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AGO NYSE· Assured Guaranty Ltd.
Earnings report Q4 2023

AGO Reports Strong Revenue Growth in Latest Quarter

Segments of revenue

AGO's revenue for the latest quarter was primarily driven by net investment income and net realized investment gains. Net investment income increased from $1 million in 2022 to $3 million in 2023, reflecting a significant growth of 200%. On the other hand, net realized investment gains remained stable at $0 million.

Strengths

AGO demonstrated strong revenue growth in the latest quarter, primarily due to the increase in net investment income. This growth can be attributed to various factors, including the gain associated with the Sound Point Transaction and AHP Transaction, as well as fair value gains on trading securities. Additionally, AGO benefited from changes in Bermuda tax laws and a change in New York State tax law, resulting in a total benefit of $208 million. Management comments suggest that these factors positively impacted the company's financial performance.

Challenges

While AGO experienced growth in net investment income, it also faced challenges in terms of higher loss expense and lower net earned premiums compared to the previous year. These challenges resulted in a decrease in adjusted operating income, which may impact the company's overall profitability.

Noteworthy

It is noteworthy that AGO recognized a benefit of $208 million in the latest quarter due to changes in tax laws. This indicates the company's ability to adapt to regulatory changes and leverage them to its advantage. Additionally, AGO's comprehensive income improved significantly from a loss of $691 million in 2022 to a gain of $895 million in 2023, primarily driven by the increase in net investment income.

Summary

AGO reported strong revenue growth in the latest quarter, primarily driven by an increase in net investment income. The company benefited from various factors, including gains from transactions, changes in tax laws, and fair value gains on trading securities. However, AGO also faced challenges in terms of higher loss expense and lower net earned premiums. Overall, AGO's ability to adapt to regulatory changes and leverage them to its advantage contributed to its improved financial performance.

Source documents

Form 10-K  filed on Feb 28, 2024
86 pages scanned

Reference data

Company financials Q4 revenue 228M
Analyst estimates Q4 EPS beat by 427.90%
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