Core Insights - TWFG, Inc. reported quarterly earnings of $0.23 per share, exceeding the Zacks Consensus Estimate of $0.19 per share, and showing an increase from $0.15 per share a year ago, resulting in an earnings surprise of +21.05% [1][2] - The company posted revenues of $64.12 million for the quarter ended September 2025, which was slightly below the Zacks Consensus Estimate by 0.27%, but an increase from $54.64 million year-over-year [2] - TWFG, Inc. has surpassed consensus EPS estimates in all four of the last quarters, while it has topped consensus revenue estimates two times during the same period [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.16 on revenues of $59.85 million, and for the current fiscal year, it is $0.71 on revenues of $238.27 million [7] - The estimate revisions trend for TWFG, Inc. was unfavorable prior to the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Insurance - Multi line industry, to which TWFG, Inc. belongs, is currently ranked in the top 22% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Core Insights - TWFG, Inc. reported a total revenue increase of 21.3% year-over-year for Q3 2025, reaching $64.1 million, driven by strong organic growth and improved market conditions [1][6][14] - The company achieved a net income of $9.6 million for the quarter, reflecting a net income margin of 15.0%, up from 13.0% in the previous year [10][11] - Adjusted EBITDA rose 44.7% to $17.0 million, with an adjusted EBITDA margin of 26.5%, indicating effective cost management and operational scalability [11][14] Financial Performance - Total Written Premiums increased by 16.9% to $467.7 million compared to $400.1 million in the same period last year, supported by acquisitions and expansion efforts [5][6] - Organic Revenue Growth Rate for the quarter was 10.2%, driven by new business production and improved retention levels [8][40] - Adjusted Net Income increased by 55.3% to $13.0 million, with an adjusted net income margin of 20.2% [10][11] Operational Highlights - The company added eight new retail locations and 370 independent agents to its MGA platform during the quarter, enhancing its distribution capabilities [3][4] - TWFG's diversified distribution platform, which includes independent agency operations and proprietary MGA programs, continues to perform well amid stabilizing pricing trends in the insurance market [4][5] - The company anticipates continued double-digit organic growth and accretive M&A activity throughout 2026, supported by favorable market conditions [14][17] Market Conditions - The personal and commercial lines markets are normalizing, leading to improved retention rates and stronger client demand [3][4] - The company is experiencing enhanced carrier capacity, which positions it well for sustained, profitable growth [3][4]

Financial Performance - Total revenues for the three months ended September 30, 2025, increased to $64,123,000, up 21.5% from $52,863,000 in the same period of 2024[19] - Net income attributable to TWFG, Inc. for the three months ended September 30, 2025, was $1,722,000, representing a 49.3% increase from $1,154,000 in the same period of 2024[19] - Operating income for the three months ended September 30, 2025, was $9,034,000, a 51.5% increase from $5,968,000 in the same period of 2024[19] - Comprehensive income attributable to TWFG, Inc. for the nine months ended September 30, 2025, was $4,974,000, compared to $1,121,000 for the same period in 2024[22] - Net income for the nine months ended September 30, 2025, was reported at $8,755,000, compared to $6,853,000 for the same period in 2024, representing an increase of about 27.7%[25] - Net income for the nine months ended September 30, 2025, was $25,473,000, an increase from $20,440,000 in the same period of 2024, representing a growth of approximately 24.9%[30] Assets and Liabilities - Total assets as of September 30, 2025, increased to $349,171,000, up from $323,428,000 as of December 31, 2024[24] - Total liabilities as of September 30, 2025, were $53,426,000, an increase from $48,142,000 as of December 31, 2024[24] - As of September 30, 2025, total stockholders' equity increased to $284,318,000, up from $275,286,000 at the end of 2024, reflecting a growth of approximately 3.75%[25] - The balance of retained earnings as of September 30, 2025, was $20,305,000, up from $15,288,000 at the end of 2024, indicating a growth of about 33%[25] - The total debt as of September 30, 2025, was $5,761,000, a decrease from $7,642,000 as of December 31, 2024, showing a reduction of 24.6%[56] Cash Flow and Investments - Cash flows from operating activities provided $40,213,000 in the nine months ended September 30, 2025, compared to $28,879,000 in 2024, indicating a significant increase of 39.5%[30] - The company reported a net cash used in investing activities of $63,745,000 for the nine months ended September 30, 2025, compared to $21,589,000 in 2024, reflecting a substantial