Core Insights - The Baldwin Insurance Group reported a revenue of $378.81 million for the quarter ended June 2025, reflecting an 11.5% increase year-over-year and a surprise of +1.23% over the Zacks Consensus Estimate of $374.2 million [1] - The earnings per share (EPS) for the quarter was $0.42, up from $0.34 in the same quarter last year, with an EPS surprise of +2.44% compared to the consensus estimate of $0.41 [1] Financial Performance Metrics - Organic revenue growth was reported at 11%, exceeding the average estimate of 9.8% based on four analysts [4] - Revenue from Insurance Advisory Solutions was $183.27 million, surpassing the estimated $176.75 million, representing a year-over-year increase of +9% [4] - Revenue from Underwriting, Capacity & Technology Solutions was $147.51 million, exceeding the estimated $145.7 million, with a year-over-year change of +20.4% [4] - Revenue from Mainstreet Insurance Solutions was $66.56 million, below the estimated $71.56 million, indicating a year-over-year decrease of -0.8% [4] - Revenue from Corporate and Other was reported at -$18.53 million, better than the estimated -$22.4 million, showing a year-over-year improvement of +3.9% [4] - Revenue from Commissions and fees was $376.25 million, exceeding the estimated $372.44 million, with a year-over-year increase of +11.6% [4] - Investment income was reported at $2.56 million, slightly below the estimated $2.71 million, reflecting a year-over-year decrease of -6.4% [4] Stock Performance - Shares of The Baldwin Insurance Group have returned -9.6% over the past month, contrasting with the Zacks S&P 500 composite's +1% change [3] - The stock currently holds a Zacks Rank 2 (Buy), suggesting potential outperformance against the broader market in the near term [3]

Financial Data and Key Metrics Changes - The company reported organic revenue growth of 11% and adjusted EBITDA growth of 14% for the second quarter [5][17] - Adjusted diluted earnings per share increased by 24% [5] - Total revenue for the second quarter was $378.8 million, with a GAAP net loss of $5.1 million [17] - Adjusted free cash flow decreased to $9 million from $29 million in the prior year [18] - Net leverage increased slightly to 4.17 times due to earn out payments and investments [19] Business Line Data and Key Metrics Changes - Insurance Advisory Solutions (IAS) segment saw organic revenue growth of 10%, driven by strong new business generation [5][17] - Underwriting Capacity and Technology Solutions (UCTS) segment achieved organic revenue growth of 21% [17] - Main Street Insurance Solutions (MIS) segment reported flat organic revenue growth due to commission rate reductions and elevated churn in the Medicare business [10][17] Market Data and Key Metrics Changes - Sales velocity increased from 14% in Q1 to 22% in Q2, outperforming industry median sales velocity of 11.7% [6] - The impact of rate and exposure changes was muted at 1.3%, reflecting reduced pricing in large catastrophe-exposed coastal properties [6][26] - The Medicare business, while small, is expected to stabilize in 2026 after experiencing elevated churn [11] Company Strategy and Development Direction - The company aims to achieve $3 billion in revenue and a 30% adjusted EBITDA margin by 2029, referred to as the 3B30 plan [24] - Focus on maintaining underwriting discipline amidst increased pricing pressure and competition [8][90] - The acquisition of Hippo's homebuilder distribution network is expected to enhance growth opportunities in the builder business [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering top industry organic growth and double-digit earnings growth despite current headwinds [23] - The company anticipates continued challenges in the insurance marketplace but remains focused on margin expansion and sustainable growth [15][19] - Management highlighted the importance of new business generation capabilities to drive growth amidst macro uncertainties [6][15] Other Important Information - The company has extinguished all earn out liabilities associated with partnerships completed during its first five years as a public company [5][19] - The Medicare business is expected to return to double-digit growth in 2026 and beyond [11][44] - The company is strategically managing investments to adapt to the current environment while focusing on long-term shareholder value [23] Q&A Session Summary Question: Drivers of organic growth in the Insurance Advisory Solutions segment - Management attributed the 10% organic growth to strong new business and slightly higher rate and exposure than anticipated [25][26] Question: Conviction regarding changes in rate and exposure - Management noted a deceleration in property rates and sluggishness in capital expenditures as factors influencing their outlook [29][30] Question: Adjusted free cash flow disclosure and moving pieces - Management clarified that changes in working capital can fluctuate quarter to quarter and are not a concern [38][39] Question: Main Street organic revenue growth challenges - Management identified commission reductions and elevated churn in the Medicare business as the main drivers of flat growth [41][42] Question: Employee benefits business conditions - Management reported modest rate and exposure dynamics but continued meaningful growth in the employee benefits segment [74] Question: M&A space observations - Management noted healthy deal flow activity and a divergence in M&A pricing based on business quality [60][62] Question: Rate and exposure outlook for 2026 - Management expects stabilization in the property market but does not anticipate a reversal in rate activity [86][87]

