TWFG Q2 2026 Earnings Report

TWFG EPS Results

• Actual EPS: $0.38
• Consensus EPS: $0.26
• Beat/Miss: Beat by +$0.12
• One Year Ago EPS: N/A

TWFG Revenue Results

• Actual Revenue: $87.51 million
• Expected Revenue: $77.34 million
• Beat/Miss: Beat by +$10.17 million
• YoY Revenue Growth: N/A

TWFG Announcement Details

• Quarter: Q2 2026
• Date: 8/5/2026
• Time: After Market Closes
• Conference Call Date: Thursday, August 6, 2026
• Conference Call Time: 12:00PM ET

TWFG (NASDAQ:TWFG) Insurance Services, Inc. operates as a property and casualty insurance distribution company that provides personal and commercial insurance solutions through a hybrid model of company-owned branches and franchised offices. The firm offers a broad spectrum of insurance products, including auto, homeowners, renters, umbrella, flood and specialty lines coverage, tailored to meet the needs of individuals, families and businesses. By partnering with multiple insurance carriers, TWFG delivers competitive pricing and customized policy options designed to help clients manage risk and protect their assets.

Founded in 1980 and headquartered in Odessa, Texas, TWFG has expanded its network to serve customers across numerous U.S. states. The company’s franchise system allows experienced insurance entrepreneurs to leverage TWFG’s operational platform, carrier relationships and marketing support while maintaining local autonomy. Company-owned offices complement the franchised locations, enhancing geographic reach and ensuring consistent service standards throughout its footprint.

TWFG’s business model generates revenue primarily through commissions from carrier partners and service fees for supporting agency operations. The company invests in technology platforms to streamline policy issuance, claims management and customer service, aiming to improve efficiency and responsiveness. TWFG is led by a seasoned executive team and board of directors with deep expertise in insurance distribution, franchise development and financial management, positioning the organization for continued growth in a competitive marketplace.

TWFG Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Second-quarter results materially exceeded growth expectations: revenue rose 45.1% to $87.5 million, adjusted EBITDA increased 75.8% to $26.6 million, and adjusted EBITDA margin expanded 530 basis points to 30.4%.
• Positive Sentiment: Written premium grew 26.6% to $569.9 million, supported by 51.6% new-business growth and record 93% consolidated retention; management said core organic growth excluding Citizens takeout effects remained in the high teens.
• Positive Sentiment: TWFG raised its 2026 outlook to $300 million-$320 million of revenue, 13%-17% organic revenue growth, and a 23%-27% adjusted EBITDA margin. Additional acquisitions or stronger contingent income could provide further upside because they are not included in the updated guidance.
• Negative Sentiment: Near-term margin and organic-growth benefits from the Florida Citizens takeout program are expected to normalize as policies renew with standard commission expenses, creating a larger organic-growth headwind in the fourth quarter; management currently expects fourth-quarter organic growth to be roughly flat.
• Neutral Sentiment: TWFG has nearly completed its $50 million share-repurchase authorization, buying approximately $42.9 million of stock at an average price of $19 per share, while retaining about $142.7 million of liquidity and evaluating future buybacks against M&A opportunities and other capital uses.

Presentation

[Operator]

Thank you for standing by, welcome to the TWFG, Inc announces Second Quarter 2026 Results Conference Call. At this time, all participants are in listen only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star one one on your telephone. If your question has been answered and you'd like to remove yourself from the queue, simply press star one one again. As a reminder, today's program is being recorded.

[Operator]

Now I'd like to introduce your host for today's program, Gordy Bunch, CEO. Please go ahead, sir.

[Gordy Bunch, CEO at TWFG]

Thank you, good afternoon, everyone. Thank you for joining us today to discuss TWFG'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, we'll open up the call for questions. I am pleased to report TWFG'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.

[Gordy Bunch, CEO at TWFG]

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 continued to track in line with our expectations. New business generation and improving retentions drove the results. Consolidated written premium retention reached 93%, up from 89% in the prior year quarter. Insurance services retention remained solid at 90%, reflecting strong client relationships and improving carrier availability.