increase in investment activities[30] - Cash, cash equivalents, and restricted cash at the end of September 30, 2025, totaled $162,542,000, down from $200,905,000 at the end of September 30, 2024, showing a decrease of 19%[32] Stock and Compensation - The total number of shares outstanding increased to 15,005,426 as of September 30, 2025, from 14,904,083 at the end of June 2025, reflecting an increase of approximately 0.7%[25] - Stock-based compensation expenses for the nine months ended September 30, 2025, amounted to $3,706,000, up from $1,204,000 in the previous year, showing a significant increase of about 208%[25] - The Company granted 51,652 RSUs and 38,716 performance stock units (PSUs) during the nine months ended September 30, 2025, with 3,929,169 shares of Class A Common Stock remaining available for future grants[78] Acquisitions and Intangible Assets - The company acquired customer lists and computer software totaling $47.6 million during the nine months ended September 30, 2025, with $44.0 million paid in cash at closing[47] - The company recognized a customer relationship intangible asset with an acquisition-date fair value of $21.0 million, amortized over six years[49] - As of September 30, 2025, the total intangible assets amounted to $173,977,000, an increase from $105,392,000 as of December 31, 2024, representing a growth of 64.9%[52] Tax and Compliance - The estimated effective tax rate for the three and nine months ended September 30, 2025, was 9.22% and 8.13%, respectively, differing from the 21% statutory rate due to the recognition of income tax expense only on the portion of earnings attributable to the Company[86] - The Company maintained compliance with its consolidated leverage ratio covenant of no greater than 2.00 to 1.00 as of September 30, 2025[60] Other Notable Points - TWFG, Inc. was incorporated on January 8, 2024, to facilitate an initial public offering (IPO), indicating a strategic move towards public market participation[34] - The company completed acquisitions subsequent to the quarter ended September 30, 2025, as part of its ongoing growth strategy[107] - The Progressive Corporation accounted for 11% of total revenues for both the three and nine months ended September 30, 2025[46]

Wall Street expects a year-over-year increase in earnings on higher revenues when TWFG, Inc. (TWFG) reports results for the quarter ended September 2025. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on November 12, might help the stock move higher if these key numbers are better than expec ...

Core Viewpoint - TWFG, Inc. has acquired Alabama Insurance Agency, enhancing its presence in the Southeastern United States and expanding its network of independent agents [1][2]. Group 1: Acquisition Details - TWFG, Inc. has acquired Alabama Insurance Agency, Inc. and its 20 affiliated locations across Alabama [1]. - This acquisition is part of TWFG's growth strategy and aims to deliver personalized insurance solutions [2][3]. Group 2: Strategic Benefits - The acquisition strengthens TWFG's commitment to providing innovative insurance solutions through a growing network of independent agents [2]. - Alabama Insurance Agency's strong community ties and customer-first approach will benefit from TWFG's national scale, brand recognition, technology infrastructure, and carrier relationships [2][3]. Group 3: Leadership Statements - Gene Ruggario, President of Alabama Insurance Agencies, expressed that partnering with TWFG is beneficial for customers, staff, and carrier partners [3]. - Gordy Bunch, Founder and CEO of TWFG, highlighted that the acquisition aligns with the company's mission of caring for customers and empowering independent agents [3].

Core Viewpoint - TWFG, Inc. is set to release its financial results for Q3 2025 on November 12, 2025, after market close, followed by a conference call on November 13, 2025, to discuss these results [1][2]. Company Overview - TWFG, Inc. is a leading independent insurance distribution platform that offers innovative and personalized insurance solutions to individuals and businesses across the United States [3]. - The company emphasizes service, professionalism, and an entrepreneurial spirit, empowering its extensive network of agents to provide client-focused insurance options across various personal and commercial lines [3]. Conference Call Details - The conference call to discuss the financial results will take place on November 13, 2025, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time) [2]. - Participants can register for the call via a provided link to receive dial-in details [2]. - A live webcast of the call will be available on TWFG's Investor Relations website, with a replay accessible for a limited time afterward [3]. Investor and PR Contacts - Investor contact is Gene Padgett, Chief Accounting Officer, reachable via email [4]. - PR contact is Alex Bunch, Chief Marketing Officer, also available via email [4].

