TWFG, Inc. Common Stock

Second quarter total revenues were $87.5 million, up 45.1% year over year. Adjusted EBITDA was $26.6 million, up 75.8%, with adjusted EBITDA margin of 30.4%, up 530 basis points from 25.1%. Adjusted diluted EPS was $0.38 versus $0.20 last year, and net income was $17.3 million versus $9.0 million. Total written premium grew to $569.9 million, up 26.6%. For the first half of 2026, operating cash flow was $32.5 million, up 29% from $25.2 million. Management raised full-year 2026 guidance to revenue of $300 million to $320 million, organic revenue growth of 13% to 17%, and adjusted EBITDA margins of 23% to 27%, from prior guidance of $285 million to $300 million, 10% to 15%, and 22% to 25%, respectively.

The CEO framed the quarter as TWFG’s best to date and emphasized that growth is coming from the combination of its independent agency, corporate branch and MGA platforms. He highlighted four priorities: double-digit organic growth, accretive M&A, technology investment and disciplined capital allocation. Tone-wise, he was upbeat but measured, repeatedly noting that some of the near-term boost from Florida takeout economics will normalize over time and is already reflected in guidance. He also pointed to the upcoming Investor Day on November 12 as a chance to lay out the medium-term framework and technology roadmap.

The CFO walked through the drivers behind the quarter’s financial leverage: commission income rose to $80.6 million, up 47.8%, while commission expense increased 24.4% to $42.5 million, helping expand margins. She said other administrative expenses rose to $8.6 million and depreciation and amortization to $7.1 million, both tied to acquisitions, technology spending and public-company infrastructure. She also cited strong balance-sheet flexibility, with $73.7 million of unrestricted cash, $19 million of restricted cash, full unused capacity on the $50 million revolver, and only $3 million of term debt outstanding, for total liquidity of about $142.7 million. She noted operating cash flow of $32.5 million in the first half and said consolidated retention excluding Florida was about 88%, consistent with historical norms.

Analysts focused on whether TWFG would keep buying back stock or doing M&A in the second half, and management said the base guide does not include additional acquisitions, so any deals would be upside. Questions also centered on Florida’s impact on organic growth and whether 2027 would face tough comps; management said the bigger headwind shows up in the fourth quarter of 2026, not as a large 2027 drag, and that voluntary Florida business is adding new customers beyond Citizens takeout. Another thread was pricing/compensation in the market: management said carriers are using new business incentives, quarterly spiffs and profit-sharing to compete for growth, though those incentives are typically short-lived. On cash flow, management pointed to tax distributions to LLC unitholders and acquisition-related cash usage as the main reasons cash generation looked lower than some expectations.