Earnings release
Page 1
TWFG Announces Second Quarter 2026 Results - Total Revenues increased 45.1 % for the quarter over the prior year period to $ 87.5 million – Organic Revenue Growth Rate * of 37.0 % for the quarter - - - Net income of $ 17.3 million and Net Income Margin of 19.7 % for the quarter - - Adjusted EBITDA Margin * expanded 530 basis points to 30.4 % - - Raising full - year 2026 guidance - - THE WOODLANDS , Texas , August 5 , 2026 ( GLOBE NEWSWIRE ) – TWFG , Inc. ( “ TWFG " , the " Company " or " we " ) ( NASDAQ : TWFG ) , a high - growth insurance distribution company , today announced results for the second quarter ended June 30 , 2026 . Second Quarter 2026 Highlights • • • • Total revenues for the quarter increased 45.1 % to $ 87.5 million , compared to $ 60.3 million in the prior year period Commission income for the quarter increased 47.8 % to $ 80.6 million , compared to $ 54.6 million in the prior year period Net income for the quarter was $ 17.3 million , compared to $ 9.0 million in the prior year period , and net income margin for the quarter was 19.7 % up from 14.9 % in the prior year period Diluted Earnings Per Share for the quarter was $ 0.18 and Adjusted Diluted Earnings Per Share * for the quarter was $ 0.38 Total Written Premium for the quarter increased 26.6 % to $ 569.9 million , compared to $ 450.3 million in the prior year period • Organic Revenue Growth Rate * for the quarter was 37.0 % • Adjusted Net Income * for the quarter increased 76.1 % from the prior year period to $ 20.3 million , and Adjusted Net Income Margin * for the quarter was 23.2 % • Adjusted EBITDA * increased 75.8 % to $ 26.6 million , with Adjusted EBITDA Margin expanding 530 basis points to 30.4 % , compared to 25.1 % in the prior year period Approximately $ 42.9 million in cash was used to repurchase 2,252,349 shares under the Company's $ 50 million share repurchase authorization , leaving approximately $ 7.1 million available for future repurchases . * Organic Revenue Growth Rate , Adjusted Net Income , Adjusted Net Income Margin , Adjusted EBITDA , Adjusted EBITDA Margin , and Adjusted Diluted Earnings Per Share are non- GAAP measures . Reconciliations of Organic Revenue Growth Rate to total revenue growth rate , Adjusted Net Income and Adjusted EBITDA to net income , Adjusted Diluted Earnings Per Share to diluted earnings per share and Adjusted Free Cash Flow to cash flow from operating activities , the most directly comparable financial measures presented in accordance with GAAP , are outlined in the reconciliation table accompanying this release . " Our second quarter results demonstrate our focus on delivering double digit growth . Written premium grew 26.6 % with revenue growth of 45.1 % , and our Adjusted EBITDA Margin expanded to 30.4 % . Growth was driven across our Agency - in - a- Box , Corporate Stores , and MGA programs , along with contributions from our recent acquisitions , " said Gordy Bunch , CEO . " Operationally , we remain focused on the fundamentals that drive sustainable , profitable growth , including disciplined producer recruiting , deepening carrier partnerships , and continued investment in our proprietary technology to improve agent productivity and provide the best client experience . Our MGA programs continue to scale efficiently , contributing to expanding margins across the enterprise . "
Page 2
Second Quarter 2026 Results During the quarter, industry conditions remained favorable for TWFG's distribution model even as personal auto pricing continued downward industry-wide and homeowners rate increases continued to moderate. TWFG's diversified distribution platform, combining independent agency operations, proprietary MGA programs, and technology-enabled systems, continued to convert favorable carrier economics into premium growth and margin expansion. For the second quarter, Total Written Premium increased 26.6% to $569.9 million, compared with $450.3 million in the same period of the prior year. Growth was primarily volume-led rather than rate driven, consistent with the moderating rate environment, and was supported by three key factors: (1) continued organic growth in the Agency-in-a-Box network, including increased policy count and strong client retention; (2) continued scaling of the Company’s MGA programs; and (3)contributions from new corporate store acquisitions. Consolidated written premium retention was 93% for the quarter, up from 89% in the prior year period, Consolidated written premium retention excluding takeout renewals from TWFG MGA FL, LLC (“MGA FL”), was approximately 88%. Total revenues increased 45.1% to $87.5 million, compared to $60.3 million in the same period in the prior year, outpacing written premium growth by nearly 20 percentage points. This spread reflects a structural mix shift towards a