TWFG, Inc.

Thank you for standing by and welcome to the TWFG, Inc. announces second quarter 2026 results conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 11 on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star 11 again. As a reminder, today's program is being recorded. and now I'd like to introduce your host for today's program, Gordy Bunch, CEO. Please go ahead, sir.

Thank you and good afternoon, everyone. Thank you for joining us today to discuss TWFT's second quarter 2026 results. Joining me on today's call is Janice Zwinggi, our Chief Financial Officer. After my remarks, Janice will walk through our financial performance in more detail and then we'll open up the call for questions. I am pleased to report TWFT's delivered an outstanding second quarter, reinforcing the strength and scalability of our diversified platform. Total revenues grew 45.1% to $87.5 million. Organic revenue growth rate was 37%. Adjusted EBITDA grew 75.8% to $26.6 million, with margin expansion of 530 basis points to 30.4%. Total written premium grew 26.6% to $569.9 million. These results reflect the compounding benefits of our investments in the MGA platform, carrier partnerships, technology capabilities, and talent. On the organic front, we delivered the outsized high double-digit growth we anticipated last quarter. Reported organic revenue growth rate of 37% reflected the citizens' takeout and renewal dynamics while underlying core organic growth continue to track in line with our expectations. New business generation and improving retention drove the results. Consolidated written premium retention reached 93%, up from 89% in the prior year quarter. And insurance services retention remained solid at 90%, reflecting strong client relationships and improving carrier availability. From a profitability perspective, our 30.4% adjusted EBITDA margin benefited from strong growth in the MGA channel, where commission income increased 290% quarter over quarter, and now represents 35% of total revenues, up from 15% in the prior year quarter. The MGA platform carries a structurally higher margin profile than Insurance Services, and the current runoff period for the MGA Florida Takeout Program also provides a near-term margin benefit because assumed policies generate commission income without corresponding commission expense. We expect that benefit to normalize as more takeout policies renew with full-term premiums and standard commission expenses, which is reflected in our updated guidance. The market environment continues to evolve broadly as expected. Personal auto rates have continued to moderate with mid-single-digit declines in certain sub-segments. Homeowners' rates are broadly flat with some regional pressure and catastrophe-exposed geographies. Carrier appetite for quality independent agent flow remains strong, and growth-focused carriers continue to offer competitive new business incentives. This environment supports share gain for a diversified platform like ours across both soft and hard markets. Our strategy remains consistent and disciplined. We are executing across our four core priorities, delivering strong double-digit organic growth, executing accretive M&A, investing in technology and platform improvements for our agents, and deploying capital with discipline across all these opportunities. This quarter, we made meaningful progress across all four. On the acquisition front, we completed the acquisition of Fortress Insurance Services on May 1st. Fortress is a well-established Iowa-based agency which complements our earlier Midwest additions and supports our expansion into attractive long-term growth markets. Integration is on track and the team is culturally aligned with TWFG. Fortress rounded out our M&A objectives for 2026 guidance year, so our near-term focus is integration and orientation of first half acquisitions. Any second half transactions will be incremental to the guidance we are providing today. We do have an active M&A pipeline and there is upside potential. On capital allocation, our $50 million share repurchase program authorized in February is now essentially complete. Through today, we have repurchased approximately $42.9 million at an average price of $19 per share. Retiring approximately 15% of our pre-programmed Class A share count. We view this as highly accretive capital deployment. The Board will evaluate any reauthorization in the context of our M&A pipeline, cash generation, valuation, and alternative uses of capital. Our balance sheet remains strong and gives us flexibility to invest in growth, pursue accretive M&A, and return capital to shareholders. On technology, we continue to invest in AI-enabled capabilities that make our agents more productive. TWFG is positioned to benefit from AI's continued evolution because we own our technology stack, have 25 years of proprietary underwriting data, and are deploying AI to amplify what our people do best. We remain on track to host our Investor Day, November 12th, and we are looking forward to sharing all of our details on our medium-term financial framework MGA Platform Strategy, our geographic expansion plans, and our technology roadmap. Before turning it over to Janice, I want to acknowledge the outstanding execution of our team this quarter. Our results are the product of thousands of individual decisions made every day by our agents, our operators, our carrier partners, and our corporate team. I could not be prouder of the entire TWFG family. With that, I will now turn the call over to Janice to walk through the financials in detail.