Financial Data and Key Metrics Changes - The company reported organic revenue growth of 11% and total revenue of $378.8 million for the second quarter [15] - Adjusted EBITDA rose 14% to $85.5 million, with an adjusted EBITDA margin expansion of approximately 60 basis points to 22.6% [16] - Adjusted diluted earnings per share grew by 24% [5] - The company recorded a GAAP net loss of $5.1 million, translating to a GAAP diluted loss per share of $0.05 [15] - Adjusted net income for the quarter was $49.5 million, or $0.42 per fully diluted share [15] Business Line Data and Key Metrics Changes - In the Insurance Advisory Solutions (IAS) segment, organic revenue growth accelerated to 10%, driven by strong new business generation [5] - The Underwriting Capacity and Technology Solutions (UCTS) segment saw organic revenue growth of 21%, following a strong 37% growth in 2024 [6] - The Main Street Insurance Solutions (MIS) segment experienced flat organic revenue growth due to reduced commission rates and elevated churn in the Medicare business [9][10] Market Data and Key Metrics Changes - Sales velocity increased from 14% in Q1 to 22% in Q2, with a year-to-date sales velocity of 18%, outperforming industry medians [5][6] - The company anticipates continued headwinds in the insurance marketplace, particularly in the E and S homeowners book due to increased pricing pressure and competition [7][8] Company Strategy and Development Direction - The company aims to achieve $3 billion in revenue and a 30% adjusted EBITDA margin by 2029, referred to as the 3B30 plan [21] - The acquisition of Hippo's homebuilder distribution network is expected to enhance the company's market position and provide additional proprietary capacity [12] - The company is focused on managing investments prudently to ensure margin expansion and sustainable growth [13][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver top-tier organic growth and double-digit growth in adjusted earnings despite current market challenges [20] - The company expects to face a challenging insurance marketplace throughout the year but remains focused on managing the business to achieve margin expansion goals [13] - Management highlighted the importance of new business generation capabilities to drive sustainable growth over time [6][13] Other Important Information - The company paid $57 million in earn-outs, fully extinguishing all earn-out liabilities associated with partnerships completed during its first five years as a public company [5][17] - Adjusted free cash flow for the quarter was $9 million, down from $29 million in Q2 2024, primarily due to timing of accounts receivable collections [16] Q&A Session Summary Question: Drivers of organic growth in the Insurance Advisory Solutions segment - Management attributed the strong organic growth to high sales velocity and slightly higher rate and exposure than anticipated due to new business from large energy clients [22][23] Question: Conviction on the expected changes in organic growth - Management noted that the deceleration in property rates and sluggish capital expenditures contribute to their outlook, but they expect a rebound as macro conditions improve [25][26] Question: Adjusted free cash flow disclosure and moving pieces - Management clarified that the revised presentation fully absorbs changes in working capital, and they expect growth in free cash flow to align with double-digit earnings growth [32][34] Question: Impact of Medicare business on organic revenue growth - Management indicated that elevated churn in the Medicare business is expected to continue impacting results, but they remain optimistic about returning to double-digit growth next year [39][40] Question: M&A market conditions and focus areas - Management observed healthy deal flow activity and a divergence in M&A pricing, with high-quality businesses commanding top-tier pricing [57][58] Question: Rate and exposure outlook for 2026 - Management does not anticipate a reversal in rate activity but expects some stabilization in the property market next year [82][83] Question: E and S home pressure and market competition - Management confirmed that the pressure is driven by market competition rather than reinsurance renewals, with new entrants increasing capacity [84][85]