higher- commission-rate business: Key TWFG MGA programs carry commission rates above 20% versus approximately 12% for the core Agency-in-a-Box network, and now represents a substantially higher share of total commission income than of total written premium. Organic Revenues, which exclude contingent, non-policy fee, other income, and those revenues generated from recently acquired businesses, were $75.5 million for the quarter, an increase of $20.4 million from $55.1 million in the same period last year. The Organic Revenue Growth Rate of 37.0% was driven by structural tailwinds from the 2025 MGA FL Citizens** takeout policies renewing into the quarter where the prior period had very little commissions. Commission expense for the quarter increased 24.4% to $42.5 million, reflecting acquisitions and continued production growth, while growing meaningfully slower than commission income; a roughly 2,300 basis point spread reflecting favorable mix shift and earned revenue with no corresponding commission expense for takeout policies and acquired books of business. Salaries and employee benefits were $11.8 million, up 24.1% compared to $9.5 million in the same period in theprior year, primarily due to incremental headcount associated with the Company’s continued acquisition strategy, MGA Florida infrastructure build-out, and public company maturity. Other administrative expenses rose 59.0% to $8.6 million, primarily driven by our completed acquisitions and continued investments to support our growth initiatives. Net income for the quarter was $17.3 million, compared to $9.0 million in the same prior year period resulting in a net income margin of 19.7%, up from 14.9% last year. Adjusted Net Income increased 76.1% to $20.3 million, with an Adjusted Net Income Margin of 23.2% compared to 19.1% in the same period in the prior year. Adjusted EBITDA grew 75.8% to $26.6 million, reflecting strong operating leverage across the platform, the higher-margin profile of our MGA operations, and the contribution of recent acquisitions including APIA and corporate store additions. The Adjusted EBITDA Margin expanded to 30.4%, compared to 25.1% in the second quarter of 2025. Cash flow from operating activities was $9.8 million, compared to $9.6 million in the same period of the prior year. Adjusted Free Cash Flow was $3.6 million, compared to $2.9 million in the same period of the prior year, primarily driven by the increase in net income, decrease in tax distributions to members, with a slight offset due to the increase in purchase of property and equipment in the current period. **A Citizens takeout refers to the Citizens Property Insurance Corporation depopulation program in Florida, under which policies are transferred from the state-backed insurer to approved private insurance carriers. This program is designed to reduce Citizens’ policy count and increase private market participation. Liquidity and Capital Resources As of June 30, 2026, the Company had unrestricted cash and cash equivalents of $73.7 million. We had full unused capacity on our revolving credit facility of $50.0 million as of June 30, 2026. The total outstanding term notes payable balance was $3.0 million as of June 30, 2026. 2
Page 3
During the first quarter of 2026, the Company's Board of Directors authorized a share repurchase program of up to $50.0 million of the Company’s Class A common stock. The authorization reflects the Board’s confidence in TWFG’s long-term growth outlook, strong cash generation profile and disciplined capital allocation framework. As of June 30, 2026, the Company had repurchased approximately $43.3 million under the program, with approximately $7.1 million remaining available for future repurchases. The program does not obligate the Company to repurchase any specific number of shares and may be suspended or discontinued at any time. 2026 Acquisitions Update TWFG Insurance Services completed the acquisition of Fortress Insurance Services, an Iowa-based independent agency with five locations, effective May 1, 2026, complementing our previous Midwest additions. This transaction joins a broader roster of 2025–2026 corporate store and MGA acquisitions — including Loften Wells, Mears, McInnis, Angers & Litz, Alabama Insurance Agency, and APIA — that together contributed approximately $51.0 million of incremental written premium in the first half of 2026. Updated 2026 Outlook Based on year-to-date performance and current business trends, the Company is increasing its full-year 2026 financial outlook: Metric Previous Guidance Updated Guidance Organic Revenue Growth* 10-15% 13-17% Total Revenues $285-$300 million $300-$320 million Adjusted EBITDA Margin* 22-25% 23-27% The updated outlook reflects stronger-than-expected performance across the core businesses and subsequent acquisitions. The Company