HCI earnings analysis
What we found in HCI's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
HCI delivered a strong second quarter, with revenue up 11.1% year over year to $246.653 million and diluted EPS up 8.1% to $5.60, exceeding consensus by $0.40. Growth was led by higher policy volume, Reciprocal Exchange Operations and Exzeo, while the net combined ratio remained favorable at 61.5%. The main offsets were a modest increase in gross loss ratio, lower operating cash flow year to date, significant cash deployment into fixed-income investments and continued dependence on reinsurance recoveries. No quantitative forward guidance or material risk-factor changes were provided.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue and earnings grew year over year
- Total revenue increased to $246.653 million from $221.920 million, up $24.733 million, or 11.1%, year over year; revenue also rose from $243 million in Q1 2026. Net income after noncontrolling interests increased 11.5% to $73.797 million from $66.160 million.
- Diluted EPS beat estimates
- Diluted EPS rose to $5.60 from $5.18, an increase of $0.42 or 8.1% year over year, and exceeded the $5.20 consensus estimate by $0.40. EPS increased from $5.45 in Q1 2026.
- Reciprocal operations accelerated
- Reciprocal Exchange Operations revenue increased 83.4% to $25.360 million from $13.832 million, while pretax income increased to $7.517 million from $2.807 million. Insurance Operations revenue also increased to $216.699 million from $205.739 million.
- Investment income and assets increased
- Net investment income increased 14.9% to $18.890 million from $16.445 million, primarily due to higher invested assets. Available-for-sale fixed-maturity securities increased to $1.091 billion from $597.329 million at December 31, 2025.
- Strong operating liquidity
- Operating cash flow was $273.927 million for the first six months, while purchases of property and equipment were only $0.625 million. Management reported $872.336 million of cash and cash equivalents at June 30, 2026.
- Scale grew with stable underwriting
- The net combined ratio was 61.5% versus 61.9% year over year for the quarter, while premiums ceded declined to 31.7% of gross premiums earned from 33.9%. Policies in force increased to approximately 290,100 from 270,100.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Loss ratios moved higher
- The gross loss ratio increased to 22.2% from 21.3%, and losses and loss adjustment expenses increased to $71.076 million from $64.457 million. Management attributed the increase primarily to a higher volume of policies in force.
- Reserve estimation risk
- Total reserves for losses and loss adjustment expenses were $558.982 million at June 30, 2026, including $506.9 million of IBNR. Management noted that reserve estimates may deviate substantially from prior estimates as claim severity, frequency, inflation, legal developments and economic conditions change.
- Reinsurance concentration
- Net reinsurance recoverables declined to $255.744 million from $289.896 million, and approximately 75.5% of the reinsurance recoverable balance was receivable from six reinsurers. The company remains liable for claims if reinsurers cannot meet their obligations.
- Cash declined as investments expanded
- Cash and cash equivalents declined to $872.336 million from $1.210 billion at December 31, 2025, primarily as investing cash outflows reached $500.388 million. Purchases of available-for-sale fixed-maturity and equity securities totaled approximately $547.8 million.
- Fixed-income market sensitivity
- A 100-basis-point increase in interest rates would reduce the estimated fair value of available-for-sale fixed-maturity securities by $48.389 million, or 4%, from the June 30, 2026 portfolio value.
- No new risk-factor changes
- Item 1A states that there were no material changes to the risk factors disclosed in the 2025 Annual Report. Nonetheless, the company had $36.0 million drawn on its revolving facility and only $114.0 million of available borrowing capacity at June 30, 2026.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $5.6
- Segment
- Insurance Operations: revenue $216.699 million versus $205.739 million, up $10.960 million year over year; income before taxes $75.625 million versus $68.072 million.
- Segment
- Exzeo: revenue $60.750 million versus $56.854 million, up $3.896 million; income before taxes $31.426 million versus $28.889 million.
- Segment
- Reciprocal Exchange Operations: revenue $25.360 million versus $13.832 million, up $11.528 million; income before taxes $7.517 million versus $2.807 million.
- Segment
- Real Estate: revenue $4.567 million versus $3.493 million, up $1.074 million.
- Segment
- Corporate and Other: revenue $7.544 million versus $4.682 million, up $2.862 million; loss before taxes improved to $3.683 million from $7.487 million.
What they said about what is next.
No quantitative revenue or EPS guidance was provided in the 10-Q. Management stated that future liquidity requirements are expected to be met primarily through funds from operations and that it may consider additional debt or equity financing.
The filing reads better than the one before it.
What came before.
- 10-Q · May 7, 2026
- HCI Group, Inc. reported strong Q1 2026 results with revenue at $242.9 million, slightly below expectations but achieving an EPS of $5.45, surpassing estimates. Key performance metrics indicate a resilient performance…
- 10-K · February 26, 2026
- HCI Group, Inc. reported a strong fourth quarter in 2025 with a net income of $320.4 million, significantly up from $127.6 million in the previous year, buoyed by a decrease in losses and improved premium volumes.…
- 10-Q · November 7, 2025
- HCI Group reported a strong performance in Q3 2025, with net income of $67.9 million and EPS of $4.90, significantly exceeding expectations. Revenue declined slightly from Q2 2025, primarily due to lower gross premiums…
- 10-Q · August 8, 2025
- HCI Group, Inc. reported strong second quarter results with revenue increasing to $221.9 million, a 7.5% year-over-year increase, and net income rising to $70.3 million, up 23% compared to Q2 2024. The diluted EPS was…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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