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Baldwin Insurance Group, Inc. (BWIN)·Q4 2024 Earnings Summary

Executive Summary

  • Baldwin Insurance Group delivered strong Q4: revenue $0.330B (+16% YoY), organic growth 19%, adjusted EBITDA $63.2M with margin expansion to 19.1% from 16.0% .
  • Adjusted diluted EPS rose to $0.27 (+93% YoY), while GAAP diluted loss per share was $(0.31); margin/FCF trends remained favorable with adjusted free cash flow up 328% YoY in the quarter .
  • Management introduced Q1 2025 guidance (revenue $0.410–$0.420B; adj. EBITDA $110–$115M; adj. EPS $0.62–$0.66) and reiterated FY 2025 ranges (organic growth in lower half of 10–15%, adj. EBITDA $345–$360M, FCF from ops $150–$175M), highlighting deleveraging to <4x by Q3 2025 and a capital position inflection post earn-outs .
  • Catalysts: continued industry-leading organic growth, vertical integration via a Texas reciprocal exchange, embedded home insurance tech scale-up, and free cash flow inflection; watch reinsurance pricing after California wildfires and QBE builder-book replatforming impacts on margins .

What Went Well and What Went Wrong

What Went Well

  • Industry-leading organic growth across all segments: IS +16%, UCTS +25%, MIS +19% in Q4; consolidated organic growth +19% .
  • Margin expansion and cash generation: adjusted EBITDA margin to 19.1% (+310 bps YoY); FY margin 22.5% (+200 bps); adjusted free cash flow nearly doubled in 2024 to $134.9M; net leverage down to 4.1x .
  • Strategic progress: approval to launch a Texas-domiciled reciprocal exchange for the builder homeowners book, enabling long-term capacity and vertical integration; QBE signaled continued support beyond May 1 .
  • Quote (CEO): “Organic revenue grew 19%…Adjusted EBITDA margin expanded…adjusted free cash flow growth of nearly 100%…Net leverage declined to 4.1x” .

What Went Wrong

  • GAAP loss persists: Q4 GAAP diluted LPS $(0.31) and net loss of $34.8M, reflecting interest expense and earn-out accounting impacts .
  • Reinsurance uncertainty: California wildfires may pressure June 1 renewals and gross commission rates in E&S homeowners programs; company built conservatism into 2025 margin guide .
  • Q1 2025 near-term growth cadence: management flagged organic growth toward low end of range in Q1 due to timing of net new business in IS, implying sequential margin dynamics (stronger H1 improvement, less in H2) .

Financial Results

Consolidated results (quarterly)

MetricQ2 2024Q3 2024Q4 2024Q4 2023
Revenue ($USD Billions)$0.340 $0.339 $0.330 $0.285
GAAP Diluted EPS ($)$(0.28) $(0.13) $(0.31) $(0.56)
Adjusted Diluted EPS ($)$0.34 $0.33 $0.27 $0.14
Adjusted EBITDA ($USD Millions)N/A$72.8 $63.2 $45.6
Adjusted EBITDA Margin %N/A21.5% 19.1% 16.0%
Organic Revenue Growth %19% 14% 19% 15%

Notes: Q3 margin shown as 21.5% per press release; reconciliation table rounds to 21% .

Segment revenue and organic growth (quarterly)

SegmentQ2 2024 Revenue ($USD Millions)Q2 2024 Organic Growth %Q3 2024 Revenue ($USD Millions)Q3 2024 Organic Growth %Q4 2024 Revenue ($USD Millions)Q4 2024 Organic Growth %
Insurance Advisory Solutions (IAS)$168.1 8% $159.3 7% $162.1 16%
Underwriting, Capacity & Technology Solutions (UCTS)$122.5 37% $129.8 26% $116.8 25%
Mainstreet Insurance Solutions (MIS)$67.1 25% $70.7 14% $71.9 19%

KPIs

KPIQ3 2024Q4 2024FY 2024
Sales velocity (%)N/A23% 21.5%
New business production ($USD Millions)N/AN/A$125.0
Adjusted Free Cash Flow ($USD Millions)$99.2 (9M) $16.9 (Q4) $134.9
Net leverage (x)N/A4.1x 4.1x
MGA Gross Written Premium ($USD Billions)N/AN/A$1.1

Prior-quarter reference

  • Q3 2024 consolidated revenue $0.339B (+11% YoY), adjusted EBITDA $72.8M, margin ~21.5%, adjusted EPS $0.33 .