[Part I - Financial Information](index=6&type=section&id=Part%20I%20-%20Financial%20Information) This section presents the company's unaudited condensed consolidated financial statements, management's analysis of operations, market risk disclosures, and internal controls [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The unaudited condensed consolidated financial statements present the company's financial performance for the three and six months ended June 30, 2025, and 2024. Key statements include the income statement, balance sheet, and cash flow statement, which show revenue growth, an increase in total assets driven by intangible assets from acquisitions, and significant cash usage in investing activities [Condensed Consolidated Statements of Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) This statement details the company's revenue and net income performance for the three and six months ended June 30, 2025 and 2024 - For the six months ended June 30, 2025, **total revenues increased to $114.1 million** from $99.2 million year-over-year, driven by higher commission income, with **net income rising to $15.9 million** from $13.5 million in the prior year period[16](index=16&type=chunk) Condensed Consolidated Statements of Income (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total revenues** | **$60,308** | **$53,011** | **$114,131** | **$99,155** | | Commission income | $54,562 | $48,662 | $103,347 | $91,207 | | Operating income | $7,363 | $7,521 | $13,093 | $14,825 | | **Net income** | **$9,000** | **$6,918** | **$15,853** | **$13,547** | | Net income attributable to TWFG, Inc. | $1,957 | $— | $3,295 | $— | | **Basic EPS** | **$0.13** | **N/A** | **$0.22** | **N/A** | | **Diluted EPS** | **$0.13** | **N/A** | **$0.22** | **N/A** | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement outlines the company's financial position, including assets, liabilities, and equity, as of June 30, 2025, and December 31, 2024 - **Total assets increased to $342.8 million** as of June 30, 2025, from $323.4 million at December 31, 2024, primarily due to a significant increase in **intangible assets from $73.0 million to $125.9 million**, reflecting recent acquisition activity, while **cash and cash equivalents decreased from $195.8 million to $159.8 million**[20](index=20&type=chunk) Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $159,827 | $195,772 | | Intangible assets, net | $125,901 | $72,978 | | **Total assets** | **$342,849** | **$323,428** | | Total liabilities | $53,878 | $48,142 | | **Total stockholders' equity** | **$279,210** | **$275,286** | | **Total liabilities, redeemable noncontrolling interest and equity** | **$342,849** | **$323,428** | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes the company's cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 - For the six months ended June 30, 2025, **net cash provided by operating activities was $25.3 million**, while **net cash used in investing activities was significant at $46.7 million**, primarily for the purchase of intangible assets, and **net cash used in financing activities was $12.9 million**, largely due to distributions to members[26](index=26&type=chunk) Condensed Consolidated Cash Flows (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **$25,260** | **$17,154** | | **Net cash used in investing activities** | **($46,706)** | **($21,223)** | | Purchase of intangible assets | ($47,226) | ($21,241) | | **Net cash used in financing activities** | **($12,876)** | **($5,886)** | | Distributions to members | ($13,263) | ($7,099) | | **Net change in cash, cash equivalents and restricted cash** | **($34,322)** | **($9,955)** | [Notes to the Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures regarding the condensed consolidated financial statements, including significant acquisitions and revenue breakdown - During the six months ended June 30, 2025, the company completed **asset acquisitions totaling $36.8 million for intangible assets**, and acquired a **50.1% equity interest in TWFG MGA FL, LLC for $9.7 million**, recognizing a customer relationship asset of $19.4 million[43](index=43&type=chunk)[44](index=44&type=chunk) - The Progressive Corporation was a major customer, accounting for **11% and 13% of total revenues** for the three and six months ended June 30, 2025, respectively[42](index=42&type=chunk) Disaggregation of Revenues by Offerings (in thousands) | Offering | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Insurance Services | | | | Agency-in-a-box | $39,316 | $75,312 | | Corporate Branches | $11,393 | $19,615 | | TWFG MGA | $9,233 | $18,428 | | Other | $366 | $776 | | **Total revenues** | **$60,308** | **$114,131** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the financial results, highlighting a 