Overview Assured Guaranty Ltd is a specialty financial guarantor focused on municipal and structured-credit insurance and reinsurance, combining very high reported underwriting margins with pronounced variability in earnings and cash flows. Profitability Metrics The company shows strong profitability metrics: gross margin was 95.8% for the period ending 2025-12-31 and operating margin registered 4
Assured Guaranty Ltd is a specialty financial guarantor focused on municipal and structured-credit insurance and reinsurance, combining very high reported underwriting margins with pronounced variability in earnings and cash flows.
The company shows strong profitability metrics: gross margin was 95.8% for the period ending 2025-12-31 and operating margin registered 41.8% for that same period, indicating meaningful pricing power and operating efficiency in the most recent dataset.
Revenue has also shown quarter-to-quarter recovery, rising to $674.0M for the period ending 2025-12-31 from $345.0M for the period ending 2025-03-31, and the latest reported quarterly net income was $205.0M, demonstrating the business can generate sizable top-line and quarterly earnings episodes.
At the same time, there are clear areas of concern. Trailing twelve-month net income plunged from $739.0M at the 2023 year end to $376.0M at the 2024 year end, a large decline that highlights earnings volatility.
Operating cash flow in the available series is materially negative at -$853.0M (most recent operating cash flow datapoint in 2020), and financing cash flows have swung from a $612.0M inflow in 2022 to a -$983.0M outflow in 2024 TTM (moderating to -$616.0M in 2025 TTM), pointing to uneven cash generation and capital-movement dynamics.
Return on equity has also declined to about 9.0% in the most recent quarter from highs near 20.0% in 2017, indicating weakening returns on shareholder equity.
Key fundamentals to monitor going forward are quarterly revenue and net income (most recent revenue $674.0M; most recent TTM net income $376.0M) and the reconciliation of earnings to cash flow—particularly operating cash flow (–$853.0M) and financing cash flow (–$616.0M)—as well as ROE (~9.0%), gross margin (95.8%) and operating margin (41.8%); deeper trend updates can be found on the linked cards for Revenue & Net Income, Earnings Quality Analysis, Strategic Capital Allocation, Return on Equity (ROE), Profit Margin Trends, EPS Diluted & Revenue per Share and Price-to-Earnings (PE) Ratio Trend.
The foundation of business quality and long-term value creation
ASSURED GUARANTY LTD's revenue in the most recent quarters shows an increase to $674.0M for the period ending 2025-12-31, up from $345.0M for the period ending 2025-03-31. Earlier revenue observations include $613.0M in 2023-06-30 and larger peaks of $1.61B and $1.64B in late 2013 and 2014; the series also contains a negative revenue entry of -$113.0M in 2020-06-30.
Net income has been variable across the history shown, with the most recent reported quarters at $171.0M (2024-09-30) and $205.0M (2024-12-31), representing a sequential increase between those two quarters. Prior net income points include $501.0M (2023-12-31) and several large positive and negative swings in earlier years (for example -$483.0M on 2012-03-31). The most recent quarterly revenue was $674.0M. The most recent reported net income was $205.0M.
Why Growth Matters
Consistent revenue and earnings growth are the lifeblood of successful long-term investments. Companies that can grow their top line (revenue) and bottom line (net income) over many years demonstrate they have products or services customers value and are willing to pay for repeatedly.
Revenue Growth shows whether the company is expanding its market reach, gaining market share, or successfully launching new products.Net Income Growth demonstrates the company can convert that revenue into actual profits while managing costs effectively.
Look for steady, sustainable growth rather than erratic spikes. The best businesses compound earnings year after year, creating tremendous value for shareholders over time. Companies that can grow earnings faster than revenue are improving their profitability—a sign of operational excellence and competitive strength.
Year-over-year growth rates for revenue and earnings per share
Reading the Growth Rate Chart
This chart converts the absolute per-share figures into year-over-year percentage changes, making it easy to see whether growth is accelerating, decelerating, or reverting to trend — regardless of the company's absolute size.
Revenue per Share Growth (1-year, split-adjusted) measures how quickly the top line is expanding on a per-share basis. Sustained positive growth signals that the company continues to win customers and grow its addressable market.EPS Diluted Growth (1-year, split-adjusted) measures how quickly earnings are compounding for each shareholder. When EPS growth consistently outpaces revenue growth, operating leverage and margin expansion are at work.
Look for consistency, not just magnitude. A company that reliably grows EPS 10–15% per year is far more valuable than one that alternates between 50% spikes and deep contractions. Negative EPS growth during a period of positive revenue growth is a red flag — costs are rising faster than sales. Quarters where both lines converge near zero or go negative deserve close scrutiny.