Thank you, Gordy. I am pleased to report the following second quarter results, beginning with our top KPI written premium. Total written premium grew $119.6 million, or 26.6%, to $569.9 million, driven by strong renewal and new business performance. Renewal premium grew $67.5 million, or 19.3%, and new business grew $52.1 million, or 51.6%. Consolidated written premium retention was 93% up from 89% in the prior year period and our highest retention rate to date. Excluding TWFG MGA Florida citizens takeout renewals, retention would have been approximately 88% consistent with our historical range. Looking at our primary offering components, insurance services written premium grew 49.7 million or 12.8% driven primarily by renewal growth of $48.1 million, or 15.9%, reflecting improved retention and the continued benefit of our corporate branch acquisitions. Our MGA channel written premium grew $69.9 million, or 114.8%, driven by the ramp of our voluntary Florida homeowners program, contributions from APIA, which we acquired in the first quarter, and the continued renewal cycle of our citizens' takeout book. Total revenues increased $27.2 million, or 45.1%, to $87.5 million. Commission income grew $26.1 million, or 47.8%, to $80.6 million, driven by strong MGA performance with growth of 290% to $27.3 million. This performance reflects the higher commission rate business in our MGA platform, including MGA Florida New and Renewal Takeout Business. APIA, and TWICO programs, as well as commission derived from our corporate store acquisitions. Contingent income was $2.2 million, remaining essentially flat quarter over quarter. This stability aligns with our conservative posture given carrier loss ratio uncertainty in the softening rate environment. Fee income expanded from $3.3 million to $4.2 million, fueled by solid momentum across branch, policy, and program-related fees. Organic revenues reached $75.5 million, representing a $20.4 million increase over the $55.1 million recorded in the prior year quarter. This yielded an organic revenue growth rate of 37%, which was positively impacted by the transition of MGA Florida takeout policies past their 12-month organic threshold. Our core business continues to generate sustainable and consistent organic growth independent of acquisition contributions. Now turning to expenses, commission expense grew $8.3 million, or 24.4%, to $42.5 million. Notably, this expanded at a substantially slower rate than commission income. This operating leverage was primarily driven by higher commission income rates on MGA program business and a takeout dynamic where policies were assumed without corresponding subproduce or commission expense during the runoff period. as well as an increased concentration of corporate store acquisitions carrying minimal commission expense. Salaries and employee benefits increased 2.3 million or 24.1% to 11.8 million. This expansion was predominantly driven by added headcount from our recent acquisitions alongside ongoing corporate office investments designed to support the expanding scale of our platform. Other administrative expenses increased $3.2 million or 59% to $8.6 million. This increase reflects our ongoing investments in scalable technology initiatives, the inclusion of acquired corporate store footprint expenses, and public company operating infrastructure. Depreciation and amortization increased $3.2 million or 81.1% to $7.1 million primarily from purchase accounting related to our recent acquisitions. Moving to profitability, net income for the quarter rose to $17.3 million compared to $9 million in the prior year quarter. Adjusted net income expanded 76.1% to $20.3 million, delivering an adjusted net income margin of 23.2% up from 19.1% in the prior year quarter. Adjusted EBITDA grew 75.8% to $26.6 million, and adjusted EBITDA margin expanded 530 basis points to 30.4%, compared to 25.1% in the prior year quarter. This expansion reflects strong operating leverage across our platforms, including the higher margin profile of our MGA operations, the accretive impact of our acquisitions, and the continued cost discipline as we scale. Finally, adjusted diluting earnings per share increased to 0.38 compared to 0.20 in the prior year quarter, which was primarily attributable to higher adjusted net income during the period. From a cash and capital perspective, our balance sheet remains strong. Operating cash flow for the first half of 2026 was 32.5 million, up 29% from 25.2 million in the first half of 2025. As of June 30, we had $73.7 million in unrestricted cash and cash equivalents, plus $19 million in restricted cash. We have full unused capacity on our $50 million revolving credit facility and only $3 million of term debt outstanding, giving us total liquidity of approximately $142.7 million. And with that, I will now turn it back to Gordy for closing remarks.