TWFG Announces First Quarter 2025 Results

THE WOODLANDS, Texas, May 13, 2025 (GLOBE NEWSWIRE) -- -- Total Revenues increased 16.6% for the quarter over the prior year period to $53.8 million --

-- Total Written Premium increased 15.5% for the quarter over the prior year period to $371.0 million --

-- Organic Revenue Growth Rate* of 14.3% for the quarter --

-- Net income of $6.9 million for the quarter --

-- Adjusted EBITDA* increased 35.3% for the quarter over the prior year period to $12.2 million --

THE WOODLANDS, Texas, May 13, 2025 (GLOBE NEWSWIRE) -- TWFG, Inc. ("TWFG", the "Company" or "we") $(TWFG)$, a high-growth insurance distribution company, today announced results for the first quarter ended March 31, 2025.

First Quarter 2025 Highlights

   -- Total revenues for the quarter increased 16.6% to $53.8 million, compared 
      to $46.1 million in the prior year period 
 
   -- Commission income for the quarter increased 14.7% to $48.8 million, 
      compared to $42.5 million in the prior year period 
 
   -- Net income for the quarter was $6.9 million, compared to $6.6 million in 
      the prior year period, and net income margin for the quarter was 12.7% 
 
   -- Diluted Earnings Per Share for the quarter was $0.09 and Adjusted Diluted 
      Earnings Per Share* for the quarter was $0.16 
 
   -- Total Written Premium for the quarter increased 15.5% to $371.0 million, 
      compared to $321.3 million in the prior year period 
 
   -- Organic Revenue Growth Rate* for the quarter was 14.3% 
 
   -- Adjusted Net Income* for the quarter increased 14.3% from the prior year 
      period to $9.2 million, and Adjusted Net Income Margin* for the quarter 
      was 17.1% 
 
   -- Adjusted EBITDA* for the quarter increased 35.3% over the prior year 
      period to $12.2 million, and Adjusted EBITDA Margin* for the quarter was 
      22.6% compared to 19.5% in the prior year period 

(*Organic Revenue Growth Rate, Adjusted Net Income, Adjusted Net Income Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow and Adjusted Diluted Earnings Per Share are non-GAAP measures. Reconciliations of Organic Revenue Growth Rate to total revenue growth rate, Adjusted Net Income and Adjusted EBITDA to net income, Adjusted Diluted Earnings Per Share to diluted earnings per share, and Adjusted Free Cash Flow to cash flow from operating activities, the most directly comparable financial measures presented in accordance with GAAP, are outlined in the reconciliation table accompanying this release.)

Gordy Bunch, Founder, Chairman, and CEO said "Our strong first quarter performance reflects the continued execution of our strategy and strength of our business model. Total revenues grew 16.6% year-over-year, and Adjusted EBITDA increased by 35.3%, and Adjusted EBITDA Margin expansion grew to 22.6%. Organic Revenue Growth of 14.3% underscores the productivity of our agents and the enduring value we deliver to our carrier partners and clients.

Our recruiting momentum remains robust as we continue to expand our national footprint. During the quarter, we completed the acquisition of two new corporate locations, one in Ohio and one in Texas, expanded into New Hampshire, and added 17 branches across the U.S. The new locations are in line with our acquisition expectations for both revenue and EBITDA.

As a reminder to our shareholders, newly onboarded agents typically take two to three years to reach full productivity."

First Quarter 2025 Results

Total Written Premium for the first quarter of 2025 was $371.0 million, representing an increase of 15.5% compared to the prior year period. Total revenues were $53.8 million, an increase of 16.6% year-over-year.

Organic Revenue, a non-GAAP measure that excludes contingent income, non-policy fee income, and other income, was $49.2 million for the first quarter of 2025, compared to $41.6 million in the prior year period. Organic Revenue Growth Rate was 14.3%, driven by robust new business production, moderating retention levels, rate increases, and continued growth in new business activity within one of our managing general agency $(MGA)$ programs.