13.8% increase in total revenues for Q2 2025 and a 15.1% increase for H1 2025, primarily driven by higher commission income from increased premium rates and business growth. The discussion covers performance by business segment, key performance indicators like Total Written Premium (which grew 14.4% in Q2), an analysis of non-GAAP measures such as Organic Revenue Growth (10.6% in Q2), and the company's liquidity position, which remains strong following the IPO despite significant cash use for acquisitions [Results of Operations](index=27&type=section&id=Results%20of%20Operations) This section analyzes the company's revenue and expense trends, highlighting key factors influencing financial performance for the reported periods - For Q2 2025, **total revenues increased by 13.8% YoY to $60.3 million**, driven by a 12.1% increase in commission income and a 61.6% increase in contingent income, while for H1 2025, **total revenues grew 15.1% YoY to $114.1 million**, with commission income up 13.3%[119](index=119&type=chunk)[139](index=139&type=chunk) - **Salaries and employee benefits expense increased 39.3% in Q2 2025**, which included $1.5 million in stock-based compensation and costs from recent Corporate Branch acquisitions, and **other administrative expenses rose 44.2%** due to business growth and increased costs as a public company[131](index=131&type=chunk)[133](index=133&type=chunk) Total Revenues by Offering - Q2 Comparison (in thousands) | Offering | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total Insurance Services | $50,709 | $43,773 | 15.8% | | TWFG MGA | $9,233 | $8,830 | 4.6% | | **Total revenues** | **$60,308** | **$53,011** | **13.8%** | [Key Performance Indicators](index=34&type=section&id=Key%20Performance%20Indicators) This section reviews key operational metrics such as Total Written Premium and retention rates, providing insights into business growth and performance - **Total Written Premium increased by 14.4% to $450.3 million in Q2 2025** and by **14.9% to $821.3 million in H1 2025** compared to the prior year periods, driven by increases in both new and renewal business[162](index=162&type=chunk)[165](index=165&type=chunk) - **Consolidated written premium retention decreased to 89% for Q2 2025** from 93% in Q2 2024, attributed to carriers moderating rate increases and opening up for new business after a period of restricted capacity[163](index=163&type=chunk)[164](index=164&type=chunk) Total Written Premium by Offering (in thousands) | Offering | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Total Insurance Services | $389,397 | $706,971 | | TWFG MGA | $60,891 | $114,280 | | **Total written premium** | **$450,288** | **$821,251** | [Non-GAAP Financial Measures](index=35&type=section&id=Non-GAAP%20Financial%20Measures) This section presents and reconciles non-GAAP financial measures, including Organic Revenue Growth, Adjusted Net Income, and Adjusted EBITDA, for performance assessment - The company uses several non-GAAP measures, including Organic Revenue, Adjusted Net Income, and Adjusted EBITDA, to evaluate performance, with **Organic Revenue Growth at 10.6% for Q2 2025 and 12.4% for H1 2025**, reflecting underlying business growth excluding recent large acquisitions[175](index=175&type=chunk)[178](index=178&type=chunk) Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $9,000 | $6,918 | $15,853 | $13,547 | | EBITDA | $11,838 | $10,503 | $20,926 | $20,818 | | **Adjusted EBITDA** | **$15,133** | **$10,758** | **$27,321** | **$19,765** | | **Adjusted EBITDA Margin** | **25.1%** | **20.3%** | **23.9%** | **19.9%** | Reconciliation of Net Income to Adjusted Net Income (Revised Methodology, in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $9,000 | $6,918 | $15,853 | $13,547 | | **Adjusted Net Income** | **$11,519** | **$9,822** | **$20,746** | **$17,921** | | **Adjusted Net Income Margin** | **19.1%** | **18.5%** | **18.2%** | **18.1%** | [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) This section evaluates the company's cash position, credit facilities, and capital structure, detailing the impact of IPO proceeds on liquidity - As of June 30, 2025, the company had **cash and cash equivalents of $159.8 million**, having received approximately **$192.9 million in net proceeds from its July 2024 IPO**, which was used to repay debt and for general corporate purposes[197](index=197&type=chunk) - The company has a **$50.0 million revolving credit facility** which was fully unutilized as of June 30, 2025, and the outstanding balance on its Term Loan C was $5.0 million[198](index=198&type=chunk) Comparative Cash Flows (in thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $25,260 | $17,154 | | Net cash used in investing activities | ($46,706) | ($21,223) | | Net cash used in financing