Financial Performance - Q2 2025 - Total revenue increased to $378811000, an 11% growth compared to Q2 2024's $339840000[7] - Retained commissions and fees reached $305225000, a 13% increase from Q2 2024's $271184000[7] - Adjusted EBITDA rose to $85512000, a 14% increase from $74888000 in Q2 2024[7] - Adjusted net income increased by 23% to $49510000, compared to $40339000 in Q2 2024[7] Financial Performance - Year-to-Date 2025 - Total revenue reached $792216000, a 10% increase compared to YTD 2024's $720207000[7] - Retained commissions and fees increased to $652807000, an 11% rise from YTD 2024's $590514000[7] - Adjusted EBITDA grew to $199307000, a 13% increase from $176574000 YTD 2024[7] - Adjusted net income increased by 19% to $126068000, compared to $106255000 YTD 2024[7] Strategic Acquisition - Westwood acquired Hippo's homebuilder distribution network on July 1, 2025[15] - The acquired network has approximately $29 million in LTM revenue[12] - The acquisition is expected to contribute ~$7 million in NTM Adjusted EBITDA[12]

PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=6&type=section&id=ITEM%201.%20Financial%20Statements%20(Unaudited)) Unaudited condensed consolidated financial statements for June 30, 2025, report total assets of **$3.74 billion**, revenues of **$792.2 million**, and net income attributable to Baldwin of **$10.8 million**, reflecting retrospective changes in fiduciary asset presentation Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $1,239,709 | $1,026,490 | | **Goodwill** | $1,420,583 | $1,412,369 | | **Total assets** | $3,738,985 | $3,534,731 | | **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 | Condensed Consolidated Statements of Comprehensive Income Highlights (in thousands, except per share data) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Total revenues** | $792,216 | $720,207 | | **Operating income** | $83,957 | $50,716 | | **Net income attributable to Baldwin** | $10,775 | $4,021 | | **Diluted earnings per share** | $0.15 | $0.06 | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash (used in) provided by operating activities** | $(80,704) | $21,346 | | **Net cash (used in) provided by investing activities** | $(46,201) | $35,602 | | **Net cash provided by financing activities** | $197,838 | $76,265 | | **Net increase in cash and cash equivalents** | $70,933 | $133,213 | - Beginning January 1, 2025, the company changed its balance sheet presentation for fiduciary assets and liabilities, recasting prior period amounts by separating fiduciary cash, receivables, and liabilities from other accounts[46](index=46&type=chunk)[47](index=47&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, business combinations, and segment information, highlighting the MultiStrat Group acquisition for **$24.6 million**, establishment of a captive insurance operation, and January 2025 debt refinancing, with operations across IAS, UCTS, and MIS segments - The company acquired MultiStrat Group for an aggregate purchase price of **$24.6 million**, including **$8.8 million** in contingent earnout consideration, during the six months ended June 30, 2025[68](index=68&type=chunk)[69](index=69&type=chunk)[75](index=75&type=chunk) - Effective January 1, 2025, the company's captive insurance operation (MSI Cell) began participating as a quota share reinsurer on two MGA programs, generating **$9.8 million** in assumed premium earned for the six months ended June 30, 2025[63](index=63&type=chunk)[148](index=148&type=chunk)[150](index=150&type=chunk) - On January 10, 2025, the company amended its credit facility, adding **$100.0 million** of incremental term B loans and increasing the total senior secured first lien term loan facility to **$935.8 million**[93](index=93&type=chunk) Disaggregated Revenues by Major Source (Six Months Ended June 30, in thousands) | Revenue Source | 2025 | 2024 | | :--- | :--- | :--- | | Commission revenue | $638,105 | $602,780 | | Profit-sharing revenue | $44,300 | $42,972 | | Consulting and service fee revenue | $47,531 | $38,754 | | Policy fee and installment fee revenue | $37,664 | $27,250 | | Assumed premium earned | $9,805 | $0 | | Other income | $9,375 | $3,443 | | Investment income | $5,436 | $5,008 | | **Total revenues** | **$792,216** | **$720,207** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's performance, highlighting a 10% revenue increase driven by organic growth, segment results, non-GAAP measures, and liquidity, with a strategy focused on organic growth and MGA platform expansion, maintaining sufficient liquidity with **$105.7 million** cash and **$474 million** available on the revolving facility [Results of Operations](index=38&type=section&id=Results%20of%20Operations) For the six months ended June 30, 2025, total revenues increased 10% to **$792.2 million** and operating income grew 66% to **$84.0 million**, driven by a 10% rise in commissions and fees from organic growth, MSI platform performance, and new Captive business, while operating expenses rose 6% due to Captive losses and higher professional fees Consolidated Results of Operations Highlights (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total revenues** | $792,216 | $720,207 | 10% | | **Total operating expenses** | $708,259 | $669,491 | 6% | | **Operating income** | $83,957 | $50,716 | 66% | | **Income before income taxes** | $20,442 | $10,384 | 97% | - Commissions and fees for H1 2025 increased by **$71.6 million (10%)**, driven by **$68.9 million** in organic growth from new/renewal business, MSI