[Gordy Bunch, CEO at TWFG]

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, 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, 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 segments. Homeowners' rates are broadly flat, with some regional pressure in catastrophe-exposed geographies.

[Gordy Bunch, CEO at TWFG]

Carrier appetite for quality independent agent flow remains strong. 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.

[Gordy Bunch, CEO at TWFG]

Fortress rounded out our M&A objectives for 2026 guidance year. 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.

[Gordy Bunch, CEO at TWFG]

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. 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.

[Gordy Bunch, CEO at TWFG]

With that, I will now turn the call over to Janice to walk through the financials in detail.

[Janice Zwinggi, CFO at TWFG]

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.

[Janice Zwinggi, CFO at TWFG]

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.

[Janice Zwinggi, CFO at TWFG]

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 reported 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 passed through 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.

[Janice Zwinggi, CFO at TWFG]

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 sub-producer 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.

[Janice Zwinggi, CFO at TWFG]

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 diluted 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.

[Janice Zwinggi, CFO at TWFG]

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, +$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.

[Janice Zwinggi, CFO at TWFG]

With that, I will now turn it back to Gordy for closing remarks.

[Gordy Bunch, CEO at TWFG]

Thank you, Janice. Turning to our outlook. We are raising our 2026 guidance based on the strong first half performance and our line of sight to the balance of the year. We now expect total revenues of $300 million-$320 million, up from $285 million-$300 million. Organic revenue growth of 13%-17%, up from 10%-15%. Adjusted EBITDA margins of 23%-27%, up from 22%-25%. As we look ahead, our strategy is unchanged and the drivers of our performance are compounding. We believe our diversified platform, spanning independent agencies, corporate branches, and proprietary MGA programs, is positioned to capitalize on the current market dynamics. The MGA platform is scaling through three durable growth drivers. APIA's proprietary commercial MGA Florida's voluntary homeowners program, Twico's Texas homeowner program, and the renewal tail of our Citizens takeout portfolio.

[Gordy Bunch, CEO at TWFG]

Our corporate branch model continues to deliver operating leverage, while our technology and AI investments are making agents more productive and improving client services. The insurance industry remains complex and fragmented, which increases the value of trusted advice. Deep carrier relationships and local market expertise will win the day. Our proprietary technology and 25 years of data create a competitive moat, while the TWFG family culture continues to support employee engagement, agent loyalty, and client retention. In closing, I want to thank our employees, our agents, our carrier partners, and our shareholders for their continued trust and commitment to TWFG. The years ahead will bring tremendous opportunities for all of us, and we look forward to sharing more of our medium-term financial framework and strategic roadmap at our Investor Day on November 12, 2026.

[Gordy Bunch, CEO at TWFG]

With that, operator, please open the line for questions.

[Operator]

Certainly. Ladies and gentlemen, as a reminder, if you do have a question at this time, please press star one one on your telephone. Our first question comes from the line at Tommy McJoynt from KBW. Your question, please.

[Tommy McJoynt, Director of Equity Research at KBW]

Hey, good afternoon. Thanks for taking our questions. The first one here, when we look at the strong cash flows that the business generates and seeing plenty of dry powder on the credit facilities, is it reasonable to not model either additional acquisitions or continued pace of buybacks in the back half of the year?

[Gordy Bunch, CEO at TWFG]

Good question, Tommy. Hopefully, I articulated that we do have an active M&A pipeline. When we do our modeling for guidance, we do our assumed amount of M&A in our base guidance. We don't generally adjust that upward unless we end up in a definitive agreement. There is potential upside in the back half of the year for M&A activity, but it's not built into our base guide, so that would be potential upside that's not captured in our updated guidance.

