TWFG, Inc.

Good day, ladies and gentlemen. Welcome to the TWFG first quarter 2025 earnings conference call. Today's call is being recorded. A replay will be available on our investor relations page following the conclusion of the call. Before we begin, please note that today's remarks may contain forward-looking statements and references to non-GAAP financial measures. Please refer to our press release and SEC filings for a discussion of risk factors and reconciliations to GAAP measures. I'd now like to turn the conference over to Gordy Bunch, Chief Executive Officer. Sir, please begin.

Thank you, Operator, and good morning, everyone. I appreciate you taking time to join us today. Joining me is Janice Zwingy, our Chief Financial Officer. After our remarks, we'll open the call for your questions. First, I want to thank all of our employees, agents, carrier partners, and clients for their ongoing support. Their hard work and loyalty continue to drive our success. TWFG started 2025 with strong momentum. We delivered total revenue growth of 16.6% to $53.8 million, organic revenue growth of 14.3%, and expanded adjusted EBITDA margins to 22.6%. Total written premiums rose 15.5% to 371 million, reflecting sustained strength across both new business and renewal production. Importantly, our business continues to demonstrate the scalability and resilience of our platform. Adjusted EBITDA increased 35.3% year-over-year to 12.2 million, reinforcing our ability to drive profitable growth even as we invest heavily in expanding our national footprint. During the quarter, we added 17 new branch locations, expanded into New Hampshire, completed two new corporate acquisitions in Ohio and Texas. The new locations are in line with our acquisition expectations for both revenue and EBITDA. Our M&A pipeline is stronger than ever, and our branch prospect lists continue to grow. As always, it's important to note that newly onboarded agents typically take two to three years to reach full productivity. We're confident that today's investments will continue to fuel our future growth trajectory. Turning to the broader market environment, personal lines continues to soften, and carrier capacity remains stable in most geographies. The first quarter saw the Palisades and Eaton fires in California further shift the property market in that state. TWFG has been able to navigate the difficult California property market utilizing several core admitted carriers, added additional surplus line markets, and placing risks with the California Fair Plan when necessary. Private passenger auto has normalized across the country with many national markets looking to accelerate their new business growth. TWFG expanded our private passenger auto portfolio by adding GEICO to additional states. We are seeing early success with the addition of another major national private passenger auto market. We are expecting moderate rate increases in 2025, and all carriers are keeping a close eye on how potential tariffs may increase loss costs. With personal lines returning to a more stable environment, retention rates across our platform have also normalized to our historic average of 88% this quarter. With markets opening up for growth, our growth will see more new business in the overall mix for growth as our agents will now have more options in order to place new business and renewals. Now I'd like to turn it over to Janice for a more in-depth discussion of our results for the quarter.

Thank you, Gordy, and good morning, everyone. Before diving into the quarter results, I want to note a couple of items. One, beginning this quarter, branch conversions are no longer treated as a comparative variance. They were converted in January 2024, so year-over-year comparisons are now apples to apples. And two, interest income was moved from the revenue line down to other income, so we will be comparable to prior and future periods. Starting with our top KPI, written premium. Total written premium increased by 50 million or 15.5% over the prior year period to 371 million. Within our primary offerings, insurance services grew 40.7 or 14.7% and TWFG MGA grew 9 million or 20.1%. This increase was a result of growth in both renewals and new business. During the first quarter of 2025, within both of our product offerings, we saw new business growth of 26% or 18.4 million, as well as renewal business growth of 12.5% or 31.3 million over the prior year period. Within our insurance services offering, we saw a shift in renewal and new business growth as compared to Q1 2024. New business growth was 17% up from 13% in Q1 2024, while renewal premium growth was more modest at 14% compared to 29% in the prior year period. The higher renewal business in the first quarter of 24 included an initial influx of premium from the 2023 corporate store acquisitions, resulting in an elevated renewal growth rate in that period. In our MGA offering, we saw a healthy uptick in new business growth of 89% or $8 million over the prior year period, primarily from the expansion of a key MGA program. Our consolidated written premium retention was 88% as compared to 94% in the prior year period. This decrease is correlated to the shift in renewal business growth as previously discussed and as a result of carriers moderating rate increases and opening up for new business after a period of restricted capacity and aggressive rate increases. Our total revenues increased 7.7 million or 16.6% over the prior year period to 53.8 million. The increase of 16.6% was mainly due to commission income, which represented 13.5% of the total growth. The remaining 3.1% included fee income of 1.7%, contingent income 1.3%, and other income of 0.1%. Commission income increased 6.2 million or 14.7% over the prior year period to 48.8 million, driven by new business growth and solid retention levels. Insurance services contributed 11.9% growth or 10.4% of the total, while the MGA delivered 33.7% growth or 4.3% of the total growth. Contingent income increased 0.6 million or 54.6% over the prior year period to 1.7 million, tracking closely with our written premium growth. Fee income was up 0.8 million or 34.9% to 3 million largely driven by higher policy volume from increased business in the NGA. Organic revenues increased $6.2 million reaching $49.2 million for an organic growth rate of 14.3% compared to 13% in the prior year period, which depicts our continued success in our core business. Now turning to expenses, commission expense increased $5.4 million or 20.3% over the prior year period to $31.8 million. The increase represents $3.9 million or 13.9% growth, which is consistent with commission income growth, and a one-time favorable adjustment related to the branch conversions of $1.5 million. Total salary and benefits increased by $1.9 million or 31.1% over the prior year period to $8.2 million, reflecting our scale and the IPO transition. which was driven by a $1.2 million increase from the RSUs issued in connection with the IPO and the remaining $0.7 million due to the growth of business and corporate store acquisitions. Other administrative expenses increased $1.6 million or 50.9% over the prior year period to $4.7 million, with approximately $0.4 million related to professional and consulting fees associated with being a public company. We also had $0.3 million in increase in IT costs, $0.3 million in underwriting fees, which were due to growth, and the remaining $0.6 million was tied to ongoing growth and acquisition integration. Depreciation and amortization increased $0.3 million, or 11.5%, to $3.4 million, primarily from the branch conversions and prior corporate store acquisitions. Net income for the quarter was $6.9 million, up 3.4% over the prior year period. Adjusted net income increased 14.3% to $9.2 million, driven by earnings growth and partially offset by higher public company costs and a $2.7 million increase in tax expense. EBITDA was $9.1 million and adjusted EBITDA was $12.2 million, up 35.3% over the prior year period. Adjusted EBITDA margin expanded to 22.6% compared to 19.5% in T124, reflecting both top-line growth and operating leverage. While we continue to manage the ramp-up in public company costs, we are confident in our ability to expand margins further as we scale. With that, I'll turn it back over to Gordon.