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Baldwin Insurance Group, Inc. (BWIN)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered double‑digit organic revenue growth (10%), adjusted EBITDA up 12% to $113.8M, and adjusted diluted EPS up 16% to $0.65, alongside margin expansion of ~80 bps to 27.5% .
  • Revenue was $413.4M; vs S&P Global consensus for revenue ($417.6M*) the company slightly missed, while EPS was essentially in line ($0.65 actual vs $0.648* consensus). Management guided Q2 2025 revenue to $370–$380M, adjusted EBITDA to $83–$88M, and adjusted diluted EPS to $0.41–$0.44 .
  • Segment backdrop: IS slowed (3% organic) due to an 800 bp headwind from renewal rate/exposure and project timing; UCTS accelerated to 32% organic on multifamily and home programs; MIS grew 10% organically .
  • Strategic catalysts: $110M capitalization of the Builder Reciprocal Insurance Exchange (BRE), ratings upgrade (S&P to B stable; Moody’s B2 affirmed with stable outlook), and earnout payments largely behind the company, supporting deleveraging and capital allocation flexibility .

What Went Well and What Went Wrong

What Went Well

  • UCTS organic revenue growth accelerated to 32% (vs 21% in Q1’24), driven by continued outperformance in multifamily (17% organic commissions/fees) and home portfolios (29%), plus ~500 bps incremental contribution from the multifamily captive .
  • Margin expansion (~80 bps YoY) to 27.5% and adjusted diluted EPS growth of 16% to $0.65 on operational discipline and scale benefits .
  • Strategic capital formation: “As of today, we have closed on the $110 million capitalization of the reciprocal and will imminently begin migrating the Builder Book” (BRE), a milestone in vertical integration with no consolidation of BRE’s results on Baldwin’s financials .

What Went Wrong

  • IS organic growth decelerated to 3% from timing of net new business and an aggregate -3.5% renewal premium change vs +4.5% tailwind in Q1’24 (~800 bps headwind)—including property renewal premium change of -5% vs +21% in the prior year period .
  • Benefits renewal premium change was roughly flat vs historical 3–7% trend, reflecting more muted hiring and macro uncertainty; project‑based revenues faced timing headwinds, though management cited building momentum into Q2/Q3 .
  • Revenue of $413.4M came in below S&P Global consensus ($417.6M*), and earnout cash payments lifted net leverage to 4.2x in Q1 before expected decline below 4x by Q3 .

Financial Results

Consolidated performance (sequential trend)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$338.9 $329.9 $413.4
GAAP Diluted EPS ($)$(0.13) $(0.31) $0.20
Adjusted Diluted EPS ($)$0.33 $0.27 $0.65
Adjusted EBITDA ($USD Millions)$72.8 $63.2 $113.8
Adjusted EBITDA Margin (%)21.5% 19.1% 27.5%
Organic Revenue Growth YoY (%)14% 19% 10%

Year-over-year comparison (Q1 2025 vs Q1 2024)

MetricQ1 2024Q1 2025YoY Change
Revenue ($USD Millions)$380.4 $413.4 +9%
GAAP Diluted EPS ($)$0.33 $0.20 (33 bp decline, comp includes divestiture gain last year)
Adjusted Diluted EPS ($)$0.56 $0.65 +16%
Adjusted EBITDA ($USD Millions)$101.7 $113.8 +12%
Adjusted EBITDA Margin (%)26.7% 27.5% +80 bps

Versus S&P Global consensus (Q1 2025)

MetricActualConsensusBeat/Miss
Revenue ($USD Millions)$413.4$417.6*Miss (~$4.2M, ~1.0%)*
Primary EPS ($)$0.65$0.648*In line (rounding beat)*
# of EPS Estimates—8*—
# of Revenue Estimates—5*—

Values retrieved from S&P Global.*

Segment performance

SegmentOrganic Revenue Growth (Q4 2024)Organic Revenue Growth (Q1 2025)Notes
Insurance Advisory Solutions (IS)16% 3% Headwind from renewal rate/exposure (-3.5% aggregate; property -5% YoY vs +21% last year) and project timing
Underwriting Capacity & Technology Solutions (UCTS)25% 32% Driven by home and multifamily programs; multifamily captive added ~500 bps to organic growth
Mainstreet Insurance Solutions (MIS)19% 10% Strong new business offsetting decelerating rate/exposure and CA capacity challenges

KPIs and balance sheet highlights

KPIQ1 2025
Sales Velocity14%
Client Retention~92%
Renewal Premium Change (Aggregate)-3.5%
Property Renewal Premium Change-5% (vs +21% in Q1’24)
Benefits Renewal Premium ChangeRoughly flat vs 3–7% historical trend
Adjusted Free Cash Flow ($USD Millions)$25.8
Net Leverage (x)4.2x; targeted <4x by Q3
Earnouts Paid (Q1 + April; expected Q2)$123M in Q1; $37M in April; ~$22M expected in Q2
Ratings UpdatesS&P to B stable; Moody’s B2 affirmed, outlook to stable

