Investors in The Baldwin Insurance Group, Inc. (BWIN) need to pay close attention to the stock based on moves in the options market lately. That is because the Dec. 19, 2025 $22.5 Callhad some of the highest implied volatility of all equity options today.What is Implied Volatility?Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the othe ...

Core Insights - The Baldwin Insurance Group reported a revenue of $365.39 million for the quarter ended September 2025, reflecting a year-over-year increase of 7.8% and a slight revenue surprise of +0.3% over the Zacks Consensus Estimate of $364.32 million [1] - The company's EPS for the quarter was $0.31, down from $0.33 in the same quarter last year, with an EPS surprise of +3.33% compared to the consensus estimate of $0.30 [1] Revenue Breakdown - Organic revenue growth was reported at 5%, slightly below the three-analyst average estimate of 5.5% [4] - Revenue from Insurance Advisory Solutions was $158.52 million, which is lower than the average estimate of $166.66 million, representing a year-over-year decline of -0.5% [4] - Underwriting, Capacity & Technology Solutions generated $147.27 million, exceeding the average estimate of $144.27 million, with a year-over-year increase of +13.5% [4] - Investment income was reported at $3.07 million, surpassing the estimated $2.52 million, but showing a significant year-over-year decline of -17.6% [4] - Corporate and Other revenue was reported at -$16.87 million, better than the estimated -$19.01 million, with a year-over-year change of -19.1% [4] - Commissions and fees revenue reached $362.32 million, slightly above the average estimate of $360.98 million, reflecting a year-over-year increase of +8.1% [4] - Mainstreet Insurance Solutions generated $76.48 million, exceeding the average estimate of $74.53 million, with a year-over-year growth of +8.2% [4] Stock Performance - The Baldwin Insurance Group's shares have returned -18.9% over the past month, contrasting with the Zacks S&P 500 composite's +2.1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Insights - The Baldwin Insurance Group (BWIN) reported quarterly earnings of $0.31 per share, exceeding the Zacks Consensus Estimate of $0.30 per share, but down from $0.33 per share a year ago, resulting in an earnings surprise of +3.33% [1] - The company achieved revenues of $365.39 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.30% and showing an increase from $338.94 million year-over-year [2] - The stock has underperformed significantly, losing about 42.2% since the beginning of the year compared to the S&P 500's gain of 16.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.30 on revenues of $356.42 million, and for the current fiscal year, it is $1.66 on revenues of $1.51 billion [7] - The estimate revisions trend for The Baldwin Insurance Group was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Insurance - Life Insurance industry is currently ranked in the top 20% of over 250 Zacks industries, suggesting a favorable outlook as the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Financial Data and Key Metrics Changes - Organic revenue growth in Q3 2025 was 5%, with year-to-date organic revenue growth at 9% [4] - Adjusted EBITDA was flat year-over-year at approximately $72.5 million, with an adjusted EBITDA margin decline of about 170 basis points to 19.8% [20] - Adjusted diluted earnings per share grew 11% year-over-year, reaching $0.31 [4][20] - Total revenue for Q3 was $365.4 million, with a GAAP net loss of $30.2 million [19][20] Business Line Data and Key Metrics Changes - In the Insurance Advisory Solutions (IIS) segment, organic revenue growth was flat, but adjusting for accounting changes, it would have been 4% [5][6] - Underwriting Capacity and Technology Solutions (UCTS) segment saw organic revenue growth of 16%, driven by strong performance in multifamily and commercial umbrella portfolios [9] - Mainstreet Insurance Solutions (MIS) segment experienced slightly negative organic revenue growth, primarily due to a one-time commission reset [10] Market Data and Key Metrics Changes - The renewal premium change was a significant headwind at -5.7%, reflecting client caution amid macroeconomic uncertainty [8] - Sales velocity remained strong at 20% in Q3, indicating effective new business generation [6][7] Company Strategy and Development Direction - The company announced the 3B30 CADLIST program, a three-year transformation initiative aimed at enhancing automation and AI integration [15][16] - The focus remains on organic reinvestment, M&A, and opportunistic share repurchases as part of capital allocation strategy [22][23] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to navigate a dynamic insurance market, expecting continued improvement