Executive Summary

Q3 delivered broad-based growth and margin expansion: revenue rose 21.3% to $64.1M, Adjusted EBITDA grew 44.7% to $17.0M with margin +430 bps to 26.5% .
Mix and execution drove upside: MGA program contributions and operating leverage lifted profitability; Adjusted EPS was $0.23 and GAAP diluted EPS was $0.11 .
Versus S&P Global consensus, revenue modestly beat ($64.1M vs $63.4M*) and EBITDA beat ($17.0M vs $13.5M*); GAAP EPS missed (actual $0.11 vs $0.185*), though Adjusted EPS ($0.23) outpaced Street EPS expectations on a comparable basis .
FY25 guidance tightened: revenue narrowed to $240–$245M (from $240–$255M), organic growth to 11–13% (from 11–14%), and Adjusted EBITDA margin raised to 24–25% (from 21–23%)—a likely positive catalyst given higher profitability targets .
Management cited personal lines normalization, strong retention (91%), and accretive M&A (Alabama Insurance Agency) as tailwinds into Q4 and 2026 .

What Went Well and What Went Wrong

What Went Well
- Margin expansion: Adjusted EBITDA margin reached 26.5% (+430 bps YoY) on operating leverage and higher-margin MGA/corporate branch mix .
- Strong organic engine: Organic revenue growth was 10.2% on new business, normalized retention, and modest rate improvement; consolidated written premium retention was 91% .
- Strategic expansion: Added 8 retail locations, 1 corporate location, 370 independent agents in Q3 and acquired Alabama Insurance Agency post-quarter; CEO: “position TWFG for sustained, profitable growth” .
What Went Wrong
- GAAP EPS below Street: Primary EPS consensus was ~$0.185* vs GAAP diluted EPS $0.11; higher amortization ($5.3M) and public company costs dampened GAAP EPS despite strong Adjusted EPS .
- Softening rates temper renewal dollars: Management highlighted lower average premiums in a softening personal lines market even as capacity improves, creating a trade-off between premium rates and new customer growth .
- MGA commission ratio normalization ahead: Q3 saw elevated MGA net commissions due to a Florida TPA takeout with little associated commission expense; management expects normalization as renewals add commission expense .

Financial Results

Core P&L vs prior year and prior quarter

Metric (USD)	Q3 2024	Q2 2025	Q3 2025
Total Revenues ($M)	$52.863	$60.308	$64.123
Net Income ($M)	$6.893	$9.000	$9.620
Diluted EPS (GAAP)	$0.08	$0.13	$0.11
Adjusted Diluted EPS	$0.15	$0.20	$0.23
Adjusted EBITDA ($M)	$11.738	$15.133	$16.984
Adjusted EBITDA Margin %	22.2%	25.1%	26.5%
Net Income Margin %	13.0%	14.9%	15.0%
Organic Revenue Growth %	8.6%	10.6%	10.2%

Q3 2025 Actual vs S&P Global Consensus

Metric	Consensus	Actual
Revenue ($M)	$63.36*	$64.12
EBITDA ($M)	$13.53*	$16.98
Primary EPS ($)	$0.185*	$0.11

Values retrieved from S&P Global.

Segment revenue mix (offerings)

Segment ($M)	Q3 2024	Q2 2025	Q3 2025
Agency-in-a-Box	$33.826	$39.316	$37.583
Corporate Branches	$9.248	$11.393	$12.188
TWFG MGA	$9.432	$9.233	$13.944
Total Revenues	$52.863	$60.308	$64.123

KPIs

KPI	Q3 2024	Q2 2025	Q3 2025
Total Written Premium ($M)	$400.099	$450.288	$467.741
Written Premium Retention (Consolidated)	88%	89%	91%
Personal Lines Mix (% of Premium)	82%	81%	83%
Commercial Lines Mix (% of Premium)	18%	19%	17%

Non-GAAP context: In Q3, Adjusted Net Income was $13.0M vs GAAP Net Income $9.6M, with add-backs including amortization ($5.205M) and equity-based compensation ($0.987M) contributing to the adjusted result .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenues	FY 2025	$240–$255M	$240–$245M	Tightened (lower high end)
Organic Revenue Growth	FY 2025	11%–14%	11%–13%	Tightened
Adjusted EBITDA Margin	FY 2025	21%–23%	24%–25%	Raised

