The Baldwin Insurance Group, Inc.

Greetings and welcome to the Boldrin Group 4th Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star and then zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Bonnie Bishop. Executive Director of Investor Relations. Thank you. You may begin.

Thank you and welcome to the Baldwin Group's fourth quarter 2024 earnings call. Today's call is being recorded. Fourth quarter and full year financial results, supplemental information, and Form 10-K were issued earlier this afternoon and are available on the company's website at ir.baldwin.com. Please note that remarks made today may include forward-looking statements, subject to various assumptions, risks, and uncertainties. The company's actual results may differ materially from those contemplated by such statements. For a more detailed discussion, please refer to the note regarding forward-looking statements in the company's earnings release and our most recent Form 10-K, both of which are available on the Baldwin website. During the call today, the company may also discuss certain non-GAAP financial measures, For more detailed discussion of these non-GAAP financial measures and historical reconciliation to the most closely comparable GAAP measures, please refer to the company's earnings release and supplemental information, both of which have been posted on the company's website at ir.baldwin.com. I will now turn the call over to Trevor Baldwin, Chief Executive Officer of the Baldwin Group.

Good afternoon, and thank you for joining us to discuss our fourth quarter results reported earlier this afternoon. I'm joined this afternoon by Brad Hale, Chief Financial Officer, and Bonnie Bishop, Executive Director of Investor Relations. In 2024, we witnessed an amalgamation of forces and events that shaped the risk and insurance environment for our clients, insurance company partners, communities, and firms. As we sit here today, California is beginning the long road to recovering and rebuilding in the wake of what will likely be the most destructive wildfire in history. This comes on the heels of one of the more active hurricane seasons we've experienced in some time, with three major storms making landfall in Florida and causing meaningful damage across the East Coast. These recent events serve as a stark reminder of the critical role insurance plays as a vital backstop to help individuals and businesses recover financially from the impact of unforeseen events while continuing to innovate, invest, and thoughtfully navigate risk to create jobs and support economic growth, all of which is essential to continued human progress. Quite simply, Our work in combination with our industry partners safeguards commerce and protects the possible for our clients. I extend my profound admiration and appreciation to our colleagues who worked tirelessly during 2024 and are continuing to do so today, offering their expertise, advice, and solutions to our clients as they navigate the aftermath of the California wildfires and spearhead the recovery efforts. turning to our results for the fourth quarter and for the year. For the fourth quarter, organic revenue grew 19%, with strong double-digit organic growth across all three segments, driven by record new business productivity in IS and continued momentum in both MIS and UCTS. Adjusted EBITDA margin expanded 310 basis points in the quarter to 19%. For the year, Despite continued volatility within both the insurance industry and broader economy, we once again delivered industry-leading organic revenue growth of 17%, supported by double-digit organic revenue growth across all three of our segments. As I mentioned on our third quarter call, 2024 marked the five-year anniversary of our IPO. This year, With an intense focus on efficient execution and prudent expense management, we posted the most significant EBITDA margin expansion and adjusted free cash flow generation since our time as a public company. Adjusted EBITDA margin expanded 200 basis points to 22.5%, and adjusted free cash flow grew to 134.9 million. Net leverage declined 4.1 times, down from 4.8 times at the beginning of the year. We are also pleased to announce that by the end of March, the vast majority of our earn-out obligations will be satisfied, marking a major milestone for the business in the beginning of the adjusted free cash flow inflection point we've anticipated. From there, we expect an acceleration in our delevering and a step-function increase in our capital position and capital allocation flexibility. For our IS segment, overall organic revenue growth for the quarter was 16%, bringing the 2024 total to 10%. Organic core commissions and fees revenue was up 16% for the quarter and 11% for the year. We view this as particularly strong outcome in the face of a 510 basis point headwind and underlying rate and exposure compared to the full year 2023. For the full year 2024, rate and exposure only contributed 40 basis points to our overall organic growth versus 550 basis points in the prior year. Offsetting those external market-driven headwinds was our internally-driven new business production, which set a new record at 125 million and resulted in sales velocity of 21.5%, a 410 basis point improvement over the prior year. Sales velocity for the quarter was 23%, a 250 basis point improvement over the fourth quarter of last year. I have long held that organic growth is the leading measure of health and momentum of an insurance distribution firm as a result of what it says about decline outcomes and resulting top of mind preference for a firm's requisite services and solutions that are being delivered. Sales velocity, as the most meaningful of the four building blocks of organic growth, speaks to the pure momentum in new client adoption relative to industry peers. At 21.5% sales