Tiptree Inc.
07/29/2026 | Press release | Distributed by Public on 07/29/2026 07:06
Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
Management's Discussion and Analysis of Financial Condition and Results of Operations are presented in this section as follows:
•
Overview
•
Results of Operations
•
Non-GAAP Measures and Reconciliations
•
Liquidity and Capital Resources
•
Critical Accounting Policies and Estimates
OVERVIEW
On May 29, 2026, the Company completed the sale of Fortegra, its insurance segment, pursuant to the Sale Agreement entered on September 26, 2025. The total consideration received for the sale of Fortegra consisted of cash proceeds of $1.65 billion, less transaction expenses of $25.0 million in which the Company received consideration of $1.12 billion. The Company recognized an after-tax gain on the sale of $372.2 million, which is included in net income from discontinued operations for the three and six months ended June 30, 2026.
|
($ in thousands) |
As of |
||
|
June 30, 2026 |
|||
|
Consideration |
$ |
1,650,000 |
|
|
Less: transaction expenses |
25,023 |
||
|
Net consideration |
1,624,977 |
||
|
Tiptree diluted ownership of Fortegra |
69.0 |
% |
|
|
Fair value of consideration received |
1,121,743 |
||
|
Less: Basis in Fortegra |
637,199 |
||
|
Gain subject to tax |
484,544 |
||
|
Less: Tax on gain |
112,304 |
||
|
Estimated gain on disposal |
$ |
372,240 |
|
On May 1, 2026, the Company completed the Reliance Transaction, its mortgage segment, to Carrington Mortgage Services, LLC. Total consideration from the transaction consisted of cash proceeds of $49.7 million, subject to customary post-closing adjustments. The disposal group incurred cumulative impairment losses of $9.1 million upon its initial classification as held for sale and as a discontinued operation in 2025 which was inclusive of a goodwill and intangible impairment of $1.7 million. During the six months ended June 30, 2026, the Company recognized a favorable adjustment of $0.5 million in discontinued operations related to subsequent changes in estimated fair value less costs to sell, resulting in a cumulative pre-tax loss of $8.6 million.
Prior to the sales, the assets and liabilities of Fortegra and Reliance were classified as held for sale as of December 31, 2025. Upon completion of the transactions in the three months ended June 30, 2026, the Company transferred control of the respective subsidiaries to the buyers and derecognized the related assets and liabilities from its condensed consolidated balance sheet.
RESULTS OF OPERATIONS
The following is a summary of Tiptree's consolidated financial results for the three and six months ended June 30, 2026 and 2025. In addition to GAAP results, management uses the Non-GAAP measure book value per share as a measurement of operating performance. Management believes this measure provides supplemental information useful to investors as it is frequently used by the financial community to analyze financial performance and comparison among companies. The Company has reclassified income and expenses attributable to Fortegra and Reliance to net income (loss) from discontinued operations for the three and six months ended June 30, 2026 and 2025.
Summary of Consolidated Results
|
Three Months Ended |
Six Months Ended |
|||||||||||||||
|
2026 |
2025 |
2026 |
2025 |
|||||||||||||
|
Revenues: |
||||||||||||||||
|
Other revenue |
$ |
- |
$ |
92 |
$ |
- |
$ |
482 |
||||||||
|
Total revenues |
- |
92 |
- |
482 |
||||||||||||
|
Expenses: |
||||||||||||||||
|
Employee compensation and benefits |
6,502 |
6,985 |
13,264 |
16,318 |
||||||||||||
|
Depreciation and amortization |
362 |
361 |
718 |
718 |
||||||||||||
|
Other expenses |
2,187 |
4,616 |
4,066 |
7,898 |
||||||||||||
|
Total expenses |
9,051 |
11,962 |
18,048 |
24,934 |
||||||||||||
|
Operating income (loss) before taxes |
(9,051 |
) |
(11,870 |
) |
(18,048 |
) |
(24,452 |
) |
||||||||
|
Non operating income: |
||||||||||||||||
|
Net realized and unrealized gains (losses) |
- |
(1,454 |
) |
(261 |
) |
(714 |
) |
|||||||||
|
Other income |
3,917 |
865 |
4,883 |
1,401 |
||||||||||||
|
Income (loss) before taxes |
(5,134 |
) |
(12,459 |
) |
(13,426 |
) |
(23,765 |
) |
||||||||
|
Less: provision (benefit) for income taxes |
1,315 |
(2,014 |
) |
162 |
(3,619 |
) |
||||||||||
|
Net income (loss) from continuing operations |
(6,449 |
) |
(10,445 |
) |
(13,588 |
) |
(20,146 |
) |
||||||||
|
Discontinued operations: |
||||||||||||||||
|
