Group 1 - BRP Inc. is currently ranked 16 in the Zacks Sector Rank for the Auto-Tires-Trucks group, which consists of 96 companies [2] - The Zacks Rank for BRP Inc. is 2 (Buy), indicating a favorable outlook based on earnings estimate revisions [3] - Over the past 90 days, the Zacks Consensus Estimate for BRP Inc.'s full-year earnings has increased by 9.8%, reflecting improved analyst sentiment [4] Group 2 - BRP Inc. has achieved a year-to-date return of approximately 13.9%, significantly outperforming the Auto-Tires-Trucks sector average return of -9.4% [4] - In comparison, Ferrari, another stock in the sector, has a year-to-date return of 11% and a Zacks Rank of 1 (Strong Buy) [5] - BRP Inc. is part of the Automotive - Original Equipment industry, which includes 50 companies, and this industry has an average gain of 7.8% this year [6] Group 3 - Investors should continue to monitor BRP Inc. and Ferrari for potential sustained strong performance in the Auto-Tires-Trucks sector [7]

Group 1 - The article is part of a series focusing on great and undercovered companies that are currently valued attractively [1] - It aims to provide in-depth analysis of business models, financials, and valuations of these companies [1] Group 2 - All financial figures discussed in the article are presented in Canadian dollars unless stated otherwise [1]

Core Insights - BRP has expanded its electric vehicle lineup to include the Can-Am Pulse and Origin motorcycles, four electric snowmobiles, the Rotax E10 racing powerpack, and the Can-Am Outlander Electric, catering to various rider needs and applications [1][7]. Electric Vehicle Offerings - The 2026 Can-Am Outlander Electric features a modular Rotax E-Power powerpack, delivering 47 hp and 53 lb-ft of torque, with a range of up to 50 miles in optimal conditions [3]. - The Outlander Electric can charge from 20% to 80% in just 50 minutes using a Level 2 charger, and it offers selectable ride modes: Normal, Sport, and Work [3][4]. - BRP's electric motorcycles, the Can-Am Pulse and Origin, are powered by an 8.9 kWh battery system, providing up to 100 miles of range in urban settings and achieving 0-60 mph in under four seconds [6]. Market Position and Strategy - BRP is positioned as a leader in the powersports industry with the most electric models across various categories, reflecting a deep understanding of customer needs [8]. - The company emphasizes intentional and strategic electrification, focusing on areas where it adds real value to customers [2]. Innovation and Development - BRP has a fully integrated in-house modular electric powertrain, which includes the battery pack, inverter, motor, charger, and control software, providing unmatched agility and performance [9]. - The company has introduced electric snowmobiles under the Ski-Doo and Lynx brands, initially targeting tour operators and ski centers, now available to consumers [7]. Company Overview - BRP Inc. is a global leader in powersports products, with annual sales of CA$7.8 billion and a workforce of approximately 16,500 employees as of January 31, 2025 [11].

Core Insights - BRP has expanded its electric vehicle lineup to include the Can-Am Pulse and Origin motorcycles, four electric snowmobiles, the Rotax E10 racing powerpack, and the Can-Am Outlander Electric, catering to various rider needs and applications [1][7]. Electric Vehicle Offerings - The 2026 Can-Am Outlander Electric features a modular Rotax E-Power powerpack, delivering 47 hp and 53 lb-ft of torque, with a range of up to 50 miles in optimal conditions [3]. - The Outlander Electric can charge from 20% to 80% in just 50 minutes using a Level 2 charger, and it boasts a towing capacity of 1,830 lbs [4]. - BRP's electric motorcycles, the Can-Am Pulse and Origin, are powered by an 8.9 kWh battery system, offering up to 100 miles of range and 0-60 mph acceleration in under four seconds [6]. Market Position and Strategy - BRP is positioned as a leader in the electrification of powersports, with the most electric models across various categories, reflecting a deep understanding of customer needs [8]. - The company emphasizes intentional and strategic electrification, focusing on areas that provide real value to customers [2]. Development and Innovation - BRP has a fully integrated in-house modular electric powertrain, which includes the battery pack, inverter, motor, charger, and control software, allowing for unmatched agility and performance [9]. - The company has received positive feedback from riders regarding the torque-rich experience and smooth handling of its electric motorcycles [6]. Company Overview - BRP Inc. is a global leader in powersports products, with annual sales of CA$7.8 billion and a workforce of approximately 16,500 employees as of January 31, 2025 [11].