in organic revenue growth in 2026 [18][24] - The company anticipates a cumulative transformation charge of approximately $40 million by the end of 2028, with projected annualized savings of $40 million [17][18] Other Important Information - The company is experiencing a historic high in the backlog of won but not yet booked new business, indicating strong future revenue potential [6] - The acquisition of Hippo's home builder distribution network is expected to enhance growth opportunities in the embedded home insurance market [13] Q&A Session Summary Question: Clarification on IIS segment performance - Management noted that the flat organic growth in IIS was impacted by a procedural accounting change, which is a timing issue rather than a loss of revenue [28] Question: Competitive pressures in UCTS - Management indicated that competitive dynamics vary by product line, and they maintain a strong market position through embedded insurance solutions [34][36] Question: Preliminary outlook for 2026 - Management expects high single-digit organic growth in 2026, with a gradual acceleration throughout the year [39][43] Question: Impact of commission changes on future revenue - Management clarified that the headwinds from commission changes will cease by April 2026, transitioning into a tailwind as new fee structures take effect [50][51] Question: Capital management and share buybacks - Management reiterated the commitment to achieving leverage below four times before initiating a share buyback program, emphasizing the importance of financial flexibility [53][54]

Q3 2025 EARNINGS SUPPLEMENT November 2025 Non-GAAP financial measures This presentation includes certain financial measures (including, retained commissions and fees, organic revenue, organic revenue growth, adjusted EBITDA, adjusted EBITDA margin, adjusted EBITDA margin on retained commissions and fees, adjusted net income, adjusted diluted EPS, pro forma revenue, pro forma adjusted EBITDA, pro forma adjusted EBITDA margin, and adjusted free cash flow) that are calculated and presented on the basis of meth ...

Financial Performance - Total revenues for Q3 2025 reached $365.4 million, a 7.5% increase from $338.9 million in Q3 2024[22]. - Commissions and fees contributed $362.3 million to total revenues in Q3 2025, up from $335.2 million in Q3 2024, reflecting an 8.1% growth[22]. - Operating income for Q3 2025 was $3.2 million, a significant decrease from $15.4 million in Q3 2024, indicating a decline of 79.1%[22]. - Net loss attributable to Baldwin for Q3 2025 was $18.7 million, compared to a loss of $8.4 million in Q3 2024, representing a 122.5% increase in losses[22]. - Basic and diluted loss per share for Q3 2025 was $0.27, compared to $0.13 in Q3 2024, reflecting a 107.7% increase in loss per share[22]. - Total operating expenses for Q3 2025 were $362.2 million, up from $323.5 million in Q3 2024, marking a 12% increase[22]. - The company reported a comprehensive loss of $29.2 million for Q3 2025, compared to a comprehensive loss of $14.5 million in Q3 2024[22]. - For the nine months ended September 30, 2025, total revenues were $1.16 billion, an increase of 9.3% from $1.06 billion in the same period of 2024[22]. - The company experienced a net loss of $10.5 million for the nine months ended September 30, 2025, compared to a loss of $6.2 million for the same period in 2024[22]. - The Baldwin Insurance Group reported a net loss of $10,480,000 for the nine months ended September 30, 2025, compared to a net loss of $6,242,000 for the same period in 2024, indicating a year-over-year increase in losses of approximately 68%[32]. Assets and Liabilities - Total assets increased to $3.794 billion as of September 30, 2025, up from $3.535 billion at December 31, 2024, representing a growth of approximately 7.3%[15]. - Current assets reached $1.106 billion, compared to $1.026 billion at the end of 2024, indicating an increase of about 7.8%[15]. - Total liabilities rose to $2.666 billion, up from $2.526 billion, reflecting an increase of approximately 5.5%[15]. - The company reported a total stockholders' equity of $1.128 billion, an increase from $1.008 billion, marking a growth of around 11.9%[15]. - Cash and cash equivalents at the end of the period were $325,944,000, down from $344,716,000 at the end of the same period in 2024, representing a decrease of approximately 5.5%[32]. - The Baldwin Insurance Group's total stockholders' equity increased to $1,036,234,000 as of September 30, 2024, from $1,018,488,000 at the end of 2023, reflecting a growth of approximately 1.7%[29]. - Total accrued expenses and other current liabilities rose from $160,631,000 at December 31, 2024 to $221,665,000 at September 30, 2025, an increase of about 38.1%[95]. Cash Flow and