How revenue converts to net income for the most recent annual period
Period Information
Report Type: Annual (10-K)
Period: Jan 2025 to Dec 2025
Analyzing long-term margin stability and competitive positioning
ASSURED GUARANTY LTD’s gross margin has risen in the available series, from 90.7% for the period ending to 95.8% for the period ending , an increase of 5.1 percentage points.
Operating margin is reported only for the most recent period and stands at 41.8% for the period ending , representing the current level of operating profitability in the dataset.
Net profit margin data is available only for earlier years and shows a modest increase from 50.2% () to 54.6% (), a 4.4 percentage-point rise in that interval; no later net margin figures are provided.
Most recent gross margin: 95.8% (2025-12-31)
Most recent operating margin: 41.8% (2025-12-31)
Most recent net profit margin: 54.6% (2014-12-31)
Understanding Profit Margins
Between Jan 2025 and Dec 2025, Assured Guaranty Ltd converts every dollar of revenue through the following stages:
Sustainable competitive advantages reveal themselves through consistently superior profit margins over extended periods. Companies with durable economic moats maintain pricing power and operational efficiency that competitors struggle to match.
A sign of durable competitive advantage is earning sustained higher margins than competitors.Look for margins that remain stable or improve over time, especially during economic downturns. Declining margins may signal increasing competition, pricing pressure, or deteriorating business fundamentals.
Comparing reported earnings to actual cash generation
ASSURED GUARANTY LTD's trailing twelve-month net income has declined in the most recent year, falling from $739.0M at the 2023 year end to $376.0M at the 2024 year end. Historically the company has shown wide swings in net income — peaks above $1.0B in the mid-2010s and lower levels in other years — but the most recent inflection is the sizable drop between the 2023 and 2024 TTM figures.
Operating cash flow (TTM) in the provided series is negative in the most recent available period, with a material deterioration to -$853.0M at the 2020 year end from earlier positive and smaller negative readings (for example, $577.0M in 2014 and -$509.0M in 2019). There is a timing disconnect in the dataset: the latest net income figure is for 2024 while the latest operating cash flow figure is for 2020. The most recent Net Income (TTM) was $376.0M. The most recent Operating Cash Flow (TTM) was -$853.0M.
The Earnings vs. Cash Flow Gap
Reported earnings (Net Income) doesn't always reflect actual cash generation. Companies use accrual accounting, which recognizes revenue when earned and expenses when incurred—not when cash actually changes hands. This creates timing differences and opportunities for accounting discretion that can mask underlying business health.
Net Income (the "earnings" number) can be influenced by non-cash items like depreciation, stock-based compensation, and changes in accounting estimates.Operating Cash Flow, however, shows the actual cash the business generates from its core operations—a harder number to manipulate.
What to Look For
Key Insight: Companies with durable competitive advantages typically show operating cash flow that meets or exceeds net income over time, demonstrating they convert accounting profits into actual cash that can be returned to shareholders or reinvested in the business.
Measuring management's efficiency at generating profits from shareholder capital
ASSURED GUARANTY LTD's return on equity has moved lower in the most recent reporting window: the trailing twelve-month ROE was 9.0% at 2018-03-31, down from 20.0% at 2017-06-30 and 13.5% at 2016-12-31. Recent quarters therefore show a material decline from the mid-2017 level to the current quarter.
Across the full series, ROE has been variable, with a high of 22.3% on 2015-03-31 and a low of 1.0% on 2012-09-30, reflecting several pronounced inflection points over the period. The most recent quarterly ROE was 9.0%.
The Gold Standard of Profitability
Return on Equity (ROE) is a powerful measure of how effectively a company's management is using the money shareholders have invested. Calculated by dividing Net Income by Shareholders' Equity, it reveals how much profit is generated for every dollar of equity capital.
A consistently high ROE (typically above 15-20%) is often the signature of a "quality" business with a durable competitive advantage. It indicates that the company can generate high returns on its own capital, which it can then reinvest at these high rates to compound value over time.
What to Look For:
How the company generates and deploys its cash
ASSURED GUARANTY LTD's financing cash flow TTM shows large multi-year swings. After a positive financing inflow of $612.0M in 2022, the company recorded a sizable outflow of −$983.0M for the 2024 TTM period, which moderated to an outflow of −$616.0M in the 2025 TTM period. Historically the financing series has frequently been negative (examples: −$847.0M in 2015, −$766.0M in 2017, −$795.0M in 2018), with intermittent positive spikes such as 2022.
The most recent available trailing-twelve-month operating and investing cash flow datapoints in the series are from 2020. Operating cash flow TTM deteriorated from −$509.0M in 2019 to −$853.0M in 2020, while investing cash flow TTM was reported at $788.0M in 2020. The most recent financing cash flow TTM is −$616.0M. The most recent trailing-twelve-month operating cash flow was −$853.0M. The most recent trailing-twelve-month investing cash flow was $788.0M. The most recent trailing-twelve-month financing cash flow was −$616.0M.