Income (loss) from discontinued operations (1) |
395,682 |
29,405 |
417,067 |
44,741 |
||||||||||||
|
Net income (loss) attributable to common stockholders |
$ |
389,233 |
$ |
18,960 |
$ |
403,479 |
$ |
24,595 |
||||||||
|
Net income (loss) per common share: |
||||||||||||||||
|
Basic earnings per share |
$ |
10.38 |
$ |
0.50 |
$ |
10.72 |
$ |
0.66 |
||||||||
|
Diluted earnings per share |
$ |
10.30 |
$ |
0.39 |
$ |
10.64 |
$ |
0.55 |
||||||||
|
Weighted average number of common shares: |
||||||||||||||||
|
Basic |
37,501,135 |
37,496,875 |
37,644,493 |
37,422,957 |
||||||||||||
|
Diluted |
37,501,135 |
37,496,875 |
37,644,493 |
37,422,957 |
||||||||||||
|
Dividends declared per common share |
$ |
0.06 |
$ |
0.06 |
$ |
0.12 |
$ |
0.12 |
||||||||
|
Non-GAAP: (2) |
||||||||||||||||
|
Book value per share |
$ |
24.34 |
$ |
13.33 |
$ |
24.34 |
$ |
13.33 |
||||||||
(1)
See Note (3) Dispositions & Discontinued Operations for further details.
(2)
See "-Non-GAAP Reconciliations" for a discussion of non-GAAP financial measures.
Revenues
The Company did not generate operating revenues from continuing operations during the three months ended June 30, 2026, compared to $0.1 million in the prior year, driven by lower other revenue. The Company did not generate operating revenues from continuing operations during the six months ended June 30, 2026, compared to $0.5 million in the prior year, driven by lower other revenue. Interest income from the Company's cash and cash equivalents and marketable securities was recorded in other income within non operating income.
Expenses
Total expenses include employee compensation and benefits, public company expenses and other expenses. Employee compensation and benefits include the expense of management, legal, and accounting staff. Other expenses primarily consisted of audit and professional fees, insurance, office rent, and other expenses.
For the three months ended June 30, 2026, expenses were $9.1 million, which decreased $2.9 million, or 24.3%, compared to the prior year. For the six months ended June 30, 2026, expenses were $18.0 million, which decreased $6.9 million, or 27.6%, compared to the prior year. For the three and six months ended June 30, 2026, employee compensation and benefits were $6.5 million and $13.3 million, compared to $7.0 million and $16.3 million, in the respective prior year periods. The declines were driven by lower incentive
compensation and payroll expense associated with the reduction in workforce. Employee compensation and benefits included incentive compensation expense accruals related to the performance of the Company's continuing and discontinued operations. For the six months ended June 30, 2026 and 2025, incentive compensation expense included $2.9 million and $8.4 million of stock-based compensation, respectively. Other expenses were $2.2 million and $4.1 million for the three and six months ended June 30, 2026, respectively, compared to $4.6 million and $7.9 million for the corresponding periods in 2025, primarily driven by declines in professional fees.
Non Operating Income
For the three months ended June 30, 2026, there were no net realized and unrealized gains or losses, as compared to the losses of $1.5 million in the prior year, driven by the change in fair value of certain equity and other investments carried at fair value. For the three months ended June 30, 2026, other income was $3.9 million, as compared to $0.9 million in the prior year, primarily driven by higher interest income earned on U.S. Treasury securities held within cash and cash equivalents and marketable securities.
For the six months ended June 30, 2026, net realized and unrealized losses were $0.3 million, as compared to the losses of $0.7 million in the prior year, driven by the change in fair value of certain equity and other investments carried at fair value. For the six months ended June 30, 2026, other income was $4.9 million, as compared to $1.4 million in the prior year, primarily driven by higher interest income earned on U.S. Treasury securities held within cash and cash equivalents and marketable securities.
Income before taxes
For the three and six months ended June 30, 2026, the Company reported a pre-tax loss of $5.1 million and $13.4 million, respectively, compared to a pre-tax loss of $12.5 million and $23.8 million, in the corresponding prior year periods. The improvement in both periods was driven by lower operating expenses and higher other income.