[Tommy McJoynt, Director of Equity Research at KBW]

Okay, got it. Switching over, as we start thinking about organic growth and some of the comps that you've seen in the first half of the year. Has the Florida MGA tailwinds to the organic growth in the first half of the year, have those been significant enough that we might expect to see organic face some really tough comps in the first half of 2027? Are they significant enough where organic could turn negative or be close to zero? Can you help us just sensitize to how much of a tailwind it has been and how much of a difficult comp it could be in 2027? Thanks.

[Gordy Bunch, CEO at TWFG]

If I'm looking at the impact of Florida, really the first impact to organic was in the second quarter. The offset to that is going to be in the fourth quarter of 2026. The takeout policies, when they were in runoff, were being paid on an earned basis through the expiration of the policy. Then when it renewed into its natural expiration date, it renewed into a different period. We do have premium that was present in the fourth quarter and a little in the third quarter of 2025 that has already renewed in the first quarter or second quarter of 2026 that won't be there to lap in the third and fourth quarter of 2026. We do have that factored in.

[Gordy Bunch, CEO at TWFG]

If I'm looking at third quarter for us, we're still going to be in the double-digit teens for organic, even with that dynamic. The fourth quarter is where we have the bigger headwind, where we had compounding runoff policies in that period that have already renewed into a different period. That's why when you look at the full guidance for full calendar year 2026, we're giving you that 13%-17%. I would look at fourth quarter right now as a flattish organic, and that would really be just taking out the noise from prior year takeout policies that were present in that period that now showed up in first quarter, second quarter of this year, and a little bit into the third quarter of this year.

[Gordy Bunch, CEO at TWFG]

If you take out the impacts of takeout business in the second quarter, our core organic still would've been in the high teens. That kind of gets you to where we think there's noise with Citizens takeout, depending on the periods that the earned premium was present, and then what period did the policy actually renew into, for a long-term basis. As far as the impact rolling into 2027, Janice, you'd have to answer that. I don't think we have a tremendous amount of takeout business that ends up skewing 2027 data.

[Janice Zwinggi, CFO at TWFG]

Yeah, Gordy, that's correct. We're still fine-tuning 2027. We'll have a better idea as we get closer to the end of this year to see on the new business for Florida and even the renewals, how we're going to play out. You hit it on the head there. Thank you.

[Tommy McJoynt, Director of Equity Research at KBW]

Thanks.

[Operator]

Thank you. Our next question comes from the line of Mike Zaremski from BMO Capital Markets. Your question, please.

[Mike Zaremski, Senior Equity Research Analyst and Managing Director at BMO Capital Markets]

Hi, thanks for taking my questions. The first is regarding the organic growth trajectory for Agency-in-a-Box and corporate branches, so X the MGAs. It appears there's increasing momentum. Gordy, in your prepared remarks, I think you talked about this environment being more conducive for share gains. You obviously talked about pricing still being a bit of an absolute headwind. I'm not sure if it's increased sequentially or not. Can you kind of talk to bigger picture or maybe smaller picture, too, why you think this environment's more conducive for share gains and whether pricing is still impacting their organic rate of growth, or is it more steady pricing at the same negative level as previous quarters? Thanks.

[Gordy Bunch, CEO at TWFG]

Yeah. Good question, Mike. We do still see pricing as you follow all the carriers, every carrier out there is still having excellent combined ratios, and there's a significant amount of competition for growth. We are seeing the nationals, the regionals, and the super regionals still working on their pricing algorithms. We are seeing PIF count growth, albeit at a lower average premium. We do end up with a new business velocity that supports the long-term organic. We're just not going to have any of the gains that you're going to have in a more rate-taking environment where that would support pushing it up even further.

[Gordy Bunch, CEO at TWFG]

Agency-in-a-Box and corporate stores, they're still getting good organic growth, but a lot of that is being supported by now retention and new business growth versus in the hard market, you had more from retention and rate. Being able to add more policies and policyholders into the portfolio as rates normalize and go back to mid-single-digit increases, that should support a rebound to the organic in the out periods. We're still holding good. If we look at isolating the organic for retail, it's still going to be a double-digit organic year for 2026. We think that's very strong given what we've seen the peers reporting.

