TWFG Announces Third Quarter 2024 Results

Core Insights - TWFG, Inc. completed its IPO in July 2024, raising $192.9 million through the issuance of 12,650,000 shares at $17.00 per share [1] - The company reported a total written premium of $400.1 million for Q3 2024, reflecting a 13.0% increase year-over-year [2][7] - Total revenue for the quarter was $54.6 million, up 14.5% from the previous year [2][7] - The organic revenue growth rate was 7.6% for the quarter [2][7] - Net income for Q3 2024 was $6.9 million, with diluted earnings per share of $0.08 [2][9] - Adjusted EBITDA increased by 29.7% year-over-year to $11.7 million, with an adjusted EBITDA margin of 21.5% [2][10] Financial Performance - Total written premium for Q3 2024 was $400.1 million, compared to $354.1 million in Q3 2023 [2] - Total revenues increased to $54.6 million from $47.7 million in the same period last year [2] - Organic revenue for Q3 2024 was $47.3 million, up from $42.8 million in Q3 2023 [7] - Adjusted net income for the quarter was $8.3 million, down 4.0% from the prior year [2][9] - Adjusted net income margin for Q3 2024 was 15.3%, compared to 18.2% in the same period last year [9] Operational Highlights - The company opened 86 new TWFG locations in Q3 2024, expanding into 13 new states [5] - The recruiting efforts have outpaced historical growth trends, indicating potential for future growth [5][6] - The company experienced a 5.2% decrease in total commission expense despite a 9.7% growth in commission income due to branch conversions [8] Cash Flow and Liquidity - Cash flow from operating activities for Q3 2024 was $11.7 million, compared to $7.4 million in the same period last year [10] - Adjusted free cash flow for the quarter was $11.5 million, significantly up from $4.6 million in Q3 2023 [10] - As of September 30, 2024, the company had cash and cash equivalents of $191.2 million and $50.0 million unused capacity on its revolving credit facility [11] Market Context - The company operates as a high-growth insurance distribution platform in the U.S., representing hundreds of insurance carriers [15] - The results reflect the resilience of the company's business model amid challenges such as multiple hurricanes [4][3]