Core Insights - BRP Inc. has donated over CAD $500,000 worth of Lynx apparel to support seven Northern Communities in partnership with the Healthy Horizons Foundation [1][2] - The donation is part of BRP's Ride Out Intimidation program, which aims to improve the health and well-being of youth in these communities [1][2] - The Healthy Horizons Foundation has coordinated the distribution of the donated apparel, benefiting over one thousand individuals in small northern communities [3][4] Company Initiatives - BRP and the Healthy Horizons Foundation launched the Northy Club afterschool program in October 2024, aimed at empowering students in Northern Indigenous communities [2][5] - The Northy Club focuses on education, personal growth, and healthy lifestyles while promoting anti-bullying and intimidation prevention [5] - The program will continue in the fall of 2025 and is set to expand based on community needs [5] Organizational Background - The Healthy Horizons Foundation is dedicated to advancing the health and well-being of youth in northern and remote communities, investing in high-impact programs since its establishment in 2015 [6] - BRP Inc. is a global leader in powersports products, with annual sales of CAD $7.8 billion and a workforce of approximately 16,500 employees as of January 31, 2025 [8]

Company Overview - BRP Inc. is a global leader in powersports products, propulsion systems, and boats, with over 80 years of experience [4] - The company reported annual sales of CA$7.8 billion from over 130 countries and employs approximately 16,500 people as of January 31, 2025 [4] Upcoming Financial Results - BRP Inc. will hold its second quarter FY26 financial results conference call on August 29, 2025, at 9 am (EDT) [1] - The press release for the financial results will be distributed on Canadian and American newswires at approximately 6 a.m. (EDT) on the same day [2] Conference Call Details - Analysts can join the conference call via a toll-free number in North America, with an event code provided for access [2] - Business media are allowed to join the call but will not be permitted to ask questions [3] - A live webcast will be available, and an archived recording will be accessible for 30 days after the event [3]

```markdown PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=ITEM%201.%20Financial%20Statements%20%28Unaudited%29) The unaudited condensed consolidated financial statements for the quarterly period ended June 30, 2025, show an increase in total assets to **$3.74 billion** from **$3.53 billion** at year-end 2024. For the six months ended June 30, 2025, total revenues grew to **$792.2 million** from **$720.2 million** year-over-year, and net income increased to **$19.8 million** from **$8.2 million**. The statements also reflect a change in presentation for fiduciary assets and liabilities, now shown separately on the balance sheet [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (as of June 30, 2025 vs. Dec 31, 2024) | Account | June 30, 2025 ($ in thousands) | December 31, 2024 ($ in thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $105,695 | $90,045 | | Total current assets | $1,239,709 | $1,026,490 | | Goodwill | $1,420,583 | $1,412,369 | | Total assets | $3,738,985 | $3,534,731 | | **Liabilities & Equity** | | | | Total current liabilities | $1,007,489 | $1,056,434 | | Long-term debt, less current portion | $1,494,712 | $1,398,054 | | Total liabilities | $2,688,616 | $2,525,934 | | Total stockholders' equity | $1,049,924 | $1,008,344 | - **Total assets increased** from **$3.53 billion** to **$3.74 billion**, primarily driven by increases in fiduciary cash, fiduciary receivables, and goodwill. Total liabilities also increased, mainly due to a rise in long-term debt and fiduciary liabilities[16](index=16&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) Statement of Comprehensive Income Highlights | Metric | Three Months Ended June 30, 2025 ($ in thousands) | Three Months Ended June 30, 2024 ($ in thousands) | Six Months Ended June 30, 2025 ($ in thousands) | Six Months Ended June 30, 2024 ($ in thousands) | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $378,811 | $339,840 | $792,216 | $720,207 | | Operating income | $27,940 | $16,458 | $83,957 | $50,716 | | Net income (loss) | $(5,141) | $(30,867) | $19,757 | $8,233 | | Net income (loss) attributable to Baldwin | $(3,164) | $(17,557) | $10,775 | $4,021 | | Diluted earnings (loss) per share | $(0.05) | $(0.28) | $0.15 | $0.06 | - For the six months ended June 30, 2025, **total