Management reiterated improving personal lines conditions and expanding carrier availability as supportive backdrops alongside M&A momentum .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 2025)	Trend
Personal lines market	Softening with expanding capacity; retention normalizing; management still sees double-digit organic potential .	Market transitioned from hard to soft starting early Q2’25; lower renewal rates but more client onboarding; impact to abate by Q2’26 .	Continued normalization; near-term renewal headwind vs volume tailwind.
MGA programs & margin	New Florida MGA property program added in Q2 ; Texas FICO admitted program dynamics explained; reinsurance timing constrained Q2 growth .	Florida TPA takeout in June drove commission revenue without matching expense, boosting MGA margins; expect normalization as renewals carry commission expense .	Near-term margin tailwind normalizes in 4Q/2026.
M&A pipeline	Four Q2 acquisitions; expansion into KY; reiterated M&A contribution to back-half weighting .	8 retail, 1 corporate location, +370 independent agents added; post-Q3 Alabama Insurance Agency (23 locations) acquisition; expect earlier-cycle execution in 2026 .	Accelerating and broadening geographically.
Technology/AI & efficiency	Piloting AI tools; scaling service efficiency .	Continuing tech investments and Philippines VA expansion to drive scalability; 2026 investment plans forthcoming with 10-K .	Ongoing efficiency initiatives support margin.
Capacity/admitted vs E&S	FICO (TX) admitted; Dover Bay ENS terms updated; ENS competition can affect renewal premiums .	Clarified all originated programs are admitted except Dover Bay (E&S) .	Clarity on program mix; capacity is constructive.
Geography & regulatory	Q2: CA remains a hard personal lines market .	CA still hard; varied cat exposure by region; broader cat geographies relatively soft given cat pricing/capacity .	Regional divergence persists.
Capital deployment	Q1: strong liquidity; Q2: reiterated cash and revolver availability .	Deployed ~$10M from “other investments” to internal premium finance for >7% yields vs 4% alternatives .	Incrementally accretive yield on cash.

Management Commentary

“We delivered 21.3% total revenue growth, 10.2% organic growth and 430-basis-points improvement in Adjusted EBITDA margin to 26.5%, highlighting the scalability of our model and disciplined cost management.” — CEO .
“Adjusted EBITDA of $17 million grew 44.7%, translating to a margin of 26.5%...reflects operating leverage, expense discipline, and an increasing mix of higher-margin corporate branch locations.” — CFO .
“As the market also then opens up, customers have more access to different carrier options… We should see the impact of that abating once we get into the second quarter of 2026.” — CEO on market cycle .
“We completed the acquisition of Alabama Insurance Agency…adding 23 additional retail locations and marking Alabama as our newest state expansion.” — CEO .

Q&A Highlights

Premium finance deployment: ~$10M moved to fund TWFG’s premium finance operations, producing >7% yield vs ~4% alternatives; management called it “highly accretive” .
MGA margin mechanics: Florida TPA takeout created commission revenue with minimal commission expense, lifting Q3 MGA margins; renewals will normalize the ratio .
Admitted vs E&S clarity: All originated programs are admitted except Dover Bay (E&S), benefiting from capacity shift back to admitted markets .
Margin trajectory by channel: Corporate branch EBITDA margins exceed Agency-in-a-Box (AIB) by >2x given 100% renewal retention at corporate locations .
2026 outlook: Expect to execute earlier in the M&A cycle vs 2025; full-year 2026 investments and targets will be provided with the 10-K .

Estimates Context

Q3 2025: Revenue beat ($64.12M vs $63.36M*), EBITDA beat ($16.98M vs $13.53M*), GAAP EPS miss ($0.11 vs $0.185*). Adjusted EPS of $0.23 exceeded consensus EPS on a comparable basis .
Estimate breadth: Q3 EPS (6 ests), Revenue (3), Target Price mean $33 (6) [GetEstimates*].
Forward consensus: Q4 2025 EPS ~$0.179*, Revenue ~$59.78M*, EBITDA ~$11.66M*; Q1 2026 EPS ~$0.191*, Revenue ~$61.52M*, EBITDA ~$12.79M* [GetEstimates*].