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ2 2025N/A$370M–$380M New
Adjusted EBITDAQ2 2025N/A$83M–$88M New
Adjusted Diluted EPSQ2 2025N/A$0.41–$0.44 New
Organic Revenue Growth (Consolidated)FY 2025Lower half of 10%–15% Unchanged Maintained
Total RevenueFY 2025$1.52B–$1.56B Unchanged Maintained
Adjusted EBITDAFY 2025$345M–$360M Unchanged Maintained
Adjusted Diluted EPSFY 2025$1.70–$1.80 Unchanged Maintained
Adjusted Free Cash FlowFY 2025$150M–$175M Unchanged Maintained
IS Organic GrowthFY 2025Double‑digit commissions & fees Mid–high single digit organic (more cautious range) Lowered range framing

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
Insurance pricing and exposureOngoing moderation in rate/exposure tailwinds, industry normalization Aggregate renewal premium change -3.5%; property renewal -5% vs +21% prior year; benefit renewals flat Headwind for IS; expected stabilization through year
Project-based revenue timingNormal variability, strong pipelines Timing caused 200 bps organic headwind; springloaded pipeline with new starts in May/June Improving into Q2/Q3
UCTS momentumMGA GWP >$1.1B; strong multifamily/home growth 32% organic; multifamily captive contributed ~500 bps; Juniper Re high single-digit $M LTM revenues Accelerating
Reinsurance market (CAT/XOL, quota share)Cautious view post California wildfires; potential headwinds in June 1 renewals Conversations constructive; CAT XOL environment favorable, quota share still supply constrained Cautiously constructive
Capital structure and leverageNet leverage 4.1x; deleveraging plan, term loan pricing step-down <4x Net leverage 4.2x due to earnouts; path to <4x by Q3; ratings improved (S&P/Moody’s) Improving
Vertical integration and capacityPlanning reciprocal for builder book BRE capitalized at $110M; migration imminent; not consolidated; attorney-in-fact as equity method Executed milestone
Free cash flow presentationMethodology change (fiduciary reporting), seasonality expected Adjusted FCF $25.8M; ~50% conversion target with long-term 65–70% potential More seasonal; improving conversion over time

Management Commentary

  • “We were extremely pleased with the first quarter overall as we continued our track record of industry‑leading organic growth, ongoing margin expansion, and double‑digit growth in earnings.”
  • “As of today, we have closed on the $110 million capitalization of [BRE] and will imminently begin migrating the Builder Book… we do not intend to consolidate BRE’s financial results.”
  • “For the second quarter of 2025, we expect revenue of $370 million–$380 million… adjusted EBITDA between $83 million–$88 million and adjusted diluted EPS of $0.41–$0.44.”
  • “Our target remains… $150 million–$175 million of free cash flow for the year (~50% conversion); we can progress towards closer to a 65%–70% conversion rate… over time.”

Q&A Highlights

  • IS headwinds timing and rate/exposure: Property renewal premium change -5% vs +21% last year; benefits renewals roughly flat due to more cautious outlook; sequential acceleration expected through the year .
  • Project-based work: Management cited ~200 bps organic headwind from timing; noted a “springloaded” pipeline, with multiple project starts from May and expectations into June .
  • UCTS growth drivers: Homeowners and multifamily portfolios driving high-20s growth; multifamily captive added ~500 bps to segment organic in Q1 .
  • Florida market: Legal system abuse costs down due to tort reform, stabilizing the market, but underlying nat-cat cost of risk remains structurally rising with values and climate trends .
  • Capital and reinsurance: June 1 reinsurance discussions constructive; CAT XOL favorable, quota share remains supply constrained; no negative contingent commission impact from wildfires .

Estimates Context

  • Q1 2025: Revenue $413.4M vs $417.6M* consensus (miss ~1.0%); EPS $0.65 vs $0.648 consensus (in line/rounding beat)*.
  • Q2 2025: Guidance ($370M–$380M revenue; $0.41–$0.44 EPS) brackets S&P Global consensus ($375.0M revenue; $0.416 EPS)*; implies a conservative stance given IS normalization and reinsurance uncertainty .
  • FY 2025: Management maintained guidance; with UCTS strength and MIS resilience, Street may focus on IS recovery trajectory and quota share supply dynamics before revising full-year numbers .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • UCTS is the primary growth engine; BRE’s $110M capitalization and multifamily captive should reinforce capacity and incremental economics without adding consolidated balance sheet risk .
  • IS headwinds appear transitory (rate/exposure lap, project timing); watch for sequential organic acceleration and pipeline conversion through Q2–Q4 .
  • Margin profile inflecting: 27.5% adjusted EBITDA margin vs 19.1% in Q4; improved mix and operating leverage are visible—monitor sustainability against reinsurance outcomes .
  • Deleveraging and FCF: Earnouts largely behind, ratings improved; path below 4x net leverage by Q3 and 50%+ FCF conversion aim supports future capital allocation (M&A later, not near-term) .
  • Near-term trading: Q2 guide at low end of long-term range tempers expectations; catalysts include visible IS acceleration, June 1 reinsurance clarity, and BRE migration updates .
  • Medium-term thesis: Vertical integration (reciprocal, ILS/MultiStrat, Juniper Re) and embedded distribution (MIS) underpin durable double-digit organic growth and margin accretion across cycles .

Additional notes:

  • 8‑K headline referenced “Adjusted EBITDA Margin of 28%,” while the detailed reconciliation table and management commentary specify 27.5%—we anchor on 27.5% given reconciliation detail and CFO confirmation .
  • No additional Q1 2025 press releases were found beyond the 8‑K furnished earnings release [List: 0 press releases; Q1 items in 8‑K] .