Expenditures - Cash flows from operating activities resulted in a net cash used of $39,687,000 for the nine months ended September 30, 2025, contrasting with net cash provided of $53,754,000 in 2024[32]. - The company incurred capital expenditures of $29,174,000 during the nine months ended September 30, 2025, compared to $28,897,000 in the same period of 2024, reflecting a slight increase of 1%[32]. - The Company reported share-based compensation expense of $51,772,000 for the nine months ended September 30, 2025, compared to $46,764,000 in 2024, marking an increase of about 11%[32]. - The Company recorded share-based compensation expense of $22.0 million for the three months ended September 30, 2025, compared to $17.9 million for the same period in 2024, representing a 22.9% increase[115]. Business Combinations and Acquisitions - The Company completed two business combinations for an aggregate purchase price of $129.1 million during the nine months ended September 30, 2025[72]. - The Company acquired assets and equity interests of MultiStrat Group effective April 1, 2025, enhancing its capability to source alternative reinsurance capital[75]. - The Company acquired all outstanding equity interests of Hippo's Homebuilder Distribution Network effective July 1, 2025, improving its distribution capabilities for property and casualty insurance solutions[75]. - Total revenues from business combinations for the three months ended September 30, 2025, were $12.2 million, with net income of $2.7 million[77]. - The total consideration for Hippo's Homebuilder Distribution Network acquisition was $129.078 million, including cash consideration of $87.399 million[80]. - Recognized amounts of identifiable net assets acquired totaled $122.879 million, with goodwill recognized at $104.119 million[80]. Debt and Financing Activities - The 2025 Term Loan Facility has a principal amount of $1.006 billion, maturing on May 24, 2031[12]. - The revolving line of credit stands at $66 million, maturing on May 24, 2029[12]. - The company’s long-term debt as of December 31, 2024 was $1.44 billion, which included a term loan facility of $840 million and a revolving credit facility of $600 million[96]. - As of September 30, 2025, the outstanding borrowings under the 2025 Term Loans were $1.004 billion with an interest rate of 6.64%[101]. - The Company’s net cash provided by financing activities was $182,439,000 for the nine months ended September 30, 2025, compared to $38,390,000 in 2024, indicating a substantial increase in financing activities[32]. - The Company provided for $75.0 million of incremental term B loans as part of the amendments to the 2024 Credit Agreement[285]. - The aggregate principal amount of the 2025 Term Loans was increased to $1.006 billion following the amendments to the 2024 Credit Agreement[288]. Risk Management - The company emphasizes the importance of risk factors that could impact future performance, as outlined in their annual report[11]. - The company utilized derivative instruments to mitigate risks related to rising interest rates on cash flows, although not for trading or speculative purposes[283]. - A floating-to-fixed interest rate swap agreement was entered into with a notional amount of $500.0 million, converting variable rate cash flows into fixed rate payments at 3.244%[286]. - The interest rate swap aims to manage exposure to interest rate risk and provides predictability in interest expense[286]. - An increase of 100 basis points on the SOFR rate would have increased annual interest expense under the 2024 Credit Facility by $5.7 million[287]. Revenue Recognition - The Company recognizes revenue from commissions based on a percentage of premiums paid by clients, with allowances for estimated policy cancellations[57]. - The Company’s profit-sharing commissions are based on underwriting results and are subject to significant reversal due to loss performance uncertainty[61]. - The Company’s investment income primarily consists of interest earnings on cash invested in treasury money market funds[65]. - The Company recognized revenue of $38.1 million related to contract liabilities balance at December 31, 2024, during the nine months ended September 30, 2025[91]. Operating Groups - The Company generated commissions from insurance placement and profit-sharing income across its three operating groups[135]. - The Insurance Advisory Solutions operating group focuses on commercial risk management and employee benefits solutions[136]. - The Underwriting, Capacity & Technology Solutions group includes a proprietary, technology-enabled insurance product platform[136]. - The Mainstreet Insurance Solutions group offers personal and commercial insurance solutions through sheltered distribution channels[136].

