The Baldwin Insurance Group, Inc.

Ladies and gentlemen, greetings and welcome to the Baldwin Group Third Quarter 2025 Earnings Score. At this time, all participants are in the 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 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, Investor Relations. Please go ahead.

Thank you. Welcome to the Baldwin Group's third quarter 2025 earnings call. Today's call is being recorded. Third quarter financial results, supplemental information, and Form 10-Q 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, including, for example, our strategy with respect to our capital allocation in the future. The company's actual results may differ materially from those contemplated by such statements. For more detailed discussion, please refer to the note regarding forward-looking statements in the company's earnings release and our most recent Form 10-Q, both of which are available on the Baldwin website. During the call today, the company may also discuss certain non-GAAP financial measures. For a 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 third quarter results reported earlier today. I'm joined by Brad Hale, Chief Financial Officer, and Bonnie Bishop, Executive Director of Investor Relations. We generated strong overall results in the third quarter despite a dynamic operating environment and the expected persistence of certain idiosyncrasies we highlighted last quarter. Organic revenue growth in the quarter was 5%. bringing our year-to-date organic revenue growth to 9%. Adjusted EBITDA was flat year over year, bringing our year-to-date adjusted EBITDA growth to 9%. Adjusted EBITDA margin and adjusted diluted earnings per share contracted slightly in the quarter. On a year-to-date basis, adjusted EBITDA margin is roughly flat year over year, and adjusted diluted earnings per share has grown 11% year over year. We previously discussed two temporary items that we expected to have a finite impact on our results over the near term. First, a procedural accounting change in our insurance advisory solution segment impacting timing of when we recognize commission revenues. And second, the reduced commission from QBE that went effective on May 1 on the builder-sourced homeowner's book of business we are rolling into our recently formed reciprocal exchange brief. As a reminder, these are temporary headwinds persisting through the first half of 2026, which then reverse into tailwinds, as these are not revenues that are lost, just deferred relative to when they will be recognized in our P&L. Adjusting to these items, total commissions and fees organic revenue growth in Q3 would have been 10%, and total overall organic revenue growth would have been 9%. bringing the year-to-date totals for both metrics to 11%. In insurance advisory solutions, overall organic revenue growth was flat compared to the third quarter of 2024. Removing the impact of the procedural accounting change, overall organic revenue growth was 4%, and organic growth on core commissions and fees was 6%. Sales velocity remained top decile at 20% in the third quarter, bringing year-to-date sales velocity to 19%, highlighting our consistent ability to take share and win new business. In fact, as we sit here today, our backlog of one but not yet booked new business that should bind in the first half of 2026 is sitting at a historic high for our firm, including several seven-figure commission and fee client wins from large global competitors. highlighting the demand for our innovative advice and solutions in the marketplace and the growing power and impact of our integrated operating platform. We are consistently performing in the top decile for new business generation in our industry, based on recent industry data showing the median at 12.2% and the top quartile at 15.9%, reinforcing the effectiveness of our go-to-market strategy and and the positive regard clients and prospects have for our teams and the solutions we are delivering. The impact of rate and exposure or renewal premium change was a meaningful headwind at minus 5.7%, reflective of the continued client caution tied to macro uncertainty and reduction in large CAT-exposed coastal property pricing, partially offset by ongoing rate action and certain litigation-exposed casualty lines of business. From where we sit today, we expect the third quarter renewal premium change headwind reflects a floor going forward from which we will see incremental improvement over the coming quarters. However, we don't anticipate this fully reverses into a tailwind in the near term, highlighting the importance of our industry-leading new business generation capabilities to drive sustainable growth over time. In our underwriting capacity and technology solution segment, Organic revenue growth came in at 16%, driven by continued strength in our multifamily portfolio, which grew commissions and fees at 16%, and our commercial umbrella portfolio, which grew organic revenue 15%. As discussed last quarter, we continued to maintain underwriting discipline in our E&S Homeowners Book in a rapidly softening property environment. which was a 400 basis point drag on UCTS organic growth in the quarter. In July, we began migrating renewals of the builder book away from QBE into the reciprocal insurance exchange we launched earlier this year, which thus far is performing in line to slightly better than expectations. Additionally, following the transaction we announced with HIPAA, We have begun work with the HIPPO and Spinnaker teams on a second builder homeowner's insurance program, which we expect to launch next year. Over time, we expect it will materially increase our capture rate of Westwood's builder business into proprietary MSI programs, which sits at around a 30% capture rate today. This should unlock a meaningful growth opportunity for MGA and expand vital insurance capacity for our builder partners and their homebuyer customers. In our Main Street Insurance Solutions segment, organic revenue growth was slightly negative, driven by the one-time commission reset on the QBE Builder Book and continued elevated attrition in our Medicare business due to the broader managed care marketplace disruption. Removing the impact of the one-time commission reset on the QBE Builder Book, overall organic revenue growth was 8%. As a reminder, this impact will persist