is unable to provide a reconciliation of Organic Revenue Growth or Adjusted EBITDA Margin guidance to the most directly comparable GAAP measures without unreasonable effort due to the inherent difficulty in forecasting the timing and magnitude of items that have not yet occurred. The Company believes any such difference would be immaterial. *For a definition of Organic Revenue Growth Rate and Adjusted EBITDA Margin, see “Non-GAAP Financial Measures” below. Investor Day TWFG will host an Investor Day on November 12th, 2026, from 10:00 a.m. to 3:00 p.m. Central Time at its home office, located at 10055 Grogans Mill Road., Suite 500, The Woodlands, Texas. Conference Call Information TWFG will host a conference call to discuss its financial results at 11:00 a.m. Central Time (12:00 p.m. Eastern Time) on August 6, 2026. To access the call by webcast please visit https://edge.media-server.com/mmc/p/nuz2eovi/ To register for access to the live conference call: • Visit the link below and complete the online registration form. • Upon registering you will receive the dial-in info and a unique PIN to join the call as well as an email confirmation with the details. • Select a method for joining the call: • Dial-In: A dial in number and unique PIN are displayed to connect directly from your phone. • Call Me: Enter your phone number and click “Call Me” for an immediate callback from the system. The call will come from a US number. Registration Link: https://edge.media-server.com/mmc/p/nuz2eovi/ A replay of the webcast will be available on the Investor Relations website for a limited time following the call. 3
Page 4
About TWFG TWFG (NASDAQ: TWFG) is an independent distribution platform for personal and commercial insurance in the United States. TWFG represents hundreds of insurance carriers across personal and commercial lines, serving clients through its network of branches, corporate stores and managing general agency operations. For more information, please visit twfg.com. Forward-Looking Statements This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties. All statements, other than statements of historical fact included in this release, are forward-looking statements. Forward-looking statements give our current expectations relating to our financial condition, results of operations, plans, objectives, future performance, and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. In some cases, you can identify these statements by forward-looking words such as “may,” “might,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “outlook,” “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, as well as statements regarding our share repurchase program, including the timing, amount, or completion of any repurchases. 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 “Risk factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K, any Quarterly Reports on Form 10-Q and the other documents that the Company files with the U.S. Securities and Exchange Commission. You should specificallyconsider the numerous risks outlined under “Risk factors” in the Annual Report on Form 10-K for the year ended December 31, 2025. 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. Non-GAAP Financial Measures and Key Performance Indicators Non-GAAP Financial Measures Organic Revenue, Organic Revenue Growth, Adjusted Net Income, Adjusted Net Income Margin, Adjusted Diluted Earnings Per Share, Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Free Cash Flow included in this release are not measures of financial performance in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and should not be considered substitutes for GAAP measures, including revenues (for Organic Revenue and Organic Revenue Growth), net income (for Adjusted Net Income, Adjusted Net Income Margin, Adjusted EBITDA and Adjusted EBITDA Margin), diluted earnings per share (for Adjusted Diluted Earnings Per Share), and cash flow from operating activities (for Adjusted Free Cash Flow), which we consider to be the most directly comparable GAAP measures. These non-GAAP financial measures have limitations as analytical tools, and when assessing our operating performance, you should not consider these non-GAAP financial measures in isolation or as substitutes for revenues, net income, operating cash flow or other consolidated financial statement data prepared in accordance with GAAP. Other companies may calculate any or all of these non-GAAP financial measures differently than we do, limiting their usefulness as comparative measures. Organic Revenue. Organic Revenue is total revenue (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 with over $0.5 million in annualized revenue that have not reached the twelve-month owned mark. Organic Revenue Growth. Organic Revenue Growth is the change in Organic Revenue period-to-period, with prior period results adjusted to include revenues that were excluded in the prior period because the relevant 4