[Mike Zaremski, Senior Equity Research Analyst and Managing Director at BMO Capital Markets]

Got it. That's helpful, Gordy. Just maybe nitpicking here, knowing cash flows can be volatile from quarter to quarter. It just came in, I guess, meaningfully lower the consensus had expected. Anything we should be cognizant of there, or just normal volatility?

[Gordy Bunch, CEO at TWFG]

You talking about the cash flow from adjusted net income?

[Mike Zaremski, Senior Equity Research Analyst and Managing Director at BMO Capital Markets]

Correct. For I think the $4 million-ish figure.

[Gordy Bunch, CEO at TWFG]

Yeah, I think that's netting out tax distributions to LLC unit holders and distributions to that shareholder class. Janice, you can correct me if I'm wrong, but exclusive of those distributions, you may be able to shed a little more light on Mike's question.

[Janice Zwinggi, CFO at TWFG]

No, I think that was the majority of it, Gordy, was the distribution. I don't have it. I'm sorry, I don't have it in front of me, the cash.

[Mike Zaremski, Senior Equity Research Analyst and Managing Director at BMO Capital Markets]

Okay, got it. We were just looking at the 9.8-[crosstalk].

[Janice Zwinggi, CFO at TWFG]

Oh, the 9.8.

[Mike Zaremski, Senior Equity Research Analyst and Managing Director at BMO Capital Markets]

Versus the 9.6 the prior year, I think consensus had a bigger increase. We can take it offline, too.

[Janice Zwinggi, CFO at TWFG]

Oh, right. Well, we did use some cash for our acquisitions this year, more so than the prior year. You're right, the tax distribution to members was similar to what it was in Q2 2025.

[Mike Zaremski, Senior Equity Research Analyst and Managing Director at BMO Capital Markets]

Okay. Thank you very much.

[Operator]

Thank you. As a reminder, ladies and gentlemen, if you do have a question at this time, please press star one one on your telephone. Our next question comes from the line of Rowland Mayor from RBC Capital Markets. Your question, please.

[Rowland Mayor, VP at RBC Capital Markets]

Hi, guys. Gordy, I wanted to quickly ask, you had talked about potential transformative acquisitions prior to all the volatility in the stock. With the shares somewhat recovering that, are those deals potentially back on the table later this year?

[Gordy Bunch, CEO at TWFG]

I would say we have an active M&A pipeline, with recovery, those opportunities will be resurfaced and revisited. We did not incorporate any of that potential in our updated guidance, which does imply there could be upside at the back half of 2026. We are back in a position where we can start to entertain those transactions again.

[Rowland Mayor, VP at RBC Capital Markets]

Thank you. For my follow-up, the contingents are up a bit, but I don't think they drove the margin upside you had reported. Could you maybe walk through the moving pieces on the margin this year and maybe unit contribution?

[Gordy Bunch, CEO at TWFG]

Let me try to answer the contingent question first. I think as we noted in the first quarter call, our contingency, for our guidance year 2026 is below the actualized ratios we had in 2025. We entered the calendar year knowing we were going into a softening market, where pricing was coming down, anticipating that the loss ratio metrics of those profit-sharing agreements would degrade over time. Far, we have not seen that play out. The carriers are still showing excellent profitability year to date. I did mention last call that we will update the contingency after the third quarter.

[Gordy Bunch, CEO at TWFG]

The third quarter is when we get our lock-in agreements, and we have great line of sight to where we think those will ultimately come in. There is still upside in the margin and upside on total revenue relative to contingent income as we get into that third quarter update. I know this year, we're doing updates more frequently to guidance just based on some of the lumpiness with Florida and also this contingency dynamic.

[Rowland Mayor, VP at RBC Capital Markets]

Thank you. That's super helpful. Congrats on the quarter.

[Gordy Bunch, CEO at TWFG]

Thank you.

[Operator]

Thank you. Our next question is a follow-up from the line of Mike Zaremski from BMO Capital Markets. Your question, please.