velocity, we generated new client relationships and revenues at nearly double the rate of industry peers for which the median is roughly 11%. and a third more than the top 25% of our competitors at roughly 16%. Sales velocity, unlike rate and exposure, is entirely internally driven and creates sustainability and consistency to our organic growth profile throughout both economic and insurance market cycles. The growing momentum we have seen in our sales velocity across the IAS platform is a testament to the depth and breadth of client capabilities we have built over the past five years and how our integrated platform enables us to deliver the best of what Baldwin has to offer to our clients no matter where they reside. Our UCTS segment had a fantastic fourth quarter with organic revenue growth of 25%. Our multifamily and home portfolios continue to scale generating commissions and fees growth of 23% and 37%, respectively. For the year, UCTS organic revenue growth was 27%, an incredibly strong performance on the heels of 31% organic growth print in 2023, as the MGA finished the year with over $1.1 billion in gross written premium. Two months into 2025, We wanted to provide two updates related to our homeowners product suite. First, while California property represents less than 10% of our overall premium base in the MGA, our ENS homeowners portfolio has some exposure to the recent fires that will deliver losses to our reinsurance partners. While we do not directly bear any of the costs of those losses, it remains to be seen what impact the event will have on reinsurance pricing for wildfire more broadly, and what, if any, impact that will have on terms and conditions in our June 1 reinsurance renewals. Second, related to our builder-sourced homeowner's book with QBE, as anticipated, we are pleased to confirm QBE's intent to continue supporting the program past May 1, as we work to accelerate moving the book off of QVE's paper to other capacity providers. To that end, in January we received formal approval and a certificate of authority from the Texas Department of Insurance to form and launch a Texas domiciled reciprocal insurance exchange focused on our builder book of business, for which the MGA intends to serve as the attorney in fact. We are in the process of finalizing a third-party-led capitalization of the reciprocal ahead of beginning the right business into the reciprocal two to three months thereafter. The approval and forthcoming launch of our debut Baldwin-sponsored reciprocal exchange represents a meaningful milestone in our continued journey to vertically integrate across the value chain and bring innovative third-party risk capital platforms to market in support of more efficient risk transfer outcomes for our clients. Our MIS segment delivered total organic revenue growth of 19% during the fourth quarter and 20% for the full year. These full year results are particularly impressive considering the 820 basis point headwinds we absorbed as a result of moderating rate and exposure tailwinds compared to 2023. Importantly, We made meaningful strides in growing our reputation as the leading purveyor of embedded home insurance solutions at point of new home sale and mortgage origination. Our Westwood franchise onboarded six new builders in 2024 and now powers the home insurance experience for 18 of the top 25 home builders across the country. Additionally, after more than two years of technology build, We launched our debut digital embedded home insurance initiative in the mortgage title and real estate brokerage channel, going live with this embedded solution for the first time with a mortgage partner in the fourth quarter. Lastly, our Medicare business had a record annual enrollment period on the back of growth and contracted agents of over 20%. In addition to continued momentum and leading organic growth results, Adjusted EBITDA margin expanded 250 basis points as we continue to grow into the de novo investments across our mortgage and real estate channels. In summary, we are pleased with the strong results for the year, and in particular, the recent quarter, as we enter 2025 with growing momentum across our segments. Organic revenue growth of 17%, adjusted EBITDA growth of 25%, Adjusted earnings per share growth of 34% and adjusted free cash flow growth of nearly 100% in 2024 are a testament to the quality of our colleagues and the strength of our client franchise, which enables our ability to produce outsized organic growth with an even more meaningful flow through to earnings and cash flow. While the insurance marketplace remains dynamic and challenging for many of our clients, the growing complexity of the risk and insurance landscape will continue to inure to the benefit of our vertically integrated franchise. As it highlights the outsized value, our teams continue to deliver the innovative products, solutions, and risk capital formations that uniquely and efficiently solve many of our clients' risks and uncertainties. The strong validation we see from clients in the marketplace day in and day out, as evidenced by our industry-leading sales velocity and organic growth, further solidifies our confidence in the sustainability of our financial performance and continued ability to deliver outsized organic growth, ongoing margin accretion, and expanded adjusted free cash flow well into the future. As we have finally reached the post-earnout inflection point on cash flow, we now have expanded opportunities to invest in attracting and retaining talent, developing products and solutions for our clients, and ongoing optimization of our operations, which will further enhance the sustainability of our operating model and our ability to deliver top and bottom line growth. With that, I will turn it over to Brad, who will detail our financial results.