revenues increased by 10%** YoY to **$792.2 million**, and **operating income grew by 66%** YoY to **$84.0 million**. **Net income attributable to Baldwin significantly increased** to **$10.8 million** from **$4.0 million** in the prior year period[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Highlights for the Six Months Ended June 30 | Cash Flow Activity | 2025 ($ in thousands) | 2024 ($ in thousands) | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(80,704) | $21,346 | | Net cash provided by (used in) investing activities | $(46,201) | $35,602 | | Net cash provided by financing activities | $197,838 | $76,265 | | **Net increase in cash and cash equivalents and fiduciary cash** | **$70,933** | **$133,213** | - For the six months ended June 30, 2025, **net cash used in operating activities was ($80.7 million)**, a significant shift from the **$21.3 million** provided in the same period of 2024. This was primarily due to an **$85.1 million** payment of contingent earnout consideration in excess of purchase price accrual. Net cash from financing activities increased, driven by proceeds from the revolving line of credit and debt refinancing[29](index=29&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - **Effective January 1, 2025, the company changed its balance sheet presentation** to separately report fiduciary assets (fiduciary cash, fiduciary receivables) and fiduciary liabilities. Prior period amounts have been recast for comparability[46](index=46&type=chunk)[47](index=47&type=chunk) - **On April 1, 2025, the company acquired MultiStrat Group**, a reinsurance underwriting platform, for a total consideration of **$24.6 million**, including **$12.1 million** in cash and **$8.8 million** in contingent earnout consideration. This acquisition added **$8.2 million** in goodwill[68](index=68&type=chunk)[69](index=69&type=chunk)[76](index=76&type=chunk) - **On January 10, 2025, the company amended its credit facility**, increasing its senior secured first lien term loan facility by **$100.0 million** to a total of **$935.8 million**. The proceeds were used to repay the existing 2024 Term Loans[93](index=93&type=chunk) - **The company is appealing a Delaware Court of Chancery opinion** regarding its 2019 Stockholders Agreement and a related **$2.4 million** attorneys' fee award. Management estimates the potential loss to be between **$0** and **$2.4 million**[123](index=123&type=chunk) - **Effective January 1, 2025, the company's new captive insurance operation**, MSI Multifamily Series Protected Cell, began participating as a quota share reinsurer. For the six months ended June 30, 2025, it generated **$9.8 million** in assumed premium earned and incurred losses of **$8.8 million**[148](index=148&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk) - **Subsequent to the quarter end, on July 1, 2025, the company acquired Hippo Holdings Inc.'s homebuilder distribution network** for **$75 million** in cash upfront and a **$25 million** deferred payment. The acquisition was funded by borrowing an additional **$68 million** on its Revolving Facility[152](index=152&type=chunk)[153](index=153&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's performance, highlighting a **10%** increase in total revenues for the first six months of 2025, driven by organic growth in core commissions and fees. Operating income grew **66%** to **$84.0 million**. The discussion details results by the three operating segments: Insurance Advisory Solutions (IAS), Underwriting, Capacity & Technology Solutions (UCTS), and Mainstreet Insurance Solutions (MIS). The company's liquidity remains strong, with **$105.7 million** in cash and **$474 million** available on its revolving facility as of June 30, 2025 [Results of Operations](index=38&type=section&id=Results%20of%20Operations) Consolidated Results of Operations Summary | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Variance % | | :--- | :--- | :--- | :--- | | Total revenues | $792,216 | $720,207 | 10% | | Colleague compensation and benefits | $393,491 | $376,714 | 4% | | Total operating expenses | $708,259 | $669,491 | 6% | | Operating income | $83,957 | $50,716 | 66% | | Income before income taxes | $20,442 | $10,384 | 97% | - For the six months ended June 30, 2025, **commissions and fees increased by 10%** (**$71.6 million**) year-over-year, driven by **$68.9 million** in organic growth from new and renewal business, strong performance from the MSI platform, and the new Captive business[170](index=170&type=chunk) - **Other