Net Income (Loss) from continuing operations
For the three and six months ended June 30, 2026, the Company reported a net loss from continuing operations of $6.4 million and $13.6 million, respectively, compared to a net loss of $10.4 million and $20.1 million, in the corresponding prior year periods. The improvement in both periods was driven by lower operating expenses and higher other income.
Net Income (Loss) from discontinued operations
For the three and six months ended June 30, 2026, the Company reported a net income from discontinued operations of $395.7 million and $417.1 million, respectively, compared to net income of $29.4 million and $44.7 million, in the corresponding prior year periods. The increase in both periods was primarily attributable to the gain recognized on sale on Fortegra.
Book Value per share - Non-GAAP
Total stockholders' equity was $907.1 million as of June 30, 2026 compared to $723.4 million as of June 30, 2025, with the increase driven by comprehensive income over the past twelve months, including the gain on sale of Fortegra, partially offset by share repurchases and dividends. In the six months ended June 30, 2026, the Company returned $4.5 million to common stockholders through dividends paid and $10.3 million through share repurchases.
Book value per share for the period ended June 30, 2026 was $24.34, a 82.6% increase from book value per share of $13.33 as of June 30, 2025, primarily driven by comprehensive income per share, including the gain recognized on Fortegra transaction, partially offset by dividends paid of $0.12 per share, net changes in non-controlling interests and preferred dividends paid at Fortegra.
DISPOSITIONS AND DISCONTINUED OPERATIONS
In connection with the sale of Fortegra and Reliance, the results of operations for these businesses are presented as discontinued operations in the condensed consolidated statements of operations for all periods presented. The results of discontinued operations include the operating results of Fortegra and Reliance through their respective disposal dates in the three months ended June 30, 2026 and the gain (loss) recognized upon disposition. See Note (3) Dispositions & Discontinued Operations for detailed financial information on each business sold. Following the completion of the sales in the three months ended June 30, 2026, the assets and liabilities associated with Fortegra and Reliance were derecognized and are no longer reflected on the Company's condensed consolidated balance sheet as of June 30, 2026.
Fortegra
On May 29, 2026, the Company completed the sale of Fortegra, its insurance segment, pursuant to the Sale Agreement entered on September 26, 2025. The total consideration received for the sale of Fortegra consisted of cash proceeds of $1.65 billion, less transaction expenses of $25.0 million in which the Company received consideration of $1.12 billion for its percentage ownership of the business. The Company recognized an after-tax gain on the sale of $372.2 million, which is included in net income from discontinued operations
for the three and six months ended June 30, 2026.
For the three months ended June 30, 2026, revenues from Fortegra were $341.6 million, reflecting two months of operating results prior to the sale of the business on May 29, 2026. For the three months ended June 30, 2026, the Company reported net income of $396.2 million from Fortegra in discontinued operations during the period, including $372.2 million after-tax gain on sale. For the three months ended June 30, 2025, revenues from Fortegra were $513.0 million. The Company reported income before taxes of $64.9 million and net income of $29.2 million from Fortegra in discontinued operations during the period.
For the six months ended June 30, 2026, revenues from Fortegra were $820.0 million, reflecting five months of operating results prior to the sale of the business on May 29, 2026. For the six months ended June 30, 2026, the Company reported net income of $416.7 million from Fortegra in discontinued operations during the period, including $372.2 million net gain on sale. For the six months ended June 30, 2025, revenues from Fortegra were $993.6 million. The Company reported income before taxes of $101.8 million and net income of $44.7 million from Fortegra in discontinued operations during the period.
Reliance
On May 1, 2026, the Company completed the Reliance Transaction, its mortgage segment, to Carrington Mortgage Services, LLC. Total consideration from the transaction consisted of cash proceeds of $49.7 million, subject to customary post-closing adjustments. The disposal group incurred cumulative impairment losses of $9.1 million upon its initial classification as held for sale and as a discontinued operation in 2025 which was inclusive of a goodwill and intangible impairment of $1.7 million. During the six months ended June 30, 2026, the Company recognized a favorable adjustment of $0.5 million in discontinued operations related to subsequent changes in estimated fair value less costs to sell, resulting in a cumulative pre-tax loss of $8.6 million. Transaction costs associated with the sale were $2.8 million and are also included in discontinued operations for the three and six months ended June 30, 2026.