outperformance, and the new Captive business, partially offset by a **$5.8 million** revenue decrease from the divested Wholesale Business[170](index=170&type=chunk) - Other operating expenses for H1 2025 increased by **$21.8 million**, primarily due to **$8.8 million** in incurred losses and LAE from the new Captive business, **$5.5 million** in higher professional fees, and **$3.1 million** in rebranding-related marketing costs[178](index=178&type=chunk) [Non-GAAP Financial Measures](index=41&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like Adjusted EBITDA, Organic Revenue Growth, and Adjusted Diluted EPS to assess performance, with Adjusted EBITDA increasing to **$199.3 million** and Adjusted Diluted EPS rising to **$1.06** for the six months ended June 30, 2025 Adjusted EBITDA Reconciliation (Six Months Ended June 30, in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | **Net income (loss)** | $19,757 | $8,233 | | **Adjustments** | $179,550 | $168,341 | | **Adjusted EBITDA** | **$199,307** | **$176,574** | | **Adjusted EBITDA margin** | 25% | 25% | Organic Revenue Growth (Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | **Commissions and fees (GAAP)** | $786,780 | $715,199 | | **Organic revenue** | $784,800 | $715,199 | | **Organic revenue growth %** | 11% | 17% | Adjusted Diluted EPS Reconciliation (Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | **Net income (loss) attributable to Baldwin** | $10,775 | $4,021 | | **Adjusted net income** | $126,068 | $106,255 | | **Adjusted diluted weighted-average shares** | 118,770 | 117,800 | | **Adjusted diluted EPS** | **$1.06** | **$0.90** | [Operating Group Results](index=45&type=section&id=Operating%20Group%20Results) For H1 2025, IAS revenues grew 5% to **$410.9 million**, UCTS revenues increased 20% to **$272.7 million** driven by MSI and new Captive business, and MIS revenues grew 4% to **$144.4 million** - **IAS:** H1 2025 revenue grew **5%** to **$410.9 million**, with core commission growth driven by **18%** sales velocity, partially offset by a **230 bps** headwind from softening property insurance rates[200](index=200&type=chunk)[203](index=203&type=chunk) - **UCTS:** H1 2025 revenue grew **20%** to **$272.7 million**, with core commission growth of **23%** (excluding divested Wholesale Business) driven by MSI outperformance (+$30.8 million), Capacity Solutions group (+$8.0 million), and the new Captive business (+$9.8 million)[212](index=212&type=chunk)[215](index=215&type=chunk) - **MIS:** H1 2025 revenue grew **4%** to **$144.4 million**, primarily due to a **$3.6 million** increase in profit-sharing revenue from improved loss ratios, with core commissions increasing by **$2.0 million**[225](index=225&type=chunk)[228](index=228&type=chunk) [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$105.7 million** cash and **$474 million** available on its Revolving Facility as of June 30, 2025, with primary needs including organic growth and debt service, and total contractual obligations of **$2.44 billion**, primarily **$2.33 billion** in debt - As of June 30, 2025, the company had **$105.7 million** in cash and cash equivalents and **$474 million** available under its Revolving Facility[248](index=248&type=chunk) Contractual Obligations and Commitments as of June 30, 2025 (in thousands) | Obligation Type | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | | :--- | :--- | :--- | :--- | :--- | :--- | | 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 | $21,509 | $7,552 | $13,957 | $0 | $0 | | **Total** | **$2,444,468** | **$161,378** | **$308,643** | **$382,288** | **$1,592,159** | - Net cash used in operating activities was **$80.7 million** for H1 2025, a significant increase from the **$21.3 million** provided in H1 2024, primarily due to a **$64.7 million** increase in payments of contingent earnout consideration[261](index=261&type=chunk)[262](index=262&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=55&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to market risk, primarily interest rate changes on its variable-rate debt, with **$1.04 billion** outstanding as of June 30, 2025, where a 100 basis point SOFR increase would raise annual interest expense by **$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** increase in the SOFR rate would result in an estimated **$10.4 million** increase in annual interest expense on the **$1.04 billion** of outstanding variable-rate debt[270](index=270&type=chunk) [Controls and Procedures](index=56&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes in 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 to the company's internal control over financial reporting occurred during the quarter ended June 30, 2025[273](index=273&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=57&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is appealing a Delaware court's invalidation of certain 2019 Stockholders Agreement provisions and a related **$2.4 million** attorneys' fee award, with potential losses estimated between **$0** and **$2.4 million** - The company is appealing a Delaware Court of Chancery opinion that invalidated certain provisions of its 2019 Stockholders Agreement[123](index=123&type=chunk) - The company has also appealed a related **$2.4 million** award for attorneys' fees, with potential losses estimated between **$0** and **$2.4 million**, a significant portion of which may be covered by insurance[123](index=123&type=chunk) [Risk Factors](index=57&type=section&id=ITEM%201A.