Page 5
acquired businesses had not reached the twelve-month-owned milestone, but have reached the twelve-month owned milestone in the current period. We believe Organic Revenue Growth is an appropriate measure of operating performance because it eliminates the impact of acquisitions, which affects the comparability of results from period-to-period. Adjusted Net Income. Adjusted Net Income is a supplemental measure of our performance and is defined as 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 while excluding the impact of the sale of non-current assets. We believe Adjusted Net Income is a useful measure because it adjusts for the after-tax impact of significant one-time, non-recurring items and eliminates the impact of any transactions that do not directly affect what management considers to be our ongoing operating performance in theperiod. These adjustments generally eliminate the effects of certain items that may vary from company-to-company for reasons unrelated to overall operating performance. Beginning in the year ended December 31, 2025, we updated our definition of Adjusted Net Income to exclude the impact of the sale of non-current assets. The impact of this change on our Adjusted Net Income for the year ended December 31, 2025, as well as on previously reported periods, was not material. As a result, prior ‑ period amounts have not been recast. We believe this minor refinement to our definition provides improved alignment with how management evaluates operating performance and enhances the measure’s usefulness for investors while maintaining comparability with prior periods. We are subject to U.S. federal income taxes, in addition to state, and local taxes, with respect to our allocable share of any net taxable income of TWFG Holding Company, LLC. Adjusted Net Income pre-IPO did not reflect adjustments for income taxes since TWFG Holding Company, LLC is a limited liability company and is classified as a partnership for U.S. federal income tax purposes. Post-IPO, the calculation incorporates the impact of federal and state statutory tax rates on 100% of our adjusted pre-tax income as if the Company owned 100% of TWFG Holding Company, LLC. Adjusted Net Income Margin. Adjusted Net Income Margin is Adjusted Net Income divided by total revenues. We believe that Adjusted Net Income Margin is a useful measurement of operating profitability for the same reasons we find Adjusted Net Income useful and also because it provides a period-to-period comparison of our after-tax operating performance. Adjusted Diluted Earnings Per Share. Adjusted Diluted Earnings Per Share is Adjusted Net Income divided by dilutedshares 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 units in TWFG Holding Company, LLC (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. This measure does not deduct earnings related to the noncontrolling interests in TWFG Holding Company, LLC for the period prior to July 19, 2024, when we did not own 100% of the business. The most directly comparable GAAP financial metric is diluted earnings per share. We believe Adjusted Diluted Earnings Per Share may be useful to an investor in evaluating our operating performance and efficiency because this measure is widely used by investors to measure a company’s operating performance without regard to items excluded from the calculation of such measure, which can vary substantially from company to company depending upon acquisition activity and capital structure. This measure also eliminates the impact of expenses that do not relate to core business performance, among other factors. Adjusted EBITDA. Adjusted EBITDA is a supplemental measure of our performance and is defined as EBITDA adjusted to reflect items such as equity-based compensation, interest income, other non-operating and certain nonrecurring items, while excluding the impact of the sale of non-current assets. EBITDA is defined as net income (the most directly comparable GAAP measure) before interest, income taxes, depreciation and amortization. We believe that Adjusted EBITDA is an appropriatemeasure of operating performance because it adjusts for significant one-time, non-recurring items and eliminates the ongoing accounting effects of certain capital spending and acquisitions, such as depreciation and amortization, that do not directly affect what management considers to be our ongoing operating performance in the period. These adjustments eliminate the effects of certain items that may vary from company to company for reasons unrelated to overall operating performance. Our measure of Adjusted EBITDA is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation. 5
Page 6
