TWFG, Inc.

Good morning and welcome to TWFG's third quarter 2025 earnings conference call. All participants are in a listen-only mode. Following management's prepared remarks, we will open the line for questions. As a reminder, today's call may include forward-looking statements that are subject to risk and uncertainties. Actual results could differ materially. For more information, please review our filings with the SEC. And now, I'd like to turn the call over to Gordy Bunch, Chief Executive Officer. Please go ahead.

Thank you, Operator, and good morning, everyone. TWFG delivered another strong quarter of performance, reflecting both the resilience of our distribution platform and continued scalability of our operating model. Total revenues increased 21% quarter over quarter to $64.1 million. supported by 10.2% organic revenue growth and M&A revenues, while adjusted EBITDA grew 45% to $17 million, expanding margins by 430 basis points to 26.5%. That margin expansion underscores the earnings power of our distribution platform and execution on accretive M&A as we leverage scale and financial discipline. We continue to see encouraging signs of personal lines normalization. Carrier appetite has returned, rate increases have moderated, and underwriting discipline remains strong, all of which are helping to normalize retention and new business growth across our platform. Our diversified model spanning retail, MGA, and affiliated agencies positions us to capitalize on those hard and soft market cycles. Our third quarter recruiting and M&A activities were productive, with the addition of eight new retail locations, one new corporate location, and 370 independent agents to our MGA platform. Following the quarter, we completed the acquisition of Alabama Insurance Agency, adding 23 additional retail locations and marking Alabama as our newest state expansion. These additions strengthen our foundation heading into the fourth quarter and enhance our ability to serve clients across a broader national footprint. Strategically, our priorities remain unchanged. Investing in our technology initiatives, executing our accretive M&A goals, expanding our retail and MGA distribution channels, and executing disciplined capital deployment to support these priorities. I'll now turn the call over to Janice Swingey, our CFO, to discuss some of the financial highlights.

Good morning, and thank you, Gordy. Starting with our top KPI written premium increased by $67.6 million, or 16.9%, over the prior year period to $467.7 million. We saw strong double-digit growth within both of our primary offerings. Insurance services grew $56 million, or 16.5%. and the MGA had a spike in growth of 11.7 million or 19.2%. This increase was a result of healthy growth in both renewals of 51 million or 16.4% and new business of 16.6 million or 18.7%. Our consolidated written premium retention remains strong at 91%. While a softening rate environment typically translates to increased customer shopping, our retention performance underscores the stability and engagement of our client base. Our total revenues increased 11 million or 21.3% over the prior year period to 64.1 million. This increase was driven primarily by commission income growth of 10 million or 20.8% to 58.3 million as a result of continued expansion in both of our product offerings and supported by strong renewal and new business activity. Higher contingent income and increased fee-based revenues from one of our MGA programs also contributed to the revenue growth. Organic revenues increased $5 million, reaching $54.2 million, compared to $49.2 million in the prior year period, for an organic growth rate of 10.2%, demonstrating solid momentum across both our agency and MGA platforms, and positioning us well to meet our full-year growth targets. From a profitability standpoint, adjusted EBITDA of $17 million grew 44.7%, translating to a margin of 26.5%, which was up more than 400 basis points from the prior year quarter. This expansion reflects operating leverage, expense discipline, and an increasing mix of higher margin corporate branch locations. On the expense side, Commission expense increased 3.9 million or 13% over the prior year period to 34.6 million, tracking with commission income growth, taking into account the impact of corporate store acquisitions and programs with no related commission expense. Salaries and benefits increased 1.6 million or 19.2% over the prior year period to 9.9 million, driven by investments in new corporate branch acquisitions headcount growth, and public company infrastructure. Other administrative expenses increased 8% to 5.2 million, reflecting technology upgrades and compliance initiatives. Net income was 9.6 million, up 40% over the prior year period, with a net margin of 15%. Adjusted net income rose 55% to 13 million, equating to an adjusted net income margin of 20%. We also delivered operating cash flow of $15 million and ended the quarter with $151 million in cash and no draws in our revolver, leaving us well-positioned to fund both organic initiatives and potential tuck-in M&A. For the full year 2025, we've tightened the ranges on our guidance to reflect our year-to-date performance, recent expansion activity, and current market conditions. We expect total revenues between 240 and 245 million, an organic revenue growth rate in the range of 11 to 13%, and adjusted EBITDA margins between 24 and 25%. As the personalized market continues to soften and carrier availability expands, our current recruiting and acquisition initiatives, including the addition of new retail locations, independent agents, and the Alabama Insurance Agency, provide further momentum and earnings visibility heading into year end. Together with our balanced capital allocation and disciplined execution, these factors reinforce our confidence in achieving our full year 2025 target. I'll now hand the call back to Gordy for closing remarks.