%20Risk%20Factors) No material changes have occurred 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 outlined in the Annual Report on Form 10-K for the year ended December 31, 2024, indicating no material changes[275](index=275&type=chunk) [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, repurchasing **106,955** shares of Class A common stock at an average price of **$43.67** per share during Q2 2025 to cover employee tax withholding obligations - 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** | [Other Information](index=57&type=section&id=ITEM%205.%20Other%20Information) During the quarter ended June 30, 2025, no directors or officers adopted or terminated any Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements - No directors or officers adopted or terminated any Rule 10b5-1 trading plans during the second quarter of 2025[280](index=280&type=chunk) [Exhibits](index=58&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, including CEO and CFO certifications and XBRL data files

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) [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 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, 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 earnout obligations enhancing capital allocation flexibility - 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](index=5&type=section&id=Consolidated%20Financial%20Statements) [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, while six-month revenues grew to $792.2 million with net income increasing to $19.8 million 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 and total stockholders' equity 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 prior year, largely influenced by payments for contingent earnout consideration 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](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) [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 - **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%, reflecting growth for both the quarter and six-month period 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 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% Adjusted Net Income & Diluted EPS Reconciliation Summary | 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 the prior-year period, with reconciliation adjusting for 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](index=2&type=section&id=Other%20Information) [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 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, which are subject to significant risks and uncertainties that could cause actual results to differ materially - 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)

Group 1: Congressional Trading Insights - Congressional members are actively buying and selling stocks in 2025, with significant cash flows that investors should monitor [1] - Microsoft is the most sold stock by Congress this year, with 34 trades by 17 members tracked, indicating bipartisan activity [1][2] - The sales of Microsoft are occurring alongside its status as the most bought stock, suggesting mixed signals for investors [3] Group 2: Microsoft Stock Analysis - Microsoft maintains a strong leadership position in AI and technology, despite some Congress members taking profits [3] - Analyst trends for Microsoft show a Moderate Buy rating with a price target of $550.14, indicating an expected upside of about 8% [3] Group 3: Alphabet Stock Activity - Alphabet is the second-most-sold stock by Congress in 2025, with 17 trades from 11 members, primarily occurring in the spring [5][6] - Unlike Microsoft, Alphabet is not on the Most Bought list, which may indicate a potential long-term trend of selling due to regulatory challenges [7] Group 4: Baldwin Insurance Insights - Baldwin Insurance saw significant sales from a single member, Representative C. Scott Franklin, ahead of hurricane season, raising concerns about its business exposure [10][11] - The company is facing financial pressures, including a growing debt burden, leading to negative sentiment and price declines [12] Group 5: Lam Research Overview - Lam Research is the fourth most sold stock by Congress, with nine members selling 13 times from January to May, aligning with a broader market sell-off [14] - Analysts have shown a rebound in sentiment for Lam Research, with a Moderate Buy rating and a price target of $100.57, suggesting potential for growth [15] Group 6: NVIDIA Trading Activity - NVIDIA is the sixth-most-sold stock by Congress, but it is also the second most bought, indicating overall bullish sentiment [18][19] - Analysts are optimistic about NVIDIA's revenue growth and AI dominance, with a consensus price target suggesting an increase of nearly 40% from late-July trading levels [20]