until April of 2026, after which it turns into a multi-year tailwind as the commission reduction we are absorbing today reverses back into fee revenues for our attorney in fact vehicle, which manages the reciprocal exchange. I want to take a minute to talk about the exciting momentum we are seeing across our embedded home insurance businesses. As I mentioned last quarter, In December, we launched our new technology platform and digital experience to support the seamless sale of home insurance at point of mortgage origination and home sale. This quarter, our embedded mortgage and real estate business went live with three new mortgage and real estate channel partners, bringing the total channel partners live on our platform to 10. Included in the partners who went live on our platform in Q3 was a top 20 mortgage originator who went live in mid-August and has shown very promising proof points of success. In our second week post-go-live, we sold over 150% of the volume achieved by their previous insurance partner in their best day ever over a two-year period, and we have maintained those elevated volumes. These results are enabled by our proprietary technology platform that powers our digital insurance buying experience, and the seamless nature of this process in the mortgage market and real estate transaction flows. In fact, when a potential homeowner engages through our digital experience, we bind a home insurance policy for them at a rate that is three and a half times what is achieved through non-digital channels. The power of our technology platform and digital agent experience includes AI-powered real-time agent advice, which is driving tremendous momentum in conversion rates, and presents opportunity for margin expansion in the medium to long term. We remain bullish on the growth prospects of this business as we continue to make progress towards simplifying the home ownership journey through our embedded technology. Our pipeline of new embedded partners in this channel is as strong as we have seen yet with our implementation backlog well into 2026. As we mentioned last quarter, We completed the acquisition of HIPPO's home builder distribution network in July. We are now live and facilitating the home insurance process for 20 of the top 25 home builders across the country. Our builder partners account for 57% of all new homes built in the U.S. and 93% of the homes built by the top 25 builders in the U.S. In aggregate, the partners in our combined embedded home insurance strategies drove over 500,000 home and mortgage closings in 2024, which accounts for roughly 12% of homes sold in the U.S. annually, positioning us as the leading embedded personal lines distribution platform in the $500 billion premium U.S. personal lines market. Before I turn it over to Brad to provide additional details on our Q3 financial performance, I want to share a strategic update that marks a pivotal moment in our evolution. Today, we're announcing our 3B30 CADLIST program, a three-year transformation program launched during the third quarter of 2025. CADLIST is designed to accelerate the infusion of automation, business process optimization, and artificial intelligence to transform and elevate our workforce. Building on our two foundational pillars of talent and technology, for building the broker of the future and meeting our aspirational goal of 3B30. This initiative is designed not only to elevate the work and impact our colleagues are delivering on a daily basis, but to unlock new avenues for growth. By aligning our workforce and technology investments with the demands of a rapidly changing market, we are positioning ourselves to accelerate innovation across our client engagement model and insurance product offerings. enhance client and colleague experience through smarter, more agile client service delivery, empower our teams to elevate their focus on high-impact growth-driving activities, and enable enhanced real-time decision-making by streamlining processes, data, and systems. We anticipate a cumulative transformation charge of approximately $40 million by the end of 2028, with cumulative savings of the same period of approximately 50 million and projected run rate annualized savings of 40 million by the end of 2028. We expect savings to ramp over time with no material savings in 2025, 3 to 5 million in savings in 2026, and 10 to 15 million in 2027. We expect charges of 15 million in each of 2026 and 2027. The 3B30 Catalyst program is designed to accelerate our ability to capture operating leverage across our business while simultaneously enhancing growth, both organically and through M&A. Cash restructuring charges of approximately $40 million reflect a savings-to-cost ratio of roughly 1.25 times and are largely related to workforce transformation and technology implementations. The charges represent less than 10% of expected free cash flow over the next three years and do not impact our expectation to deliver double-digit free cash flow growth driven by strong growth in revenue, operating income, and working capital improvements. This is an important step forward for our firm, one that reflects our commitment to positioning ourselves for the rapidly evolving technology landscape. further bolstering our status as a leading destination for our industry's top talent, and accelerating our pace to fulfill our vision for the broker of the future. As we move forward, we remain focused on delivering long-term value for our clients, colleagues, and shareholders, driving growth and innovation and expanding margins and free cash flow. In summary, We're pleased with our third quarter results in such a dynamic insurance market and macro operating environment. While we expect we will continue to face an insurance marketplace in transition, we are increasingly confident in our ability to deliver in 2026 and beyond, as evidenced by the strength of the underlying momentum in the business. We sincerely thank our clients for placing their trust in us to provide strategic guidance, expert insights, and innovative solutions in an ever-changing risk landscape. We also extend our deep appreciation to our colleagues for their steadfast dedication and tireless efforts in delivering meaningful results for our clients and valued insurance partners. With that, I'll turn it over to Brad, who will detail our financial results.