Beginning in the year ended December 31, 2025, we updated our definition of Adjusted EBITDA to exclude the impact of the sale of non-current assets. The impact of this change on our Adjusted EBITDA for the year ended December 31, 2025, as well as on previously reported periods, was not material. As a result, prior ‑ period amounts have not been recast. We believe this minor refinement to our definition provides improved alignment with how management evaluates operating performance and enhances the measure’s usefulness for investors while maintaining comparability with prior periods. Adjusted EBITDA Margin. Adjusted EBITDA Margin is Adjusted EBITDA divided by total revenue. We believe that Adjusted EBITDA Margin is a useful measurement of operating profitability for the same reasons we find Adjusted EBITDA useful and also because it provides a period-to-period comparison of our operating performance. Adjusted Free Cash Flow. Adjusted Free Cash Flow is a supplemental measure of our performance. We define AdjustedFree Cash Flow as cash flow from operating activities (the most directly comparable GAAP measure) less cash payments for tax distributions, purchases of property, plant, and equipment and acquisition-related costs. We believe Adjusted Free Cash Flow is a useful measure of operating performance because it represents the cash flow from the business that is within our discretion to direct to activities including investments, debt repayment, and returning capital to stockholders. The reconciliation of the above non-GAAP measures to their most comparable GAAP financial measure is outlined in the reconciliation table accompanying this release. Key Performance Indicators Total Written Premium. Total Written Premium represents, for any reported period, the total amount of current premium (net of cancellations) placed with insurance carriers. We utilize Total Written Premium as a key performance indicator when planning, monitoring, and evaluating our performance. We believe Total Written Premium is a useful metric because it is the underlying driver of the majority of our revenue. 6
Page 7
ContactsInvestor Contact: Investor Relations for TWFG Email: IR@twfg.com PR Contact:Alex Bunch, CMO for TWFG Email: alex@twfg.com 7
Page 8
Condensed Consolidated Statements of Income (Unaudited) (Amounts in thousands, except share and per share data) Three Months EndedJune 30, Six Months EndedJune 30, 2026 2025 2026 2025 Revenues Commission income $ 80,643 $ 54,562 $ 147,694 $ 103,347 Contingent income 2,167 2,033 4,102 3,696 Fee income 4,165 3,329 7,513 6,340 Other income 536 384 1,043 748 Total revenues 87,511 60,308 160,352 114,131 Expenses Commission expense 42,491 34,151 79,521 65,965 Salaries and employee benefits 11,781 9,493 21,682 17,689 Other administrative expenses 8,587 5,400 15,977 10,124 Depreciation and amortization 7,065 3,901 13,234 7,260 Total operating expenses 69,924 52,945 130,414 101,038 Operating income 17,587 7,363 29,938 13,093 Interest expense (57) (68) (119) (151) Interest income 759 1,751 1,973 3,614 Other non-operating income (expense), net (7) 574 702 573 Income before tax 18,282 9,620 32,494 17,129 Income tax expense 1,031 620 2,164 1,276 Net income 17,251 9,000 30,330 15,853 Less: net income attributable to noncontrolling interests 14,880 7,043 26,202 12,558 Net income attributable to TWFG, Inc. $ 2,371 $ 1,957 $ 4,128 $ 3,295 Weighted average shares of common stock outstanding: Basic 13,096,390 14,904,083 14,001,518 14,896,951 Diluted 13,096,390 56,278,869 14,001,518 15,083,695 Earnings per share: Basic $ 0.18 $ 0.13 $ 0.29 $ 0.22 Diluted $ 0.18 $ 0.13 $ 0.29 $ 0.22 (1) Commission income - related party of $4,070 and $2,784 for the three months ended and $8,348 and $5,918 for the six months ended June 30, 2026 and 2025, respectively. (2) Fee income - related party of $947 and $893 for the three months ended and $1,843 and $1,727for the six months ended June 30, 2026 and 2025, respectively. (3) Other administrative expenses - related party of $851 and $779 for the three months ended and $1,692 and $1,549 six months ended June 30, 2026 and 2025, respectively. (4) Contingent income - related party of $125 and $250 for the three and six months ended June 30, 2026 and none for the three and six months ended June 30, 2025, respectively. (1) (4) (2) (3) 8
Page 9
