-13%. The Hagerty brand is on track to add another quarter of a million members in 2023, creating a growing base of auto enthusiasts to provide our products and services. Moving down the P&L, we now expect full year Adjusted EBITDA of $55 million-$75 million, equivalent to 6%-8% margins. This increased outlook incorporates the additional expected savings from the recent restructuring and should accelerate our return to double-digit EBITDA margins. In summary, we are well on our way toward achieving our 2023 plan for profitable growth. We have judiciously removed back-of-the-house costs that do not impact our brand strength and excellent customer service, as seen in our Net Promoter Score of 83 and retention of 88%. This recipe should allow us to continue to gain share over the coming years and deliver significantly improved margins and profitability. Let's now open the call to your questions. Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Your first question comes from Mark Hughes with Truist. Please go ahead. Yeah, thank you. Good morning. Morning, Mark. Any change in the State Farm timing or momentum, this quarter compared to what you might have discussed on the four Q call? You know, thanks, Mark. It's a great question, and, you know, we're still feeling quite confident that we're gonna be launching in our four states yet this year. We were code complete on the integration between the technical teams in April, and we're continuing down the path. Really no change. We're gonna be up and running, you know, this year in the second half of the year with those four states. The intention between the teams, which is to get going and keep the momentum accelerating really. Really the momentum question, I think, is the key piece. State Farm continues to be very committed to the program. The teams are excited about it and they continue growing their own business, so that's gonna be good for us. I see your the loss ratio very steady. Any impact here from inflation? Could you talk about the kind of the price versus inflation dynamic as you're seeing it play out? Yeah. Mark, as you know, we might have talked about before, there's, you know, last year we were seeing this tricky combination of some increased costs in, you know, a few pieces of loss costs. We've really seen some nice stabilization this year. Some of it due to, of course, our rates coming through, but also, just the combination of valuations and managing expenses through the claim process seem to be working very effectively. We're feeling really quite good about our targets here. Yeah. You give a pretty good range of EBITDA guidance, $55 million-$75 million. What needs to happen in order to hit the higher end of that range? What are some of the variables that you need to see play out in order to, you know, to do again, the high end of that range? Sure. It's Patrick. Mark, good to talk to you again. Yeah, we feel good about the range. We feel confident in sort of at the midpoint of the range right now. I would say that we've started the year from a revenue standpoint, particularly written premium related revenue, with a little bit of wind behind our sails. It was a good first quarter. We feel good about that. Not enough that we're going to declare, you know, that we need to move the guidance, but it does give us confidence that we should be within that range. On a go-forward basis, it's continuing to deliver written premium growth. It's continuing to deliver new customers, both of which are off to a good start so far this year. The first quarter is seasonally slow, right? The haymaking quarters are the second and third quarter. We've got to keep pushing that advantage. As you work down the P&L, we're doing everything possible to make sure that we're, you know, being very focused on costs, right? We did a cost exercise at the end of last year. We did another one during the first quarter. We're trying to insulate the P&L and increase the likelihood that we hit our plan, which would put us, you know, right in the midpoint of that range. I think it's lining up pretty well right now. It's just too early in the year to declare that we're going to be, you know, more near the top than the bottom of the range. We'll keep pushing. Appreciate that. Thank you. Next question, Greg Peters with Raymond James. Please go ahead. Hey, good morning. This is Sid Schultz for Greg. Just wanted to go back to the underwriting results. I just wanted to, I guess, clarify or hear your comments to see if. Did you see any changes in severity or frequency in the first quarter compared to the end of the year last year? I think the better way for us to talk about it would be relative to what we've seen in other first quarters, right? Keep in mind that our business is so seasonal and, you know, these wonderful cars are typically resting during the first quarter of the year in most places. When we look at it relative to last year and the year before, we're kind of right in the middle. It's what we had predicted in terms of loss ratio. You know, our mix is heavily skewed towards the property side of things, physical damage as opposed to liability. That's coming in line with what we had expected. I think you should assume that we're off to a as expected start to the year, consistent with historical results. Okay. Understand. Thank you. Next question, Edward Reilly with EF Hutton. Please go ahead. Hey, guys. Thanks for taking my question. I'm new to the story here. It looks like the marketplace is growing nicely. Just at a broad level, could you maybe talk about customer acquisition strategy within this segment, and how you can increase market share going forward? No, thank you, and nice to talk to you. Our marketplace consists of kind of three distinct, you know, groups of how we think of that. We have our live auction strategy, which is really exciting, and that launched midyear last year with a couple of really fun and exciting sales that delivered great top and bottom line results, and that's very much a client-based business. The team that when we acquired the Broad Arrow Group, you know, there's a group that knows these clients. They're out there, you know, working with them to acquire cars, helping them sell cars, helping them find cars. Very often, those transactions take place at live auctions. There's also a robust private sale aspect to that, you know, when a customer wants something and they can just kind of get it done in between a live auction, whether it's buying or selling. You know, that we're off to a great start there. We're really excited that we're the official partner with Porsche North America to do their 75th anniversary sale in June in Atlanta at the Porsche Experience Center. That's a real marquee auction. We just had our Amelia Island auction a couple of months ago, we'll have our Monterey sales. And the idea here is that we may build out a couple more events during the course of the year. Again, client-focused, maybe a large collection becomes available, and that's what we focus on there. Same thing with the private treaty side. The digital auction strategy is the most scalable piece of our marketplace strategy, and that we're still I would describe us as just kind of coming out of the beta test mode. You know, there are a number of, you know, great digital platforms