Executive Summary

Q1 2025 delivered double‑digit top-line growth and margin expansion: revenues $53.8M (+16.6% YoY), Adjusted EBITDA $12.2M (+35.3% YoY) with Adjusted EBITDA margin 22.6% .
TWFG raised full‑year 2025 guidance across all key metrics: organic revenue growth to 12–16% (from 11–16%), Adjusted EBITDA margin to 20–22% (from 19–21%), and total revenues to $240–$255M (from $235–$250M) .
Consensus vs. reported: Q1 Primary EPS beat ($0.16 vs $0.146)* and revenue beat ($53.8M vs $53.16M); EBITDA missed vs SPGI EBITDA consensus ($8.9M actual vs $11.1M), while company Adjusted EBITDA was $12.2M .
Operating momentum underpinned by broader carrier capacity stabilization, 17 gross branch additions, and expansion into New Hampshire; consolidated retention normalized to 88% .
Near‑term stock reaction catalysts: guidance raise, sustained organic growth (14.3%), improving contingency economics and carrier loss ratios, and early traction from GEICO distribution expansion in additional states .

What Went Well and What Went Wrong

What Went Well

Robust growth and margin expansion: revenues +16.6% YoY to $53.8M; Adjusted EBITDA +35.3% YoY to $12.2M; margin expanded to 22.6% .
Strategic footprint expansion and recruiting momentum: “completed the acquisition of two new corporate locations… expanded into New Hampshire, and added 17 branches across the U.S.” .
CEO tone confident on market normalization: “Personal lines continues to soften and carrier capacity remains stable… retention rates… normalized to our historic average of 88% this quarter.” .

What Went Wrong

Commission expense growth outpaced commission income due to business growth and prior-year one‑time benefits rolling off: commission expense +20.3% to $31.8M vs commission income +14.7% to $48.8M .
Public company cost ramp (audit, consulting, IT) elevated OpEx; other administrative expenses +50.9% YoY to $4.7M; management noted expenses will increase further as compliance infrastructure scales .
Retention lower YoY on normalization and mix shift: consolidated retention 88% vs 94% prior year; MGA retention 82% (81% prior year); Insurance Services retention 88% (97% prior year) .

Financial Results

P&L by Quarter

Metric	Q3 2024	Q4 2024	Q1 2025
Total Revenues ($USD)	$54.64M	$51.74M	$53.82M
Commission Income ($USD)	$48.24M	$43.71M	$48.79M
Contingent Income ($USD)	$1.38M	$5.01M	$1.66M
Fee Income ($USD)	$2.89M	$2.75M	$3.01M
Other Income ($USD)	$2.13M	$0.28M	$0.36M
Net Income ($USD)	$6.89M	$8.15M	$6.85M
Diluted EPS ($USD)	$0.08	$0.11	$0.09
Adjusted Diluted EPS ($USD, non‑GAAP)	$0.15	$0.19	$0.16
Net Income Margin (%)	12.6%	15.8%	12.7%
Adjusted EBITDA ($USD, non‑GAAP)	$11.74M	$13.85M	$12.19M
Adjusted EBITDA Margin (%)	21.5%	26.8%	22.6%

Estimates vs Reported (Q1 2025)

Metric	Consensus	Actual (SPGI)	Reported (Company)
Primary EPS ($USD)	0.1463*	0.16*	Adjusted Diluted EPS: $0.16 ; Diluted EPS: $0.09
Revenue ($USD)	$53.159M*	$53.823M*	$53.823M
EBITDA ($USD)	$11.073M*	$8.913M*	EBITDA: $9.09M; Adjusted EBITDA: $12.19M

Values marked with * retrieved from S&P Global.

Interpretation: TWFG posted an EPS and revenue beat vs consensus; EBITDA missed on an SPGI EBITDA basis but company Adjusted EBITDA materially exceeded EBITDA and expanded YoY .

Segment Revenue Breakdown (Q1 2025 vs Q1 2024)

Segment	Q1 2024 Revenue ($USD)	Q1 2025 Revenue ($USD)
Agency‑in‑a‑Box	$31.73M	$35.99M
Corporate Branches	$7.28M	$8.22M
TWFG MGA	$6.79M	$9.20M
Other	$0.34M	$0.41M
Total Revenues	$46.14M	$53.82M

Commission Income by Offering (Q1 2025 vs Q1 2024)

Segment	Q1 2024 Commission ($USD)	Q1 2025 Commission ($USD)
Agency‑in‑a‑Box	$29.90M	$33.36M
Corporate Branches	$7.25M	$8.21M
Total Insurance Services	$37.15M	$41.57M
TWFG MGA	$5.40M	$7.21M
Total Commission Income	$42.55M	$48.79M

KPIs and Mix

KPI	Q3 2024	Q4 2024	Q1 2025
Total Written Premium ($USD)	$400.10M	$361.36M	$370.96M
Consolidated Retention (%)	88%	91%	88%
Personal Lines (% of TWP)	82%	81%	80%
Commercial Lines (% of TWP)	18%	19%	20%
Insurance Services TWP Share (%)	85%	85%	86%
MGA TWP Share (%)	15%	15%	14%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Organic Revenue Growth Rate	FY 2025	11%–16%	12%–16%	Raised lower bound
Adjusted EBITDA Margin	FY 2025	19%–21%	20%–22%	Raised range
Total Revenues ($USD)	FY 2025	$235M–$250M	$240M–$255M	Raised range