operating expenses for the first six months of 2025 increased by $21.8 million** (**24%**) YoY, primarily due to **$8.8 million** in incurred losses from the new Captive business, **$5.5 million** in higher professional fees (including for the setup of the Reciprocal), and **$3.1 million** in marketing costs for rebranding[178](index=178&type=chunk) - **The gain on divestitures decreased by $36.9 million** for the six-month period, mainly because the prior year period included a **$35.1 million** gain from the sale of the Wholesale Business[183](index=183&type=chunk) [Non-GAAP Financial Measures](index=41&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted EBITDA Reconciliation | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net income (loss) | $19,757 | $8,233 | | **Adjusted EBITDA** | **$199,307** | **$176,574** | | Adjusted EBITDA margin | 25% | 25% | Organic Revenue Growth | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Commissions and fees ($ in thousands) | $786,780 | $715,199 | | Organic revenue ($ in thousands) | $784,800 | $715,199 | | **Organic revenue growth %** | **11%** | **17%** | Adjusted Diluted EPS Reconciliation | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net income (loss) attributable to Baldwin ($ in thousands) | $10,775 | $4,021 | | Adjusted net income ($ in thousands) | $126,068 | $106,255 | | Diluted earnings (loss) per share | $0.15 | $0.06 | | **Adjusted diluted EPS** | **$1.06** | **$0.90** | [Segment Results](index=45&type=section&id=Segment%20Results) For the first six months of 2025, Insurance Advisory Solutions (IAS) revenues grew **5%** to **$410.9 million**. Underwriting, Capacity & Technology Solutions (UCTS) revenues grew **20%** to **$272.7 million**, driven by strong performance in its MSI platform and the new Captive business. Mainstreet Insurance Solutions (MIS) revenues grew **4%** to **$144.4 million** - **Insurance Advisory Solutions (IAS):** For the six months ended June 30, 2025, revenues increased **5%** YoY to **$410.9 million**, driven by **18%** sales velocity, though offset by a **230 bps** headwind from softening insurance rates, particularly in property lines[200](index=200&type=chunk)[203](index=203&type=chunk) - **Underwriting, Capacity & Technology Solutions (UCTS):** For the six months ended June 30, 2025, revenues increased **20%** YoY to **$272.7 million**. Core commissions and fees growth was **23%** after excluding the divested Wholesale Business, driven by outperformance in MSI, momentum in Capacity Solutions, and the new Captive business[212](index=212&type=chunk)[215](index=215&type=chunk) - **Mainstreet Insurance Solutions (MIS):** For the six months ended June 30, 2025, revenues increased **4%** YoY to **$144.4 million**, primarily due to a **$3.6 million** increase in profit-sharing revenue from improved loss ratios and policy volume[225](index=225&type=chunk)[228](index=228&type=chunk) [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) - **As of June 30, 2025, the company had $105.7 million** in cash and cash equivalents and **$474 million** of available borrowing capacity on its Revolving Facility. Management believes this is sufficient to fund working capital and commitments for the next twelve months and beyond[248](index=248&type=chunk) Contractual Obligations and Commitments (as of June 30, 2025) | Obligation Type | Total ($ in thousands) | Less than 1 year ($ in thousands) | 1-3 years ($ in thousands) | 3-5 years ($ in thousands) | More than 5 years ($ in thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Operating leases | $93,656 | $21,288 | $38,507 | $26,793 | $7,068 | | Debt obligations payable | $2,325,951 | $131,682 | $254,483 | $354,695 | $1,585,091 | | Undiscounted estimated contingent earnout obligation | $21,509 | $7,552 | $13,957 | — | — | | USF Grant | $3,352 | $856 | $1,696 | $800 | — | - **The maximum estimated exposure to contingent earnout liabilities was $63.2 million** at June 30, 2025. The undiscounted estimated obligation of **$21.5 million** can be settled in cash or stock at the company's option[255](index=255&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=55&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is primarily exposed to market risk through interest rate fluctuations on its variable-rate debt. As of June 30, 2025, the company had **$1.04 billion** in outstanding variable-rate borrowings. A hypothetical **100 basis point** increase in the SOFR rate would increase annual interest expense by approximately **$10.4 