Skip to content
    TWFG
    Earnings call· Jun 2026(Q2 FY26)

    TWFG Q2 FY26 earnings call TWFG

    Aug 6, 2026 Source

    Executive summary

    TWFG Q2 FY26 — Strong Organic Growth and MGA Platform Expansion Drive Profitability

    TWFG delivered an outstanding second quarter, driven by robust organic growth, significant MGA platform expansion, and accretive acquisitions. The company raised its full-year guidance, reflecting strong performance and continued strategic execution, while acknowledging some near-term headwinds from prior-year policy dynamics and contingent income.

    Highlights

    5

    • 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%.

    • Consolidated written premium retention reached 93%, up from 89% in the prior year.

    • Completed acquisition of Fortress Insurance Services, meeting 2026 M&A objectives.

    Concerns

    3

    • Contingent income remained flat at $2.2 million, below prior year actualized ratios.

    • Cash flow from operations was lower than consensus expectations, impacted by tax distributions and acquisitions.

    • Potential for flattish organic growth in Q4 FY26 due to prior year takeout policy dynamics.

    Guidance & targets

    5
    CategoryTargetConfidence
    Total revenues
    $300 million to $320 million
    high materiality
    High
    Organic revenue growth
    13% to 17%
    high materiality
    High
    Adjusted EBITDA margins
    23% to 27%
    high materiality
    High
    M&A activity
    Potential upside
    medium materiality
    Medium
    Contingent income
    Update after Q3
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Insurance Services
    Growth driven primarily by improved retention and the continued benefit of corporate branch acquisitions.
    Written premium growth: $49.7 millionRenewal premium growth: $48.1 million (15.9%)
    		—12.8%——
    MGA Channel
    Growth driven by the ramp of the voluntary Florida homeowners program, contributions from APIA, and the continued renewal cycle of the Citizens Takeout book. The MGA platform carries a structurally higher margin profile.
    Written premium growth: $69.9 millionCommission income growth: 290% ($27.3 million)Commission income as % of total revenues: 35% (up from 15% in prior year quarter)
    		—114.8%——

    Operational metrics

    27
    Total revenues
    $87.5 millionup 45.1%
    Q2 FY26

    Total revenues for the second quarter.

    Organic revenue growth rate
    37%
    Q2 FY26

    Reported organic revenue growth rate, positively impacted by the transition of MGA Florida takeout policies past the 12-month organic threshold.

    Core organic growth (ex-takeout)
    high teens
    Q2 FY26

    Underlying core organic growth, excluding the impact of Citizens takeout business.

    Adjusted EBITDA
    $26.6 millionup 75.8%
    Q2 FY26

    Adjusted EBITDA for the second quarter.

    Adjusted EBITDA margin
    30.4%up 530 basis points
    Q2 FY26

    Adjusted EBITDA margin for the second quarter, compared to 25.1% in the prior year quarter.

    Total written premium
    $569.9 millionup 26.6%
    Q2 FY26

    Total written premium for the second quarter, driven by strong renewal and new business performance.

    Renewal premium growth
    $67.5 millionup 19.3%
    Q2 FY26

    Renewal premium growth for the second quarter.

    New business premium growth
    $52.1 millionup 51.6%
    Q2 FY26

    New business premium growth for the second quarter.

    Commission income
    $80.6 millionup 47.8%
    Q2 FY26

    Commission income for the second quarter, driven by strong MGA performance.

    Contingent income
    $2.2 millionflat quarter over quarter
    Q2 FY26

    Contingent income for the second quarter, aligning with a conservative posture.

    Fee income
    $4.2 millionup from $3.3 million
    Q2 FY26

    Fee income for the second quarter, fueled by solid momentum across branch policy and program-related fees.

    Organic revenues
    $75.5 millionup $20.4 million from $55.1 million
    Q2 FY26

    Organic revenues for the second quarter, compared to the prior year quarter.

    Commission expense
    $42.5 millionup $8.3 million or 24.4%
    Q2 FY26

    Commission expense for the second quarter, expanding at a substantially slower rate than commission income.

    Salaries and employee benefits
    $11.8 millionup $2.3 million or 24.1%
    Q2 FY26

    Salaries and employee benefits for the second quarter, driven by added headcount from acquisitions and corporate office investments.

    Administrative expenses
    $8.6 millionup $3.2 million or 59%
    Q2 FY26

    Administrative expenses for the second quarter, reflecting investments in technology, acquired corporate store footprint, and public company operating infrastructure.

    Depreciation and amortization
    $7.1 millionup $3.2 million or 81.1%
    Q2 FY26

    Depreciation and amortization for the second quarter, primarily from purchase accounting related to recent acquisitions.

    Net income
    $17.3 millioncompared to $9 million in the prior year quarter
    Q2 FY26

    Net income for the second quarter.

    Adjusted net income
    $20.3 millionexpanded 76.1%
    Q2 FY26

    Adjusted net income for the second quarter.

    Adjusted net income margin
    23.2%up from 19.1% in the prior year quarter
    Q2 FY26

    Adjusted net income margin for the second quarter.

    Adjusted diluted EPS
    $0.38increased compared to $0.20 in the prior year quarter
    Q2 FY26

    Adjusted diluted earnings per share for the second quarter.