Prior-year comparison

  • Q4 2024 vs Q4 2023: revenue $0.330B vs $0.285B (+16% YoY), adjusted EPS $0.27 vs $0.14 (+93%), adjusted EBITDA margin 19.1% vs 16.0% (+310 bps) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Billions)Q1 2025Not previously provided$0.410–$0.420Initiated
Organic Revenue Growth %Q1 2025LT range 10–15%Low end of LT rangeLower cadence in Q1 (timing)
Adjusted EBITDA ($USD Millions)Q1 2025Not previously provided$110–$115Initiated
Adjusted Diluted EPS ($)Q1 2025Not previously provided$0.62–$0.66Initiated
Organic Revenue Growth %FY 2025LT range 10–15% (Q3 call)Lower half of 10–15%Refined to lower half
Total Revenue ($USD Billions)FY 2025Not previously quantified$1.52–$1.56Initiated
Adjusted EBITDA Margin Expansion (bps)FY 202525–100 bps (Q3 call)Lower half of that rangeRefined to lower half
Adjusted EBITDA ($USD Millions)FY 2025Not previously quantified$345–$360Initiated
Adjusted FCF from operations ($USD Millions)FY 2025Not previously quantified$150–$175 (40–50% conversion)Initiated
Adjusted Diluted EPS ($)FY 2025Not previously quantified$1.70–$1.80Initiated
Net leverage (x)FY 2025Target 3–4x LT<4x by Q3 2025Maintained, timetable specified
Term loan pricing2025SOFR+3.00% above 4xStep-down to SOFR+2.75% once <4xMaintained with timing

Earnings Call Themes & Trends

TopicQ2 2024 MentionsQ3 2024 MentionsQ4 2024 MentionsTrend
Margin expansionSegment margins expanding; FY runway implied (segment tables) Adj. margin ~21.5% (+60 bps YoY) Adj. margin 19.1% (+310 bps YoY); FY 22.5% (+200 bps) Sustained improvement, with mix and cost focus
Free cash flowScaling FCF with operations (implied) Adj. FCF $99.2M (9M) Adj. FCF $134.9M FY; methodology change from Q1’25 introduces seasonality Inflection post earn-outs; new presentation
Reinsurance market/wildfiresNot discussedNot discussedCalifornia wildfires could impact June 1 renewals and commission rates Emerging headwind risk for UCTS homeowners
Reciprocal exchangeNot discussedNot discussedApproval to launch Texas reciprocal; vertical integration milestone Strategic capacity build
Embedded home insurance techBuild progressingExecution strong; digital embedded initiative launched in mortgage/title/broker channel Continued momentum, onboarding with mortgage partner Scaling distribution tech
QBE builder-bookNot discussedNot discussedQBE to continue support; economics reset ($10–$15M EBITDA impact) while reciprocal earns in 2026–27 Transitional drag near term
M&A and leverageDeleveraging priorityStronger profile; flexibility aheadNo M&A modeled for 2025; will not go >4x; tight filter long-term Discipline, deleveraging first
Talent/market landscapeNot discussedNot discussedInbound talent from consolidators; platform viewed as destination Talent acquisition tailwind