[Mike Zaremski, Senior Equity Research Analyst and Managing Director at BMO Capital Markets]

Oh, great. Gordy, going back to your comments on 2027, if I interpreted correctly or heard correctly, not having significant headwinds, I thought the Florida MGA takeouts would post a headwind just because it's unlikely they'd renew 100% of policies. Is that not the case? Maybe you can help us understand, are you now expecting a better renewal rate on those policies, or is there new growth dynamic to the Florida MGA or et cetera that we're not appreciating?

[Gordy Bunch, CEO at TWFG]

Certainly. I'll frame it like this. The first quarter, second quarter, both had better renewal retention dynamics than our base model. We have, in the back half of 2026, increased our retention assumptions, based now on having a longer dataset to work from. In the MGA Florida, I think what's less appreciated is that we have a voluntary program that is separate and aside from the Citizens takeout business. That's true organic new customers coming through the 700+ appointed agencies that write voluntary new clients through the MGA Florida program. Part of what drove the second quarter organic into the 37% range, a large contribution of that was voluntary new business not tied to Citizens takeout.

[Gordy Bunch, CEO at TWFG]

Net new customers through a newly appointed distribution channel via that MGA Florida expansion. That voluntary program will continue to exist going into the back half of 2026 and into 2027. It has actually been present since May of 2025. It didn't start getting significant production traction until the later half of the first quarter of 2026, and then really had significant growth in the second quarter of 2026. There is that offsetting renewal retention pressure from the ability to rewrite new accounts in that voluntary market.

[Mike Zaremski, Senior Equity Research Analyst and Managing Director at BMO Capital Markets]

Got it. Okay. That's super helpful. Maybe since there's still plenty of time, one more follow-up. Maybe you can give us any update on a year-plus ago when you did the, I guess, deal with, I believe it was American National. That was kind of somewhat of a unique, not an acquisition, but agent acquisition. Maybe you can give us any update on how that's been playing out and whether that's any quantification too. We'd love numbers and kind of how the rest of the book is rolling over on the auto side, which I know didn't come with it, et cetera. Thanks.

[Gordy Bunch, CEO at TWFG]

Sure. We don't have cohort analytics to share with you, but I can say that one positive shift in that portfolio on that group of agents, when we added them into our distribution, they were personal lines only and still restricted for commercial lines. As of the end of June, they no longer are commercial lines restricted. We are in the process now of onboarding those agencies to add commercial lines portfolio into their TWFG relationship. We do see that as a conduit for additional growth. The vast majority of them have done very well in our business model and moved the expiring, non-renewing property into our platform. The auto now that we're in a softer market.

[Gordy Bunch, CEO at TWFG]

When they came in midway through 2024, we were still in the midst of a hard market, our auto rates at that point through our platform were not constructive for their clients to move. Now that we've expanded with additional carriers, as well as the incumbent carriers moving price down and becoming more competitive, that's starting to migrate over as well. They're part of that supporting the Agency-in-a-Box growth story and can impact it even more now that we're able to add commercial lines into their portfolios.

[Mike Zaremski, Senior Equity Research Analyst and Managing Director at BMO Capital Markets]

Great. Thank you.

[Operator]

Thank you. Our next question comes from the line of Pablo Singzon from J.P. Morgan. Your question, please.

[Pablo Singzon, Executive Director at J.P. Morgan]

Hi. I joined the call late. Apologies if this was covered already. Gordy, the first question I had was, some of your competitors have talked about comp and commission rates being renegotiated by carriers in this, I guess, more open environment where they want to grow. Have you seen the same on your end? I guess your perspective on what's going on with you and your carriers, and how do you think that affects your growth trajectory from here?