million** - **The company's primary market risk is interest rate risk** on its variable-rate debt under the 2024 Credit Facility[268](index=268&type=chunk) - **As of June 30, 2025, a 100 basis point (1%) increase in the SOFR rate would result in an estimated $10.4 million** increase in annual interest expense on the company's **$1.04 billion** of variable-rate debt[270](index=270&type=chunk) [Item 4. Controls and Procedures](index=56&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of June 30, 2025. There were no material changes to the company's internal control over financial reporting during the quarter - **The CEO and CFO concluded that the company's disclosure controls and procedures were effective** as of June 30, 2025[272](index=272&type=chunk) - **No material changes were made to the internal control over financial reporting** during the quarter ended June 30, 2025[273](index=273&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=57&type=section&id=ITEM%201.%20Legal%20Proceedings) The company refers to Note 14 of the financial statements for information on legal proceedings, which details a class action lawsuit regarding the 2019 Stockholders Agreement. The company is appealing a court opinion and a related **$2.4 million** fee award - **For details on legal proceedings, the report refers to Note 14** of the condensed consolidated financial statements[274](index=274&type=chunk) [Item 1A. Risk Factors](index=57&type=section&id=ITEM%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - **The report refers to the Risk Factors section** of the company's Annual Report on Form 10-K for the year ended December 31, 2024, indicating no material changes[275](index=275&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=57&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities. It repurchased **106,955** shares of Class A common stock during the quarter at an average price of **$43.67** per share, primarily to cover tax withholding obligations for employees on vested stock awards - **There were no sales of unregistered securities** during the period[276](index=276&type=chunk) Issuer Repurchases of Equity Securities (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 104,278 | $43.74 | | May 2025 | 2,580 | $40.75 | | June 2025 | 97 | $40.40 | | **Total** | **106,955** | **$43.67** | - **Share repurchases were made to cover required tax withholding** for employees on the vesting of stock awards and were not part of a publicly announced repurchase plan[277](index=277&type=chunk) [Item 6. Exhibits](index=58&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, CEO/CFO certifications, and XBRL data files - **The exhibits filed with this report include the CEO and CFO certifications** pursuant to the Sarbanes-Oxley Act (Exhibits 31.1, 31.2, 32) and Inline XBRL documents[282](index=282&type=chunk) ```

Financial Highlights [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%202025%20Highlights) The Baldwin Group reported strong second quarter 2025 results with double-digit total and organic revenue growth of 11%, achieving significant growth in adjusted metrics despite a GAAP net loss, with Adjusted Diluted EPS increasing by 24% and Adjusted EBITDA growing by 14%, leading to a 60 basis point margin expansion Q2 2025 Key Financial Metrics | Metric | Q2 2025 | YoY Change | | :--- | :--- | :--- | | Total Revenue | $378.8 Million | +11% | | Organic Revenue Growth | 11% | - | | GAAP Net Loss | $5.1 Million | - | | GAAP Diluted Loss Per Share | $0.05 | - | | Adjusted Diluted EPS | $0.42 | +24% | | Adjusted EBITDA | $85.5 Million | +14% | | Adjusted EBITDA Margin | 22.6% | +60 bps | [Six Months 2025 Highlights](index=2&type=section&id=Six%20Months%202025%20Highlights) For the first six months of 2025, the company sustained strong performance with 10% total revenue growth and 11% organic growth, with Adjusted EBITDA growing 13% and a 70 basis point margin expansion, though adjusted free cash flow experienced a significant 35% year-over-year decrease Six Months Ended June 30, 2025 Key Financial Metrics | Metric | Six Months 2025 | YoY Change | | :--- | :--- | :--- | | Total Revenue | $792.2 Million | +10% | | Organic Revenue Growth | 11% | - | | GAAP Net Income | $19.8 Million | - | | Adjusted Diluted EPS | $1.06 | +18% | | Adjusted EBITDA | $199.3 Million | +13% | | Adjusted EBITDA Margin | 25.2% | +70 bps | | Adjusted Free Cash Flow | $34.4 Million | -35% | [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Trevor Baldwin emphasized the company's strong Q2 