Commission expense for the quarter totaled $31.8 million, an increase of 20.3% compared to $26.4 million in the prior year period. This increase reflects the continued growth of our business, partially offset by the one-time favorable adjustment in prior year period due to the branch conversions.

Salaries and employee benefits were $8.2 million, an increase of 31.1% compared to $6.3 million in the first quarter of 2025. The increase includes $1.2 million of equity compensation expense and $0.7 million related to increased headcount and overall business growth.

Other administrative expenses were $4.7 million in the quarter, up 50.9% from the prior year period. The increase reflects investments to support business growth and the absorption of public company operating costs.

Net income for the first quarter of 2025 was $6.9 million, compared to $6.6 million in the prior year period. Net income margin was 12.7%, compared to 14.4% a year ago. Adjusted Net Income was $9.2 million for the quarter, compared to $8.1 million in the same period last year. Adjusted Net Income Margin was 17.1%, versus 17.5% in the prior year period.

Adjusted EBITDA was $12.2 million for the first quarter, an increase of 35.3% year-over-year. Adjusted EBITDA Margin expanded to 22.6%, compared to 19.5% in the first quarter of 2024.

Cash flow from operating activities was $15.6 million, up from $9.8 million in the prior year period. Adjusted Free Cash Flow for the quarter was $13.6 million, compared to $7.3 million in the same period a year ago.

Liquidity and Capital Resources

As of March 31, 2025, the Company had cash and cash equivalents of $196.4 million. We had full unused capacity on our revolving credit facility of $50.0 million as of March 31, 2025. The total outstanding term notes payable balance was $5.4 million as of March 31, 2025.

2025 Adjusted Outlook

Based on our strong first quarter results, the Company has updated its full-year 2025 guidance by raising the range of the outlook across all key metrics to reflect the improved visibility and confidence in the Company's execution.

   -- Organic Revenue Growth Rate*: Expected to be in the range of 12% to 16% 
      (prior: 11% to 16%) 
 
   -- Adjusted EBITDA Margin*: Expected to be in the range of 20% to 22% 
      (prior: 19% to 21%) 
 
   -- Total Revenues: Expected to be between $240 million and $255 million 
      (prior: $235 million to $250 million) 

The Company is unable to provide a reconciliation to the most directly comparable GAAP measures without unreasonable efforts due to the inherent difficulty in forecasting the timing of items that have not yet occurred, as well as quantifying certain amounts that are necessary for such reconciliation.

*For a definition of Organic Revenue Growth Rate and Adjusted EBITDA Margin, see "Non-GAAP Financial Measures" below.

Conference Call Information

TWFG will host a conference call and webcast tomorrow at 9:00 AM ET to discuss these results.

To access the call by phone, participants should register at this link, where they will be provided with the dial in details. A live webcast of the conference call will also be available on TWFG's investor relations website at investors.twfg.com. A webcast replay of the call will be available at investors.twfg.com for one year following the call.

About TWFG

TWFG (NASDAQ: TWFG) is a high-growth, independent distribution platform for personal and commercial insurance in the United States and represents hundreds of insurance carriers that underwrite personal lines and commercial lines risks. For more information, please visit twfg.com.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties. All statements, other than statements of historical fact included in this release, are forward-looking statements. Forward-looking statements give our current expectations relating to our financial condition, results of operations, plans, objectives, future performance, and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. In some cases, you can identify these statements by forward-looking words such as "may," "might," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "outlook," "predicts," "potential" or "continue," the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including those factors discussed under the captions entitled "Risk factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Annual Report on Form 10-K, any Quarterly Reports on Form 10-Q and the other documents that the Company files with the U.S. Securities and Exchange Commission. You should specifically consider the numerous risks outlined under "Risk factors" in the Annual Report on Form 10-K for the year ended December 31, 2024.

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