The following table presents the disaggregation of our revenues by offerings (in thousands): Three Months EndedJune 30, Six Months EndedJune 30, 2026 2025 2026 2025 Insurance Services Agency-in-a-Box $ 42,316 $ 39,316 $ 81,324 $ 75,312 Corporate Branches 14,198 11,393 24,988 19,615 Total Insurance Services 56,514 50,709 106,312 94,927 TWFG MGA 30,486 9,233 53,020 18,428 Other 511 366 1,020 776 Total revenues $ 87,511 $ 60,308 $ 160,352 $ 114,131 The following table presents the disaggregation of our commission income by offerings (in thousands): Three Months EndedJune 30, Six Months EndedJune 30, 2026 2025 2026 2025 Insurance Services Agency-in-a-Box $ 39,667 $ 36,275 $ 75,954 $ 69,634 Corporate Branches 13,690 11,294 24,324 19,508 Total Insurance Services 53,357 47,569 100,278 89,142 TWFG MGA 27,286 6,993 47,416 14,205 Total commission income $ 80,643 $ 54,562 $ 147,694 $ 103,347 The following table presents the disaggregation of our fee income by major sources (in thousands): Three Months EndedJune 30, Six Months EndedJune 30, 2026 2025 2026 2025 Policy fees $ 1,698 $ 1,082 $ 3,101 $ 2,134 Branch fees 1,484 1,416 2,805 2,671 License fees 822 559 1,351 1,167 TPA fees 161 272 256 368 Total fee income $ 4,165 $ 3,329 $ 7,513 $ 6,340 The following table presents the disaggregation of our commission expense by offerings (in thousands): Three Months EndedJune 30, Six Months EndedJune 30, 2026 2025 2026 2025 Insurance Services Agency-in-a-Box $ 29,945 $ 28,013 $ 58,586 $ 53,967 Corporate Branches 1,536 1,568 2,759 2,674 Total Insurance Services 31,481 29,581 61,345 56,641 TWFG MGA 10,955 4,544 18,018 9,270 Other 55 26 158 54 Total commission expense $ 42,491 $ 34,151 $ 79,521 $ 65,965 9
Page 10
Condensed Consolidated Balance Sheets (Unaudited) (Amounts in thousands, except share/unit data) June 30, 2026 December 31, 2025 Assets Current assets Cash and cash equivalents $ 73,745 $ 155,926 Restricted cash 19,006 11,974 Commissions receivable, net 46,826 37,322 Accounts receivable 14,241 7,469 Other current assets, net 16,703 12,827 Total current assets 170,521 225,518 Non-current assets Intangible assets, net 178,744 138,632 Property and equipment, net 3,806 3,307 Lease right-of-use assets, net 4,648 4,189 Other non-current assets 635 689 Total assets $ 358,354 $ 372,335 Liabilities, Redeemable Noncontrolling Interest, and Equity Current liabilities Commissions payable $ 20,729 $ 15,168 Carrier liabilities 22,837 13,811 Operating lease liabilities 1,225 1,320 Short-term bank debt 2,003 1,972 Deferred acquisition payables 6,749 1,505 Other current liabilities 13,026 10,308 Total current liabilities 66,569 44,084 Non-current liabilities Operating lease liabilities 3,388 2,897 Long-term bank debt 1,025 2,035 Deferred acquisition payables 343 6,669 Total liabilities 71,325 55,685 Commitments and contingencies (see Note 14) Redeemable noncontrolling interest 23,194 17,901 Stockholders' Equity Class A common stock ($0.01 par value per share - 300,000,000 authorized12,797,112 and 15,028,681 shares issued and outstanding at June 30, 2026 andDecember 31, 2025, respectively) 128 150 Class B common stock ($0.00001 par value per share - 100,000,000 authorized7,277,651 shares issued and outstanding at June 30, 2026 and December 31,2025, respectively) — — Class C common stock ($0.00001 par value per share - 100,000,000 authorized33,893,810 shares issued and outstanding at June 30, 2026 and December 31,2025, respectively) — — Additional paid-in capital 18,623 59,951 Retained earnings 27,379 23,251 Accumulated other comprehensive income 21 30 Total stockholders' equity attributable to TWFG, Inc. 46,151 83,382 Noncontrolling interests 217,684 215,367 Total stockholders' equity 263,835 298,749 Total liabilities, redeemable noncontrolling interest, and equity$ 358,354 $ 372,335 10
Page 11
Non-GAAP Financial Measures A reconciliation of Organic Revenue and Organic Revenue Growth Rate to Total Revenue and Total Revenue Growth Rate, the most directly comparable GAAP measures, for each of the periods indicated is as follows (in thousands): Three Months EndedJune 30, Six Months EndedJune 30, 2026 2025 2026 2025 Total Revenues $ 87,511 $ 60,308 $ 160,352 $ 114,131 Acquisition adjustments (6,878) (1,524) (21,019) (2,133) Contingent income (2,167) (2,033) (4,102) (3,696) Fee income (4,165) (3,329) (7,513) (6,340) Other income (536) (384) (1,043) (748) Policy fee income 1,698 1,082 3,101 2,134 Organic Revenue $ 75,463 $ 54,120 $ 129,776 $ 103,348 Prior year Organic Revenue reported $ 54,120 $ 48,378 $ 103,348 $ 89,969 Commission income at 12-month post acquisitions1,524 1,217 2,133 2,684 Disposals (544) — (1,065) — Other adjustments — (671) — (671) Organic Revenue denominator $ 55,100 $ 48,924 $ 104,416 $ 91,982 Organic Revenue $ 75,463 $ 54,120 $ 129,776 $ 103,348 Organic Revenue denominator 55,100 48,924 104,416 91,982 Organic Revenue Growth $ 20,363 $ 5,196 $ 25,360 $ 11,366 Total Revenue Growth Rate 45.1 % 13.8 % 40.5 % 15.1 % Organic Revenue Growth Rate 37.0 % 10.6 % 24.3 % 12.4 % (1) Represents revenues generated from the acquired businesses during the first 12 months following an acquisition. (2) Other adjustments reflect immaterial prior-period and comparability items consistent with management’s non-GAAP presentation policy. (3) Represents the period-to-period change in total revenues divided by the total revenues in the prior