Management rationale: increased visibility, stronger contingency economics, and execution confidence; company notes reconciliation not feasible due to forecasting complexity .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3/Q4)	Current Period (Q1 2025)	Trend
Public company cost ramp	Q4: outsized Q4 margin from contingencies and timing delay of certain public company costs; normalization expected in 2025	Additional audit/compliance infrastructure to be layered in over time; Q1 not fully loaded; guidance conservative to absorb costs	Costs rising but manageable; margin guidance raised lower bound
Carrier capacity and market backdrop	Q4: stabilization in appetites; improved loss ratios; contingent income tailwind	Personal lines softening; capacity stable; contingencies up; cautious watch on tariffs and macro	Broadly supportive; monitoring tariff impact on auto loss costs
Retention normalization	Q3/Q4: consolidated 88–91%; Insurance Services retention 89–92%	Consolidated retention at long‑term 88% target; confidence retention has bottomed	Normalized to historic average
Branch and footprint expansion	Q3: 86 new branches, 13 new states ; Q4: 144 locations added in 2024, 520 total	17 gross branch additions; expanded into New Hampshire; 2 corporate acquisitions (OH, TX)	Continued expansion; lower gross adds vs 2024 surge
Contingent commissions	Q4: contingent income $5.0M, key driver of margin	Q1 contingencies uptick supported margins; management raised margin guidance lower bound	Positive tailwind; variability acknowledged
MGA program growth	Q3: MGA growth impacted by program fee change	Q1 MGA new business +89%; ongoing program expansion	Accelerating
GEICO distribution expansion	N/A	Added GEICO to more states; favorable pricing, commissions; helps retention despite lower average premiums	New strategic partner in IA channel
Regional risk (California/Florida)	Q4: monitoring wildfires and reinsurance pricing; limited direct balance sheet risk	CA property difficult but manageable (FAIR Plan, surplus lines); Florida post‑AOB reforms an expansion opportunity	CA cautious; FL potentially additive

Management Commentary

CEO: “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…” .
CEO on recruiting/M&A: “Completed… two new corporate locations… expanded into New Hampshire, and added 17 branches… M&A pipeline is stronger than ever.” .
CFO: “Interest income was moved from the revenue line down to other income, so we will be comparable to prior and future periods.” .
CEO on macro/tariffs: “We are mindful of… tariff discussions… But rather than pulling back, we are seeing increased demand… We remain confident…” .
Press release appointment: new Chief Accounting Officer (Eugene “Gene” Padgett) joined Jan 23, 2025, enhancing SEC reporting and compliance capability .

Q&A Highlights

Public company costs timing: Not fully loaded in Q1; building audit/compliance infrastructure; margin upside possible given contingencies and disciplined guidance .
Retention outlook: Management confident 88% premium retention is long‑term average; softening market helps retention (potentially at lower premiums) .
Commission rate stability: Mix effects (E&S/state plans lower), but new business incentives and stabilizing homeowners support commission percentage; Q1 seen as a good indicator .
Branch additions: 17 gross added; compares to elevated 2024 surge tied to a single carrier’s disruption; consolidation may continue through 2025 .
Inorganic contribution: Guidance modeled with mid‑year convention (half‑year impact of $20M revenue, $5M EBITDA); pipeline may drive upside .
GEICO partnership: Significant addition with favorable pricing/commissions; aids retention via competitive auto rates and bundling with TWFG’s MGA homeowner program companion discounts .
Florida and California: Florida post‑AOB reforms attractive (watch legislative changes); California remains challenging; TWFG leveraging FAIR Plan/surplus capacity and partners .

Estimates Context

Q1 2025 beats/misses vs SPGI consensus:
- Primary EPS: $0.16 actual vs $0.146 consensus (beat)*
- Revenue: $53.82M actual vs $53.16M consensus (beat)*
- EBITDA: $8.91M actual vs $11.07M consensus (miss)*; company’s Adjusted EBITDA was $12.19M, reflecting non‑GAAP adjustments (equity comp, interest income, non‑recurring) .
  Values marked with * retrieved from S&P Global.

Implication: Street may need to adjust EBITDA frameworks to reflect TWFG’s reporting (Adjusted EBITDA) and contingency dynamics; EPS and revenue revisions skew positive.

Key Takeaways for Investors

Q1 print was clean with top‑line and adjusted margin strength; guidance raised across the board signals growing confidence in organic growth and profitability .
Expect near‑term narrative focus on contingency economics, public company cost normalization, and inorganic contributions timing; margin guidance already accounts for cost build‑out .
Structural drivers: stabilizing carrier capacity, GEICO addition, and continued MGA program expansion should support commission growth and retention, albeit with lower average premiums in some markets .
Watch regional risk dynamics: California property remains complex; Florida opportunity emerging post‑AOB reforms; reinsurance renewals (6/1, 7/1) are a swing factor for capacity and contingencies .
M&A pipeline robust; closing pace and size could drive upside to revenue/EBITDA vs mid‑year modeled assumptions .
For modeling, use Adjusted EBITDA and Adjusted Diluted EPS for comparability (peer‑consistent) and reconcile to GAAP based on disclosed adjustments .
Trading lens: Guidance raise and EPS/revenue beats are positive catalysts; any updates on GEICO rollout, mid‑year acquisitions, and contingency visibility into Q3/Q4 could further support sentiment .

TWFG, Inc. (TWFG)·Q1 2025 Earnings Summary