activities | ($12,876) | ($5,886) | | **Net change in cash, cash equivalents and restricted cash** | **($34,322)** | **($9,955)** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risk from insurance premium pricing cycles and interest rate fluctuations. A soft insurance market could negatively affect commissions, while a hard market could be beneficial. Interest rate risk affects both investment income on cash balances and interest expense on variable-rate debt. The company uses derivative instruments to mitigate interest rate risk on its term loans - The company's primary market risks are related to the cyclical nature of P&C insurance premium pricing and interest rate risk on its cash holdings and variable-rate debt[215](index=215&type=chunk)[216](index=216&type=chunk) - As of June 30, 2025, the company had **$171.0 million in cash and cash equivalents**, where a hypothetical **100 basis point change in interest rates would impact interest income by approximately $0.4 million**[218](index=218&type=chunk) - The company had approximately **$5.0 million of variable-rate debt** outstanding under its Term Loan Credit Agreement as of June 30, 2025, with the impact of a hypothetical 10% change in interest rates on this debt not considered material[219](index=219&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of June 30, 2025. They concluded that these controls were effective at a reasonable assurance level. There were no material changes to the internal control over financial reporting during the quarter - Based on an evaluation as of June 30, 2025, the Principal Executive Officer and Principal Financial Officer concluded that the company's **disclosure controls and procedures were effective** at the reasonable assurance level[222](index=222&type=chunk) - No material changes in the company's internal control over financial reporting occurred during the six months ended June 30, 2025[223](index=223&type=chunk) [Part II - Other Information](index=46&type=section&id=Part%20II%20-%20Other%20Information) This section provides disclosures on legal proceedings, updated risk factors, equity sales, and other material information not covered in Part I [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any legal proceedings that are expected to have a material adverse effect on its business, financial condition, or results of operations - The company is not presently a party to any litigation that it believes would have a material adverse effect on its business, operating results, cash flows, or financial condition[224](index=224&type=chunk) [Item 1A. Risk Factors](index=46&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 - There have been no material changes to the risk factors disclosed in the company's Annual Report[225](index=225&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reports no unregistered sales of equity securities. It details the use of the approximately $192.9 million in net proceeds from its IPO, which included acquiring LLC Units from its holding company, which in turn used the funds to pay IPO expenses and repay $41.0 million of outstanding debt under its Revolving Facility - The company received approximately **$192.9 million in net proceeds from its IPO**, a portion of which was used by its subsidiary, TWFG Holding, to repay in full the outstanding debt of **$41.0 million under the Revolving Facility**[227](index=227&type=chunk) [Item 5. Other Information](index=46&type=section&id=Item%205.%20Other%20Information) The company reported no other material information during the period. Additionally, no directors or officers adopted or terminated a Rule 10b5-1 trading arrangement - No other significant information was reported for the period, and no directors or officers adopted or terminated a Rule 10b5-1 trading arrangement[229](index=229&type=chunk) [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of the quarterly report, including the Certificate of Incorporation, By-Laws, and certifications from the CEO and CFO as required by the Sarbanes-Oxley Act - The exhibits filed with the report include the Amended and Restated Certificate of Incorporation, Amended and Restated By-Laws, CEO and CFO Certifications (Sections 302 and 906 of Sarbanes-Oxley Act), and XBRL Interactive Data Files[230](index=230&type=chunk)

