TWFG — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenues increased 24.6% year-over-year to $79.9 million, compared to $64.1 million in the prior year period.
• Commission income rose 25.9% to $73.4 million, up from $58.3 million in the prior year.
• Net income was $9.0 million, down from $9.6 million in the prior year, resulting in a net income margin of 11.3% compared to 15.0% previously.
• Diluted earnings per share (EPS) were $0.09; Adjusted Diluted EPS was $0.28.
• Adjusted Net Income increased 16.3% to $15.1 million, with an Adjusted Net Income Margin of 18.9% (vs. 20.2% prior year).
• Adjusted EBITDA grew 15.0% to $19.5 million, with an Adjusted EBITDA Margin of 24.4% (vs. 26.5% prior year).
• Cash flow from operating activities was $10.6 million, down from $15.0 million in the prior year.
• Adjusted Free Cash Flow was $7.5 million, down from $12.3 million in the prior year.
• Total Written Premium increased 18.5% to $554.2 million, compared to $467.7 million in the prior year.
• Organic Revenue was $68.7 million, representing a 16.6% growth rate against an adjusted prior-year denominator of $58.9 million.
• Commission expense increased 20.9% to $41.9 million.
• Salaries and employee benefits increased 19.3% to $11.8 million.
• Other administrative expenses increased 85.8% to $9.7 million.

Guidance and Future Outlook:

• Updated full-year 2026 Organic Revenue Growth guidance to 15-17%, up from the previous 13-17%.
• Maintained full-year 2026 Total Revenues guidance at $300-$320 million.
• Updated full-year 2026 Adjusted EBITDA Margin guidance to 24-27%, up from the previous 23-27%.
• The updated outlook reflects stronger-than-expected performance across core businesses and subsequent acquisitions.

Business Segments and Product Lines:

• Growth was supported by organic and inorganic expansion across Agency-in-a-Box, Corporate Stores, and MGA operations.
• Agency-in-a-Box revenue was $39.6 million for the quarter, up from $37.6 million in the prior year.
• Corporate Branches revenue was $14.9 million for the quarter, up from $12.2 million in the prior year.
• TWFG MGA revenue was $24.8 million for the quarter, up from $13.9 million in the prior year.
• Commission income growth outpaced written premium growth by 740 basis points due to a shift toward higher commission-rate programs.
• Policy retention rate was 88% for the quarter.
• Insurance Services represented 80% of Total Written Premium, while TWFG MGA represented 20%.
• Personal lines accounted for 81% of Total Written Premium, and commercial lines accounted for 19%.

Market and Competitive Landscape:

• Growth was primarily volume-led rather than rate-driven, reflecting a moderating rate environment.
• The company operates as a high-growth insurance distribution platform representing hundreds of carriers across personal and commercial lines.
• Growth included increased policy counts and premium retention.

Risks and Challenges:

• Net income margin declined due to higher other administrative expenses, higher salaries and benefits, lower interest income, and higher non-cash amortization related to acquisitions.
• Adjusted Free Cash Flow was impacted by working capital changes, including higher commission receivables and lower commission payables and other liabilities.
• Other administrative expenses rose significantly due to increased professional and legal fees associated with capital markets and credit facility expansion.

Management Commentary and Tone:

• CEO Gordy Bunch stated that the results highlight the strength of TWFG's diversified platform, noting growth across all major offerings and contributions from recent acquisitions.
• Management emphasized the company's ability to grow in a moderating rate environment, demonstrating value to agents, policyholders, and carrier partners.

Other Key Points:

• TWFG Insurance Services completed the branch conversion acquisition of Select Insurance Solutions, Inc. during the third quarter.
• The company's 2026 acquisition roster includes Loften Wells, Fortress Insurance Services, and APIA.
• As of September 30, 2026, unrestricted cash and cash equivalents were $77.8 million.
• The company had full unused capacity on its revolving credit facility of $125.0 million as of September 30, 2026.
• Total outstanding term notes payable balance was $2.5 million as of September 30, 2026.
• An Investor Day is scheduled for November 12, 2026, and a conference call to discuss results is scheduled for November 4, 2026.