    Unrestricted cash and cash equivalents
    $73.7 million
    as of June 30

    Balance of unrestricted cash and cash equivalents.

    Restricted cash
    $19 million
    as of June 30

    Balance of restricted cash.

    Revolving credit facility capacity
    $50 millionfull unused capacity
    as of June 30

    Available capacity on the revolving credit facility.

    Term debt outstanding
    $3 million
    as of June 30

    Total term debt outstanding.

    Total liquidity
    $142.7 million
    as of June 30

    Total liquidity, including cash and unused credit facility.

    Share repurchase program executed
    $42.9 millionout of $50 million authorized
    through call date

    Amount repurchased under the authorized program, which is now essentially complete.

    Retail organic growth
    double digit
    FY26

    Organic growth for the retail segment, expected to be very strong.

    Industry KPIs

    6
    MetricValueDetails
    Combined ratio—
    Capital returns$42.9 millionUSD
    Retention persistency93%%
    Net premiums written earned$569.9 millionUSD
    Renewal rate change pricingmid-single digit declines%
    Broker specific when present37%%

    Deals & partnerships

    3
    Fortress Insurance ServicesAcquisition of a well-established Iowa-based agency.

    Completed on May 1st. Complements Midwest expansion and supports entry into attractive long-term growth markets. Integration is on track and culturally aligned. This acquisition rounded out M&A objectives for 2026 guidance year.

    APIAAcquisition of a proprietary commercial MGA.

    Acquired in Q1, contributing to the MGA channel premium growth and scaling the MGA platform.

    American NationalAgent acquisition deal from mid-2024.

    Initially personal lines only, now onboarding agencies to add commercial lines portfolios. Auto rates through TWFG platform are becoming more competitive, supporting migration of auto business.

    Risks & headwinds

    3
    Contingent income below expectationsFY26

    Contingency for FY26 is below actualized ratios in 2025; Q2 FY26 contingent income flat at $2.2 million.

    Mitigation: Management will update contingency guidance after Q3, when lock-in agreements provide better visibility.

    Organic growth headwind in Q4 FY26Q4 FY26

    Expected 'flattish organic' in Q4 FY26.

    Mitigation: Offset by strong new business from the voluntary Florida homeowners program and improved retention assumptions for H2 FY26.

    Cash flow volatilityH1 FY26

    Operating cash flow for H1 FY26 was $32.5 million, lower than consensus expectations.

    Mitigation: Impacted by tax distributions to LLC unit holders and distributions to the shareholder class, as well as higher cash usage for acquisitions this year.

    What to watch in Q3 FY26

    5

    Contingent Income Update

    Q3 FY26 call
    Current$2.2 million (flat QoQ)
    TargetUpdated guidance for FY26 contingent income

    Why it matters

    Contingent income has been below prior year actualized ratios and management expects to update guidance, which could impact revenue and margin.

    I did mention last call that we will update the contingency after the third quarter.

    Q&A highlights

    7

    Are additional acquisitions or continued buybacks in H2 FY26 not modeled in guidance, despite strong cash flow and liquidity?

    M&A pipeline is active, but H2 transactions are incremental to current guidance, representing potential upside. The share repurchase program is essentially complete, with reauthorization to be evaluated.

    “We do have an active M&A pipeline... Any second half transactions will be incremental to the guidance we are providing today... there is upside potential.”

    asked by Tommy McJoy · answered by Unknown Speaker

    2 min read6 chapters

    Detailed Narrative

    01

    MGA Platform Expansion and Margin Impact

    The MGA channel's commission income surged 290% quarter-over-quarter, now comprising 35% of total revenues, up from 15% in the prior year. This shift to a structurally higher-margin MGA platform, coupled with a temporary margin benefit from the runoff period of the Florida Takeout Program, significantly contributed to the 530 basis points adjusted EBITDA margin expansion.

    02

    Organic Growth Drivers

    The reported 37% organic revenue growth was positively impacted by the Florida MGA takeout policies transitioning past the 12-month organic threshold. Core organic growth, excluding these dynamics, remained in the high teens, driven by new business generation and improving retention, particularly from the voluntary Florida homeowners program.

    03

    Strategic Acquisitions and Capital Allocation

    TWFG completed the acquisition of Fortress Insurance Services, an Iowa-based agency, fulfilling its M&A objectives for FY26 guidance. The company also nearly completed its $50 million share repurchase program, buying back $42.9 million at an average price of $19 per share, retiring 15% of Class A shares.

    04

    Technology and AI Investments

    The company continues to invest in AI-enabled capabilities, leveraging its proprietary technology stack and 25 years of underwriting data to enhance agent productivity and client services. This strategic focus is expected to be a competitive moat, with further details to be shared at the upcoming Investor Day.

    05

    Market Environment and Share Gains

    The market environment is characterized by moderating auto rates (mid-single-digit declines in some sub-segments) and broadly flat homeowners rates. Carrier appetite for independent agent flow remains strong, with competitive new business incentives, which TWFG believes supports share gains for its diversified platform across both soft and hard markets.

    06

    Contingent Income Outlook

    Contingent income remained flat at $2.2 million, aligning with a conservative posture given carrier loss ratios and the softening rate environment. Management expects to update contingency guidance after the third quarter, when lock-in agreements provide better visibility, noting potential upside.

    AI-generated summary of the company’s earnings call. Not investment advice.