out there where you can buy and sell cars of these types. We believe ours is differentiated because we're going to be really emphasizing the trust and transparency that we have with the Hagerty brand. You know, really delivering on valuation, making sure information is much as available as possible, and that people, when they buy something, that they really get what they're paying for. We're going to start seeing more Scaling up of that business in the coming months and quarters and years ahead. We've already started to put more volume through the digital channel. For us, we have, you know, just short of 800,000 or so paid members. That's our main marketing group where we're gonna be working with them to, you know, help them buy and sell cars, whether it's at live auctions or on digital. We're also using our social channels and all of our other marketing channels to acquire those new customers. I'd remind one thing to you, since you're kind of new to this story, is that, you know, a cool thing about our scale in this total addressable market is that, you know, within the last year, our members bought and sold sort of 300,000 cars and over $12 billion worth of value there from a transactional standpoint. That's what we're targeting first. We're less concerned about what's happening outside of our world, more concerned about what's happening inside of our member group. Okay, great. Thanks for that. Just given the cost initiatives you've taken recently, do you see any challenges in maintaining that Net Promoter Score going forward? Well, thank you. Net Promoter Score, while not a financial metric, is something that's very important to us because we believe it's one of the most important metrics to not only compare how your customers think of you, the fact that, you know, having this high of a Net Promoter Score, 82, 83, I mean, that tells you that the vast majority of the interactions we're having with our clients or members are leading to them telling their friends to come to us to buy from us or to use our services. We've seen our Net Promoter Score hold really strong heading into this year, just like we're seeing with the tailwinds of our growth. It's important to recognize that with our cost saving initiatives, our restructuring, this has not been one where we've gone in and limited our ability to serve frontline members on a day-to-day basis. It was much more in supervisory positions and in new hiring strategies. You know, we're focused on the member, and we need that Net Promoter Score to help deliver our growth. We've actually pulled the data, and so this was a profitable company to the tune of kind of high single, low double-digit profit margins, you know, 8, 9, 10 years ago and was still in the 80s from an NPS perspective. There's a keen focus on delivering value for the customer and really celebrating that customer, and that hasn't changed. What we've really focused on is you think of it as infrastructure, right? When it comes to the frontline and delivering for the customer, that doesn't change. When it comes to how we do that behind the scenes, back of house, that's what we have focused on, we'll continue to focus on to deliver efficiencies. Okay, great. Got it. Thank you very much. Once again, if you would like to ask a question, please press star one on your telephone keypad. Next question comes from Pablo Singzon with JPMorgan. Please go ahead. Hi, good morning. Any reason why the 18% growth in premium growth should not carry over through the rest of the year? Your guidance for the full year is implying a step down to about 11%-12% for the subsequent quarters this year. It's the seasonality and also how rate increases flow through. As I said earlier on the call, we started the year with a little bit of wind behind our sails, so a little bit better than what we expected in terms of written premium growth, but not much. It's pretty much in line because we did think about exactly when the rate increases flow through in different states, and then that is obviously influenced or how that flows through is influenced by renewals. When you plan it out over the course of the year with the seasonality and with the rate increases, we still think that that 11%-13% range makes sense. You know, right now I feel very comfortable at the middle point of that range, and hopefully we'll continue to have a little more wind behind our sails. it's a good, it's a good estimate for now based on seasonality. Got it. Then just moving to the loss ratio, does the 41% this quarter reflect the higher loss pick set up last year? I think it was in the third quarter. Just wanted to check that those picks are carrying through in the current loss ratio that you report. Yes. Last year, we took an increase in the reserves for liability. That did reflect what was going on in terms of inflationary environment, the social inflation. That logic is baked into how we're setting the loss ratio accruals. Keep in mind, we did take rate increases as well, and the rate increases were heavily weighted towards the liability side, and so that's offsetting that increase. It gets us back to the low 40s that we've talked about as the right loss ratio for the business. Yep, understood. The last one for me. In the press release, you provide a breakdown of the outlook, which is very helpful. I was curious about one line there, other income, where you're projecting, I think about $10 million of income for the year. Could you talk about what's in that line? Thank you. it's essentially the earnings on our cash, right? We have both our own cash, and then we've got restricted cash. Some of that's in Hagerty Re, some of that's within the MGA entity. For the most part, it's invested at the very short end of the curve. What's happened with interest rates, we've made sure that we've adjusted our investments appropriately, but we're now earning significantly more than what we had previously just based on where the rate curve is. I think it's sort of in the mid-fours right now in terms of what we're earning. All right. Thank you so much. Thank you. There are no further questions. I would like to turn the floor over to Mckeel for closing remarks. Thank you, operator, thank you to One Team Hagerty for your hard work and dedication. While we've had to make some tough decisions over the last six months, including the recently announced restructuring, I believe we have never been better positioned to capitalize on the latent growth from Hagerty's affinity business model. Our rapidly growing customer base creates the scale benefits that allows us to continue to invest in the products and services that help auto enthusiasts enjoy their passion for fun cars and for driving. Importantly, we're executing with the discipline that will create the profits needed to reinvest in sustaining these high rates of growth over the coming years. Thank you, our stakeholders, for continuing to support us. One more item of note, our Greenwich, Connecticut, Concours d'Elegance is fast approaching, and we plan on hosting an event for investors on the afternoon of Friday, June second in Greenwich. We look forward to the opportunity to spend more time with you in person. Be on the lookout for more details from us. Until then, never stop driving. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.