Summary of Baldwin Group Conference Call Company Overview - **Company**: Baldwin Group - **Industry**: Insurance Brokerage - **Founded**: Early 2010s - **IPO**: October 2019 - **Revenue at IPO**: Approximately $150 million with around 400 employees [5][6] Key Points and Arguments Growth and Business Model - Baldwin Group has rapidly scaled from a local Florida-centric retail insurance broker to a national platform, growing organically at a rate at least twice that of industry peers [4][6] - The company has completed 35 partnerships (acquisitions) since its IPO, acquiring approximately $530 million in revenue [6][15] - The company aims to achieve $3 billion in revenue and a 30% adjusted EBITDA margin over the next five years [10][16] Operating Segments - **Insurance Advisory Solutions (IES)**: Represents about 48% of total revenue, providing middle market retail insurance broking services [6][7] - **Underwriting Capacity and Technology**: Focuses on building proprietary insurance products and vertically integrating into the insurance value chain [8][11] - **Main Street Insurance**: Innovates personal insurance distribution, particularly through partnerships with homebuilders and mortgage providers [12][19] Competitive Advantages - Baldwin Group leverages technology to create a fully integrated platform, enhancing client experience and driving organic growth [7][32] - The company has a unique embedded personal insurance strategy, capturing a significant share of the new home insurance market [12][14] - The company has invested approximately $50 million since 2022 to build capabilities in the mortgage channel, anticipating significant growth [28] Financial Performance - Adjusted diluted EPS has grown nearly 40% CAGR since the IPO [16] - The company is at an inflection point for free cash flow conversion, with expectations of improved margins and reduced cash flow directed towards earn-outs [18][21] - The company has maintained a track record of executing M&A in a highly accretive manner, focusing on quality over quantity [15][21] Market Dynamics - The homeowners insurance market is currently distressed due to natural disasters, presenting an opportunity for Baldwin to offer competitive pricing and innovative solutions [23][25] - The U.S. personal lines insurance marketplace was nearly $500 billion in direct written premium, with Baldwin targeting the underserved broker channel [13][14] Future Outlook - Baldwin Group is positioned for continued organic growth, aiming for a long-term growth rate of 10% to 15% while achieving peer-level margins [21] - The company plans to re-engage in M&A as its financial profile improves, creating additional opportunities for value creation [21][22] Additional Important Content - Baldwin's unique approach to integrating acquisitions onto a single agency management system allows for consistent results in new business generation and client retention [30][32] - The company emphasizes the importance of data access for negotiating better rates with insurance partners, enhancing profitability and client outcomes [35][36]

Core Viewpoint - Baldwin Insurance Group reported strong first quarter results, highlighting industry-leading organic growth, margin expansion, and double-digit earnings growth [4]. Financial Performance - The company expressed satisfaction with its first quarter performance, emphasizing ongoing margin expansion and a continuation of its growth trajectory [4]. Conference Call Details - The earnings call included participation from key analysts from firms such as Raymond James, KBW, Bank of America, Wells Fargo, JPMorgan, and BMO Capital Markets [1]. - The call was recorded and made available on the company's website along with financial results and supplemental information [1].

Core Insights - The Baldwin Insurance Group reported revenue of $413.41 million for the quarter ended March 2025, reflecting an 8.7% increase year-over-year, but a slight miss of 1.03% against the Zacks Consensus Estimate of $417.7 million [1] - Earnings per share (EPS) for the quarter was $0.65, matching the consensus estimate but up from $0.56 in the same quarter last year [1] Revenue Performance - Organic revenue growth was reported at 10%, slightly above the four-analyst average estimate of 9.9% [4] - Revenue from Insurance Advisory Solutions was $227.67 million, below the average estimate of $238.87 million, but showing a year-over-year increase of 2.4% [4] - Underwriting, Capacity & Technology Solutions generated $125.17 million, exceeding the average estimate of $118.98 million, with a significant year-over-year growth of 20.5% [4] - Mainstreet Insurance Solutions reported revenue of $77.87 million, slightly below the average estimate of $80.13 million, with an 8.6% year-over-year increase [4] - Commissions and fees revenue was $410.53 million, close to the average estimate of $412.08 million [4] - Investment income reached $2.87 million, surpassing the average estimate of $2.78 million [4] Stock Performance - The Baldwin Insurance Group's shares have returned -1.2% over the past month, contrasting with the Zacks S&P 500 composite's +11.5% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]