performance, highlighting double-digit organic growth and margin expansion, with the completion of remaining earnout obligations enhancing capital allocation flexibility for future strategic investments aimed at sustaining growth, improving margins, and reducing leverage - The CEO highlighted the completion of earnout obligations from partnership activity over the last five years as a key milestone[3](index=3&type=chunk) - The company now has increased flexibility for capital allocation to invest in strategic opportunities, improve margins, and decrease financial leverage[3](index=3&type=chunk) [Liquidity and Capital Resources](index=2&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, The Baldwin Group maintained a solid liquidity position with **$105.7 million** in cash and cash equivalents and substantial borrowing capacity of **$474 million** under its revolving credit facility - As of June 30, 2025, the company had **$105.7 million** in cash and cash equivalents[5](index=5&type=chunk) - The company had **$474 million** of borrowing capacity under its revolving credit facility[5](index=5&type=chunk) Consolidated Financial Statements [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) For Q2 2025, total revenues increased to $378.8 million from $339.8 million in Q2 2024, leading to a reduced net loss of $5.1 million compared to a $30.9 million loss in the prior-year period, while for the six-month period, revenues grew to $792.2 million, and net income increased to $19.8 million from $8.2 million year-over-year Income Statement Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $378,811 | $339,840 | $792,216 | $720,207 | | Operating Income | $27,940 | $16,458 | $83,957 | $50,716 | | Net Income (Loss) | $(5,141) | $(30,867) | $19,757 | $8,233 | | Diluted EPS | $(0.05) | $(0.28) | $0.15 | $0.06 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets stood at $3.74 billion, an increase from $3.53 billion at the end of 2024, accompanied by a rise in total liabilities to $2.69 billion from $2.53 billion, primarily due to increased long-term debt and borrowings on the revolving credit facility, with total stockholders' equity also increasing to $1.05 billion Balance Sheet Summary (in thousands) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $105,695 | $90,045 | | Total Assets | $3,738,985 | $3,534,731 | | Long-term debt, less current portion | $1,494,712 | $1,398,054 | | Total Liabilities | $2,688,616 | $2,525,934 | | Total Stockholders' Equity | $1,049,924 | $1,008,344 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2025, the company reported net cash used in operating activities of $80.7 million, a significant reversal from the $21.3 million provided by operations in the same period of 2024, heavily influenced by payments for contingent earnout consideration, while net cash from financing activities was $197.8 million, largely from proceeds from the revolving line of credit and debt refinancing Cash Flow Summary (in thousands) | Metric | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(80,704) | $21,346 | | Net cash provided by (used in) investing activities | $(46,201) | $35,602 | | Net cash provided by financing activities | $197,838 | $76,265 | | Net increase in cash | $70,933 | $133,213 | Non-GAAP Financial Measures and Reconciliations [Explanation of Non-GAAP Measures](index=8&type=section&id=Explanation%20of%20Non-GAAP%20Measures) The company utilizes non-GAAP financial measures such as Adjusted EBITDA, Organic Revenue, Adjusted Net Income, and Adjusted Free Cash Flow to provide investors with a clearer understanding of its core operating performance, excluding items like amortization, share-based compensation, transaction expenses, and other non-recurring costs to enhance comparability across periods - **Adjusted EBITDA:** Defined as net income adjusted for interest, taxes, D&A, and other specific items like share-based compensation and transaction expenses to measure operating performance[23](index=23&type=chunk) - **Organic Revenue:** Calculated based on commissions and fees, excluding the first twelve months of revenue from new partners and revenue from divestitures, to measure underlying growth[26](index=26&type=chunk) - **Adjusted Free Cash Flow:** Calculated as net cash from operating activities, excluding the impact of payments for contingent and colleague earnout consideration, to measure cash generation from business operations[29](index=29&type=chunk) [Reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin](index=10&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA%20and%20Adjusted%20EBITDA%20Margin) Adjusted