BRP Group, Inc.(BWIN) - 2025 Q2 - Quarterly Results

Financial Highlights Second Quarter 2025 Highlights 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 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 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] - The company now has increased flexibility for capital allocation to invest in strategic opportunities, improve margins, and decrease financial leverage[3] Liquidity and Capital Resources 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] - The company had $474 million of borrowing capacity under its revolving credit facility[5] Consolidated Financial Statements Condensed Consolidated Statements of Comprehensive Income (Loss) 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 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 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 Explanation of Non-GAAP Measures 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] - 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] - 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] Reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin 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 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 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 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 Conference Call Information 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] - A live webcast, slide presentation, and replay will be available on the company's investor relations website at ir.baldwin.com[7][8] Forward-Looking Statements 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] - 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]