Specialty insurance provider Palomar Holdings (NASDAQ:PLMR) beat Wall Street’s revenue expectations in Q1 CY2026, with sales up 59.7% year on year to $278.9 million. Its non-GAAP profit of $2.31 per share was 5.1% above analysts’ consensus estimates.
Is now the time to buy Palomar Holdings? Find out by accessing our full research report, it’s free.
Palomar Holdings (PLMR) Q1 CY2026 Highlights:
- Net Premiums Earned: $261.4 million vs analyst estimates of $246.1 million (59.3% year-on-year growth, 6.2% beat)
- Revenue: $278.9 million vs analyst estimates of $263.6 million (59.7% year-on-year growth, 5.8% beat)
- Combined Ratio: 84.5% vs analyst estimates of 76.6% (788.3 basis point miss)
- Adjusted EPS: $2.31 vs analyst estimates of $2.20 (5.1% beat)
- Market Capitalization: $2.96 billion
Mac Armstrong, Chairman and Chief Executive Officer, commented, “The first quarter was another demonstration of our sustained profitable growth. Our unique, ‘one of one’ specialty products portfolio is purposely built to generate consistent earnings and compelling margins in any market cycle. The combination of Palomar’s mix of personal and commercial lines products written on both an admitted and excess and surplus basis, and strong growth from our Crop and Surety franchises made for a great start to the year.”
Company Overview
Founded in 2013 to fill gaps in catastrophe insurance markets, Palomar Holdings (NASDAQ:PLMR) is a specialty insurance provider that offers property and casualty insurance products in underserved markets, with a focus on earthquake coverage.
Revenue Growth
Insurers earn revenue three ways. The core insurance business itself, often called underwriting and represented in the income statement as premiums earned, is one way. Investment income from investing the “float” (premiums collected upfront not yet paid out as claims) in assets such as fixed-income assets and equities is the second way. Fees from various sources such as policy administration, annuities, or other value-added services is the third. Over the last five years, Palomar Holdings grew its revenue at an incredible 40.4% compounded annual growth rate. Its growth surpassed the average insurance company and shows its offerings resonate with customers, a great starting point for our analysis.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Palomar Holdings’s annualized revenue growth of 55.5% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, Palomar Holdings reported magnificent year-on-year revenue growth of 59.7%, and its $278.9 million of revenue beat Wall Street’s estimates by 5.8%.
Net premiums earned made up 92.9% of the company’s total revenue during the last five years, meaning Palomar Holdings lives and dies by its underwriting activities because non-insurance operations barely move the needle.
While insurers generate revenue from multiple sources, investors view net premiums earned as the cornerstone - its direct link to core operations stands in sharp contrast to the unpredictability of investment returns and fees.
WHILE YOU’RE HERE: The Next Palantir? One satellite company captures images of every point on Earth. Every single day. The Pentagon wants it. Hedge funds are using it to beat earnings. You’ve probably never heard of it.
This is what the early days of Palantir looked like before it became a $437 billion giant. Same playbook. Different technology. If you missed Palantir, you need to see this. Claim The Stock Ticker for Free HERE.
Net Premiums Earned
When insurers sell policies, they protect themselves from extremely large losses or an outsized accumulation of losses with reinsurance (insurance for insurance companies). Net premiums earned are therefore net of what’s ceded to reinsurers as a risk mitigation and transfer strategy.
Palomar Holdings’s net premiums earned has grown at a 40% annualized rate over the last five years, much better than the broader insurance industry and in line with its total revenue.
When analyzing Palomar Holdings’s net premiums earned over the last two years, we can see that growth accelerated to 55.8% annually. This performance was similar to its total revenue.
In Q1, Palomar Holdings produced $261.4 million of net premiums earned, up a hearty 59.3% year on year and topping Wall Street Consensus estimates by 6.2%.
Key Takeaways from Palomar Holdings’s Q1 Results
We were impressed by how significantly Palomar Holdings blew past analysts’ net premiums earned expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. Overall, we think this was a solid quarter with some key areas of upside. The stock traded up 5.3% to $116.63 immediately after reporting.
Palomar Holdings may have had a good quarter, but does that mean you should invest right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).