twfg-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________

FORM 10-Q

___________________________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ______________

Commission file number 001-42177

___________________________________

TWFG, Inc.

(Exact name of registrant as specified in its charter)

___________________________________


Delaware									99-0603906
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)

10055 Grogans Mill Rd. Suite 500 The Woodlands, Texas									77380
(Address of Principal Executive Offices)									(Zip Code)

(281) 367-3424

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.01 par value per share	TWFG	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes x No o

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes o No x

As of May 9, 2025, there were 14,904,083 shares of Class A common stock, 7,277,651 shares of Class B common stock and 33,893,810 shares of Class C common stock outstanding.

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		Page
Part I - Financial Information
	Item 1. Condensed Consolidate d Financial Statements (Unaudited)	1
	Condensed Consolidated Statements of Income for the three months ended March 31, 2025 and 2024	1
	Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2025 and 2024	2
	Condensed Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024	3
	Condensed Consolidated Statements of Stockholders’/Members’ Equity for the three months ended March 31, 2025 and 2024	4
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024	5
	Notes to the Condensed Consolidated Financial Statements	7
	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	20
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	36
	Item 4. Controls and Procedures	37
Part II - Other Information
	Item 1. Legal Proceedings	38
	Item 1A. Risk Factors	38
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	38
	Item 5. Other Information	38
	Item 6. Exhibits	39
Signatures		40

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Cautionary Note Regarding Forward-Looking Statements

We have made statements in this Quarterly Report on Form 10-Q (this “Quarterly Report”) that are forward-looking statements. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue,” the negative of these terms and other comparable terminology. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements, including those factors discussed under the captions entitled Part I, Item 1A “Risk factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission (“SEC”) on March 27, 2025 (our “Annual Report”) and Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report. Many of these factors have previously been identified in fillings or statements made by us or on our behalf.

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Commonly Used Defined Terms

•“we,” “us,” “our,” the “Company,” “TWFG,” and similar references refer to: (i) TWFG, Inc. and, unless otherwise stated or the context otherwise requires, all of its subsidiaries, including TWFG Holding Company, LLC (“TWFG Holding”), for periods following the consummation of certain reorganization transactions (the “Reorganization Transactions”), including our initial public offering (“IPO”), and (ii) TWFG Holding and, unless otherwise stated or the context otherwise requires, all of its subsidiaries, for periods prior to the completion of the Reorganization Transactions, including our IPO;

•Adjusted Diluted Earnings Per Share: Adjusted Net Income divided by diluted shares outstanding after adjusting for the effect of (i) the exchange of 100% of the outstanding Class B common stock of the Company (the “Class B Common Stock”) and Class C common stock of the Company (the “Class C Common Stock”) (together with the related limited liability company units of TWFG Holding (the “LLC Units”)) into shares of Class A common stock of the Company (“Class A Common Stock”) and (ii) the vesting of 100% of the unvested equity awards and exchange into shares of Class A Common Stock;

•Adjusted EBITDA: EBITDA adjusted to exclude equity-based compensation and other non-operating items, including certain nonrecurring or non-operating gains or losses;

•Adjusted EBITDA Margin: Adjusted EBITDA divided by total revenues;

•Adjusted Free Cash Flow: Cash flow from operating activities (the most directly comparable GAAP measure) less cash payments for tax distributions, purchases of property and equipment and acquisition-related costs;

•Adjusted Net Income: Net income (the most directly comparable GAAP measure) before amortization, non-recurring or non-operating income and expenses, including equity-based compensation, adjusted to assume a single class of stock (Class A) and assuming noncontrolling interests do not exist;

•Adjusted Net Income Margin: Adjusted Net Income divided by total revenues;

•Admitted: The insurance market comprising insurance carriers licensed to write business on an “admitted” basis by the insurance commissioner of the state in which the risk is located. Insurance rates and forms in this market are highly regulated by each state and coverages are largely uniform;

•Book of Business: Active Client list;

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•Branch: An independent agency that contracts with our Insurance Services offering, operates its agency through TWFG’s “Agency-in-a-Box” and with TWFG’s branding, and receives all benefits of working with TWFG, including a work and revenue share, TWFG back-office support, marketing and access to a fully integrated agency management system. TWFG branding is restricted to the Branches and Corporate Branches, all of which are listed on our website and can be found using the location filter. Branches and Corporate Branches are exclusive to TWFG, meaning that they can only write certain insurance business through TWFG;

•Client: Individual or entity that purchases an insurance policy or seeks to purchase an insurance policy from TWFG Agencies;

•Corporate Branch: An agency within our Insurance Services offering that is wholly owned by TWFG;

•EBITDA: Earnings before interest, income taxes, depreciation and amortization;

•M&A: Mergers and acquisitions;

•MGA: Managing general agency;

•MGA Agencies: Independent agencies that contract with TWFG MGA to obtain access to additional insurance carriers or programs. TWFG MGA Agencies do not include TWFG branding and are not exclusive to TWFG;

•Organic Revenue: Total revenues (the most directly comparable GAAP measure) for the relevant period, excluding contingent income, non-policy fee income, other income and those revenues generated from acquired businesses;

•Organic Revenue Growth: Organic Revenue Growth is the change in Organic Revenue period-to-period;

•P&C: Property and casualty insurance;

•Total Written Premium: The total amount of current premium (net of cancellations) placed with insurance carriers;

•TWFG Agencies: Branches, Corporate Branches and MGA Agencies; and

•TWFG MGA: TWFG’s managing general agency.

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Part I - Financial Information

Item 1. Financial Statements

TWFG, Inc.

Condensed Consolidated Statements of Income

(Amounts in thousands, except share and per share data)

(unaudited)


	Three Months Ended March 31,
	2025		2024
Revenues
Commission income (related party of $3,135 and $1,109 for the three months ended March 31, 2025 and 2024, respectively)	$	48,785	$	42,545
Contingent income	1,663		1,076
Fee income (related party of $834 and $354 for the three months ended March 31, 2025 and 2024, respectively)	3,011		2,232
Other income	364		290
Total revenues	53,823		46,143
Expenses
Commission expense	31,814		26,443
Salaries and employee benefits	8,196		6,254
Other administrative expenses (related party of $770 and $401 for the three months ended March 31, 2025 and 2024, respectively)	4,724		3,130
Depreciation and amortization	3,359		3,013
Total operating expenses	48,093		38,840
Operating income	5,730		7,303
Interest expense	83		842
Interest income	1,863		170
Other non-operating expense	1		2
Income before tax	7,509		6,629
Income tax expense	656		—


Net income	6,853		6,629

SEC Form 10-Q filed by TWFG Inc.