TWFG Q2 Earnings Call Highlights

TWFG (NASDAQ:TWFG) reported second-quarter 2026 revenue growth of 45.1% and raised its full-year outlook, citing expansion in its managing general agency, or MGA, operations, improving retention and contributions from acquisitions.

Total revenue increased to $87.5 million from the prior-year quarter, while organic revenue rose 37% to $75.5 million. Adjusted EBITDA increased 75.8% to $26.6 million, and the adjusted EBITDA margin expanded 530 basis points to 30.4%.

Chief Executive Officer Gordy Bunch said the results reflected investments in the company’s MGA platform, carrier relationships, technology and personnel. Total written premium rose 26.6% to $569.9 million, supported by a 19.3% increase in renewal premium and a 51.6% increase in new-business premium.

Retention and MGA growth drive results

Consolidated written-premium retention reached 93%, compared with 89% a year earlier. Chief Financial Officer Janice Zwinggi said retention would have been approximately 88% excluding renewals associated with the company’s Florida Citizens takeout program, which was consistent with TWFG’s historical range.

Insurance services written premium grew 12.8% to reflect higher renewals, improved retention and the benefit of corporate branch acquisitions. MGA written premium more than doubled, increasing 114.8%, driven by the company’s voluntary Florida homeowners program, its first-quarter acquisition of APIA, and continued renewals from the Citizens takeout portfolio.

Commission income rose 47.8% to $80.6 million. MGA commission income climbed 290% to $27.3 million and represented 35% of total revenue, up from 15% in the prior-year quarter. Bunch said the MGA channel has a structurally higher margin profile than insurance services.

The company also benefited from a temporary commission-expense dynamic associated with policies assumed through the Florida takeout program. During the runoff period, those policies generate commission income without corresponding sub-producer commission expense. Bunch said that benefit is expected to normalize as policies renew with full-term premiums and standard commission expenses.

Fee income increased to $4.2 million from $3.3 million, while contingent income was essentially flat at $2.2 million. Management said it has maintained a conservative posture on contingent income because of uncertainty around carrier loss ratios in a softening rate environment.

Profitability, cash and capital allocation

Net income rose to $17.3 million from $9 million in the prior-year quarter. Adjusted net income increased 76.1% to $20.3 million, producing an adjusted net income margin of 23.2%, compared with 19.1% a year earlier. Adjusted diluted earnings per share increased to $0.38 from $0.20.

Commission expense increased 24.4% to $42.5 million, a slower pace than commission income. Salaries and employee benefits rose 24.1% to $11.8 million, primarily due to acquisition-related headcount and corporate investments. Other administrative expenses increased 59% to $8.6 million, reflecting technology spending, acquired corporate-store expenses and public-company infrastructure. Depreciation and amortization rose 81.1% to $7.1 million, largely due to acquisition-related purchase accounting.

Operating cash flow for the first half of 2026 was $32.5 million, up 29% from the first half of 2025. As of June 30, the company had $73.7 million of unrestricted cash and cash equivalents, $19 million of restricted cash, no borrowings under its $50 million revolver and $3 million of term debt. Zwinggi said total liquidity was approximately $142.7 million.

TWFG completed the acquisition of Iowa-based Fortress Insurance Services on May 1. Bunch said Fortress completed the company’s acquisition objectives included in its 2026 guidance, with near-term attention focused on integrating first-half acquisitions. The company has an active acquisition pipeline, and management said any additional second-half deals would represent potential upside not included in guidance.

The company’s $50 million share-repurchase authorization, approved in February, is nearly complete. Through the date of the call, TWFG had repurchased approximately $42.9 million of shares at an average price of $19 per share, retiring about 15% of its pre-program Class A share count.

Updated outlook and market conditions

TWFG raised its 2026 outlook, now expecting:

• Total revenue of $300 million to $320 million, compared with prior guidance of $285 million to $300 million.
• Organic revenue growth of 13% to 17%, compared with 10% to 15% previously.
• Adjusted EBITDA margins of 23% to 27%, compared with 22% to 25% previously.

Bunch said personal-auto rates have continued to moderate, including mid-single-digit declines in certain segments, while homeowners rates have been broadly flat with regional pressure in catastrophe-exposed areas. He said carrier appetite for quality independent-agent business remains strong, with growth-oriented insurers offering new-business and quarterly incentives.

Management expects organic growth to remain in the double-digit teens during the third quarter, despite timing effects from the Florida takeout business. Bunch said fourth-quarter organic growth could be “flattish” because prior-year runoff premiums renewed earlier in 2026 and will not recur in the same periods. Excluding the Florida takeout business, he said second-quarter core organic growth would have been in the high teens.

The company plans to host an Investor Day on Nov. 12, where management expects to discuss its medium-term financial framework, MGA strategy, geographic expansion and technology roadmap.

About TWFG (NASDAQ:TWFG)

TWFG Insurance Services, Inc operates as a property and casualty Insurance distribution company that provides personal and commercial Insurance solutions through a hybrid model of company-owned branches and franchised offices. The firm offers a broad spectrum of Insurance products, including auto, homeowners, renters, umbrella, flood and specialty lines coverage, tailored to meet the needs of individuals, families and businesses. By partnering with multiple Insurance carriers, TWFG delivers competitive pricing and customized policy options designed to help clients manage risk and protect their assets.

Founded in 1980 and headquartered in Odessa, Texas, TWFG has expanded its network to serve customers across numerous U.S.

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