Revenue Performance - Total revenue for Q3 2025 increased by 8% year-over-year to $365.4 million, with organic revenue growth of 5%[1] - Year-to-date total revenue grew by 9% to $1.158 billion, with organic revenue growth also at 9%[11] - Total revenues for Q3 2025 were $365,389,000, an increase from $338,938,000 in Q3 2024, with total revenues for the nine months reaching $1,157,605,000 compared to $1,059,145,000 in the prior year[37] - Organic revenue for Q3 2025 reached $350,095,000, reflecting a growth of 5% year-over-year, while organic revenue growth for the nine months ended September 30, 2025, was 9%[39] - Organic revenue growth for the nine months ended September 30, 2025, was $91,369,000, down from $144,844,000 in the same period of 2024, indicating a slowdown in growth[39] Net Loss and Earnings - Q3 2025 net loss was $30.2 million, resulting in a diluted loss per share of $0.27; adjusted diluted EPS was $0.31, a decrease of 6% year-over-year[5] - Year-to-date net loss amounted to $10.5 million, with a diluted loss per share of $0.12; adjusted diluted EPS increased by 11% year-over-year to $1.37[11] - The company reported a net loss of $30,237,000 for Q3 2025, compared to a net loss of $14,475,000 in Q3 2024, resulting in a net loss margin of -8%[37] - Net loss for the nine months ended September 30, 2025, was $10,480, compared to a loss of $6,242 in the same period of 2024, reflecting a deterioration of 68.0%[23] Adjusted EBITDA and Cash Flow - Adjusted EBITDA for Q3 2025 was $72.5 million, maintaining the same level year-over-year, with an adjusted EBITDA margin of 19.8%[5] - Year-to-date adjusted EBITDA grew by 9% to $271.8 million, with an adjusted EBITDA margin of 23.5%[11] - Adjusted EBITDA for Q3 2025 was $72,520,000, slightly down from $72,751,000 in Q3 2024, with an adjusted EBITDA margin of 19.8% compared to 21.5% in the previous year[37] - Adjusted free cash flow for Q3 2025 increased by 26% year-over-year to $41.8 million[5] - Adjusted free cash flow for the three months ended September 30, 2025, was $41,810,000, up from $33,180,000 in 2024, indicating a growth of 26%[47] - Adjusted free cash flow for the nine months ended September 30, 2025, was $76,257,000, down from $86,043,000 in 2024, reflecting a decline of 11%[47] Financial Position - As of September 30, 2025, cash and cash equivalents were $89.7 million, with a borrowing capacity of $524 million under the revolving credit facility[6] - Total assets increased to $3,793,774, up from $3,534,731, representing a growth of 7.3%[21] - Current liabilities decreased to $959,713 from $1,056,434, a reduction of 9.2%[21] - Total stockholders' equity increased to $1,127,680 from $1,008,344, a rise of 11.8%[21] - Cash and cash equivalents at the end of the period were $325,944, down from $344,716, a decrease of 5.0%[23] Capital Expenditures and Contingent Payments - The company reported capital expenditures of $29,174 for the nine months ended September 30, 2025, compared to $28,897 in 2024, indicating a slight increase of 1.0%[23] - The company reported a significant payment of $85,090 for contingent earnout consideration, compared to $21,145 in the previous year, reflecting an increase of 302.5%[23] - Payment of contingent earnout consideration in excess of purchase price accrual for the nine months ended September 30, 2025, was $85,090,000, compared to $21,145,000 in 2024[47] - Payment of colleague earnout incentives for the nine months ended September 30, 2025, was $30,854,000, up from $11,144,000 in 2024[47] Future Reporting Changes - The company plans to present fiduciary assets and liabilities separately on the consolidated balance sheets starting January 1, 2025, which will affect the calculation of adjusted free cash flow[35] - Adjusted free cash flow is now impacted by changes in fiduciary cash presentation, which may affect previously reported figures for prior periods[35] Management Insights - The CEO highlighted ongoing optimization of the capital stack and continued de-levering as key drivers for long-term shareholder value[4] - The company highlighted the importance of organic revenue growth as a key metric for assessing financial performance, although specific figures were not provided[28]