Financial Data and Key Metrics Changes - Total revenue grew by 13.8% to $60.3 million, with organic revenue growth of 10.6% [5][11] - Adjusted EBITDA increased by 40.7% to $15.1 million, with margins expanding to 25.1% [5][14] - Total written premiums rose by 14.4% to $450.3 million [5][9] Business Line Data and Key Metrics Changes - Insurance services grew by 16.5% to $55 million, while TWFG MGA grew by 2.7% to $1.6 million [9] - Renewal business within insurance services increased by 16.1%, while new business grew by 17.8% [10] - MGA experienced a shift with renewal business growing by 8.1%, while new business growth declined [11] Market Data and Key Metrics Changes - The personal lines market is softening, with expanding carrier capacity and moderating rate increases [6][29] - Retention rate remained at 89%, consistent with long-term averages [7][11] - Certain regions, such as Florida and Louisiana, are experiencing price deceleration, while Texas remains stable [35][36] Company Strategy and Development Direction - The company focuses on four strategic pillars: expanding national footprint, investing in agent productivity, enhancing technology infrastructure, and deepening carrier relationships [7] - AI-driven tools are being piloted to improve efficiency and responsiveness [8] - The company is actively pursuing M&A opportunities to support growth [16][50] Management's Comments on Operating Environment and Future Outlook - Management expects moderate rate increases in 2025 and is monitoring potential tariff impacts on costs [7] - The company remains confident in its ability to deliver long-term value despite a moderating rate environment [46] - Guidance for 2025 includes organic revenue growth of 11% to 14% and adjusted EBITDA margins between 21% and 23% [16][42] Other Important Information - Net income for the quarter was $9 million, up 30.1% year-over-year [14] - The company has $160 million in cash and a fully available credit revolver, providing flexibility for investments [16] Q&A Session Summary Question: Profit margins this quarter - Management explained that lower commission expense is due to lower commission revenues, with corporate store acquisitions contributing to margin expansion [19][20] Question: Changes in organic growth expectations - Management noted that the market conditions have softened, leading to more options for customers and impacting organic growth [28][30] Question: M&A contribution to revenue - Management clarified that M&A contributions depend on the timing of asset onboarding, with expectations for increased contributions in the second half of the year [48][50] Question: Future EBITDA margin expansion - Management indicated that continued EBITDA margin expansion is feasible, depending on future acquisitions and operational efficiencies [53][54] Question: MGA business and competition - Management discussed the competitive landscape in the E&S home insurance market and its impact on MGA's trajectory, noting that their core program remains stable [66][68]

Core Insights - TWFG, Inc. reported revenue of $60.31 million for the quarter ended June 2025, marking a year-over-year increase of 13.2% [1] - The earnings per share (EPS) for the same period was $0.20, a significant decrease from $14.89 a year ago [1] - The reported revenue fell short of the Zacks Consensus Estimate of $63.94 million, resulting in a surprise of -5.68% [1] - The company achieved an EPS surprise of +11.11%, with the consensus EPS estimate being $0.18 [1] Revenue Breakdown - Contingent income was reported at $2.03 million, exceeding the average estimate of $1.8 million from four analysts [4] - Fee income was recorded at $3.33 million, slightly below the average estimate of $3.42 million from four analysts [4] - Commission income totaled $54.56 million, which was lower than the average estimate of $58.81 million based on four analysts [4] - Other income was reported at $0.38 million, also below the average estimate of $0.4 million from three analysts [4] Stock Performance - TWFG, Inc. shares have returned -17.6% over the past month, contrasting with the Zacks S&P 500 composite's +2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - TWFG, Inc. reported quarterly earnings of $0.20 per share, exceeding the Zacks Consensus Estimate of $0.18 per share, but significantly lower than $14.89 per share from the previous year, indicating a substantial decline in earnings year-over-year [1] Financial Performance - The company posted revenues of $60.31 million for the quarter ended June 2025, which fell short of the Zacks Consensus Estimate by 5.68%, compared to $53.27 million in revenues a year ago [2] - Over the last four quarters, TWFG has surpassed consensus EPS estimates three times and topped consensus revenue estimates three times as well [2] Stock Performance - TWFG shares have declined approximately 11.9% since the beginning of the year, contrasting with the S&P 500's gain of 8.4% [3] - The current consensus EPS estimate for the upcoming quarter is $0.20 on revenues of $66.98 million, and for the current fiscal year, it is $0.70 on revenues of $247.13 million [7] Industry Outlook - The Zacks Industry Rank for Insurance - Multi line is currently in the top 41% 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]