period. (4) Represents Organic Revenue Growth divided by the Organic Revenue denominator. A reconciliation of Adjusted Net Income and Adjusted Net Income Margin to net income and net income margin, the most directly comparable GAAP measures, for each of the periods indicated is as follows (in thousands): Three Months EndedJune 30, Six Months EndedJune 30, 2026 2025 2026 2025 Total Revenues $ 87,511 $ 60,308 $ 160,352 $ 114,131 Net Income $ 17,251 $ 9,000 $ 30,330 $ 15,853 Income tax expense 1,031 620 2,164 1,276 Acquisition-related expenses 30 19 155 52 Equity-based compensation 1,166 1,515 2,022 2,719 Other non-recurring items — 10 466 10 Gain on sale of non-current assets, net 1 — (701) — Amortization expense 6,909 3,762 12,937 6,971 Adjusted income before income taxes 26,388 14,926 47,373 26,881 Adjusted income tax expense (6,099) (3,407) (10,934) (6,135) Adjusted Net Income $ 20,289 $ 11,519 $ 36,439 $ 20,746 Net Income Margin 19.7 % 14.9 % 18.9 % 13.9 % Adjusted Net Income Margin 23.2 % 19.1 % 22.7 % 18.2 % (1) Non-recurring expense for the six months ended June 30, 2026 relates to the write-off of a commission receivable resulting from a contractual dispute with a carrier, resolved through commercial concession. (1) (2) (3) (4) (1) (2) 11
Page 12
(2) During the first and second quarters of 2025, a gain related to the sale of non-current assets was not excluded from Adjusted Net Income consistent with the Company’s stated definition. The presentation has been adjusted in the fourth quarter and full-year 2025 results to conform to the Company’s definition of Adjusted Net Income. This adjustment impacts only non-GAAP measures and had no effect on previously reported GAAP results. A reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin to net income and net income margin, the most directly comparable GAAP measures, for each of the periods indicated is as follows (in thousands): Three Months EndedJune 30, Six Months EndedJune 30, 2026 2025 2026 2025 Total Revenues $ 87,511 $ 60,308 $ 160,352 $ 114,131 Net income $ 17,251 $ 9,000 $ 30,330 $ 15,853 Interest expense 57 68 119 151 Interest income (759) (1,751) (1,973) (3,614) Depreciation and amortization 7,065 3,901 13,234 7,260 Income tax expense 1,031 620 2,164 1,276 EBITDA 24,645 11,838 43,874 20,926 Acquisition-related expenses 30 19 155 52 Equity-based compensation 1,166 1,515 2,022 2,719 Interest income 759 1,751 1,973 3,614 Gain on sale of non-current assets, net 1 — (701) — Other non-recurring items — 10 466 10 Adjusted EBITDA $ 26,601 $ 15,133 $ 47,789 $ 27,321 Net Income Margin 19.7 % 14.9 % 18.9 % 13.9 % Adjusted EBITDA Margin 30.4 % 25.1 % 29.8 % 23.9 % (1) Interest income reflects interest and other earnings on cash balances held by the Company. This income is included in Adjusted EBITDA as we view our total interest and investment income as an integral part of our business model and earnings stream until deployed. (2) During the first and second quarters of 2025, a gain related to the sale of non-current assets was not excluded from Adjusted Net Income consistent with the Company’s stated definition. The presentation has been adjusted in the fourth quarter and full-year 2025 results to conform to the Company’s definition of Adjusted Net Income. This adjustments impacts only non-GAAP measures and had no effect on previously reported GAAP results. (3) Non-recurring expense for the six months ended June 30, 2026 relates to the write-off of a commission receivable resulting from a contractual dispute with a carrier, resolved through commercial concession. (1) (1) (2) (3) 12
Page 13
A reconciliation of Adjusted Free Cash Flow to Cash Flow from Operating Activities, the most directly comparable GAAP measure, for each of the periods indicated is as follows (in thousands): Three Months EndedJune 30, Six Months EndedJune 30, 2026 2025 2026 2025 Cash Flow from Operating Activities $ 9,818 $ 9,615 $ 32,537 $ 25,260 Purchase of property and equipment (505) (44) (797) (59) Tax distribution to members (5,711) (6,728) (13,037) (8,752) Acquisition-related expenses 30 19 155 52 Adjusted Free Cash Flow $ 3,632 $ 2,862 $ 18,858 $ 16,501 (1) Tax distributions to members represents the amount distributed to the members of TWFG Holding Company, LLC in respect of their income tax liability related to the net income of TWFG Holding Company, LLC allocated to its members. A reconciliation of Adjusted Diluted Earnings Per Share to diluted earnings per share, the most directly comparable GAAP measure, for each of the periods indicated is as follows: Three Months EndedJune 30, Six Months EndedJune 30, 2026 2025 2026 2025 Earnings per share of common stock – diluted $ 0.18 $ 0.13 $ 0.29 $ 0.22 Plus: Impact of all LLC Units exchanged for Class A Common Stock 0.06 0.03 0.11 0.06 Plus: Adjustments to Net Income 0.06 0.04 0.11 