Management Commentary

  • Strategic positioning: “The growing complexity of the risk and insurance landscape will continue to inure to the benefit of our vertically integrated franchise…deliver outsized organic growth, ongoing margin accretion and expanded adjusted free cash flow well into the future.”
  • Cash inflection: “By March, the vast majority of our earn-out obligations will be satisfied…beginning of the adjusted free cash flow inflection point we’ve anticipated.”
  • UCTS homeowners programs: “E&S homeowners portfolio has some exposure to the recent fires…remains to be seen what impact…on reinsurance pricing…June 1 renewals.”
  • Capacity strategy: “Approval…to form and launch a Texas domiciled reciprocal insurance exchange…represents a meaningful milestone…vertically integrate across the value chain.”
  • Segment execution: “Westwood franchise onboarded six new builders…now powers the home insurance experience for 18 of the top 25 homebuilders.”

Q&A Highlights

  • Earn-out incentives: Clarified colleague earn-out incentives reclassification; not recurring post earn-out; producers not specifically targeted; organic growth in regions exiting earn-outs was strongest since joining .
  • Capital allocation vs. FCF signaling: Priority to delever to 3–4x; will demonstrate FCF generation; opportunistic M&A later under tight filter without exceeding 4x leverage .
  • Q1 growth cadence: IS momentum strong but timing effects lower Q1 organic growth; contingency income cautious given wildfires .
  • QBE economics and reciprocal: QBE support beyond May 1; fixed gross commission reduction ($10–$15M EBITDA impact) consistent with Q3 commentary; reciprocal expected to restore economics over 2026–27 .
  • Reinsurance pricing: California wildfires (potential top-3 CAT event) likely to pressure reinsurance pricing for secondary perils; could affect gross commission rates at renewal; sizing uncertain .
  • FCF presentation change: Moving fiduciary cash flows to financing; expect minimal FCF in Q1, stronger in Q2–Q4; 2024 base would be lower under new methodology .
  • CapEx: ~$40M run-rate, primarily internal-use software for embedded initiatives .
  • Rate/exposure: IS rate/exposure headwinds modest in 2024; expects easing or potential tailwinds in 2025 .
  • Talent/M&A landscape: PE-backed consolidators slowing; large publics more active; increasing inbound talent to Baldwin .

Estimates Context

  • Wall Street consensus via S&P Global for Q4 2024 was unavailable at the time of this analysis due to a data access limit; as a result, we cannot determine beat/miss versus Street for revenue, EPS, or EBITDA. Values retrieved from S&P Global were unavailable.
  • Company-reported results: revenue $0.330B, adjusted diluted EPS $0.27, adjusted EBITDA $63.2M, adjusted EBITDA margin 19.1% .

Key Takeaways for Investors

  • Durable organic growth profile with segment breadth: IS/MIS/UCTS all double-digit organic growth; watch IS contingent income exposures in 2025 given CAT backdrop .
  • Margin trajectory remains positive despite near-term UCTS and QBE transitions; FY 2025 margin guide refined to lower half of prior range reflects prudence on reinsurance pricing .
  • FCF inflection post earn-outs and leverage path to <4x by Q3 2025 are central to equity re-rating and optionality for capital deployment; term loan spread step-down a potential earnings tailwind .
  • Strategic capacity via reciprocal exchange and embedded distribution tech can improve unit economics and growth durability in homeowners over 2026–27; near-term optics may be noisy .
  • Monitoring points: June 1 reinsurance renewals (commission rates), Q1 growth cadence in IS (timing), updated FCF methodology seasonality, and any incremental clarity on California wildfire losses transmission to pricing .
  • No M&A modeled for 2025; discipline on leverage (<4x) should maintain valuation support; increasing inbound talent could bolster IS growth and margins .
  • Actionable: Position for continued organic growth and margin accretion with potential mid-year volatility around reinsurance; reassess 2H 2025 outlook post renewals and reciprocal launch progress .

Additional document note: No other Q4 2024 press releases were identified beyond the earnings press release furnished as Exhibit 99.1 in the 8-K .