HG Holdings Reports Q1 2025 Financial Results with Revenue Increase and Net Loss

HG Holdings, Inc. reported its financial results for the first quarter of 2025, revealing a total revenue of $2.72 million, a slight increase from $2.70 million in the same period of 2024. The company's net premiums written decreased marginally to $1.39 million from $1.40 million year-over-year. Escrow and other title fees rose to $584,542, while management fees from related parties remained stable at $750,000. Despite the increase in revenue, the company recorded a net loss attributable to shareholders of $257,000, compared to a net income of $20,000 in the prior year, resulting in a basic and diluted loss per share of $0.09.

The financial performance reflects a challenging environment for HG Holdings, particularly in its title insurance segment, which is closely tied to real estate activity. The company noted that the overall level of real estate transactions has been affected by high mortgage interest rates, which have dampened market activity. Operating expenses increased to $3.17 million from $3.08 million, primarily due to higher general and administrative costs. The gross underwriting profit for the quarter was $2.62 million, up from $2.58 million in the previous year, indicating some operational efficiency despite the losses.

In terms of strategic developments, HG Holdings has made significant organizational changes, including a restructuring of its reportable segments effective January 1, 2025. The company now operates under two segments: Title Insurance and Corporate and Other, which consolidates previous segments into a more streamlined reporting structure. Additionally, on April 21, 2025, HG Holdings entered into a Master Services Agreement with HP Risk Solutions, LLC, which will provide managerial and operational services for $6 million annually over three years. This agreement is expected to enhance the company's operational capabilities and financial performance.

Operationally, the company reported a total asset increase to $45.76 million as of March 31, 2025, up from $42.17 million at the end of 2024. Cash and cash equivalents rose to $13.26 million, while restricted cash increased to $11.85 million, reflecting a strong liquidity position. The company also reported a total employee headcount of 2,813, consistent with the previous year. However, the reserve for title claims increased to $642,637, indicating a cautious approach to potential future liabilities.

Looking ahead, HG Holdings anticipates that the title insurance market may improve as mortgage rates stabilize and real estate activity potentially increases. The company is focused on leveraging its net operating loss carryforwards and pursuing acquisition opportunities to enhance shareholder value. However, management remains cautious about the impact of external economic factors, including interest rates and market conditions, on future performance. The company believes its current cash position and revenue streams will be sufficient to meet operational needs for the foreseeable future.