[Gordy Bunch, CEO at TWFG]

I think, we are getting what I would call new business incentives, quarterly incentives. They're coming out with what we would call a spiff, which is incentive downstream to our service employees. You are seeing carriers trying to compete, not just on price, but on comp in order to get portfolio and retain either their market share or grow their market share. I don't look at some of those near-term compensation agreements as long-term factors because they tend to be short in nature and next time a hard market presents itself, they disappear pretty quick. We are getting that. We are getting new business incentives. We are getting quarterly incentives, some of the markets are coming out more favorably on the profit-sharing and contingency side as well as they're all fighting for growth. That's just a component of a soft market.

[Gordy Bunch, CEO at TWFG]

Some carriers are offering book roll incentives, which we tend not to participate in. We like to be loyal to the carriers that have provided their capacity to us in good times and bad times. We try to just work with our markets and say, if we have a carrier that's out of market on comp and the rest of our portfolio is moving upward, we do share that feedback with the market, letting them know that they're no longer in a competitive environment. Even if their product and pricing is competitive, if they're not competitive on compensation, that's something that we do raise and try to address with them. I will say, in a soft market environment, it is a very much a incentive-driven environment now for the carriers to try to get everybody's attention to turn their way.

[Gordy Bunch, CEO at TWFG]

They can do that with comp, or they can do that with rate or even underwriting guidelines that are also loosening up substantially from where they were just two years ago.

[Pablo Singzon, Executive Director at J.P. Morgan]

Thanks, Gordy. My follow-up, I was wondering if you strip out the effect of the Florida book, what did you say is your new business growth rate for sort of the core agency franchise? Thank you.

[Gordy Bunch, CEO at TWFG]

I don't know that I gave that metric. I know, Pablo, you said you came on late, I will say that I did already state that excluding Florida takeout business and the renewals thereof, our organic still would've been in the high teens. Hopefully that's helpful to answer your question. I don't know, Janice, if you have a new business percentage for just retail. I do think we had a shift in growth where our new business ratio was higher than the contributing renewal portfolio from the prior period. I don't have that in front of me, Pablo. Maybe Janice does.

[Janice Zwinggi, CFO at TWFG]

I have. Well, what we did disclose was that consolidated retention, excluding MGA Florida, was 88% compared to the 93% that we have. If I can disclose this, the MGA piece was 110%, but excluding Florida would be 71%. The consolidated retention of 88% is more in line with our norm.

[Gordy Bunch, CEO at TWFG]

I think he was wanting to know about the new business mix of insurance services. How much of the?[crosstalk].

[Janice Zwinggi, CFO at TWFG]

Yeah, the renewal is what spiked up so much on insurance services, not so much the new business.

[Gordy Bunch, CEO at TWFG]

Okay.

[Pablo Singzon, Executive Director at J.P. Morgan]

Thank you.

[Operator]

Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Gordy Bunch for any further remarks.

[Gordy Bunch, CEO at TWFG]

Thank you, everybody, for taking time to hear what I consider to be our best TWFG quarter to date. We appreciate all your thoughtful questions. I do want to reiterate that our updated guidance is consistent with our business model, our projections, and what's in our line of sight. We did note there are at least two potential upsides to revenue and margin that we will update during our third quarter call. That being contingencies, which we get our more fulsome update from our carrier partners, in the third quarter. As well as M&A, where we have already achieved our guided M&A activity. We still do have an active M&A pipeline, and there is potential upside for us if we transact any additional acquisitions in the remaining two quarters of 2026.

[Gordy Bunch, CEO at TWFG]

We do appreciate our shareholders, our agents, our staff, and everyone who attended today's call and appreciate and look forward to hosting everybody November 12th. If you can mark your calendars, we will be hosting our Investor Day at the home office at TWFG and look forward to hosting many here in person on November 12th. Thank you for your time today, and thank you for your trust. Appreciate you.

[Operator]

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

Participants

Executives

• Gordy Bunch, CEO
• Janice Zwinggi, CFO

Analysts

• Tommy McJoynt, Director of Equity Research at KBW
• Mike Zaremski, Senior Equity Research Analyst and Managing Director at BMO Capital Markets
• Rowland Mayor, VP at RBC Capital Markets
• Pablo Singzon, Executive Director at J.P. Morgan