For the three months ended June 30, 2026, revenues from Reliance were $5.5 million, reflecting only one month of operating results prior to the sale of the business on May 1, 2026. The Company reported net loss of $0.5 million from Reliance in discontinued operations during the period. For the three months ended June 30, 2025, revenues from Reliance were $16.2 million. The Company reported a net income of $0.2 million from Reliance in discontinued operations.
For the six months ended June 30, 2026, revenues from Reliance were $21.4 million, reflecting four months of operating results prior to the sale of the business on May 1, 2026. The Company reported net income of $0.3 million from Reliance in discontinued operations during the period. For the six months ended June 30, 2025, revenues from Reliance were $31.4 million. The Company reported net income of $0.1 million from Reliance in discontinued operations.
Provision for Income Taxes
The income tax expense of $1.3 million and benefit $2.0 million from continuing operations for the three months ended June 30, 2026 and 2025, respectively, was reflected as components of net income (loss) from continuing operations. For the three months ended June 30, 2026 and 2025, the Company's effective tax rate related to pre-tax income from continuing operations was equal to (25.6)% and 16.2%, respectively, with both lower than the U.S. statutory income tax rate of 21.0%, primarily due to the impacts of nontaxable and nondeductible items.
The income tax expense of $0.2 million and benefit $3.6 million from continuing operations for the six months ended June 30, 2026 and 2025, respectively, was reflected as components of net income (loss) from continuing operations. For the six months ended June 30, 2026 and 2025, the Company's effective tax rate related to pre-tax income from continuing operations was equal to (1.2)% and 15.2%, respectively, with both lower than the U.S. statutory income tax rate of 21.0%, primarily due to the impacts of nontaxable and nondeductible items.
Tiptree sold its insurance and mortgage subsidiaries during the three months ended June 30, 2026. It had previously recorded deferred taxes on the outside basis on those investments which represented the tax that would be due, before consideration of loss carryforwards, when Tiptree sold its shares in these subsidiaries at their carrying values on Tiptree's condensed consolidated balance sheet. The balance just prior to the sales was $130.0 million, an increase of $12.2 million from the year ended December 31, 2025, of which $1.8 million of benefit was recorded in OCI, and $14.0 million of expense was recorded as a provision for income taxes in discontinued operations. As of June 30, 2026, the deferred tax liability relating to these investments has been brought to zero and a current tax payable of $204.8 million has been established through the provision for income taxes in discontinued operations.
Balance Sheet Information
Tiptree's total assets were 1.13 billion as of June 30, 2026, compared to 6.84 billion as of December 31, 2025. The decrease was primarily driven by the derecognition of the assets previously classified as held for sale in connection with the completed sales of Fortegra and Reliance during the three months ended June 30, 2026.
Total stockholders' equity was $907.1 million as of June 30, 2026, compared to $752.4 million as of December 31, 2025, with the increase primarily driven by comprehensive income over the past six months, including the gain on sale on Fortegra, offset by dividends
paid and share repurchases. As of June 30, 2026, there were 37,266,005 shares of common stock outstanding as compared to 37,824,472 shares as of December 31, 2025, with the decrease driven by share repurchases.
NON-GAAP MEASURES AND RECONCILIATIONS
Book Value per share - Non-GAAP
Management believes the use of this financial measure provides supplemental information useful to investors as book value is frequently used by the financial community to analyze company growth on a relative per share basis. The following table provides a reconciliation between total stockholders' equity and total shares outstanding, net of treasury shares.
|
(in thousands, except per share information) |
As of June 30, |
|||||||
|
2026 |
2025 |
|||||||
|
Total stockholders' equity |
$ |
907,123 |
$ |
723,368 |
||||
|
Less: Non-controlling interests |
- |
223,530 |
||||||
|
Total stockholders' equity, net of non-controlling interests |
$ |
907,123 |
$ |
499,838 |
||||
|
Total common shares outstanding |
37,266 |
37,497 |
||||||
|
Book value per share |
$ |
24.34 |
$ |
13.33 |
||||
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal sources of liquidity are unrestricted cash, cash equivalents and other liquid investments, including income generated from the Company's investment portfolio and proceeds from the sale of investments and other assets. The Company's cash resources are intended to fund corporate operations, pursue capital allocation opportunities and return capital to shareholders, as appropriate. Management may seek additional sources of cash to fund acquisitions or investments. These additional sources of cash may take the form of debt or equity and may be at the parent, subsidiary or asset level. Tiptree is a holding company, and the Company's liquidity needs are primarily for compensation, professional fees, office rent and insurance costs.