Core Insights - The Baldwin Group's Q3 2025 Market Pulse report indicates a continued softening in the commercial property market, driven by renewed competition, improved capacity, and more flexible structures for well-differentiated risks [1] Commercial Property Market - The report highlights a clear trend of softening in the commercial property market, suggesting a shift in pricing dynamics [1] - Factors contributing to this softening include increased competition and enhanced capacity within the market [1] - The introduction of more flexible structures for well-differentiated risks is also noted as a significant factor [1] Casualty Lines - The report implies that casualty lines are experiencing different dynamics compared to the commercial property market, although specific details are not provided [1]

Economic Indicators - China's September exports rose by +8.3% year-on-year, exceeding expectations of +6.6% and marking the largest increase in six months [1] - September imports in China increased by +6.4% year-on-year, surpassing expectations of +1.8% and representing the largest rise in 17 months [1] Market Reactions - Stock indexes experienced a sharp rise on Monday, recovering some losses from the previous Friday's plunge, driven by a softening of the Trump administration's rhetoric towards China [5][6] - The S&P 500 Index closed up +1.56%, the Dow Jones Industrials Index rose by +1.29%, and the Nasdaq 100 Index increased by +2.18% [6] Corporate Earnings - More than 22% of S&P 500 companies provided guidance for Q3 earnings that are expected to exceed analysts' expectations, the highest in a year [10] - Q3 profits are projected to rise by +7.2%, the smallest increase in two years, while sales growth is expected to slow to +5.9% from 6.4% in Q2 [10] Sector Performance - Chipmakers and AI infrastructure stocks rallied, with Broadcom's shares jumping over +9% following a multi-year agreement with OpenAI [5][15] - Rare earth stocks surged due to tensions between China and the US, with Critical Metals closing up more than +53% [17] - Mining stocks also increased as gold prices rose more than +3% to an all-time high, benefiting companies like Coeur Mining and Newmont [18] Upcoming Events - The market will focus on trade or tariff news and attempts to reopen the government, with major banks set to release Q3 earnings results [9]

Core Viewpoint - Investors in the Life Insurance sector should consider Voya Financial (VOYA) and The Baldwin Insurance Group (BWIN) for potential value opportunities [1] Group 1: Zacks Rank and Earnings Estimates - Voya Financial has a Zacks Rank of 2 (Buy), indicating a positive earnings estimate revision activity, while The Baldwin Insurance Group has a Zacks Rank of 4 (Sell) [3] - The Zacks Rank emphasizes earnings estimates and revisions, which are crucial for identifying value opportunities [2] Group 2: Valuation Metrics - Voya Financial has a forward P/E ratio of 8.24, significantly lower than BWIN's forward P/E of 17.25 [5] - Voya's PEG ratio is 0.54, compared to BWIN's PEG ratio of 0.92, indicating better value relative to expected earnings growth [5] - Voya has a P/B ratio of 1.1, while BWIN's P/B ratio is 3.25, further highlighting Voya's more attractive valuation metrics [6] Group 3: Overall Value Assessment - Based on the stronger estimate revision activity and more favorable valuation metrics, Voya Financial is considered the superior option for value investors compared to The Baldwin Insurance Group [7]