Understanding Company Strategy
Capital allocation refers to how management decides to spend and invest the company's cash. Analyzing the three primary categories of cash flow reveals a company's true operational strategy:
What to look for: Is the company bootstrapping (funding growth solely from operating cash)? Are they borrowing to fund aggressive expansion or dividends? Or are they capital raising by issuing new shares, potentially diluting your ownership? A healthy, mature company typically generates strong operating cash, moderately invests in growth, and returns the surplus to shareholders through financing activities.
Net assets attributable to each share — the accounting floor of intrinsic value
Why Book Value per Share Matters
Book value per share is the net worth of the company — total assets minus total liabilities — divided by shares outstanding (split-adjusted). It represents the theoretical liquidation value per share if every asset were sold and every liability repaid at balance-sheet carrying values. It is the accounting foundation upon which much of equity valuation is built.
A steadily rising book value per share is one of the most reliable signals of compounding wealth creation. It means the company is retaining earnings and building net worth faster than it is returning capital or eroding it. Warren Buffett famously tracked Berkshire Hathaway's book value per share for decades as his primary measure of intrinsic value growth.
Context is essential. Asset-heavy businesses (banks, manufacturers, utilities) should be judged by book value more directly than asset-light businesses (software, consumer brands), where intangible assets like intellectual property and customer loyalty may far exceed their balance-sheet carrying values. A company trading at a large premium to book value is not necessarily overvalued — it may simply possess competitive advantages that accounting rules do not capture. Conversely, a declining book value per share — especially over multiple years — is a serious warning sign of capital destruction.
How much of the company is financed by debt versus shareholders' equity
Reading the Debt-to-Equity Ratio
The debt-to-equity (D/E) ratio compares total financial debt to shareholders' equity. A ratio of 1.0 means the company has borrowed one dollar for every dollar of equity; a ratio of 2.0 means it has borrowed twice as much as it owns. Financial leverage amplifies both returns and risk: in good times, debt turbocharges equity returns; in bad times, it accelerates losses and can threaten solvency.
Trends matter more than a single number. A rising D/E ratio can mean the company is taking on debt to fund growth — potentially value-creating if returns exceed the cost of capital. But it can also mean equity is being eroded through losses or that the business is borrowing simply to sustain operations. A falling D/E ratio generally reflects strengthening financial health: earnings are being retained, debt maturities are being paid down, or both.
Industry norms vary enormously. Capital-intensive sectors (utilities, real estate, financials) routinely carry high D/E ratios that would be alarming in, say, a technology company. Always compare against sector peers. As a rough rule of thumb, a D/E above 2× in a cyclical business warrants careful scrutiny of interest coverage and refinancing risk.
Short-term liquidity — can the company cover its near-term obligations?
Liquidity: Can the Business Pay Its Bills?
The current ratio is calculated as current assets divided by current liabilities. A ratio of 1.5 means the company has $1.50 of short-term assets — cash, receivables, inventory — for every $1.00 of obligations due within the next twelve months. It is the most direct measure of near-term financial resilience: can the business meet its obligations without needing to raise new capital or sell long-term assets at a discount?
A ratio above 1.0 is generally healthy, meaning current assets exceed current liabilities. A ratio consistently above 2.0 may indicate the company is holding excess cash or inventory that could be deployed more productively. A ratio below 1.0 is a warning sign — the company is relying on future cash generation or external financing to cover its near-term obligations, which is manageable in normal conditions but dangerous during a downturn.
Trends and context matter.A declining current ratio isn't always alarming — highly efficient businesses (e.g., large retailers with reliable daily cash flows) often run leaner balance sheets intentionally. Conversely, a rapidly rising current ratio can signal slowing sales causing inventory to build, or customers taking longer to pay. Always compare the trend against industry peers and cross-reference with the cash flow statement to assess whether the business is genuinely liquid or just holding non-cash current assets.
How much the market is paying for each dollar of company earnings
What Is the PE Ratio?
The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics in investing. It divides the current stock price by the company's earnings per share (EPS), revealing how much investors are willing to pay for each dollar of earnings. A high PE can signal that the market expects strong future growth, while a low PE may suggest undervaluation—or reflect genuine concerns about the company's prospects.
Context matters:PE ratios vary significantly across industries. High-growth technology companies routinely trade at PE ratios above 30x or 40x, while mature, low-growth sectors like utilities or financials often trade closer to 10–15x. Always compare a company's PE to its own history and its industry peers, not just an absolute number.
What to Look For:
Key Insight:The PE ratio is a snapshot of market sentiment and expectations. Tracking it over time alongside earnings trends reveals whether the market's valuation has expanded or contracted—and whether that change is justified by fundamentals.