As of June 30, 2026, cash and cash equivalents were $946.9 million, compared to $30.8 million as of December 31, 2025, an increase of $916.1 million, primarily reflecting the net proceeds received from the completed sales of Fortegra and Reliance. In addition, the Company held marketable securities of $158.2 million as of June 30, 2026, compared to $21.7 million in December 31, 2025, as a portion of the sale proceeds were invested in U.S. Treasury securities with a maturity date greater than 90 days at purchase. As of June 30, 2026, the Company had a current tax payable of $204.8 million primarily related to the Fortegra sale. The majority is expected to be paid prior to September 30, 2026.
Management believes that cash and cash equivalents, marketable securities, and cash flow from operations will provide sufficient capital to continue to grow the business, cover capital expenditures and other general corporate needs over the next several years. As management continues to expand Tiptree's business, including by any acquisitions the Company may make in the future, additional working capital for increased costs could be required.
Consolidated Comparison of Cash Flows
The following table summarizes cash flows from continuing operations.
|
($ in thousands) |
Six Months Ended |
|||||||
|
2026 |
2025 |
|||||||
|
Cash and cash equivalents provided by (used in): |
||||||||
|
Operating activities |
$ |
(18,394 |
) |
$ |
(13,673 |
) |
||
|
Investing activities |
(136,324 |
) |
(62,948 |
) |
||||
|
Financing activities |
(89,654 |
) |
64,650 |
|||||
|
Change in cash, cash equivalents and restricted cash |
$ |
(244,372 |
) |
$ |
(11,971 |
) |
||
Refer to the Consolidated Statement of Cash Flow and Note (3) Dispositions & Discontinued Operations for additional details on cash flows related to discontinued operations.
Operating Activities from Continuing Operations
Cash used in operating activities for continuing operations for the six months ended June 30, 2026 and 2025 was $18.4 million and $13.7 million, respectively. This reflects the use of funds to support centralized management and ongoing corporate-level operating requirements.
Investing Activities from Continuing Operations
For the six months ended June 30, 2026 and 2025, cash used in investing activities was $136.3 million, and $62.9 million, respectively, driven by purchases of investments outpacing the proceeds from sales and maturities of investments.
Financing Activities from Continuing Operations
Cash used in financing activities was $89.7 million for the six months ended June 30, 2026, primarily attributable to the principal paydown of borrowings at the holding company, repurchases of common stock, and payment of common dividends. Cash provided by financing activities was $64.7 million for the six months ended June 30, 2025, primarily attributable to proceeds from issuance of debt at the holding company, partially offset by the payment of dividends, cash paid in connection with vested or exercised stock awards, and payment of debt issuance costs.
Cash Flows from Discontinued Operations
Cash flows pertaining to discontinued operations are reported separately on the Condensed Consolidated Statements of Cash Flows.
Cash provided by discontinued operating activities was $53.2 million, and $1.6 million for the six months ended June 30, 2026 and 2025, respectively. Cash provided by discontinued investing activities was $696.3 million, and $73.0 million for the six months ended June 30, 2026 and 2025, respectively, primarily related to the Fortegra and Reliance dispositions. Investing activities related to the Fortegra sale included deal proceeds of $1.12 billion, reduced by $402.7 million of cash held at Fortegra and expected escrow-related amounts, resulting in net proceeds of $713.4 million. Investing activities related to the Reliance sale included deal proceeds of $46.9 million, reduced by $14.6 million of cash held at Reliance and expected escrow-related amounts, resulting in net proceeds of $29.9 million. Cash provided by discontinued financing activities was $42.2 million for the six months ended June 30, 2026, compared with cash used in discontinued financing activities of $10.2 million for the six months ended June 30, 2025.
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
The preparation of the Company's financial statements, which are in accordance with U.S. GAAP, requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates. There have been no material changes to the critical accounting policies and estimates as discussed in Part II, Item 7A in Tiptree's Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Recently Adopted and Issued Accounting Standards
For a discussion of recently issued accounting standards, see Note (2) Summary of Significant Accounting Policies, in the accompanying consolidated financial statements.
Tiptree Inc. published this content on July 29, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on July 29, 2026 at 13:06 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]