EBITDA for Q2 2025 increased to $85.5 million from $74.9 million in Q2 2024, with the margin expanding to 22.6%, and for the six-month period, Adjusted EBITDA grew to $199.3 million from $176.6 million, with the margin increasing to 25.2%, reconciled from GAAP Net Income (Loss) through adjustments for interest, amortization, share-based compensation, and other non-recurring expenses Adjusted EBITDA Reconciliation Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) | $(5,141) | $(30,867) | $19,757 | $8,233 | | Total Adjustments | $90,653 | $105,755 | $179,550 | $168,341 | | Adjusted EBITDA | $85,512 | $74,888 | $199,307 | $176,574 | | Adjusted EBITDA Margin | 22.6% | 22.0% | 25.2% | 24.5% | [Reconciliation of Organic Revenue and Organic Revenue Growth](index=11&type=section&id=Reconciliation%20of%20Organic%20Revenue%20and%20Organic%20Revenue%20Growth) The company's organic revenue, which adjusts for new partnerships, was $374.3 million for Q2 2025 and $784.8 million for the first six months, resulting in an 11% organic revenue growth rate for both periods when compared to the adjusted prior-year figures Organic Revenue Growth Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Commissions and fees | $376,249 | $337,103 | $786,780 | $715,199 | | Partnership commissions and fees | $(1,980) | - | $(1,980) | - | | Organic Revenue | $374,269 | $337,103 | $784,800 | $715,199 | | Organic Revenue Growth % | 11% | 19% | 11% | 17% | [Reconciliation of Adjusted Net Income and Adjusted Diluted EPS](index=12&type=section&id=Reconciliation%20of%20Adjusted%20Net%20Income%20and%20Adjusted%20Diluted%20EPS) Adjusted Net Income for Q2 2025 was $49.5 million, a significant increase from $40.3 million in Q2 2024, translating to an Adjusted Diluted EPS of $0.42, up 24% from $0.34, while for the six-month period, Adjusted Net Income reached $126.1 million, with Adjusted Diluted EPS growing 18% to $1.06 Adjusted Net Income & Diluted EPS Reconciliation Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) Attributable to Baldwin | $(3,164) | $(17,557) | $10,775 | $4,021 | | Adjusted Net Income | $49,510 | $40,339 | $126,068 | $106,255 | | Diluted EPS | $(0.05) | $(0.28) | $0.15 | $0.06 | | Adjusted Diluted EPS | $0.42 | $0.34 | $1.06 | $0.90 | [Reconciliation of Adjusted Free Cash Flow](index=13&type=section&id=Reconciliation%20of%20Adjusted%20Free%20Cash%20Flow) For the six months ended June 30, 2025, Adjusted Free Cash Flow was $34.4 million, a 35% decrease from $52.9 million in the prior-year period, with the reconciliation adjusting the GAAP net cash used in operating activities of ($80.7 million) by adding back payments related to contingent earnout consideration and colleague earnout incentives Adjusted Free Cash Flow Reconciliation (in thousands) | Metric | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(80,704) | $21,346 | | Payment of contingent earnout consideration | $85,090 | $20,373 | | Payment of colleague earnout incentives | $30,061 | $11,144 | | Adjusted free cash flow | $34,447 | $52,863 | Other Information [Conference Call Information](index=2&type=section&id=Conference%20Call%20Information) The Baldwin Group will host a conference call and webcast to discuss the second quarter 2025 financial results on August 5, 2025, at 5:00 PM ET, with materials and access details available on the company's investor relations website - A conference call and webcast to discuss Q2 2025 results is scheduled for 5:00 PM ET on the day of the release[7](index=7&type=chunk) - A live webcast, slide presentation, and replay will be available on the company's investor relations website at ir.baldwin.com[7](index=7&type=chunk)[8](index=8&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This press release includes forward-looking statements concerning future events and financial performance, based on current management expectations and subject to significant risks and uncertainties that could cause actual results to differ materially, with investors advised to consult the company's SEC filings for a detailed discussion of these risks - The report contains forward-looking statements that are not historical facts and involve significant risks and uncertainties[12](index=12&type=chunk) - Readers are directed to the "Risk Factors" section of the company's Form 10-K and other SEC filings for a comprehensive understanding of potential risks[13](index=13&type=chunk)

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