0.09 Plus: Other Adjustments 0.08 — 0.14 — Adjusted Diluted Earnings Per Share $ 0.38 $ 0.20 $ 0.65 $ 0.37 Weighted average common stock outstanding – diluted 13,096,390 56,278,869 14,001,518 15,083,695 Plus: Impact of all LLC Units exchanged for Class A Common Stock 41,310,273 — 41,292,207 41,171,461 Adjusted Diluted Earnings Per Share diluted share count54,406,663 56,278,869 55,293,725 56,255,156 (1) For comparability purposes, this calculation incorporates the net income that would be distributable if all shares of Class B Common Stock and Class C Common Stock, together with the related LLC Units, were exchanged for shares of Class A Common Stock. For the three and six months ended June 30, 2026, this includes $10.5 million and $18.3 million, respectively, of net income on 54,406,663 and 14,001,518 weighted-average shares of common stock outstanding-diluted, respectively. For the three and six months ended June 30, 2025, this includes $7.0 million and $12.6 million, respectively, of net income on 56,278,869 and 56,255,156 weighted-average shares of common stock outstanding-diluted, respectively. For the three and six months ended June 30, 2026, weighted average outstanding Class B Common Stock and Class C Common Stock were considered dilutive and included in the 54,406,663 weighted-average shares of common stock outstanding-diluted within diluted earnings per share calculation. See Note 13 Earnings Per Share to our Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report for more information about the earnings per share. (2) Adjustments to Net Income are described in the footnotes of the reconciliation of Adjusted Net Income to net income in “Adjusted Net Income and Adjusted Net Income Margin”, which represent the difference between net income of $17.3 million and Adjusted Net Income of $20.3 million, as well as the net income of $30.3 million and Adjusted Net Income of $36.4 million for the three and six months ended June 30, 2026, respectively. Adjusted Diluted Earnings Per Share include adjustments of $3.0 million to Adjusted Net Income on 54,406,663 weighted-average shares of common stock outstanding-diluted and $6.1 million to Adjusted Net Income on 55,293,725 weighted-average shares of common stock outstanding-diluted, for the three and six months ended June 30, 2026, respectively. (3) Impact of TWFG MGA FL redeemable noncontrolling interest: Incorporates the net income attributable to the 49.9% interest in TWFG MGA FL, LLC held by AIH Sub, Inc. Unlike the Class B and Class C holders, AIH Sub, Inc. does not hold exchange rights into Class A Common Stock but rather holds a put option exercisable between 2030 and 2033. This component is included to present Adjusted Diluted Earnings Per Share on the same fully consolidated basis as Adjusted EBITDA, ensuring comparability between the two metrics. For the three and six months ended June 30, 2026, this component includes $4.3 million and $7.9 million of net income attributable to AIH Sub, Inc. (1) (1) (2) (3) (1) 13
Page 14
Key Performance Indicators The following presents the disaggregation of Total Written Premium by offerings, business mix and line of business (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Amount % of Total Amount % of Total Amount % of Total Amount % of Total Offerings: Insurance Services Agency-in-a-Box $ 324,516 57 % $ 293,846 65 % $ 602,279 59 % $ 543,321 66 % Corporate Branches 114,563 20 95,551 21 200,340 19 163,650 20 Total Insurance Services 439,079 77 389,397 86 802,619 78 706,971 86 TWFG MGA 130,812 23 60,891 14 225,491 22 114,280 14 Total written premium $ 569,891 100 % $ 450,288 100 % $1,028,110 100 % $ 821,251 100 % Business Mix: Insurance Services Renewal business $ 350,004 61 % $ 301,930 67 % $ 635,029 62 % $ 546,775 67 % New business 89,075 16 87,467 19 167,590 16 160,196 20 Total Insurance Services 439,079 77 389,397 86 802,619 78 706,971 87 TWFG MGA Renewal business 66,771 12 47,366 11 % 122,433 12 % 83,741 10 % New business 64,041 11 13,525 3 103,058 10 30,539 3 Total TWFG MGA 130,812 23 60,891 14 225,491 22 114,280 13 Total written premium $ 569,891 100 % $ 450,288 100 % $1,028,110 100 % $ 821,251 100 % Written Premium Retention: Insurance Services 90 % 90 % 90 % 89 % TWFG MGA 110 % 80 % 107 % 81 % Consolidated 93 % 89 % 92 % 88 % Line of Business: Personal lines $ 457,233 80 % $ 365,409 81 % $ 831,377 81 % $ 663,699 81 % Commercial lines 112,658 20 84,879 19 196,733 19 157,552 19 Total written premium $ 569,891 100 % $ 450,288 100 % $1,028,110 100 % $ 821,251 100 % (1) TWFG MGA retention includes take-out business and subsequent renewals from TWFG MGA FL, LLC, which can cause retention to exceed 100%. Excluding TWFG MGA FL, MGA retention would have been approximately 71% and consolidated retention approximately 88% for the three months ended June 30, 2026. (1) 14